Defending Damages Including Considering Life Care Plans and Economic Loss

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1 Defending Damages Including Considering Life Care Plans and Economic Loss R. Thomas Radcliffe, Jr. DeHay & Elliston LLP 36 S Charles St Ste 1300 Baltimore, MD (410) tradcliffe@dehay.com

2 R. Thomas Radcliffe, Jr., joined DeHay & Elliston, L.L.P. as a partner in the Baltimore office in Previously, he was a partner with Church & Houff, P.A., and an associate with Tydings & Rosenberg in Baltimore. Mr. Radcliffe has been a member of the Bar of the State of Maryland since Mr. Radcliffe is also licensed in Pennsylvania, Virginia and the District of Columbia. Mr. Radcliffe concentrates his practice of law in mass tort litigation and insurance defense. He has trial experience in many of the Circuit Courts of Maryland as well as in states other than Maryland. He has tried or participated in the trial of cases in California, Delaware, Florida, Georgia, Louisiana, Mississippi, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia, Washington, D.C., and West Virginia. Mr. Radcliffe maintains a trial case load on a national level and actively supervises attorneys in jurisdictions throughout the country. Mr. Radcliffe is AV rated by Martindale Hubbel.

3 Defending Damages Including Considering Life Care Plans and Economic Loss Table of Contents I. Introduction II. Conduct Proper and Early Discovery III. Non Acceptance of Speculative Determinations IV. Getting/Sharing an Economist and Producing the Results V. Economists Should Be Held to the Same Standards as Other Experts VI. Case Example Defending Damages Including Considering Life Care Plans and Economic... Radcliffe 217

5 Defending Damages Including Considering Life Care Plans and Economic Loss I. Introduction There is no question that as clients, insurance carriers and defense attorneys attempt to value cases in the asbestos litigation, the repeated questions that come are: how many shares are expected and what is the percentage of the verdict likely to be assigned to the client. As such, a major focus for defense of asbestos cases in discovery has become getting viable shares or proving other exposures to lower the percentage of the verdict assigned if possible. In the end, the idea is simple, reduce what is owed by reducing the percent of the verdict a client will have to pay. As the focus in discovery on other defendants, bankrupt entities, other causes and assigning blame has increased, there continues be an overlooked and simple way at reducing the amount owed at the end of the day: getting the total amount of damages lowered by the time a case valuation is necessary. While more and better effort is being directed at establishing alternative exposures yet less time and money is being spent on reducing the economic damages number. Too often the focus of defendants on damages comes late in the game and after most discovery has taken place. Defendants at depositions, particularly Plaintiff depositions, spend days focused on product identification, yet spend very little time on actual damages. Further, many defendants across the country attempt to reduce expert costs by not hiring an economist or waiting to hire an economist. Additionally, even if an economist is hired, often times, the decision is to not produce a report or produce the expert so as not to set a bottom line. In the end, by focusing on damages early in discovery and producing the evidence of reduction of Plaintiff s economist opinions, a defendant can significantly drop the value of the case impacting settlement and if necessary a final verdict. II. Conduct Proper and Early Discovery In some jurisdictions, depositions of family members for damages are deferred until the time of trial. The idea is that defendants do not need to explore damages until they are sure they are in the case and it is going to trial, and many do not want to go to the extra expense of family depositions until trial. What is more alarming is the continuing trend of deposition transcripts where no questions are asked regarding damages, beyond asking about the Plaintiffs current work status and a basic medical status. Depositions are a prime opportunity to lower the ability of the Plaintiff s expert to support their claims and reduce the ultimate amount of damages. Good written discovery on damages is also lacking in many cases. Too often defendants rely solely on social security records, or accept a very limited production of tax returns and W-2s. Defendants need to push for disclosure of the information, which can be gathered from the IRS, and take a hard line approach of a complete production of requested documents. As defendants have forced more Courts to accept that bankruptcy information must be provided and refuse to move forward with cases without production of social security authorizations and records, so too must defendants take a hard line approach on all tax information. Additionally, written discovery, and later depositions, should focus on questions of life care plans, services paid for, benefits from employment, retirement plans, other sources of income and areas focused on damages that an expert may rely upon. Vague and incomplete responses should be pursued with the same force that lacking information on key issues of product identification are pursued. Defending Damages Including Considering Life Care Plans and Economic... Radcliffe 219

