Martin v. City of San Jose

Opinion

1 2 3 6 7 ANDY MARTIN, Case No. 19-cv-01227-EMC

8 Plaintiff, ORDER RE NEGATIVE DISCOUNT 9 v. RATE

10 CITY OF SAN JOSE, et al., Docket Nos. 137-38 11 Defendants.

12 13 14 The Court has reviewed the parties’ briefs regarding Plaintiff’s expert Robert Johnson and 15 his testimony relating to a negative discount rate. See Docket Nos. 137-38. The Court denies 16 Defendants’ motion to strike Mr. Johnson’s testimony. 17 First, the motion to strike is untimely. Defendants did not seek to exclude Mr. Johnson’s 18 testimony until after he had already given his testimony to the jury. Defendants suggest that they 19 did not know that there would be an issue with Mr. Johnson’s testimony until he actually testified 20 at trial because that was the first time he provided concrete numbers for inflation rates and interest 21 rates. That is not wholly accurate. While the interest rate applied under the formula was revised 22 upward at trial (thereby lowering the PDV of projected medical expenses) – compared to his initial 23 report – his methodology remained the same. His initial report also presented a negative discount 24 rate. Yet Defendants brought no timely challenge. Moreover, even though Mr. Johnson did revise 25 the interest rate input, Defendants do not contend that he failed to disclose his methodology. 26 Defendants therefore have not been prejudiced. He was subject to cross-examination on his 27 assumptions at trial. And Defendants still have an opportunity to rebut in their case-in-chief. 1 Circuit did not hold in Trevino v. United States, 804 F.2d 1512 (9th Cir. 1986), that a negative 2 discount rate is per se unreasonable. The court’s ruling was based on flawed factual assumptions, 3 not the conceptual issue of a negative discount rate. Nor is application of a negative discount rate 4 barred by Jones v. Laughlin Steel Corp. v. Pfeifer, 462 U.S. 523 (1983). If Defendants take issue 5 with the negative discount rate, that is a matter for cross-examination and rebuttal; it is not basis to 6 exclude. 7 9 10 Dated: May 24, 2021 11 12 ______________________________________ EDWARD M. CHEN 13 United States District Judge 14 15 16 17 18 19 20 21 22 23 24 25 26 27