Originally published by: New York Law Journal
By: Michael Hoenig
In a bombshell decision issued on July 30, Eastern District of New York U.S. Judge Jack B. Weinstein held that it is unconstitutional to use ethnicity-based statistics to calculate future economic loss in a tort case. In G.M.M. v. Kimpson
,1 an infant lead poisoning claim against a defendant landlord that resulted in a two-week trial and a plaintiff's verdict of about $2 million, the judge ruled that the testimony of three economics experts (two for the plaintiff and one for defendant) could not rely on assumptions based on ethnicity—in this case the fact that the infant was Hispanic. The July 30 Memorandum and Order copiously explained the trial ruling and the reasons why such testimony is unconstitutional. Judge Weinstein found that use of "ethnicity-based statistics" to obtain a reduced damage award in calculating future economic loss violates due process and equal protection.
Weinstein's decision could have profound impact on economic loss evidence in cases where consulting or testifying economists rely on assumptions and statistics based, in part, on ethnicity factors. For example, in personal injury cases involving youngsters, impairment of future earnings and earning capacity are often contested issues. Proverbially and exaggeratedly speaking, just to make a point, plaintiffs' lawyers might like to posit that a 5-year-old claimant, were she not injured, would have become a neurosurgeon. The defense, however, might like to show that, based on ethnicity and economic strata data, the child likely would not have gone beyond a high school education, which translates into a lower range of earnings into the future.
This kind of debate, fortified by assumptions, statistics, trends, graphs and historical data, is subject matter routinely and typically reflected in a battle among experts. The economic loss damages in a given case can be significant. If a youngster could be projected out to graduating from university into high-paying professions, then a future worklife expectancy into the child's 60s or 70s can support a high damage award. On the other hand, if the infant plaintiff is likely to engage in lower-paying work, then the economic loss projected forward for five decades or so justifies only a lower award. Weinstein's ruling and rationales affect the permissible assumptions and statistical bases that expert economists can use and, therefore, perhaps also the quality of their testimony as well as the loss figures in their bottom-line opinions.
The Kimpson decision is lengthy and, as often in Judge Weinstein's pivotal opinions, is lucidly erudite, chock-full of facts, statistics and data. Although infant tort claims are a natural arena in which the decision's influence will be felt, that's not the only area of potential impact. Economic loss issues affect adults in tort cases. Such questions can also arise in non-personal injury settings as well. Thus, especially if followed by other judges, the Kimpson ruling is something litigators need to review right away. They need to infuse its lessons into their trial evidence checklists when dealing with economist experts.
Then, there is the question of what Kimpson's
effect will or should be with respect to cases not yet tried but scheduled for trial soon in which the parties have hired experts, issued expert reports, exchanged experts' depositions, filed pretrial orders and, in effect, are "ready to go." Do these cases now warrant a revisit by the affected counsel and the filing of possible motions to preclude, curtail or modify evidence? Should applications for trial postponements be made or allowed to accommodate Judge Weinstein's declaration of widespread constitutional effects?
Then there is the question of cases already tried to verdict yet still alive in the post-verdict pipeline, for example, where post-trial motions are pending. If the problem is one of constitutional dimensions and the verdict was based on evidence or economic testimony laced with unconstitutional ethnicity-based assumptions or data, should that issue now be considered at this stage? Does it matter if the issue was not preserved?
After all, Judge Weinstein acted on his own motion. Should other judges follow suit? And, how about cases on appeal? If the evidence was unconstitutionally infirm, is that a question that has some effect for the pending appeal? Perhaps the issue was waived, if the "prejudiced" party did not preserve the question by objection, motion or application. Or, does Weinstein's conclusion have prospective effect only? Such thorny but practical questions warrant thoughtful consideration by counsel since, again, Kimpson
has overt constitutional implications.
Let's briefly highlight select aspects of Judge Weinstein's lengthy opinion. A mother sued on behalf of herself and her child claiming injury to the infant's central nervous system caused by absorption of lead dust. Defendant was the owner and lessor of the apartment the plaintiffs lived in during the child's gestation, birth and first year of life. The jury found the apartment contained lead-based paint that had not been properly removed or encapsulated. The jury returned a verdict of $2 million in favor of plaintiffs.
At trial the child was less than 4 years old. A critical factor in determining damages required ascertaining the infant's prospects for obtaining post-secondary education degrees had he not suffered from lead poisoning. In contesting damages, defendant's attorney attempted to show, through expert economic testimony, statistics and cross-examination of plaintiffs' experts, that because the child was "Hispanic," the likelihood of obtaining a bachelor's, master's or doctoral degree, and any corresponding elevated income, was improbable.
