special masters are not bound by their own or other special masters’ decisions or those of the U.S. Court of Federal Claims except in the same case
How later courts described this case
- special masters are not bound by their own or other special masters’ decisions or those of the U.S. Court of Federal Claims except in the same case
Written by the judges who cited it.
The opinion
In the United States Court of Federal Claims
OFFICE OF SPECIAL MASTERS
No. 12-618V
Filed: September 17, 2015
Reissued Redacted: October 13, 2015
To be Published
*************************************
J.T., *
*
Petitioner, * Respondent’s Motion for a Ruling on the
* Basis for Calculating Lost Earnings Award;
v. * conceded case; petitioner seeks damages for
* lost earnings due to Table injury of brachial
SECRETARY OF HEALTH * neuritis after Tdap vaccine; respondent
AND HUMAN SERVICES, * seeks calculation based on history; petitioner
* seeks calculation based on business he
Respondent. * hoped to start but for injury; speculation.
*
*************************************
Lisa A. Roquemore, Rancho Santa Margarita, CA, for petitioner.
Lisa A. Watts, Washington, DC, for respondent.
MILLMAN, Special Master
RULING ON CALCULATING WAGE LOSS 1
On September 19, 2012, petitioner filed a petition under the National Childhood Vaccine
Injury Act, 42 U.S.C. § 300aa-10-34 (2012), alleging that a tetanus-diphtheria-acellular pertussis
(“Tdap”) vaccine administered on October 1, 2009 caused him neurologic injury. Petitioner was
53 years old when he received the Tdap vaccine. He is now 59 years old.
On February 19, 2010, petitioner went to the Mayo Clinic and neurologist Dr. Rami
Massie took a history and performed a physical examination. Med. recs. Ex. 9, at 132. Besides
petitioner’s brachial plexopathy symptoms, he had diffuse large fiber length dependent
peripheral neuropathy in his legs. Id. at 133. Petitioner told Dr. Massie that his legs were almost
1
Vaccine Rule 18(b) states that all decisions of the special masters will be made available to the public
unless they contain trade secrets or commercial or financial information that is privileged and
confidential, or medical or similar information whose disclosure would constitute a clearly unwarranted
invasion of privacy. When such a decision is filed, petitioner has 14 days to identify and move to redact
such information prior to the document’s disclosure. If the special master, upon review, agrees that the
identified material fits within the categories listed above, the special master shall redact such material
from public access. On September 28, 2015, petitioner moved to redact this ruling. The undersigned
grants petitioner’s motion.
more bothersome to him than his arm symptoms. Id. Dr. Massie said he did not know the
etiology of petitioner’s peripheral neuropathy in his legs. Id. Dr. Massie thought the most likely
explanation for petitioner’s peripheral neuropathy in his legs was Crohn’s disease because people
with Crohn’s can get peripheral neuropathy. Id. A less likely explanation would be that
petitioner has hereditary neuropathy with liability to pressure palsies (“HNPP”). Id.
Prior to receiving the Tdap vaccine on October 1, 2009, petitioner had numerous medical
conditions, according to a medical history petitioner gave to Dr. Peter B. Dyck, neurologist, at
the Mayo Clinic on May 16, 2011. Med. recs. Ex. 9, at 66. He had Crohn’s disease in 2009, and
developed Crohn’s arthritis in March 2011. Id. He had prostate cancer in April 2010 followed
by a prostatectomy. Id. In 2001, petitioner developed back and shoulder pain which radiated
into his arm, forearm, and hand. Id. After four to six weeks, he developed atrophy in his
anterior forearm and noticed weakness with wrist extension, wrist flexion, and grip. Id. At the
same time in 2001, he noticed prickling and tingling in the soles of his feet, which he still had at
the time of this visit 10 years later. Id. Petitioner then developed tingling in his upper back,
thoracic region, and shoulder, mostly in the morning. Id. He was found to have a T5 through T8
thoracic syrinx. 2 Id. Shortly afterward, his Crohn disease became active and he lost 50 pounds
and did not do much work. Id. Dr. Dyck summed up petitioner’s experience post-Tdap by
stating that he believed petitioner had two episodes of inflammatory brachial plexopathy
occurring on both sides separated by about 10 years. Id. at 67. He considered them to be
monophasic illnesses with an active inflammatory component and then gradual improvement that
was often fairly mild. Id. At the time Dr. Dyck examined petitioner on May 16, 2011, he did not
think petitioner had an inflammatory neuropathy present and did not recommend specific
treatment with immunomodulating therapy for his neuropathy. Id.
On December 10, 2012, the undersigned held a telephonic status conference with the
parties to discuss the case, suggesting settlement, and ordering petitioner to make a demand on
respondent by February 1, 2013. (At that time, Conway, Homer & Chin-Caplan, P.C.
represented petitioner.) Order dated December 10, 2012.
On December 18, 2012, respondent filed her Rule 4(c) Report conceding entitlement, i.e.,
that the Tdap vaccine caused petitioner’s left brachial neuritis, a Table injury. Resp’t’s Rep. at
6-7.
On February 1, 2013, petitioner filed a status report which was in reality a motion for an
extension of time within which to make a demand because petitioner had scheduled an on-
sitevisit and wanted until April 19, 2013 to make a demand on respondent.
On February 4, 2013, the undersigned issued an Order interpreting petitioner’s “status
report” as a motion for an extension of time, and granted it. The undersigned ordered petitioner
to make a demand on respondent by April 19, 2013, and rescheduled a previously scheduled
telephonic status conference from February 15, 2013 to May 2, 2013.
2
A syrinx is an abnormal cavity in the spinal cord. Dorland’s Illustrated Medical Dictionary 1858 (32d ed. 2012).
2
On April 22, 2013, three days after petitioner was to have made a demand on respondent,
petitioner filed a second “status report” which was in reality a motion for an extension of time
within which to make a demand because petitioner’s life care planner was still working on a life
care plan and petitioner was compiling information on lost wages and out-of-pocket expenses.
