Court Opinion

ID: 8918044
Source: CourtListenerOpinion
Date Created: 2022-11-27 05:56:38.544298+00
Date Added: 2024-06-11T17:09:10.667051
License: Public Domain

. JOHN R. BROWN, Circuit Judge,
with whom FAY, POLITZ, R. LANIER ANDERSON, III, RANDALL, TATE, SAM D. JOHNSON and JERRE S. WILLIAMS, Circuit Judges, join, dissenting:
With the ink scarcely dry on Pfeifer (Jones & Laughlin Steel Corp. v. Pfeifer, -U.S.-,-, 103 S.Ct. 2541, 2554, 76 L.Ed.2d 768, 788 (1983)), in which, with remarkable unanimous clarity, the High Court chose not to pick one of the several methods in its collective economic hat it considered legally sound for calculating lost future wages in civil damage actions and instead chose to leave that crucial decision to the trial judge in that and future cases, a majority of this Court elevates one approach beyond any choice to be the only way, for mandatory application in eighteen federal judicial districts across a half-dozen Southern states,1 for a broad group of litigants to arrive at fair sums of money to compensate injured parties. Guided by the decision of Pfeifer, its approval of Culver I, and the direction that the choice of methodology should be left to the district court, not this Court, I respectfully dissent.2
*124I.
In overruling Penrod (Johnson v. Penrod Drilling Co., 510 F.2d 234 (5th Cir.) (en banc), cert. denied 423 U.S. 839, 96 S.Ct. 68-69, 46 L.Ed.2d 58 (1975)) which forbade proof, argument, or jury instruction concerning inflationary factors in damage awards in actions under maritime or federal law, “it [was] not our purpose to establish a single methodology” for all federal courts in the Old Fifth to thenceforth account for such factors in determining future lost earnings. Culver v. Slater Boat Co., 688 F.2d 280, 305 (5th Cir.1982) (en banc) (Cul-ver I). Rather, we adopted a “flexible approach to the problem which [w]ould result in fairness regardless of the economic circumstances that exist at the time of trial” and left open the opportunity for each party to offer relevant evidence supporting or refuting any of the several discussed theories of calculating lost earnings. Id. at 286. “In the dynamic and ever-changing world of finance and economics,” we felt that “any standard which is inflexible . . . will likely be unable to cope with the problem of preventing windfalls either to plaintiff or defendant.” Id. at 300. Our goal was “to create standards that are fair to both sides of the controversy, with the trier of fact being allowed to receive and act upon credible evidence of the economic facts bearing, pro and con, on the competing theories.” Id.
Pfeifer, on the heels of Culver I, clearly follows this flexible approach. The Supreme Court unequivocally refused to establish anything but “the general boundaries within which a particular award will be considered legally acceptable,”3 U.S. at -, 103 S.Ct. at 2555, 76 L.Ed.2d at 789, simply because no one method of calculating lost earnings was above some legitimate criticism and thus appropriate for all cases.
The Court questioned certain aspects of each of the three principal proposed methods, making it clear that under some circumstances one or more of the three could be inappropriate, (i) It thought that methods employing specific forecasts of future inflation on a case-by-case basis “remain too unreliable to be useful in many cases,” - U.S. at -, 103 S.Ct. at 2556, 76 L.Ed.2d at 790 (emphasis added), and discouraged their general use. (ii) As to the real interest (or below-market) discount rate approaches, the Court found the “economic evidence distinctly inconclusive regarding an essential premise of those approaches,” id. — the “key premise ... that the real interest rate remains stable over time.” Such a rate is “obviously not perfectly stable,” and, the Court observed, “whether it is even relatively stable is hotly disputed among economists.” Id. at -n. 30, 103 S.Ct. at 2556 n. 30, 76 L.Ed.2d at 790 n. 30; accord Culver I, 688 F.2d at 302 (“As evidence becomes available that the next 20 or 30 years will not be like the past 20 or 30 years, then the Feldman [real interest rate] approach is less helpful.”). Even the majority recognizes this.4 (iii) Lastly, it “was not prepared to impose [the “total offset” approach] on unwilling litigants,” as had the Third Circuit below, for such approaches rely on at least one assumption the Court could not unquestioningly accept — that “the national patterns of wage growth are likely to reflect the patterns within any given industry.”-U.S. at -, 103 S.Ct. at 2557, 76 L.Ed.2d at 791-92; cf. Culver I, 688 F.2d at 299 (“penalizes defendants because . .. interest *125rates on relatively safe investments will typically ride several percentage points above the rate of inflation”). To the Court, “[t]he legislative branch of the federal government [was] far better equipped than [it] to perform a comprehensive economic analysis and to fashion the proper general rule.” -U.S. at-, 103 S.Ct. at 2557, 76 L.Ed.2d at 792. Importantly, though, the Court characterized each of the three methods as “legally acceptable.”
Consequently, the Court chose to allow to the trial judge on remand discretion to apply in a deliberate choice any one or more of the “legally acceptable” methods the Court discussed — those involving specific forecasts of future inflation, those using a below-market or real interest discount rate, or those based on the notion of total offset. That is precisely what Culver I ordained: no one method was either prescribed or forbidden. And Pfeifer approved Culver I5
II.
Despite the clear holding in Pfeifer and its approval of Culver J’s approach, the majority today declares that, though “the Supreme Court declined in Pfeifer to select a single method of accounting for inflation,” unless the parties can stipulate to the contrary, all “fact-finders in this Circuit must adjust damage awards to account for inflation according to the below-market discount rate method.” See supra at 16123. The Court takes from the district court— and puts squarely in the hands of the Court of Appeals — the responsibility of choosing, from among competing economic theories, the methodology or methodologies which could be used to most equitably and adequately determine future lost earnings under the circumstances of that case. Apparently this is done to spare jurors from the rigors of listening to presentations on such competing methods (which the Court seems “convinced” will invariably turn into “graduate seminar[s] on economic forecasting,” see supra at 117), and from the difficulty of making such reasoned choices. In doing so, the Court makes choices of economic fact “hotly disputed [even] among economists.”
Pfeifer, like Culver I, however plainly evidences a confidence that trial courts6 are fully capable and actually better able to make such difficult decisions on the facts of individual cases, at least until Congress declares otherwise.
I thus must dissent.7

