How to protect damages in federal tort cases: safeguard your clients' awards by knowing the pitfalls of Federal Tort Claims Act litigation.

The Federal Tort Claims Act (FTCA) waives sovereign immunity and provides a judicial remedy to those who have been injured by U.S. government employees' negligence. (1) In many cases, the damages recoverable from the federal government are effectively the same as those available from a private defendant. But litigating claims under the FTCA poses many legal challenges.

The basic standard of liability imposed by the FTCA on the federal government is that which local law imposes on a similarly situated private individual. (2) The act allows for actual damages to compensate the claimant for the loss, injury, or grievance. The law of the state where the misconduct occurred governs the substantive tort liability in FTCA cases; similarly, "the components and measure of damages in FTCA cases are taken from the law of the state where the tort occurred." (3) Only the law of the place of misconduct controls; not the law of the forum state or the state where the injury occurred. (4)

The act places no caps on compensatory damages. Since the FTCA adopts the substantive law of the index state, in some states, caps or limitations on damages may apply to FTCA cases. (5) Additionally, postjudgment interest and costs are recoverable "as provided for by law." (6)

The FTCA does impose some limits on damages. Punitive damages are not recoverable, and prejudgment interest is not available under the act. Attorney fees are capped at 25 percent for litigated claims and 20 percent for settled administrative claims.

Filing an administrative claim

Before filing a complaint in federal court, the plaintiff must file an administrative claim (Form 95) with the head of the federal agency involved. This claim notice is a prerequisite to suit; no suit may be filed until the agency has denied it. An agency's failure to settle the administrative claim within six months can be considered a denial, and the claimant can file suit at that point. (7) If the agency has not yet denied the claim after six months, a plaintiff is not required to file suit. Instead, he or she can use this indefinite holding period to allow, for example, a minor child to mature so as to reveal the extent of damages more accurately.

Avoid underestimating damages when filing the administrative claim notice. Under [section] 2675(b) of the act, after the claim is denied, a plaintiff cannot file suit for more than the damages claimed administratively unless newly discovered evidence or related, intervening facts are presented. This notice requirement "ensure[s] that `[t]he government will at all relevant times be aware of its maximum possible exposure to liability and will be in a position to make intelligent settlement decisions.'" (8)

When in doubt, think big. You will file the administrative claim before conducting discovery or, probably, fully developing all the experts. The claimant has the burden of proving either intervening facts or newly discovered evidence. (9)

Increasing the damages

Circuit courts have disagreed about when the claimant is entitled to recover damages in excess of the amount sought in the administrative claim.

Eleventh Circuit. In Cole v. United States, this court affirmed that "a reasonably based change in expectation as to the severity and permanence of an injury is newly discovered evidence within the meaning of [section] 2675(b)." (10)

When the plaintiff in Cole initially filed his administrative claim, he was told by doctors that he would eventually be able to return to work. (11) Nearly two years after his administrative filing, he learned for the first time that he suffered from a permanent condition, thrombophlebitis, and would never be able to go back to his job. (12) The Eleventh Circuit upheld the district court award in excess of his administrative claim, noting that a "plaintiff should not be charged with knowing what the doctors could not tell him." (13)

First and Fifth circuitS. Other circuits have strictly construed the requirements of [section] 2675(b), including the First Circuit in Reilly v. United States (14) and the Fifth Circuit in Low v. United States. (15)

In Reilly, an infant sustained catastrophic injuries at birth due to medical negligence. Her parents filed an administrative claim on her behalf for $10 million. After the claim was not settled, they sued. At trial, the district court granted the plaintiffs' request for damages in excess of the administrative claim, finding that only after the FTCA claim notice was filed was it medically possible to know the extent of the daughter's injuries. (16)

The First Circuit reversed, holding that "the fact that the degree of disability was uncertain was, in and of itself, inadequate to trigger the exception to [section] 2675(b)." Despite the "worst-case scenario" diagnosis, the parents were barred from increasing their claim because they had been put on "fair notice" of that possibility. (17)

The Fifth Circuit reached a similar conclusion in Low. In this birth injury case, the parents filed the administrative claim when their child was two years old, though they could not determine the extent of his injury until he was four or five. (18) The Fifth Circuit held that because the parents knew the "worst-case prognosis" when they filed the claim notice, the new evidence presented at trial went to "the precision with which the severity of the condition could be known." (19) There was no evidence that the child's condition had worsened, the court said.

