# Petition — Reederei v. Byrd > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385011_1589%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition - **Published:** January 1, 1984 - **Citation:** 467 U.S. 1252 ## Text Office - Su Court, U.S. 88-1749 FILED APR 27 1904 BUD. conn ALEXANDER L. STEVAS., IN THE Supreme Court of the Anited States OCTOBER TERM, 1983 HEINRICH SCHMIDT REEDEREI, Petitioner, Ve WILLIE Mae Byrb, As Administratrix of the Estate of Lawrence Byrd, deceased, Respondents. PETITION OF HEINRICH SCHMIDT REEDEREI FOR WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT Dewey R. VILLAREAL, JR. Fow.er, WHITE, GILLEN, Boccs, VILLAREAL & BANKER, P.A. Counsel for Petitioner Post Office Box 1438 Tampa, Florida 33601 (813) 228-7411 re ae a een cer PRESS OF BYRON S. ADAMS PRINTING, WASHINGTON, D.C. (202) 347-8203 i QUESTION PRESENTED FOR REVIEW Whether the Fifth Circuit Court of Appeals erred by ruling that, as a matter of law, the below market discount rate is the only method to be used in the (old) Fifth Circuit to adjust damage awards to account for the effects of inflation. i TABLE OF CONTENTS QUESTION PRESENTED FOR REVIEW .............0000: cn secu cbabcovecees The Fifth Circuit Court Of A + Disregarded The Mandate Of The Supreme Court As Shi Forth In Jones & Laughlin Steel C v. Pfeifer, __. U.S. —_., 103 S.Ct. 2541, 76 L. d. 768 (1983) ....... es ceeeccbcsceces i nwecsccdoosces TABLE OF AUTHORITIES CASES: Jones & Laughlin Steel Corp. v. Pfeifer, ___ U.S. —_, 103 S.Ct. 2541, STATUTES: 28 U.S.C. § 1254(1) 33 U.S.C. § 905(b) 76 L.Ed 768 (1983) ............. TRatrererstt Dh hU6C Uh POPC ROP ARTE “Tannen i oepeewetreweeoaee ce eS CPR RS Rae Page 3 IN THE Supreme Court of the Anited States OCTOBER TERM, 1983 a HEINRICH SCHMIDT REEDEREI, Petitioner, Vv. WILLIE Mae Byrp, As Administratrix of the Estate of Lawrence Byrd, deceased, Respondents. PETITION OF HEINRICH SCHMIDT REEDEREI FOR WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT The Petitioner respectfully prays that a Writ of Certiorari issue to review the Judgment and Opinion of the United States Court of Appeals for the Fifth Circuit (former Fifth) entered in this proceeding on September 22, 1982. OPINION BELOW The opinion below consists of the following decisions (listed chronologically): 1. Judgment entered by the U.S. District Court for the Middle District of Florida, Tampa Division. 2. Opinion of the U.S. Court of Appeals for the Fifth Cir- cuit. Byrd v. Reederei, 638 F.2d 1300 (Sth Cir. 1981). 3. Petition for Rehearing and Petition for Rehearing En Banc. Byrd v. Reederei, 650 F.2d 1324 (5th Cir. 1981). 2 4. En Banc Opinion of the U.S. Court of Appeals for the Fifth Cireuit. Byrd v. Reederei, 688 F.2d 324 (5th Cir. 1982). 5. En Banc Opinion of the U.S. Court of Appeals for the Fifth Circuit. Culver v. Slater Boat Co., 688 F.2d 280 (5th Cir. 1982). Byrd v. Reederei case number 78-3064, was consolidated with Culver v. Slater Boat Co., number 79-3985. 6. En Banc Opinion of the U.S. Court of Appeals for the Fifth Circuit. Culver v. Slater Boat Co., and Byrd v. Reederei, 722 F.2d 114 (5th Cir. 1983). The decisions appear in the Appendix to this writ JURISDICTION The Judgment of this Court of Appeals for the (old) Fifth Circuit sought to be reviewed in this case was entered on December 22, 1983. A timely Petition for Rehearing en banc was denied on February 24, 1984, and this Petition for Cer- tiorari will be filed within ninety days of that date. This Court’s jurisdiction is invoked under 28 U.S.C. § 1254(1). STATEMENT OF THE CASE The facts are not in dispute. On July 28, 1975, the German freighter M/V ANTARES arrived at Port Manatee, Florida, there to be ‘ully loaded with densely compacted cardboard cartons. Petitioner Heinrich Schmidt Reederei, (hereafter, for convenience, Schmidt), the vessel’s owner, retained a stevedoring company to carry out the loading operations. Dur- ing the course of those operations, several bales of cardboard fell on a group of longshoremen who had been hired by the stevedoring company, injuring two of them and killing a third. The injured longshoremen and the widow of the deceased filed suit pursuant to Title 33 U.S.C. § 905(b). In the trial below, all three actions were consolidated for trial. All charged the Petitioner, Schmidt, with negligence. At trial, the District Court denied Respondents’ motions for directed verdicts on the issue of contributory negligence, and 3 prohibited Respondents from introducing testimony on infla- tion. The jury was also instructed that it could not consider the effects of inflation in awarding damages. The jury returned verdicts for Respondents, but also found Respondents to be contributorily negligent and accordingly reduced the damages award. Motions for a new trial and for judgment notwithstand- ing the verdict were filed by the Respondents, and in due course were considered and denied, Respondent Byrd then appealed to the Court of Appeals for the Fifth Circuit which, on March 12, 1981, reversed the trial court and ordered the dis- trict court to enter judgment in the full amount of the damages assessed. However, the court of appeals also held that the trial court was correct in refusing to allow the jury to consider the effects of inflation in assessing damages. On rehearing, the Court of Appeals for the Fifth Circuit held that, given certain guidelines, evidence cf wage increases due to inflationary trends was admissible and remanded the case for new trial. Subsequently, on the December 22, 1983, on re-hearing, the Fifth Circuit modified its earlier holding, mandating the use of the below-market discount rate method alone in considering the effects of inflation. REASON FOR GRANTING THE WRIT The Fifth Circuit Court Of Appeals Disregarded The Man- date Of The Supreme Court As Set Forth In Jones & Laugh- lin Steel Corp. v. Pfeifer, __. U.S. —_, 103 S.Ct. 2541, 76 L.Ed. 768 (1983). In adopting a single method of calculating damages, the below-market discount rate, the Fifth Circuit has disregarded the Supreme Court's warning in Jones & Laughlin Steel Corp. v. Pfeifer, __. U.S. —__., 108 S.Ct. 2541, 76 L.Ed. 768 (1983), that economic evidence is distinctly inconclusive regarding an essential premise upon which this method is based. The Su- preme Court recognized ‘hat due to changing circumstances, none of the three methods, set forth as legally acceptable, would be valid for all cases. The adoption by the Fifth Circuit of 4 only one of the three methods acceptable to the Supreme Court forecloses the use in trial courts of the other methods accept- able to the Supreme Court and precludes the admission of evidence necessary to lay a predicate for the other methods, which might lead to more realistic awards, which was the purpose behind the ruling in Pfeifer. For these reasons Peti- tioner submits that this decision conflicts with the decision of the Supreme Court in Pfeifer. CONCLUSION For the above reason a writ of certiorari should be granted. Respectfully submitted, DEWEY R. VILLAREAL, JR. FOWLER, WHITE, GILLEN, Boccs, VILLAREAL & BANKER, P.A. Counsel for Petitioner Post Office Box 1438 Tampa, Florida 33601 (813) 228-7411 la APPENDIX A Anited States District Court FOR THE MIDDLE DISTRICT OF FLORIDA—TAMPA DIV Civil Action File No. 75-696-Civ-T-H WILLIE MAE ByrD, individually, and as Administratrix of the Estate of Lawrence Byrd, deceased, and MIDLAND !NSURANCE COMPANY, a corporation Vv. HEINRICH SCHMIDT REEDEREI, a foreign corporation, JUDGMENT FILED TAMPA, FLA. APR 20 1978 WESLEY R. THIES CLERK This action came on for trial before the Court and a jury, Honorable Wm. Terrell Hodges, United States District Judge, presiding, and the issues having been duly tried and the jury having duly rendered its verdict, It is Ordered and Adjudged that the plaintiffs WILLIE MAE ByrD, individually, and MIDLAND INSURANCE COMPANY, a corporation, recover of the defendant HEINRICH SCHMIDT REEDEREI, a foreign corporation, the sum of $50,000.00, with interest thereon at the rate of 6% as provided by law, and their costs of action; and that the plaintiffs WILLIE Mag Byrb, as Administratrix of the Estate of Lawrence Byrd, deceased, and MIDLAND INSURANCE COMPANY, a corporation, recover of the defendant HE!NRICH SCHMIDT REEDEREI, a foreign corpora- 2a tion, the sum of $12,500.00, with interest thereon at the rate of 6% as provided by law, and their costs of action. Dated at Tampa, Florida, this 20th day of April, 1978. Wesley R. Thies WESLEY R. THIES Clerk of the Court By John F. Gay JOHN F. Gay Deputy Clerk 3a APPENDIX B United States Court of Appeals Fifth Circuit, Unit B March 12, 1981 No. 78-3064 Willie Mae Byrp, as Administratrix of the Estate of Lawrence Byrd, deceased, Plaintiff-Appellant-C ross-Appellee, V. Heinrich Schmidt REEDEREI, Defendant-Appellee-Cross Appellant. Widow brought action under Longshoremen’s and Harbor Workers’ Compensation Act against shipowner. The United States District Court for the Middle District of Florida, Terrell Hodges, J., entered judgment on jury verdict, and appeal was taken. The Court of Appeals, Kravitch, Circuit Judge, held that: (1) holding longshoremen contributorily negligent for failing to stop work after shipowner had been notified of dan- gerous condition and failed to remedy such condition impermissibly charged longshoremen with assumption of risk, and (2) District Court did not err in instructing jury not to consider effects of inflation in assessing damages. Affirmed in part and reversed in part, and judgment vacated and case remanded for entry of new judgment. Joel D. Eaton, Walter H. Beckham, Jr., Miami, Fla., Roger Vaughan, Wagner, Cunningham, Vaughan & Genders, Tam- pa, Fla., for plaintiff-appellant, cross-appellee. Fowler, White, Gillen, Boggs, Villareal & Banker, Natha- niel G. W. Pieper, Dewery R. Villareal Jr., Tampa, Fla., for defendant-appellee, cross-appellant. 4a Appeals from the United States District Court for the Mid- dle District of Florida. Before KRAVITCH and FRANK M. JOHNSON, JR., Circuit Judges and ALLGoop, District Judge. KRAVITCH, Circuit Judge: This action under the Longshoremen’s and Harbor Workers’ Compensation Act arises from the death of Lawrence Byrd, a longshoreman killed while loading freight aboard a ship owned by appellee, Heinrich Schmidt Reederei. The jury found Reederei negligent and assessed total damages of appellant Willie Mae Byrd. Byrd’s widow and the administratrix of his estate, at $125,000. The jury also found Byrd 50% at fault. The court rendered judgment for appellant Byrd in the amount of $62,500, half the damages assessed. Two issues confront us: 1) whether, as a matter of law under the Act [LHWCA] as amended in 1972, a longshoreman may be found contributorily negligent for failing to stop work after a shipowner has been notified of a dangerous condition and fails to remedy it, and 2) whether a jury instruction not to consider inflation in calculat- ing damages was erroneous. We conclude that the court improperly applied contributory negligence but did not err in its jury instruction regarding inflation; Johnson v. Penrod Drilling Co., 510 F.2d 234 (5th Cir. 1975) (en banc), prohibiting instructions, contra, remains the law of this circuit. We affirm in part, reverse in part and remand with directions that the district court enter judgment for appellant in the full amount, $125,000, found by the jury. The facts are not in dispute. Shortly after midnight on July 28, 1975, the German ship M/V ANTARES arrived at Port Manatee, Florida to be fully loaded with densely compacted old cardboard cartons (hereafter, “OCC”). Reederei, the vessel’s owner, had retained as stevedore Eller & Co. to carry out the loading operations. Lawrence Byrd was one of several inde- pendent longshoremen Eller & Co. hired at the local union hall on the morning of July 28 to load the ship. 5a The stevedoring hierarchy, insofar as it is relevant, was as follows: Eller’s “ship superintendent: Michael O’Kash was in charge. Below him were two “ship foremen,” Willie Doby and Hugh Overton. Under the ship foreman were four “headers,” each of whom was responsible for overseeing the loading of one of the ship’s four holds, and the longshoring “gang” assigned to that hold. Rudy Logan was the “header” in charge of the number 3 hold; his gang consisted of nine men: two “landers” on the pier, who tied the bales of OCC to the crane-like cargo boom; a “winchman” operating the cargo boom on board the deck; a “flagman” directing the winchman; a forklift operator in the hold who placed the lowered bales into a stowed position; three “pullers” in the hold who detached the bales from the cargo boom’s hook after they were lowered; and an additional longshoreman who rotated between the winch and forklift, freeing one man from work. The bales of OCC, each measuring five feet by five feet by three and a half feet, tied with wire, and weighing approxi- mately 1500 pounds, were thus lifted from the pier and lowered through the narrow opening in the top of each hold by the cargo boom, detached from the boom by the “pullers,” and moved to the sides of the hold and stowed in stacks six high by the forklift operator. Eller & Co. selected this method of stowage. On July 28, Byrd, who had 22 years’ experience as a long- shoreman and was qualified to be a header, was hired as a puller and assigned to the number 3 hold. With him as pullers were Lucious Holden and William Avant. Holden had five years’ experience as a longshoreman and Avant slightly less than that. With respect to complaints regarding working con- ditions, the stevedoring hierarchy was strictly enforced: “pul- lers” were to complain only to “headers” who in turn could speak only to the ship foremen who, with O’Kash, could com- plain directly to the vessel’s crew. Anyone, however, could complain to the crew of very serious conditions. The lines tying the ship to the pier descend from the ship to the pier. As the ship is loaded, riding lower in the water, they slacken, allowing the ship to roll and creating the possibility 6a that stacked freight can fall. (With slack lines, the ship rolls inshore each time a cargo boom lifts cargo from the pier.) The lines must therefore be continually tightened during loading. The parties agree that tight lines and a stabie ship are essential to safe loading and that on board the ANTARES these condi- tions were solely the responsibility of the ship’s crew and not of the stevedore or of individual longshoremen, who were forbid- den to touch the lines. The parties further agree that on July 28 the lines slackened throughout the day, the ship rolled con- siderbly, and stevedore employees repeatedly complained of this condition to the ship’s crews. Reederei also admits that although the ship’s rolling and the complaints continued into the afternoon, the crew tightened the lines only once, at ap- proximately 10:15 a.m. At 3:50 p.m., Byrd, Holden