Court Opinion

ID: 9471233
Source: CourtListenerOpinion
Date Created: 2023-08-05 03:27:40.2668+00
Date Added: 2024-06-11T17:42:19.403083
License: Public Domain

K.K. HALL, Circuit Judge, dissenting:
I cannot agree with the majority’s conclusion that the damages awarded Flannery for loss of enjoyment of life fall within the punitive damage proscription of the FTCA. Nor can I agree that the award for lost future earnings is punitive or otherwise improper because of the failure to deduct federal income taxes. In my view, these aspects of the damages award are a matter of state law, which have been conclusively resolved in Flannery’s favor by the decision of the West Virginia Supreme Court of Appeals in Flannery v. United States, W.Va., 297 S.E.2d 433 (1982). I can only conclude that this decision of the West Virginia Supreme Court is binding upon this Court. Finally, I disagree with the majority’s conclusion that the award of lost earnings should be reduced on the ground that it partially duplicates the award of future medical expenses. For these reasons, I must vigorously dissent pursuant to the FTCA.
It is undisputed that, as a result of the government’s negligence, twenty-two year old Michael Flannery was rendered permanently and totally disabled and, as the district court found, “will remain in a semi-comatose state for the remainder of his life.” He is not expected to live beyond the year 2008 and this is contingent upon his receipt of constant custodial and good nursing care.
As the majority opinion notes, the only issue on appeal is the calculation of damages. In a personal injury action, such as this one, brought pursuant to the FTCA, damages are a matter controlled by state law. Under the provisions of 28 U.S.C. § 2674, “[t]he United States shall be liable, respecting the provisions of this title relating to tort claims, in the same manner and to the same extent as a private individual under like circumstances, but shall not be liable for interest prior to judgment or for punitive damages.” 28 U.S.C. § 1346(b) further provides that:
Subject to the provisions of chapter 171 of this title, the district courts, together with the United States District Court for the District of the Canal Zone and the District Court of the Virgin Islands, shall have exclusive jurisdiction of civil actions on claims against the United States, for money damages, accruing on and after January 1, 1945, for injury or loss of property, or personal injury or death caused by the negligent or wrongful act or omission of any employee of the Government while acting within the scope of his office or employment, under circumstances where the United States, if a private person, would be liable to the claimant in accordance with the law of the place where the act or omission occurred.
When this case first came before us on appeal, we perceived — in my opinion, correctly — that the damages question was a matter of state law, which required clarification from the West Virginia Supreme Court of Appeals. Pursuant to our earlier opinion in this case, Flannery v. United States, 649 F.2d 270 (4th Cir.1981), we, therefore, certified the following two questions to the West Virginia Supreme Court of Appeals:
1. Under West Virginia law, is a plaintiff in a personal injury action, who has been rendered permanently semi-comatose by his injuries and is therefore unable to sense his injuries, entitled to recover for the impairment of his capacity to enjoy life?
2. Under West Virginia law, must the trial court, when sitting as the finder of fact in a personal injury action, deduct from the plaintiff’s award for lost earning capacity an amount equal to federal income taxes which would have been levied upon such income had it actually been earned?
*114The answers which we received from the West Virginia Supreme Court of Appeals were as follows:
1. We ... hold that a plaintiff in a personal injury action who has been rendered permanently semi-comatose is entitled to recover for the impairment of his capacity to enjoy life as a measure of the permanency of his injuries even though he may not be able to sense his loss of enjoyment of life. Flannery v. United States, W.Va., 297 S.E.2d at 439.
2. [W]e adopt the majority view and hold that in computing the loss of future earning capacity a deduction need not be made for federal income taxes. Id. W.Va., 297 S.E.2d at 441.
Under the Rules of Decision statute, 28 U.S.C. § 1652, “[t]he laws of the several states, except where the Constitution or treaties of the United States or Acts of Congress otherwise require or provide, shall be regarded as rules of decision in civil actions in the courts of the United States, in cases where they apply.” In my opinion, the decision of the West Virginia Supreme Court in response to our certified questions in this case is unquestionably controlling under the Rules of Decision statute. I, therefore, believe that we are required to affirm the district court’s judgment with respect to both the award for loss of enjoyment of life and the loss of future earning capacity. Nor am I persuaded by the majority’s view that these damages are in any way punitive and, consequently, prohibited under 28 U.S.C. § 2674 of the FTCA, which permits only compensatory damages.
