Sleeman v. Chesapeake & Ohio Railway Co.

305 F. Supp. 33, 1969 U.S. Dist. LEXIS 10018
CourtDistrict Court, W.D. Michigan
DecidedSeptember 9, 1969
DocketCiv. A. No. 5086
StatusPublished
Cited by6 cases

This text of 305 F. Supp. 33 (Sleeman v. Chesapeake & Ohio Railway Co.) is published on Counsel Stack Legal Research, covering District Court, W.D. Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sleeman v. Chesapeake & Ohio Railway Co., 305 F. Supp. 33, 1969 U.S. Dist. LEXIS 10018 (W.D. Mich. 1969).

Opinion

OPINION

FOX, District Judge.

This case is before the court on remand from the Sixth Circuit Court of Appeals for recomputation of damages. The recomputation involves reduction to present worth of plaintiff’s damages, awarded by the court, for loss of future earning capacity.

At the trial of this Federal Employers’ Liability Act case, the court computed plaintiff’s damages for loss of earning capacity by applying two adjusting factors to the gross amount of its award. These factors were a present worth discount and an inflationary factor to allow for probable future wage increases. The court felt that the present worth reduction, which was five per cent under Michigan law, would be offset by future wage increases and thus found it unnecessary to raise or lower the gross amount of its award.

The Sixth Circuit reversed and remanded on this point only in 414 F.2d 305, decided July 25, 1969. It was held that, as a matter of federal law in Fed[34]*34eral Employers’ Liability Act cases, a present worth reduction must be applied to an award of future earnings, citing C & O Ry. v. Kelly, 241 U.S. 485, 36 S.Ct. 630, 60 L.Ed. 1117 (1916). As to future wage trends, the Sixth Circuit found no basis in the record to support such an offset in this case, citing McWeeney v. N. Y. N. H. & H. RR., 282 F.2d 34 (2d Cir. 1960). Plaintiff's damages for loss of future earnings will therefore be recomputed to harmonize with the mandate of the Court of Appeals. In making such a recomputation, this court is faced with the problem of applying the proper present worth formula.

First, since a present worth reduction has been held to be required as a matter of federal law, it would therefore be improper to use the Michigan five per cent formula, which was applied at the trial of this ease, to effect this reduction. General state law can be neither binding nor particularly instructive when applying similar federal standards to specific areas of federal law. Therefore, the court will look to federal law, and in particular to that law as developed in Federal Employers’ Liability Act cases, for guidelines to apply in reducing this award to present worth.

The case of C & O Ry. v. Kelly, supra, which this court has been directed to follow, does require a present worth reduction in Federal Employers’ Liability Act cases, but gives no indication of a specific formula to be used. The language of that case directs only “that adequate allowance be made, according to the circumstances, for the earning power of money * * No more detailed rule or formula was adopted; in fact, the Supreme Court expressly declined the opportunity to do so. Thus, Kelly should be considered merely a statement of general principle, a flexible rule capable of varying implementation as dictated by circumstances. Therefore, in following Kelly, this court must apply a present worth reduction that meets the test of adequacy and reasonableness.

Such a reasonable formula has been adopted by trial judges in the Second Circuit, and was approved by the Second Circuit Court of Appeals in McWeeney v. N.Y. N.H. & H. RR., supra. McWeeney was also a Federal Employers’ Liability Act case. The Court of Appeals, in discussing the calculation of damages for loss of future earnings, stated 282 F.2d at page 35:

Only three elements need now be found in determining damages from loss of earning power in a total disability case — future normal earning power, expectancy, and discount factor.3 The third is charged by the
3. In a partial disability case there is a fourth, plaintiff’s post-accident earning power.
court, often accompanied, as it was here, by a rule of thumb formula to simplify the jury’s task.

The rule of thumb referred to above is contained at page 42 of the District Court’s unpublished jury charge:

“To determine the present cash value or worth of future loss of earnings, if any, which you may award, you may use the following rule of thumb: discount or reduce the estimated future loss by a per cent equal to the number of years it is assumed that the loss will be sustained. In other words, in the illustration which I gave, I think I referred to a 21-year period of work expectancy. You discount the total by 21 per cent.”

This often applied rule of thumb has thus been adopted by other federal courts as a reasonable and adequate procedure to effect a present worth reduction in Federal Employers’ Liability Act cases. The court sees no reason why it should not be applied in this case.

The defendant objects to the adoption of this formula. It has attempted to introduce, for the court’s consideration, testimony concerning the present value of plaintiff's damage award. It has also sought a hearing for the purpose of introducing such testimony.

[35]*35I. Defendant’s objection to the rule of thumb.

The thrust of defendant’s objection to the often used rule of thumb is simply that it leaves too much of plaintiff’s judgment intact. This objection, which reflects defendant’s persistent attempts to whittle down this award, is entirely inconsistent with the clearly enunciated policy of the Supreme Court with respect to Federal Employers’ Liability Act cases. That Court, in Rogers v. Mo. Pac. R. R. Co., 352 U.S. 500, 77 S.Ct. 443, 1 L.Ed.2d 493, 501 (1957), emphasized the “special features of this statutory negligence action,” enacted “because the Congress was dissatisfied with the common law duty of the master to his servant.” The Court stated, 352 U.S., at page 509, 77 S.Ct., at page 450, 1 L.Ed.2d at page 501:

Some say the Act has shortcomings and would prefer a workmen’s compensation scheme. The fact that Congress has not seen fit to substitute that scheme cannot relieve this Court of its obligation to effectuate the present congressional intention by granting certiorari to correct instances of improper administration of the Act and to prevent its erosion by narrow and niggardly construction.

This case does not justify a “narrow and niggardly” construction in favor of an employer-tortfeasor whose parsimony in planning, construction and maintenance of its yard where passenger and freight comingled was a proximate cause of the railroad employee’s crippling and disabling injuries.

The hallmark of the Federal Employers’ Liability Act is concern for the welfare of injured employees. The Congress intended this essentially humanitarian legislation to be liberally applied to provide a full remedy to those within the scope of its protection. The courts were charged in Rogers to exercise vigilance to effect this legislative purpose. Applying that principle, it is clear that to allow defendant’s objection to the rule of thumb would violate this duty. It would promote the very erosion of the spirit of the legislation that was condemned by the Rogers court.

On the contrary, this court finds the often used rule of thumb to be well suited to the special nature of Federal Employers’ Liability Act actions.

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305 F. Supp. 33, 1969 U.S. Dist. LEXIS 10018, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sleeman-v-chesapeake-ohio-railway-co-miwd-1969.