and Avant were in the number three hold with the forklift operator awaiting delivery of addi- tional bales. The men stood on the offshore side of the hold in front of a number of bales which had already been stowed, since this was their safest location when the cargo boom brought the cargo in over the inshore side of the hatch. Without warning, several bales fell from the stacks in the offshore wing toward the center of the hold, striking the forklift and the three men. Two bales fell on Byrd, crushing his chest. He died approxi- mately 25 minutes later. Holden and Avant were injured. In her complaint, appellant alleged that the shipowner’s negligence was a proximate cause of her husband’s death. Holden and Avant brought like suits: the three were con- solidated for trial. Reederei denied liability and alleged alternatively that the three men, having continued to work under conditions they knew to be dangerous, were con- tributorily negligent. The court denied plaintiffs’ motion for a directed verdict on the contributory negligence issue, stating that the evidence of plaintiffs’ negligence “may be slight or nil” but that continuing to work under dangerous conditions after protesting to no avail “could arguably constitute negligence.” Hence, it submitted the question to the jury. Over plaintiffs’ objection, the court also charged the jury that they were not to Ta increase any damages awarded to plaintiffs because of an ex- pectation of future inflation. The jury found Reederei negli- gent, and Lawrence Byrd, Holden and Avant 50%, 20% and 10% at fault, respectively. It assessed appellant’s damages at $125,000, and the court entered judgment for her in the amount of $62,500. Willie Mae Byrd’s motions for a new trial and for judgment notwithstanding the verdict were denied. On appeal Byrd raises three issues: 1) that the trial court erroneously denied her motions for a directed verdict and for judgment notwithstanding the verdict on the issue of con- tributory negligence, instead submitting it to the jury, 2) alternatively, that the trial court erroneously denied her mo- tion for new trial on the ground that the jury’s assignment of three different percentages of fault to Byrd, Holden and Avant and its finding that Byrd was equally at fault with the shipown- er for failing to stop work were irrational and against the manifest weight of the evidence, and 3) that the court erred in refusing to allow the jury to consider the effects of inflation in awarding damages. Il. Boeing Co. v. Shipman, 411 F.2d 365 (5th Cir. 1969) (en banc) governs our review of motions for directed verdict. Un- less there was “a conflict in substantial evidence,” 411 F.2d at 375, the court improperly submitted the question to the jury. Appellant Byrd argues that there was no evidence favoring appellee on this issue, because holding a longshoreman con- tributorily negligent for failing to stop work after he has com- plained to no avail of dangerous working conditions is tanta- mount to holding that he assumed the risk, a now impermissi- ble defense. Reederei counters that contributory negligence properly applies in this situation, especially under the 1972 amendments to tre LHWCA. In this guise the issue is drawn; Reederei does not argue that Byrd (or his co-workers Holden and Avant) was negligent in any respect other than failing to stop work. 8a (1) We first note that there is no question that assumption of the risk is not a permissible defense to actions brought under the LHWCA, as was made clear in Gay v. Ocean Transport & Trading, Ltd., 546 F.2d 1233, 1238 (5th Cir. 1977): {C]ertain common land-based principles of state law are not to be carried over into the federal law governing a suits. Assumption of risk may not be utilized as a efense.... Thus, our primary question is whether, as appellant claims, the trial court impermissibly applied the assumption of risk defense, albeit by another name — contributory negligence — or whether, as appellee contends, this is merely a factual inquiry to which contributory negligence properly applies. In Schlemmer v. Buffalo, Rochester & Pittsburgh Railway Co., 205 U.S. 1, 27S.Ct. 407, 51 L. Ed. 681 (1907), the Supreme Court faced a similar question. A railroad employee was killed while performing his job and the statute under which his ad- ministrator sued abrogated an assumption of the risk defense. Judgment was entered for the railroad on the ground that the decedent had been contributorily negligent. Justice Holmes thus addressed the same distinction we now consider: [Tjhe risk is said to be assumed because a person who freely and voluntarily encounters it has only himself to thank if harm comes, on a general principle of our law. Probably the modification of this general principle by some judicial decisions and by statutes like § en the defense] is due to an opinion that men who work wit their hands have not always the freedom and equality of position assumed by the doctrine of /aissez faire to exist. Assumption of risk in this broad sense obviously shades into negligence as commonly understood. Negligence con- sists in conduct which common experience or the special knowledge of the actor shows to be likely to produce the result complained of, under the circumstances known to the actor, that he is held answerable for that result, al- though it was not certain, intended, or foreseen. He is held to assume the risk upon the same ground. . . . [T]he prac- tical difference of the two ideas is in the degree of their proximity to the particular harm. The preliminary con- 9a duct of getting into the dangerous employment or relation is said to be accompanied by assumption of the risk. The act more immediately leading to a specific accident is called negligent. But the difference between the two is one of degree rather than of kind; and when a statute ex- onerates a servant from the former, if at the same time it leaves the defense of contributory negligence still open to the master ..., then, unless great care be taken, the servant’s rights will be sacrificed by simply charging him with assumption of the risk under another name... . We cannot help thinking that this had happened in the present ee 205 U.S. at 12-13, 27 S.Ct. at 409. Justice Holmes went on to state that the danger was so great and “inevitably an clearly attached to the risk which Schlemmer did not assume, that to enforce the statute [abrogating assumption or risk] requires that the judgment should be reversed.” 205 U.S. at 14, 27S.Ct. at 410. Several circuits have applied the same logic to cases similar to the instant one brought under the LHWCA. Faced with parallel facts, in Rivera v. Rederi A/B Nordstjernan, 456 F.2d 970 (1st Cir.), cert. denied, 409 U.S. 876, 93 S.Ct. 124, 34 L.Ed.2d 128 (1972), the First Circuit held that appellant long- shoremen could not be charged with contributory negligence for continuing to work, where they had complained of danger- ous conditions and were told that the problem would be re- medied and that they should return to work. “To say the plaintiffs were contributorily negligent in these circumstances would be to state that in continuing work they assumed the risk of obeying orders. We will not allow assumption of risk to masquerade as contributory negligence.” 456 F.2d at 974. Similarly, the Second Circuit, under like circumstances in Rivera v. Farreli Lines, Inc., 474 F.2d 255 (2d Cir. 1973), cert. denied, 414 U.S. 822, 94 S.Ct. 122, 38 L.Ed.2d 55 (1974), reached the same conclusion. There, a messman brought suit against the shipowner for injuries he had suffered from falling on a wet pantry floor covered with soapy water as a result of defective drains. He had continually but unsuccessfully com- plained of this condition to the ship’s officers. The shipowner 10a defended on the ground that the messman’s continuing to work in the light of such known dangers constituted contributory negligence, and the jury so found. The Second Circuit respond- ed: The «‘stinction between assumption of risk and con- tributory negligence is well established. In common law days the knowledgeable acceptance by an employee of a dangerous condition when and if such acceptance was necessary for the performance of his duties was assump- tion of msk. .. . Contributory negligence, on the other hand, connotes some careless act or omission on the part of the employee over and above that knowledgeable accept- ance... . As the defense of assumption of risk has been abolished by statute ... the first issue before us is whether the charge permitted assumption of risk to go to the jury in the guise of contributory negligence. The only theory of contributory negligence the record reveals. . . was the argument that te ant was careless in moving in and about the pantry, knowing the sloppy condition of the floors. This theory, however, was really assumption of risk masquerading under another name, because it allowed a finding of contributory negligence on the strength of appellant’s knowledge that a dangerous condition in his line of duty existed and his working in that line of duty. . . . Thus the verdict must be set aside. . . . 474 F.2d at 257-58. The Fourth Circuit, also, has concluded that holding an employee contributorily negligent because he knew of a dan- gerous condition and yet continued to work impermissibly charged him with assumption of the risk. In Sessler v. Allied Towing Corp., 538 F.2d 630 (4th Cir. 1976), a barge employee used a “non-explosion proof” pump to remove gasoline from the barge, and an explosion occurred. The court held that the district court’s finding of contributory negligence on the part of Sessler was “tantamount to holding Sessler negligent because he realized his job was dangerous but did it anyway. Since the {non-explosion proof] pump was the only pump available for his work, he could avoid using it only by refusing todothejob... . Viewed in this light, Sessler’s conduct is properly character- lla ized as assumption of risk, not contributory negligence.” 538 F.2d at 632. Earlier, in Smith v. United States, 336 F.2d 165 (4th Cir. 1964), the fact that the injured longshoreman had known the ladder he used to exit a hold was defective was held not to render him contributorily negligent; to do so would charge him with “ ‘assumption of the risk under another name.’ ” 336 F.2d at 168. Only if there had been a safe alterna- tive route available to Smith could his choice of the known-to- be unsafe ladder “possibly have indicated contributory fault.” (2] Our decisions, while they do not parallel as closely the facts before us, are in accord. In San Pedro Compania Arma- doras, S. A. v. Yannacopoulos, 357 F.2d 737 (5th Cir. 1966), a seaman was ordered to climb into a tank that had a defective top. The top fell crushing his hand. Setting aside the district court’s finding that Yannacopoulos was 50% contributorily negligent, we wrote: Since he had no choice but to use (the tank top] as it was, he cannot be made to assume the risk of injury when using the unseaworthy appliance in the regular discharge of his duties. . . . To do so would permit the rejected doctrine of assumption of risk to be applied under the label of con- tributory negligence. 357 F.2d at 741. In Brock v. Coral Drilling, Inc., 477 F.2d 211 (5th Cir. 1973), we affirmed the trial court’s holding that Brock had not been contributorily negligent for following orders to unload cargo after he had complained of the hazardous condi- tions present. In doing so, we recognized that “Brock’s deci- sion must be evaluated in light of his economic dependence on Coral for future employment.” 477 F.2d at 215. In Wedd v. Dresser Industries, 536 F.2d 603 (5th Cir. 1976) a seaman sent ashore to Alaska to pick up supplies requested appropriate boots for the errand, was refused, and while ashore, slipped on the ice and was injured. The trial court made no finding regard- ing contributory negligence, and we remanded for considera- tion of that issue hecause Webb might have been able to obtain boots on his own. In doing so, however, we noted: ate aperture for finding comparative fault on this basis failing to minimize present dangers] is very narrow—the 12a rule is confined to instances where there has been gener- ous opportunities safely to correct the known dangerous situation, and a heavy burden of proof rests with the defendant. (footnote omitted) 536 F.2d at 609. Our review of these cases convinces us that Byrd does not fit within this narrow aperture. He had no opportunity to minimize the dangers caused by the ANTARES ’ rolling other than to stop work. In our judgment, holding him contributorily negligent for failing to do so, impermissibly charges him with assumption of the risk. Appellee asserts, however, that Mazzanti v. Lykes Bros. Steamship Co., Inc., 524 F.2d 961 (5th Cir. 1975), the only case upon which the district court relied in submitting the question of appellant’s contributory negligence to the jury, is contra and controls. We disagree. Mazzanti, a longshoreman, was injured when he slipped and fell upon trash that had accumulated on the deck area. The district court found Mazzanti 75% con- tributorily negligent “becuase [he] should have reported the condition of the area to the gang foreman who could have requested that the area be cleaned by a cleanup crew or could have requested that aid be sent to the longshoremen’s gang to assist them in cleaning the area.” 524 F.2d at 962. After analyz- ing the ship’s and Mazzanti’s varying opportunities to correct the dangerous condition and concluding that the ship’s crew was better able to do so than appellant, we directed that Mazzanti’s contributory negligence be reduced to 50%. We also stated: “The alternatives available to [Mazzanti] in lieu of continuing work at the risk of harm to himself were to refuse to work or to report the condition and hope that cleanup assist- ance would be sent.” (footnote omitted) Jd. We conclude that Mazzanti does not control because of a critical factual differ- ence between that case and the instant: Mazzanti had not reported the dangerous condition in order that it be corrected. Here, longshoremen complained repeatedly. [3] Appellee next argues that the above-cited cases (other than Mazzanti) are inapposite in that they either concern seamen, as opposed to longshoremen, or that they predate the 13a 1972 Amendments to the LHWCA and thus no longer apply. Altheugh the 1972 Amendments to the Act effected several fundamental changes in the nature of longshoremen’s compen- sation, those changes did not alter the impermissibility of the assumption of risk defense. Gay v. Ocean Transport & Trad- ing, Ltd., swpra. Gay also makes clear that under the amend- ments, seamen and longshoremen are to be treated alike for these purposes. Thus, we pointed to the House of Representa- tives Committee Report which stated: (T]he Committee intends that the admiralty concept of comparative negligence [governing seamen], rather than the common law rule as to contributory negligence, = apply in cases where the injured employee’s own ne ety may have contributed to caus the injury. e Committee intends that the ad ty rule which re. cludes the defense of “assumption of risk” in an action by an — employee shall also be applicable. (footnote omitted 546 F.2d at 1237. [4] Moreover, the Act is to be liberally construed to pro- mote its compensatory purpose in favor of the injured employ- ee. Alabama Dry Dock & Shipbuilding Co. v. Kininess, 554 F.2d 176 (5th Cir. 1977), cert. denied, 439 U.S. 903, 98 S.Ct. 299, 54 L.Ed.2d 190 (1978); Smith v. M/V Captain Fred, 546 F.2d 119 (5th Cir. 1977). See also United States v. Bender Welding & Mach. Co., 558 F.2d 761 (5th Cir. 1977). This reinforces the conclusion that the cases cited supra, prohibit- ing application of the “assumption of risk” doctrine under the rubric of contributory negligence, properly apply. We conclude that the trial court erred in denying appellant’s motion for directed verdict on the issue of contributory negli- gence and in reducing appellant’s award of damages by 50%, the proportion of negligence the jury attributed to Byrd. Hence, we need not reach appellant’s second argument, that the assignment of different percentages of contributory fault to the three longshoremen was irrational, or that Byrd could not, for not refusing to work, be charged with negligence equal to that of Reederei. l4a Ill. Appellant also challenges the instruction that the jury ex- clude inflation from its damage calculations. Six years ago, in Johnson v. Penrod Drilling Co., supra, we squarely faced this question and held that juries should not be instructed to con- sider “future inflationary or deflationary trends in computing future lost earnings.” 