By A. Scott Ross
We recently won a defense verdict for Hankook Tire in the Western District of Tennessee, Eastern Division.[1] The plaintiff was paralyzed from the neck down. Workers compensation had paid more than $1.75 million in past medical expenses, and the plaintiff also sought millions in future life care expenses. Had we not obtained a defense verdict, the plaintiff’s non-economic damages would have tested the Civil Justice Act (CJA) damage caps. And the plaintiff also sought punitive damages.
Significant effort went into the damages part of the case. Along the way we learned a few things.
Punitive Damages and Compliance with Government Standards: Two new statutory provisions bar punitive damages when the defendant has complied with applicable government regulations. The first applies to civil matters generally and applies whenever a defendant demonstrates “substantial compliance” with applicable federal or state “regulations setting forth specific standards applicable to the activity in question and intended to protect a class of persons or entities that includes the plaintiff.”[2] The second, largely parallel provision applies to products liability cases.[3] Our client’s product complied with all requirements of the Federal Motor Vehicle Safety Standards (FMVSS), and we obtained concessions to this effect during the course of discovery. The Western District ultimately granted partial summary judgment to our client on the punitive damages claims.[4]
Billed versus Paid Medical Expenses: Amounts billed by the plaintiff’s medical providers exceeded amounts paid to them by about 40%. It has long been the law that plaintiffs in personal injury actions may only recover the reasonable cost of medical care received. Following the Tennessee Supreme Court’s decision in West v. Shelby County Healthcare Corp., 459 S.W.3d 33 (Tenn. 2014), several Western District of Tennessee rulings hold that undiscounted amounts billed by medical providers do not represent the reasonable cost of medical care received – that a plaintiff may recover only the usually much lower amounts actually paid to his medical providers.[5] Thereafter, the Tennessee Court of Appeals decided Dedmon v. Steelman,[6] casting doubt on this position. However, the Tennessee Supreme Court has Dedmon under review and the Western District has continued to make an Erie guess that West will be applied outside the hospital lien context, and to hold that plaintiffs may not prove or recover the undiscounted amount of their medical bills. We moved for partial summary judgment on this issue, and to exclude any evidence of the undiscounted amounts billed for past medical care. The Western District granted our motion.[7] At trial, the plaintiff was permitted to prove only the amounts actually paid for his medical care.
Proof of Medical Expenses and the Statutory Presumption: A Tennessee Code provision can help a plaintiff prove his medical expenses. For medical expenses exceeding $4,000, this statute, Tenn. Code Ann. § 24-5-113(b), raises a rebuttable presumption that medical expense amounts itemized and served at least 90 days before trial are reasonable in amount. Separate proof is still required that all treatment was medically necessary and caused by the accident at issue; the statutory presumption does not help with that.[8] In drafting the statutory notice document, consider two lessons from our case. First, if you seek to utilize the statutory presumption, then your itemized listing of medical expenses should include both the amount billed and the amount paid for each item. We filed a response objecting to the plaintiff’s notice because he had listed only amounts billed, which could not be recovered under the Western District authorities discussed above. After the Court granted summary judgment on this issue and ruled that amounts billed could not be proven at trial, the plaintiff in our case faced considerable difficulty proving his medical expenses at trial. Second, when a plaintiff continues to receive treatment, this must be addressed in drafting and supplementing the statutory notice filing. Failing to do so makes the statutory notice filing ineffective as proof of amounts incurred subsequent to the notice filing. Alternatively, for large dollar cases consider using an expert witness who can testify to the reasonable amount of the plaintiff’s medical expenses. Relying solely on the statutory presumption to prove big dollar medical expenses carries significant risk, as our case demonstrated. A proper expert witness also can prove medical necessity and causation, for which the statutory presumption provides no help.
