Appendix — Jones & Laughlin Steel Corp. v. Pfeifer

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APPENDIX A

Opinion of the Third Circuit Court of Appeals

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 81-1928

HOWARD E. PFEIFER

v.

JONES & LAUGHLIN STEEL CORPORATION

Owner or owner pro hac vice of

Barges 1011, 1384, 1400, 1363, and

others in a fleet,

Appellant

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE. WESTERN DISTRICT OF

PENNSYLVANIA-PITTSBURGH

(D.C. Civil No. 79-1597)

Argued March 18. 1982

Before: ALDISERT, VAN DUSEN, and GARTH,

Circuit Judges

(Filed April 16, 1982)

Robert W. Murdoch, Esquire (Argued)

Jones, Gregg. Creehan & Gerace -

1010 Grant Building

Pittsburgh. Pennsvivania 15219

Counsel for Appellant

Jerome M. Libenson. Esquire (Argued)

Baskin and Sears. P.C.

10th Floor. Frick Building —

Pittsburgh. Pennsylvania 15219

Counsel for Appellee

Appendix A—Opinion of the Third Circuit

Court of Appeals.

ALDISERT, Circuit Judge.

Jones & Laughlin Steel Corporation appeals from a

judgment in favor of plaintiff Howard E. Pfeifer in a

third-party negligence action under the

men’s and Harbor Workers’ Compensation Act. The ma-

jor question presented is whether the district court erred

in applying the “total offset method” as a federal rule of

damages, wherein the discount factor used to reduce fu-

ture earnings to present worth is presumed offset by fu-

ture inflation. We find no error and affirm.

Pfeifer was employed by appellant Jones &

Laughlin (J&L) as a landing helper on its coal barges.

On January 13, 1978, he slipped and fell because of ice

and snow that had accumulated on the gunnel of a barge

on which he was working. He struck a barge rail and

landed on his tailbone, and a heavy electric motor that

he was carrying fell in his lap. He has not returned to

work since the accident. He has been examined by a

number of physicians, several of whom testified at the

trial, and he has undergone extensive physical therapy.

The district court found that appellant was negli-

gent and that its negligence was the proximate cause of

Pfeifer's accident and resulting injury. It determined

further that Pfeifer was completely disabled from the

date of the accident until July 1, 1979, and that there-

after he was capable of doing “light work” and lifting

weights of up to twenty-five pounds, but that he could

not work on the river. Appellant has not offered Pfeifer a

job of any type since his injury, and the parties have not

discussed the availability of a light duty position.

Relying on our decisions in Griffith v.

Wheeling-Pittsburgh Steel Corp.. G10 F.2d 11G (3d Cir.

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Court of Appeals.

1979), vacated, 451 U.S. 965 (1981), reinstated on re-

mand, 657 F.2d 25 (3d Cir. 1981), petition for cert. filed,

50 U.S.L.W. 3377 (U.S. Oct. 29, 1981) (No. 81-826);

and in Blair v. United States Steel Corp., 444 F.2d 1390

(3d Cir. 1971) (per curiam), cert. denied, 404 U.S. 1018

(1972), the district court determined that as a vessel

owner pro hac vice, appellant was liable for negligence

under §5(b) of the Longshoremen's and Harbor Work-

er’s Compensation Act (LHWCA), 33 U.S.C. §905(b). In

measuring damages, it declined to consider future wage

increases or to discount the award to present value, cit-

ing Kaczkowski v. Bolubasz, 491 Pa. 561, 421 A.2d 1027

(1980). The court multiplied Pfeifer's 1978 annual wage

by his work life expectancy, deducted the amount of

compensation Pfeifer had received under LHWCA, and

subtracted his projected earnings at minimum wage

from July 1, 1979, until his sixty-fifth birthday, taking

judicial notice that the federal minimum wage at the

time of the accident was $2.90 per hour.

On appeal, J&l does not challenge the district

court's findings that it was negligent and that its negli-

gence was the proximate cause of Pfeifer’s injury, nor

does it contend that it was not correctly found to be an

owner pro hac vice under the standards set forth in

Blair, 444 F.2d at 1391. It argues, however, that be-

cause Pfeifer was its employee he does not have a cause

of action for negligence under §5(b) of LHWCA. It ar-

gues also that the district court erred in applying the

Pennsylvania damages test of Kaczkowski, and further

in factoring damages on the basis of the minimum wage

rate instead of wages for light duty.

We quickly dispose of appellant's argument that the

district court erred in allowing Pfeifer to proceed in a

negligence action against his own employer under §5(b)

of LHWCA. J&L reads §5(a) as an absolute limitation on

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a longshoreman’s right to sue his employer under §5(b):

unless the employer has failed to secure payment of

compensation as required by §4 of LHWCA, 33 U.S.C.

§904, it cannot be held liable as a third party under

§5(b). We carefully considered the identical argument

in light of the 1972 LHWCA amendments in Griffith v.

Wheeling-Pittsburgh Steel Corp., 521 F.2d 31, 38-44 (3d

Cir. 1975), cert. denied, 423 U.S. 1054 (1976) (Griffith

1); and we concluded that we remain bound by the Su-

preme Court's decision in Reed v. The Yaka, 373 U.S.

410 (1963), which held that §5(a) (then §5) does not bar

a suit against an owner pro hac vice who also is an em-

ployer liable for compensation. Griffith | requires us to

reject J&L’s argument in this case.

Appellant next argues that the district court erred in

its calculation of damages by applying the rule an-

nounced in Kaczkowski v. Bolubasz, 491 Pa. 561, 421

A.2d 1027 (1980). It contends that damages in an

LHWCA case must be computed according to a uniform

federal standard; and that federal law requires that a

lump sum award for lost future earnings be reduced to

present value, a practice effectively abolished in Penn-

sylvania by the decision in Kaczkowski. To meet this

contention, we must explore the developing law of dam-

ages in state and federal decisions in light of controlling

legal precepts and prevailing economic conditions.

A.

But first we must make the preliminary determina-

tion of what precise aspect of the damage issue has been

preserved for appeal. Our examination of the record per-

suades us that appellant has not preserved for review its

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Court of Appeais.

contention that the court erred in applying Pennsylvania

law because it felt obliged to apply state law, rather than

federal law. It was the plaintiff's position at trial that fed-

eral law controlled damages and that inflation was a val-

id consideration under federal law. Appellant did not

seem to challenge this position except to suggest that

evidence of inflation had to be introduced by expert testi-

mony and that future earnings had to be reduced to

present worth:

MR. MURDOCH: We're here today under a

Federal statute under Federal law and I don’t think

that the finding of the Pennsylvania Supreme Court

in the recent case regarding not reducing damages

to present worth is applicable in this particular case.

THE COURT: We may have to have a little ar-

gument on that at some point.

MR. MURDOCH: Yes, sir.

MR. LIBENSON: Under Federal law. you can

add inflation.

MR. MURDOCH: If we have expert testimony.

THE COURT: That's a little bit down the road

and we'll wait on that.

App. at 43a.

Standing alone, the court's damages discussion in

its opinion, id. at 492-93a, may be considered ambigu-

ous; without more, it could be argued that the court was

of the view that although this was a federal claim

brought in a federal court in Pennsylvania it was re-

quired to apply the state law of damages. But when the

opinion is read in conjunction with the carlier dialogue

between the court and counsel, we are persuaded that

the court applied federal law and that the dispute be-

tween the parties at trial was limited to the proper feder-

al measure of damages. We conclude that appellant has

preserved for review only the question of the prdéper ele-

ments in the federal law of damayes under the circum-

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Court of Appeals.

stances of this case.' It is to this analysis that we now

turn.