510 F.2d at 241. That decision has been criticized by members of our own bench. It is also inconsistent with the decisions of the majority of other circuits that have addressed the question without reference to state law and with the holdings of the state courts, with one exception, in ur jurisdiction. In addition, commentators generally have dis- favored Penrod’s result. Nonetheless, as Judge Wisdom stated in Davis v. Hill Engineering, Inc., 549 F.2d 314, 332 (5th Cir. 1977), “({uJntil Penrod is overruled . . . an inflation element cannot be included in damage computations.” Thus, we decline to discuss the merits of the controversy and instead address the sole question before us: has Penrod been overruled? {5] Anen banc decision of our court may be overruled only by subsequent en banc consideration or by the United States Supreme Court. No en banc court has again addressed this question, but last year in Norfolk Western Railway v. Liepelt, 444 U.S. 490, 100 S.Ct. 755, 62 L.Ed.2d 689 (1980), the Su- preme Court held that the effect of income taxes could be considered in determining damage awards. Responding to the argument that the future prediction of tax consequences is “too speculative and complex for a jury’s deliberations,” the Court stated: Admittedly there are many variables that may affect the amount of wage earner’s future income tax liability. . . . But future employment itself, future health, future per- sonal expenditures, future interest rates and future tke tion are also matters of estimate and prediction. . . . [T]he ractical wisdom of the trial bar and the trial bench has eveloped effective methods of presenting the essential elements of an expert calculation in a form that is under- standable by juries that are increasingly familiar with the complexities of modern life. We therefore reject the no- l5a tion that the introduction of evidence describing a dece- dent’s estimated after-tax earnings is too speculative or complex for a jury. (footnote omitted; emphasis supplied) 444 U.S. at 494, 100 S.Ct. at 758. The Second Circuit recently pointed to this language as indicating the Supreme Court’s approval of the consideration of inflation in damage awards and held that inflation could be so considered. Doca v. Marina Mercante Nicaraguense, S.A., 634 F.2d 30 (2d Cir. 1980). However, no Second Circuit decision contra bound the Doca panel; it reached its conclusion only after reviewing decisions of other courts, its prior decisions regarding the consideration of inflation in assessing damages, and the merits of the con- troversy. It did not hold that Liepelt compelled its result. We are not similarly free, and we agree that Liepelt’s favorable dicta is only that. Thus, until the Supreme Court speaks more directly or we, as an en banc court decide otherwise, Penrod still applies: the district court did not err in instructing the jury not to consider the effects of inflation in assessing Byrd’s damages. Accordingly, we affirm in part and reverse in part. We vacate the judgment and remand to the trial court to enter judgment for appellant in the full amount, $125,000, assessed by the jury. l6a APPENDIX C United States Court of Appeals Fifth Circuit June 24, 1981 No. 78-3064 Willie Mae Byrp, as Administratrix of the Estate of Lawrence Byrd, Deceased, Plaintiff-Appellant, Cross-Appellee, V. Heinrich Schmidt REEDEREI, Defendant-Appellee, Cross Appellant. Appeal from the United States District Court for the Middle District of Florida; Wm. Terrell Hodges, Judge. Joel D. Eaton, Walter H. Beckham, Jr., Miami, Fla., Roger Vaughan, Wagner, Cunning, Vaughan & Genders, Tampa, Fla., for plaintiff-appellant, cross-appellee. Fowler, White, Gillen, Boggs, Villareal & Banker, Natha- niel G. W. Pieper, Dewey R. Villareal, Jr., Tampa, Fla., for defendant-appellee, cross-appellant. ON PETITION FOR REHEARING AND PETITION FOR REHEARING EN BANC (5 Cir., 1981, 638 F.2d 1300). Before GopBOLD, Chief Judge, and Brown, AINSWORHT, CHARLES CLARK, RONEY, GEE, TJOFLAT, HILL, Fay, Rusin, VANCE, KRAVITCH, FRANK M. JOHNSON, Jr., GARZA, HENDER- SON, REAVLEY, PoOLiITz, HATCHETT, ANDERSON, RANDALL, TaTE, Sam D. JoHNsoN, THomas A. CLARK and WILLIAMS, Circuit Judges. 17a By THE CouRT: A member of the Court in active service having requested a poll on the application for rehearing en banc and a majority of the judges in active service having voted in favor of granting a rehearing en banc, 638 F.2d 1300, 5 Cir. It Is ORDERED that the cause shall be reheard by the Court en banc with oral argument on a date hereafter to be fixed. The Clerk will specify a briefing schedule for the filing of sup- plemental briefs. 18a APPENDIX D United States Court of Appeals Fifth Circuit Sept. 22, 1982 No. 78-3064 Willie Mae Byrp, individually and as administratrix of the Estate of Lawrence Byrd, decease” Plaintiff-Appellant, ('russ-Appellee, Vv. Heinrich Schmidt REEDEREI, a foreign corporation, Defendant-Appellee, Cross Appellant. Widow brought suit under the Longshoremen’s and Harbor Workers’ Compensation Act against shipowner, seeking re- covery for the alleged wrongful death of her husband. The United States District Court for the Middle District of Florida, at Tampa, Wm. Terrell Hodges, J., rendered judgment for plaintiff in the amount of half the damages assessed, and an appeal and cross appeal were taken. The Court of Appeals, 638 F.2d 1300, affirmed in part and reversed ir part. On rehearing en banc, the Court of Appeals, Brown, Circuit Judge, held that: (1) plaintiffs objection to jury charge, precluding consid- eration of the effect of future inflation on an award of damages, was properly before the Court of Appeals, since a reading of the trial transcript showed that counsel for plaintiff attempted to create a record to challenge or at least find an exception to Penrod, and (2) under certain guidelines, evidence of wage increases due to inflationary trends may be introduced at trials in the Fifth Circuit. Reversed and remanded. Tjoflat, Circuit Judge, filed a concurring opinion. 19a James C. Hill, Circuit Judge, filed a dissenting opinion in which R. Lanier Anderson, III, Circuit Judge, joined. Charles Clark, joined by Roney, Gee and Frank M. Johnson, Jr., Circuit Judges, dissented. Joel D. Eaton, Walter H. Beckham, Jr., Miami, Fla., Roger Vaughan, Wagner, Cunning. Vaughan & Genders, Tampa, Fla., for plaintiff-appellant cross-appellee. Fowler, White, Gillen, Boggs, Villareal & Banker, Natha- niel G. W. Pieper, Dewey R. Villareal Jr., Tampa, Fla., for defendant-appellee cross-appellant. Appeals from the United States District Court for the Mid- die District of Florida. ON REHEARING EN BANC Before GopBOLD, Chief Judge, BRowN, CHARLES CLARK, Roney, GEE, TJOFLAT, HILL, Fay, RuBIN, VANCE, KRAVITCH, FRANK M. JOHNSON, Jr., HENDERSON, REAVLEY, POLITZ, HATCHETT, ANDERSON, RANDALL, TATE, SAM D. JOHNSON, Tuomas A. CLARK and WILLIAMS, Circuit Judges. JOHN R. Brown, Circuit Judge: {1] Willie Mae Byrd was the plaintiff in a third party action for the wrongful death of her husband, Lawrence Byrd, arising under the LHWCA, 33 U.S.C. §§ 901 et seg., and general maritime law. Mr. Byrd was killed when 3,000 pounds of card- board cartons fell from the hold of a ship owned by the defend- ant, Heinrich Schmidt Reederei, and crushed his chest. At trial, the District Court denied Byrd’s motion for directed verdict on the issue of contributory negligence, and also prohi- bited her from introducing testimony on inflation. The jury returned a verdict for $125,000, but found Mr. Byrd 50% contributorily negligent and reduced the award to $62,500. A panel of this Court, 638 F.2d 1300, reversed the District Court’s denial of a motion for directed verdict and ordered the trial court to enter judgment for Byrd in the full amount of the damages assessed. The trial court also rejected the issue of 20a whetier future inflation may be considered by the jury when assessing an award of future damages on the basis of this Court’s decision in Johnson v. Penrod Drilling Co., 510 F.2d 234 (5th Cir. 1975) (en banc). In an opinion issued concurrently with the present opinion, Culver v. Slater, 688 F.2d 280 (5th Cir. 1982), this Court held that, under certain guidelines, evidence of wage increases due to inflationary trends may be introduced at trials in this Circuit. Therefore, we remand this case for a new trial on Byrd’s damages, in accordance with the principles of Culver, unreduced by any percentage for the contributory negligence of Mr. Byrd. {2] Several arguments raised by the defendant in this case merit discussion. The defendant argues that this Court may not properly reach the inflation issue because Byrd did not introduce or proffer evidence upon which inflation could be considered. Given that Byrd was prohibited at trial from in- troducing testimony upon future inflationary trends, and in light of the instruction that the jury was not to consider infla- tion in determining future damages, both limitations created by Penrod, we need not closely examine either the probative weight of the evidence presented on inflation or the sub- sequent absence of a detailed recitation of reasons underlying Byrd’s objection to the jury instructions. See F.R. Civ. P51. In cross-examining the defendant’s investment expert, Byrd at- tempted to ask questions about the effect of inflation rates on the bond market. The District Court, on the basis of Penrod, sustained the objections to that line of questioning. At that time, counsel for Byrd tried, to no avail, either to distinguish Penrod or to explain that doubts have arisen in the Circuit with regard to evidence on inflation. The court granted a recess, and the following discussion took place between counsel for Byrd and the trial judge: THE CourT: . .. What you started . . . to pursue was the effect of inflation on the market generally. And at that point I sustained the objection, and would—and would and do sustain the objection. 2la CounsEL: Alright, sir. Your Honor, I wish to proffer for the record some information. . . because to, in effect, require this person to reduce their investment for the future but not let them take into consideration the increase in value, the loss of the borrowing, the loss of the purchasing power of the dollar, is in effect to give a double reduction. The reason this money—the reason that a person pays these dollars for a thousand dollar bond has to do with inflation. And to let that go in to reduce this person’s recovery because they believe they will be able to get this amount of money in the future, in effect, causes a double reduction. Because at the end of 2007 that one thousand dollars she gets back will be worth five hundred dollars. «x = « «x x [COUNSEL FOR DEFENDANT: But hasn’t that been laid to rest in Penrod?] THE Court: I understand—and he does, too—in the en banc decision of the Fifth Circuit. - «x «x x « COUNSEL: Well, let me proffer in the presence of the witness and ask if this is correct before the jury physically comes in the door. I believe that may be sufficient, Your Honor. I believe the witness has told me that the current U.S. Government estimated rate of inflation is six and a half toseven percent for the coming year, that his company’s estimated rate of inflation is seven and a half percent; that the lowest rate he, himself, has ever heard of in the past is between three and a half or four percent . . . and that in his opinion, based upon reading and other knowledge in the field, he believes the best that — can hope for in the future is a five percent rate of inflation. . . . We would proffer all that in evidence as indicat- ing the minimum amount of rate of inflation that the plaintiffs should be entitled to, regardless, and we would take three and a half percent if that were proper. 