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Lin v. McDonnell Douglas Corp.

July 30, 1984

SHU-TAO LIN, AS ADMINISTRATOR OF THE GOODS, CHATTELS AND CREDITS WHICH WERE OF SHU-REN LIN, M.D., DECEASED, PLAINTIFF-APPELLEE,
v.
MCDONNELL DOUGLAS CORPORATION AND AMERICAN AIRLINES, INC., DEFENDANTS-APPELLANTS



Appeal from a final judgment of the United States District Court for the Southern District of New York (Robert J. Sweet, Judge), awarding plaintiff $4,274,500 in compensatory damages after a jury trial. Reversed and remanded.

Author: Winter

Before: FRIENDLY, PIERCE and WINTER, Circuit Judges.

WINTER, Circuit Judge:

Defendants American Airlines, Inc. and McDonnell Douglas Corporation appeal from a final judgment entered after a jury trial before Judge Sweet. This is a wrongful death diversity action in which the parties have entered into a no-contest stipulation as to defendants' liability. The jury verdict consisted of a damage award in the amount of $7,010,000.In an opinion with which familiarity is assumed, Judge Sweet held that manifold errors had denied thedefendants a fair trial and that the verdict was excessive. Shu-Tao Lin v. McDonnell Douglas Corp., 574 F. Supp. 1407 (S.D.N.Y. 1983). He ordered a new trial unless the plaintiff accepted a remittitur in the amount of $4,274,500.

The plaintiff accepted this offer, and final judgment was entered. On appeal, defendants argue that the judgment as remitted is still excessive and request as relief either a recalculated remittitur or a new trial. Because we conclude that use of remittitur deprived the defendants of their right to a jury trial on the issue of pecuniary loss, we reverse and remand for further proceedings. We affirm the verdict as to pre-impact pain and suffering.

FACTS AND PROCEEDINGS BELOW

The decedent, Shu-Ren Lin, M.D., was killed on May 25, 1979, when the American Airlines jet in which he was a passenger crashed shortly after takeoff from Chicago's O'Hare International Airport. At the time of his death, Dr. Lin, age 42, was an associate professor of neuroradiology at the University of Rochester Medical School. He was married and had four children, then of ages 15, 14, 9 and 1. The administrator of decedent's estate, Shu-Tao Lin, brought this action to recover damages for Dr. Lin's death as well as for the pain and suffering he may have experienced in the period immediately preceding the crash.

After the case had been transferred by the Judicial Panel on Multidistrict Litigation to the Northern District of Illinois for proceedings common to the many actions arising out of the crash, the parties entered into a no-contest stipulation on the issue of defendants' liability. The case was then returned to the Southern District of New York for a trial on the issue of damages.

After a five-week trial, the jury returned a verdict of $7,000,000 for the pecuniary loss suffered by Dr. Lin's wife and children as a result of his death. Using a special verdict form, the jury expressly based the award on a finding that Dr. Lin would have "continued to practice in his profession substantially as he had prior to his death and would not have entered the private practice of neuroradiology." The jury also awarded $10,000 for Dr. Lin's pre-impact pain and suffering.

After entry of judgment, the defendants moved to set aside the component of the jury's verdict relating to pecuniary injury and for a new trial on that issue. At the same time, they argued that the jury's finding relating to Dr. Lin's future practice should be preserved in any subsequent trial. The defendants also moved for judgment notwithstanding the verdict on the issue of Dr. Lin's pre-impact pain and suffering.

In ruling on these motions, Judge Sweet held that various errors committed before and during the trial combined to deny the defendants their right to a fair trial.*fn1 574 F. Supp. at 1409-13. Most important was the admission of testimony of Dr. Mantell, an economist who testified for the plaintiff concerning Dr. Lin's likely future income stream. Judge Sweet concluded that some of Dr. Mantell's estimates were based on contradictory factual assumptions while others were utterly unsupported by the record.His testimony was, therefore, neither probative nor based on data "of a type reasonably relied upon by experts in the particular field," as required by Fed. R. Evid. 703.*fn2 Moreover, even if some of Dr. Mantell's testimony was admissible, the defendants never had an opportunity in pretrial discovery to examine his computer methodology and thus were impaired in conducting an effective cross-examination.*fn3

Noting that in the last full year of his life Dr. Lin had earned $56,000 and that the jury's award could be invested to afford Dr. Lin's family some $700,000 in annual tax-free income, Judge Sweet concluded that the net effect of the errors had been to produce an excessive verdict and to deny the defendants a fair trial. Rather than grant the defendants' motion for a new trial outright, however, he offered the plaintiff a remittitur, permitting a choice between the certainty of a lowered verdict and the uncertainty of further proceedings.

To derive what he believed to be the appropriate remittitur, Judge Sweet computed the damages de novo to determine the amount a "properly functioning jury -- one not misled by the prejudicial evidence presented in this trial -- would have awarded." 574 F. Supp. at 1415. He concluded that a properly functioning jury would have awarded the plaintiff $4,274,500, $3,864,000 of which represented compensation for the loss of Dr. Lin's financial support, $400,000 for the loss to Dr. Lin's children of his nurture, care and guidance, and $10,000 for Dr. Lin's pre-impact pain and suffering.*fn4 Among the assumptions used by Judge Sweet to derive these figures were: (1) in computing the present value of Dr. Lin's projected future income stream, no adjustment for Dr. Lin's potential income tax liability was necessary since Dr. Lin's family would incur taxes on the income earned on the damage award and the two liabilities would effectively cancel each other out; (2) the loss of Dr. Lin's nurture, care and guidance could be valued by hypothesizing that his children might compensate for this loss by seeking psychiatric help and that the reasonable cost of such help would be $100,000 per child; (3) prejudgment interest was not included as an element of the award; and (4) the jury's award of $10,000 for Dr. Lin's pre-impact pain and suffering should be included in the judgment.

Based on his calculation of what a properly functioning jury would have awarded, Judge Sweet offered the plaintiff the choice between the remittitur and a new trial. He did not explicitly rule on the defendants' motion that a new trial must proceed on the factual assumption, as found by the jury, that Dr. Lin "would have continued to practice his profession substantially as he had prior to his death." The plaintiff accepted the remittitur and defendants appealed. On appeal, defendants renew their contention that a new trial should be granted on the limited issue of the pecuniary injury inflicted by the loss of the income stream Dr. Lin would have earned if he continued to practice "substantially" as he had before his death. Alternatively, they seek an appellate recomputation of the damages.

We reverse and remand for further proceedings with regard to pecuniary loss. We affirm the award for ...


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