TILDEN DAVID NESMITH, PLAINTIFF-APPELLEE,
v.
TEXACO, INC., ET AL, DEFENDANTS; POOL OFFSHORE COMPANY, DEFENDANT-APPELLEE, V. TIDEX, INC., DEFENDANT-APPELLANT
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The court held that the district court erred in its method of calculating damages by applying an inflation factor and a discount rate, and must reassess damages using the below-market-discount method.
The district court calculated plaintiff's damages using a 6% inflation factor and an 8% discount rate. This calculation was reconsidered in light of s…
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PER CURIAM:
We delayed consideration of this case pending decision en banc of Culver v. Slater Boat Co., 644 F. 2d 460 (5th Cir.1981). Following the en banc decision in Culver, 688 F. 2d 280 (5th Cir.1982) (en banc) (Culver I), the Supreme Court decided Jones & Laughlin Steel Corp. v. Pfeifer,-- U.S. --, 103 S.Ct. 2541, 76 L.Ed.2d 768 (1983). Prompted by the Pfeifer opinion, this Court reconsidered Culver I on petition for rehearing. Culver v. Slater Boat Co., 722 F. 2d 114 (5th Cir.1983) (en banc) (Culver II).
In light of Culver II this Court vacates the damage award and remands for reassessment of damages. In calculating plaintiff’s award, the district court applied a 6% inflation factor2 and an 8% discount rate to plaintiff’s estimated lost earnings. The en banc Court in Culver II opted for the below-market-discount method. This approach does not allow for consideration of inflationary factors when calculating plaintiff’s lost stream of future earnings. Instead, the trier of fact estimates the wage increases the plaintiff would have received each year as a result of individual and societal factors (excepting price inflation), e.g., personal merit and experience. The resulting income stream is then discounted by a below-market discount rate.
On remand the district court, 491 F.Supp. 561, may hear any further evidence it deems necessary pursuant to Culver II in order to recalculate plaintiff’s damage award. The court is directed to apply the principles of Culver II in adopting the appropriate discount rate. The remainder of the appeal presents no issues requiring written disposition. Accordingly, the judgment of liability against the defendants is affirmed.
AFFIRMED IN PART; VACATED IN PART AND REMANDED.
. The court estimated that plaintiff’s annual lost wages equalled $24,600 in 1980 dollars and then assumed a 6% inflation rate so that his annual lost wages at the end of his work life in 2013 amounted to $150,000. After discounting, the court applied a 15% rate to adjust the award for income taxes.
Cases With Similar Vibessemantic neighbors from the corpus
Citator
Authorities Cited
- Jones & Laughlin Steel Corp. v. Pfeifer, 462 U.S. 523 (U.S. 1983)
- Culver v. Slater Boat Co., 722 F.2d 114 (5th Cir. 1983)
- Thomasville Branch OF the Nat'l Ass'n FOR the Advancement OF Colored People v. Thomas Cnty., 688 F.2d 280 (5th Cir. 1982)
- Culver v. Slater Boat Co., 644 F.2d 460 (5th Cir. 1981)