Our starting point is the recognition that Article III,

§2 of the Constitution, in extending the judicial power of

the United States “to all Cases of admiralty and maritime

Jurisdiction,”

referred to a system of law coextensive with, and op-

erating uniformly in, the whole country. It certainly

could not have been intended to place the rules and

limits of maritime law under the disposal and regu-

lation of the several States, as that would have de-

feated the uniformity and consistency at which the

Constitution aimed on all subjects of a commercial

character affecting the intercourse of the States

with each other or with foreign states.

1. For a reviewing court to determine that there is reversible

error, three critical prerequisites must be implicated in the judicial

error-correcting process. It is necessary that there be (a) specific

acts or omissions by the trial court constituting legal error. (b) prop-

erly suggested as error to the trial court, and (c) if uncorrected on

that level, then properly presented for review to the appellate court.

For there to be reversible error, it is mandatory for the appellant

properly to identify the error to the trial court and to suggest a legal-

ly appropriate course of action. The reasons for this requirement go

to the heart of the common law tradition and the adversary svstem.

It affords an opportunity for correction and avoidance in the wial

court in various ways: it gives the adversary the opportunity either

to avoid the challenged action or to present a reasoned defense of

the trial court's action; and it provides the trial court with the alter-

native of altering or modifying a decision or of ordering a more fully

record for review. This philosophy is embodied in the

Federal Rules of Civil Procedure. Thus. Rule 46 requires a party to

“makje} known to the court the action which he desires the court to

take or his objection to the action and his grounds therefor.” (Em-

phasis supplied. )

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Appendix A—Opinion of the Third Circuit

Court of Appeals.

Southern Pacific Co. v. Jensen, 244 U.S. 205, 215 (1917)

(quoting The Lottawanna, 88 U.S. (21 Wall.) 558, 575

(1875)).? We must, therefore, apply a uniform federal

rule; and our decision is not controlled, as in diversity

cases, by the law of the underlying state.

This recognition is not the end of the analysis, how-

ever, but only the beginning. It is not unusual for a fed-

eral court to borrow substantive state law and adopt it as

federal law. As expressed by Justice Jackson, a federal

court addressing a federal question that cannot be an-

swered by reference to federal statutes alone is “free to

apply the traditional common-law technique of decision

and to draw upon all the sources of the common law.”

D’Oench, Duhme & Co. v. F.D.1.C., 315 U.S. 447, 472

(1942) (concurring opinion); see id. at 469.* No rule of

2. See also Pope & Talbot, Inc. v. Hawn, 346 U.S. 406, 409

(1953) (plaintiff's “right of recovery for. . . negligence is rooted in

federal maritime law”); 1A Benedict on Admiralty §2 at 1-4 (7th ed.

1981) (“the maritime law must be uniform throughout the nation

and state legislation may not introduce disharmonious elements”);

H.R. Rep. No. 1441. 92d Cong.. 2d Sess. . reprinted in 1972

U.S. Code Cong. & Ad. News 4698, 4705 (“The Committee intends

that legal questions which may arise in actions brought under |the

1972 amendments to LHWCA| shall be determined as a matter of

Federal law”).

3. See also. «g.. Imbler « Pachtman, 424 U.S. 409 (1976),

which held that the same considerations of public policy that under-

lic the common law rule of absolute immunity of state prosecutors

from tort liability countenance absolute immunity under 42 U.S.C.

$1983, Moragne v. States Marine Lines. Inc., 398 U.S. 375, 390-93

(1970). relying on state wrongful death statutes in recognizing a

right of action for wrongful death under federal maritime law: Mon-

roe v. Pape. 365 U.S. 167. 187 (1961). holding that 42 U.S.C. §1983

“should be read against the ba ‘kground of tort liabilitv that makes a

man responsible for the natural consequences of his actions:” Tex-

tile Workers Union <. Lincoln Mills. 353 U.S. 448. 457 (1957).

which held that in fashioning substantive federal Law under §301 of

the Labor Management Relauions Act. 29 U S.C. $185. “state law. if

compatible with the purpose of §301. mav be resorted to in order to

find the rule that will best effectuate the federal pobcv:” and United

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state law applies of its own force to compel a particular

decision; but we may resort to a rule derived from any

source, state, federal, or foreign, if its intrinsic wisdom

commends it to the case at hand. Once we have trans-

planted to federal soil a rule previously adopted by a state

court, however, it takes on a new life of its own and

grows independently of further modifications or refine-

ments announced by the court which first gave it root.

See Textile Workers Union v. Lincoln Mills, 353 U.S.

448, 457 (1957); D’Oench, Duhme, 315 U.S. at 469

(Jackson, J., concurring).

Accordingly, we find no jurisprudential impediment

to adoption of the state measure of damages. We now

turn to prudential and consequential considerations, and

we must respect the important concerns of consistency

and coherence in the law of damages.

C.

Prior to 1980, the Pennsylvania law of damages for

torts did not ta ¢ into account the pernicious presence of

inflation. Thus in 1976 the Pennsylvania Superior Court

was of the view that “the erratic behavior of the economy

over the past half dozen years, plagued by war and other

unusual circumstances, is not a sufficient demonstra-

tion that inflation at any predictable rate will continue

for another twenty years.” It thus dismissed consider-

ation of inflation as “speculative.” Havens v. Tonner,

243 Pa.Super. 371, 378, 365 A.2d 1271. 1274 (1976). In

1980, however, Pennsylvania's highest court concluded.

NOTE — (Continued)

States v. Hext, 444 F.2d 804, 809-11 (Sth Cir. 1971). looking to Ar-

ticle 9 of the Uniform Commerciai Code as a source of federal com-

mon law governing suits arising from Farmers’ Home Administra-

tion secured loan transactions. under the doctrine of Clearfield

Trust Co. v. United States, 318 U.S. 363 (1943).

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Appendix A—Opinion of the Third Circuit

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“in light of clear scientific evidence of the fact that infla-

tion. . . [has] become an established part of our econo-

my,” that this factor must be considered in awarding

damages for lost future earnings. Kaczkowski, 491 Pa. at

566-67, 421 A.2d at 1030.* It held that continued judici-

al refusal to recognize the impact of inflation, while

maintaining the practice of discounting lump sum

awards to “alleged present value,” id. at 570, 421 A.2d at

1032, would “ignore our responsibility to attempt to

‘graduate the amount of the damage award exactly to the

extent of the loss.’ Jd. at 571, 421 A.2d at 1032 (quot-

ing Forsyth v. Palmer, 14 Pa. 96, 97 (1850)).

In a most persuasive opinion, replete with relevant

and credible economic data, see, e.g., id. at 572-74 nn.

11-15, 580-81, 421 A.2d at 1033 nn. 11-15, 1037, the

court declared:

Despite the uninformed belief of the |Havens]

court, inflation and productivity factors are not

speculative and are capable of definition and predic-

tion by economic experts. For decades, economists

4. Writing for the court. Justice Nix defined inflation as

follows:

Inflation is “the increase in the volume of money and cred-

it relative to available goods resulting in a substantial and con-

tinuing rise in the general price level.” Websters, Third Inter-

national Dictionary (1965). Inflation gains are measured in

terms of what the average person refers to as “cost of living in-

creases.” An example of inflation evidencing an increase in

prices unrelated to an increase in intrinsic value is that the

juice content of oranges has not increased in years, but their

price continues to rise.

