Free Motion in Limine - District Court of Colorado - Colorado

Case 1:04-cv-00560-OES-BNB

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 04-cv-00560-OES-BNB

GEORGE M. BULL, Plaintiff, v. UNION PACIFIC RAILROAD COMPANY, a Delaware corporation, Defendant.

DEFENDANT UNION PACIFIC'S MOTION IN LIMINE RE ADMISSIBILITY OF PLAINTIFF'S RAILROAD RETIREMENT DISABILITY PENSION

Plaintiff has applied for and is receiving his Railroad Retirement Administration (RRA) occupational disability pension. It will be Plaintiff's position that this disability pension is a collateral source and thus not admissible. In this motion Defendant will demonstrate to the Court why the prior case law on this issue should not be followed where the extent of Plaintiff's efforts to mitigate his damages is seriously disputed. In such a case the jury is entitled to have all of the evidence that would bear upon their determination of the extent of Plaintiff's injury and his compliance with his duty to mitigate. I. The collateral source rule does not necessarily preclude evidence of an FELA plaintiff's receipt of Railroad Retirement Board benefits. A. Eichel has been misapplied for over forty-two years.

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Forty-two years ago, in Eichel v. New York Central R.R. 375, U.S. 253 (1963), a case brought under FELA, the U.S. Supreme Court as dicta simply acknowledged that the defendant railroad had not asserted that it should be permitted to introduce evidence that the plaintiff was receiving RRA disability benefits in order to mitigate the damages for which the defendant might be liable. In ensuing years "[c]ourts have

consistently interpreted Eichel to preclude admission of evidence of collateral benefits whether such evidence is presented during the liability or damages phase of the trial." Sheehy v. Southern Pac. Transp. Co., 631 F.2d 649, 651-52 (9th Cir. 1980). As a result, millions of dollars in windfall has accrued to FELA plaintiffs at the expense of the nation's railroads. Eichel typically is interpreted as a containing a per se rule of inadmissibility of what is often a relevant and probative piece of evidence in FELA cases, i.e., that the plaintiff is already receiving, and will continue to receive a substantial payment directly related to the disability for which plaintiff is seeking compensation from the railroad. Courts have accepted as gospel the notion that the prejudicial effect of such evidence always outweighs its probative value. B. Railroad disability benefits should not be categorized as a collateral source.

The rationale behind the collateral source rule does not apply with respect to RRA occupational disability benefits. In Green v. Denver & Rio Grande Western R.R., 59 F.3d 1029 (10th Cir. 1995) the court summarized the purpose and rationale for the collateral source rule:

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The collateral source rule allows a plaintiff to seek full recovery from a tortfeasor even where an independent source has compensated the plaintiff in full or in part for the loss. The rationale for the rule is twofold: First, public policy favors giving the plaintiff a double recovery rather than allowing a wrongdoer to enjoy reduced liability simply because the plaintiff received compensation from an independent source (emphasis supplied) FDIC V. United Pac. Ins. Co., (10th Cir. 1994). Second, by assuring a plaintiff's payments from a collateral source will not be reduced by a subsequent judgment, the rule encourages the maintenance of insurance. Quinones v. Pennsylvania Gen. Ins. Co., 804 F.2d 1167, 171 (10th Cir. 1986). 59 F.2d at 1032. "However, where the defendant has been the source of the payment, the damages, generally, cannot include the benefit conferred by the defendant." Feely v. United States, 337 F.2d 924, 927 (3rd Cir. 1964). Although "the collateral source rule . . . bars a tortfeasor from reducing the quantum of damages owed to a plaintiff by the amount of recovery the plaintiff received from other sources of compensation that are independent of (or collateral to) the tortfeasor," Davis v. Odeco, Inc., 18 F.3d 1237, 1243 (5th Cir. 1994), "[p]roperly interpreted [it] also prevents tortfeasors from paying twice for the same injury B a result that would achieve both overdeterrence and overcompensation." Id. at 1243, n.21. See also Phillips v. Western Co. of N. Am., 953 F.2d 923, 931 (5th Cir. 1992) It is clear that only where the plaintiff receives payment from a source independent from the defendant is it appropriate to permit a double recovery, and consequently to exclude evidence of the collateral payment. However, the premise that RRA occupational disability benefits are independent of the railroad employer does not withstand scrutiny of the program under which those benefits are administered. Occupational disability benefits are part of the Railroad Retirement System, and while they are administered and paid by a government agency, they are funded, in part, by railroad employers. C. Argument Because occupational disability benefits received under the RRA are not independent of, but are funded in part through contributions made by the plaintiff's employer, the primary rationale for the collateral source rule is not applicable. 3

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Moreover, because RRA disability benefit payments are not the result of individual decisions to procure insurance against disability, there is no concern that permitting an offset will reduce a railroad employee's motivation to maintain insurance. It is difficult, therefore, to see why introducing evidence of payments received by plaintiff from a federally mandated program would prejudice FELA plaintiffs, unless it is their contention that it is prejudicial to present facts that would cause juries to avoid awarding damages for non-existent wage losses. There is no justification for deviating from the principles of compensation recognized by numerous courts and state legislatures simply to maintain a special, expensive collateral source rule for the benefit of FELA plaintiffs. Like the Plaintiff in this case, numerous railroad employees who have received awards under FELA also collect monthly RRA disability payments. Although Congress has chosen to confer on railroad employees unique and favored treatment under both FELA and the Railroad Retirement System, and only Congress can change that status, neither law nor public policy requires either that (1) a railroad employee be compensated twice for the same injury, or (2) railroad employers pay twice for that injury. Even if the jury takes into account receipt of RRA disability benefits, at worse the plaintiff-employee would still receive his or her full wage loss through a combination of the disability benefits received and the damages awarded for lost earnings from the defendant (and would also be entitled to any non-economic damages proven). So long as the employee receives the equivalent of his full wage loss, he or she is being made

