Petition for Writ of Certiorari — Humble Oil & Refining Co. v. Domeracki

INTHE —

Supreme Court of the United States ~ ~

October Term, 1971.

| “No. ¥ +. PAT. . ;

MARION DOMERACKI,

Respondent,

e 7

HUMBLE OIL & REFINING CO,

. | Petitioner.

PETITION FOR A WRIT. OF CERTIORARI TO THE-—

- UNITED STATES COURT OF APPEALS»

FOR THE THIRD CIRCUIT. —

te |

JAMEs F, Youne,

Raymonp T, LETULLE,

Joun C, Detweier,

21 South 12th Street,

Philadelphia, Pa, 19107° «

Counsel for Petitioner.

International, 711 So. 50th St., Phila., Pa. 19143-Tel SA 7-8711 Area Code 215

“;— REasons FOR, Grawtnc THE Writ (hawdaeseaueas AA ba vale

-I. A Purely Prospective Ruling by a Federal Court Is _

- Prohibited by the Case and Controversy Requirement /

of Article III of the Constitution .................

II. Even Assuming That Pure Prospectivity Is Constitu-

tionally Permissible, the Court Below Erred.i in’ _Ignor-

ig Criteria Established by. This Court Which Neces-_

sitated Application of New Judicial Precedent to the

Litigants Before the Court’ .............. Faas aie gl /

A. There Ts No Justification for a Purely: Prospective

Ruling ir 2 Case of First Impression ...,4....

B. There Is No Justification for a Purely Prospective

Ruling When: the New Judicial Precedent Goes to

the Fairness of the Trial and Influences the Very

Integrity of the Fact-Finding Process ........

C. A-Party-Who Brings About an Inriovative Prin- -

ciple of Law Is Entitled 40 the Benefits of the Ry

TOE gsi oneview tcuesczigeher hice

CONCLUSION :......... Le Cee ee et Pre er ere Tee

APPENDIX: .

GONE isc oxanseacthasees yen rere ere eieercndwes

Scars ec awaciees EET E TT eer eyee paneeens

Opleton- of the Court «oo... bocce cic cececccecccl..

FORE onde ccesins SPE RTO re Arete Pani nes

Excerpt From Articic III of the United States Conitbiilais

| Ae

' TABLE OF CASES CITED.

: * Page

Central. Nat'l. Bank of Cleveland v. . United States, 41. F. Supp.

239 (Ct. Cl. 1941) ..... Nkap sadee caer s.. aan 8

Cipriano v. City of Houma, 395 U. S. 701 ing J ioe wwe 7

- Desist v. United States, 394 U. S. 244,(1969) *......... co *

» Fairbanks v, Schaibe, 375 P. 2d 201 (1962) :............. 10,

Linkletter v. Walker, 381 U.-S. 618-(1965) ...... seas 4,6

Mapp v. Ohio, 367 U. S. 643 (1961) ..... Se ne 6

Moiltov v. Kaneland Community Unit’ Dist., 163 R E. 2d

WO a eg 10

Rampone v. Wanskuck Bldgs., Inc. QIK 2d 586 (R. I. 1967 y 10

Safarik v. Udall, 304 I. 2d 944 (D: C. Cir. WED pacanevivs eg

Simpson vy. Union Oil Co. of California, 396 U.S. 13 (1969) 5,11.

- Stovall 'v. Denno, 388 U. S. 293 (1967) ...... Wate peas Lies 4,11

United States ex rel. Allison: ‘-v. New Jersey, 418 F. 2d 332 (3rd _

ssh ag! SEE CET STI ONE Senn 9

United States v. Cocke, 399 F. 2d 433 (Sth Cir. 1968) he eae 7

AUTHORITIES CITED.

» . Page

Note, Limitation of Judicial Decisions to Prospective Opera- :

tion, 46 Iowa L. Rev. 600 (1961) Liwien shee amen s cans 7.

. Note, Prospective Overruling and Retroactive Application in

_. the Federal-Courts, 71 Yale L. j. SP (1962) 5s... 4

1B Moore’ s Federal Practice J 0.402 [3.-2- 1] (2d ed. 1965) .

1B — s Federal Practice {| 0.402 [3.-2- 4] (2d ed. 1965) . 7

_w

ad " ; és

. a «-

eSATA Pectiet i a a GS eriieeme sas

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@

To the Honorable Chief J ustice, and the Associate Justices

of the Supreme Court of the United States: —

Petitioner, Humble Oil and Refining Company, respect-

fully prays that a Writ of Certiorari issue to review the

judgment-of the United States Court of ‘Appeals for the

Third Circuit entered in the above entitled cate on May 18, -

1971. re ba .

; “ OPINIONS BELOW. f

-The opinion of the District“ Coust for the Eastern 4

District of Pennsylvania is reported at 312 F, Supp. 374 —

(i. D. Pa. 1970) and is printed infra, p.14. The opinion of

' the Court of Appeals for the Third Circuit is as yet unre-

ported and is printed infra, p. 24. | :

P

_. JURISDICTION. a

The judgment of the Court of Appeals was entered on oo |

| May 18, 1971, infra, p. 37. The Jurisdiction of this Court P .

is invoked under 28 U.S. C. Section 1254(1).

\ QUESTIONS PRESENTED, —

1 Xe NOT A PURELY PROSPECTIVE RULING

BY A FEDERAL COURT PROHIBITED BY THE CASE

AND CONTROVERSY REQUIREMENT OF ARTICLE -

III OF THE CONSTITUTION? __ eee fl

II. ASSNMIN G THAT PURE PROSPECTIVITY IS.

CON STITUTIONALLY PERMISSIBLE,

A. Can such a ruling be made ina case of first

‘impression? ea: ee ben apeoney

B. Can such.a ruling be made when thé new judicial

precedent goes to the fairness’ of the trial and the in-.

tegrity of the fact-finding process? .

C. Is a party who brings about an innovative prin-

ciple of law entitled "to the benefits of the rule an- |

nounced ? | « eo

ore

PRE ee ten».

*

to

Petition for Writ of Certiorari

a3 ; ‘

CONSTITUTIONAL PROVISION CITED.

‘United States. Constitution, ‘Article II, Section 2 (Ap-

pendix p. 38).

pate

STATEMENT OF THE CASE.

-On February 25, 1964, Marion Domeracki, a longshore-

man, suffered personal injuries aboard: petitioner ’s vessel,

the SS Esso Lima. Following trial before a jury, * trial

court direeted a verdict for plaintiff and entered jix gment

on that verdict in the sum of $270,982. The petitioner then © -

filed motions asserting, infer alia, that the verdict was -

excessive, that the trial court erred in ‘failing to grant a

new trial when it became known to tlie court that the jury

failed to follow the court’s instructions with regard to dam- —

ages; and that the court erred in failing to give instructions.

to the jury concerning the effect of income taxes on the

verdict.

There followed an appeal from the decision of the trial

court, handed down February 26, 1970, denying defendant’s

motions. That appeal was argued before’ the United States

Court of Appeals for the Third Cireuit on March 29, 1971.

The Cireuit Court affirmed the judgment of the District

Court on all grounds asserted by petitioner. However, the -

appellate court.did hold. that the requested instruction con. -

cerning the effect of income taxes on the verdict, although

not to be ‘2pplied to the parties litigant, must in the future

be the law of the Third Cirenit. This prospective ruling is

the subject of this petition.

t

In fixing the amount of the award.

: Petition aed Writ of Certiorari ‘3

\

REASONS FOR. GRANTING THE WRIT. \ j

Introdnetion,

As is so often the case, a very arrow issue raises some

of the most far- reaching constitutional problems. This peti-

tion is mandated by Mr.‘ Justice Harlan’s statement. in

De sist v. United’ States, 394 U. 8..244, 258 (1969), + ‘Retro .

* activity’ must be. rethought. si Although made in connection

witha criminal ¢ case, the statement was not intended to ex-

clude civil cases, United States v. Est. of Donnelly, 397

Rie 286, 295 (1970). The only point of law raised by this .

pe titioh i is whether the court below erred in denying /peti--

tioner the benefit of its prospective holding that, im the

future, a tfial judge must honor a request by counsel to.

instruct the jury that any awarg will not be subject to fed-

eral taxes and that the j jury shafl not add or subtract taxes

I. A Purely Prospective Ruling by a Federal Court Is Pro-

hibited by the Case and Controversy Requirement of

Article ITI of the Constitution. ,

The general rule is that new judicial. preeedenta por-

“mally operate retroactively as well as prospectiv ely! 1B

Moore’s Federal P) ‘acticé 70.402 [3.-2-1], p. 171 (2d ed.