The presence of inflation plays two distinct roles in an

award for prospective damages. The first role is

the impact of inflation on the future earnings of the victim. The

second place in which inflation plays a part is in determining

the appropriate interest rate to discount the future damage

award to its present value.

491 Pa. at 565 n.4. 421 A.2d at 1029 n.4.

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have been refining tools to forecast economic

growth and have used these tools with proven accu-

racy. Sophisticated economic forecasts are relied

upon by every major government agency, corpora-

tion, and financial institution. These forecasts are

based upon all that is known in the American econ-

omy and despite small tolerances of error, these pro-

jections have been accurate in the past. See, Dis-

trict of Columbia v. Barriteau, D.C.App., 399 A.2d

563, 566 (1979). Thus, there exists a reasonable ba-

sis in fact for this court to consider the impact of in-

flation and productivity on lost future earnings. A

court has a responsibility to the citizenry to keep

abreast of changes in our society. In light of the rec-

ognized acceptance of the science of economics, the

courts of this Commonwealth can no longer main-

tain their ostrich-like stance and deny the admissi-

bility and relevancy of reliable economic data con-

cerning the impact of productivity and inflation on

lost future earnings. Indeed, to ignore economic

realities and presume that there will be no changes

in an individual's future earnings because of such

factors is further removed from reality than any

variance that may result from our efforts to predict

these factors.

Id. at 572, 421 A.2d at 1032-33.

But the 1980 Pennsvlivenia decision was not with-

out formidable precedent. li ‘he post World War | infla-

tionary period, over a half century ago. the Vermont Su-

preme Court cited extensive authority for considering

inflation in awarding damages:

The result sought by the law in assessing dam-

ages in [tort] cases is compensation — so far as a

money payment can — the ascertainment of such a

sum as will compensate the plaintiff for the injurv.

Necessarily, damages are to be expressed in terms

of money... . . As a medium of exchange. its value

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Appendix A—Opinion of the Third Circuit

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appreciates or depreciates according to the rise and

fall in commodity prices. So it is that, at least so far

as those elements of damages properly classed as

pecuniary losses — like loss of time, loss of earning

power, expenses and the like — are concerned, it is

proper for the jury to take into consideration the

fact, known to everybody, that the purchasing pow-

er of money is at present seriously impaired.

Halloran v. New England Telephone & Telegraph Co., 95

Vt. 273, ——, 115 A. 143, 144 (1921).°®

Moreover, state judges have not been alone in rec-

ognizing, in Justice Roberts’ words, that “the orderly de-

velopment of the law must be responsive to new condi-

tions and to the persuasion of superior reasoning.”

Griffith v. United Air Lines, Inc., 416 Pa. 1, 23, 203 A.2d

796, 806 (1964). Over 20 years ago, in a case under the

Federal Employers’ Liability Act, Judge Friendly wrote

that “there is little or no authority in favor of charging

the jury to take future inflation into account,” but he

recognized that “there are few who do not regard some

degree of continuing inflation as here to stay and would

be willing to translate their own earning power into a

fixed annuity.” McWeeney v. New York, N.H. & H. R.R.

Co., 282 F.2d 34, 38 (2d Cir.) (in banc), cert. denied, 364

U.S. 870 (1960). Eleven years later, in a longshoreman’s

personal injury case, Judge Friendly noted that “if infia-

tion should continue at its present pace, courts may have

to reconsider the propriety of the long recognized charge

with respect to discount.” Yodice v. Koninklijke

Nederlandsche Stoomboot Maatschappij, 443 F.2d 76,

79 (2d Cir. 1971) (citing McWeeney).® More recently, in

5S. A comprehensive list of state cases is set forth in Feldman v.

Allegheny Airlines, inc., 382 F Supp. 1271, 1290 (D.Conn. 1974),

aff'd in pertinent part, 524 F 2d 384 (2d Cir. 1975). See also Annot.,

12 A.L.R.2d 611.

6. The court in Yodice declined to undertake the suggested re-

consideration because “the complete absence of economic data in

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Court of Appeals.

Doca v. Marina Mercante Nicaraguense, S.A., 634 F.2d

30, 36 (2d Cir. 1980), cert. denied, 451 U.S. 971 (1981),

a second circuit panel in an LHWCA case surveyed the

economic literature demonstrating the persistence of

strong inflationary pressures and held that “inflation

should be considered in estimating the present value of

lost future wages.” See also, e.g., Steckler v. United

States, 549 F.2d 1372, 1375-78 (10th Cir. 1977) (Feder-

al Tort Claims Act); Freeport Sulphur Co. v. S/S

Hermosa, 526 F.2d 300, 308-11 (Sth Cir. 1976) (Wis-

dom, J., specially concurring) (admiralty); and United

States v. English, 521 F.2d 63, 72-76 (Sth Cir. 1975)

(Tort Claims Act). And the virulent influence of inflation

was strikingly brought home to federal judges in The Re-

port of the Commission on Executive, Legislative, and

Judicial Salaries (December, 1980) at 7-9. The report

disclosed the following:

* From 1969 to 1980, the Consumer price index

rose by more than 130 per cent.

* During the same period, the Hourly Earnings In-

dex, which reflects wage rates in the private,

non-farm economy, also rose by more than 130

per cent.

* The 1980 $57,500 salary for U.S. Circuit Judges

amounted to $24,400 in terms of 1969 dollars or a

reduction of 43 per cent.

NOTE — (Continued)

the present record and the relatively small loss of future earnings”

made it “difficult to imagine a case which would be a more inappro-

priate vehicle for that purpose.” 443 F.2d at 79. Given the extensive

development in the common law. the present economic

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criteria of “justice,” “common sense,” and “public poli-

cy” generally used by the courts in evaluating the conse-

quences of embracing a new and attractive rule of law —

what legal philosophers are wont to describe as “utilitar-

ian” in the Benthamite scale of measurable

aggregates of pleasures and pains.’ If the spectre of

“speculation” is removed, a matter we shall address

later, our immediate task is to determine whether the

Kaczkowski formula is congruent with the federal law of

damages in maritime cases. We believe it is.

D.

The relevant federal law of damages is familiar and

uncomplicated, and is not materially different from com-

parable state law. This court carefully surveyed the case

law and delineated the permissible elements of recovery

in Downie v. United States Lines Co., 359 F.2d 344,

347-48 (3d Cir.) (in banc), cert. denied, 385 U.S. 897

(1966). We adhered in that decision to the general rule

that a seaman injured by the tortious conduct of his em-

ployer is entitled to an award of damages commensurate

with the nature and extent of his injuries. He is entitled

to reimbursement for his loss of earnings, past and pro-

spective; for any impairment of his earning capacity; for

medical expenses incurred and to be incurred; and for

any other economic loss he may have sustained or is

likely to sustain. He is also entitled to redress for his

7. See N. MacCormick. Legal Reasoning and Legal Theory 105

(1978).