Although the circuits are divided, it is best to assume a worst-case scenario in any jurisdiction to protect the judgment down the line. Remember to file a separate administrative claim for each parent and child involved. Also, if state law holds parents responsible for a child's medical care to age 18, include the child's projected medical expenses to that age in the parents' administrative claims.

Surviving appeal

You have secured a judgment for your client--but before you open the champagne, it is critical to understand how to protect the judgment on appeal. A district court's award of damages is a finding of fact, which is reviewed under the "clearly erroneous" standard. (20) District courts enjoy "wide discretion" in awarding damages, and a district court's award should be reduced only if it is so large as to "shock the judicial conscience," "so gross or inordinately large as to be contrary to right reason," "so exaggerated as to indicate bias, passion, prejudice, corruption, or other improper motive," or "clearly exceeding that amount that any reasonable man could feel the claimant is entitled to." (21)

In response to what some federal courts consider a growing trend toward excessive verdicts, many appellate courts have become increasingly willing to reduce damages awards on remittitur. Several circuit courts employ a "maximum recovery rule" in reviewing damages awards. (22) Although its application varies from circuit to circuit, the maximum recovery rule is intended "to bring rough consistency into comparable damages awards." (23) Courts evaluate the reasonableness of a particular award by comparing it to awards in "similar" cases. (24)

No two cases are exactly alike, and therein lies the problem with the maximum recovery rule. This judge-made rule threatens to cripple noneconomic awards to plaintiffs and minimize the fact finder's power.

The rule was the cornerstone of the federal government's appeal of Lebron v. United States, a case recently decided in the Fifth Circuit. (25) Lebron involved obstetrical and nursing negligence, which caused permanent, severe brain injury to a child at a military hospital in Texas. The government admitted liability at trial.

On appeal, the government never claimed that the evidence did not support the damages awarded; instead, it merely brandished smaller verdicts within the jurisdiction and argued that the application of the maximum recovery rule required remittitur. The Lebron verdict was not the result of a runaway jury or punitive damages, yet the judgment was reduced arbitrarily at the government's request.

The Fifth Circuit's maximum recovery rule seems straightforward at first. It applies only when an award exceeds 133 percent of the highest previous recovery in the state, and it affects only noneconomic damages awards. (26) Under the rule, the court compares the judgment to other awards in factually similar cases in the same state. (27) Yet the rule leaves awards vulnerable to arbitrary reduction because it lacks any real guidelines. The trouble begins with defining "factually similar case." The rule does not contain any working definition of the term.

Further, Lebron created a new hurdle for plaintiffs. For the first time, the court specifically stated that only reported decisions can be used as benchmarks for comparison under the rule. (28) This further reduces the verdicts that plaintiffs can cite to support their claims.

Although the Fifth Circuit intended an "objective" case comparison, the government typically takes advantage of the rule's vague terminology on appeal by demanding that the plaintiffs present "factually similar cases." The government then attempts to distinguish the facts of any high-verdict cases that could support the award, which is not difficult, given the lack of structure to this analysis. For example, in a case involving a brain-injured child, does "factually similar" require a case with another brain-injured child, or can it involve an adult? The stricter the interpretation of the factual requirement, the more inoperable the rule becomes.

In some jurisdictions, the highest award in a factually similar reported case may be over a decade old, yet the maximum recovery rule makes no provision for the present value of money damages.

Other difficulties arise when applying the rule. For instance, although jury verdicts serve as the basis of comparison under the rule, juries do not make a finding of life expectancy in brain injury cases, even though that number significantly affects noneconomic damages.

Also, what dollar figures should courts use? Should they compare mental anguish damages line by line? Or should they weigh the total amount of intangible damages? Even a specific category of damages such as mental anguish or loss of consortium can be narrowed to the point of futility. For example, must the court always compare loss of consortium of an adult child to that of another adult child, or can a minor child's award provide a frame of reference? An aggregate award to several plaintiffs may indicate what a jury is willing to award, but is it necessary to use only individual awards for comparison?

The rule also leaves some procedural questions unanswered. Trial lawyers should anticipate the government's attempt to strictly define "factually similar" and make a record in the trial court to protect the judgment on appeal. Many federal district court judges prefer that counsel refer to the amount of damages other courts have awarded in similar cases. (29) But if the government does not challenge the verdict amount in a motion for new trial or a motion to amend the judgment--as it failed to do in Lebron--how does a plaintiff lawyer introduce verdicts to inform the trial court of the range of damages previously awarded? When in the trial process should the information be offered, and how should the evidence be introduced?