. Though I of course agree with the result of the majority opinion, that the judgment below be reversed to overrule Penrod, the drastic *124modification of Culver I and disregard of Pfeifer nevertheless compels me to dissent.

. The Supreme Court was squarely faced with the same choice before this Court today.
The litigants and the amici in this case urge us to select one of the many rules that have been proposed and establish it for all time as the exclusive method in all federal trials for calculating an award for lost earnings in an inflationary economy.
-U.S. at-, 103 S.Ct. at 2555, 76 L.Ed.2d at 789. Like that Court I am “not persuaded, however, that such an approach is warranted.” Id.

. Even establishing an appropriate below-market discount rate, however, is difficult. Economists do not yet fully understand the relationship between inflation and interest. Recent studies discredit the received wisdom, voiced a decade ago, that there is a constant real rate of interest that can be determined merely by filtering inflationary expectations from nominal interest rates.
See supra at 16123.

. Of course, Pfeifer did point out,-U.S. at -n. 27, 103 S.Ct. at 2554 n. 27, 76 L.Ed.2d at 787 n. 27, an error in steps (2) and (3) in this Court’s illustrative summary of computation of lost earnings in Culver I. See 688 F.2d at 309 (concerning “average annual income”). Unavoidably cast in general terms, that summary would have led to significant error. Since averaging the normally increasing estimated annual income stream would raise estimates for the early years and lower them for the later years, and since early years are discounted less than later years, averaging would unjustifiably increase the award to plaintiffs. In the year since Culver I was handed down, I have valiantly made every effort to correct this error.

. I read nothing in Pfeifer which would prevent a trial judge from choosing the appropriate economic theory for calculating lost future earnings in a jury trial, based on the proof put forward by the parties. To me, however, Pfeifer leaves no room for this Court to make a similar decision for all cases for all time without any consideration of the circumstances of a particular case.

.Beyond disagreeing with the majority’s an-nointment of one method over the other “legally acceptable” rules for calculating lost earnings, I simply point out that whether the majority has made the correct choice is problematic. See, e.g., Zocco & Ledford, Penrod Overruled: Implications and Shortcomings in Culver regarding the Determination of Economic Damages, 29 Loy.L.Rev. 37, 47-53 (1983) (authors recommend adoption of the “expected inflation method,” as “the Feldman method [using a below-market discount rate and adopted by the majority here] ... is merely Penrod in disguise”); also see the criticisms of that theory in Pfeifer, -U.S. at-, 103 S.Ct. at 2556, n. 30, 76 L.Ed.2d at 790-91, n. 30; and Culver I, 688 F.2d at 300-02. That the below-market discount rate method may be inappropriate under some (or most) circumstances is only further evidence supporting the flexible approach of Culver I.