Petitioner had moved from Iowa to California, but his documentation of out-of-pocket expenses
remained in Iowa. His wife was going to travel to Iowa in May. Petitioner anticipated making a
demand on respondent by June 12, 2013.
On April 22, 2013, the undersigned issued an Order interpreting petitioner’s second
“status report” as a motion for an extension of time, and granted it. The undersigned ordered
petitioner to make a demand on respondent by June 12, 2013, and rescheduled the previously
scheduled telephonic status conference from May 2, 2013 to July 11, 2013.
On June 12, 2013, petitioner filed a status report and motion for an extension of time.
Petitioner’s life care planner was finalizing petitioner’s life care plan, and anticipated the life
care plan would be completed by July 19, 2013. In addition, petitioner continued to compile and
itemize information regarding lost wages and out-of-pocket expenses. Petitioner anticipated
making a demand on respondent by August 9, 2013.
On June 13, 2013, the undersigned issued an Order granting petitioner’s motion for an
extension of time. The undersigned ordered petitioner to make a demand on respondent by
August 9, 2013, and rescheduled the previously scheduled telephonic status conference from July
11, 2013 to August 26, 2013.
On August 8, 2013, petitioner filed his fourth “status report” which was in reality a
motion for an extension of time within which to make a demand because petitioner’s life care
planner had not yet finalized her life care plan, but anticipated doing so in the next two weeks.
In addition, petitioner continued to work toward preparing an accurate demand for lost wages.
Petitioner anticipated making a demand on respondent by September 12, 2013.
On August 9, 2013, the undersigned issued an Order interpreting petitioner’s fourth
“status report” as a motion for an extension of time, and granted it. The undersigned ordered
petitioner to make a demand by September 12, 2013, and rescheduled the previously scheduled
telephonic status conference from August 26, 2013 to October 1, 2013.
On September 12, 2013, petitioner filed his fifth status report, stating that he made a
demand on respondent on September 12, 2013, ten months after the first status conference in this
case, and also noting that he was looking for alternate counsel to represent him.
On September 24, 2013, respondent filed a stipulation for interim attorneys’ fees and
costs for the Conway, Homer & Chin-Caplan, P.C., firm for $42,170.12 in attorneys’ fees and
costs, based upon which the undersigned issued an Interim Attorneys’ Fees and Costs decision
awarding $42,170.12. Judgment entered on October 2, 2013.
3
On September 30, 2013, by non-PDF Order, the undersigned rescheduled the October 1,
2013 telephonic status conference to October 31, 2013.
On October 7, 2013, petitioner filed a Motion to Substitute or Change Attorney of
Record, which petitioner’s current counsel, Lisa A. Roquemore, signed.
On October 31, 2013, the undersigned held a telephonic status conference with counsel.
Petitioner’s counsel stated she was reviewing the files and attempted to reach petitioner’s life
care planner, but she was out of the country. She stated she retained an economist to determine
lost wages and lost opportunity. Respondent requested insurance information (petitioner was
insured through his wife’s employer) and the disability policy which paid petitioner through
Mercy Medical Center. The onsite visit was conducted on March 12, 2013.
On November 11, 2013, petitioner filed medical records from the Mayo Clinic as Exhibit
17. The first record, dated July 22, 2013, recounts a visit with a speech pathologist, to evaluate
petitioner’s voice. Dr. Diana M. Orbelo (Ph.D.) notes that petitioner was unable to perform
long-term speaking. Med. recs. Ex. 17, at 1. He still could not sing. Id. On physical
examination, petitioner was mildly hoarse. Id.
The second record in Exhibit 17, dated July 23, 2013, recounts a visit with an internist,
Dr. Paul S. Mueller. Id. at 7. Dr. Mueller recounts petitioner’s brachial neuropathy (Parsonage-
Turner syndrome), and petitioner’s and his wife’s move from Iowa to California where there
were better school options for their children with special needs. Id. Petitioner also had erectile
dysfunction and urologic concerns, particularly nocturnal incontinence. Id. Dr. Frank had
petitioner change his Cialis to Viagra, particularly because of the headaches, but he was aware
that Viagra can also cause headaches. Id. Petitioner complained about Crohn’s disease which
his brother also has with fistula which had not yet occurred in petitioner. Id. Petitioner also
complained of shoulder pain which was due to arthritis, revealed on x-ray. Id. He complained of
pain due to his Parsonage-Turner syndrome taking the form of episodic bilateral back spasms.
Id. Petitioner had a history of prostate cancer for which he had a prostatectomy. Id. at 9. He
also had a history of transient global amnesia and malignant melanoma. Id.
The third record in Exhibit 17, dated July 24, 2013, recounts a visit with a sports
medicine consultant, Dr. Jay Smith, to deal with petitioner’s right shoulder pain. Id. at 15. Dr.
Smith did a full physical examination of petitioner and found “there is no clear explanation for
the extent of mechanical symptoms he is having.” Id. at 16. Dr. Smith had a long discussion
with petitioner and his wife, saying “I am uncomfortable attributing the extent of his symptoms
to what I am seeing with his rotator cuff.” Id. He recommended an MRI of the shoulder. Id.
Dr. Smith wanted to find out if petitioner has abnormal glenohumeral kinematics. Id. On that
same date, Dr. Smith did an ultrasound of petitioner’s right shoulder and discovered the
glenohumeral joint was normal. Id. at 18. He found a probable small partial articular-sided
supraspinatus rotator cuff tear versus high-grade tendinosis as well as thickening of the anterior
bicipital sling possibly suggestive of rotator interval injury. Id. at 19.
4
The fourth record in Exhibit 17, dated July 24, 2013, recounts a visit with a neurologist,
Dr. Eduardo E. Benarroch, regarding petitioner’s brachial plexopathy. Id. at 20. Petitioner also
complained of left toe numbness and mild sensorimotor peripheral neuropathy. Id. at 20-21. He
has bilateral high arches which his mother also has, suggesting a hereditary peripheral
neuropathy. Id. at 21. No clear cause for his dysphonia was found. Id. Dr. Benarroch’s
conclusion was that the right shoulder pain was very unlikely to be a manifestation of
exacerbated brachial plexopathy because the right deltoid reflex was stronger than the one on the
left, and the right biceps and right brachioradialis reflexes were stronger than those on the left.