22a THE Court: Well, the proffer is in the record. It’s not in evidence. Reading the trial transcript, we are convinced that counsel for Byrd was attempting to create a record to challenge or at least find an exception to Penrod. Byrd’s later objection to the instruction that the jury should not employ an estimated rate of inflation to increase damages must be viewed in the context of Penrod’s shackles. While it is true that counsel for Byrd did not offer a lengthy explanation for his objection to the instruc- tion, we find that the matter was sufficiently presented to the judge at trial and that all parties understood the dilemma— Byrd wanted the jury to consider inflation, and Penrod stood in the way. See Culver, supra. In short, we find that Byrd’s objection to the jury charge is properly before this Court under F.R.Civ.P. 51. REVERSED AND REMANDED TJOFLAT, Circuit Judge, concurring: Although I agree with the majority that the time has now arrived for reconsideration of Johnson v. Penrod Drilling Company, 510 F.2d 234 (5th Cir. 1975), I write separately to make clear that the majority opinion should be read as doing nothing more than overruling Penroa’s flat proscription of competent, otherwise admissible evidence on inflation. Hence- forth, the Federal Rules of Evidence alone will govern the admissibility of such evidence, and render appropriate a jury instruction on inflation commensurate with the evidence pre- sented. Appellees are justified in pointing out that neither the Pre- trial Stipulation, Record, vol. 1, at 13, nor the Pre-trial Order, Record, vol. 1, at 14, gives any indication that the plaintiffs sought to raise the inflation issue at trial. Indeed, plaintiffs rested their case without an offer of proof on inflation, which clearly would have been the most appropriate way to preserve 23a the Penrod question for appeal. Although appellants did not do all that they should have done to preserve the inflation issue, their proffer was sufficient to satisfy the Federal Rules of Evidence. See Fed. R. Evid. 103(a)(2). The proffer made during the cross-examination of the defendant’s investment expert, Gerald Powers, was probably sufficient to establish a ground- work for appeal, although it should not be considered as a guide for the district courts. On cross-examination, plaintiffs’ counsel asked Powers: “Are you familiar with the general rates of inflation as pre- dicted by the Federal Government?” Record, vol. 7, at 172. The court sustained the defendant’s general objection. After an extended colloquy on whether the defendant had “opened the door” to inflation questions on cross-examination by put- ting the issue before the jury on direct, the court ruled that he had not, and then sustained the objection to further inflation inquiry on Penrod grounds. It should be emphasized that at no time did the defendant make a specific objection to the line of questining, or the subsequent proffer, as improper because they were beyond the scope of the direct examination. Contra- ry to the claim in the Supplemental Brief of Defendant on Rehearing En Banc at 7, the record shows that counsel’s argumentation went exclusively to whether defendant had opened the door to questioning otherwise clearly barred by the Penrod rule of exclusion. Similarly, the record demonstrates that the court excluded such evidence solely on Penrod grounds, without any consideration of the potential objection that plaintiffs had rested their case and could not now delve into these matters. Record, vol. 7, at 172, 179, 181. At that point, plaintiffs’ counsel made a speaking proffer, in the presence of the witness, as to the rationale for including inflation in a damages award and various estimated rates of inflation. See Record, vol. 7, at 179-80, 182-83; Majority Opin- ion at 326. Defendant did not object contemporaneously to the adequacy of the proffer and did not challenge the qualifications of the expert to give this testimony. Nor did he seek re-direct examination on this offer of proof or offer any rebuttal of the 24a witness’ “testimony” or its probative value. Thus, all these potential objections to plaintiffs’ offer of proof must be con- sidered to have been waived. See Fed.R.Evid. 103(a)(2). We agree, therefore, with the majority that counsel for plaintiffs did succeed in creating a record to “challenge or at least find an exception to Penrod,” Majority Opinion at 326, although their effort to do so was tardy. Il. I emphasize the limited nature of the court’s holding today: evidence concerning the impact of inflation on recoveries of lost future wages will be admitted insofar as it conforms to the Federal Rules of Evidence, and a jury instruction on inflation will be appropriate if a predicate of competent, relevant and otherwise admissible evidence has been established. As the Ninth Circuit Court of Appeals has written, “[{W]e allow the trier of fact in awarding damages to take into account only such estimates of future changes in the purchasing power of money as are based on sound and substantiated economic evidence, and as can be postulated with some reliability.” United States v. English, 521 F.2d 63, 75-76 (1975). Specifically, the trial court should ensure that the expert testimony concerning inflation meets the requirement of Fed- .R. Evid. 702: : If scientific, technical or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by en skill, experience, training, or education, may testify thereto in the form of an opinion or otherwise. Once rule 702 has been satis ‘ied, the trial court should also exercise sound discretion to ensure compliance with Fed. R. E- vid. 403: Although relevant, evidence may be excluded if its proha- tive value is substantially outweighed by the danger of 25a unfair prejudice, confusion of the issues, or misleading the jury. ... This rule is particularly important with a complex issue such as inflation, where confusing expert testimony might well hinder rather than assist the trier of fact. The application of these evidentiary filters is critical if today’s holding is to enhance the accuracy of damages awards in this circuit. JAMES C. HILL, Circuit Judge, with whom T. LANIER ANDER- son, III, Circuit Judge, joins, dissenting: For the reasons set forth in my opinion in Culver v. Slater, 688 F.2d 280 (5th Cir. 1982) (en banc), issued this date, I dissent from so much of the court’s decision as authorizes a procedure other than that used in Feldman v. Allegheny Air- lines, Inc., 382 F.Supp. 1271 (D.Conn. 1974), aff'd in relevant part, 524 F.2d 384 (2d Cir. 1975). For the reasons set forth in their dissenting opinions in 79-3985, Culver v. Slater, Judges CHARLES CLARK, joined by RoONEY, GEE and FRANK M. JOHNSON, Jr., also dissent. APPENDIX E United States Court of Appeals Fifth Circuit Sept. 22, 1982 No. 78-3985 Ruth CuLven, et al., Plaintiffs-Appellants, Cross-Appellees, v. SLATER Boat Co., et al., Defendants-Appellees, Cross Appellants. EUROPIRATES INTERNATIONAL, INC., et al., Defendants-Appellees and Cross-Appellees-Appellants, v. ODECO DRILLING, et al., Defendants-Appellees Cross Appellants. Wife and children of foreman of anchor-pulling crew brought maritime personal injury case arising out of foreman’s death. The United States District Court for the Eastern District of Louisiana, Charles Schwartz, Jr., J., entered judgment from which appeals and cross appeals were taken. The Court of Appeals affirmed as modified, 644 F.2d 460. On rehearing en banc, the Court of Appeals, Brown, Circuit Judge, overruling a previous case, held that: (1) prohibition of any consideration of inflationary factors in ascertaining damages award for loss of future wages is unfair to plaintiffs and would be overruled, and (2) in ascertainment of damages for loss of future wages, plain- tiffs should be permitted to establish by factual economic and labor data, and expert testimony, that their income would probably continue to increase in response to inflation in future 26a years if they continue to work, and likewise, using economic and labor data and expert testimony, defendant should be permitted to rebut such evidence. Reversed and remanded. James C. Hill, Circuit Judge, filed opinion concurring in part and dissenting in part, in which R. Lanier Anderson, III, Circuit Judge, joined. Charles Clark, Circuit Judge, dissented and filed opinion in which Roney and Gee, Circuit Judges, joined. Gee, Tjoflat and Frank M. Johnson, Jr., Circuit Judges, dissented and filed opinions. W. James Kronzer, W. W. Watkins, Houston, Tex., Frederick J. Gisevius, Jane M. Gisevius, New Orleans, La., for Ruth Culver et al. Leonard Fuhrer, Alexandria, La., for amicus curiae Louis Ober. Patrick A. Juneau, Jr., Lafayette, La., for amicus curiae Penrod Drilling. Richmond M. Eustis, New Orleans, La., for Slater Enter- prises, Europirates, Ete. Drury, Lozes & Curry, Felicien P. Lozes, New Orleans, La., for Gulf Overseas Ser. Corp. J. Walter Ward, New Orleans, La., for Ocean Drilling. Mat M. Gray, III, New Oeleans, La., for St. Paul Fire. Appeals from the United States District Court for the East- ern District of Louisiana. ON REHEARING EN BANC Before GoDBOLD, Chief Judge, BRowN, CHARLES CLARK, RonEY, GEE, TJOFLAT, HILL, Fay, RuBin, VANCE, KRAVITCH, FRANK M. JOHNSON, Jr., HENDERSON, REAVLEY, POLITz, 27a HATCHETT, ANDERSON, RANDALL, TATE, SAM D. JOHNSON, Tuomas A. CLARK and WILLIAMS, Circuit Judges. JOHN R. Brown, Circuit Judge: This case comes before us on rehearing en banc to consider whether the holding of this Court in Johnson v. Penrod Drill- ing Co., 510 F.2d 234 (5th Cir. 1975) (en banc), that neither proof, nor argument, nor jury instructions concerning in- flationary factors may be considered or used in maritime, Jones Act, and FELA personal injury and wrongful death actions, should be overruled. After careful consideration of this singular issue, we overrule Penrod and remand this case to the District Court. Si Bound by Penrod The facts leading up to this appeal have already been out- lined by this Court in the panel’s ovinion, 644 F.2d 460, 462-63 (5th Cir. 1981). Briefly, Curtis Culver was killed while working on a vessel owned by Slater Boat Company. The vessel upon which the accident took place was engaged in moving the drilling barge OCEAN QUEEN from its location on the Outer Continental Shelf to a new location. The fatal injury occurred before the barge was actually moved. Culver’s widow and children brought suit under the Jones Act, 46 U.S.C. § 688, the Death on the High Seas Act (DOHSA), 46 U.S.C. § 761 et seq., and the general maritime tort and negligence theory. The jury found negligence on the part of Gulf Overseas Marine Corpora- tion (Culver’s employer), Euro-Pirates International (the charterer of the vessel), and Ocean Drilling & Exploration Company (the owner of a barge involved in the fatality), and no contributory negligence on the part of Culver. On the issue of damages, the District Court allowed testi- mony concerning discount rates and the earning power of money invested in low risk bonds. The jury was instructed to “discount the total amount” of any award by a percentage that represented an appropriate rate of interest. In answer to the 28a spcial interrogatory submitted asking what discount percen- tage rave was applicabie, the jury filled in “25%”. The trial judge, on the basis that the jury obviously misunderstood the interrogatory, substituted 9.125%, the only other rate put into evidewnce by the defendant. In accordance with Penrod, the District Court did not allow testimony, charges, or in- terrogatories to be submitted on the effects of inflation on probable loss of future income. In short, Culver was not permitted to show any likely in- crease in future earnings due to inflation. But the award was to be discounted by an interest factor reflecting anticipated infla- tion. Culver initially appealed the judgment, raising five issues: (i) should Penrod be overruled?; (ii) if Penrod is not overruled, should evidence of probable non-inflationary future wage in- creases (e.g., merit raises) be prohibited?; (iii) can a District Court disregard a jury finding regarding the discount rate and apply one based on opinion testimony?; (iv) was the testimony of culver’s adverse witness sufficiently clear that the court could apply that witness’ opinion of the discount rate?; and (v) ean a District Court enter a final judgment for damages appli- cable to all beneficiaries in a maritime death action that is incapable of apportionment among the various beneficiaries? Cross-appeals were brought by all of the defendants raising several additional issues. Oral argument was heard by a panel of this Court, and the District Court judgment was affirmed as slightly modified. Specifically, the panel considered itself bound by Penrod’s holding that “the influence on future damages of possible infla- tion or deflation is too speculative a matter for juridcal determination,” 644 F.2d at 643, quoting Penrod, 510 F.2d at 241. And in accordance with Byrd v. Reederei, 638 F.2d 1300 (5th Cir. 1981) (rehearing en banc granted), the panel rejected Culver’s argument that the Supreme Court overruled Penrod in Norfolk & Western Railway v. Liepelt, 444 U.S. 490, 100 S.Ct. 755, 62 L. Ed.2d 689 (1980). Likewise, the panel found no 29a error in the trial judge’s refusal to allow Culver to argue likely future wage increases on the basis of merit, because no evi- dence was offered to show that such an argument was war- ranted and in addition, such evidence was “merely an indirect way of putting inflation factors into evidence before the jury {which is] not allowed under Penrod.” 644 F.2d at 464. Culver filed a petition for panel rehearsing, and a separate petition for rehearing en banc, as required by ur rules, raising two closely related issues: (i) should Penrod be overruled and (ii) does Penrod prohibit a trier of fact in this Circuit to receive evidence of non-inflationary factors, such as probable merit raises and productivity increases, in arriving at future losses? This Court, voting for rehearing en banc, determined that the time was ripe for reconsideration of the rule in Penrod pertain- ing to the “inflation factor” in damages awards. Although Culver’s brief to this court on rehearing en banc addressed primarily issue (i), whether proof and argument concerning inflationary factors should be permitted in this Circuit, issue (ii) is also involved since automatic exclusion of evidence of probable merit raises has resulted from a misreading of Pen- rod. The defendants argue that Penrod should be upheld, and, in addition, contend that Culver waived the right to relief on the inflation issue by failing to make an offer of proof regarding the likelihood of inflation. A. {1} Briefly, we will address the defendants’ claim that Cul- ver waived the right to raise the issue of inflation by his failure to make a formal proffer at trial. The defendants called as a witness an investment banker who specialized in bonds. On cross-examination, Culver’s attorney attempted to ask whether people earned more money over the years of their employment due only to productivity. An objection to the question was sustained. After several more questions, all counsel approached the bench where the jdge made it clear that the type of evidence excluded by Penrod woul not be permitted in court. The jury was then temporarily excused, 30a and Culver’s attorney told the judge that he wanted to ask the expert whether the principal of a bond would be worth less in the future. The trial judge replied that deflation was as likely as inflation, and any testimony as to such factors would be pure speculation. The judge concluded that “I will not permit you to intorduce any evidence before the jury relative to inflation in view of the present law that I am bound by which is the Penrod case.” Before closing argument, and before the jury returned, the judge explained that: Plaintiff's counsel will not be permitted to argue that the jury should take into consideration inflation, nor will it be permitted to make an indirect argument which would achieve the same purpose of permitting him to argue inflation by attempting to indicate that it could be ex- pected