1965): A stite court, uninhibited by any constitutional re-

quirements, may apply a newly announced judicial precedent

in one of three ways: (1) to conduct: -oceurring subsequent |

to the arnouncement agly ; (2) to conduct occurring subse-

quent to the announcement and also to the present litigants ;

or (3) to conduct oceurring subsequent to the announcenent,

to the present litigants, and also to conduct which occurred

prior to the announcement. A federal court’s choices are

more limited. ~ |

q .

—O

ee Petition for Writ of Corttorart

The first technique described above is commonly termed -

~ a““purely prospective’’ ruling since it does not apply even

to the parties before the court. ~ Linkletter v. Walker, 381

U.S. 618, 621-622 (1965). This alternative isnot available

to a federal court because of the restrictions of Article III

of the United States Constitution.

The foremost objection to denying the benefits of ‘a new

rule to the litigants at bar and awarding them only to future

litigants is that such a limitation makes the articulation of

the new rule only ‘dictim—since it does not apply to the

appealing litigants, it is not necessary to the decision made.

Article III, Section 2 of the Const itution limits the judicial

power of the federal courts to adjudicating ‘‘eases’? or

‘‘controversies’’, A federal court. may resolve only actual

and concrete cases and controversies; it may not render an

advisory opinion by entertaining abstract and hypothetical

questions. New judicial. precedent which is made purely

prospective and is therefore not applicable to the parties

before the court is no more than dictum and is in fact a

constitutionally impermissible advisory opinion. See Note,

Prospective Overr uling and. Retroactive Application in the

federal Courts, 71-Yale L. J. 907 (1962). - . :

Minimum constituti nal standards require that a party

who brings about an innovative principle of law be given

the benefit of that new rule. This Court, in some of its

latest pronouncements on point, has expressed a willingness

‘to aecept this restriction on the judicial alternatives of fed-

eral courts. In Stovall. v. Denno, 388 U.S. 293, 301 (1967),

_ Me. Justice Brennan, speaking for this: Court, stated that:

‘We recognize that Wade and Gilbert are, therefore,

the only victims of pretrial confrontations in the ab-

sence of their counsel to have the benefit of the rules

established in ‘their cases.~ That they must be given

that benefit is, however, an unavoidable consequence |

. L

a”

_' Petition for Writ of Certiorari - 5

of the necéssity that constitutional adjudications not

stand as mere\ dictum. Sound policies of decision-

making, rooted in. the command of Article III of the

Constitution that we resolve issues solely in concrete

cases or aa. and in the possible effect upon

the incentive of counsel to advance contentions requir-

ing a change in the law, militate against denying Wade

and Gilbert the benefit. of today’s decision.’’ [Em-

-phasis supplied. ]

Likewise, in the recent civil case of Simpson v. Union Oil

- Co.-of California, 396°U. S. 13, 15 (1969), this Court in a

. per curiam opinion stated that : Ce |

“Formulation of a rule of law in an Article ITE case

-.or controversy which is prospective as to the parties

involved in the immediate litigation would be most

unusual.". . .’’ 7 .

| In the instant case, the court below held that its ruling

was to operate in a-purely prospective manner and was to

have no application to the litigants presently: before the

Court. This promulgation of a purely prospective ruling

is constitutionally impermissible. Article III of the Con-

stitution requires the Cireuit Court to apply the - new

precedent to the litigants who brought about the innovative

principle which that court approves.

The decision ‘below flaunts the mandates of the United

States Constitution and the policy of this Court. The court

below would have been well-advised to heed the admonition

of Mr. Justice Harlan that, © | |

“. . . onee the decision to abandon precedent is

made, [there is] no justification for applying principles

determined to be wrong, be they constitutional or other-

3

6 Petition for Writ of Certiorari

wise, to litigants who are in or may still ¢ome to court.”’

United States v. Est. of Donnelly, 397 U.S. 286, 295-296

(1970).

In fact, to refuse to resolve this question would ‘be.to waste

the. opportunity to prevent civil cases from becoming mired

in the procedural and doctrinal confusion characteristic of

criminal cases involving this same basic question. |

II. Even Assuming That Pure Prospectivity Is- Constitu-

_ tionally Permissible, the Court Below Erred in Ignor-

ing Criteria Established by This Court Which Neces-

| sitated Application of New Judicial Precedent to the

Litigants Before the Court.

A. There Is No J ustification for a Purely Prospective ,

Ruling in a Case of First Impression.

This Court in Linkletter v. Walker, supra, examined

the question of whether the constitutional requirements of

Mapp v. Ohio, 367 U.'S. 643 (1961), operated retrospectively

upon cases finally decided in the period prior to Mapp.

~ After noting that no distinction should be drawn between

civil and ‘criminal cases, Mr. Justice Clark outlined the

criteria to guide a court in determining whether a new *

judicial precedent, should operate retrospectiv ely or

prospectively: _

“TA court] must . . . weigh the merits and ‘de-

merits in each case by looking to the prior history of

the rule in question, its purpose and effect, and whether

retrospective operation will further or retard its opera-

tion.’’ 387 U.S. at 629.

A federal court contemplating a prospective ruling must

adhere to these directives and remember that “ ‘pure

Petition for Writ. of Certiorari ee

in civil cases. , . , upon the same considerations that lie

at the core of stare decisis, namely to avoid jolting the ex-

pectations of parties to a transaction.”? United States v.

Est. of Donnelly, supra at pp. 295-296 ( 1970).- This bond

of justifiable reliance links almost all of the cases refusing

to apply a decision retroactively: That is to say, courts

ordinarily will give prospective effect to an overruling.deci-

sion only where persons have contracted, acquired rights,

or acted in reliance on a prior decision, and where the oper- °

ation of the later decision retrospectively would result in

substantial harm to such persons. Cipriano v. City of

Houma, 395 U. §. 701, 706, (1969) ; Safarik’v. Udall, 304 F.

2d 944, 949-950 (D. C. Cir. 1962); see Note, Limitation of

Judicial Decisions to Prospective Operation, 46 Iowa L.

Rev. 600, 601 (1961). 7 . *

Professor Moore also agrees that the overwhelming

majority of cases in which an overruling decision has been

denied retroactive effect have turned on the issue of. re-

liance. 1B Moore’s Federal Practice { 0.402 [3-2-4], p. 207

(2d ed. 1965). He then raises this query: afar

“If justifiable reliance: is the only justification

. for limiting a judicial decision to. prospective

effect, what justification can be advanced to support

the imposition of a similar limitation upon a decision

in a case of first impression?”

eens ee

~~

8 Petition for Writ. of Certiorari

The observations of Professor Moore are extremely’

pertinent to the present controversy. The court below recog-

nized that the propriety of a cautionary charge-on taxes

Was.an open question in the Third Circuit. There was,

therefore, no prior rule of law on which the parties could

have justifiably relied since ‘‘the rule of stare decisis is only

applicable where the law has been settled, not when it is

uneertain.’? Central Nat’l. Bank of Cleveland_v. United

: States, 41_F. Supp. 239, 247 (Ct. Cl. 1941). Nevertheless,

the court below chose to make its ruling purely prospective

_ even though the case before it lacked any element of justi-

” fiable reliance which weuld have warranted such a decision.

There is no coneeivable way in which application of the

newly formulatéd judicial precedent.to the parties before

th court could have jolted the expectations of either liti-

gant; there is no way in which such application would have

harmed or prejudiced either litigant. Indeed, the court

below stressed that without the benefit of a cautionary

, charge on taxes, a typical jury of tax-conscious Americans

might not be able to properly fix the correct amount of an

award in a personal injury action. Since there is no

justification for a purely prospective ruling in a case of -

first impression, the dictates of sound decision-making re-

quired the court below to apply its new principle of law to

the parties before the court.

B. There Is No Justification for a Purely Pirelpective

a Ruling When the New Judicial Precedent Goes to

the Fairness of the Trial and Influences the Very

Integrity of the Fact-Finding Process. .

One of the guidelines controlling the retroactive appli-

cation of newly announced decisions governing -criminal

procedure, as laid down by this Court in Linkletter v.

Walker, supra, focused on the purpose and effect of the rule

i eee OL seater. te ee Tee

Petition for Writ of Certiorari 9.

in question. In Desist v. United Staies, supra, the Court

ruled that primary consideration should be given this eri-

terion. The one purpose which has uniformly been consid-

ered to be fulfilled by. retroactivity is preservation of the

integrity and reliability of the fact-finding process. United

States ex rel. Au ison v. New Jersey, 418 F. 2d 332, 336 (3rd

Cir. 1969). Thus, ‘‘where the combination of factors in the

new rule affects the integrity of the fact finding or.truth

determining process so as to render it. unreliable’’ this

Court has consistently held that application of the new rule

to the litigants at bar is justified. United States v. Sorenson,.