Id. at 22-23. Dr. Benarroch diagnosed petitioner’s sensorimotor peripheral neuropathy as
probably hereditary. Id. at 23. Dr. Benarroch also diagnosed petitioner with mild venous
incompetence in the lower extremities consistent with his symptoms beginning after a long plane
ride and repetitive movement of the left foot producing mild cyanotic discoloration of the foot in
association with improvement of his sensory symptoms. Id.
On January 17, 2014, the undersigned held a telephonic status conference with counsel.
Petitioner’s counsel stated that petitioner and his wife had lost confidence in their life care
planner and switched to a different life care planner. Petitioner’s counsel said she would make a
demand for pain and suffering on respondent, but had not yet calculated economic loss and
unreimbursable past medical expenses.
On March 4, 2014, petitioner filed a status report stating he had made a demand for pain
and suffering on January 21, 2014. Status Rep. at 1. On February 25, 2014, respondent made a
counteroffer on pain and suffering. Id. at 2. Petitioner was reviewing the counteroffer and also
seeking consultations with physicians regarding his future needs. Id. Petitioner was still
working on the following: past unreimbursable medical expenses, a lost wages analysis, and his
Social Security earning history which respondent had requested. Id. Petitioner’s counsel asked
for an extension of time within this status report to change the status conference from March 18,
2014 until 60 days later or approximately May 19, 2014. Id.
On March 5, 2014, interpreting part of petitioner’s status report as a motion for an
extension of time, the undersigned granted it and rescheduled the telephonic status conference
from March 18, 2014 to May 20, 2014.
On May 20, 2014, the undersigned held a telephonic status conference with counsel.
Petitioner’s counsel stated the parties were close to settling an amount for pain and suffering.
She sent the unreimbursable medical expense information to respondent’s counsel the prior week
and hoped to send petitioner’s life care plan to respondent’s counsel by May 23, 2014.
Petitioner’s counsel still needed to obtain lost wages information and was meeting an expert for
that purpose. Petitioner had ordered his Social Security earning history. He applied for Social
Security Disability Insurance (“SSDI”) one to two months previously. The next telephonic status
conference was set for June 19, 2014.
On June 19, 2014, the undersigned held a telephonic status conference with counsel.
Petitioner’s counsel said the parties had made progress. Respondent was examining petitioner’s
5
out-of-pocket expenses. Petitioner’s counsel sent petitioner’s life care plan to respondent and the
parties’ life care planners were going to meet to discuss it. She had received the lost wages
information on June 18, 2014, and stated she would file it. Respondent’s counsel stated she
needed a business evaluation expert, but asked for the undersigned’s input first. Petitioner was
earning money by doing physical therapy at a hospital, but his lost wages demand reflected his
hopes for the new career he wanted to have which was his own physical therapy business. He
already had a seminar business, but petitioner stated he can no longer gave seminars. The
undersigned asked petitioner’s counsel to file the lost earnings material and then set a new
telephonic status conference for August 22, 2014.
After the telephonic status conference, on June 19, 2014, petitioner filed Exhibit 25, the
expert report of economist Brad Johnson, estimating lost economic value at $11,614,677.00. Ex.
25, at 5. That figure was derived from the purported present value of physical therapy income of
$9,275,940.00, purported present value from the sale of the anticipated physical therapy practice
of $1,015,244.00, purported present value of seminar income of $1,069,345.00, and purported
present value from the sale of petitioner’s seminar business of $254,148.00. Id. Mr. Johnson
based the over $11 million for lost economic value on what petitioner hoped his proposed
physical therapy company would earn (“PT Plan”) and what his seminar and speaking
engagement business (“Seminar Plan”) would earn, buttressed by the opinions of others who
knew petitioner and estimated he would have earned had he been able to start a physical therapy
business and continue speaking at seminars. Id. at 2. Attached to Exhibit 25 are seven exhibits
marked as Exhibits 26-32. 3
On August 20, 2014, petitioner filed his SSDI package, including the statement of his
conditions: neuralgic amyotrophy, bilateral carpal tunnel syndrome, torn right rotator cuff (right
hand dominant), Crohn’s disease, prostate cancer (in remission), malignant melanoma (in
3
In 2009, the year petitioner had his vaccine injury, petitioner had an adjusted gross income of $96,469.00, and a
taxable income of $61,698.00. Ex. 77, at 1, 2. He had a $2,456.00 loss from his unspecified business. Id. at 4. In
2008, the year before petitioner had his vaccine injury, petitioner had an adjusted gross income of $118,014.00, and
a taxable income of $91,347.00. Ex. 76, at 1, 2. He had a $1,909.00 profit from his business. Id. at 3. In 2007,
petitioner had an adjusted gross income as a physical therapist of $162,208.00, and a taxable income of $136,276.00.
Ex. 75, at 1, 2. He had an $8,951.00 loss from his business. Id. at 4. In 2006, petitioner had an adjusted gross
income of $189,300.00, and a taxable income of $167,003.00. Ex. 74, at 1, 2. He had a $6,617.00 profit from his
business. Id. at 4. In 2005, petitioner had an adjusted gross income of $184,760.00, and a taxable income of
$162,085.00. Ex. 73, at 1, 2. He had a $3,803.00 loss from his business. Id. at 4. In 2004, petitioner had an
adjusted gross income of $196,725.00, and a taxable income of $175,502.00. Ex. 72, at 1, 2. He had a $1,788.00
profit from his business. Id. at 4. In 2003, petitioner had an adjusted gross income of $167,350.00, and taxable
income of $143,419.00. Ex. 71, at 1, 2. He had a $10,646.00 loss from his business. Id. at 4. In 2002, petitioner
had an adjusted gross income of $191,653.00, and a taxable income of $167,417.00. Ex. 70, at 1, 2. He had a
$1,477.00 profit from his business. Id. at 4. In 2011, petitioner had an adjusted gross income of $146,958.00, and a
taxable income of $123,026. Ex. 69, at 1, 2. He had a $2,719.00 loss from his business. Id. at 4. In 2000,
petitioner had an adjusted gross income of $128,120.00, and a taxable income of $102,991.00. Ex. 68, at 1, 3. He
had a $4,401.00 loss from his business. Id. at 5. Petitioner did not file a copy of his 1999 and 1998 tax returns. In
1997, petitioner had an adjusted gross income of $149,990.00, and a taxable income of $141,269.00 as an employee
of Physiotherapy Associates. Ex. 67, at 1, 3. He had a $27,800.00 profit from his business. Id. at 5. In 1996,
petitioner had an adjusted gross income of $102,630.00, and a taxable income of $93,551.00. Ex. 66, at 1, 2. He
had a $16,183.00 profit from his business. Id. at 4.
