Opinion ID: 159750
Heading Depth: 1
Heading Rank: 3

Heading: daubert and expert testimony concerning design defect and hedonic damages

Text: 15 Ingersoll-Rand contends the district court abdicated the gatekeeping requirements imposed by Daubert v. Merrell Dow Pharmaceutical, Inc., 509 U.S. 579 (1995), in admitting the testimony of two experts regarding defects in the milling machine and the testimony of a third expert concerning hedonic damages. We apply an abuse-of-discretion standard when reviewing a trial court's decision to admit or exclude expert testimony. General Electric v. Joiner, 522 U.S. 136, 138-39 (1997). 16 In Daubert, the Supreme Court held Federal Rule of Evidence 702 requires the trial court to ensure any scientific testimony offered under the rule is not only relevant, but reliable. 509 U.S. at 589. In Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137 (1999), which was decided after the district court ruled in this case, the Supreme Court significantly clarified the scope of Daubert, holding the Rule 702 gatekeeping duties of the trial judge apply to all expert testimony, whether such testimony is based on scientific, technical or other specialized knowledge. Kumho also makes it clear that the gatekeeping function is a flexible and commonsense undertaking in which the trial judge is granted broad latitude in deciding both how to determine reliability as well as in the ultimate decision of whether the testimony is reliable. Id. at 141-42. The purpose of the Daubert gatekeeping function is not to measure every expert by an inflexible set of criteria but to undertake whatever inquiry is necessary to make certain that an expert, whether basing testimony upon professional studies or personal experience, employs in the courtroom the same level of intellectual rigor that characterizes the practice of an expert in the relevant field. Id. at 152. 17 Ingersoll-Rand contests the admission of the testimony of Dr. Edward Karnes, offered by the plaintiffs as an expert in human factors engineering, or ergonomics, and Vincent Gallagher, offered by the plaintiffs as an expert safety consultant. Dr. Karnes testified, based on a review of depositions and discovery material, Ingersoll-Rand failed to conduct an adequate human factors analysis of the milling machine before marketing it. He also testified, from the standpoint of human factors analysis, that the lack of adequate visibility around the vehicle and the noise, which prevented adequate communication among workers, made the machine unreasonably dangerous and defective. Asked what devices he would recommend adding to the machine to increase safety, Dr. Karnes testified the machine should have had mirrors to enable the operator to view the groundsmen on either side. Finally, Dr. Karnes disputed Ingersoll-Rand's claim that mirrors would create a false sense of security leading to more accidents, testifying the claim was a rationalization which had been tested and disproven in human factors literature. 18 For his part, Mr. Gallager testified, based on his review of depositions and discovery documents, Ingersoll-Rand failed to conduct appropriate hazard analyses and risk assessments before marketing the milling machine. He opined the failure to properly consider the hazards and risks led to adoption of improper safety measures. Ingersoll-Rand argues the conclusions of both Mr. Gallager and Dr. Karnes are unreliable under Daubert because neither had firsthand experience with milling machines. 19 We see no abuse of discretion in the district court's decision to admit the testimony of both Dr. Karnes and Mr. Gallagher. The record discloses they are amply qualified as experts in their respective fields, and their testimony was limited to matters within their fields of expertise. Neither possessed firsthand knowledge of the particular machine at issue, but firsthand knowledge is not requisite to the admissibility of an expert opinion. Daubert, 509 U.S. at 592 ([A]n expert is permitted wide latitude to offer opinions, including those that are not based on firsthand knowledge or observation.). The bulk of the testimony by both Mr. Gallagher and Dr. Karnes focused on the procedures Ingersoll-Rand followed in developing and marketing the milling machine, an area into which firsthand observation of the machine would shed little light. Nevertheless, to the extent the lack of firsthand experience by either expert is relevant, it goes, as the district court ruled, to the weight and not the admissibility of the testimony. See 63B Am. Jur. 2d Products Liability 1860 (1997). 20 Ingersoll-Rand also objects to the testimony of Stan Smith, a forensic economist. At trial, the plaintiffs attempted to have him testify, based on his own calculations, that Ron Smith's hedonic or loss of enjoyment of life damages fell between $1,742,514 and $2,323,411. Ingersoll-Rand moved in limine to exclude this testimony. 21 Responding to Ingersoll-Rand's motion in limine to exclude Stan Smith's hedonic damages testimony, the district court, relying on our decision in Compton v. Subaru of America, Inc., 82 F.3d 1513 (10th Cir. 1996), overruled by Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137 (1999), determined Stan Smith's testimony was not scientific and therefore Daubert was inapplicable. Nonetheless, the district court found Stan Smith's valuations of a statistical human life to be unreliable and concluded any attempt to quantify Ron Smith's hedonic damages would be both unhelpful and confusing to the jury. The district court therefore excluded any testimony purporting to quantify hedonic damages. 22 The district court did, however, allow Stan Smith to testify about the meaning of hedonic damages. The court reasoned that, as hedonic damages are explicitly allowed under New Mexico law, testimony explaining hedonic damages and how they differ from other damages, particularly pain and suffering would ensure hedonic damages were given the consideration they deserve as part of the substantive law of New Mexico and would help the jury place a value on a loss that is difficult to quantify. 23 Although it succeeded in excluding all testimony quantifying hedonic damages, Ingersoll-Rand appeals, arguing, first, that expert testimony about hedonic damages is inherently unreliable under Daubert, and, second, that the district court allowed Stan Smith to define New Mexico substantive law on hedonic damages in violation of the court's duty to charge the jury on matters of law. 24 Ingersoll-Rand's claim necessitates differentiating hedonic damages as a concept from the methodology generally used in their computation. The concept of hedonic damages is premised on what we take to be the rather noncontroversial assumption that the value of an individual's life exceeds the sum of that individual's economic productivity. In other words, one's life is worth more than what one is compensated for one's work. 3 The assumption that life is worth more than the sum of economic productivity leads to the equally noncontroversial conclusion that compensatory awards based solely on lost earnings will under-compensate tort victims. 