To: Mrs. Seawell
From: Group X
Date: March 28, 2015
This memo considers whether you should appeal the decision by the District Court in your case involving compensation for your (past and future) economic and non-economic losses resulting from your participation in the National Bird Flu Immunization Program (NBFIP).
The memo first gives the background of your case, describes the court’s findings, considers possible errors by the court, and finally analyzes an appeal.
Background
Patricia Seawell sued the United States under the Federal Tort Claims Act to recover for injuries she suffered because of the NFFBI. The parties stipulated that the United States is legally liable for her injuries. Mrs. Seawell's injuries are the result of her contracting Guillain-Barre Syndrome (GBS), an affliction caused by the Bird Flu Vaccine.
Mrs. Seawell participated in the NBFIP on October 13, 2006, at City Hall. She was given a Bird flu inoculation by the County Health Department. Three days later, Mrs. Seawell began to feel numb in both legs. This numbness spread to her hands and face. She was hospitalized and diagnosed as having Guillain-Barre Syndrome as a result of the Bird flu inoculation.
As required by the Bird Flu Act and the Federal Tort Claims Act, Mrs. Seawell filed an administrative claim with the Public Health Service on May 1, 2008. Her claim was denied “for the inability to arrive at a mutually acceptable settlement figure in this matter.”
Mrs. Seawell then filed this lawsuit in 2009 against the United States. Her action, along with many others, was transferred by order of the Judicial Panel on Multidistrict Litigation to the United States District Court for the District of Columbia for consolidated pretrial proceedings. Four years later, the D.C. District Court entered an order that the United States was liable and remanded the transferred cases for trial on damages.
Court’s findings
A bench trial on damages was held in Mrs. Seawell’s case in 2015. [Cite to decision] The court made the following findings:
• Personal background. Mrs. Seawell was, at the time of trial, a thirty-seven (37) year old female, married, with two children, ages ten and twenty. When Mrs. Seawell contracted GBS, she was employed full-time as a legal secretary for Mr. Charles E. Mahaffee, an attorney practicing law in the City.
• Physical condition. She began to experience the effects of GBS three to four days after immunization. Despite numerous hospitalizations, Mrs. Seawell continued to suffer from severe physical limitations and facial distortion. These severe physical conditions continue to exist ten years after Mrs. Seawell was first diagnosed as having GBS.
• Psychological impairments. Mrs. Seawell has shown a positive attitude throughout her illness. But she suffered a traumatic GBS illness which included, complete paralysis, facial disfigurement, and numerous other physical and nerve maladies that will continue in the foreseeable future to cause an onset of post traumatic stress syndrome in Mrs. Seawell.
• Employability. Mrs. Seawell's employment would place her at a great risk, not only to herself, but her employer. She could injure herself in any job requiring stair climbing, long periods of standing, walking on rough or uneven surfaces (such as through a parking lot). Mrs. Seawell could carry out full-time gainful employment only in the most sedentary type of work and due to her fatigability only by giving up other aspects of her life, such as household duties.
• Past medical expenses. Mrs. Seawell incurred medical expenses proximately caused by her GBS illness (hospital expenses $35,300, physicians expenses $23,500, medical equipment $14,100, travel expenses $4,200, baby-sitting (while being treated) $4,800. Total: $81,900.
• Past economic losses. Mrs. Seawell began as a legal secretary in 1997 with a salary of $14,400 and in 2006 at the time her disability had a salary of $27,600. Her fringe benefits (health care insurance and retirement plan) averaged 20% of salary. The court assumes lost earnings from 2006 to 2015 based on continuing annual salary increases of seven percent (7%). Total: $457,600.
• Future economic losses. Mrs. Seawell would have continued to work until retirement at age 65. Her future earnings would have continued to increase at a more moderate rate of five percent (5%) per year. The court assumes a salary in 2015 of $50,741, plus fringe benefits of 20%, growing at five percent (5%) for 28 years, until age 65. Discount these earnings by 10%. Total: $931,094.
• Pain and suffering. Mrs. Seawell has suffered and will continue to suffer for the remainder of her life “anguish, humiliation and considerable pain all to a degree words may be inadequate to describe. She has suffered and will continue to suffer considerable loss in the enjoyment of her life. She lost many years of the enjoyment a parent experiences with growing children. She has lost and will continue to lose much in the enjoyment that comes with a good marriage that existed between her and her husband before trouble came in the form of GBS.” Total: $750,000.
The court granted judgment to Mrs. Seawell against the United States in the sum of $ 2,220,600.
Court’s abuse of discretion
When reviewing a trial court’s decision we review on an abuse of discretion standard. An abuse of discretion occurs when “ . . . the court’s ruling is manifestly unsupported by reason or is so arbitrary that it could not have been the result of a reasoned decision.”[1] Several issues could be appealable in regards to the judgment amount.
