Norfolk Southern Railway Corp. v. Tiller

CHARLES E. MOYLAN, Jr., Judge, retired, specially assigned. The injured railroad employee in this case is doubly protected against the risk of diminution of his award for damages. As a successful plaintiff, he is protected by Maryland’s collateral source rule generally. His protection is enhanced by that rule’s favored status within the special context of the Federal Employers’ Liability Act (“FELA”).

Procedural Background The appellant is the Norfolk Southern Railway Corporation. The appellee, Henry Tiller, had been, as of the time of the accident, an employee of Norfolk Southern for 29 years and 5 months. On March 31, 2004, Tiller was struck on the head by the boom of a crane mounted on a wreck truck, then being operated by his supervisor. The injury was to Tiller’s neck.

He has been determined to be totally disabled and unable to return to work. On September 13, 2005, Tiller brought suit under FELA in the Circuit Court for Cecil County, alleging negligence on the part of Norfolk Southern for not providing him a reasonably safe workplace. Prior to trial, Norfolk Southern conceded its negligence. Liability, therefore, is not an issue before us.

Trial proceeded before Judge O. Robert Lidums and a jury, exclusively on the issue of damages. The jury awarded damages to Tiller in the amount of $1,001,278. Norfolk Southern has appealed from that award. ³²¹ The Appellate Issue The single issue before us is the admissibility of certain evidence offered by Norfolk Southern bearing on the computation of damages. Prior to trial, Tiller filed a Time of Trial Motion to Limit the Testimony of Norfolk Southern’s Economic Expert Witness Thomas Walsh.

The motion sought to preclude Walsh from testifying that Tiller, who was at trial time 52 years of age, would be eligible to retire “with full benefits” at 60 years of age. 1 Judge Lidums granted Tiller’s motion. Narrowing the Focus The damages award was in the total amount of $1,001,278. That award was broken down into four subcategories: Loss of past earnings.........$141,317 Past pain and suffering.......$100,500 Future pain and suffering.....$190,532 Loss of future earnings.......$568,929 Accepting at face value the purpose for which Norfolk Southern sought to offer the evidence of Tiller’s expected retirement benefits, that evidence would have had a bearing only on the fourth of the subcategories of damages, to wit, on Tiller’s loss of future earnings. The calculation is straightforward.

Once the multiplicand of lost wages for the present year is established, the multiplier is then the number of years between the employee’s current age and the age at which the employee would ordinarily have been expected to stop working if the injury had not occurred. That expectation inevitably involves some degree of speculation. A number of factors may enter into the making of what amounts to such an educated guess. One significant factor, of course, is the announced intention of the employee himself.

Even if an employee is eligible to retire at age 60, he is not required to do so. Tiller testified that, prior to his injury, he had always thought that he would continue to work into his mid- ³²² 60’s, probably stopping at about age 65. Looking ahead to age 65 from the then present age of just under 52 would have given the jury a multiplier of 13 years (and a few months). Norfolk Southern’s trial strategy, on the other hand, was to persuade the jury that Tiller was eligible to retire at age 60 and, therefore, would most likely retire at age 60.

Looking ahead to age 60 from the then present age of just under 52 would have given the jury a smaller multiplier of 8 years (and a few months). A reduction in the multiplier from 13 + to 8 + would have reduced the product, the future lost wages, proportionately. 2 What Norfolk Southern was hoping to do, therefore, was apparent. It wanted to inform the jury that Tiller was eligible to receive retirement benefits at age 60 in order to persuade the jury that, notwithstanding his testimony to the contrary, he in all likelihood would have stopped working at age 60. Norfolk Southern’s contention that the evidence of retirement eligibility was erroneously excluded takes two forms: 1.

The evidence generally was admissible; and 2. Even if presumptively inadmissible because of the collateral source rule, Tiller “opened the door” to its admissibility when his economic expert made a reference to Social Security benefits. The Special FELA Context This is no ordinary tort case, although it has some characteristics thereof. It is a FELA case, and that designation places it in a special legal province all of its own with special rules of its own.