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physical injury. including the effects thereof, such as

pain, suffering, mental anguish, discomfort, and incon-

venience. If the injuries are permanent and result in an

impairment of earning capacity, he may recover dam-

ages for such impairment, including (but not limited to)

his probable loss of future earnings. Damages resulting

from the impairment of earning capacity and the prob-

able loss of carnings must be measured on the basis of

life expectancy at the time of injury. The award must be

based upon the probable pecuniary joss reduced to its

present net worth. The injured worker is also entitled to

compensation, again based on life expectancy at the

time of the injury, for the physical and mental effects of

the injury on his ability to engage in those activities

which normally contribute to the enjoyment of life, in-

cluding, for example, his avocations. The specific ele-

ments of such an award necessarily depend upon the

proofs. There are no precise criteria by which these ele-

ments may be evaluated, but they are measurable to the

same extent as pain, suffering. and mental anguish.

Full compensation for lost prospective earnings is

most difficult, if not impossible, to attain if the court is

blind to the realities of the consumer price index and the

recent historical decline of purchasing power. Thus if

we recognize, as we must, that the injured worker is en-

titled to reimbursement! for his loss of future carnings,

an honest and accurate calculation must consider the

stark reality of inflationary conditions.

IV.

What had troubled the courts for years was the

a, nature of predicting future inflationary

The Pennsylvania Court has not only recognized

Sas auditions tal enol te Balad eo te anette Os

known as the “total offset method,” a variation of meth-

ods introduced by the federal district court in Feldman v.

Allegheny Airlines, Inc., 382 F.Supp. 1271 (D.Conn.

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1974), affd in pertinent part, 524 F.2d 384 (2d Cir.

1975), and the Alaska Supreme Court in Beaulieu v. El-

liott, 434 P.2d 665 (1967). and State v. Guinn, 555 P.2d

530 (1976). The total offset method avoids the danger of

speculating as to the future rate of inflation by making

what we consider a very sensible accommodation: it as-

sumes that in the long run the effects of future inflation

and the discount rate will co-vary significantly with the

other. See authorities cited in Kaczkowski, 491 Pa. at

581, 421 A.2d at 1037. Moreover, we are impressed by

the pragmatic considerations embraced by the Pennsyl-

vania Court:

An additional virtue of the total offset method is

its contribution to judicial efficiency. Litigators are

freed from introducing and verifying complex eco-

nomic data. Judge and juries are not burdened with

complicated. time consuming economic testimony.

Finally, by eliminating the variables of inflation and

future interest rates from the damage calculation,

the ultimate award is more predictable.

Id. at 583, 421 A.2d at 1038.

We are impressed by the “total offset method” be-

cause it both accommodates the reality of inflation and

bids fealty to the concept of reducing future earnings to

present worth. It makes a judgment — evaluative to be

sure, but no better or no worse than the varying prognos-

tications of expert witnesses --- that the rate of future in-

flation will be equivalent to future interest rates. From a

pragmatic viewpoint, lost future carnings need not be

discounted to present value, although the formula calls

for a theoretical reduction to present worth, because the

inflation and discount rates are legally presumed to be

equal and cancel one another.

We find the foregoing analysis coherent and con-

sistent with the elements of damages discussed in pre-

vious case law. It does not contradict valid and binding

rules of our court. The total offset formula embodies the

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continued requirement of reduction to present worth,

see Chesapeake & Ohio Railway Co. v. Kelly, 241 U.S.

485 (1916); Downie, 359 F.2d at 347, and it avoids con-

siderations that would tend to introduce an illicit specu-

lative element into the computations. Indeed, by elimi-

nating the discount factor from the jury's or the court's

calculations, the total offset method will tend to elimi-

nate the necessity for speculation, to introduce greater

certainty into the parties’ own calculations, and thereby

perhaps to facilitate settlement of personal injury claims

without the necessity of judicial intervention. We there-

fore hold that the district court did not err in computing

damages for the loss of future earnings, because it is not

necessary to go through the process of discounting lump

sum awards to theoretical present value; the discount

factor is presumed equal to and offset by the impact of

inflation on the future economic value of the award.

Vv.

Appellant's final contention is a challenge to the fac-

tual predicate of the court’s computation of projected

earnings. It argues that the court erred in using the

minimum wage as a factor instead of the wage J&L pays

its light duty employees. At bottom this is a question of

fact finding reviewed under the “clearly erroneous”

standard. Fed. R. Civ. P. 52(a); see Krasnov v. Dinan.

465 F.2d 1298, 1302-03 (3d Cir. 1972). We do not view

the findings as clearly erroneous.

V1.

The judgment of the district court will be affirmed.

A True Copy:

Teste:

Clerk of the United States Court of Appeals

jor the Third Circuit

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Appendix A—Opinion of the Third Circuit

Court of Appeals.

UNITED STATES COURT OF APPEALS

For the Third Circuit

No. 81-1928

HOWARD E. PFEIFER,

vs.

JONES & LAUGHLIN STEEL CORPORATION,

Owner or owner pro hac vac vice of Barges

1011, 1384, 1400, 1363, and others in a fleet,

Appellant.

(D. C. Civil No. 79-1597)

On Appeal from the United States District Court

for the Western District of Pennsylvania.

Present: Aldisert, Van Dusen and Garth,

Circuit Judges.

JUDGMENT

This cause came on to be heard on the record from the

United States District Court for the Western District of

Pennsylvania and was argued by counsel on March 18,

1982.

On consideration whereof, it is now here ordered and

adjudged by this Court that the judgment of the said

District Court, entered April 16, 1981, be, and the same

is hereby affirmed. Costs taxed against appellant.

ATTEST:

SALLY MRVOS

Clerk.

April 16, 1982.

18a

Appendix A—Opinion of the Third Circuit

Court of Appeals.

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 81-1928

HOWARD E. PFEIFER

v.

JONES & LAUGHLIN STEEL CORPORATION

Owner or owner pro hac vice of

Barges 1011, 1384, 1400, 1363, and

others in a fleet,

Appellant

(W.D. Pa. (Pgh.) Civil No. 79-1597)

met

SUR PETITION FOR REHEARING

Present: SEITZ, Chief Judge,

ALDISERT, ADAMS, GIBBONS, HUNTER, WEIS. GARTH,

HIGGINBOTHAM, SLOVITER, BECKER and VAN DUSEN,

Circuit Judges

The petition for rehearing filed by Appellant in the

above entitled case having been submitted to the judges

who participated in the decision of this court and to all

the other available circuit judges of the circuit in regular

active service, and no judge who concurred in the deci-

sion having asked for rehearing. and a majority of the

circuit judges of the circuit in regular active service not

having voted for rehearing by the court in banc. the peti-

tion for rehearing is denied.

Judges Adams and Hunter would grant the petition

for rehearing.

19a

Appendix A—Opinion of the Third Circuit

Court of Appeals.

Statement of Judge Adams:

Judge Adams believes that the damages rule estab-

lished in this case — that inflation and interest rates

will be deemed to offset one another so thai no dis-

count to present value is necessary — is likely to

have considerable consequences for a great many

subsequent cases. Although it may be that econom-

ic conditions warrant this dramatic change in our

system of calculating damages, the presence at this

time of very high interest rates and substantially re-

duced inflation would suggest caution in adopting a

rule that appears to be premised on some immuta-

ble relationship between interest and inflation.

Even if the newly-adopted damages rule is appropri-

ate under today’s economic situation, institution of

the rule is a matter of unusual importance that mer-

its consideration by the full Court. Moreover, be-

cause the rule implicates interests and affects par-

ties in a wide range of litigation settings, rehearing

in banc would provide an opportunity for this Court

to consider amicus briefs from other groups con-

cerned with the damages rule. Accordingly, he dis-

sents from the denial of rehearing in banc.