that plaintiff would receive job promotions or merit increases. Again, the judge mentioned the prohibitions of Penrod. Given this flat prohibition against introducing testimony (or making argument) as to future inflationary trends on the basis of Penrod, it makes no sense to argue that Culver may not raise this issue on appeal simply because he did not proffer an expert on inflation. Reading the trial transcript, it is obvious that a record was being created to challenge or at least find an excep- tion to Penrod. We find that the matter was sufficiently pre- sented to the judge at trial and that all parties understood the dilemma—Culver wanted the jury to consider inflation, and Penrod stood in the way. B. The most problematic issue on this appeal remains: Should Penrod be opverruled so as to allow parties to present proof and argument concerning inflationary factors to the trier of fact? Our analysis will begin with a brief review of the Penrod decision. In order to illustrate graphically the implications of Penrod and why it has to be overruled, we will discuss many of the cases in this Circuit where Penrod’s prohibitions were effective. Next, we will summarize the criticisms of Penrod which come from other circuits as well as commentators. As 3la our analysis proceeds, it will become clear that the problem is one of fairness to plaintiffs as well as defendants in the trial process. Personal injury awards, once they have been calcu- lated on the basis of projected income and life expectancy, are padi immediately to the plaintiff. It is well-known that if a plaintiff (or his beneficiaries) receives a lump-sum award, totaling the income that the plaintiff would have received throughout the rest of his work life, that money can be invested so as to yield a far greater amount than the initial award. This would be unfairly liberal to the plaintiff. Consequently, the law traditionally permits introduction of testimony, usually by an expert in financial matters, that the lump-sum should be dis- counted by a factor equal to the interest rate which could likely be earned on a relatively safe investment by an unsophisti- cated investor. The total projected earnings are thus reduced to the present cash value. However, it will be demonstrated that in an inflationary economy, discounting an award in this manner results in unfairness to a plaintiff or his beneficiaries. When a discount rate is applied to an award in an economy where wage-earners typically receive cost of living increases each year due to inflation, the plaintiff will not be adequately compensated for his loss of future income—inflation will erode the value of the award, and no adjustment for cost of living can be made even though wages continue to increase throughout the economy. On the other hand, if courts respond to this dilemma by refusing to apply a discount rate, as some have, the result would be unfairness to defendants. Quite simply, plain- tiffs are to be compensated, by a culpable tortfeasor, but should not be over- or under-compensated. Likewise, defend- ants found liable should pay no more or less than the amount a plaintiff lost because of the injury. Keeping in mind the goal of fairness to both sides of a controversy, this opinion will con- sider alternatives and possible guidelines for use in this Cir- cuit. We will establish a flexible approach to the problem which should result in fairness regardless of the economic circum- stances that exist at the time of trial. In the process, we overrule Penrod. 32a Il. Prolegomena It is crucial to keep in mind that this is really an economic, and not a legal, problem. The likelihood of future wage in- creases, whether given om the basis of productivity, merit advancement, or inflation, or a combination of them, does not have anything to do with the law. The legal question whether such matters should be considered by the courts is a found- ational policy question, the answer to which will be influenced by recourse to the financial and economic community. At trial, the issue may well be a legal credibility of witnesses or com- petency of evidence, but a pronouncement that inflation is speculative or that workers will or will not receive productivity and merit raises is essentially an economic statement, not a declaration of law. If we consider, as an example, a person totally and permanently injured by a defendant’s negligence, the injured worker is entitled to the equivalent of his lost future earnings. The law decides that much, and the question remains how much money should be given to him now. Once a lump-sum determintion is made, it is clearly unfair to give him the whole amount, because even an unsophisticated investor could earn a great deal in interest. However, in predicting how much money this worker will likely receive throughout the remain- der of his work-life, we must consider the likely increase in wages he would have received. These will include possible advancements from one position to another, any raises due to company productivity, or other merit increases. In addition, in an inflationary economy, we must consider projected cost of living increases which are given by an employer to offset in part the effects of inflation. Each of these factors must be carefully distinguished, since they arise from wholly different causes. Although these factors may not all be present in a particular case, each must be considered in computing the total amount of likely earnings before a discount rate is applied to reduce that amount ot its present cash value because of invest- 33a ment potential. The goal, albeit ideal, is that if the injured worker has a 20-year work-life expectancy, and he invests his lump-sum award in relatively risk-free investments, he will receive in the nineteenth and in the twentieth year roughly the same amount as if he had worked each of those years. The goal is not, it must be made clear at the outset, to protect the lump-sum award from the effect of inflation. Rather, before determining how much now needs to be paid, the goal is to assure the plaintiff the equivalent of the total of all of his future wages, including those likely to be given/received in the form of cost of living increases in response to inflation. III. The Prohibitions of Penrod In Johnson v. Penrod Drilling Co., 510 F.2d 234 (5th Cir. 1975) (en banc), we recognized “the likelihood that inflatin could become a predictable condition for the future,” but we were not able to “so surely discern the shadow of inflation as a coming event as to warrant requiring its inclusion in a present rule for calculating future damages.” 510 F.2d at 236. Quoting the full initial panel opinion in Penrod, we expressly dis- approved “the district court’s attempt to take into account, in computing the plaintiffs’ future lost earnings, inflationary trends in this nation’s economy for the next several decades.” 510 F.2d at 241. The “influence on future damages of possible inflation or deflatiion is too speculative a matter for judicial determination.” Jd. Therefore, triers of fact “should not be instructed to take into account future infaationary or deflationary trends in computing future lost earnings, nor should the jury be advised to consider such alternative descrip- tions of inflationary and deflationary trends as the purchasing power of the dollar or the consumer price index.” /d. The defendants and others have suggested that Penrod could be “modified”, “explained”, or watered down by this Court, but not overruled, so that adjustments could be made in individual cases where the influence of inflation was not 34a speculative. However, if fairness requires that we allow some evidence of inflation properly to compensate plaintiffs and avoid windfalls to defendants, any hope of “distinguishing” or “explaining away” Penrod crumbles in the face of Penrod’s own words—-inflation and deflation are too speculative for judicial determination, triers of fact should not take into ac- count future inflationary or deflationary trends, juries should not consider changes in the purchasing power of dollars or the consumer price index, and judges should not undertake to instruct juries on such ideas. The prohibition on such evidence could not be clearer. To argue, as the defendants do, that Penrod forecloses only consideration of futwre economic trends, while it allows evi- dence of past inflation, is to miss the point. The significant basis for predicting future inflation or deflation is past inflation or deflation. And the effect of past inflation alone, under a rule forbidding consideration of likely future inflation, leaves eco- nomically eclipsed a significant portion of the amount of money the wage-earner may receive in the future. Even if it were possiblet isolate Penrod and analyze its terms in an academic vacuum, to reach the conclusion that evidence of inflation is permissible in the Fifth Circuit so long as the jury is not permitted to “speculate” as to the “influence” on future damages of “possible” inflation or deflation, the re- sult of this exercise would be unworkable as a practical matter. For in practice, Penrod has placed a prison-like wall between any evidence of likely inflationary or deflationary trends (and argument or instruction thereon) and the courtrooms of the Fifth Circuit. Our decisions since 1975 on this issue have mere- ly served to place barbed wire on top of the wall. Moreover, it is likely that in other cases, as in this one, evidence of probable increases in wages due to merit or productivity has been kept out of the jury room unwittingly because of Penrod’s prohibi- tions. Economic data is readily available concerning past aver- age annual wage increases of workers in the United States, and such data is often broken down into particular professions and geographic areas. But it is difficult to determine the percen- 35a tage of those increases given for merit-productivity and distin- guish the percentage representing cost of living increases in response to inflation. Many plaintiffs have thus been unable to scale Penrod’s wall and introduce evidence of non-inflationary wage increases, even though such increases are theoretically unaffected by inflation, and thus evidence of such increases should not have been prohitibed. IV. Penrod in Practice In our determination of whether Penrod ought to be over- ruled, it is important not only to consider what Penrod says, but also what this Court through the years since 1975 has saidit says. We will look first to the recent cases arising in this Circuit applying Penrod. In Davis v. Hill Engineering, Inc., 549 F.2d 314 (5th Cir. 1977), this Court reduced the District Court’s award of $628,991 to $425,321 for the total loss of the plaintiffs future earning capacity, because the District Court increased the basic damage award, prior to discounting to present value, to offset wage and price inflation. The plaintiff's expert was unimpeached, and the defendants had no opposing expert. The trial judge was thus free to rely on the expert’s testimony, and was apparently convinced of the need to allow over $200,000 to offset expected wage increases due to inflation. 549 F.2d at 331. Nevertheless, we held that until Penrod is overruled, an inflation element cannot be included in damage computations, either in the form of [i] calculating loss of future earnings without discounting to present value or of [ii] a basic damage award, prior to discount- ing, with a figure representin the p joy inflation rate. The former [i] is the Beaulieu [v. Elliott, 434 P.2d 665, 671 (Alaska 1967)] method, the latter [ii] the District Court’s method in this case. 549 F.2d at 332 (brackets added). Judge Wisdom Acknowl- edged that other circuits consider inflation as a factor in computing future earnings damages, an approach that “more accurately [reflects] loss of future earnings than does a dis- 36a counted figure because it prevents inflation from eroding the damage award.” 549 F.2d at 332. Alas, he conceded, his hands were tied by Penrod. Id. In Jn the Matter of S/S HELENA, 529 F.2d 744, 753 (5th Cir. 1976), this Court remanded for recalculation the District Court’s damages award because an inflationary rate was as- sumed and applied. In determining the damages for loss of support payable to the wives of deceased crew members of a vessel, the trial judge stated: I have to some degree offset discount to present value by the effects of inflation and a likely rise in decedent’s earn- ings resulting from increases in the general wage level. I have assumed a discount rate of 5%, and a three per cent inflationary level thus making the net discount rate 2%. 529 F.2d at 753, quoting 329 F. Supp. 652 at 660. Other calcula- tions of the damages for loss of support also “seemed to be based on the inflation and present value factors, the expert testimony of an economist as to expected future earnings, and the present cost of annuities that would pay monthly amounts increasing at the estimated rate of inflation.” 529 F.2d at 753. Quoting Penrod, we remanded to District Court for a more detailed calculation of the damages. On remand, the District Court filed supplemental responses heeding our instructions, and Penrod was again faithfully followed. Matter of S/S HELENA, sub nom. Sincere Navigation Corp. v. United States, 547 F.2d 255, 256 (5th Cir. 1977). The element of inflation was eliminated and the damages recomputed. /d. In Higginbotham v. Mobil Oil Corporation, 545 F.2d 422, 433-35 (5th Cir. 1977), rev’d and remanded on other grounds, 436 U.S. 618, 98 S.Ct. 2010, 56 L.Ed.2d 581 (1978), this Court reviewed the District Court’s use of a 5% annual straight line estimated salary increase to calculate the probable future earnings of the deceased. Although the trial judge stated that he did not take into consideration “the decreasing purchasing power of the dollar,” we held that under Penrod “the plaintiff must bear the difficult burden of proving what portion of the increases would have beeen given other than as an automobile 37a hedge against inflation.” 545 F.2d 434-35. The defendants, wielding the mighty sword of Penrod, made the factually un- supported argument that “it is common experience that annual ‘raises’ are for the most part cost of living wages,” therefore a 5% straight line annual increase amounted to a hidden inflation-based award. 545 F.2d at 434. While common experi- ence likewise tells us that some portion of pay raises reflect performance and experience, the plaintiffs expert failed to distinguish between cost of living or inflationary increases and rewards for experience or productivity. 