Although FELA has been on the books for a full century, since 1908, the Maryland case law dealing "with it remains skimpy. In CSX v. Miller, 159 Md.App. 123, 128-46 , 858 A.2d 1025 (2004), we examined in depth its special characteristics. And see Haischer v. CSX, 381 Md. 119 , 848 A.2d 620 ³²³ (2004); Bittinger v. CSX, 176 Md.App. 262 , 932 A.2d 1243 (2007). In CSX v. Miller, 159 Md.App. at 129 , 858 A.2d 1025 , we commented on one unusual feature of a FELA action: The FELA law is a hybrid.

It hovers ambivalently between workers’ compensation law and the common law tort of negligence. It is neither, but it partakes of characteristics of both. In Kernan v. American Dredging Co., 355 U.S.426, 431-32, 78 S.Ct. 394 , 2 L.Ed.2d 382 (1958), Justice Brennan recounted the provenance of FELA as a deliberate policy recognition that the railroad industry itself was better able to shoulder the cost of industrial injuries and deaths than were the industry’s injured workers or their families. [I]t came to be recognized that, whatever the rights and duties among persons generally, the industrial employer had a special responsibility toward his workers, who were daily exposed to the risks of the business and who were largely helpless to provide adequately for their own safety. Therefore, as industry and commerce became sufficiently strong to bear the burden, the law, the reflection of an evolving public policy, came to favor compensation of employees and their dependents for the losses occasioned by the inevitable deaths and injuries of industrial employment, thus shifting to industry the “human overhead” of doing business.

For most industries this change has been embodied in Workmen’s Compensation Acts. In the railroad and shipping industries, however, the FELA and Jones Act provide the framework for determining liability for industrial accidents. (Emphasis supplied). In Consolidated Rail Corporation v. Gottshall, 512 U.S. 532, 542 , 114 S.Ct. 2396 , 129 L.Ed.2d 427 (1994), the Supreme Court more recently reaffirmed that energizing purpose of FELA: Cognizant of the physical dangers of railroading that resulted in the death or maiming of thousands of workers every year, Congress crafted a federal remedy that shifted part of ³²⁴ the “ ‘human overhead’ ” of doing business from employee to their employers.

From FELA’s history and its animating philosophy, this Court concluded in CSX v. Miller: Thus, although the FELA is not a workers’ compensation act, the social forces that produced it and the generating spirit that drives it resonate with the language and philosophy of workers’ compensation principles. 159 Md.App. at 131 , 858 A.2d 1025 (emphasis supplied). An Employee-Friendly Standard of Review Routinely at the outset of an opinion, we make reference to the controlling standard of appellate review. It is particularly appropriate that we do so in a FELA case. Because of its midway position between a common law action in negligence and a workers’ compensation claim, a FELA case calls for an interpretative approach that is significantly different from that which ordinarily prevails in a suit for common law negligence.

As early as Jamison v. Encarnacion, 281 U.S. 635, 640 , 50 S.Ct. 440 , 74 L.Ed. 1082 (1930), the Supreme Court set out a basic guideline: The Act is not to be narrowed by refined reasoning. It is to be construed liberally to fulfill the purposes for which it was enacted. (Emphasis supplied). The Supreme Court’s literal holding of Urie v. Thompson, 337 U.S. 163 , 69 S.Ct. 1018 , 93 L.Ed. 1282 (1949), does not concern us, but the psychological attitude with which it approached a FELA problem does.