Lost Household Services: In a wrongful death case, the decedent’s family not only loses the monetary income the decedent would have earned, they also lose the non-monetary value of household services he would have provided to the family (cooking, cleaning, lawn mowing, etc.). In a death case, economists often include lost household services as an element of damages because these are losses suffered by the family members bringing the wrongful death action. In our case, however, the plaintiff did not die, and was suing on his own behalf. The plaintiff nonetheless sought to recover the loss of his own household services to himself, as a separate element of damages. But because the plaintiff was totally incapacitated by his injuries, his life care plan damages already included the cost to have someone else provide all household services (all cooking, cleaning, lawncare, etc.). We, therefore, challenged plaintiff’s lost household services claim as double-counting. The Western District ultimately agreed that plaintiff was seeking to recover twice for the same loss, and eliminated this claim on summary judgment.[9]
Pre-Accident Versus Post-Accident Life Expectancy: In our case, experts agreed that the plaintiff’s injuries had roughly halved his pre-accident life expectancy. Statistics show that people with spinal cord injuries simply do not live as long as the general population. Future life care expenses formed the largest element of economic damages, and the plaintiff’s experts argued stridently for application of a pre-accident life expectancy to the life care plan, roughly doubling the bottom line figure. We countered that life care plan damages are meant to estimate the total cost of caring for the plaintiff for the remainder of his life, and that a post-accident life expectancy represents the best estimate of how long those life care expenses will continue. The plaintiff’s shortened life expectancy does not go uncompensated. That loss is compensated as lost enjoyment of life (which is subject to the CAJA cap on non-economic damages). Using a pre-accident life expectancy to estimate life care plan damages would double count those other damage elements. Although no case had decided this pre-accident versus post-accident life expectancy question, a CJA statutory provision directs that post-accident life expectancy be used in estimating future care expenses.[10] The Western District granted us partial summary judgment on this issue, requiring that the plaintiff utilize post-accident life expectancy in presenting life care damages at trial.[11]
Even with this ruling, we faced another life expectancy issue at the close of trial. Tennessee Civil Pattern Jury Instruction 14.53 instructs jurors that life expectancy figures are not conclusive and that they may apply a higher or lower figure.[12] This makes some sense when the jury is provided with figures from a general population life expectancy table, like the one now found as an appendix to the Tennessee Civil Pattern Jury Instructions.[13] In our case, however, the experts agreed on the plaintiff’s particular post-accident life expectancy in view of his specific health conditions. The proof on this point was uncontradicted, as was the plaintiff’s life care damage estimate based upon this life expectancy. We moved for judgment as matter of law under Fed. R. Civ. P. 50 directing the jury that it could not award more than this amount, and objected to the TPI instruction. The court included the instruction and denied our pre-verdict Rule 50 motion, which we would have renewed following the verdict had we not prevailed. With undisputed proof of life expectancy, the jury did not have a “legally sufficient evidentiary basis” to increase plaintiff’s life care damages beyond what he had proven, thus meeting the standard for judgment as a matter of law on this issue.[14]
CJA Damages Caps in Federal Court: The Civil Justice Act caps non-economic damages at $750,000, or $1 million for catastrophic injuries, defined to include spinal cord injury resulting in quadriplegia.[15] The statute directs that this cap on damages “shall not be disclosed to the jury, but shall be applied by the court to any award of noneconomic damages.”[16] As a matter of substantive law, the damages cap must be applied in a federal diversity case under Erie R. Co. v. Tompkins.[17] The question arises, however, what procedural vehicle a federal court should use to reduce a jury verdict to the amount allowed by the cap. One possibility would be to use a special verdict and to reduce the jury’s verdict to the maximum allowed when entering judgment, pursuant to Rules 49 and 58.[18] By contrast, a recent decision from the Eastern District of Tennessee handled the issue through a post-trial motion.[19] It is not clear from the motion or the court’s ruling, however, whether the motion was being treated as a Rule 50 motion for judgment as a matter of law,[20] as a motion to alter or amend the judgment under Rule 59,[21] or on some other basis.[22] In another recent federal case, the post-trial application of Tennessee’s cap on punitive damages was presented as part of a broader Rule 50 motion for judgment as a matter of law.[23] In light of the possibility that the court may view Rule 50 as the proper vehicle for post-verdict application of Tennessee’s damages caps, counsel should preserve the issue by moving for judgment as a matter of law on these grounds before the case is submitted to the jury.[24]
Because the damage claims in our case were so large, we were able to dig deeply into a number of issues. I hope that something we learned may be helpful in your practice.
Neal & Harwell, PLC
1201 Demonbreun Street, Suite 1000
Nashville, TN 37203
sross@nealharwellstg.wpenginepowered.com
(615) 244-1713
[1] Cone et al. v. Hankook Tire Company, Ltd., No. 1:14-cv-01122-STA-egb (W.D. Tenn.)