308 F. Supp. 1268, 1273 (KE. D. N.Y: 1970) and cases cited

therein. — , ee se

The court below indicated that this was an element con-

sidered in reaching its decision when it stated,

‘The very purpose of a cautionary instruction is.

_+.+ « to dispel a possible misconception in the minds of

the jury that the government will make a valid claim to

a portion of the award. Its effect is simply to dissuade

juries from improperly increasing the award because

of this mistaken belief.’’ |

Surely no rule could be more intimately related to the in:

tegrity of. the fact-finding process than the one in question.

The purpose behind the lower court’s decision was to aid

the jury in properly determining a factual matter, namely,

the proper amount of damages to award the plaintiff; and

the court below, mindful of the pervasive impact of taxation,

recognized that without this cautionary charge a_tax-

conscious jury might mistakenly award the plaintiff more

than that to which he is lawfully entitled. at

The facts of the instant ease are peculiarly pertinent,

because they demonstrate an obvious confusion on the

Jury’s part to understand the trial Judge’s instructions on

—

10—~___ Petition for Writ of Certiorart

damages. Without here detailing all the relevant circum-

stances (pp. 22, 25-26), it is sufficient. to note that the trial.

judge felt that the jury’s verdict was not computed in ac-

cordance, with his instructions. Here a novel rule of law

has been advanced and adopted.. Case law ‘requires that

such a rule be. applied to the litigants at-bar if the rule in-

fluences the integrity of the fact-finding process. Since it

is a basic tenet of our judicial system that a jury’s deliber-

ations remain. confidential, seldom, if ever, can there be-

stronger evidence of some taint on the fact-finding process.

And no case can more clearly require that the new rule of

law ‘be adopted with respect to the instant parties as well

as future litigants.

The new rule in question did have the primary purpose

of enhancing the reliability of the fact-finding, and it directly

related to the integrity of the trial process. ’ Hence, the

refusal of the court below to extend the benefits of the new -

rule to the petitioner made it utterly impossible for the

petitioner to receive the fair and impartial hearing to which

it was entitled.

C. A Party Who Brings About an Innovative Principle

of Law ds Entitled to the Benefits of the Rule

Announced.

_In a substantial number of cases in-which a party has

succeeded in persuading an appellate court to estabiish a

new rule favorable to him, the court has applied the rule to

‘him and prospectively as to future litigants. Rampone vr.

Wanskuck Bldgs., Iné., 227 A. 2d 586 (R. I. 1967); Webb +.

Zern, 220 A. 2d 853 (Pa. 1966) ; Fairbanks’ v..Schaible, 375

P. 2d 201 (1962); Molitow v. Kaneland Community Unit .

Dist., 163 N. E. 2d 89 (1959). The rationale supporting such

rulings is twofold: (1) That-there will be no incentive to a

plaintiff to seek to have a new rule established, that is, to

ee a eee

Petition for. Writ of Certiorari 1 ;

improve the law, if he is to get nothing for his: pains-if he

succeeds, and (2) That it is unfair to the party who has

fought the case, sometimes through several courts, to tell,

him that he is right, but that he i is to receive nothing for -

efforts or his expenses.

Pure prospectivity, which does not apply anew rule of

law to the litigants at bar, tends to diminish the incentive of

parties .to seek changes in the law. This inhibition of the

initiative ‘of litigants to seek changes in the law clearly

stifles the growth and development of the law and was ex-"

pressly denounced in Stovall v. Denno, supra at P. 301

(1967). .

Most recently, in Simpson v. Union Oil Co. of Cali-

fornia, supra at p. 14 (1969), this Court reversed a purely

prospective lower court ruling in a per curiam opinion

’ which stated that it was error for thé lower court ‘‘to deny

the fruits of successful litigation to the petitioner’’. This

same reasoning makes it apparent that the court below

‘seriously erred in failing to grant the petitioner the benefit

of the innovative principle’ of law which it had brought’

about. -

CONCLUSION.

A purely prospective ruling by a federal court is in

derogation of the case and controversy requirement of

Article III of the United States Constitution. By denying

the beneficial application of an innovative principle of law

to litigants whose efforts have produced the® innovation, a

purely prospective ruling makes the articulation of the

new rule no more than dictum and therefore an imper-’

missible advisory opinion. Minimum constitutional stand-

ards demand that a new ly-formulated rule of law be applied

to the parties involved i in the immediate litigation.

\

ad

Lad

12. Petition for Writ of Certiorari

‘

_ Even assuming arguendo that pure prospectivity is con-"

stitutionally permissible, the criteria set forth by this Court

require application of the new rule in question to the parties

in the instant case. The court below ruled in this case of |

first impression that upon request, a cautionary instruction

on taxes would be given to all future personal injury actions

in the Third Circuit. The court below declined, however,

to apply the new rule to the instant controversy. This ac-

tion is at variance with strong authority indicating that the

impossibility’ of juStifiable reliance in «x civil case of first

impression eliminates all justification for a purely prospec-

tive ruling. Soa, es :

The new rule in question has the primary purpose of

enhancing the reliability of the fact-finding and hence is

directly related to the integrity-of the trial process. Surely

this is.one of the ‘‘positive and persuasive reasons for giv-

ing the cautionary instruction’’.. How the court below could -

ignore this factor and maintain that refusal to give the in-

“struction would in no way prejudice petitioner is utterly —

incomprehensible. _ . | oe e

\There are also policy considerations which mitigate

against the use of purely prospective rulings. Refusal to

apply the newly formulated rule to petitioner in this case

deprives it of the benefit of its effort and expense... Pure

prospectivity destroys any incentive of litigants or lawyers

to have a new rule of law established. |

This court should avail itself of the opportunity to rule

definitively on the constitutionality of purely prospective

Tulings in civil cases. A clear mandate from this Court

would aid sound decision-making and judicial uniformity

In the federal courts and would at the.same time reseue

civil litigation frem the. retroactivity versus prospectivity’

quagmire that has unfortunately plagued the area of crim- -

inal litigation:

5)

SS OO ELLE CLLR OLIN DEC ENE RLE cd SRE

Petition for Writ of Certiorari. 13

Once a court determines to blaze a new legal trail by

establishing a fresh rule of law there is no justification for

its refusal to apply that rule to the litigants who have

prompted the court to act. The mandates of the Constitu-

‘tion, the policies of this Court, and all notions of justice

demand that petitioner be aw arded the fruits of its suecess-

ful litigation.

srs ~ Respeetfully submitted, |

James F, Youne,

Raymonp T, Lerutip,

Joun C. DertTWEILER,

Counsel for Petitioner.

ad

a 7 e : - es howe Lon te

14 | 4 ppendix ;

IN THE

UNITED STATES DISTRICT COURT

For THE ‘Eastern District or PENNSYLVANIA!

' Civ. Action No. 37907.

+ MARION DOMERACKI

Vv.

HUMBLE OIL & REFINING CO.

OPINION.

Lvonco, J. | - Fenguary 26, 1970

Marion Domeracki, ‘a longshoreman, was seriously in-

jured while loading stores aboard the defendant’s vessel,

* the Ss Esso Lima. In this action, Domeracki contended °

that his injuries were caused by the unseaworthiness of the

vessel and the defendant’s uegligence i in failing to maintain

a reasonably safe place to work.. The court submitted eight .

, interrogatories. to the jury for its consideration. Pursuant

to the jury’s answers thereto,’ I directed a verdict for the

plaintiff and- entered judgment accordingly on May 22, .

1969.

‘1. Fhe following are the interrogatories submitted to the jury,

and the answers thereto:

“1. Did defendant shipowner breach the absolute duty to

furnish a safe and seaworthy vessel

: (a) by furnishing defective equipment ?

Yes X No

(b) by failing to furnish adequate equipment ?

Yes X No

i

wr

; Appendix 9° * 15

?

Presently before me are defendant’s motions under |

Rule 50, F. R. C. P., for judgment notwithstanding: the

verdict, or, in the alternative, for a new trial. In support

of these motions, defendant has set forth. the following

grounds: (1) the verdict was contrary to the evidence and .

against the weight of the evidence; (2). the verdict. was

excessive and ‘given under the influence of passion and

prejudice; (3) the jury should have been withdrawn when

plaintiff’s counsel improperly referred to a separate in-.

demnity action between defendant and plaintiff’s employer;

(4) defendant’s request for certain points for charge

should have been granted; (5) instructions to the jury on

‘*proximate causation’’ were inadequate; (6) eautionary

instructions on the effect of federal income taxes bn the

damages awarded should have been given to the jury; :

(7) the defendant either should have been permitted to

Note 1—confinued. Min

(c)- by permitting an improper method of operation in the

loading of stores? . :

Yes X No

“2. If ‘you have answered “Yes” to any of the parts .of In-

terrogatory No. 1, was plaintiff’s injury proximately caused by

defendant’s breach of duty set forth in - .

l(a)? Yes’ X No : rai

1(b)? Yes X No :

l(c)? Yes X - No .~ °

_“3. Was defendant shipowner negligent in failing to pro-

vide a reasonably safe place for plaintiff to work ?-

Yes X . No

“4. If your answer to Interrogatory No. 3 is “YEs”, was

plaintiff's injury proximately caused by that negligence?