Without any clear textual predicate for doing so, the Supreme Court boldly asserted that FELA covered occupational diseases as surely as it covered accidental physical injuries. The text of the Congressional act itself by no means compelled such a sweeping result. The primary rationale advanced by the Court for so bold an expansion of FELA’s coverage was the act’s broad energizing purpose. ³²⁵ Considerations arising from the breadth of the statutory language, the Act’s humanitarian purposes, its accepted standard of liberal construction in order to accomplish those objects, the absence of anything in the legislative history indicating a congressional intent to require a restricted interpretation or expressly to exclude such occupational disease, and the trend of existing authorities dealing with the question, combine to support this conclusion. 337 U.S. at 180-81 , 69 S.Ct. 1018 (emphasis supplied). The Supreme Court summarized a series of its earlier liberal interpretations of FELA: We think they were made in the spirit the statute contemplated for its administration and application.

That spirit is one not in conformity with importing nice distinctions in applying the act’s broad and general terms or cutting down their full scope by inference or implication. 337 U.S. at 186 , 69 S.Ct. 1018 (emphasis supplied). Kernan v. American Dredging Co., 355 U.S. at 432 , 78 S.Ct. 394 , reconfirmed that interpretive approach to the FELA statute. Congress saw fit to enact a statute of the most general terms____[I]t is clear that the general congressional intent was to provide liberal recovery for injured workers; and it is also clear that Congress intended the creation of no static remedy, but one which would be developed and enlarged to meet changing conditions and changing concepts of industry’s duty toward its workers. (Emphasis supplied).

In that opinion, Justice Brennan further described the process by which the FELA would continue to evolve in order the better to provide “compensation for injuries to employees consistent with the changing realities of employment in the railroad industry.” Congress, in 1908, did not crystallize the application of the Act by enacting specific rules to guide the courts. Rather, by using generalized language, it created only a framework within which the courts were left to evolve, much in the manner of the common law, a system of principles provid ³²⁶ ing compensation for injuries to employees consistent with the changing realities of employment in the railroad industry. 355 U.S. at 437 , 78 S.Ct. 394 (emphasis supplied). The drumbeat of liberal interpretation continued unabated in Atchison, Topeka and Santa Fe v. Buell, 480 U.S. 557, 562 , 107 S.Ct. 1410 , 94 L.Ed.2d 563 (1987): We have recognized generally that the FELA is a broad remedial statute, and have adopted a “standard of liberal construction in order to accomplish [Congress’] objects.” (Emphasis supplied). Consolidated Rail Corporation v. Gottshall, 512 U.S. at 560-61 , 114 S.Ct. 2396 , added its “Amen” in 1994.

Relying upon “the breadth of the statutory language, [and] the Act’s humanitarian purposes,” this Court has accorded the FELA a notably “liberal construction in order to accomplish [Congress] objects.” Dissenting opinion of Ginsburg, J. (emphasis supplied). After surveying that unbroken line of the Supreme Court support for a FELA claim, this Court’s CSX v. Miller observed with respect to the standard of appellate review: In the wake of this juggernaut of language, consistently iterated and reiterated over the course of seven and one-half decades, it is not hard to figure out who wins the ties and who gets the benefit of the close calls. 159 Md.App. at 145 , 858 A.2d 1025 (emphasis supplied). The standard of review is clear.

The Collateral Source Rule We sympathize with Norfolk Southern’s evidentiary frustration. On the issue of the loss of future wages, the age at which the injured employee would have been expected to stop working, had the accident never occurred, is obviously very material. The employee’s eligibility for retirement benefits at a particular age, moreover, is unquestionably relevant evidence as to the probable age at which the employee might ³²⁷ have been expected to stop working. The admissibility of such evidence, indisputably both relevant and material, is on a direct collision course, however, with the massive and imposing bulk of the collateral source rule.

It is that collision of competing values that is the nub of this case. Which shall prevail? The basic collateral source rule? An arguable exception?