545 F.2d at 435. Thus we rejected the District Court’s award based on the 5% future earnings factor, and remanded to give the plaintiff an oppor- tunity to walk the straight and narrow of Penrod. Judge, now Chief Judge, Godbold, in his partial dissent, observed that in “innumerable other contexts we accept the events of the past as the basis for an inference as to what the future will hold.” 545 F.2d at 437 (Godbold, J.). “Yet we would not permit considera- tion of evidence that a particular plaintiff had received a $200 per year increase in pay every year for 20 years, unless he could divide it up into ‘productivity’ pay and ‘economic change pay.’” Id. (Godbold, J.). In this single area of projecting future earnings we deny ourselves the best evidence available on the asserted ground that it is not sufficiently reliable, and, in the name or reliability we mandate the artificial conclusion that one will earn the rest of his life what he is earning on the day he is killed or injured. The only thing certain about this is that it is certain to be wrong. Id. (Godbold, J.). In Menard v. Penrod Drilling Company, 538 F.2d 1084, 1089 (5th Cir. 1976), the plaintiff's economic expert estimated that, apart from the possibility that plaintiff might advance through the ranks of his employer, a worker “would have to get at least 2% per year, on the average, increase to maintain the same buying that he has to-day.” A discount rate of 442% was selected by the expert. Jd. Because no objection was made, the jury was actually permitted to consider future inflation as a factor in calculating damages. One member of this Court’s 38a panel observed that although this was not plain error under Penrod had an objection been made. /d. (Gee, J., concurring). Continuing our historical journey into the past, this Court in Lacaze v. Olendorff, 526 F.2d 1213, 1222 (5th Cir. 1976), reh’g en banc granted, 526 F.2d at 1223, found error in the trial court’s overruling an objection to expert testimony on future lost earnings because the expert included a 3% inflation rate in his calculations. On the basis of Penrod the case was reversed and remanded on the issue of damages. 526 F.2d at 1223. In Weakley v. Fischblach & Moore, Inc., 515 F.2d 1260 (5th Cir. 1975), a diversity suit aris'ng out of an electrical explosion in Texas, we affirmed the judgment of the District Court even though the jury considered both future productivity and future inflation in assessing a $300,000 award for lost earning capac- ity. For this Court, Judge Wisdom observed that although this “Court has writ large its disapproval of calculating future damages by reference to predictions of future inflation,” Texas law applied, and juries in Texas are permitted to weight evi- dence for future damages, 515 F.2d at 1266-67, citing Penrod. In a similar federal cause of action we may be certain that this Court would have reversed a judgment based on such a “speculative” jury finding. Again, specificaly on the basis of Penrod, we concluded in Petition of M/V ELAINE JONES, 513 F.2d 911, 912 (5th Cir. 1975) cert. denied, 423 U.S. 840, 96 S.Ct. 71, 46 L.Ed.2d 60 (1975), that the District Court erred by including a 2% per year cost of living increase in the computation of loss of future earnings. We announced that “the trier of fact should not be instructed to take into account future inflationary or deflationary trends in computing future lost earnings.” In Standefere v. United States, 511 F.2d 101 (5th Cir. 1975), the District Court, sitting without a jury, awarded damages to a plaintiff for loss of future earnings and included an inflationa- ry factor of 5.5%; in addition, the award of future medical expenses included an inflationary factor of 4.5%. Because Pen- rod foreclosed any consideration of inflation in computing such 39a damages, the District Court’s decision was reversed and re- manded for a recomputation of damages. Robertson v. Douglas Steamship Company, 510 F.2d 829 (5th Cir. 1975), stands as yet another example of how we applied the Penrod strait-jacket. In accordance with the trial court’s instructions, the jury divided the plaintiff's award into (i) the amount of basic damages and (ii) the amount of damages sustained “as a result of loss of future wage increases or infla- tion or decrease in the purchasing power of money.” 510 F.2d at 836-37. Of course, the second part of the award wa sreversed, even though it is possible that a portion of that element was awarded due to likely merit or productivity in- creases not based upon inflation or cost of living adjustments. Thus we see that although Penrod was not intended to elimi- nate evidence of future wage increases on the basis of merit or productivity, the practical effect of Penrod is often to throw the baby of future merit increases out with the inflationary washtub waters. Finally, on the very day that Penrod was published, this Court, in Law v. Sea Drilling Corporation, 510 F.2d 242, 251-52 (5th Cir. 1975) on reh’ing, 523 F.2d 793 (5th Cir. 1975), held that the District Court’s allowance for additional in- flationary cost of living increases in the decedent’s income over the years before his death, upon which the trial judge based his reasonable expectation that the decedent’s income would have continued to rise, probably reflected increases due to both merit and productivity and not just cost of living increases. Nevertheless, because an element of inflation was considered, Penrod was dispositive. In all of the above discussed cases, this Court by both its actions and its words, flatly prohibited any consideration of inflation, whether in evidence presented, in jury instructions or in final argument, without regard to the cogency or persuasiveness of the evidence offered to prove that inflation, to some extent, will likely occur. Swept unthinkingly before Penrod also were merit-productivity increases. Thus stands the law in this Circuit, until today. 40a In our attempt to assess the impact of Penrod in this Circuit, not only is it necessary to consider our own appellate opinions, as we have done above, but it is also helpful to review some of the District Court opinions where the tentacles of Penrod were perceived and predictably effective. Jn Complaint of Metcalf, 530 F.Supp. 446 (S.D. Tex. 1981), the District Court stated emphatically that in its award for loss of earnings in the future, any “future inflationary or deflationary effect on earnings is not to be considered.” 530 F.Supp. at 458, citing Penrod. Likewise, in Kratzer v. Capital Marine Supply, Inc., 490 F.Supp. 222 (M.D. La. 1980), affd 645 F.2d 477 (1981), the plaintiff produced an economist who testified as to lost wages predicated upon an inflation factor and an increased productiv- ity factor. The District Court simply cited Penrod and stated that there “was no evidentiary justification for these factors, and the Court declines to accept them, and as noted, utilized a discount figure of 6 percent with no other factors in computing lost wages.” Again, we see how Penrod often operates to prohobit not only evidence of likely of inflation, but also evi- dence of likely merit or productivity wage increases. In McLean v. United States, 446 F.Supp. 9 (E.D. La. 1977), the plaintiff carefully met his burden of proof by establishing a “productivity” factor of 5.7% on the basis of past merit and change in job title increases over his pervious years of employ- ment. Because that factor was in no way compensation for inflation, evidence thereof was admissible under Penrod. 446 F.Supp. at 13, 14. In Thompson v. Offshore Co., 440 F.Supp. 752 (S.D. Tex. 1977), the District Court announced that in calculating a decedent’s future earnings, any future inflationa- ry effect on wages is not to be considered. 440 F.Supp. at 762. Finally, in Hamilton v. Canal Barge Co., 395 F.Supp. 978 (E.D. La. 1975), allowance for inflation or increased cost of living was denied in light of Penrod, and for the additional reason that the diminution in the purchasing power of an award, caused by inflation, is not an item of damage caused by death or by prepayment of future wages. 395 F.Supp. at 987. However, the District Court did allow a 4% annual increase factor on the basis of skill and productivity. Jd. 4la Nesmith v. Texaco, Inc., 491 F.Supp. 561 (W.D. La. 1980), stands out as an anomaly to the law of Penrod. In startling contrast to the usual acceptance of Penrod’s rejection of evi- dence of inflation, the District Court interpreted Norfolk & Western Railway v. Liepelt, 444 U.S. 490, 100 S.Ct., 755, 62 L.Ed.2d 689 (1980), to say that “in arriving at an award for future loss of earnings the very factors disapproved in [Pen- rod] should now be considered.” 491 F.Supp. at 564. While the court was “mindful of the fact that this interpretation of Liepelt may be erroneous, and [Penrod] may still bar the door to speculative damages as to factors other than income taxes in a case of future loss from personal injuries,” the plaintiff was permitted to present expert testimony that the growth rate for wages based upon inflationary factors in the plaintiffs job and geographic area will be approximately 6% over the next 30 years. 491 F.Supp. 564, 565 n.4. This attempt to break the bonds of Penrod resulted in an appeal, disposition of which is being held pending the outcome of the present opinion and Byrd, see note 1. The cases discussed in this section demonstrate the absolute prohibition on any consideration of inflationary or cost of living trends in the courts of this Circuit. District Court judges have found themselves under a duty, imposed by Penrod, to prevent experts in their testimony, and attorneys in their arguments, from even mentioning economic trends that would effect future wage increases. Likewise, in their instructions to the jury, District judges have been careful not to mention inflation as a factor in computing damages, or, where inflation was men- tioned, the purpose was to explain to the jury that they should not consider inflation in their computations. In those cases where the jury was permitted to consider the effect of future ° inflation on damage awards, either because they heard testi- mony by an expert or because they heard testimony by an expert or because the trial judge instructed them to consider inflation, wer have reversed the judgment and, in most cases, remanded for a new trial. In non-jury cases, the District Court judges have not been permitted to consider inflation in their 42a assessment of damages. Even where plaintiffs have clearly limited their evidence (as to inflation) to likely cost of living increases, thereby carefully avoiding any inference that the total award should be somehow “protected” from inflation irrespective of wage increases, the evidence has been rejected. In short, Penrod in practice has been a firm, inflexible stand- ard that we have been unable to explain or interpret away. The standard is simple: no evidence of inflation may be presented to the trier of fact, regardless of how expert the testimony, how understandable the presentation, or how fair to the parties. Argument of counsel is also forbidden, as is jury instruction by the Court. This standard has at times been so overwhelming that it has prohibited evidence that should have been allowed, such as evidence of likely wage increases based upon merit or productivity, either on a misreading of Penrod or a perceived (and sometimes actual) impossibility of separating out in- flationary elements from admissible merit-productivity in- creases. Quite possibly, an employer may take into account rising inflation in his decision to grant promotions, and it would be impossible for anyone, expert or otherwise, to distinguish that part due to merit only and determine the percentage amount of the raise due wholly to non-inflationary factors. We Penrod and Other Circuits Worthy of our consideration is how our sister circuits per- ceive Penrod. In 1975 the Eighth Circuit, citing Penrod, was able to say that the federal circuits that have faced the issue in cases involving federally created claims, governed by federal rather than state law, have for the most part rejected testimony, jury instructions or trial court consideration of future in- flationary trends in damage assessment. Johnson v. Serra, 521 F.2d 1289, 1295-96 (8th Cir. 1975), aff'd on remand, 586 F.2d 1291 (8th Cir. 1978). More recently, however, in the trend toward increasing consideration of infla- tion, Taenzler +. Burlington Northern, 608 F.2d 796, 800 n.9 43a (8th Cir. 1979), cited Penrod but declined to follow its ap- proach. Expert testimony on future wage increases, when limited to future trends in earnings of a parcitular group of employees, thus avoiding the excessively general national in- flation rate, was found to be acceptable in trial courts. 608 F.2d at 801. Feldman v. Allegheny Airlines, Inc., 524 F.2d 384 (2d Cir. 1975), a case arising under Connecticut law, cited with approv- al Judge Friendly’s earlier assessment of inflation: There are few who do not regard some degree of continu- ing inflation as here to stay and would be willing to trans- late their own earning power into a fixed annuity, and it is scarcely to be expected that the average personal injury plaintiff will have the acumen to find investments that are proof against both inflation and depression—a task for- midable for the most expert investor. 524 F.2d at 388, citing McWeeney v. New York, New Haven and Hartford Railroad, 282 F.2d 34, 38 (2d Cir. 1960) (Friend- ly, J.). The computation by trial Judge Blumenfeld of the discount rate by offsetting the anticipated rate of earnings on a prudent unsophisticated investment by an inflation factor was approved. This computation, subtracting the assumed infla- tion rate from the rate of interest on a safe investment (the traditional discount rate), yields an “inflation-adjusted dis- ‘count rate.” Judge Friendly, a member of the panel in Feld- man, was not completely satisfied with this result—Penrod’s emphasis on “the plethora of uncertainties” that accompany testimony regarding inflationary trends was contrasted with the trial court’s apparent construction of “an iron-clad guaran- ty against the unkonwn and unknowable futur effects of infla- tion.” 524 F.2d at 392 (Friendly, J.) concurring). Such protec- tion against inflation is not enjoyed by the millions of Amer- icans on fixed pension or investment income, or even by the average worker whose wages do not keep up with inflation. This highlights a weakness in the Feldman approach: it as- sumes that wage increases will mirror inflation. /d. Judge Friendly thus predicted that Feldman “will not constitute a 44a precedent on the inflation problem in a case arising under federal law.” 524 F.2d at 393, (Friendly, J. concurring). More recently, in a suit brought by an injured cargo checker against a stevedore and a shipowner (neither was his employ- er), pursuant to the LHWCA, 33 U.S.C. §§ 901 et seq., the Second Circuit carefully considered the question whether and to what extent an award for lost future wages should be ad- justed because of inflation. Doca v. Marina Mercante Nicar- aguense, S.A., 634 F.2d 30 (2d Cir. 1980), cert. denied, 451 U.S. 971, 101 S.Ct. 2049, 68 L. Ed.2d 351 (1981). Penrod as well as similar cases in the Third and First Circuits were identified as unsound minority views, 634 F.2d at 36. Broad agreement was perceived among economists that inflation “is a dominant factor on the current economic scene and, despite episodic recessions, is likely to be so for the foreseeable future.” 