6
remission), arthritis, and anxiety. Med. recs. Ex. 56, at 8. He stated he stopped working on
March 17, 2010, which is six months after the onset of his brachial neuropathy. Id. at 25. He
described his prior employment as physical therapist/director of sports medicine and stated he
earned $105,000.00 per year. Id. at 25.
On August 22, 2014, the undersigned held a telephonic status conference with counsel.
Petitioner’s counsel said that tax returns had been requested and the life care planners were
speaking with two doctors. Respondent’s counsel requested more documentation of petitioner’s
claimed past unreimbursable medical expenses.
On October 15, 2014, respondent filed as Exhibit A her preliminary calculation of
petitioner’s lost earnings. The discounted present value from 2009 to 2023 was $582,477.29.
Ex. A, at 2.
Since then, the parties have been engaged in an attempt to settle damages. The one
barrier to settlement is the calculation of petitioner’s earning loss. Petitioner hoped to start his
own physical therapy business and calculates the business would have earned him $11 million in
earnings loss. Respondent based her calculation of petitioner’s earning loss on his pre-
vaccination earnings as an employee and participant in physical therapy seminars, which comes
to less than $1 million. With this $10 million difference between the parties, respondent moved
for the undersigned to rule on the basis for calculating petitioner’s lost earnings, i.e., whether to
award damages based on his aspirations or on his known historical wages. Respondent
emphasized that petitioner’s Exhibit 25 was a valuation report focusing on a business that was
never a going concern, and that petitioner’s business plan (Exhibit 27, at 9) was written long
after his vaccine injury. In an Order of the same date, the undersigned set a deadline of
November 13, 2014 for petitioner to file a motion or memorandum summarizing his argument
for future lost wages and the legal basis for justifying such an award. Respondent’s response
was due January 5, 2015 with petitioner’s reply due February 4, 2015. The undersigned
scheduled the next telephonic status conference for October 7, 2014.
At the request of the parties, the status conference was moved to October 9, 2014. On
October 9, 2014, the undersigned held a telephonic status conference with counsel. Petitioner’s
counsel said that petitioner had a start date to receive SSDI. His Medicare coverage would
become retroactive to December 2013 once he obtained it in December 2015. Petitioner had
filed his tax returns, but the life care planners still wanted to speak to his doctors. Petitioner was
trying to separate his unreimbursable past medical expenses for his prostate cancer treatment
from his shoulder injury treatment. Petitioner has two special needs children for which people
come into the home to provide services. Petitioner’s economic loss expert report reflects the
view that petitioner would have sold his business at some point, in consideration of the fact that
he was 53 years old when he was injured. In an Order dated the same date, the undersigned also
mentioned that petitioner and his wife moved to California in 2013 because there was a special
school there for children with Fragile X syndrome. Therefore, petitioner’s economic loss
valuation should reflect his move from Iowa to California. The undersigned scheduled the next
telephonic status conference for January 12, 2015.
7
On January 7, 2015, petitioner filed his declaration as Exhibit 58, stating he would not
have moved from Iowa to northern California if he did not have a vaccine injury (even though he
and his wife placed the elder son in a special private school in northern California because he
could not transition from middle school to high school in Iowa). Ex. 58, at 1-3.
On January 12, 2015, the undersigned held a telephonic status conference with counsel.
Petitioner’s counsel stated that petitioner and his economist were going to meet that week, and
the information from Heather Schellhorn and Rebecca Carver, two people with whom petitioner
was going to contract to work for him at his proposed physical therapy business, should be
produced regarding what their salary would have been and what net income petitioner would
have had from reducing their salary from his anticipated profits. Marek Wensel’s data was
already filed as Exhibit 60 (Mr. Wensel was another prospective employee with whom petitioner
was going to contract). Petitioner’s counsel explained that she was still obtaining information
regarding petitioner’s unreimbursable past medical expenses minus the payments made for his
prostate cancer. Respondent’s counsel described petitioner as a professional in midlife with a
defined earnings history. She could not find a basis to engage in speculation about whether
petitioner would have succeeded if he had his own business. Petitioner had significant past
earnings. Petitioner’s counsel said petitioner’s economic evaluation of wage loss included a
discount for speculative factors, including the high risk of failure. In an Order dated January 12,
2015, the undersigned ordered petitioner to file a status report with the exhibit number and page
numbers of the economist’s formula for this calculation of a discount for speculative factors.
Petitioner was ordered to file such calculation if petitioner’s economist did not explain this
calculation.. (In a subsequent filing, petitioner stated his economic expert reflected the
speculative nature of his figures for economic impairment by using a 12% discount rate.)
On March 25, 2015, the undersigned held a telephonic status conference with counsel.
Petitioner’s counsel said that petitioner wanted $250,000.00 as a sales price for his seminar
business. Respondent’s counsel noted Dr. Utz’s statement in December 2013 that petitioner
could return to work (Ex. 22). Respondent’s counsel also stated that petitioner assumed he
would make a $240,000.00 profit in the first year of his proposed physical therapy business. His
earnings as a physical therapist in a hospital were $100,000.00. In an Order of the same date, the
undersigned ordered respondent to file a motion for a ruling on lost wages by May 26, 2015,
with petitioner’s response due July 27, 2015, and respondent’s reply due August 26, 2015. The
undersigned scheduled the next telephonic status conference for September 1, 2015.