6 III. Non Acceptance of Speculative Determinations Defendants often accept the stated life care in a Plaintiff s expert calculation. Life care and household services should not be speculative. A life care plan is not something that can be set up by an economist. There needs to be support as to what the life care plan is and why it is necessary. The first questions that always must be asked are what purchases and services are needed. Not, what services and purchases does the economist believe. This answer should be supported by a medical doctor. It should be established in discovery: if a life care plan been established, what discussions were there with a doctor and what recommendations were made, what actual purchases or services are being undertaken and what the actual cost of those services is. Then, Plaintiff s expert must be able to defend why they selected a life care plan and the amount assigned. When it comes to determining the value of a household service, Plaintiff should not be able to pull out the Dollar Value of a Day, select every service without detail and assign a value. The value cannot be established until there is some evidence that Plaintiff performed that service and now they no longer can do so. Often, expert reports calculate household services without any information as a basis for this selection. These experts do not speak to the individual to make the determinations but merely calculate a norm. Proper discovery, particularly at depositions, can establish what was really done, and how it that work is now really be made up for. IV. Getting/Sharing an Economist and Producing the Results Economists are overlooked as a way to save on expert costs. Yet, there may be no single expert that more defendants should share than an economist. The economist rarely is going to have an opinion that will implicate one defendant but exonerate another as other often shared experts, such as pathologist do. The more defendants on board to share an economist, the lower the cost per defendant. An economist should be part of any defense cost sharing agreement. Another common problem of practice that has emerged is that economist s reports are not produced. Common practice is that Defendant s want an economist to help them figure out ways to reduce a Plaintiff s number but they do not want a report produced for fear it will establish a minimum. Certainly, understanding the opinion of the economist prior to a report is important, however, most of the time a good defense economist, in a case with properly conducted discovery, should be able to reduce Plaintiff s number. If this is the case, producing a report and producing the economist for deposition will lower the number prior to the time of trial, driving down the valuation of the case for settlement. Additionally, at trial, if the jury goes with the defense number, or reduces Plaintiff s number, this is a success with real benefits. No one should believe that in most cases a jury will find for the Plaintiff but completely dismiss their economist s number if he or she is the only expert witness presented on damages. V. Economists Should Be Held to the Same Standards as Other Experts It is often a difficult task to get an expert excluded by way of motion practice. However, to the extent that Defendants focus on excluding other Plaintiff s experts, a Defendant should put the same consideration on whether or not they can move to exclude Plaintiff s economic experts. Focusing on what an economist uses to make his or her projections is a sound approach. Just as a defendant would seek an expert s back-up materials for fiber counts or staining, so too should back up materials be sought from Plaintiff s experts. How these experts make their calculations, and 220 Asbestos Medicine November 2015

7 what these calculations are based on are not just important for being able to cross the expert, but prior to trial may be crucial in a motion to eliminate the expert from the trial all together. VI. Case Example Taking a recent real life case an example, Plaintiff produced an expert who gave the following opinion of the high end present loss of value of a Plaintiff in a mesothelioma case: Earnings $709,994 Unemployment ($42,090) Adjusted Earnings Totals $667,904 Fringe 12.54% $83,755 Household Services $188,381 Earnings, Fringe Benefits & Household Services $904,040 Following the growing trend, it would have been easy to accept the report. Initial contact with the defense economist indicated that Plaintiff s number was overvalued. However, it was not until the economist was asked to come up with his own number, in a manner that could be produced, that the disparity was made apparent. The defense economist report for the same Plaintiff were as follows: Earnings $180,223 Fringe Benefits $0 Household Services $0 Earnings, Fringe Benefits & Household Services $188,223 The number of the defense economist is nearly 80% less. After production of the report of the defense economist, Plaintiff s economist amended their report to conclude the following high number: Earnings $159,475 Unemployment ($4,687) Adjusted Earnings Totals $154,788 Fringe 14.84% $22,971 Household Services $248,080 Earnings, Fringe Benefits & Household Services $426,080 The economic workup in the case reduced Plaintiff s own expert s present loss of value number, alone by over 50%. The major difference in this case was discrediting Plaintiff s working life estimate. Plaintiff s expert used a healthy life expectancy to calculate a working life expectancy. Plaintiff s expert, after having this pointed out, reduced the working life expectancy by over 12 years. The second report still left many areas susceptible to attack from the defense. Defending Damages Including Considering Life Care Plans and Economic... Radcliffe 221

8 Plaintiff s expert took no account for taxes on Plaintiff s income. This is a common mistake seen in the litigation. Here an after tax discount rate was used, however, the original lost earnings were not projected after tax. Plaintiff s expert was allowing for a fringe benefit of deferred income, however, he never excluded that number from the wage calculation and thus double counted it. Plaintiff s expert calculated a large loss of household services. Plaintiff s expert used the Dollar Value of a Day, and a generic block of the Plaintiffs sex, age and number of children. However, documents and deposition testimony revealed that Plaintiff was able to perform normal household duties and even if she was not, Plaintiff s expert failed to include other conditions and factors established in discovery that would affect services. This case demonstrated that, well before the case was headed to trial, the value of the damages of Plaintiff s case could be reduced significantly. Additionally, the defense gained the opportunity to discount the number further, in negotiations and at trial. There has been a reduced focus on devaluing damages in asbestos litigation as a way to save time and cost. However, proper discovery and expert practice among all defendants to collectively pursue a reduction in damages may allow the equivalent of lost share at the time of settlement negotiation or at trial. 222 Asbestos Medicine November 2015

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