634 F.2d at 37. The District Court in Doca, 474 F Supp. 751, 758(S.D.N.Y. 1979), found that the plaintiff was entitled to recover $352,560, “representing his future loss of earnings considering both probability of continued inflation and a discount to present value.” The extent to which inflation was considered was un- specified, and no computation was provided by the District Court. 634 F.2d at 34. On appeal, the plaintiff urged that the trial judge used a discount factor of 1%, an inference drawn by comparing the difference between the award given and the plaintiff's own projection of future lost wages. 634 F.2d at 34 & n.4. The defendants objected to the court’s computation on the grounds of lack of evidence to support an estimate of future inflation and argued that any adjustment for inflation is imper- missible. 634 F.2d at 34-35. The Second Circuit in Doca described two basic approaches as to how inflation could be considered. First, the question of inflation rate may be submitted to the fact finder in one of three ways: (i) by allowing expert opinion, (ii) by requiring the fact finder to apply its own knowledge, or (iii) by permitting the fact finder to apply its own knowledge together wiih expert testi- 45a mony. Each of the three contemplate that a separate determination as to inflation is to be made in each case. Second, a rule of law may be adopted that focuses on the somewhat constant relationship between inflation and interest rates, as in the Alaska Supreme Court’s view that the inflation rate should be assumed to equal the interest rate, thereby eliminat- ing the discount to present value. 634 F.2d at 38-39. The Doca Court was not prepared to specify any particular methodology: If litigants prefer to offer evidence as to future rates of both inflation and interest, they are entitledtodoso.... We emphasize that we are not requiring the use of an inflation-adjusted discount rate. . . . Litigants are free to account for inflation in other ways, or, if they use the adjusted discount rate approach, to offer evidence of a rate [other] than 2%. 634 F.2d at 39-40. The District Court’s award was remanded for reconsideration for two reasons: (i) if a 1% adjusted dis- count rate was used, it was too low since 2% is the “true cost of money appropriate for use in a computation to determine the present value of lost future wages,” and (ii) the District Court took into account a post-trial wage increase based upon cost of living, therefore duplicative consideration was given to the impact of inflation. 634 F.2d at 40. Feldman, supra, approved the use of an “inflation-adjusted discount rate” of 1.5%. 524 F.2d at 387. The purpose of the method used in Feldman, and approved as one possible techni- que in Doca, was to determine the “real yield” of money—that portion of interest gained on virtually risk-free investments which represents only the real growth of the investment and not the losses due to future inflation. The theory is that the “real yield” of money is roughly 2% in any year, because in periods of high inflation, interest rates will be a bit higher, and in low inflationary periods, the interest rates will still be a litt! above the rate of inflation. Doca recognized the disagreement among economists over the validity of the assumption that the real rate of interest is constant and consequently independent of inflation, but noted 46a that various economic studies of similar time frames have estimated that the real rate of interest was between 1.5% and 3%. 634 F.2d at 39 n.10. VI. Penrod and Some Commentators In 1977, one commentator—with an error in timing— predicted that “the Fifth Circuit soon could decide . . . that Penrod is ‘substantively indefensible.’ ” This was precipitated by Judge Wisdom’s concurring opinion in Freeport Sulphur Co. v. SSS HERMOSA, 526 F.2d 300, 311 (5th Cir. 1976) (Wisdom, J., concurring). Judge Wisdom there expressed his dissatisfaction with Penrod and identified the inconsistency in this Circuit’s insistence upon discounting while ignoring in- flationary effects. Jd. The policy concerns of Penrod, (i) achiev- ing complete compensation, (ii) preventing speculation, and (iii) simplifying trial procedures, would be served better by adopting an approach that considered the effect of inflation on damage awards. /d. Penrod has also been labeled a source of serious judicial error. Kane, /nflation, tight money, and Penrod: the cost of judicial error, Texas Trial Lawyers Forum, April-June, 1980, at 3-5. In Penrod, we stated that “if future inflation does cause higher wages, experience predictably demonstrates that high- er interest rates on investments which have always accompa- nied inflation will also occur and this factor will mitigate the failure to include an inflationary surcharge in wage rate calculations.” 510 F.2d at 236. The obvious flaw in this line of reasoning lies in the fact that while interest rates do rise in response to accelerating inflation, a higher interst rate only reduces the present value of a future loss, thus further penalizing the plaintiff. The problem for the plaintiff is compounded when the series of future income = cannot be proportionally increased for the same tion that drove up the interest rate. Kane, supra, at 3-4. 474 Spiraling inflation during the years since Penrod has in- directly led to much of the criticism of our 1975 opinion. Al- though consumer prices have fallen in the early months of 1982, which might signal the beginning of the end to “spiraling” inflation, this does not demonstrate that Penrod is not primari- ly its spectacular unfairness in periods of extremely high infla- tion. To the contrary, the danger of Penrod lies in its unwilling- ness to consider the effect of inflation on future wages at all. Penrod stands for the inflexible proposition or deflation at all, whether high or low or nonexistent, in predicting wage loss. At the same time, defendants are freely allowed to show the highest inflation-induced interest rates available on relatively safe investments. Unfortunately, any evidence of the fact that wages will likely increase to combat the eroding effects of inflation remains eclipsed by the Court-declared spectre of speculation. What we seek, in response to criticism from both within and without the Circuit, is fairness with regard to the presentation of economic data by either side in the legal controversies that our federal courts face. The principles that we adopt to facili- tate this goal must be flexible enough to remain workable in any economic climate. To this end, the remainder of this opin- ion will explore the alternatives and adopt those that meet the standards of economic flexibilit Y and fairness to plaintiffs and defendants alike. VII. The Real Rate of Interest: A Possible Solution In laymen’s terms, the real rate of interest mirros the rate of interest that lenders would charge in an inflationless society. Interest rates are much higher because of the expectation of inflation and the uncertainty as to its extent. Thus, the real rate of interest becomes more difficult to calculate. For ex- ample, You lend [or invest] $100 for . . . 30 years, at a rate of interst of 5 percent per year. The $5 interest paid to on _ annually ally wits rise or fall in purchasing power dependi 48a upon whether or not the general price level of various goods and services falls or rises. If the price level should increase during the first year by 3 percent, this means that of the 5 percent interest ($5 each year) about 3 percentage points (or $3 in real terms) is eroded away by the higher prices you must pay for goods and services. In effect, in real terms _ have gotten only about 2 percent interest on your $100 loan [or investment]. A. Alchian & W. Allen, University Economics 193 (3d ed. 1972). Thus, the lender who correctly anticipated the rise in price level would have set a higher nominal interest rate on the loan, perhaps 8%, to allow 3% for the anticipated rise in prices and 5% for interest in terms of real purchasing power. /d. Accordingly, the nominal or advertised interst rate reflects both the basic or real rate of interest (which would exist absent any inflation anticipations) and an adjustment for the antici- pated rise in price levels. In theory, the real rate of interest represents a possible standard for determining the proper and fair discount rate to be applied to damages resulting from the loss of future income. For courts using this method, the rate of inflation, however calculated, is subtracted from the interest rate for some rela- tively risk-free investment, and the remainder is the real rate of interest, or discount rate, to be applied to the damages award. In practice, of course, the problem becomes more diffi- cult. Even where parties to a controversy are able to establish both a projected inflation rate and an interest rate on some risk-free investment, using legally acceptable indexes nd tables, the fact remains that the goal of the exercise is to compensate the plaintiff for the income the worker would in all probability actually receive in future years. It is well- recognized that the average wage increases of many workers in the United States have not kept up consistently with infla- tion. This factor, then, must be applied to increase (e.g., from 2% to 4%) the discount rate so that the plaintiff, whose wages have not kept up and likely will not keep up with inflation, will not receive increases based upon inflation. On the other hand, if the average annual increase in wages in a particular profes- 49a sion has risen above the inflation rate, the plaintiff should not be limited to increases based upon the inflation rate. This factor highlights the major weakness of the “real rate of the interest” approach. A simpler and more accurate approach to the problem is found where the plaintiff shows, by expert testimony or other- wise, all of the increases in wages he is likely to receive during his work-life expectancy. Likely increases in wages due to cost of living increases, merit or productivity increases, or promo- tion increases could all be separately established by the plain- tiff in computing the total amount of lost wages. For most occupations, it is easy to find economic data of general wage increases, which include increases due to cost of living, merit, and productivity. The more difficult task of breaking down the data into the reasons for the increase, e.g. cost of living or merit increases, is not necessary in this simpler method. Then, the defendant has the opportunity to establish, by expert testimony or otherwise, the discount rate which reflects the rate of interest in a relatively safe investment, which is applied to the award to reduce it to present value. If this methodology is followed, the rate of inflation itself is only indirectly reflected (i) in the cost of living increases projected by the plaintiff (which may be more or less than the rate of inflation), and (ii) in the discount rate established by the defendant (which includes both the real rate of interest and the predicted effect of infla- tion). The result of such a calculation should not differ greatly from the result obtained through the Feldman approach. How- ever, unlike the Feldman approach, this alternative method would more accurately represent the future wages lost by a particular plaintiff, in a particular occupation, in a particular geographic area. VIII. Economic Predictions and the Courts’ Serbonian Bog We agree with the critics that Penrod represents an idea whose time has passed. In an era of inflation, which has been with us for over forty years, it is quite clear that plaintiffs are 50a unfairly penalized by their absolute inability to present evi- dence of a historical fact—inflation. The likely effect of in- flationary trends upon future wages is forbidden even though Penrod allows evidence from defendants regarding the appli- cable discount rate which has been increased by the very inflation so roundly excluded. However, we are less than satisfied with the so-called Alas- ka Rule, which by assuming that the discount rate and the inflation rate are virtually identical, unncecessarily penalizes defendants because, as noted above in our discussion of the real estate of interest, interest rates on relatively safe investments will typically ride several percentage points above the rate of inflation. In addition, tied as it is to changes in the Consumer Price Index (CPI), the result would unfairly award the plaintiff the difference between the changes in the CPI and the actual or average increase in wages. We are much impressed with, but certainly not willing to embrace uncritically, Feldman’s approval of an inflation- adjusted discount rate in the neighborhood of 1.5%. 