The undersigned GRANTS respondent’s motion for a ruling on the basis for calculating
petitioner’s lost earnings award. Petitioner wants compensation for a business he never had,
which has no prior earnings history, and where the income which he hoped to have was based
not only on his own efforts, but on those of others with whom he intended to contract for
services. Moreover, petitioner’s valuation of his economic loss includes a proposed selling price
for the business he never had, which presumes not only what petitioner’s net income would have
been had he started and developed this business, but also what a prospective buyer would have
paid for this business at some point in the future. This is not a case of someone training in
8
college to take a salaried position as a teacher who, having become disabled, can no longer earn
the known salary of that position. Legally, the undersigned cannot award speculative damages.
In essence, petitioner has picked an $11 million lost economic value based on hope. The
undersigned finds that expectation based on speculation. However, since petitioner stated he
intended to work until age 70, the undersigned holds that respondent’s calculations should be
modified from an approximate 67-year work life expectancy to a 70-year work life expectancy.
Respondent receives an offset for the disability payments to petitioner as well as for Medicare
payments to petitioner under 42 U.S.C. § 300aa-15(g).
The statutory provision, 42 U.S.C. § 300aa-15(a)(3)(A), stating petitioner may receive
“compensation for actual and anticipated loss of earnings determined in accordance with
generally recognized actuarial principles and projections” does not envision that “anticipated loss
of earnings” includes speculation. Moreover, using a very high discount rate of 12% does not
cure the speculative nature of the assessment of future economic impairment. It is important to
distinguish the loss of earning capacity evaluation for someone over 18 for whom “actual and
anticipated loss of earnings” may be determined more concretely than for someone under 18 who
does not have an earnings history. The language of §15(a)(3)(B) for vaccinees under the age of
18 predicates the determination of “impaired earning capacity” on the “average gross weekly
earnings of workers in the private, non-farm sector, less appropriate taxes and the average cost of
a health insurance policy . . . .”
Tembenis v. Secretary of Health and Human Services, No. 03-2820V, 2011 WL
5825157, at *4 n.5, *5 (Fed. Cl. Spec. Mstr. Oct. 26, 2011), aff’d, 2012 WL 5395405 (Fed. Cl.
Oct. 19, 2012), rev’d, 733 F.3d 1190, 1195 (Fed. Cir. 2013); and Stotts v. Secretary of Health
and Human Services, 23 Cl. Ct. 352, 366 n.13 (1991), are informative for the principle that
impairment of earning capacity is compensable even though there are no actual lost earnings
when the vaccinee is a minor (as in Stotts), but is inappropriate when the minor vaccinee has
died (as in Tembenis). One would think that if impairment of earning capacity, regardless of
actual past earnings, were a sufficient criterion for awarding wage loss, the Federal Circuit would
have recognized that in Tembenis and affirmed the award to the dead minor’s parents. The only
conclusion one can draw from the Tembenis decision is that where circumstances would not
envision lost wages, i.e., when a child dies, no award for lost future wages is permissible.
Similarly, when the vaccinee is an adult, if circumstances (i.e., injury before engaging for the
first time in a business venture) do not permit a reasonable basis for an award of lost earnings,
then only the actual wages the vaccinee earned as an employee constitute a reasonable basis for a
lost wages award.
On September 1, 2015, the undersigned held a telephonic status conference with counsel
to inform them of how the undersigned was going to rule on respondent’s motion for a ruling on
the basis for calculating petitioner’s lost earnings award and stated the undersigned would issue
the written ruling within two weeks of the status conference. See Order of September 1, 2015.
The undersigned advised the parties during the status conference to work on resolving damages,
and set another status conference for October 19, 2015. Id.
9
On September 8, 2015, petitioner’s counsel filed transcripts from another case in which
she represented a different petitioner before a different special master in which earnings loss was
an issue. The result of the hearing was respondent’s proffer of damages, upon which the other
special master relied in issuing a damages decision dated September 10, 2007. Also on
September 8, 2015, petitioner filed a status report regarding the transcripts he filed from this
other petitioner’s hearing, stating, “Petitioner acknowledges that such ruling has zero
precedential value; but it does indicate how other Special Masters have ruled in the past and
wanted this Court to have this information.” Pet’r’s status rep., at 2.
Petitioner is correct that the information revealed in another petitioner’s hearing has zero
precedential value, but the rest of that statement is wrong and misleading. Firstly, there was no
ruling on the issue. Respondent in the other case settled with petitioner and then filed a proffer.
The special master merely awarded the damages to which the parties agreed. He did not issue a
ruling interpreting how future earnings loss in that case should be calculated. Moreover, there
were no other special masters “ruling” on this issue, although petitioner states in his status report
that this non-existent ruling “does indicate how other Special Masters have ruled in the past. . . .”
Id.
Even arguendo if the other special master had issued a ruling on the issue of earnings
loss, his opinion would not bind the undersigned to follow his decision. Hanlon v. Sec’y of
HHS, 40 Fed. Cl. 625, 630 (1998), aff’d, 191 F.3d 1344 (Fed. Cir. 1999) (special masters are not
bound by their own or other special masters’ decisions or those of the U.S. Court of Federal
Claims except in the same case).
On September 9, 2015, the undersigned issued an Order striking petitioner’s Exhibit 103,
the transcripts of the hearing in the other case, because petitioner violated 42 U.S.C. § 300aa-
12(d)(4) (2015), in filing them in this case without the other petitioner’s express written consent.