Addressing first the issue of Flannery’s entitlement to damages for loss of enjoyment of life, I note that the majority’s view of “punitive” prevents Flannery from recovering a component of damages to which he is clearly and unequivocally entitled under West Virginia law. The majority has thus succeeded in creating two conflicting standards for damages awards in West Virginia. In the future, a victim, such as Flannery, who is injured by a private party, will be entitled to recover damages for loss of enjoyment of life, while that same person, if injured at the hands of the government will receive nothing. This, I submit, is in direct conflict with the clear meaning and intent of the provisions of 28 U.S.C. § 2674 and 1346(b), which state that the government shall be liable in the same manner and to the same extent as a private party and in accordance with the laws of the place where the negligence occurred.
The majority premises its holding that an award to Flannery for loss of enjoyment of life is punitive on the ground that it is of no direct benefit to him. At least one federal appeals court has refused to follow the view that any award of damages over and above a plaintiff’s actual loss is “punitive.” In Kalavity v. United States, 584 F.2d 809 (6th Cir.1978), the Sixth Circuit held that under Ohio law an award of damages in a wrongful death action in favor of decedent’s spouse could not be reduced on the ground that the spouse had remarried and received support from her new husband. The court rejected as “farfetched” the government’s contention that this award did not compensate the plaintiff for any direct or actually-suffered loss. The Court in Kalavity recognized that “[d]amages are ‘punitive’ when awarded separately for the sole purpose of punishing a tortfeasor who inflicted injuries ‘maliciously or wantonly, and with circumstances of contumely or indignity.’ Milwaukee R.R. v. Arms, 91 U.S. 489, 493, 23 L.Ed. 374 (1875).” Id. at 811, n. 1. The Court then went on to note that
the purpose of ordinary tort damages, as distinguished from “punitive” damages, is both to compensate and to deter. Tort law mixes these two purposes, compensation and deterrence, when it awards ordinary damages. Tort law may award as customary damages something more than simply out-of-pocket loss, something for deterrence, without spilling over into “punitive” damages awarded solely for the purpose of punishment... In excluding “punitive” damages from the coverage of the Tort Claims Act, we believe that Congress simply prohibited use of a retributive theory of punishment against the government, not a theory of damages which would exclude all customary dam*115ages awarded under traditional tort law principles which mix theories of compensation and deterrence together. [Footnote omitted] Id. at 811.
I completely agree with this common-sense approach to the meaning of “punitive” under the FTCA and would, accordingly, find the damages awarded to Flannery for loss of enjoyment of life entirely outside the scope of the FTCA’s prohibition of punitive damages.
Similarly, I see nothing which would require the district court to deduct an amount for federal income taxes from Flannery’s award for lost future earnings. The majority recognizes that even those cases which have held that such a deduction is required were cases in which the decedents in wrongful death actions were high wage earners with annual incomes in excess of $30,000.00. Flannery, whose future wages were calculated on the basis of a $17,481 per year income in 1978, hardly falls in that category. Nor do I subscribe to the majority’s implicit holding that this issue is governed by any principle of federal common law applicable to admiralty, worker’s compensation, or Federal Employers Liability Act cases. As stated previously, I view the issue of damages entirely as a matter of state law. In West Virginia a deduction for federal income taxes from an award of lost future earnings “need not be made.” Flannery v. United States, W.Va., 297 S.E.2d at 441.1
Finally, I am unpersuaded by the majority’s belief that the award for lost future earnings duplicates in part the award of future medical expenses. In FTCA cases, which are tried without a jury, factual determinations, including damages, are governed by the clearly erroneous standard of review. United States v. Pendergrast, 241 F.2d 687, 689 (4th Cir.1957); Fed.R.Civ.P. 52(a). In such cases, we will judge a trial court’s finding as to damages to be clearly erroneous only if, after reviewing the entire evidence, we are “left with the definite and firm conviction that a mistake has been committed.” United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 541, 92 L.Ed. 746 (1948); see also Ferrero v. United States, 603 F.2d 510, 521 (5th Cir.1979). The government in this case has not even argued that there has been any duplication in the two components of the damages award which comprise loss of future earnings and future medical expenses. Under West Virginia law, Flannery, as a personal injury plaintiff, is entitled to damages both for his lost earning capacity and for his future medical expenses. On the record before us, I am unable to conclude that the amounts awarded by the district court for these components of Flannery’s damages are clearly erroneous.
For the foregoing reasons, I would affirm the district court’s judgment.

. The 10% deduction suggested by the government and adopted by the majority is arbitrary and without evidence to support it. I also find the majority’s approach on the issues of taxes inconsistent and illogical. On the one hand, the majority insists on a deduction for future taxes, but refuses any upward adjustment for income taxes payable by Flannery on post-judgment income from invested funds. The basis for the latter view is the majority’s purely speculative theory that all of the income could be invested in tax-exempt securities.