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whole, which of course, is the purpose of the FELA. Michigan Central R.R. v. Vreeland, 227 U.S. 59, 70 (1913). The FELA does not contemplate that the Plaintiff receive any more than the full actual loss suffered as a consequence of the injury. In Norfold & Western Ry. v. Liepelt, 444 U.S. 490 (1980), the Supreme Court held that a trial court may not preclude a railroad from introducing evidence of the income taxes payable on the plaintiff's past and future wages. Such evidence would tend to decrease the amount of damages for which the railroad would be liable to the injured employee (from gross pay to net pay). Nonetheless, even though it may serve to reduce the plaintiff's damages, such evidence is appropriate because the goal of the FELA is to replace only what the injured party has lost. Id. at 496, n.10. Re-examination of Eichel would be consistent with the principles announced in Liepelt. The Plaintiff in this case will reap a windfall if evidence of RRA benefits is excluded and the Defendant may be victimized by having to pay Plaintiff's lost earnings while plaintiff is receiving substantial RRA benefits. The Defendant respectfully urges the court to reject the institutionalized insanity of Eichel and permit it to introduce evidence concerning the Plaintiff's receipt of RRA disability benefits. D. Exceptions to Eichel Eichel v. New York Central Railroad Co., 375 U.S. 253, 11 L. Ed.2d 307 (1963) does not automatically preclude evidence of an FELA's plaintiff's receipt of collateral benefits. In McGrath v. Consolidated Rail Corp., 136 F.3d 838, 841 (1st Cir. 1998) the court found that the collateral source (Railroad Retirement

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Administration "RRA" disability) payments received by the FELA plaintiff were relevant and probative on the issue of whether the plaintiff was "malingering," and a limiting instruction cured any possible prejudice to the plaintiff. The receipt of disability benefits has been admitted in several FELA cases utilizing this analysis. In Gladden v. P. Henderson & Co., 385 F.2d 480 (3rd Cir. 1967), the plaintiff placed his financial viability at issue. The court held that evidence of the plaintiff's receipt of financial assistance was properly admitted as the defendant was not required to leave that testimony unchallenged. The court distinguished Eichel, finding that the plaintiff in Eichel had not affirmatively placed the issue before the court. In Lange v. Missouri Pacific Railroad Co., 703 F.2d 322 (8th Cir. 1983), the court allowed evidence of collateral source payments received by a railroad employee to rebut his claim that he had to return to work immediately after his surgery because he had no income. The court found it was necessary to admit the evidence to protect the right of cross-examination, a fundamental tenant of the adversary system. See also Moses v. Union Pacific Railroad, 64 F.3d 413 (8th Cir. 1995) (Where plaintiff's case makes the existence of collateral sources probative, proof thereof may be allowed); Simmons v. Hoegh Lines, 784 F.2d 1234 (5th Cir. 1986) (Collateral sources may be admitted for proving another matter if there is a limiting instruction and little likelihood of prejudice); Adams v. Burlington Northern Railroad Co., 865 S.W.2d 748 (Mo. App. 1993) (Collateral source payments were admissible where plaintiff raises the issue). It is also error for Plaintiff to argue that the railroad abandoned him without financial assistance when he

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was in fact receiving disability benefits. Tucker v. Kansas City Southern Railway Co., 765 S.W.2d 308 (Mo. App. 1989). Railroad Retirement Administration disability benefits may also be admissible if Plaintiff or his economist, Jerome Sherman, Ph.D., fails to deduct Railroad Retirement taxes from his gross wages when computing damages, or by claiming the loss of such tax payments as a lost fringe benefit. Jones & Laughlin Steel Corp. v. Pfeifer, 462 U.S. 523, 103 S.Ct. 2541, 76 L.Ed.2d 768 (1983). Pursuant to Jones & Laughlin Steel Corp. v. Pfeifer, Plaintiff's future loss of income should be based on net wage loss. Accordingly, Plaintiff, or his economist, must deduct the Plaintiff's Railroad Retirement taxes to determine net loss, particularly where Plaintiff, as here, is receiving or has received the disability benefits. Id. Failure to make the deduction would be contrary to Jones & Laughlin, supra. Plaintiff cannot be permitted to claim the Railroad Retirement tax payments as a loss or fail to deduct them from his gross loss, while at the same time he is receiving a RRA annuity. Should Plaintiff attempt to recover these damages, Defendants must be permitted to introduce evidence of Plaintiff's receipt of the RRA annuity. DATED this 8th day of September, 2005. Respectfully submitted,

_s/Mark C. Hansen_______ MARK C. HANSEN Union Pacific Railroad Company 1331 17TH Street, Suite 406 Denver, CO 80202 (303) 964-4583 FAX: (303) 964-4585 7

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CERTIFICATE OF SERVICE I hereby certify that on this 8th day of September, 2005, I electronically filed the foregoing with the Clerk of the Court using the CM/ECF system which will send notification of such filing to the following e-mail addresses: [email protected] Sabina Y. Chung, Esq. Jack D. Robinson, Esq. SPIES, POWERS & ROBINSON, P.C. 1660 Lincoln Street, Suite 2220 Denver, CO 80264 Fredric A. Bremseth, Esq. Thomas W. Geng, Esq. BREMSETH LAW FIRM 810 East Lake Street Wayzata, MN 55391

[email protected]

I certify that there are no non CM/ECF participants in this case.

_s/Mark C. Hansen_______ MARK C. HANSEN Union Pacific Railroad Company 1331 17TH Street, Suite 406 Denver, CO 80202 [email protected]

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