MOTION AND FILINGS
On May 21, 2015, respondent filed her Motion for a Ruling on the Basis for Calculating
Petitioner’s Lost Earnings Award, together with respondent’s Exhibit B. Respondent updated
her calculation of economic loss to $628,031.08 consisting of past lost earnings of $201,689.35
(assuming judgment enters in 2015), and future lost earnings of $426,341.73. Resp’t’s Mot., at
7. This assumes a base earnings capacity starting in 2009 of $114,000.00 yearly pre-tax, offset
by reported earnings and group disability insurance payments. Ex. B, at 2. Estimated work life
expectancy was 13.51 years. Id. Respondent used a net discount rate for future earnings of
either 1.5% or 1.6%. Id. Respondent increased petitioner’s previous annual earnings from
$105,000.00 to $114,000.00 by including income from petitioner’s seminar and speaking
engagement business, even though petitioner reported a profit from his business for only half the
years from 1996 to 2012. Resp’t’s Mot. at 8. Respondent notes that petitioner’s earnings placed
him in the top 90% of physical therapists. Id. at 9. Respondent also notes that approximately
25% of new businesses fail within the first year, while approximately 50% of new businesses fail
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within the first five years. Id.
Respondent states that petitioner’s Seminar Plan (Ex. 28) envisions an after tax net profit
of $47,860.00 in 2010, even though he had a loss of $2,456.00 in 2009, and a meager $1,909.00
profit in 2008. Id. at 10. Petitioner also described in his physical therapy business plan a net
profit of $243,180.00 (an 18.1% profit margin) in 2010, the first year of its operation, which
would grow to $774,759.99 by 2014. Id. Respondent notes that petitioner’s physical therapy
business plan specified that patient-care would not be Medicare-based, excluding a significant
Iowa population from its customers. Id. at n.14. Respondent also notes that petitioner’s
economic expert estimated petitioner would have an operating profit before taxes of $460,000.00
in the first year of the business’s operation, growing to a $1,675,949.00 pre-tax operating profit
to petitioner by 2014. Id. at 10 (citing Ex. 25, at 5).
Respondent concludes by noting that at the time petitioner had an adverse reaction to his
vaccination, he did not have a business plan to start his own physical therapy business, he had
not secured financing to start this business, he had not leased space for this new business, he did
not have a business tax ID for his proposed business, he did not have a business bank account for
this new business, he had not purchased or leased equipment for this new business, and he had
not hired a single employee. Resp’t’s Mot. at 10. In other words, this new business was not in
existence when petitioner was injured. Id.
On July 23, 2015, petitioner filed Exhibits 90 to 97 in support of his Response to
Respondent’s Motion for a Ruling on the Basis for Calculating Petitioner’s Lost Earnings
Award. In Exhibit 90, petitioner declares that in 1995, as the clinic manager for Iowa
Orthopedic and Sports Therapy (Physiotherapy Associates), he turned a money-losing business
into a profitable business, making it a multimillion dollar enterprise and opening four satellite
locations. Ex. 90, at 2. It became the most profitable of 500 clinics in the country. Id. He said
his plan to open his own physical therapy business began before he had his vaccine injury, but it
was on separate pieces of paper and he did not need a formal plan for the startup because it
would have modest costs. Id. at 3. He stated that he decided not to obtain third-party financing
for his prospective business because he had more than adequate assets within his investment
accounts for the very modest financial needs of his startup model, citing to Exhibit 94. Id.
Also, on July 23, 2015, petitioner filed Exhibits 98 to 101 in support of his Response to
Respondent’s Motion for a Ruling on the Basis for Calculating Petitioner’s Lost Earnings
Award. These consist of declarations of others that petitioner would have succeeded in his
planned business.
On July 23, 2015, petitioner also filed a 32-page brief entitled Petitioner’s Response to
Respondent’s Motion for a Ruling on the Basis for Calculating Petitioner’s Lost Earnings
Award. The brief explained that four others who had their own physical therapy businesses told
petitioner to start small. Pet’r’s Resp. at 3. These four individuals discouraged petitioner from
pursuing his initial business model. Id.
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On August 24, 2015, respondent filed her Reply and Renewed Motion for a Ruling on the
Basis for Calculating Petitioner’s Lost Earnings Award under the Vaccine Act, reiterating her
points in her earlier Motion, and stating that she calculated lost wages on an almost 67-year work
life expectancy, rather than petitioner’s intended 70-year work life expectancy. Resp’t’s Reply,
at 6. Respondent’s calculation of petitioner’s wage loss also includes an offset for petitioner’s
receipt of disability payments, per 42 U.S.C. § 15(g):
Payment of compensation under the Program shall not be made for
any item or service to the extent that payment has been made, or
reasonably be expected to be made, with respect to such item or
service (1) under any State compensation program, under an
insurance policy, or under any Federal or State health benefits
program . . . .
Payments made to petitioner for disability qualify as an offset under this provision (“under an
insurance policy”) and payments under Medicare qualify as an offset as well (“under any Federal
. . . health benefits program”). Id.
DISCUSSION
The undersigned does not impute ill intent to either petitioner or his many supporters, all
of whom say that if he had only begun his own physical therapy business, he would have
succeeded. However, the undersigned cannot award damages based on speculation. There is no
such thing as guaranteed income or even likely income when one starts a new business. The
undersigned finds interesting that petitioner states he planned to have modest costs for starting
his business in 2010, yet his economic expert views the first year of petitioner’s fledgling
business as yielding a quarter-million dollars in profit. Ex. 90, at 3. This is not a credible
statement. Furthermore, although petitioner successfully worked as a manager for Physiotherapy
Associates, his projected new physical therapy business would have been in competition with the
physical therapy business he had built up for Physiotherapy Associates as well as with other
already-existing physical therapy businesses. An economic pie split in pieces is less than the
whole.
Petitioner sought advice from four physical therapy business owners who told him to start
small. How does starting small generate a quarter-million dollar first-year profit? When he
began managing Physiotherapy Associates, it was already an established business.
