Features
How
to protect damages in federal tort cases
Michael E. J.
Archuleta and Laurie M. Higginbotham
Safeguard your
clients' awards by knowing the pitfalls of Federal Tort Claims Act
litigation.
The Federal
Tort Claims Act (FTCA) waives sovereign immunity and provides
a judicial remedy to those who have been injured by U.S. government
employees' negligence.1 In many cases, the damages recoverable from
the federal government are effectively the same as those available
from a private defendant. But litigating claims under the FTCA poses
many legal challenges.
The
basic standard of liability imposed by the FTCA on the federal government
is that which local law imposes on a similarly situated private individual.2
The act allows for actual damages to compensate the claimant for the
loss, injury, or grievance. The law of the state where the misconduct
occurred governs the substantive tort liability in FTCA cases; similarly,
"the components and measure of damages in FTCA cases are taken from
the law of the state where the tort occurred."3 Only the law of the
place of misconduct controls; not the law of the forum state or the
state where the injury occurred.4
The
act places no caps on compensatory damages. Since the FTCA adopts
the substantive law of the index state, in some states, caps or limitations
on damages may apply to FTCA cases.5 Additionally, postjudgment interest
and costs are recoverable "as provided for by law."6
The
FTCA does impose some limits on damages. Punitive damages are not
recoverable, and prejudgment interest is not available under the act.
Attorney fees are capped at 25 percent for litigated claims and 20
percent for settled administrative claims.
Filing
an administrative claim
Before
filing a complaint in federal court, the plaintiff must file an administrative
claim (Form 95) with the head of the federal agency involved. This
claim notice is a prerequisite to suit; no suit may be filed until
the agency has denied it. An agency's failure to settle the administrative
claim within six months can be considered a denial, and the claimant
can file suit at that point.7 If the agency has not yet denied the
claim after six months, a plaintiff is not required to file suit.
Instead, he or she can use this indefinite holding period to allow,
for example, a minor child to mature so as to reveal the extent of
dam ages more accurately.
Avoid
underestimating damages when filing the administrative claim notice.
Under §2675(b) of the act, after the claim is denied, a plaintiff
cannot file suit for more than the damages claimed administratively
unless newly discovered evidence or related, intervening facts are
presented. This notice requirement "en sure[s] that '[t]he government
will at all relevant times be aware of its maximum possible exposure
to liability and will be in a position to make intelligent settlement
decisions.'"8
When
in doubt, think big. You will file the administrative claim before
conducting discovery or, probably, fully developing all the experts.
The claimant has the burden of proving either intervening facts or
newly discovered evidence.9
Increasing
the damages
Circuit
courts have disagreed about when the claimant is entitled to recover
damages in excess of the amount sought in the administrative claim.
Eleventh
Circuit. In Cole v. United States, this court affirmed
that "a reasonably based change in expectation as to the severity
and permanence of an injury is newly discovered evidence within the
meaning of §2675(b)."10
When
the plaintiff in Cole initially filed his administrative claim,
he was told by doctors that he would eventually be able to return
to work.11 Nearly two years after his administrative filing, he learned
for the first time that he suffered from a permanent condition, thrombophlebitis,
and would never be able to go back to his job.12 The Eleventh Circuit
upheld the district court award in excess of his administrative claim,
noting that a "plaintiff should not be charged with knowing what the
doctors could not tell him."13
First
and Fifth circuits. Other circuits have strictly construed the
requirements of §2675(b), including the First Circuit in Reilly
v. United States14 and the Fifth Circuit in Low v. United States.15
In
Reilly, an infant sustained catastrophic injuries at birth
due to medical negligence. Her parents filed an administrative claim
on her behalf for $10 million. After the claim was not settled, they
sued. At trial, the district court granted the plaintiffs' request
for damages in excess of the administrative claim, finding that only
after the FTCA claim notice was filed was it medically possible to
know the extent of the daughter's injuries.16
The
First Circuit reversed, holding that "the fact that the degree of
disability was uncertain was, in and of itself, inadequate to trigger
the exception to §2675(b)." Despite the "worst-case scenario"
diagnosis, the parents were barred from increasing their claim because
they had been put on "fair notice" of that possibility.17
The
Fifth Circuit reached a similar conclusion in Low. In this
birth injury case, the parents filed the administrative claim when
their child was two years old, though they could not determine the
extent of his injury until he was four or five.18 The Fifth Circuit
held that because the parents knew the "worst-case prognosis" when
they filed the claim notice, the new evidence presented at trial went
to "the precision with which the severity of the condition could be
known."19 There was no evidence that the child's condition had worsened,
the court said.
Although
the circuits are divided, it is best to assume a worst-case scenario
in any jurisdiction to protect the judgment down the line. Remember
to file a separate administrative claim for each parent and child
involved. Also, if state law holds parents responsible for a child's
medical care to age 18, include the child's projected medical expenses
to that age in the parents' administrative claims.