Yes X No : Raa

“5. In what ‘amount do you assess plaintiff's damages?

$270,982.00

“6. Was plaintiff guilty of contributory negligence ?

Yes No ;

“7. If your answer to Interrogatory No. 6 is “Yes”, to what

extent (stated in percentage) did-plaintiff’s negligence contribute

to his injury?

a

~

/

oe /

16 : | Appendix

impeach the jury’s verdict, or should have -been granted

a new trial when it/ became known to the court that the

jury failed to follew the court’s instructions with regard

to fmages.

The defendant’s motions will be denied.

(1) Viewing the evidence in the light most favorable

to the plaintiff (Lind v. Schenley Industries, Inc., 278 F. 2d

79 (3d Cir. 1959), cert. denied, 364 U. S. 835 (1960) ), the

jury could re: asonably have found the facts to be'as follows:

On the afternoon of September 25, 1964, Domeracki

was a member of a work crew assigned by his employer,

the Philadelphia Ship Maintenance Co., to load stores, in-

cluding 3 or 4 heavy erates of minehinery weighing 300-350

pounds each,’ aboard the SS Esso. Lima. Although the

vessel’s mate was aware of the size and weight of the.

crates, he deneid the request of the foreman of the work °:

crew to’ use the ship’ s boom for loading the stores. The

foreman then ordered his crew to load the stores by pass-

ing them through the pipe rail, an opening in tlie railing

of the ship crossed by two. chains which lock onto the side

railing. ‘The lower chain was disengaged and dropped, but

‘the longshoremen — were unable to free the upper chain

because the lock was rusted and. frozen. The mate was

informed that the chain was frozen but he did nothing to”

correct it, telling the foreman to do the best he could.’ The

~~ work crew then proceeded to attempt to load the stores by

passing them through the opening between the lip of the

‘ship and the upper chain. The. mate was on deck in the

vicinity while the loading operation was going on. While

one of the heavy crates of machinery was being thus loaded

it was blocked by the upper chain. Domer acki lifted’ the

chain and at the same tiine pressed down on the erate to

‘permit his co-workers to push the rate onto the deck,

While plaintiff was in this precarious position, the erate

i : ’

7

: Appendix . 17

slipped and plaintiff felt a sharp pain in~his back. He

was unable to perform further duties that day. ©.

: Plaintiff offered expert testimony to the effect that

the method utilized to load the stores was improper; that

the ship’s ‘boom sliould have been made ‘available to the

longshoremen; and that the upper chain should not have

been frozen, , ty

As a result of the occurrence, plaintiff suffered two

herniated dises. One was corrected by surgery, but plain-

tiff refused further su rgery because of fear and uncertainty _

as to the success of a second operation. * Donicracki’s doc-

tors testified that he will continue to suffer. pain in his

back and numbness in his leg, and that he will no longer be

able to perform manual labor. |

By its-answers to the court’s interrogatories, the jury

found that defendant breached its duty to furnish a sea-

worthy vessel (a) by furnishing defective equipment (the °

frozen chain) > (b) by failing to supply adequate equipment

(the ship’s boom) ; and (¢) by permitting an improper

method of loading; that defendant was negligent in fail-

ing to provide a reasonably safe place for plaintiff to work;

that plaintiff was not contributorily negligent; that de-

fendant’s failure to maintain a seaworthy vessel and the

defendant’s negligence were the proximate causes of plain-

uff’s injuries, and assessed damages in the total amount

‘of $270,982. an

‘The jury’s special verdict as to defendant’s breaches.

of duty and ‘causation was based on ample evidence and

consequently the verdict must stand, Cf, Blackburn v.

Aetna Freight Lines, Inc., 250 I’, Supp. 289 (W. D. Pa.),

aff'd, 368 F. 2d 346 (8d Cir. 1966) ; Tarter.v. Souderton

Motor Co.,°257 F. Supp. 598 (KE. D. Pa. 1966). -

(2) Defendant contends that the $270,982 award was

excessive and that it was the result of passion and preju-

18 aan _ Appendix

dice o¢easioned by plaintiff’s counsel’s remarks during

summation concerning the then recent discovery by the

corporate defendant of huge oil reserves in‘Alaska. The

defendant, however, failed to object to the remarks at the

time and is precluded from raising the objection now.

Uhl v. Echols Transfer Co., 238 F. 2d 760, 765 (Sth Cir.

1956); Levin v. Trans World Airlines, Inc., 201 F. Supp.

791 (W. D. Pa. 1962); Russell v. Monongahela Ry. Co.,

159 F. Supp. 650 (W. W. Pa.), aff'd, 262 F. 2a 349 (3d

Cir 1958). In any event the remarks were not so preju-

dicial as to justify a new trial, particularly in view of the

‘ cautionary instructions given to the jury. Cf. Marchant v.

American Airlines, Inc., 146-F. Supp. 612 (D.C. R. I. 1956),

aff'd, 249 F. 2d 612 (1st Cir. 1957).

As to the amount of the award, although high, it was

Within reasonable limits. The evidence established that past

‘medical expenses and loss of Garnings totalled approxi-

mately $31,000. At the time of trial, the plaintiff had a life

expectancy of approximately 34 years and had little chance

of rehabilitatf@n. Even under defendant’s assuredly con-

servative figures, the present worth of plaintiff ’s future

earnings loss: would be at least $100,000. The jury could

very properly have awarded $140,000 for past and future

pain and suffering and loss of life’s pleasures. The award

Was based on sufficient evidence and was not so hi¢h as to

shock the conscience of the court. Thompson v. Calmar

Steamship Corp., 331 F. 2d 697 (3d Cir.), cert. denied, 270

U.S. 913 (1964); Russell v. Monongahela Ry. Co, 262 F.2d

349 (3d Cir.71958) : Vainelli v. Haberstroh, 237 F.Supp. 190

(M. D. Pa. 1964), aff'd per curiam, 344 F.2d 965 (2d Cir.

1965)." : me

(3) During the es bysplaintiff’s counsel, .refer-

ence was made to a separate indemnity action instituted by

the defendant against the plaintiff's employer. Defendant

Se ee

Appendix ; 19

immediately objected, and I gave cautionary instructions to

the-jury to disregard the remarks and admonished counsel .

for having’ made them.. I cannot understand how the com-

ment.can -be considered prejudicial in light of the fact that -

in most suits by longshoremen against vessels, the indemnity

action by the vessel against the stevedore is tried before the

same jury as a third-party action in the longshoreman’s

suit. Again, however, whatever prejudice might ‘have re-

sulted was eliminated by cautionary instrnetions. Cf. War-

chant v. American A irlines, Inc., supra. - :

(4) Defendant’s counsel requested. certain points for

charge (notably his numbers 12-15 inclusive).* “I refused to

charge the jury precisely as defendant requested and de-

fendant took exceptions. | oe

_ Ohne request, although couched in terms of contributory

negligené, actually sought an instruction charging plaintiff |

with assumption of risk. Assumption of the risk, however,

2. The points requeged by defendant’s counsel were as follows:

“12. If you believe that Mr. Domeracki continued to work

under conditions suchas the stuck chain rail, improper use of

~ equipment and failure‘to inspect the area in which. he worked,

and the conditions were, known to him as likely to cause harm

and he was hurt,’ you may find that Mr. Dameracki was con-

tributorily negligent and should deduct from any recovery what-

ever percentage you find he contributed to his own injury.

.. 13. The vessel owner cannot: be held responsible for the

negligence of the fellow employees of plaintiff: unless the facts

indicate that the owner or the vessel's agent knew or should. have

known of the existence of a dangerous condition. (Citations

omitted ). :

“14. The operational negligence of otherwise seaworthy

equipment. by a fellow longshoreman does not make a vessel

unseaworthy. (Citations omitted ). :

“15. If you find that the cause of plaintiff's injury was

not the ship, its. appurtenances, or its crew, but the isolated

and unforeseeable introduction of an improper loading method

by the independent employees hired by the vessel then the de-

fendant cannot be held liable. Morales 'v. City of Galveston, 370

U.S. 165 (1962),

.