According to the Restatement of Torts, “[b]ecause of a justifiable doubt as to the success
of new and untried enterprises, more specific evidence of their probable profits is required than
when the claim is for harm to an established business. (See Illustration 12).” Restatement
(Second) of Torts § 912 cmt. d (1979). Illustration 12 states:
12. A pays B $10,000 for a license to sell in specified territory a
new drink, produced and extensively advertised by B. Before a
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shipment has been made, C tortiously causes B to refuse to make
delivery. A is not entitled to substantial damages from C on proof
that the gross profit would have been 20 per cent., that other drinks
have had a ready sale in the same locality, that in other localities
large quantities of the same drink have been sold, and that in the
past A has been successful in other enterprises.
Petitioner cites Jones & Laughlin Steel Corp. v. Pfeifer, 462 U.S. 523 (1983), as having
“critical significance to the instant case.” Pet’r’s Resp. at 9. In Jones & Laughlin, the United
States Supreme Court states, in the context of longshore worker wages when a longshore
worker slipped and fell on snow and ice left on a deck, “In calculating damages, it is assumed
that if the injured party had not been disabled, he would have continued to work, and to receive
wages at periodic intervals until retirement, disability, or death.” Id. at 533. “The most
obvious and most appropriate place to begin is with the worker’s annual wage at the time of
injury.” Id. at 534. This annual wage may be enhanced by foreseeable promotions and
productivity growth within the worker’s industry. Id. at 536. The bulk of the Supreme Court’s
opinion is devoted to a discussion of how to value the rate of inflation in arriving at a figure to
compensate plaintiff. It is in the context of valuing inflation that the Supreme Court said,
“Because the lost stream can never be predicted with complete confidence, any lump sum
represents only a ‘rough and ready’ effort to put the plaintiff in the position he would have been
in had he not been injured.” Id. at 546. This statement in the context of determining inflation
in compensating a salaried employee was not a license to engage in speculation in the context
of what profits a non-existent business would have made in future, as is the issue in the instant
action. Another difference is the nature of the longshore industry, which the Supreme Court
called “relatively stable and predictable,” noting that the plaintiff’s wages were determined by a
collective bargaining agreement explicitly providing for cost of living increases. Id. at 552. In
contrast, petitioner’s field in the instant action involves a physical therapy business which, had
it ever existed, would have had competition from other physical therapy businesses, including
his former employer’s business. Instead of predictable wages, petitioner was gambling on
generating enough business, while employing people to work under him, to generate a net
profit for himself. Petitioner’s aspirations are far removed from the settled wage loss in the
Jones & Laughlin case.
Petitioner cites with approval to former Special Master Richard Abell’s decision in
Brown v. Secretary of Health and Human Services, No. 00-182V, 2005 WL 2659073 (Fed. Cl.
Spec. Mstr. Sept. 21, 2005). Pet’r’s Resp. at 9, 19. Special Master Abell conducted a damages
hearing after ruling that tetanus toxoid vaccine caused petitioner chronic inflammatory
demyelinating polyneuropathy (“CIDP”). Id. at *1. Petitioner was an employee of
Highwaymaster which became @Track Communications in 2000, then Aether Systems in
2002, and then Slingshot Acquisition Corporation in 2004. Id. at *5, n.6. Because of
petitioner’s CIDP, his employer terminated him. Id. at *5. Although Special Master Abell
recognized that petitioner was “being groomed for upper management . . . [and] this vaccine-
related injury derailed the meteoric rise of a talented young executive,” he said an award of lost
earnings should be calculated in a “cautious manner.” Id. at *6. Recognizing that petitioner’s
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employer was about to promote petitioner to a valuable position in the company as vice-
president, but due to his vaccine injury petitioner was demoted instead, Special Master Abell
awarded petitioner what he could have earned as vice-president of the company. Id. at *7.
Mr. Brown’s position as a valued employee in a company set to promote him to vice-
president contrasts markedly with petitioner’s position in the instant action. Whereas the salary
Mr. Brown could have had if not for the vaccine injury was readily known and his promotion
certain, petitioner herein was going to launch a business venture from which he would earn
nothing if it were not profitable. There was no known net profit for him and this unknown
would extend to his entire work life as an entrepreneur. Further unknowns are the sales prices
for this proposed business venture and for petitioner’s seminar and speaking engagement
business, the latter of which, even before the vaccine injury, resulted in losses as often as gains,
depending on the tax year.
Petitioner further cites with approval Connolly v. Pre-Mixed Concrete Co., 49 Cal.2d
484, 319 P.2d 343 (1957), concerning a 20-year-old amateur tennis player on the verge of
going professional, who was thrown from a horse that a cement mixer truck frightened. Pet’r’s
Resp. at 10. A jury awarded her $95,000.00 and the company that owned the cement mixer
truck appealed to the Supreme Court of California, which affirmed the jury’s award because it
was not so disproportionate to any reasonable limit of compensation as to indicate passion,
prejudice or corruption on the jury’s part. Id. at *488, *345. Plaintiff was the National Junior
Girls Singles Tennis champion at the ages of 14 and 15. Id. at *488, *345-46. She won the
National Women’s Singles Title three times and was preparing to compete a fourth time. Id. at
*488, *346. For three successive years, she won at Wimbledon, and, the year before her
accident, she won the French, Australian, and United States championships, winning the four
major tennis championships in the world. Id. She was twice named Woman Athlete of the
Year in a newspaper poll. Id. The accident occurred in July 1954, and it was plaintiff’s intent
to participate in the United States championship tournament and then turn professional in
October 1954. Id. She planned to go on a three-month professional tennis tour for which she
had been offered a percentage of the receipts, with a guarantee of $30,000.00. Id. She would
have received $62,500.00 if the tour had continued outside the United States, and she would
have received additional money from endorsements of sporting goods and other articles,
clearing $50,000.00 during that year. Id. Other witnesses estimated her first-year earnings as a
professional at $75,000.00. Id. at *488-89, *346. Evidence showed she could expect at least
seven or eight years as a professional were it not for her injury. Id. at *489, *346. In light of
this evidence, the court affirmed the award. Id.