Surviving
appeal
You
have secured a judgment for your client—but before you open the
champagne, it is critical to understand how to protect the judgment
on appeal. A district court's award of damages is a finding of fact,
which is reviewed under the "clearly erroneous" standard.20 District
courts enjoy "wide discretion" in awarding damages, and a district
court's award should be reduced only if it is so large as to "shock
the judicial conscience," "so gross or inordinately large as to be
contrary to right reason," "so exaggerated as to indicate bias, passion,
prejudice, corruption, or other improper motive," or "clearly exceeding
that amount that any reasonable man could feel the claimant
is entitled to."21
In
response to what some federal courts consider a growing trend toward
excessive verdicts, many appellate courts have become increasingly
willing to reduce damages awards on remittitur. Several circuit courts
employ a "maximum recovery rule" in reviewing damages awards.22 Although
its application varies from circuit to circuit, the maximum recovery
rule is intended "to bring rough consistency into comparable damages
awards."23 Courts evaluate the reasonableness of a particular award
by comparing it to awards in "similar" cases.24
No
two cases are exactly alike, and therein lies the problem with the
maximum recovery rule. This judge-made rule threatens to cripple noneconomic
awards to plaintiffs and minimize the fact finder's power.
The
rule was the cornerstone of the federal government's appeal of Lebron
v. United States, a case recently decided in the Fifth Circuit.25
Lebron involved obstetrical and nursing negligence, which caused
permanent, severe brain injury to a child at a military hospital in
Texas. The government admitted liability at trial.
On
appeal, the government never claimed that the evidence did not support
the damages awarded; instead, it merely brandished smaller verdicts
within the jurisdiction and argued that the application of the maximum
recovery rule required remittitur. The Lebron verdict was not
the result of a runaway jury or punitive damages, yet the judgment
was reduced arbitrarily at the government's request.
The
Fifth Circuit's maximum recovery rule seems straightforward at first.
It applies only when an award exceeds 133 percent of the highest previous
recovery in the state, and it affects only noneconomic damages awards.26
Under the rule, the court compares the judgment to other awards in
factually similar cases in the same state.27 Yet the rule leaves awards
vulnerable to arbitrary reduction because it lacks any real guidelines.
The trouble begins with defining "factually similar case." The rule
does not contain any working definition of the term.
Further,
Lebron created a new hurdle for plaintiffs. For the first time,
the court specifically stated that only reported decisions can be
used as benchmarks for comparison under the rule.28 This further reduces
the verdicts that plaintiffs can cite to support their claims.
Although
the Fifth Circuit intended an "objective" case comparison, the government
typically takes advantage of the rule's vague terminology on appeal
by demanding that the plaintiffs present "factually similar cases."
The government then attempts to distinguish the facts of any high-verdict
cases that could support the award, which is not difficult, given
the lack of structure to this analysis. For example, in a case involving
a brain-injured child, does "factually similar" require a case with
another brain-injured child, or can it involve an adult? The stricter
the interpretation of the factual requirement, the more inoperable
the rule becomes.
In
some jurisdictions, the highest award in a factually similar reported
case may be over a decade old, yet the maximum recovery rule makes
no provision for the present value of money damages.
Other
difficulties arise when applying the rule. For instance, although
jury verdicts serve as the basis of comparison under the rule, juries
do not make a finding of life expectancy in brain injury cases, even
though that number significantly affects noneconomic damages.
Also,
what dollar figures should courts use? Should they compare mental
anguish damages line by line? Or should they weigh the total amount
of intangible damages? Even a specific category of damages such as
mental anguish or loss of consortium can be narrowed to the point
of futility. For example, must the court always compare loss of consortium
of an adult child to that of another adult child, or can a minor child's
award provide a frame of reference? An aggregate award to several
plaintiffs may indicate what a jury is willing to award, but is it
necessary to use only individual awards for comparison?
The
rule also leaves some procedural questions unanswered. Trial lawyers
should anticipate the government's attempt to strictly define "factually
similar" and make a record in the trial court to protect the judgment
on appeal. Many federal district court judges prefer that counsel
refer to the amount of damages other courts have awarded in similar
cases.29 But if the government does not challenge the verdict amount
in a motion for new trial or a motion to amend the judgment—as
it failed to do in Lebron—how does a plaintiff lawyer
introduce verdicts to inform the trial court of the range of damages
previously awarded? When in the trial process should the information
be offered, and how should the evidence be introduced?
Finally,
reviewing a claim for excessive damages is not an exact science. On
the contrary, the Fifth Circuit admits, it is "inherently subjective,
involving the interplay of experience, emotions, and calculation"
of the justices.30 Plaintiffs' noneconomic damages are ultimately
in the hands of appellate court judges, who must glean from a cold
record the depth and complexity of damages like physical pain and
mental anguish. Without hearing the honest urgency of witnesses, seeing
the pain in a victim's eyes, or watching a brain-injured child struggle
to enter the courtroom, a higher court is ill-equipped to second-guess
a trial court's finding of noneconomic damages.