[2] Tenn. Code Ann. § 29-39-104(e).
[3] Tenn. Code Ann. § 29-28-104(b).
[4] Order, D.E. 275, Cone et al. v. Hankook Tire Company, Ltd., No. 1:14-cv-01122-STA-egb (W.D. Tenn., January 23, 2017).
[5] Hall v. USF Holland, Inc., 152 F. Supp. 3d 1037, 1040 (W.D. Tenn. 2016); Smith v. Lopez-Miranda, 165 F. Supp. 3d 689, 691 (W.D. Tenn. 2016); Keltner v. United States, No. 2:13-cv-2840-STA-dkv, 2015 WL 3688461, at *4 (W.D. Tenn. June 12, 2015). See also Johnson v. Trans-Carriers, Inc., No. 2:15-CV-2533-STA-DKV, 2017 WL 28004, at *3 (W.D. Tenn. Jan. 3, 2017).
[6] No. W201501462COAR9CV, 2016 WL 3219070 (Tenn. Ct. App. June 2, 2016), appeal granted (Oct. 21, 2016).
[7] Order, D.E. 279, Cone et al. v. Hankook Tire Company, Ltd., No. 1:14-cv-01122-STA-egb (W.D. Tenn., January 25, 2017).
[8] See, e.g., Wilson v. Monroe Cty., 411 S.W.3d 431, 442 (Tenn. Ct. App. 2013).
[9] Order, D.E. 279, Cone et al. v. Hankook Tire Company, Ltd., No. 1:14-cv-01122-STA-egb (W.D. Tenn., January 25, 2017).
[10] Tenn. Code Ann. § 29-39-103(c). Sensibly, this provision also directs that pre-accident life expectancy be used in estimating lost future income, as this is the period over which the plaintiff would have had earnings but for his injuries.
[11] Order, D.E. 279, Cone et al. v. Hankook Tire Company, Ltd., No. 1:14-cv-01122-STA-egb (W.D. Tenn., January 25, 2017).
[12] T.P.I.—CIVIL14.53 Life Expectancy, 8 Tenn. Prac. Pattern Jury Instr. T.P.I.-Civil 14.53 (2016 ed.)
[13] APPENDIX E. LIFE EXPECTANCY TABLE, 8 Tenn. Prac. Pattern Jury Instr. T.P.I.-Civil Appendix E (2016 ed.)
[14] Fed. R. Civ. P. 50(a); cf. Kelley v. Apria Healthcare, LLC, No. 3:13-CV-96, 2017 WL 2703520, at *7 (E.D. Tenn. June 22, 2017) (holding that life expectancy was factually disputed).
[15] Tenn. Code Ann. § 29-39-102.
[16] Tenn. Code Ann. § 29-39-102(g).
[17] 304 U.S. 64, 58 S. Ct. 817, 82 L. Ed. 1188 (1938).
[18] Fed. R. Civ. P. 49, 58(b).
[19] See Kelley v. Apria Healthcare, LLC, No. 3:13-CV-96, 2017 WL 2703520, at *1 (E.D. Tenn. June 22, 2017).
[20] Fed. R. Civ. P. 50.
[21] Fed. R. Civ. P. 59(e).
[22] See also Learmonth v. Sears, Roebuck & Co., 710 F.3d 249, 255 (5th Cir. 2013) (“Although the district court denied Sears’ request for a new trial or remittitur, it reduced noneconomic damages to $1 million” under a Mississippi damage cap).
[23] Lindenberg v. Jackson Nat’l Life Ins. Co., 147 F. Supp. 3d 694, 708 (W.D. Tenn. 2015). However, the court ultimately deferred application of the punitive damages cap pending certification of its constitutionality to the Tennessee Supreme Court. The Tennessee Supreme Court declined to accept the certified question. See Order on Defendant’s Motion for Judgment as a Matter of Law as to Punitive Damages, No. 2:13-cv-02657-JPM-cgc (W.D. Tenn. September 28, 2016).
[24] Fed. R. Civ. P. 50(a)(2) states: “A motion for judgment as a matter of law may be made at any time before the case is submitted to the jury.”