4 The theory of hedonic damages becomes highly controversial when one attempts to monetize that portion of the value of life which is not captured by measures of economic productivity. 25 Attempts to quantify the value of human life have met considerable criticism in the literature of economics as well as in the federal court system. Troubled by the disparity of results reached in published value-of-life studies and skeptical of their underlying methodology, the federal courts which have considered expert testimony on hedonic damages in the wake of Daubert have unanimously held quantifications of such damages inadmissable. See, e.g., Saia v. Sears Roebuck & Co., 47 F. Supp. 2d 141, 148-49 (D. Mass. 1999) (finding Stan Smith's hedonic damages testimony inadmissible because his calculations are untestable and the theory does not meet the requirement of general acceptability); Mercado v. Chicago, No. 96-C-2787, 1997 WL 537343 (N.D. Ill. 1997) (excluding Stan Smith's hedonic damages testimony due to the lack of unanimity among economists as to which life valuation studies ought to be considered) (citing Mercado v. Ahmed, 756 F. Supp. 1097 (N.D. Ill. 1991)); Brereton v. United States, 973 F. Supp. 752, 758 (E.D. Mich. 1997) (finding Stan Smith's calculations of hedonic damages unreliable under Daubert); Kurncz v. Honda North America, 166 F.R.D. 386 (W.D. Mich. 1996) (finding Stan Smith's hedonic damages testimony inadmissable under Daubert for the reasons articulated in Ayers v. Robinson, 887 F. Supp. 1049 (N.D. Ill. 1995)); McGuire v. City of Santa Fe, 954 F. Supp. 230, 232-33 (D.N.M. 1996) (finding, under Daubert, hedonic damage testimony is neither testable nor generally accepted); Ayers v. Robinson, 887 F. Supp. 1049 (N.D. Ill. 1995) (finding variation of results and assumptions underlying value of life studies made hedonic damages calculations unreliable under Daubert); Hein v. Merck & Co., 868 F. Supp. 230 (M.D. Tenn. 1994) (rejecting hedonic damages testimony as insufficiently reliable or valid to meet the requirements of Daubert); and Sullivan v. United States Gypsum Co., 862 F. Supp. 317 (D. Kan. 1994) (finding Stan Smith's calculation of hedonic damages to lack sufficient validity to be admissible under Daubert). 26 This case, however, does not require us to determine the admissibility of studies purporting to quantify hedonic damages, and we venture no opinion on that count. We must instead evaluate the considerably narrower testimony the district court did admit. Here, Stan Smith testified only to the definition of loss of enjoyment of life, which he described as an estimate of the value of a person's being for enjoyment of life as opposed to the value of a person's doing or their economic productive capacity, whether it's in the marketplace, in the business, or in the household as a service. Stan Smith further testified that in valuing the loss of enjoyment of life he considers the effect the injury has on the ability to enjoy the occupation of your choice, activities of daily living, social leisure activities and internal well-being. 27 As we noted above, the district court, relying on our decision in Compton, admitted Stan Smith's testimony without explicitly preforming a Daubert analysis. We do not believe, however, the bare fact that the district court did not explicitly utilize the Daubert analysis in admitting Stan Smith's testimony renders the admission erroneous. Kumho teaches that the word Daubert is not talismanic; it simply means that prior to admitting expert testimony, the court must insure the testimony is not only relevant, but reliable. Kumho, 526 U.S. at 147. 28 We believe the district court appropriately exercised its Rule 702 gatekeeping function. First, the district court determined that testimony defining hedonic damages was relevant. As the district court correctly noted, New Mexico state law permits both the recovery of hedonic damages and allows an economist to testify regarding his or her opinion concerning the economic value of a plaintiff's loss of enjoyment of life. Sena v. New Mexico State Police, 892 P.2d 604, 611 (N.M. Ct. App. 1995), cert. denied, 890 P.2d 1321 (N.M. 1995). The district court also made an appropriate decision regarding reliability, excluding the quantification which has troubled both courts and academics, but allowing an explanation adequate to insure the jury did not ignore a component of damages allowable under state law. 29 Ingersoll-Rand also contends Stan Smith's explanation of hedonic damages constituted impermissible testimony on an ultimate question of law, violating our admonition that in no instance can a witness be permitted to define the law of the case. Specht v. Jensen, 853 F.2d 805, 810 (10th Cir. 1988). This rule is not, however, a per se bar on any expert testimony which happens to touch on the law; an expert may be called upon to aid the jury in understanding the facts in evidence even though reference to those facts is couched in legal terms. Id. at 809. Expert testimony on legal issues crosses the line between the permissible and impermissible when it attempt[s] to define the legal parameters within which the jury must exercise its fact-finding function. Id. at 809-10 (emphasis added). 30 We do not believe Stan Smith's testimony constitutes such an attempt. Stan Smith did no more than explain his interpretation of the meaning of hedonic damages and offer four broad areas of human experience which he would consider in determining those damages. Importantly, Stan Smith made no attempt to apply the facts of this case to the criteria he proffered to the jury; the jury remained free to exercise its fact-finding function. We believe Stan Smith's testimony on hedonic damages no more defined the law of the case than did his testimony regarding the computation of other types of damages. For example, he described in great detail the factors the jury could consider in calculating Ron Smith's lost future earnings. Such testimony is common and certainly does not define the law of the case. 29 Charles Alan Wright & Victor James Gold, Federal Practice and Procedure: Evidence 6264 (1997).