To
artificially cap damages when they are otherwise supported by evidence
is inherently unjust. Moreover, it significantly diminishes the power
of the fact finder without any legal justification.
The
Fifth Circuit's maximum recovery rule is an attempt to provide some
consistency and structure to the broad federal power of remittitur
for allegedly excessive verdicts. But it fails to achieve its original
purpose: consistent, reliable verdicts and, ultimately, justice for
injured people. For now, plaintiff attorneys will have to keep searching
for the elusive "factually similar case" to sustain the awards intended
to make their clients whole.
Overcoming
hurdles
The
Federal Tort Claims Act is the most comprehensive remedy available
against the federal government for torts by federal employees. It
basically equates the United States to an individual for purposes
of liability. Under the act, the government can be sued without any
federal limit on actual or compensatory damages.
But
there are unique procedures and hurdles to overcome when litigating
an FTCA case. From the outset, anticipate government challenges. Before
filing suit, protect the judgment you anticipate by seeking a maximum
amount of damages in the administrative claim. Be prepared to cite
other reported verdicts and judgments in your jurisdiction to support
the judgment during trial and appeal. With careful attention to detail,
you can navigate the legal maze to achieve justice for your client
under the FTCA.
Notes
1. 28
U.S.C.A. §§1346(b), 2401(b), 2671-2680 (2000).
2. Hatahley
v. United States, 351 U.S. 173, 182 (1956).
3. Wakefield
v. United States, 765 F.2d 55, 58 (5th Cir. 1985).
4. Richards
v. United States, 369 U.S. 1, 10 (1962).
5. Carter
v. United States, 982 F.2d 1141 (7th Cir. 1992).
6. 28
U.S.C.A. §2412; 31 U.S.C.S. §1304; 28 U.S.C.S. §1961.
7. 28
U.S.C.A. §2675(a).
8. Reilly
v. United States, 863 F.2d 149, 173 (1st Cir. 1988) (quoting Martinez
v. United States, 780 F.2d 525, 530 (5th Cir. 1986)).
9. Allgeier
v. United States, 909 F.2d 869, 877 (6th Cir. 1990); Kielwien v. United
States, 540 F.2d 676, 680 (4th Cir. 1976), cert. Denied, 429
U.S. 979 (1976).
10. 861
F.2d 1261, 1262 (11th Cir. 1988); see also Fraysier v. United
States, 766 F.2d 478, 481 (11th Cir. 1985).
11. Cole,
861 F.2d 1261, 1262.
12. Id.
13. Id.,
citing Fraysier, 766 F.2d 478, 481.
14. 863
F.2d 149.
15. 795
F.2d 466 (5th Cir. 1986).
16. Reilly,
863 F.2d 149, 171.
17. Id.
at 172-73.
18. Low,
795 F.2d 466, 470.
19. Id.
at 471.
20. Douglass
v. Delta Air Lines, Inc., 897 F.2d 1336, 1339 (5th Cir. 1990).
21. Id.
at 1339 n.3 (citing Caldarera v. Eastern Airlines, Inc., 705 F.2d
778, 784 (5th Cir. 1983)); see also Wheat v. United States,
860 F.2d 1256, 1259 (5th Cir. 1988).
22. See,
e.g., Shockley v. Arcan, Inc., 248 F.3d 1349, 1362 (Fed. Cir.
2001); Koster v. Trans World Airlines, 181 F.3d 24, 36 (1st Cir. 1999);
Spesco, Inc. v. Gen. Elec. Co., 719 F.2d 233, 240-41 (7th Cir. 1983).
23. Lebron
v. United States, 279 F.3d 321, 328 (5th Cir. 2002).
24. Bailey
v. Andrews, 811 F.2d 366, 373-76 (7th Cir. 1987).
25. 279
F.3d 321.
26. See
Douglass, 897 F.2d 1336, 1344 n.14.
27. Id.;
see also Marcel v. Placid Oil Co., 11 F.3d 563, 568 (5th Cir.
1994); Wheat, 860 F.2d 1256, 1259.
28. 279
F.3d 321, 326.
29. 2
LESTER S. JAYSON & ROBERT C. LONGSTRETH, HANDLING FEDERAL TORT
CLAIMS: ADMINISTRATIVE AND JUDICIAL REMEDIES §10.04[2], at 10-58.4
(2001).
30. Wheat,
860 F.2d 1256, 1259.
Michael
E. J. Archuleta practices with the Michael Archuleta Law Firm in Austin,
Texas. Laurie M. Higginbotham practices with Whitehurst, Harkness,
Ozmun & Brees in Austin.
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