In re Joint Eastern & Southern Dist. Asbestos Lit.

• Decision Date: 07 December 1989
• Docket Number: No. CV-87-2173.,CV-87-2173.
• Parties: In re JOINT EASTERN and SOUTHERN DISTRICT ASBESTOS LITIGATION. Frank RUMMO and Betty Rummo, Plaintiffs, v. The CELOTEX CORPORATION, Defendant.
• Court: U.S. District Court — Eastern District of New York

726 F. Supp. 426

In re JOINT EASTERN and SOUTHERN DISTRICT ASBESTOS LITIGATION.

Frank RUMMO and Betty Rummo, Plaintiffs, v. The CELOTEX CORPORATION, Defendant.

No. CV-87-2173.

United States District Court, E.D. New York.

December 7, 1989.

Jay W. Dankner, Abby J. Resnick, Sullivan & Liapakis, P.C., New York City, for plaintiffs.

David Speziali, Speziali & Constantine, Newfield, N.J., for defendant.

MEMORANDUM AND ORDER

WEINSTEIN, District Judge.

Plaintiff is dying of mesothelioma, a dread cancer of the lining of the lungs, as a result of his work with asbestos thirty years ago in the Brooklyn Navy Yard. He has less than one year to live. He cannot work. Were it not for this disease, this 53 year-old man would have a work-life expectancy of some twelve years. The question posed is whether his loss of future income should be based on the one year he may live or the many years he could have lived were it not for the defendant's delict in supplying asbestos without warning workers of the dangers.

The court instructed the jury to make alternative findings of fact. Based on present work-life expectancy it fixed loss of earnings at $45,000.00. Based on work-life expectancy not reduced by mesothelioma it awarded $775,000.00. Both sums are supported by the trial record.

I. Principles of Compensation

This is a diversity case. New York law applies. Erie R.R. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). But this state's highest courts have not definitively analyzed the issue in published opinions. We turn therefore to the general law of torts, as would New York's highest court. MacPherson v. Buick Motor Co., 217 N.Y. 382, 111 N.E. 1050 (1916) (Cardozo, J.). "Underlying principles, with whatever qualification may be called for as they are applied to varying conditions, are the tests and standards of our law." Id. 111 N.E. at 1053.

A. Actions by Injured Party

A primary goal of the American law of torts is to adequately and justly compensate personal injury victims. Compensatory damages include the loss or impairment of earning capacity. 22 Am.Jur.2d Damages § 157 (1988); 4 F. Harper, F. James, Jr. & O. Gray, The Law of Torts § 25.8 (2d ed. 1986); 2 S. Speiser, C. Krause and A. Gans, The American Law of Torts § 8:27 (1985); 4 Restatement (Second) of Torts § 924, comments c & d (1979). Damages are computed by measuring the monetary value of the diminution in the plaintiff's annual earning capacity, multiplying that amount by the number of years the plaintiff could have worked—his work-life expectancy—and then discounting that amount to present value. See 2 M. Minzer, J. Nates, C. Kimball, D. Axelrod & R. Goldstein, Damages in Tort Actions § 10.23 (1989); 4 F. Harper, F. James Jr. & O. Gray, The Law of Torts § 25.8 (2d ed. 1986); 2 S. Speiser, C. Krause & A. Gans, The American Law of Torts § 8:27 (1985).

The problem of whether to use pre- or post-injury life expectancy when calculating personal injury damages has been largely neglected until recently because medical knowledge was not sufficiently advanced to permit a reliable estimate of reduced life expectancy. Improvements in medical technology, demographics and statistics now allow that estimation to be made with sufficient accuracy to satisfy legal standards. Fleming, The Lost Years: A Problem in the Computation and Distribution of Damages, 50 Cal.L.Rev. 598, 599-600 (1962).

Given the possibility of accurate projections, it is desirable to think of a worker's earning capacity as equivalent to work-capital. Adjusting for such factors as increased skills, demand for the worker's services, and inflation, that capital is depleted as life advances. An injury that reduces the period of work-life expectancy deprives the worker of the value of work-capital. By awarding damages for lost earning capacity, we are, in effect, compensating the worker for the shortening of his or her "economic horizon." 2 S. Speiser, C. Krause & A. Gans, The American Law of Torts § 8:27, at 628 (1985).

The Restatement (Second) of Torts may be read to support compensation to the victim directly for loss of work-capital. It states that anticipated losses of earnings should be calculated for "the expected working period that the plaintiff would have had during the remainder of his prospective life, but for the defendant's act." 4 Restatement (Second) of Torts § 924, comment d at 525 (1977) (emphasis supplied).