20 Appendix ,

is not a defense in longshoremen cases. 46 U.S. ¢. S 688,

#0 Us S.C. $545 Adams ve United States, 393 F.2d 903 (9th

Cir, 1968).: A proper instruction was given to the jury on

contributory negligence to the effect that plaintiff would be

contributorily negligent only if he failed to aet with reason-

able care under all the circumstances, including the hazard-_

ous conditions. See Wtistakis v. United Cross Navigation

Corp., 316 F.2d 869 (2d Cir.), appeal after remand, 824 FB.

2d 728 (2d Cir. 1963), cert. denied. 377 U.S. 915 (1964).

Another request for charge presented by defendant

sought an instruction ‘to the. effect that the vessel owner was’

not liable if he.did not have actual or constructive notice of

the hazardous conditions. Notice, or the lack thereof, is"no .

‘deferise,to the unseawort hy condition of the vessel. Poignant

t. United States, 225 F’. 2d 595 (2d Cir. 19550). A proper.

instruction was given to the jury, however, to the effect that

a shipowner’s duty to maintain a reasonably safe place to

work requires that the shipowner have actual or construe-

tive knowledge of the hazardous conditions. See Guitierre:

t. Waterman Steamship Corp., 873 U.S. 206, reh. denied,

d14 U.S. 858 (1963). . _—

- Defendant also requested a. charge on ‘operational

$9

negligence.’? This doctrine holds that negligence by fellow

longshoremen jn the operation of: otherwise seaworthy

equipment.does not make the vessel unseaworthy. Price v.

SS Faracuz, 878 F.2d 156 (5th Cir. 1967). Since in this

ase there was unseaworthiness in the failure to furnish

adequate equipment (ship’s boom) and since there was ad-

mittedly unseaworthy equipment (the frozen chain) used by

the longshoremen, an instruction on “operational negli-

gence’? was not, relevant to the case, and the point was

properly refused. | i.

Defendant also requested that the jury be charged that

an improper method of loading does not make a vessel un-

seaworthy. In support of that request,. defendant errone-

Appendix 21

ously relied upon Morales v. City of Galveston, 370, U.S.

165 (1962). Both the Supreme Court in Morales and the

Court of Appeals for this Cireuit in Thompson v. Calmar

Steamship Corp., supra, have held that an improper method

of loading may make a vessel unseaworthy: I charged the

jury accordingly.

(9) Defendant asserts that the Jury’s findings that the

failure to provide the ship’s boom and to properly maintain

the upper chain of the pipe railing evidence the jury’s mis-

understanding of the. definition of ‘proximate causation’’.

This conclusion is grounded on defendant’s flat assertion

that as a matter of law these events were too remote to be

considered substantial factors in causing harm to plaintiff.

Defendant states that the jury’s confusion was probably

due to the failure to reiterate the definition of proximate

‘cause at the time thé Jury was charged on how to answer

the interrogatories, Z. .

There was sufficient evidence that these breaches of

duty were substantial factors in causing plaintiff’s injuries.

I cannot assume that the jury misunderstood an admittedly

proper instruction or that its memory was so short that the

charge should-have been repeated.

(6) A> verdict awarding damages for future loss of

inconie in a persanal injury action is not subject to federal

Income taxes. 26°U. S. @. $104. Defendant argues that

the jury should have been told that the vard to plaintiff

would not be subject to federal income taxes. ;

[ see no.reason why the defendant should gain 4 redue-

tion in the verdict because of a tax advantage Congress

has granted to the injured plaintiff. The majority rule,

which has been consistently adhered to in-this district and

‘in other courts in this circuit, is that it is not reversible

error to refuse to give an instruction on the ineome tax

effect of an award. Chicago & N. W: Ry. Co. v. Curl, 178

22 Appendix

I. 2d 497 (Sth Cir. 1949); Culley v. Pennsylvania R. Co.,

244 F. Supp. 710 (D. Del. 1965); Altemus v. Pennsylvania

Rt. Co., 32 F. R. D.7 (D. Del. 1963). See LeRoy v. Sabena

Belgian World Airlines, 344 F. 2d 266 (2d Cir.), cert.

denied, 382 U.S. 878 (1965); Girard Trust Corn Exchange

. Bank v. Philadelphia Transportation Co., 410 Pa. 530

(1963) ; Annot., 63 A. L. R. 2d 1378 (1959). .

..—(7) Defendant’s final argument revolves around an

unusual incident which took place after the venict had

been recorded and the jury dismissed, At that time, the

courtroom clerk handed to me two sheets of yellow scratch

paper.“ One piece of paper contained a notation ‘of the

amonnt awarded by the jury to the plaintiff and the signa:

tures of each of the jurors beneath it. The second sheet

contained, some computations (the exact nature. of which

has now happily slipped my memory), which apparently

had something to-do with the jury’s caleulations in regard

to damages. I made a comment to counsel to the effect

that I believed that these computations indicated that the

jury failed to follow the eourt's instructions in regard to

damages, (N. T. pp. 390, 398) but I did not permit counsel

to see the second sheet of paper. aa

Counsel for defendant contends that the papers should

have been given to him to enable him to impeach the Jury’s

verdict, and that the court’s refusal to grant this request

is ground for a new trial. oe, Ts

Even if I were to assume that the papers evidence

the jury’s confusion on calculating damages, the verdict

was still proper. Whatever oceurred in the jury room

3. The Marshal received the papers from the forelady with the

exhibits, and handed all materials to the. courtroom clerk after the

verdict was recorded. Upon. seeing the nature of these papers, the

clerk presented them to me. . :

Both pieces uf paper have been sealed and impounded pursuant

to my order of may 22, 1969, and will be available for examination

by the appellate courts if they deem examination yecessary or proper. |

Pua eee TR WeR ere rec nity ea Ae ESRD te a a Naa Raia eee

~

~~

Appendix 23 |

‘‘inheres’’ in the recorded verdcit. Farmers Co-op Elev.

Ass’n Non-Stock v. Strand, 382 F. 2q 224, 230 (8th Cir.),

cert, denied, 389 U.S. 1014 (1967), reh.- denied, 390 U. S.

913 (1968). Cf. Finn v. Carnegie-Illinois Steel Corp., 68

F. Supp. 423 (W. ‘D- Pa. 1946). It was not proper even

for the court to examine the content of the papers. “By

doing so, in effect, the court intruded upon the jury’s de-

liberative process. It would have been highly improper to

“permit counsel to examine the papers and inquire into

the means by which the jury arrived at its proper verdict, ©

Cf. Chicago, R. 1. & P. R. Co. v. Speth, 404 F. 24 291 (8th

Cir. 1968). The situation here is somewhat analogous

to those cases in which the jury adds some commentary

to its verdict. It has been consistently held that such

gratis comments are to be disregarded and the recorded

- verdict finalized. See, e.g., Hong Sai Chee v. Long Island

R. Co., 328 F. 2d 711 (2d Cir. 1964); Cleary v. Indiana -

_ Beach, Inc. 275°F. 2d 543° (7th Cir.), cert. denied, 364 U. S.

.825 (1960). | ° hare,

Since none of the defendant’s contentions have any

merit, an order will issue denying defendant’s motions for

* judgment notwithstanding the verdict or in the alternative

for a new trial. |

) _ ORDER.-

Ir Is Orpverep, this 26th day of February, 1970,. that

defendant’s . Motions for. Judgment. Notwithstanding the

Verdict or for a New Trial be and they are hereby Deniep,

Aurrep L, Luonco, J. *

“-

24 a: . = ppendix

UNITED STATES COURT OF APPEALS.

- Por rue Trirp Circurr,

No. 18886.

MARION DOMERACKI

HUMBLE -OIL & REFINING CO.,

| ? ae Appellant.

ee, %

ApreaL From tir Unerep. Srares Districr Court ror THE — °

*

. Masrern Disrricr or PENNSYLVANIA.

Re Argued March 29, 1971. -

Before: Hastizn, Chief Judge, and Serrz and

7 ' Aupisert, Circuit Judges.

OPINION OF THE COURT

(Filed May 18, 1971).

Avpisert, Circuit Judge.