Contrast petitioner in the instant action with Ms. Connolly’s proven track record of
being the best women’s tennis player in numerous national and international competitions. It is
beyond dispute that she would have succeeded as a professional tennis player because of her
past success. There can be only one champion in a competition. The certainty of her success
had she not been injured is reflected in the contractual offer of a percentage of receipts once she
turned professional with a guarantee of $30,000.00, which in 1954 would have been considered
real money. Moreover, the earnings of tennis professionals over the next seven or eight years
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were not in dispute. Petitioner in the instant action had no guarantee of a net profit from
starting his own physical therapy business. The vagaries of the business environment, his
success depending upon the achievements of his employees and not just his own skills, and the
competition from other physical therapy companies necessitate guessing not only whether his
physical therapy business would have succeeded at all, but also what amount of money he
would receive each year in net profit once he had paid his employees’ salaries and the other
costs of running a business. Further speculation in the instant action surrounds the selling
prices of this putatively successful enterprise and of his seminar and speaking engagement
business which, in the past, had not been uniformly profitable.
Petitioner also cites with approval Gargir v. B’nei Akiva, 66 Cal.App. 4th 1269, 78 Cal.
Reptr. 2d 557 (1998), which concerned the propriety of jury instructions in a personal injury
action during which plaintiff, a first-time skier, fell down and suffered a knee injury. Pet’r’s
Resp. at 11. Plaintiff was 16 years old. Id. at *1273. The jury found that plaintiff’s damages
were $1.2 million, but since she was 50 percent negligent, the jury awarded her $600,000.00.
Id. at *1274. The court stated, regarding impairment of the power to work, that the test is not
what plaintiff would have earned, but what she could have earned. Id. at *1280. The court
emphasized that this principle was particularly applicable when plaintiff was a student or an
apprentice. Id. The court cited a case, Lang v. Barry, 71 Cal. App. 2d 121, 161 P.2d 949
(1945), in which, at the time of plaintiff’s injury, plaintiff was a 16-year-old part-time gas
station attendant. 71 Cal.App.2d at *123. His injury disqualified him from entering the regular
military, permitting only limited service as a specialist. Id. at *126. The court found
estimating the impairment of the minor plaintiff’s earning power a proper consideration for the
jury. Id. at *126-27. In Gargir, plaintiff intended to pursue a career teaching young children
with mental or physical disabilities, a job entailing physical dexterity and mobility. 78 Cal.
Rptr. 2d at *1282. Plaintiff’s knee injury and her possible future surgeries impaired her ability
to follow her chosen career. Id. The court affirmed the jury’s verdict. Both Ms. Gargir’s and
Mr. Lang’s situations are vastly different from petitioner’s circumstances in the instant action.
Both Ms. Gargir and Mr. Lang could concretely ascertain what a special education teacher (Ms.
Gargir) and a regular military person (Mr. Lang) would earn, and therefore awarding damages
for the impairment of their earning capacity was not speculative. By contrast, petitioner in the
instant action can only guess as to whether he would earn a net profit from his business and, if
he did, what that profit would be, whether he would ever experience a net loss, and how much
the sales prices of his physical therapy business and his seminar and speaking engagement
business would be.
The undersigned finds curious that petitioner was going to invest $250,000.00 of his
own money in his proposed physical therapy business, yet his expert economist projected that
in the first year of the physical therapy business’s existence in 2010, petitioner was going to
receive a net profit of $335,470.00 (discounted at a 12% rate for damages purposes to
$299,526.00). Pet’r’s Resp. at 16; Ex. 25, at 8. In other words, at the very beginning of
petitioner’s proposed business, he was already going to be an amazing success. The
undersigned wonders, if petitioner’s reputation as a physical therapist was so sterling, why his
seminar and speaking engagement business was not similarly amazingly successful in the
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past.He had quite a few years in which he had a net loss on his income tax returns for his
business. If the basis of all the affiants’ opinions of petitioner’s undoubted future success was
his past stellar reputation as a physical therapist, how does his failure to have uniform success
in his seminar and speaking engagement business correlate with these affiants’ opinions?
The undersigned also finds curious petitioner’s statement: “Just because [petitioner’s]
tax returns did not indicate a profit [for his seminar and speaking engagement business] does
not mean that all of Mr. [J.T.]’s efforts and education did not put him in the position where his
seminar business would start to become profitable as outlined in the economist [sic] report and
as outlined in [sic] various experts who knew [J.T.] and also had physical therapy businesses as
well as seminar businesses.” Pet’r’s Resp. at 26. Petitioner seems to be saying that just
because his seminar and speaking engagement business was not uniformly profitable in the past
does not mean that it would not be profitable in the future, as if experiencing a net loss over
several years put him a position to experience a profit if only he had not incurred his vaccine
injury. This makes no sense. Petitioner then analogizes his position as being akin to a medical
or law student who goes through education and training but then gets injured and is not entitled
to future lost wages. Id. This not a true analogy. A doctor or lawyer can earn a concretely
ascertainable amount being employed at a hospital or a law firm, just as a prospective teacher
or military employee has a known wage. Someone setting up his own physical therapy
business and hoping finally to make a success of his seminar and speaking engagement
business is living in the world of speculation.
Petitioner seems to think that his economic expert’s discount rate of 12%, which is quite
high, resolves the argument that petitioner’s net profit from a non-existent physical therapy
business and a seminar and speaking engagement business which was never consistently
profitable is not speculative but instead is reasonable. Pet’r’s Resp. at 29. It is salutary that
petitioner’s economic expert recognizes the riskiness of his calculations, which he couches in
the context of “smaller health services companies,” but the high discount rate does not make
the amount of $11 million for impaired earnings less speculative. Id. at 30.
The only reasonable way to calculate loss of earnings capacity in this case is by basing
that calculation on petitioner’s known earnings in both his physical therapy employment and
his former seminar and speaking engagement business, extended to a work-life expectancy of
70 years.
CONCLUSION
The undersigned rules in favor of respondent on the issue of how to calculate petitioner’s
loss of earnings capacity except for the terminus of petitioner’s work-life expectancy.
IT IS SO ORDERED.
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Dated: October 13, 2015 /s/ Laura D. Millman
Laura D. Millman
Special Master
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