The Restatement (Second) of Torts indicates one way of calculating that life expectancy by use of statistical tables:

In order to ascertain the damages, to determine the expectancy of the injured person's life at the time of the tort ... it is permissible to use mortality tables and other evidence as to the average life expectancy of a large number of persons.

Id. comment e, at 526 (emphasis supplied).

Speiser, Krause and Gans note:

Work life expectancy is an important factor in determining an injury victim's damages from loss or impairment of future earning capacity.

2 S. Speiser, C. Krause & A. Gans, The American Law of Torts § 8:27, at 632 (2d ed. 1985). Building on the possibility of prediction, these authors strongly urge compensating the living victim for the loss of his or her work-capital. They write that:

damages for decreased earning capacity should be determined by deducting the injury victim's earning ability after the injury from his earning ability immediately prior to the injury.

Id. at 630. Earning ability prior to the injury must be calculated based on the victim's pre-injury life expectancy.

Calculating damages for lost earning capacity based on the victim's pre-injury life expectancy has been criticized as overcompensating the plaintiff, because no deductions are made for his or her living expenses between the time of projected actual death and the time death probably would have occurred had there been no injury. It has been viewed, however, as the "lesser of two evils." The alternative method of awarding damages based on the victim's shortened life expectancy would, in effect, reward the defendant for having successfully injured the plaintiff so severely as to curtail his or her life span, and would under-compensate plaintiff's dependents for the loss of support during those lost years. 4 F. Harper, F. James, Jr. & O. Gray, The Law of Torts § 25.8, at 552 n. 9 (2d ed. 1986); Note, The Measure of Damages For a Shortened Life, 22 U.Chi.L.Rev. 505, 505-06 (1955). "It is permitting a defendant to assert the excessiveness of his own tort to escape paying full compensation for the injury." Note, The Measure of Damages For a Shortened Life, 22 U.Chi.L. Rev. 505, 506 n. 6 (1955) (quoting Olivier v. Houghton County Street Ry., 138 Mich. 242, 244, 101 N.W. 530, 531 (1904)). As between some unfairness to the tort-feasor and gross under-compensation to the victim, the former seems more appealing to our sense of justice.

B. Relation to Death Actions

Addressing the legal problem requires consideration of damages awarded in a death action brought for loss to the estate because of the worker's untimely death, as well as damages awarded in a suit by a victim commenced during his or her lifetime. Damages for the period by which the victim's life has been curtailed have traditionally been awarded in wrongful death actions. 1 S. Speiser, Recovery for Wrongful Death § 3:64 (2d ed. 1975). The justification—even though somewhat unrealistic for most workers—is that a longer working life would have resulted in a greater estate. If shortened life expectancy can be calculated prior to the victim's death, the issue is whether the damages for lost earning capacity for the years lost due to the injury should be awarded directly to the personal injury victim during his or her lifetime in a personal injury judgment, or to the decedent's heirs in a subsequent wrongful death action. The first alternative has the obvious advantage of allowing the victim to enjoy some of the value of his or her lost working capital and to personally decide—rather than have the state's rules on death actions determine— how to distribute any surplus remaining on death.

A case where the injured person is still alive but suffers from a fatal injury combines elements of two situations that are usually distinct: (1) an accident which impairs the victim's earning capacity without reducing his life expectancy—a situation in which his dependents have no independent claim of action against the tort-feasor; and (2) a fatal accident—where the dependents' interests are recognized in their own right in wrongful death statutes. Fleming, The Lost Years: A Problem in the Computation and Distribution of Damages, 50 Cal. L.Rev. 598, 608 (1962).

If damages awarded to the personal injury victim during his or her lifetime are based upon post-injury rather than pre-injury life expectancy, and decedents are barred from bringing a subsequent wrongful death action, then the tort-feasor benefits from conduct that curtailed the life expectancy of the victim. If, however, plaintiff's recovery in a personal injury action did not bar a subsequent wrongful death action, awarding full damages in both actions for lost earning capacity would result in a double recovery. The victim and estate are jointly unjustly enriched at the expense of the tort-feasor. Should damages for lost earning capacity be awarded to the victim in a personal injury judgment, the issue becomes whether a prior judgment in a personal injury action should bar any subsequent wrongful death action or only bar it to the extent that is necessary to prevent duplication of damages. 1 Speiser, Recovery for Wrongful Death § 5:20 (2d ed. 1975).

In the majority of American jurisdictions, damages awarded for loss of earning capacity are based on the victim's work-life expectancy unabbreviated by the injury. See generally 4 F. Harper, F. James, Jr. & O. Gray, The Law of Torts § 25.8 (2d ed. 1986). The problem of double recovery is avoided by barring subsequent...