524 F.2d at 387-88. This view represents a compromise between the Alas- ka rule’s penalizing of defendants and Penrod’s penalizing of plaintiffs. However, fixing the inflation-adjusted discount rate at 1.5%, or even 2% or 3%, would subject this Court to critic- isms not unlike those aimed at Penrod and even the Alaska rule. In the dynamic and ever-changing world of finance and economics, we as judges cannot rule out that the interest rate on risk-free investments might equal the inflation rate during a certain period such that the Alaska Rule is vindicated. Indeed, the logic behind the Alaska Rule is that in an economy of ups and downs, “it will all come out in the wash”—the interest rate and the inflation rate being, on the average, roughly equiva- lent. However, any standard which is inflexible in a dynamic economy will likely be unable to cope with the problem of preventing windfalls either to plaintiff or defendant. Although a perfect method may never be found, we must attempt to create standards that are fair to both sides of the controversy, with the trier of fact being allowed to receive and act upon 5la credible evidence of othe economic facts bearing, pro and con, on the competing theories. The methodological basis of Feldman must be clearly under- stood as our analysis proceeds. Quite simply, and perhaps even simplistically, Feldman is a backward-looking, past- performance approach: (1) It begins by considering the effective annual interest rate payable on a certain relatively risk-free investment each year during a particular past period of years, for example, 1940-1980. For each of those years during the period chosen, the average annual percentage change in the Consumer Price Index (CPI) (see note 25, supra) is determined using historical data. (2) Subtracting the average annual percental change in the CPI for each year from the effective annual interest on the investment for that same year yields the actual or “real” rate of interest that an investor would gain during that year in terms of the buying power of the dollars invested. Because a single year in the past several decades might be unreliable, all of the real rates of interest are averaged. The result of such an analysis, for almost any relatively risk-free investment during any 10 or 15 year period in the past several decades, will be approximately 1-3%. (3) This inflation-adjusted discount rate, the result of subtracting changes in the CPI from safe investment interest rates, is then projected over the plaintiffs expected work-life by applying the inflation-adjusted discount rate to each year’s estimated salary to reduce the future annual salaries to their present value. The discount factor applied to each year would be different because the present value of a dollar received in the future, e.g., ten or twenty years from trial-date, is much less than the present value of a dollar received on the date of trial. Indeed, one dollar received even one year from now is worth less than one dollar today. (4) If wages will increase due to promotion, merit, or peoductivity, then instead of using the plaintiffs current 52a wages as the amount to be discounted to present value for each future year of expected work-life, each future year’s wage is computed by finding wat a person in the promoted position would likely be earning in the respective year. All the years are then added together to reach the lump-sum award. This computation is not limited to the single promotion or merit increase that the plaintiff would have received during the year of his injury, but may involve several increases during the plaintiff's work-life expectancy. For example, if the plaintiff is a stock-boy with a 30-year work-life expectancy, and he likely would be promoted in 10 years to stock manager, and in 10 more years to store manager, which is the highest position he would predictably attain, then the trier of fact would compute the trial-date salary of stock manager and store manager. The stock-boy’s salary for each of the first 10 years would be re- duced to its present value, the stock manager’s salary for each of the second 10 years would be reduced to its present value, and the store manager’s salary for each of the third 10 years would be reduced to its present value. All these results are added to find the lump sum award. In light of our discussion, supra, of the theory of the “real rate of interest,” several critical remarks are appropriate. First, the purpose of an inflation-adjusted discount rate, which simply means that the discount rate (proposed on the basis of safe investment) should be reduced by the rate of inflation eroding the profit on such an investment, is fully to compensate the plaintiff such that if the lump-sum award given in court is invested, the plaintiff will be able to receive, as nearly as possible, the amount of assumed income that would have been received each year in the future if no injury had occurred. However, the Feldman approach assumes that the plain- tiffs past and future income would increase, as it has, roughly, in the past forty years, along with the CPI. The difficulty with this assumption is that annual wage increases may not keep up with inflation as reflected in the CPI, and, tothe contrary, such increases in average earnings in some occupations might be much greater than inflation. Second, the American economy 53a may change radically in the next several years. As evidence becomes available that the next 20 or 30 years, then the Fe/d- man approach is less helpful. Nevertheless, despite these cri- ticisms, the Feldman approach represents a fair and flexible alternative that is clearly superior, and more economically sound, than either Penrod or the Alaska Rule. Lest we lose sight of the forest of practice in these trees of theory, our analysis must move to a practical example. IX. A Helpful Hypothetical “The war against inflation is a grim affair.” Justice Douglas, Davies Warehouse Co. v. Bowles, 321 U.S. 144 at 158, 64S.Ct. 474 at 482, 88 L.Ed. 635. We may now consider two hypothetical situations illustrat- ing that the process of computing likely wage increases, due to the effects of inflation and other factors, need not depend upon suspect speculation, the use of strange formulae, or intricate expert prognoses. First, assume that a plaintiff is totally and permanently disabled and that after allowable deductions for income taxes, social security taxes, and union dues, and after adding various fringe benefits, where applicable, his/her loss of future earn- ings would be $10,000 per year for the balance of a work-life expectancy of 18 years, or a gross expectancy of $180,000. This plaintiff could purchase for approximately $78,000 enough United States Bonds to allow him or her to receive $10,000 each year from 1981 through 1998. Government Bonds are relative- ly risk-free invesments for an unsophisticated investor, be- cause they typically require no reinvesting of funds over the next 18 years provided that no bonds are redeemed in advance of their maturity. This rough computation takes into account the interest that would be paid on the bonds, as well as the estimated income taxes on the interest received each year by the plaintiff, such that the plaintiff receives $10,000 spendable dollars each year. The economic fact that the plaintiff needs 54a only $78,000 to ensure that he or she will receive the assumed $180,000 in lost future wages is, of course, the legal justifica- tion for applying a discount rate. Significantly, this model assumes that the plaintiff would have received no wage in- creases, for whatever reason, in the next 18 years. Second, assume a projected 5.12% annual increase in wages based upon past increases in the national average weekly wage, such that this plaintiff's salary increases from $10,000 in the first year, to $10,512 in the second year, to $11,050 in the third year, and so on until an annual salary of $23,314 is reached in 1998. The total amount earned by the plaintiff, assuming this increase in wages, would be $284,494. Of course, this estimate assumes that the plaintiff would experience wage increases, either on the basis of performance and experience or due tocost of living increases, at the national average (5.12%) of workers over the past several decades. Using the same calculations as above for a risk-free U.S. Bond portfolio, it can be estimated that approximately $120,000 would produce the $284,000 in wages lost with the 5.12% per year increase considered. In summary, in the first hypothetical situation above, the plaintiff would introduce evidence that his/her annual take- home pay is $10,000 and that he/she would probably have worked for 18 more years. The defendant would simply prove that it would take about $78,000, safely invested, to assure that projected loss of income. In the second hypothetical situation, which is much more realistic in terms of our national economy, the plaintiff not only shows present income and work-life ex- pectancy, but also presents evidence that his/her salary will likely increase, just like average wages have increased in the past, at the annual rate of 5.12% due to inflationary (cost of living increases) and non-inflationary (merit, productivity, etc.) factors. The defendant in its response again can establish that approximately $120,000, safely invested, would allow the plaintiff to spend each year an amount roughly equivalent to his/her projected annual salary. Comparing the above two hypothetical situations with the approach in other jurisdictions, it is clear that under the Alaska “7 ova Rule, the plaintiff would receive a lump sum of $180,000 in both situations, because inflation (and cost of living increases) are presumed equal to the discount rate (i.e., safe investments). No discount rate is applied, an obvious windfall to the plaintiff who could, using safe investments, produce $414,000 over the next 18 years. Under Penrod, the first situation was common: lump-sum awards were discounted while no evidence of cost of living increases, which account for most of the 5.12% figure in the second situation, was permitted. Under Feldman’s inflation-adjusted discount rate (real rate of interest) ap- proach, past average wage increases are not considered, but past annual inflation rates are subtracted from past annual interest rates on safe investments to determine the discount rate. The plaintiff in this situation would receive $156,725.26. (2, 3) Given the likely availability of relatively risk-free investments to the unsophisticated investor, and given a duna- mic economy, it is not our purpose to establish a single metho- dology. Nor. are we attempting to decide today what precie types of economic data should be found competent by the courts as parties attempt to prove up, or discount, probable future lost wages. We do hold, however, that Penrod’s prohibi- tion of any consideration of inflationary factors is unfair to plaintiffs and is therefore overruled. The basis for that holding is not that “inflation is here to stay,” for we are not capable of making such an economic prediction. The critical error of Pen- rod was its failure to recognize the effects of inflation on wages in this country over the past several decades, as they would bear upon the actual dollar amount of money a person would receive over a future period of time. Given that wage-earners have typically received cost of living wage increases on the basis of inflation, plaintiffs should be permitted to establish by factual economic and labor data, and expert testimony, that their income would probably continue to increase in response to inflation in future years if they continued to work. Likewise, using economic and labor data and expert testimony, the de- fendant should be permitted to rebut such evidence. 56a Significantly, economic and labor data regarding increases in wages and inflation are not always complex and mysterious so as to require highly skilled economists to interpret them. On the contrary, most of the tables prepared by the Department of Labor, Bureau of Labor Statistics, are readily availble and easy to understand, and, more importantly, are considered accurate for most purposes. The availability of such statistics is import because an injured plaintiff (or his beneficiaries) is never to recover damages simply because inflation is likely to erode an award, but only lost wages, and insofar as wages will likely increase in the future, evidence of inflation is permitted to show what future wages wille be. [4,5] Various methods are available that allow the plaintiff to ensure consideration of the effects of future inflation on lost wages. We have already discussed the inflation-adjusted dis- count rate (or real rate of interest) used in Feldman. Although we find such an approach acceptable, and certainly superior to the Penrod or Alaska Rule approach, we must emphasize that defendants must be permitted to demonstrate the likelihood that the plaintiff's wages have not kept up, nor will they likely keep up, with inflation. Given this additional factor, the Feld- man approach becomes less simple. Another approach, illus- trated in our hypothetical above, allows the plaintiff to present evidence of average annual national, local, or occupational wage increases over the past sever decades, and thereby to present an average annual increase in wages due to merit, productivity, promotion, or cost of living increases. This may, in some cases, be a simpler approach. Other approaches will likewise be found acceptable, insofar as they permit the plain- tiff to show likely wage increases, due to inflation or any other reason, and at the same time allow defendants to present evidence of relatively risk-free investments in the economy that would allow a plaintiff to replace lost income in future years. 57a » & Jury Instructions {6, 7] Where the case is tried to a jury, instructions are required. Without attempting to writ or construct a suggested charge, we point out that the instructions may take several different forms depending on the permissible methodology used. If the Feldman approach is used with its inflation-adjusted discount rate (real rate of interest), the jury must make three separate determinations. First, they must consider and deter- mine all of the future income losses on the basis of the plaintiff's present income on the basis of the plaintiffs present income and, in addition, any increases that the plaintiff would likely have received due to merit, productivity, or promotion, but not inflation. In determining future merit raises or promotions, it should be made clear to the jury that any portion of such increases due to inflation or cost of living raises should not be added into the aggregate sum. Second, the jury must deter- mine, on the basis of the evidence presented to them, the likely increase in the CPI (the acceptable inflation indicator under Feldman). Third, the rate of interest available on some safe investment must be determined. On the basis of the second and third findings, the trial judge will then be in a position to determine the inflation-adjusted discount rate (real rate of interest) by subtracting the projected change in the CPI from the investment interest rate. The result is the discount rate to be applied to reduce the lost future income to its present value to determine the amount of the award. [8-10] On the other hand, if the plaintiff shows all likely wage increases due to inflation and other factors (as in the hypothetical above where a 5.12% annual increase was used), which allows the defendant to show what amount of money is necessary, using a relatively risk-free investment, to ensure that the plaintiff will receive those projected future wages losses, the jury should be instructed to answer two basic ques- tions. First, the amound of lost future earnings must be deter- 58a mined and must include all likely increases due to inflationary factors such as cost of living increases as well as non- inflationary factors such as merit or promotion raises. It must be made clear that the jury is to project only those increases that the plaintiff would actually have received, with reasonable likelihood. All projected future lost earnings are then aggre- gated by the jury without considering any discount to present value. Second, the jury must determine the likely earning capacity of an invested award. The answer to this question may take two forms: (1) Where the parties have introduced evi- dence of the probable availability of particu [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385011_1589%3A1. Public record. Not legal advice.