Martin v. United States
471 F. Supp. 6 (1979)
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Rule of Law:
Damages for a minor's lost future earning capacity are calculated by projecting a likely career path and earnings, adjusting that future income stream for an anticipated rate of wage inflation, and then discounting the total amount to its present value using an estimated rate of return on a low-risk investment.
Facts:
- On September 21, 1977, Jeffrey Martin and Melvin Burrows, both grade school students, were riding a motorbike.
- Martin was operating the motorbike, and Burrows was the rear passenger.
- They struck a sagging or 'down' power line that was negligently maintained by the United States government.
- The electrical shock caused Burrows to suffer severe, third-degree burns to over 80% of his head and face, resulting in permanent, severe disfigurement, the loss of his right ear, and the inability to smile.
- The same incident caused Martin to suffer severe electrical burns to his dominant right arm, which was so damaged that it required amputation at the shoulder three days later.
Procedural Posture:
- The plaintiffs, Jeffrey Martin and Melvin Burrows, filed a lawsuit against the United States government in the U.S. District Court for the District of Arizona under the Federal Tort Claims Act.
- The case was tried before the court without a jury.
- The court first issued an oral opinion finding the government was negligent and that the plaintiffs were not contributorily negligent, thus establishing the government's liability.
- The court then requested the parties to submit post-trial memoranda solely on the issue of damages before issuing its final written opinion on the amount of the awards.
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Issue:
In a personal injury case involving a minor with no work history, is the proper method for calculating damages for lost future earning capacity to project a likely career, estimate future income based on that career, adjust for predicted wage inflation, and then discount the total amount to its present value using an estimated rate of investment return?
Opinions:
Majority - Judge James M. Burns
Yes. In a personal injury case involving a minor, the court must calculate damages for lost future earning capacity by projecting a likely career path, estimating the corresponding future income stream, adjusting for a predicted rate of wage inflation, and then discounting that total to its present value. The court, acting as fact-finder, must weigh expert testimony to predict the plaintiffs' likely vocational future absent their injuries. Based on testimony regarding their intelligence and local opportunities, the court concluded both boys would have become skilled workers in the construction trades. The court then calculated the difference between their projected pre-injury earnings and their greatly diminished post-injury earning capacity. This resulting lifetime stream of lost wages was adjusted upward using a 5.5% annual wage inflation rate and then discounted to a present lump-sum value using a 7.5% annual investment return rate to ensure fair compensation without providing a windfall.
Analysis:
This case provides a detailed judicial roadmap for calculating damages for lost future earning capacity, a speculative but essential component of tort awards for young plaintiffs with catastrophic injuries. The opinion demonstrates the court's role in weighing competing expert testimonies to make concrete predictions about a minor's un-lived future, including career path, inflation, and investment returns. This methodology, which involves discounting a future stream of income to its present value, has become a standard framework in personal injury litigation. The case highlights how judges must translate devastating, life-altering injuries into specific dollar amounts based on a structured economic analysis, separating the calculation from pure sympathy.
