Thursday, November 29, 2012

2d Circuit affirms $48 million personal injury verdict

In this horrible case involving an American Airlines employee who was rendered a quadriplegic while riding on a baggage tractor that went awry, the jury awarded the plaintiff over $48 million in damages. The case raises a strange issue of how to assess whether the damages are too high under state law.

The case is Saladino v. American Airlines, Inc., a summary order decided on October 17. In federal cases involving state-law negligence, the defendant will argue that the damages are excessive, that is, they deviate materially from what would be reasonable compensation. That's the standard under CPLR sec. 5501(c). Defendants' counsel argued that the appropriate damages amount should be $5 million for past pain and suffering and $10,000 for future pain and suffering. The Court of Appeals (Newman, Lynch and Lohier) disagrees and upholds the $48 million.

In assessing whether the damages are too high, the federal court will decide the case as the New York State Appellate Division would. Since there are four regional Appellate Divisions in New York, the federal courts have a lot of case law to choose from. What makes this case unusual is defendants' argument: the federal court could only look at cases from the Appellate Division Second Department (which sits in Brooklyn and covers Long Island, parts of New York City and the suburban counties in upstate New York). I am sure that defendants cited some cases from the Second Department that low-balled serious pain and suffering cases. God knows where defendants came up with this argument, but the Court of Appeals rejects it out of hand, emphasizing that courts should take the case law where they can find it in trying to assess high damages awards:

defendants argue that the district court was legally required to examine only cases arising in the Second Department. But they have failed to point us to any binding authority for this proposition. Given the paucity of cases factually similar to Saladino’s, and in the absence of any evidence that community standards differ between, for example, Manhattan and Queens, we believe it would be odd for a federal court to disregard potentially informative cases arising in other parts of the state. Similarly, although it is true that awards affirmed by the Appellate Division are the most important to a federal court’s § 5501(c) analysis, that does not mean that unappealed state trial court verdicts or federal court verdicts are irrelevant. Thus, the district court did not err by examining federal cases, state appellate cases from outside the Second Department, or a state trial court decision.

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