New England Biz Law Update
Two railroads charged under the Federal Employers’ Liability Act with negligently causing injuries to a former employee could introduce evidence that the employee was getting about $3,000 a month in disability benefits under the Railroad Retirement Act, the 1st U.S. Circuit Court of Appeals has found.
The employee argued that the disability benefits evidence should have been excluded under the collateral source rule.
But the 1st Circuit disagreed.
“[The employee]’s own testimony elevated the benefits evidence from merely circumstantial to a component of direct evidence of purposeful malingering,” Justice David H. Souter, sitting by designation, wrote for the three-judge panel. “This testimony is an admission of malingering, the most convincing possible evidence on this point, so powerful that its probative value … could not have been substantially outweighed by the danger of any prejudice that could be called unfair.”
The 13-page decision is Crowther v. Consolidated Rail Corporation, et al.
The employee was represented on appeal by Thomas J. Joyce III of New Jersey. Andrew E. Tauber of Washington, D.C., was the lawyer for the employers.
Federal complaint
The plaintiff, Geoffrey Crowther, held various labor and supervisory positions over the course of 30 years.
The case involved claims of cumulative, or wear-out, injuries to his neck, knees, left elbow and thumb, and for accidental injury to his left forearm, which occurred while he was driving a spike in 2005.
The plaintiff filed a federal complaint for the wear-out injuries on March 5, 2009, together with separate claims for aggravation of physical conditions, not previously raised. Later in the same year he filed a federal complaint for the accidental injury to the forearm.
U.S. District Court Judge Michael A. Ponsor in Massachusetts granted the defendants’ motion for judgment as a matter of law as to most of the plaintiff’s claims. Those remaining were tried to a jury, resulting in verdicts for the defendants.
No abuse of judicial discretion
On appeal, the plaintiff assigned error to the trial judge’s decision to admit evidence that the plaintiff was receiving disability benefits under the Railroad Retirement Act.
The plaintiff contended that admitting the evidence violated the U.S. Supreme Court’s 1963 holding in Eichel v. New York Cent. R.R. Co., “which he reads as flatly precluding admission of collateral source evidence in trials of FELA claims like this one.”
The 1st Circuit, however, found that there was no error in allowing the jury to consider that evidence based on its own 1998 precedent in McGrath v. Consol. Rail Corp.
“While Eichel is generally regarded as laying down an unqualified rule against revealing a collateral source in a FELA case, … this circuit has read the per curiam opinion less globally as simply affirming the trial judge’s discretionary judgment to exclude in that case (consistently with the current Federal Rule of Evidence 403, leaving a trial court with discretion to exclude otherwise relevant evidence if its probative value is substantially outweighed by the danger of unfair prejudice),” Souter wrote.
The collateral source rule, Souter explained, is meant to guard against two risks: that after a jury has found liability and goes on to assess damages it will deduct from the appropriate award whatever compensation a plaintiff is receiving for injuries from a source other than a liable defendant (such as health insurance benefits), and the more general risk that a jury will regard the receipt of such benefits as a reason to avoid finding liability at all in a close case.
The employee’s claim of error “boils down to whether letting in the evidence of benefits raised such an unjustifiable risk of swaying the jury’s judgment on the issue of negligence itself as to amount to abuse of discretion even under a deferential standard,” Souter said.
“There is evidence pointing each way,” he added, saying that the jury learned that the plaintiff customarily took a daily four-mile walk, went swimming five days a week and cycled three days, could lift a kayak and go fishing and snowshoeing.
“This demonstration of reluctance to return to gainful work, combined with the showing of physical activity, certainly shot holes through the disability claim and if considered in isolation would be a good reason to conclude that it was reversible error to admit cumulative collateral source evidence,” Souter said.
That threat, however, was mitigated by the trial judge’s instructions, which were clear that the evidence of benefits was allowed in only as it might indicate whether Crowther had fulfilled his “obligation, if he’s asking for compensation or damages to replace lost wages, to engage in whatever work he is capable of engaging in.”
The 1st Circuit went on to find that admissions made by the plaintiff and his counsel justified the trial judge’s decision to apprise the jury of the collateral benefits.
At a pre-trial deposition, the plaintiff’s counsel made it clear that the reason his client was not working was “because he is on a disability annuity. … That’s why he is not working okay.”
At trial, prior to the plaintiff’s testimony, his attorney made the same point, telling the judge that if the plaintiff worked, he would lose his disability income.
During redirect examination by his own counsel, the plaintiff candidly confirmed what his counsel had earlier represented.
The attorney asked, “Is it your understanding that if you were working, that you would lose your disability from the Railroad Retirement Board?” The plaintiff said yes, as he did to the follow-up question: “And that’s the reason you’re not working?”
It was the employee’s — or his lawyer’s — choice to incorporate the fact revealed by the collateral source evidence “into an avowal of the intentional malingering that the railroads sought to show,” Souter concluded.