First, the Court incorrectly calculated past annual increases in salary. The court used 7% when past annual salary increases had averaged 7.5%. The court abused its discretion by incorrectly calculating past salary increases. Had the Court used the more appropriate interest rate, the salary computation would have equaled $503,777.00 rather than $457,600.00. The Court incorrectly awarded lost salary for the year 2006 when salary was only lost after October 13th, 2006. If this issue is appealed, the defendants will surely win on this issue and so it must be considered. Finally the Court should have converted all lost economic damages into current day value, i.e. 2015 dollars, whereas they awarded wages based on the year that the wages were lost. After converting wages to 2015 dollars and subtracting out the ¾ of a year incorrectly awarded, this totals $497,237. This would result in an increased judgment of almost $40,000.
Second, because future economic losses are based on Mrs. Seawell’s salary figure, the figures are wrong because the salary figure was incorrectly based on the 7% salary increase figure. Based on the correct salary figure as calculated above, Seawell’s future economic loss should have been $970,992.00.[2] On appeal, an argument exists for a higher salary increase rate, something approaching 7.5% based on past salary increases, or for a lower discount rate. However, these arguments are not likely to succeed because salary increases tend to flatten out with time and the 10% discount rate actual appears to favor plaintiff. Table 1 shows the expected future economic losses if an argument can be made for a different interest rate or discount rate.
Table 1: Future Economic Losses with varying Interest and Discount Rates
Interest / DR / Future Economic Losses0.05 / 0.1 / $970,922
0.075 / 0.1 / $1,296,033
0.075 / 0.08 / $1,663,442
Third, the Trial Court abused its discretion when it failed to convert medical bills into 2015 dollars as opposed to the cost of the procedures as incurred in 2006. If appealed, it can be shown that this dollar amount should be $163,718.48 if money is borrowed at an 8% interest rate.
Fourth, the trial court abused its discretion by failing to consider the fair market salary of a legal secretary in 1996. Mrs. Seawell was under compensated at the time of injury and the correct legal representation would have been the market value of your services, which have been calculated to $30,000 at the time of injury in 1996. Using this market value of services gives substantially higher judgment awards as indicated in Table 2. Even using the Trial Court’s variables of 7% salary increase past losses, 5% future losses and 10% discount rate, this would raise total economic losses over $100,000. However, this argument is not likely to win.
Table 2: Past and Future Economic Losses assuming Fair Market Value of Labor
FMV $30,000 / Past Economic Losses / Future Economic LossesLower Court Variables / $497,392 / $1,012,058
Argued Variables / $509,295 / $1,808,090
Appeal of decision
In order to decide if an appeal would be proper, we consider the arguments that defendants may bring forward in this case that could reduce the judgment amount or have the ruling overturned entirely. In this case, as mentioned, the Court failed to subtract the already earned 2006 portion of the salary before injury. The defendants will likely win this argument if they raise it on appeal. The defendants will also ask for a much higher discount rate considering that legal secretary jobs are being outsourced, competitive forces are driving their salary down and secretaries tend to be replaced by younger secretaries as they grow more experienced.
The defendants may also argue that total loss of wages is the incorrect measure of compensation as Mrs. Seawell is capable of performing some secretarial type duties and would be able to mitigate those salary losses through another less strenuous job. A calculation shows that this number may approach 1/3 of the total payout amount for past and future economic damages.
Finally, the defendants may argue that the pain and suffering damages amount is excessive and move for a new trial on that matter. Past cases in the 1980s awarded damages ranging from $115,000 to $250,000, which when converted to 2015 dollars equals about $300,000 to $625,000 dollars.[3] This is less than the judgment amount and if appealed, defendants will likely bring this argument forward.
In a best case scenario, damages may be recalculated to $3,055,327 representing an almost 1 million dollar increase. Some of these arguments are unlikely to be won on the merits. If the case is appealed, defendants have a substantial chance of reducing damages by almost $750,000 on the future losses calculation if a higher discount rate is argued and if the court agrees that the plaintiff should have mitigated damages by seeking employment. In addition, per our contractual agreement, additional legal fees would be charged.
The decision to appeal is ultimately a matter for the client to decide. In this case, we feel that it is in the best interest of the client to not pursue the appeals process because of the extra cost and time involved and because defendants are likely to present arguments that will reduce damages while we believe our arguments are not as strong.
Memo to Client Page 4 of 4
Group X
[1] State v. Hennis, 323 N.C. 279, 285, 372 S.E.2d 523, 527 (1988)( citing State v. Parker 315 N.C. 249, 337 S.E.2d 497 (1985).
[2] Assuming the same discount rate and an increase in salary of 5% for the remaining years such as the trial court used
[3] See Manko v. U.S., 636 F.Supp. 1419 (1986), Leeper v. U.S., 756 F.2d 300 (1985)