Judge Weinstein observed that the child's father has a baccalaureate degree, the mother has a Master of Fine Arts. Both held "responsible income-generating jobs." The family was "stable," and the parents were "caring." Based upon "his specific family background, had the child not been injured, there was a high probability of superior educational attainment and corresponding high earnings." Treated by experts as a "Hispanic," however, his potential, based on the education and income of "average 'Hispanics' in the United States," was "relatively low."2
At trial, the court ruled that, for the purposes of projecting damages, the "specific characteristics of the child and his family," rather than the characterization of the child as a member of a particular ethnic group, "must be used" in determining damages. This ruling was based on the same constitutional and other factors relied upon in a 2008 decision, McMillan v. City of New York
,3 which held that statistical evidence, used to prove that a spinal cord-injured "African-American" was likely to survive for fewer years than occidental persons with similar injuries, "violated the equal protection and due process clauses" of the U.S. Constitution, and "was inadmissible in computing life expectancy and damages."4
Judge Weinstein posed the question and answer this way: "[C]an statistics based on the ethnicity (in this case 'Hispanic') of a child be relied upon to find a reduced likelihood of his obtaining a higher education, resulting in reduced damages in a tort case? The answer is no."5
During trial, testimony regarding the future economic prospects of the child, had he not been poisoned with lead, were discussed by three experts: Dr. Kenneth W. Reagles, plaintiffs' forensic rehabilitation expert; Dr. Frank Tinari, plaintiffs' forensic economist, and Dr. Bernard F. Lentz, defendant's forensic economist. Dr. Reagles noted the general "Hispanic" background of the boy, but placed primary reliance on the parents' specific backgrounds.6
On cross-examination, defense counsel emphasized the "low general educational backgrounds of the ethnic group he characterized as 'Hispanics'." After a series of questions and answers along this line, the court precluded an answer "on its own motion" and "exclud[ed] ethnicity as a factor in damages computations." The court then asked Dr. Reagles whether his testimony would be changed if the undifferentiated statistics with respect to "Hispanics" would be struck, to which the expert responded, "Not materially and substantially at all."7
The court explained outside the presence of the jury that it was basing its decision on the McMillan ruling regarding race sociology and statistics. Neither party objected to the ruling. Before plaintiffs' separate economic expert, Dr. Tinari, took the stand, the court reminded the jury of its earlier ruling and instructed: "[y]ou cannot say that, for example, Hispanics generally go to college less than others and therefore use that statistic or that analysis or that chart." Dr. Tinari was told to adhere in his testimony to that instruction. Dr. Tinari projected the child's future economic losses to be between $2.5 and 4 million.8
Defense expert economist, Dr. Lentz, found that because the child-plaintiff was "Hispanic," his "future economic loss of earnings was lower than that projected by plaintiffs' forensic economist." The court told Dr. Lentz about his ruling of unconstitutionality and instructed: "So all of your answers should be based on individual characteristics and not the general characteristics of a group, ethnic group. Is that clear to you?" Dr. Lentz responded: "I believe so, sir."9 Taking the court's ruling into consideration, the defense expert ultimately projected that if the child obtained a baccalaureate degree, his total future economic loss would be some $2.5 million. If he obtained only a high school diploma, the loss was projected as less than $1.4 million.10
In his Kimpson decision, Judge Weinstein explained at length the McMillan precedent11 and the unconstitutionality of "race" as a criterion for assessing damages (including the "equal protection" and "due process" principles).12 Tracing and discussing a number of scholarly sources, Weinstein said that "[e]thnicity, like race, as discussed in McMillan
, is a fictitious, changing, and unreliable social construct."13 It is "unconstitutional in a tort trial to premise projected societal and educational achievements on race or ethnicity to reduce tort damages." Indeed, the "state itself discriminates by enforcing a substantive rule of discrimination—damages—based on race or ethnicity in reducing damages in tort cases. Such an illegal standard cannot be enforced by the courts."14 Judge Weinstein hinted that the problem may extend to "gender worklife expectancy tables" but the court did not have to confront that issue in this case.15 Counsel and readers: Be alert to this gender evidence issue on the horizon!
There's more, lots more and, so, only a careful reading of this studious opinion will uncover the potential to affect what presently constitutes the gigantic status quo of statistically based economic assumptions and expert opinions. Weinstein admonished that use of "ethnicity-based statistics" to obtain a reduced damage award in calculating future economic loss "is unconstitutional." It violates due process "because it creates arbitrary and irrational state action, and equal protection, because it subjects the claimant to a 'disadvantageous estimate' of damages 'solely on the basis' of ethnic classification."16
"Propelling race and ethnicity to the forefront of predictions about an individual's future achievement ignores the myriad factors affecting an individual's capacity to fulfill his or her potential."17 And here's another land mine of sorts for trial counsel to ponder: there may be times when the use of Federal Evidence Rule 403 to exclude "racially-, ethnically- and gender-based tables," even when they have probative force and are therefore relevant, is justified.18
Judge Weinstein's erudite opinion has some explosive potential to alter the quality, quantity and content of expert opinions regarding future economic loss as well as the tables, statistics, charts and data upon which experts rely—to the extent that they employ race-, ethnicity- or gender-based conclusions and assumptions. Counsel certainly have some interesting work ahead of them in order to keep pace. The bench and bar generally have some homework too. So do economic experts.
1. 2015 U.S. Dist. LEXIS 99715 (E.D.N.Y. July 30, 2013).
2. Id. LEXIS at *2-*3.
3. 253 F.R.D. 247 (E.D.N.Y. 2008).
, supra n. 1, LEXIS at *3.
5. Id. LEXIS at *2.
6. Id. LEXIS at *8-*16.
7. Id. LEXIS at *15-*16.
8. Id. LEXIS at *17.
9. Id. LEXIS at *19.
11. Id. LEXIS at *20-*31.
12. Id. LEXIS at *31-*32.
13. Id. LEXIS at *50-*51.
14. Id. LEXIS at *53.
15. Id. LEXIS at *54.
16. Id. LEXIS at *63.
17. Id. LEXIS at *64.
18. Id. LEXIS at *78.