The collateral source rule in Maryland traces back at least as far as 1899. In Baltimore City Passenger Railway Company v. Baer, 90 Md. 97 , 44 A. 992 (1899), the Court of Appeals, albeit not giving the rule a name, applied it in principle. The sixth prayer asserts the correct proposition that any sick benefits received by the plaintiff from any source other than the defendant were not to be considered by the jury, in making up their verdict. 90 Md. at 108 , 44 A. 992 (emphasis supplied). That principle was described as “well established” by 1913 when Chesapeake Iron Works v. Hochschild, 119 Md. 303, 307-08 , 86 A. 345 (1913), stated: It is said in 38 Cyc. 537: “It will be no defense that the injured party has been indemnified by insurance, although he has collected all or a part of such indemnity,” and in 13 Cyc. 70: “The rule seems to be well established by the authorities that the fact of insurance can not be set up in mitigation of damages, whether such reduction is set up in mitigation in case of fire, life, marine or accident insurance.” In the case of City Pass.

Ry. Co. v. Baer, 90 Md. at 108 [, 44 A. 992 ], this Court said: “The sixth prayer asserts the correct proposition that any sick benefits received by the plaintiff from any source other than the defendant were not to be considered by the jury, in making up their verdict.” (Emphasis supplied) By 1916 the principle was taking on a respectable pedigree, as American Paving and Contracting Co. v. Davis, 127 Md. 477, 485 , 96 A. 623 (1916), announced: Its fourth prayer asserted the proposition that if the plaintiffs house was insured, and he received the sum of $885.00 ³²⁸ from the insurance company in payment of the loss caused by the fire, he was not entitled to recover, and is disposed of by the case of City Pass. Ry. Co. v. Baer, 90 Md. at 108 [, 44 A. 992 ], where it was said: “The sixth prayer asserts the correct proposition that any sick benefits received by the plaintiff from any source other than the defendant were not to be considered by the jury, in making up their verdict,” and the case of Ches.

Iron Works v. Hochschild, 119 Md. 303 [, 86 A. 345 ], where this Court said: “The rule seems to be well established by the authorities that the fact of insurance cannot be set up in mitigation of damages, whether such reduction is set up in mitigation in case of fire, life, marine or accident insurance.” See also Barnes v. United Railways & Electric Co., 140 Md. 14 , 116 A. 855 (1922); Plank v. Summers, 203 Md. 552, 561-62 , 102 A.2d 262 (1954). It was Judge Hammond’s opinion for the Court of Appeals in Leizear v. Butler, 226 Md. 171, 175 , 172 A.2d 518 (1961), that made it clear that the collateral source rule’s general preclusive ban applies not just to the payment of insurance benefits but also to the payment of wages by an employer during an injured worker’s period of disability. Leizear contends (a) that it was prejudicial error for the trial court to admit evidence that he was paid his wages by Montgomery County during the period of his absence from work____The trial court correctly ruled that the amount of Leizear’s damages was not to be reduced because of the payment of his wages by his employer during the period of disability due to the accident, Plank v. Summers, 203 Md. 552 , 102 A.2d 262 , but, nevertheless, permitted Leizear to testify over objection that Montgomery County had paid him his regular salary during the time he was not working after the accident. Courts in other states have held that such testimony is admissible if there is evidence in the case of malingering or exaggeration of injury but is inadmissible if there is no such evidence or if the question is asked ³²⁹ for the real purpose of mitigating the liability of the defendant.

(Emphasis supplied). Kelch v. Mass Transit Administration, 42 Md.App. 291, 296 , 400 A.2d 440 (1979), reaffirmed that evidence of benefits from a collateral source is not admissible to diminish damages even though it may sometimes be admissible to prove that the plaintiff is malingering or exaggerating the extent of the injuries. In Leizear , the Court of Appeals noted with approval that the evidence of collateral payments is admissible if there is evidence in the case of malingering or exaggeration of injury but evidence as to collateral payments is inadmissible in the absence of evidence of malingering or exaggeration or where the real purpose of the evidence offered as to collateral sources is the mitigation of liability for damages of the defendant. (Emphasis supplied).