\

A judgment of $270,982 was entered on a jury. verdict

2 Ss e e.

against. appellant shipowner and-in favor of appellee, a

longshoreman who sustained personal injury while loading

‘ashipin port. The jury accepted appellee’s contention that

lis injury was.caused by the unseawortliy condition of the

véssel and by the failure of the shipowner to provide a safe

‘place to work.! 8 ‘ : : S

-—

1. The facts are not complicated. Plaintiff-appellee was one of

“three longshoremen engaged in. loading a craté onto the S: S. Esso

Lima. He contended that his fareman requested, and the ship's:

mate refused to provide, a boom to lift the crate from the dock,

thereby necessitating that the crate be manhandled from the dock

\

“

a

Pe

Bee

NASA NOR IO Oot SNE NE UTA tee Be es

Appendix 25

Appellant concedes the severit y of the injury: appellee

suffered herinated dises in his back ; only one was corrected:

by surgery, while the other caused continuing «disability,

Past lass of earnings amounted to $28,000, medical expenses

totaled $5,000, and loss of future earning power over a pro-

Lee Jected 28-year period approximated $100,000. “Appellant -

contends, however, that the verdict was tainted, and exces-

sive, because the jury (1) failed to adhere to’ the’ court’s

instructions, (2) rendered its verdict ‘under the influence. of |

Passion and prejudice pu rposely induced by appellee’s eoun-

sel, and (3) deliberated under‘the mistaken impression that

the award would be subject to federal income tax obligations.

i

The first assignment of error relates to an incident that

occurred in the courtroom at the time the verdict was re-_

ceived... The jury had been given special written interroga-

tories which, together with the replies, were handed by the -

forelady to thedeputy marshal-for transmittal to the eourt-

In submitting the interrogatories, however, the forelady in-

advertently.inchuded two sheets of, paper containing certain

Written matter, It is conceded that these papers were not a

part of the jury's verdict and probably constituted serateh

paper utilized by the forelady or others during deliberations

in the jury room. The trial judge notified counsel that

‘these papers had inadvertently come inte my possession.

and that | had glanced at them and seen some figures which

<

Note 1—continued. . Te:

to the deck through an opening ‘in’ the ship's rail, . Two. removable

chains guarded the opening. The lower chain was removed in the

loading process, but the upper one could not be removed because.

it was rusted and frozen. The vessel's maté, although notified of

this condition, told -the longshoremen foreman to do the best he

could. Plaintiff-appellee was directed to. board the ship to lift the

upper chain and assist in hoisting the crate through the opening.

The injuries occurred when he. was holding the crate with one land

and lifting the chain with the other.

26 ; A ppendix

would cause me to wonder whether they {the jury] had fol-

lowed the Court’s instructions precisely.’’ Subsequently,

the court declared: “Upon further reflection I think that

what I did was improper in looking at what the jury did,

and rather than compound that error, I have impounded °

these papers. - . » [happen to know, by that inadvertent

glance at that. piece of paper, how they. arrived at [the

verdict]. I shall have to do my best to wipe clean from my

mind that information which I now have inmy head... .”

- Appellant then moved for a new_trial, grounding its

motion on the theory that a new trial should be granted

When it is apparent that the jury has not followed the court’s .

instructions on damages. . Although’we do not quarrel with

this statement of the controlling abstract principle, the cir-

cumstances here preclude our reaching this question. Neither

atrial court nor an appellate court has the authority to

inquire into the jury’s decisional processes, even when in-

formation pertaining to the deliberations is volunteered by.

one of the. jurors. “lA lfter reception of the verdict-and

discharge of the jury, testimony of jurors should be incom-

petent, under the no-impeachment rule ; > ., to illuminate -

the suspicion [of a failure to. follow instructions] by inguir-

ing into their mental processes.”” 6A Moorr’s Frperar,’

Practice §59.08[4],.at 3804, as : ~

Long settled considerations. of publie policy “dictate

‘‘that mistake of the testimony, misappreliension of the

law, error in computation, irregular or illegal methods. of

arriving at damagés, unsound reasons or improper motives, .

uisconduct during the ‘trial or in the Jury Room, cannot

be shown by the evidence of the Jurors themselves, as the

ground of disturbing the verdict, duly rendered,’’ Capen

v. Stroughton, 82 Mass. (16 Gray) 364, 366. (1860).? The

.. 2. E.g., Farmers Co-Op. Elevator Ass'n Non-Stock v. Strand,

382 F. 2d 224, 230-31 (8 Cir. 1967 ) Complete Auto Transit, Inc. vy.

Wayne Broyles Eng. Corp., 351 F. 2d 478, 480 (5 Cir. 1965 ).; Lohr

“Appendix | 27

- sound justification for the concept that “such matters all

inhere in the ver dict itself,2* Chicago, R. 1. & Pac. RR ve

Speth, 404 F, 2d 291, 29518 Cir. 1968), is the salutary desire

to protect participetifs in the jury system from being

‘‘harrassed and beset by the defeated. party. . . . If evi-

dence [obtained from jurors] could be thus used, the result

Would be-to make what-was intended to be a private deliber-

Ation fhe constant ‘subject of publie inv estigation—to the

destruction of all frankness and freedom of discussion and

conference.’?- McDonald. v. Pless, 238 U. S. 264, 267-68.

(1915). In short, the district court properly concluded that

the information to which he aceidentally beeame privy was |

incompetent to provide a basis for a finding that the jury

failed to adhere to the court’s instructions.

II.

Appellant also insists that a new trial should be granted

due to the prejudice allegedly created when appellee’s coun-

sel. suggested ‘that the shipowner would have recourse

against any third party responsible for the unseaworthy

condition-of the ship. Upon objection, the court instructed

the jury to ‘‘ignore’’. such remarks: ‘‘Members of the jury,

you are trying oné law suit. “You are not here to determine

Whether the ship has any rights against anybody else. "

The court previously had.told the jury: ‘You are here to

try the case of. Marion Domeracki against the Humble Oil °

and Refining Company. That is the only case you are here

to try, Whatever reference may have been made to other

litigation, just disregard it. This is the ease you are here

.to try, you are sworn to try, and this i is the only one I want

Note 2—continued.

v. Tittle, 275 F. 2d 662, 667 (10 Cir. 1960) ; Webb v. Ynited States -

ye Co., 206 F. 2d 611, 612 (2 Cir.“1959) ; Thedorf v. ‘Lipsey, 237

- F. 2d 190, 194 (7 Cir. 1956) ; Northern Pac. Ry. v.»Mely, 219 F. 2d

199, 201, 202 (9 Cir. ioe Stiles v. Lawrie, 211 F. 2d 188, 189 (6.

Cir. 1954).

SS

[a

28. - | Appendix

. . . ay ;

you to consider.’ We are satisfied that these cautionary

statements were adequate and that no prejudidial error

resulted. , |

We also find no merit in appellant’s additional con-

tention that’ the jury Was improperly influenced by an

oblique reference during appellee’s closing argument to’ the

financial capacity of Humble Oil! See United States v.

Socony-Vacuwan, R10 U. S. 150, 237-42 (1939). In any case,

appellant registered no timely objection to the remark.!

Id. at. 239; -. See Fed. R. Civ. Pro. 46.

: IT.

- Appellant submitted, and the district court, refused, the

following Pe ies re x : 4

I charge you, as a matter of law, that any award

made to the plaintiff in this case, if any is made, is not

iacome to the plaintiff within the meaning of the

federal income tax law. Should you find that plaintiff

is entitled to an award of damages, then you are’ to

follow the instructions already given to you by this

Court in measuring those damages, and in no event

should you cifher add to or subtract from that award

on account-of federal income taxes,

-3. “Now, do you. think, ladies and gentlemen, that a company

like Humble Oil, a company who’ has: the investigative ingen-

uity to strike oil in the Alaskan. northern slopes, could not -firtd

a witness to refute plaintiff's case, if there’ was such a. Witness 2”

4. Norgdid appellant object to what it now characterizes as an

“unwarranted appeal to sympathy” during the closing: argument.

_ “And remember this, that your award shouldbe such that

if you pass Mr. Domeracki on the street 20. years from now or

25 years from now and you see him, ‘as you. will; limping in

pain and unable to avork, that you don't Have to_walk ‘on the

other side of the street because-you can’t look hin in the eye

; for what you did or for what you déin’t do.” / ie

Appellant concedes that this somewhat dramatic. statement. “[s]tand-.

ing by_ itself ... . may not be prejudicial error.” Even, read in

context_with the entire closing, we cannos conclude that this remark,

or the closing as a whole, created prejudice to justify reversal,

. ‘ “ 9

‘ :

Appendix 29.

ra 5

Whether the refusal of this instruction resulted in prejudice

sufficient to entitle appellant to a new trial is the question

to which we now address ourselves.

It is true, as stated in the requested charge, that awards

received by settlement or verdie? in personal injury actions

are not taxable under the federal income tax laws. Section

104 of the Internal Revenue Code of 1954, 26 U.S. C. § 104

- provides: | pe ar 3

(a) In General—Kxcept in the case of amounts at-

tributable to (and not.in excess of) deductions alowed

under section 213 (relating to: medical, ete. expenses) ©

for any prior taxable Year, gross income does ‘not

include— . aa

(2) The amount of any damages received (whether

by suit or agreement) on account of personal injuries

or sitkness. . . . 3 ae |

But whether this is a fact of which a Jury should be ap-

prised, upon a defendant’s request for a proper cautionary

instruction, is an open question in this -Cireuit. . Other

courts, both state and federal, which have considered

the question have answered it in different ways.> The issue.

