Economic Expert Testimony on Lost Wages OK'd in Fatal Accident Case

As reported by Shannon P. Duffy, The Legal Intelligencer, 05-10-2006

'When calculating the lost wages of a college student who died in a rollover accident -- and whose parents say he planned to become a lawyer -- a federal judge, U.S. District Judge Gene E.K. Pratter, has ruled that an economic expert witness may be allowed to testify that one possible calculation of his lost wages would be premised on a lifelong career as a practicing lawyer -- possibly up to the age of 89.'

Click here for the opinion

Two interesting things about this case:

* Judge allowed the economist to present a high end loss scenario that had the deceased becoming an attorney even though the deceased was only in undergraduate school at the time of his death.

* The judge recognized and saw through attempts by the defense to miss- characterize the plaintiff's economics expert's methodology.

Overall this is an exciting decision because it gives economists and attorneys who have to develop economic damage scenarios for individuals with little or no labor market history something to stand-on...at least in PA!
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From, Shannon P. Duffy, The Legal Intelligencer, 05-10-2006

Specifically, the defense team insisted that the plaintiff's experts calculations were unrealistic because he improperly assumed that Montgomery would continue working until age 89 and therefore have a 66-year career as a practicing lawyer.

But Pratter found that the defense had mischaracterized Gamboa's calculations because they were expressed in ranges premised on numerous "worklife expectancy" probabilities, including that there was only a 1.4 percent chance that he would work to age 89.

Pratter concluded that the "work-life expectancy table" Gamboa had constructed "really represents a statistical exercise constructed to estimate economic loss, and is not expected to reflect actuality."

Although the defense may at trial challenge the "weight and credibility" of the data Gamboa used, Pratter refused to exclude it, saying the evidence "does not suggest that the work-life expectancy table was created based on unreliable assumptions."


The plaintiff's economic expert also produced a multi-scenerio economic damage report. The lowest figure on the chart is slightly more than $589,000 and is premised on the assumption that Montgomery would end his education with a bachelor's degree and would never marry.

But the chart also includes estimates for an extended education, including law school, as well as three additional possible fates for his family -- married without children, with one child, and with two children.

The highest figure on the chart is more than $5 million, premised on the possibility that he would have become a lawyer and father of two.

Criticizing the chart, the defense team argued that "each of these calculations is laden with unsupported speculation." But the Montgomery family's lawyers -- argued that the plaintiff's economic expert had properly based his calculations on "traditional and reasonable factual assumptions taking into account decedent's station in life, as well as [his] family background, the demographics of the Montgomery family and appropriate economic factors traditionally employed in studying and calculating a person's loss of earnings capacity."

The evidence, they said, will show that Montgomery was a junior at Penn State University who was earning good grades and who had expressed his long-term plans of attending graduate school, law school, marrying, and having a family.

The defense team argued that a trio of decisions from the 3rd U.S. Circuit Court of Appeals dating back to 1983 supported their argument that Gamboa's conclusions were unfairly speculative. But Pratter found that none of the 3rd Circuit decisions was particularly helpful.

In one, Pratter said, the 3rd Circuit "focused on the methodology applied by the vocational rehabilitation expert, and not entirely on the data or assumptions relied upon."

In the second, she said, "the focus was really on the qualifications of a certified public accountant to conduct a vocational assessment and estimate an economic loss, and not the reliability of the data used, as is the question here."

And in the third, Pratter said, the appellate court found fault in the data used by the expert because it included "the plaintiff's entire life span as opposed to his work--life expectancy" and because the data inflated the plaintiff's actual income and added fringe benefits that the plaintiff had never received.

Instead, Pratter found that the case most directly on point was the Pennsylvania Superior Court's 1987 decision in Mecca v. Lucasik which held that "estimating the future wage loss of a youth is not inappropriate."

In Mecca, an economic expert was called upon to predict the future earnings of five teenagers who had been killed.

The Superior Court concluded that the assumptions regarding the teenagers' incomes was reasonable because they were based on testimony that amounted to "more than the dreams of each teenager as supported by his or her parents at trial."

Pratter noted that the Mecca court "found acceptable that the expert had looked to not only the desires of the teenagers that had been conveyed through the testimony of their parents, but also to testimony with respect to the teenagers' grades, the performance of siblings, and the educational and vocational backgrounds of their parents."