Wage and Hour Meals Stateby State

http://www.dol.gov/esa/programs/whd/state/meal.htm

It gives meal period legislation by state.

Dispute on lost profits go to weight...

From Blog702....

The Eighth Circuit has upheld the trial court's decision admitting CPA testimony on lost profits in a commercial dispute involving breach of a distributorship agreement.

The defense attorneys for distributor objected that the CPA's expert analysis rested on undemonstrated factual assumptions. The appellate panel dismissed that argument, restating the Eighth Circuit's general rule that the factual bases of an expert's opinion usually go to weight, not admissibility.

That rule was all the more applicable, said the panel, given that the CPA's need to make factual assumptions arose largely from the distributor's breach. See Matthew Headley Holdings, LLC v. McCleary, Inc., No. 05-2122 (8th Cir. May 19, 2006) (Colloton, Heaney, & Gruender, JJ.).

How big is the expert witness industry?

About $6 to $8 billion per year according to BARRY SHLACHTER, a Fort Worth
STAR-TELEGRAM STAFF WRITER

Some examples he points out in his article:

Texas Christian University business professors: $650,000 for the 1,100 hours he devoted to reviewing the business practices of former Chief Executive Kenneth Lay.

Auto engineer: goes from being a $130,000-a-year engineer at Ford to an expert witness who billed his former employer $22 million from 2002 to 2005

“In patent litigation, the average cost per side is $2 million. There are 2,814 patent litigation filings in 2003, which means about $11 billion. If just 1 percent was spent on expert witnesses, that’s more $1 billion for patent cases alone.

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."

Do forensic economists calculate pre-judgment interest in Tennessee?

Generally the court, and not economists, calculates pre-judgment interest in Tennessee. In other words, it is a lawyer issue and not an economist issue. Economists practicing in the area report that pre-judgment interest is allowed in employment cases but there is uncertainty regarding PI and WD cases.

The pertinent statute is TENN. CODE ANN. § 47-14-123:

“Prejudgment interest, i.e., interest as an element of, or in the nature of, damages, as permitted by the statutory and common laws of the state as of April 1st 1979, may be awarded by courts or juries in accordance with the principles of equity at any rate not in excess of a maximum effective rate of ten percent (10%) per annum.”

Another application of the collateral source rule

Collateral Source Rule Applies to Lawyers
By John Day on Damages

A lawyer was hurt in a wreck and received injuries that limited his work hours. He was a partner is a law firm and continued to receive his regular compensation despite his failure to work and bill the required number of hours. The judge did not permit the defendant to tell the jury that the lawyer received his normal compensation. The jury awarded money for lost of income and defendant appealed.

The California Court of Appeal affirmed, stating "[h]owever criticized, maligned or debatable the application of the collateral source rule may be in this case, it is not within our province to depart from established California law and we decline to do so." The case includes a nice discussion of the public policy supporting the rule.

The case is Smock v. State of California, (A107532, A108413 Cal. Ct. App. 1st Dis., Div. 3 4/18/06). You can read it here

Economic witness testimony in the news

Jerry Arnold of USC, testified for Ken Lay in the Enron trial and found nothing misleading in their accounting. He was paid about $1 million for the work and research he performed in the case.

Walter Rush, working for Jeff Skilling, also found no problem in the accounting. He was paid $600 per hour. As of his cross-examination, he spent 954 hours in preparing this opinion and testifying. ($572,400)

Source: http://www.chron.com/disp/story.mpl/chronicle/3839450.html