The Rationale Behind the Rule In holding that the collateral source rule was not applicable to a claim against the Motor Vehicle Administration and its Assurance Fund, Motor Vehicle Administration v. Seidel, 326 Md. 237, 254 , 604 A.2d 473 (1992), quoted with approval from Restatement (Second) of Torts (1977), § 920A(2), Comment b, as the Restatement explained the salutary purpose behind the collateral source rule. “Payments made or benefits conferred by other sources are known as collateral-source benefits. They do not have the effect of reducing the recovery against the defendant. The injured party’s net loss may have been reduced correspondingly, and to the extent that the defendant is required to pay the total amount there may be a double compensation for a part of the plaintiffs injury. But it is the position of the law that a benefit that is directed to the injured party should not be shifted so as to become a windfall for the tortfeasor.

If the plaintiff was himself responsible for the ³³⁰ benefit, as by maintaining his own insurance or by making advantageous employment arrangements, the law allows him to keep it for himself If the benefit was a gift to the plaintiff from a third party or established for him by law, he should not be deprived of the advantage that it confers. The law does not differentiate between the nature of the benefits, so long as they did not come from the defendant or a person acting for him.” (Emphasis supplied). See also Dennison v. Head Construction Co., 54 Md.App. 310, 319-22 , 458 A.2d 868 (1983). In a nutshell, the evidence, though otherwise admissible, is deemed to do more harm than good.

On balance, therefore, it is out! The Collateral Source Rule In FELA Cases Although the collateral source rule has significant preclusive force in tort cases generally, it takes on added force in the special habitat of FELA litigation. For FELA cases, the handwriting, albeit obliquely italic, was placed on the wall by the Supreme Court in Tipton v. Socony Mobil Oil Co., Inc., 375 U.S. 34 , 84 S.Ct. 1 , 11 L.Ed.2d 4 (1963). An injured worker brought suit against his employer under the Jones Act, a federal act applicable only to seamen but otherwise a mirror image of the FELA.

The employer’s defense was that the employee was not a seaman, who would have been covered by the act, but an offshore drilling employee, who was explicitly not covered by the act. The employer’s evidence of non-coverage was the fact that the injured employee “had accepted compensation benefits under the Longshoremen’s and Harbor Workers’ Compensation Act,” an act that was explicitly inapplicable to seamen. 375 U.S. at 34-35 , 84 S.Ct. 1 . The employee, the employer’s argument ran, apparently considered himself, if he were being honest, as something other than a seaman. The evidence, therefore, was unquestionably relevant to help prove that the employee was not a seaman and was not eligible for coverage under the Jones Act.

The United States Court of Appeals for the Fifth Circuit agreed with the employee, however, and ruled that the trial court’s admission of the evidence as to the receiving of compensation benefits ³³¹ was error, but it further found that the error was harmless. 315 F.2d 660 . The Supreme Court noted: The Court of Appeals for the Fifth Circuit unanimously held it error to have admitted the evidence of other compensation benefits but, with one judge dissenting, found the error harmless. 375 U.S. at 35 , 84 S.Ct. 1 . The Supreme Court agreed with the Fifth Circuit that the admission into evidence of the fact that the employee was receiving compensation benefits was error, but it reversed the Fifth Circuit’s conclusion that the error was harmless. We do not agree that on the record in this case the error may be regarded as harmless.

There can be no doubt that the evidence of other benefits was pressed upon the jury. Throughout the trial respondent’s counsel emphasized that the petitioner “has a remedy under a federal compensation act, and in fact received benefits in the form of weekly payments under that act ....” 375 U.S. at 35 , 84 S.Ct. 1 (emphasis supplied). Although the direct concern in the Tipton case had been with liability rather than with damages, of broader import was the Supreme Court’s recognition that a jury can readily misuse evidence of collateral benefits. Eichel v. New York Central Railroad Co., 375 U.S. 253 , 84 S.Ct. 316 , 11 L.Ed.2d 307 (1963), followed Tipton within less than two months and recognized what Tipton had presaged: We have recently had occasion to be reminded that evidence of collateral benefits is readily subject to misuse by a jury.