—

5. Forscompilations of the. pertinent cases, see Nordstrom,

“Income Taxes and Personal Injury Awards,” 19 Ohio St. I). rire

214 n.3 (1958) ; Note, “Ifcome Taxation and Damages for Personal

Injuries,” 50 Ky. L. J. 601 n:3 (1962). For additional federal cases,

see note 15, infra. Hall v. Chicago & N.W. Ry., 5 Ill, 2d 135, 125

N. E. 2d 77 (1955), states the majority view that it is error to inform

the jury that plaintiff's award will not be taxable. Dempsey wv.

Thompson, 363 Mo. 339, 251 S. \W. 2d 42 (1952) stands for the

minority position that reftisal ta give an appropriate cautionary *

.

instruction is prejudicial error. Other courts have adopted more

‘flexible ‘rules, holding that the giving of an instruction js discre-

tionary with the trial court, Anderson v. United Air Lines, Intc., 183

F. Supp. 97°(S. D. Calif. 1960), or that'the instruction, while proper,

is not mandatory, and that a refusal to give a proper instruction is

not reversible error. M/cl¥eeney v. New York, N? H. &*H. R .R.,

282 IF. 2d 34 (2 Cir. 1960). I‘inally some of the cases which have

30 Appendix

has also generated sharp disagreement among commenta-

tors, although a majority appear to favor an appropriately

worded charge.® _

Our analysis begins with the elementary rule of dam-

ages in personal injuries actions: a plaintiff should be-

compensated (1) for monies of which he has been deprived

and which presumably he would have received had he not

heen injured, ‘including wages, and earnings, past and

future; and. (2) for the expenses, inconveniences and suf-

fering which have been thrust upon him by virtue of his

injuries. The purpose, then of personal injury compensa-

tion is neither to reward the plaintiff, nor to punish the

defendant, but to replace plaintiff’s losses.

Insofar as wages are concerned, as (sic) injured plaintiff

loses only his net or take-home pay, that is, his gross earn-

— ings, less taxes. He does not in fact ‘lose?’ his gross earn-

ings. Neverthelesy; in-the three ‘states and one territory of

this Circuit, as in fost jurisdictions, the courts hold that the

gross earnings: of the plaintiff, rather than net earnings

Note 5—continued. a

. found an instruction to be improper can be distinguished on the basis

of the wording of the requested charge. In Maus v. The New Y ork,

Chicago & St. Louis R. R. Co.. 165 Ohio. St. 281, 135 N. E. 2d 253,

* (1956), for example, the requested instruction merely averted to the

section tO4 exclusion and added that “you must take this fact into

_ consideration in arriving at the amount of your verdict in this case.”

6. Approving an instruction: I] Harper & James, The Law of

Torts § 25.12, at 1327-28 (1956); Feldman, “Personal Injury

Awards: Shouid Tax-Exempt Status Be Ignored?” 7 Ariz. L. Rev.

272 (1965) ; Burns, “A Compénsatiori Award for Personal Injury or

Wrongful Death is Tax-Exempt: Should We Tell the Jury?" 14 De

Paul L. Rev. 320 (1965) : Nordstrom, 19 Ohio St. L. J. 212 (1958),

supra, note 4; Note, 50 Ky. L. J. O01 (1962), supra, note 4; 26 Ford.

L. Rev. 98 (1957):4U.C. L.A. L. Rev. 636 (1957); 25.U. Cin.

L. Rey. 385 (1956) ; 44 Ky. L. J. 384 (1956) 49 Vand. 543 (1956) ; .

11 Wash. & Lee L. Rev. 66 (1954) ; 42 Geo. L. J. 149 (1953) ; 32

Tex. L. Rev. 108 (1953), Opposing instruction: 35 N. Car. a

Rev. 401 (1957) : 42 Iowa L. Rev. 134 (1956): 8 Ark. L. Rev. 174

(1953); 33 B. U. L. Rev. 114 (1953); 21 U. Chi. L. Rev: 156

(1953). .

Appendia ~~" > &

after taxes, are admissible as evidence for the jury’s con-

sideration in éaleulating this item of damages. Thus, the

jury is presented not with evidence of wages which plaintiff

has actually lost, but sums which, in fact, may be con-.-.

siderably higher depending upon his particular income tax _

bracket. ) 3 ae a.

Defense attorneys have sought to avoid this result in at’

least two ways.’ They have attempted to present evidence

of the amount of federal income tax that the plaintiff was

paying prior to his injuries in order to offset the ‘‘gross in-

come’ evidence introduced by the plaintiff. Alternatively,

they have requested an instruction that any award will not

be subject to federal income tax, and that the jury ‘‘should ;

not consider such taxes,’’ * or, more specifically, should not

‘‘add or subtract’? from any award on account of taxes.®

The avowed purpose of such a request is to discourage a

jury from enlarging an award to the extent it erroneously

believes that the plaintiff will be called upon to pay income

taxes. * ah Ane | |

We readily recognize the problems which could. result

from the introduction of income, tax evidence: Shifting tax

rates, together with other variables, could give rise to great.

conjecture, at least as to in futuro earnings.'° Indeed, the

7. See Nordstrom, supra, note 4,19 Ohio St. L. J. at 212-213.

8. £.g., Dempsey v. Thompson, supra note 4, 363 Mo. at 339,

251 S. W: 2d at ‘45. “ :

. 9%. This was the phraseology requested in the instant case and

suggested elsewhére.. E.g.,. Nordstrom, supra note: 4, 19 Ohio St.

L. J. at 235; Feldman, supra note 5, at 279. . ‘

10. Professor Nordstrom recognizes the speculative nature of

such evidence but suggests that this factor should not of- necessity

be defeating. : As F

This conjecture and speculation could be found in such

things as: (1) the family status of, the. injured party in the

years to come; (2) possible changes in the exemption and de-

duction provisions of the tax law; (3) possible changes in the

.

a

32 ; Appendix

tax computation itself could completely overshadow. the

basic issues of: liability and damages. Moreover, recovery

for pain, suffering and medieal expenses is not meastred

by one’s income and, in any case, would probably not. be

taxable."! <

Although some courts and writers have confused the

evidentiary issue with the question of a cautionary instrue-

tion,” we believe that the considerations reliting to. the

former issue have no rele ‘ance to the second. The instrue-.

tion requested in this, case would not require the introdue-

tion of any additional evidence. No reference to any TRS

regulation or to any specific statute would be necessary,

No tax expert.would need be summoned as a witness. No

tax tables would be hanled into the courtroom. No addi-

tional, computation would be required. In brief, such an

instruction would not open the trial to matters irrelevant to

traditional issues in personal injury litigation, and thus

would in no way complicate the ease or confuse the jury.

Moreover, there are positive and persuasive reasons

for giving the instruction. We are not unaware of the per-

Note 10—continued. RS Sneha seer oar ee arenes

rates of taxation ; and (4) possible chaniges in the cost of living,

thus reflecting itself on the income of the plaintiff. These items -

are speculative. But are they so speculative that we should

refuse to let the deféndant even try to show them? © Indeed,

which is more conjectural: the existence of income tax in this

country along the pattern that we now know it, or the continu-

ance of the plaintiff's salary dyring exactly the same period?

Yet, we have no real difficulty in letting the jury speculate as

to the existence of the. latter. We will even let the plaintiff try

to-show that he might have earned more salary in the future,

If the. plaintiff receives the advantage of the speculation in his-

favor, why do we bar the defendant from even trying to show

What appears to be a smaller speculation in his favor ?

Nordstrom, supra note 4,19 Ohio St. I. }. at 2a7,

11. See 42 Iowa L. Rey. 134, 137 (1956) and 8 Ark. L. Rey.

174, 177 (1954), suggesting that ‘a tax would be due if medical.

expenses had been- deducted in. a prior year and were currently

recoverable. re

12. See, e.g. Highshew y. Kushto, 235 Ind. 505, 134 N. E. 2d

555 (1956); 33 B. U. L. Rev. tid (1953).