Judge Hunter also would grant rehearing and joins

in Judge Adams’ statement.

BY THE COURT,

RUGGERO J. ALDISERT

Circuit Judge

Dated: May 20. 1982

20a

Appendix A—Opinion of the Third Circuit

Court of Appeals.

A True Copy:

Teste:

Clerk of the United States Court of ._ppeals

for the Third Circuit

2la

Appendix A—Opinion of the Third Circuit

Court of Appeals.

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 81-1928

HOWARD E. PFEIFER

v.

JONES & LAUGHLIN STEFL CORPORATION

Owner or owner pro hac vice of

Barges 1011. 1384, 1400, 1363, and

others in a fleet.

Appellant

(W.D.Pa. (Pgh.) Civil No. 79-1597)

AMENDMENT

SUR PETITION FOR REHEARING

Judge Adams’ statement granting petition for

rehearing in the above, filed on May 20, 1982, is to be

amended to include a footnote following the second sen-

tence in that statement. to read as follows:

1. Other Courts of Appeals have considered the

problem of accounting for inflation in damage awards,

and have arrived at outcomes that are somewhat at vari-

ance with the rule adopted here. The Second Circuit, for

example, after reviewing economic literature in the field,

ruled that damage awards should still be discounted to

reflect a “real” interest rate, untainted by inflation, esti-

mated at about one to two percent. Doca v. Marina

Mercante Nicaraquense, S.A., 634 F.2d 30, 39-40 (2d

Cir. 1980): accord, O'Shea v. Riverway Towing Co., No.

81-1924. Slip Op. at 9-12 (7th Cir. Apr. 27, 1982). The

Fifth Circuit, which has until now applied a higher dis-

count rate, recently voted to reconsider in banc the

22a

Appendix A—Opinion of the Third Circuit

Court of Appeals.

proper treatment of inflation in calculating damage

awards. Byrd v. Reederei, 638 F.2d 1300, rehearing

granted, 650 F.2d 1324 (Sth Cir. 1981).

BY THE COURT,

ARLIN M. ADAMS

Circuit Judge

Dated: June 1, 1982

A True Copy:

Teste:

Clerk of the United States Court of Appeals

for the Third Circuit

23a

Appendix A—Opinion of the Third Circuit

Court of Appeals.

UNITED STATES COURT OF APPEALS

For the Third Circuit

No. 81-1928

HOWARD E. PFEIFER,

vs.

JONES & LAUGHLIN STEEL CORPORATION,

Owner or owner pro hac vac vice of Barges

1011, 1384, 1400, 1363, and others in a fleet,

Appellant.

(D. C. Civil No. 79-1597)

On Appeal from the United States District Court

for the Western District of Pennsylvania.

Present: Aldisert, Van Dusen and Garth,

Circuit Judges.

JUDGMENT

This cause came on to be heard on the record from the

United States District Court for the Western District of

Pennsylvania and was argued by counsel on March 18,

1982.

On consideration whereof, it is now here ordered and

adjudged by this Court that the judgment of the said

24a

Appendix A—Opinion of the Third Circuit

Court of Appeals.

District Court, entered April 16, 1981, be, and the same

is hereby affirmed. Costs taxed against appellant.

ATTEST:

SALLY MRVOS

Clerk.

April 16, 1982.

Certified as a true copy and issued in lieu of a formal

mandate on May 28, 1982.

Costs taxed in favor of appellee as follows:

Diba bbaedboesecdedddccogbteccccse $184.75

SS a ee $184.75

Test:

M. ELIZABETH FERGUSON,

Chief Deputy Clerk,

United States Court of Appeals

for the Third Circuit.

25a

Appendix A—Opinion of the Third Circuit

Court of Appeals.

UNITED STATES COURT OF APPEALS

For the Third Circuit

June 8, 1982

No. 81-1928

HOWARD E. PFEIFER,

vs.

JONES & LAUGHLIN STEEL CORPORATION,

Owner or owner pro hac vac vice of Barges

1011, 1384, 1400, 1363, and others in a fleet,

Appellant.

(D. C. Civil No. 79-1597)

Present: Aldisert.

1. Motion by appellant for stay of mandate which

the Court may wish to treat as a motion to recall the

mandate;

2. Answer by plaintiff-appellee to motion for stay

of mandate;

3. The opinion was filed and judgment entered on

April 16, 1982. An order denying appellant's peti-

tion for rehearing en banc was filed May 20, 1982.

26a

Appendix A—Opinion of the Third Circuit

Court of Appeals.

The certified judgment in lieu of formal mandate

issued on May 28, 1982;

in the above-entitled case.

Respectfully,

SALLY MRVOS/i(Illegible)

mmd Clerk

Enc.

The foregoing Motion is/are granted and the mandate

is recalled. Appellant is directed to notify the Clerk when

the Petition for Certiorari is filed or alternatively, if it is

decided that no such Petition will be filed.

BY THE COURT,

ALDISERT,

Judge.

Dated: June 11, 1982.

27a

APPENDIX B.

Opinion of the District Court for Western

District of Pennsylvania

IN THE UNITED STATES DISTRICT COURT

For the Western District of Pennsylvania

HOWARD E. PFEIFER,

Plaintiff,

vs.

JONES & LAUGHLIN STEEL CORPORATION,

owner or owner pro hac vice of Barges 1011,

1384, 1400, 1363 and others in a fleet,

Defendant.

Civil Action No. 79-1597.

FINDINGS OF FACT AND CONCLUSIONS

OF LAW

Plaintiff, Howard E. Pfeifer, brought this action pur-

suant to the Longshoremen’s & Harbor Worker's Com-

pensation Act, §5(b), as amended, 33 U.S.C. §905(b), to

recover damages from defendant, Jones & Laughlin Steel

Corporation, for personal injuries allegedly sustained as

the result of defendant's negligence. Pursuant to Fed. R.

Civ. P. 52, we make the following Findings of Fact and

Conclusions of Law.

Findings of Fact

1. Plaintiff is an individual residing at Box 126-A,

R.D. #1, Ford City, Armstrong County, Pennsylvania

16226.

Appendix B—Opinion of the District Court for

Western District of Pennsylvania.

2. Defendant is a corporation with its principal place

of business in Pittsburgh, Allegheny County, Penn-

sylvania.

3. Defendant corporation is engaged, inter alia, in the

business of owning and operating a fleet of vessels, boats

and barges upon the Ohio, Monongahela and Allegheny

Rivers and their tributaries, all of which are navigable

waters of the United States.

4. At the time of plaintiff's accident, the defendant

had a fleet of approximately thirty-five coal barges at its

No. 1 landing on the north side of the Monongahela

River and used said vessels in the aforementioned

navigable waters of the United States. At all times

hereinafter mentioned, defendant owned, managed and

operated, or was owner pro hac vice, of said vessels.

5. Plaintiff was permanently employed by defendant

for nineteen years as a landing helper on defendant's coal

barges. The defendant moved barges to and from its by-

products plant on the Monongahela River, and plaintiff

aided in loading and unloading the barges at that plant.

6. On January 13, 1978, plaintiff reported to work at

landing No. 1 at 12:00 A.M. Defendant assigned plaintiff

the duties of a “head man.” (Although ordinarily

classified as a landing helper, plaintiff worked as head

man when the regular head man was absent because of

illness or vacation).