Tipton v. Socony Mobil Oil Co., Inc. It has long been recognized that evidence showing that the defendant is insured creates a substantial likelihood of misuse. Similarly, we must recognize that the petitioner’s receipt of collateral social insurance benefits involves a substantial likelihood of prejudicial impact. 375 U.S. at 255, 84 S.Ct. 316 (emphasis supplied). Eichel was a FELA case. The injured employee had been working for the New York Central Railroad for 40 years when ³³² he suffered a permanently disabling injury allegedly as a result of the railroad’s negligence.

The jury found in his favor and awarded damages in the amount of $51,000. In an effort to show that the employee was malingering and that the injury was not permanent, the railroad offered evidence that the employee was receiving “disability pension payments under the Railroad Retirement Act.” The evidence was for the express “purpose of impeaching the testimony of [the employee] as to his motive for not returning to work and as to the permanency of his injuries.” 375 U.S. at 254, 84 S.Ct. 316 . The trial judge excluded the evidence pursuant to the collateral source rule. The Court of Appeals for the Second Circuit, however, reversed the trial court and held that it had been “prejudicial error to exclude the evidence of the disability pension.” 319 F.2d 12 .

The Supreme Court, in turn, reversed the Second Circuit. In Eickel, as in the case now before us, the source of the collateral benefits was the Railroad Retirement Act of 1937, now codified as 45 U.S.C. § 231a(a)-(b). The Supreme Court made it clear that benefits received under the Railroad Retirement Act are benefits received from a collateral source and not benefits received from the defendant railroad per se. The Supreme Court, 375 U.S. at 254, 84 S.Ct. 316 , quoted with approval from New York, New Haven and Hartford Railroad Co. v. Leary, 204 F.2d 461, 468 (1953): “The Railroad Retirement Act is substantially a Social Security Act for employees of common carriers ....

The benefits received under such a system of social legislation are not directly attributable to the contributions of the employer, so they cannot be considered in mitigation of the damages caused by the employer.” (Emphasis supplied). The use the defendant railroad sought to make of the disability pension benefits in Eichel was closely analogous to the use Norfolk Southern sought to make of the future pension benefits in this case. The New York Central was trying to show that the injured employee in that case had a ³³³ motive not to go back to work because he was then collecting disability pension benefits. Norfolk Southern was trying to show that Tiller would have had a motive for not continuing to work past age 60 because he could then have been collecting retirement pension benefits.

In each case, the motive not to work because of benefits as an alternative to work was the same. We do not see the difference in the tenses as compelling a different result. The Supreme Court summarized the defendant railroad’s argument in Eichel : Respondent argues that the evidence of the disability payments, although concededly inadmissible to offset or mitigate damages, is admissible as bearing on the extent and duration of the disability suffered by petitioner. At trial counsel for respondent argued that the pension would show “a motive for [petitioner’s] not continuing work, and for his deciding not to continue going back to work after the last accident.” 375 U.S. at 254-55, 84 S.Ct. 316 (emphasis supplied).

What in that case was offered as “bearing on the extent and duration of the disability” was in this case offered as bearing on the extent and duration of the work-life expectancy. The Second Circuit had been persuaded by New York Central’s argument that the probative value of the collateral benefits outweighed the potential misuse of the evidence. The Supreme Court summarized what the Second Circuit had concluded: On the basis of this argument the Court of Appeals concluded that the disputed evidence should have been admitted because: “Its substantial probative value cannot reasonably be said to be outweighed by the risk that it will ... create substantial danger of undue prejudice through being considered by the jury for the incompetent purpose of a set-off against lost earnings. Id. at 255 , 84 S.Ct. 316 .

The Supreme Court, however, reached a diametrically different conclusion. ³³⁴ We disagree. In our view the likelihood of misuse by the jury clearly