°

.

x ‘yi ppendix ; wo

vasive impact of taxation—federal, state, and local—in the

lives of Americans. It has been properly observed that what

we know as men, we should not ignore as judges. We know

of the widespread attention given by the media to the tax

consequences affecting winners of the Irish Sweepstakes,

state-conducted ‘lotteries, and contests conducted on tele-

vision. We take judicial notice of the “tax consciousness”?

of the American public." Yet, we also recognize, as did the

court in Dempsey v. Thompson, 363 Mo. 339, 251 S. W. 2d

e - ’ . . - A*

42 (1952), that few members of the general public are aware

of the. special statutory exception for personal’ injury

awards contained in the Internal Revenue Code.

[T}here is always danger that today’s tax-conscious

juries may assume (mistakenly of course) that the

judgment will be taxable and Sherefore make their

verdict big enough so that plaintiff would get what

13. [I]t is likely that many jurors, without such an instruc-

tion. . . would believe that damage awards are taxable, and

would weigh this factor ‘against the defendant. . . | T]he

public press has carried many reports of large sums won on.

television quiz programs of in lotteries and sweepstakes. These

accounts almost always point out that a very large percentage

of the winrtings must be paid to the government as income tax,

It would be natural enough for the layman. to conclude that

the plaintiff's receipts from the judgment would be taxed.

McW'ceney v. New. York, N. H. & H.R. R., 282 F. 2d 34, 41 (2d

Cir. 1960) (en banc) (Lumbard, C. J., dissenting ).

To ignore the tax element at the present day would be to act

in a manner which is out of touch with reality. Nor can I re-

gard the tax-element as so remote that it should be disregarded

in assessing damages. The obligation to pay. tax—save for

thase in possession of -exiguous incomes—is almost universal

in its application. That obligation is ever present in tlie minds

of those who are called on to pay taxes, and no sensible person

any longer regards’ the net earnings from his trade or: profes-

sion as the equivalent of his’ available income. Indeed, save for

the-fact that in many cases—though by no means in all cases—

the tax only becomes’ payable. after the money has been re-

ceived, there is, I think, no’ element of remoteness or uncer-

tainty about’ its incidence. ! he at

British Transp. Comm'n v. Gourley, 3, All E. R. 796, 802 (1955).

fs

34 a Appendix

they think he deserves after the imaginary tax is taken

out of it.

IT Harper & James, Tuk Law or Torts § 25.12, at 1397-28

(1956). The very purpose of a cautionary instruction is

merely to dispel a possible misconception in the minds of

the jury that the government will make a valid claim to a

portion of the award. Its effect is simply to dissuade juries

from improperly inereasing the award. because of this

mistaken belief,. ae.

Given the absence of complications that an instruction

would engender, the tax consciousness of the American

public, and the general lack of knowledge about the statu-

tory exclusion, we hold that in personal injuries actions the

trial courts in this Cireuit must, in the future, upon request

by counsel, instruct the jury that any award will not be sub-

ject to federal income taxes and that the Jury should not,

therefore, add or subtract taxes in fixing the amount of any

award. ante oS a

We decline, however; to reverse the judgment of the

court below. Two important considerations influence this

determination. First, the’ purpose of. the rule which we

promulgate for prospective application in this Cireuit

is to remove the possibility that juries will increase awards

based on mistaken considerations of tax consequences. In

the case at bar, however, there is no evidence that the jury

was in fact-so motivated,” and because of the settled rule,

a . * 2

14. The Supreme Court of M issouri in Dempsey v. Thompson,

363 Mo, 339, 251 S. W. 2d 42 (1952), made prospective only its

overruling of the refusal to give a requested cautionary instruction.

Our action in giving prospective effect to our rulmg is based on’

our general supervisory power over the district courts in this Cir-

cuit. See MeNabb v. United States, 318 U.S, 332 (1943); United

States v. Fioravanti, 412 F-. 2d 407, 420 (1969), eM a

15. It was this factor that led the Second Circuit to concltide

that the failure to give the charge was not reversible error. Ac-

knowledging that the instruction “imposes no new burdens on the

jury and there is nothing speculative about it,” still. Judge. Friendly

reasoned that

-

Appendix — } 35

heretofore discussed; that the sanctity of jury delibérations.,

‘may ‘not be invaded subsequent to the rendition of the

verdict, any inquiry is now foreelosed. : es

Secondly, we recognize that our approach to this-

problem -represents a new’ view in this Judicial circuit as

well as in other Circuits." Indeed, the position we adopt

has been accepted by only a handful of state Jurisdictions.

‘In this situation, it cannot be, said that the trial court erred

in refusing the instruetion at the time it was proffered.

Paying even the most scrupulous attention to the sonte-

times subtle shifting of appellate winds, the distriet: court

could not have been expected to forecast the decision we’

reach here. © | | ae

_» In conclusion, after considering all the arguments pre-

“sented by appellant, we hold that there was no reversible

Note 15—continued. ; :

[bJefore an appellate court should hold that. failure to give

such a cautionary instruction was reversbile error, there ought

‘ to’ be evidence either that juries in general increase recovery

on this account or that the particular jury did so. The pub-

lished material on the former point is too slender to ‘support a

judgment that juries do this gencrally,-and there is nothing to

suggest that this one did. )

McWeeney v. New York, N. H. & H.R. R.; 282 F. 2d 34; 39 62d

Cir. 1960) (en banc).

16: Our research discloses that three Circuits have validated

.tefusals to give a cautionary instruction. Only the Second Circuit,

however, has recorded its reasons, and its most. recett analysis of

the question resulted in a 3-2 en bane decision. McWeeney v. New

York, N. H. & H.R. R., supra, notes 12 and 14. Both opinions in

the Fifth Circuit were per curiams; and both disposed of the issue

in one sentence. Cunningham v. Bay Drilling Co., 421 F. 2d 1398.

1399 (Sth Cir. 1970): “We believe ‘the refusal Jof the instruction |

was proper.” Prudential Ins, Co. v. Wilkerson, 327 ¥, 2d 997, 998

(Sth Cir. 1964) : “We are ofthe opinion that the court properly re-

fused to instruct the jury [on the issue]. *The Sixth Circuit pro-

nouncements are equally cryptic. In New York Central RR v. Delich,

252 F. 2d 522, 527 (6th Cir. 1958), the court concluded: simply that

[i]t was not error” to refuse the instruction, In a subsequent deci-

sion, the court cited Delich and said that no case relied upon by the

appellant “stands for a contrary holding.” Payne v. B. & O. R. K:,

309 F. 2d 546,,549-50 (6th Cir. 1962).

EE

36 | a saat |

trial error. Moreover, we cannot say that the amount of the

verdict shocks the conscience of the court.

- The judgment of the district court Ww ill be aMirmed.

A True Copy:

Teste: :

Clerk of the United States Court of Appeals

& for the Third Circuit. .

Pia ,

a

i * . ;

“

*

es

‘

Appendix | | 37

JUDGMENT.

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

United States District Court for the Eastern District of

Pennsylvania and was argued by counsel.

On consideration whereof, it is now here ordered and

_ adjudged by this Court that the judgment of the said Dis-

trict Court, filed May 22, 1969, be, and the’same is hereby

affirmed, with costs taxed in favor of appellee. .

Arrest:

‘Tuomas F, Quinn,

. ca . Clerk, .

May 18, 1971 _ : 2

Certified as a true copy-and issued i in liew

of a formal mandate on June 9, 1971.

Test: THOMAS F. Quinn,

—

Clerk, United States Court of Appeals

for the Third Circuit.

ae ie Appendix :

EXCERPT FROM ARTICLE III OF THE

UNITED STATES CONSTITUTION.

‘Section 2. The judicial Power shall extend to all. Cases,

in Law and Equity, arising under this Constitution, the

‘Laws of the United States s, and Treaties made, or which

shall. be. made, under their Authority ;—to all Cases af-

fecting Ambassadors, ‘other’ public Ministers and Con-

suls; :-—to all Cases of admiralty and maritime J urisdiction ;

—to Controversies to which the United States shall be a

Party ;—to Controversies between two or more States ;—

between a State and Citizens of another State; Gate

Citizens of different States »—between Citizens of the same .

State claiming Lands under Grants of different States, and

between a State, or the Citizens thereof, and foreign States,

Citizens‘or Subjects. .

‘ In all Cases_affecting- Ambassadors, other public Min- ‘

‘isters and Consuls, and those in which a State shall be

“Party, the supreme Court shall have original Jurisdiction.

In all the other Cases before mentioned, the supreme Court

shall have appellate Jurisdiction, both as to Law and Fact,

with such Exceptions, and under such: Regulations as the

Congress shall make.

~ The Trial of all Crimes, except in Cases of Impeacli-

ment, shall be by Jury; pnd such Trial shall be held ih the

State where the said Crimes shall have been committed ; but

when not committed within any State; the Trial shall be at

such Place or Places as the Congress may by Law’ have

directed. = |

U.S.C. Constitution, Art. ITI, Sec. 2. .