7. Plaintiff's duties on January 13, 1978 consisted of

moving loaded barges of coal to the coal hoist or elevator

to be emptied into defendant's coal bins, moving the

Appendix B—Opinion of the District Court for

Western District of Pennsylvania.

empty barges away from the coal hoist, and tying them

with other barges to be joined in a fleet and moved

away. Plaintiff's duties also included filing reports, in-

specting the loaded barges in the fleet for possible leaks,

and, when necessary, pumping water out of the leaking

barges.

8. Two other bargemen or bargehelpers, Walter Tad-

der and Harvey Hicks, assisted plaintiff in his duties on

January 13, 1978.

9. Plaintiff's accident occurred during the 12:00 A.M.

to 8:00 A.M. shift on that date.

10. There was an accumulation of snow and ice on the

gunnels of the barges where plaintiff was working. A

weather report (Plaintiff's Exhibit ‘‘2’’) indicates that the

temperature was 22 degrees, that there had been a two-

inch accumulation of snow on January 12, 1978, and that

an additional inch of snow fell between 12:50 A.M. and

6:50 A.M. (hours included in plaintiff's shift) on January

13, 1978.

11. It was customary at the No. 1 landing to have

salt stored for use in salting the gunnels of the barges

and dissolving ice on the loads of coal. The salt was

usually available in five-gallon paint buckets. It also was

customary for additional personnel to be used when there

were snowy and icy conditions. This procedure was

sometimes referred to as ‘“‘doubling out."

12. At approximately 12:30 A.M., plaintiff requested

salt from the shift foreman, Sherman Haddex. Haddex

responded that he had no one available to deliver the

salt. :

30a

Appendix B—Opinion of the District Court for

Western District of Pennsylvania.

13. In addition to requesting salt, plaintiff asked the

shift foreman for additional help in shovelling snow off of

the gunnels.

14. No snow was shoveled from the barges during

plaintiff's shift because the men working that shift were

busy moving barges and attending to a sinking barge.

(Scme barges had broken loose earlier that night, requir-

ing an additional motor vessel to come up and bring

them back into the fleet. This reduced the time available

to attend to the sinking barge earlier or to shovei snow

and ice. In addition, the third man on the shift that

night, Harvey Hicks, was quite inexperienced and

therefore provided less help than an experienced man

might have in moving the barges and taking care of the

fleet. In fact Tadder had to stay close to Hicks most of

the time because the weather conditions, together with

Hicks’ inexperience, caused Tadder to be concerned

about Hicks’ safety.)

15. OSHA regulations (Plaintiff's Exhibit “11,” pages

102, 103) required defendant to remove the snow from

the gunnels of barges and not allow a slippery surface.

Defendant failed to comply with these governmental

safety regulations and the safety and health regulations

for longshoremen.

16. At the start of plaintiff's shift, one of the barges

in the fleet was leaking, and one pump in a gunnel at the

quarter head of the barge was in operation. The leaking

barge had a full load of coal.

17. At about 4:00 A.M., plaintiff learned that the

leaking barge was starting to sink, and upon inspection

3la

Appendix B—Opinion of the District Court for

Western District of Pennsylvania.

the men on the 12:00-8:00 A.M. shift decided that the

barge needed an additional pump in its bulkhead.

18. The pumps available on the night of plaintiff's ac-

cident were more cumbersome and not as easy to connect

to the electrical system as the pumps which were usually

supplied.

19. The pump that plaintiff used that night consists

of three parts: a leg or tube of metal approximately eight

feet long with a propellor at the bottom, weighing be-

tween 80 and 90 pounds; a 12-inch by 18-inch electric

motor weighing approximately 80 pounds; and an elec-

trical connection. The operation of this pump requires

the insertion of an electrical line that was rolled from a

heavy spool. Ordinarily three men are needed to assem-

ble the pump.

20. Walter Tadder went to get the leg of the pump;

Harvey Hicks went to get the electrical wiring, and

plaintiff went to the pump barge and found a motor and

breaker box. Plaintiff proceeded to walk from the pump

house across the gunnel of a barge carrying the motor on

his right shoulder and the breaker box, which weighs ap-

proximately 5 pounds, in his left hand. He had traversed

three quarters of the barge gunnel and had reached the

quarter head in view of Tadder, who was on the sinking

barge, when both of his feet went out from under him

because of the ice and snow accumulated on the gunnel

of the barge.

21. Plaintiff could not break his fall because he was

carrying the motor and breaker box. Plaintiff struck a

barge rail and landed on his tailbone, with the motor fall-

ing onto his lap.

32a

Appendix B—Opinion of the District Court for

Western District of Pennsylvania.

22. Plaintiff complained that his neck and the right

side of his back were sore. (Plaintiff's medical case record

(Plaintiff's Exhibit “4’') states that plaintiff suffered

mild soreness to the nape of his neck, and a mo-erate

severe contusion to the coccygeal region with swelling

and that he complained of soreness in his thoracic lum-

bar region.)

23. Walter Tadder, who saw plaintiff fall, took the

motor off of plaintiff's lap, and together with Hicks, in-

serted the motor into the pipe while plaintiff held a flash-

light.

24. The sinking barge was only 2‘ to 3 inches above

the water when plaintiff was carrying the pump motor,

and it therefore presented an emergency situation.

25. The testimony of defendant's witnesses regarding

the use of salt on gunnels was contradictory. David Cur-

ran testified that the men do not salt the gunnels, where-

as Sherman Haddex, the foreman, testified that they do.

26. Haddex stated in his accident report that ‘not

putting salt on icy barges’’ was an unsafe practice.

(Plaintiff's Exhibit ‘3,’ Line 18).

27. The report went on to note that in order to pre-

vent similar accidents, the river crew was to be instruct-

ed to salt the gunnels of the barges. (Plaintiff's Exhibit

*3,”" Line 26).

28. Defendant, through Mr. Haddex, admits that “ice

on gunnels of barges” is an unsafe condition (Plaintiff's

Exhibit “3,"’ Line 19).

33a

Appendix B—Opinion of the District Court for

Western District of Pennsylvania.

29. The day of the accident, plaintiff went to defen-

dant’s dispensary to get medication and to have X-rays

taken. Plaintiff was taken from the dispensary to South

Side Medical Center where more X-rays were taken.

30. Plaintiff's back was black and blue and swollen

below the belt line immediately after his fall.

31. In April, 1978, defendant's plant physician, Dr.

Anas El Attar, prescribed physical therapy for plaintiff.

On January 20, 1978, Dr. El Attar had certified that

plaintiff could return to work without restrictions im-

mediately, but plaintiff did not. Between April, 1978 and

April, 1979, plaintiff went to Citizens General Hospital

in New Kensington for physical therapy fifty-eight

times.

32. At defendant's request, plaintiff was seen in con-

sultation with neurosurgeons, Hershey, Gray & Palmer,

and by Dr. Danilo L. Enriquez. None of these doctors

required plaintiff to undergo any additional treatment or

medical procedures. None of the consultant physicians

recommended that plaintiff return to work.

33. Dr. Enriquez performed electromyographic

studies, the results of which were consistent with a

motor neuron disease.

34. Dr. El Attar issued a certificate stating that as of

March 16, 1979, the plaintiff was totally disabled as a

result of (a) advanced degenerative osteoarthritis of the

spine, cervical, thoracic and lumbar, (b) partial blindness,

and (c) generalized muscular dystrophy.

34a

Appendix B—Opinion of the District Court for

Western District of Pennsylvania.

35. In his testimony, Dr. El Attar stated that the

term “muscular dystrophy” was not used in its popular

sense, but rather, was used to describe a muscular weak-

ness in order to help plaintiff qualify for the medical dis-

ability pension that he had requested.

36. Dr. El Attar testified that there was no disability

whatsoever as of March 16, 1979 as a result of the alleg-

ed injuries of January 13, 1978, but plaintiff could not be

reemployed by Jones and Laughlin as a result of Dr. El

Attar’s findings of March 16, 1979.

37. Joseph Novak, M.D., a Board certified physician,

examined plaintiff on May 22, 1979 at the request of the

Hartford Insurance Company; he subsequently testified

on behalf of plaintiff. Plaintiff had no independent

medical treatment or examination of his own choosing.

38. Plaintiff could not do a sit up, had limited range

of motion in his back, and no muscle tone. He had

soreness and pain that felt like he was “sitting on golf

balls,” neck pain, continuous headaches (occipital and

frontal), low back pain and pain in both hips. He had to

go to bed early at night because of increasing pain; he

39. Dr. Novak’s examination revealed that plaintiff is

skinny, muscular, walks stooped forward, has a flatten-

ing of his lumbar lordosis, and has some limitation of

motion of his lumbar spine, but that plaintiff willingly

went through the requested maneuvers. Plaintiff was

able to walk on his tiptoes and heels without any difficul-

ty and had no sciatic stretch pain on straight leg raising;

his reflexes were 3 plus and active in both legs; there

35a

Appendix B—Opinion of the District Court for

Western District of Pennsylvania.

were no atrophies visible and his muscles were normal.

Plaintiff told Dr. Novak that he was unable to do a sit

up because of low back pain.

40. It was Dr. Novak's opinion, within a reasonable

degree of medical certainty, that the fall of January 13,

1978 was a superimposed trauma on the pre-existing con-

dition of degenerated arthritis to the lumbar and cervical

spine.

41. It was also Dr. Novak's opinion, within a

reasonable degree of medical certainty, that plaintiff was

permanently disabled and unable to do the work that he

formerly had performed.

42. Dr. Novak stated that it was his opinion that

plaintiff was limited to a very restricted, sedentary, light

type of work and that he knew of no light duty that

could be performed in defendant's place of business.

43. Dr. Novak testified that he had reviewed the

report of Dr. El Attar and Dr. Enriquez and found no in-

dication of a muscular dystrophy as reported by Dr. El

Attar. He criticized diagnosis and further stated that he

was eminently qualified to disagree with Dr. El Attar on

the diagnosis. Dr. Novak further testified that he did not

feel that Dr. Enriquez’s diagnosis was correct and

speculated that he was practicing defensive medicine in

regard to his diagnosis of motor neuron disease, which he

depicted as ‘“The Lou Gehrig Disease.” Dr. Novak stated

that in his opinion plaintiff did not have a motor neuron

disease and that plaintiff would not be here today if he

had it.

36a

Appendix B—Opinion of the District Court for

Western District of Pennsylvania.

44. Dr. Novak testified that in his opinion, osteo-

arthritis can be present in a person for twenty years

without the person knowing of this condi.ion. It was his

opinion, within a reasonable degree of medical certainty,

that the trauma, that is, plaintiff's fall on January 13,

1978, superimposed on his existing arthritis, caused

plaintiff's present permanent disability and his inability

to perform his former occupation.

45. When plaintiff underwent physical therapy treat-

ments at Citizens General Hospital, New Kensington,

Pa. (see finding No. 31), it was under the supervision of

Dr. El Attar. He was also seen by other physicians and

given medicaticn.

46. Dr. El Attar testified that by March of 1979,

plaintiff could have been active and could have lifted fif-

ty pounds. Dr. Novak felt that plaintiff was capable of

carrying ten to twenty-five pounds and could have held a

job that might involve sitting, standing, walking or driv-

ing for periods of up to two hours, but at the end of such

a two-hour period he would have to rest.

47. We find that after July 1, 1979, plaintiff would

have been capable of doing light work which could in-

volve lifting weight of not more than twenty-five pounds.

48. Defendant never offered plaintiff a job of any

type after his injury. There were never any discussions

between defendant an aintiff regarding the availabili-

ty of a light duty job.

49. The plaintiff could not work on the river.

50. Plaintiff's annual wage in 1978 was $26,065.

37a

Appendix B—Opinion of the District Court for

Western District of Pennsylvania.

51. As of October 31, 1980 (the date of trial), plaintiff

had received payments of $33,079.14 under the

Longshoremen’s and Harbor Workers’ Compensation

Act.

52. The legal minimum hourly wage in the United

States in 1979 was $2.90, or $6,032 per year ($2.90 x

2080 hours).

53. Plaintiff has a seventh grade education and has

no job experience other than heavy, outdoor, strenuous,

laboring-type work. He had worked steadily for the

defendant for nineteen years and was considered a good

worker.

54. Plaintiff applied for two jobs after the accident

but was unable to pass the physical examinations re-

quired.

55. Plaintiff was born on June 27, 1925, was approx-

imately 52-1/2 years old when the accident occurred on

June 13, 1978 and will be 65 years old on June 27, 1990,

twelve and one-half years after the accident.

56. Plaintiff's work expectancy at the time of the ac-

cident was twelve and one-half years.

Conclusions of Law

1. This Court has jurisdiction pursuant to 28 U.S.C.

$1333.

2. In 1972, Congress amended the Longshoremen’'s

and Harbor Worker's Compensation Act of 1927

(hereinafter ‘“‘LHWCA"’), 33 U.S.C. §§901-950, fundamen-

tally changing the basis for a longshoreman’s action

3de

Appendix B—Opinion of the District Court for

Western District of Pennsylvania.

against a vessel owner. Under the Act as amended, a

vessel owner is no longer strictly liable for a

longshoreman’s injuries on the basis of unseaworthiness

or nondelegable duty, or for a stevedore’s negligence

under a respondent superior theory. Imstead, “‘an owner

[is] liable to an injured longshoreman only for its own

negligence that proximately caused the injury.". McCar-

thy v. Silver, 487 F. Supp. 1021, 1024 (E.D. Pa. 1980).

See Rich v. United States Lines, Inc., 546 F.2d 541, 545

(3d Cir. 1979).

3. The Third Circuit has held that “[Section] 905(b)

imposes on vessel owners the same duty to exercise

‘reasonable care under the circumstances of each case’

that would be applicab.’ co a land based business."’ Gri/-

fith v. Wheeling-Pittsburgh Steel Corp., 610 F.2d 116,

125 (3d Cir. 1979), appeal pending, 444 U.S. 1042 (1980).

4. Applying this standard, the Griffith court stated

that a vessel could be found negligent on a showing: (1)

that the vessel knew of or by exercise of reasonable care

could have discovered the condition on board ship that

led to the injury; (2) that the vessel knew or should have

known that the condition would impose an unreasonable

risk of harm to a longshoreman working on board the

ship; and (3) that the vessel failed to exercise reasonable

care to protect the longshoreman against that danger.

Id. at 126.

5. In Griffith, a barge was delivered to a steel com-

pany’s landing by a riverboat company and was incor-

porated into a fleet there under the supervision of the

steel company’s dock foreman. The barge was in the ex-

39a

Appendix B—Opinion of the District Court for

Western District of Pennsylvania.

clusive possession of the steel company until the time of

the accident; its movement was the responsibility of the

foreman, and the steel company was free to choose which

barge it would use for steel products. The Third Circuit

found that these facts fit squarely within Blair v. United

States Steel Corp., 444 F.2d 1390 (3d Cir. 1971), cert.

denied, 404 U.S. 1018 (1972), in which the Court held

that a bailee in exclusive possession of a river barge is

the owner pro hac vice of the vessel.

6. We find that the defendant, Jones & Laughlin

Steel Corporation, was the owner pro hac vice of the

barges in the fleet at its No. 1 landing on January 13,

1978.

7. Applying the standard of care set forth in Griffith

to the facts of this case, we find that defendant, as

owner pro hac vice of the barge on which plaintiff was

injured, was negligent.

8. The weather report shows that there was an ac-

cumulation of snow and ice on the gunnels at the time of

plaintiff's accident. Prior to the accident, defendant had

requested salt, as well as additional workmen to shovel

the snow.

9. Thus, the defendant knew of the condition on

board the vessel that led to plaintiff's injury, knew that

the condition imposed an unreasonable risk of harm to

longshoremen working on the vessel, and failed to exer-

cise reasonable care to protect the longshoremen against

danger.

40a

Appendix B—Opinion of the District Court for

Western District of Pennsylvania.

10. The evidence presented demonstrated that plain-

tiff slipped and fell on the snow and ice that defendant

had allowed to accumulate on the gunnels of the barge,

i.e., defendant's failure to provide salt, or to salt the gun-

nels, and its failure to provide additional help to shovel

snow and clear ice off the gunnels were the proximate

causes of plaintiff's injury.

11. A longshoreman may recover damages for injuries

he sustained if he demonstrates that the owner was

negligent in failing to correct a dangerous condition of

the vessel not created by the employee, and that the

owner's negligence was the proximate cause of his injury.

In this case, the dangerous condition caused by the snow

and ice was created prior to and during plaintiff's shift

and defendant had notice of the condition as a result of

plaintiff's request for salt and additional help in shovell-

ing the gunnels of the barges prior to his accident.

12. There was no contributory or comparative

negligence on the part of plaintiff.

Damages

1. On the basis of our Findings of Fact, we must

award damages to plaintiff based on the following: 1)

his complete inability to work from January 13, 1978,

the date of the accident, until July 1, 1979, after which

time we have found that plaintiff was capable of doing

light work; 2) his reduced capacity for work from July 1,

1979 until his presumed date of retirement on his 65th

birthday, June 27, 1990; and 3) pain, suffering, and in-

convenience sustained.

4la

Appendix B—Opinion of the District Court for

Western District of Pennsylvania.

2. Counsel for plaintiff has submitted, as proposed

damages, a computation of plaintiff's estimated wages as

an employee of the defendant from the date of the acci-

dent until his presumed date of retirement. He has in-

cluded in this proposal cost of living raises predicated on

the recent history of defendant's wage rates. We do not

disagree with these projections, but feel they are inap-

propriate in view of the holding in Kaczkowski v.

Bolubasz, ___ Pa. 421 A.2d 1027 (1980).

This case sets forth a new procedure for covering

damages in personal injury cases. The Supreme Court of

Pennsylvania stated that

Henceforth, in this Commonwealth, damages will be

awarded for lost future earnings that compensate

the victim to the full extent of the injury sustained.

Upon proper foundation, the court shall consider the

victim's lost future productivity. Moreover, we find

as a matter of law that future inflation shall be

presumed equal to future interest rates with these

factors offsetting. Thus, the courts of this Com-

monwealth are instructed to abandon the practice of

discounting lost future earnings.

Id. at . 421 A.2d at 1038-39.

3. We believe that it would be inconsistent with the

Kaczkowski decision to build into a damage award pro-

jected cost of living increases, since this would give

plaintiff a double consideration for inflation; it would per-

mit plaintiff to have the advantage of the Kaczkowski

case in which inflation is presumed to offset future in-

terest rates while at the same time allowing him to insert

cost of living increases into the award.

42a

Appendix B—Opinion of the District Court jor

Western District of Pennsylvania.

4. We have found that the plaintiff could have taken

up light work on July 1, 1979. We take judicial notice of

the fact that at that time the minimum hourly wage was

$2.90. We disregard cost of living increases in the United

States minimum wage law in our computations for the

same reasons as noted above with respect to projected

cost of living increases paid by the defendant to its

employees. Accordingly, we do not consider in our com-

putations the subsequent raises which have brought the

minimum wage up to $3.35/hour currently, nor do we

consider possible future increases.

5. As of the time of trial, plaintiff had received

$33,079.14 in benefits under LHWCA. These will be an

offset to the damage award, as will any such payments

received by the plaintiff since that time.

6. We have computed the award as follows. At the

time of the accident, plaintiff's annual wage was $26,025,

and he had a work expectancy of 12.5 years.

$ 26,025

x12.5

$325,312.50 projected earnings without regard for

inflation or cost of living increases.

43a

Appendix B—Opinion of the District Court for

Western District of Pennsylvania.

Plaintiff could have taken up light work on July 1,

1979. We assume he would have earned the minimum

wage for the rest of his working life. He had a work ex-

pectancy at that time of 11 years. At $2.90 per hour, his

annual wage would have been $6,032.

$ 6,032

xll

$66,352 projected earnings at minimum wage.

We do not believe that there was sufficient evidence to

establish a basis for estimating increased future produc-

tivity for the plaintiff, and therefore we will not inject

such a factor in this award.

We believe that plaintiff is entitled to an award of

$50,000 for his pain and suffering. In sum, we compute

plaintiff's award as follows:

$325,312.50 projected earnings at present wage

—66,352.00 projected earnings at minimum wage

$258,960.50

+50,000.00 pain and suffering

$308,960.50 judgment

=33,079.14 less compensation paid to date of trial

$275,881.36 final judgment less any compensation paid

from date of trial to date of payment.

An appropriate order will be entered.

MAURICE B. COHILL, JR.

United States District Judge

44a

Appendix B—Opinion of the District Court for

Western District of Pennsylvania.

IN THE UNITED STATES DISTRICT COURT

For the Western District of Pennsylvania

HOWARD E. PFEIFER,

Plaintiff.

vs.

JONES & LAUGHLIN STEEL CORPORATION,

owner or owner pro hac vice of Barges 1011,

1384, 1400, 1363 and others in a fleet,

Defendant.

Civil Action No. 79-1597.

ORDER

AND NOW, to-wit, this 15th day of April, 1981, for the

reasons set forth in the accompanying opinion, it is

ORDERED, ADJUDGED and DECREED that judgment

be and the same hereby is entered in favor of the plaintiff

and against the defendant in the amount of $275,881.36

less any benefits received by plaintiff under the

Longshoremen’s and Harbor Worker’s Compensation Act

from October 30, 1980, the date of trial, until the date of

payment of the judgment by defendant.

MAURICE B. COHILL, JR.

United States District Judge

cc: Jerome M. Libenson, Esq.

Baskin & Sears

10th Floor Frick Bidg.

Pittsburgh, Pa. 15219

Robert W. Murdoch, Esq.

Jones, Gregg, Creehan & Gerace

1010 Grant Bidg.

Pittsburgh, Pa. 15219