Finally, reviewing a claim for excessive damages is not an exact science. On the contrary, the Fifth Circuit admits, it is "inherently subjective, involving the interplay of experience, emotions, and calculation" of the justices. (30) Plaintiffs' noneconomic damages are ultimately in the hands of appellate court judges, who must glean from a cold record the depth and complexity of damages like physical pain and mental anguish. Without hearing the honest urgency of witnesses, seeing the pain in a victim's eyes, or watching a brain-injured child struggle to enter the courtroom, a higher court is ill-equipped to second-guess a trial court's finding of noneconomic damages.

To artificially cap damages when they are otherwise supported by evidence is inherently unjust. Moreover, it significantly diminishes the power of the fact finder without any legal justification.

The Fifth Circuit's maximum recovery rule is an attempt to provide some consistency and structure to the broad federal power of remittitur for allegedly excessive verdicts. But it fails to achieve its original purpose: consistent, reliable verdicts and, ultimately, justice for injured people. For now, plaintiff attorneys will have to keep searching for the elusive "factually similar case" to sustain the awards intended to make their clients whole.

Overcoming hurdles

The Federal Tort Claims Act is the most comprehensive remedy available against the federal government for torts by federal employees. It basically equates the United States to an individual for purposes of liability. Under the act, the government can be sued without any federal limit on actual or compensatory damages.

But there are unique procedures and hurdles to overcome when litigating an FTCA case. From the outset, anticipate government challenges. Before filing suit, protect the judgment you anticipate by seeking a maximum amount of damages in the administrative claim. Be prepared to cite other reported verdicts and judgments in your jurisdiction to support the judgment during trial and appeal. With careful attention to detail, you can navigate the legal maze to achieve justice for your client under the FTCA.

Notes

(1.) 28 U.S.C.A. [subsection] 1346(b), 2401(b), 2671-2680 (2000).

(2.) Hatahley v. United States, 351 U.S. 173, 182 (1956).

(3.) Wakefield v. United States, 765 F.2d 55, 58 (5th Cir. 1985).

(4.) Richards v. United States, 369 U.S. 1, 10 (1962).

(5.) Carter v. United States, 982 F.2d 1141 (7th Cir. 1992).

(6.) 28 U.S.C.A. [section] 2412; 31 U.S.C.S. [section] 1304; 28 U.S.C.S. [section] 1961.

(7.) 28 U.S.CA. [section] 2675(a).

(8.) Reilly v. United States, 863 F.2d 149, 173 (1st Cir. 1988) (quoting Martinez v. United States, 780 F.2d 525, 530 (5th Cir. 1986)).

(9.) Allgeier v. United States, 909 F.2d 869, 877 (6th Cir. 1990); Kielwien v. United States, 540 F.2d 676, 680 (4th Cir. 1976), cert. denied, 429 U.S. 979 (1976).

(10.) 861 F.2d 1261, 1262 (11th Cir. 1988); see also Fraysier v. United States, 766 F.2d 478, 481 (11th Cir. 1985).

(11.) Cole, 861 F.2d 1261, 1262.

(12.) Id.

(13.) Id., citing Fraysier, 766 F.2d 478, 481.

(14.) 863 F.2d 149.

(15.) 795 F.2d 466 (5th Cir. 1986).

(16.) Reilly, 863 F.2d 149, 171.

(17.) Id. at 172-73.

(18.) Low, 795 F.2d 466, 470.

(19.) Id. at 471.

(20.) Douglass v. Delta Air Lines, Inc., 897 F.2d 1336, 1339 (5th Cir. 1990).

(21.) Id. at 1339 n.3 (citing Caldarera v. Eastern Airlines, Inc., 705 F.2d 778, 784 (5th Cir. 1983));see also Wheat v. United States, 860 F.2d 1256, 1259 (5th Cir. 1988).

(22.) See, e.g., Shockley v. Arcan, Inc., 248 F.3d 1349, 1362 (Fed. Cir. 2001); Koster v. Trans World Airlines, 181 F.3d 24, 36 (1st Cir. 1999); Spesco, Inc. v. Gen. Elec. Co., 719 F.2d 233, 240-41 (7th Cir. 1983).

(23.) Lebron v. United States, 279 F.3d 321, 328 (5th Cir. 2002).

(24.) Bailey v. Andrews, 811 F.2d 366, 373-76 (7th Cir. 1987).

(25.) 279 F.3d 321.

(26.) See Douglass, 897 F.2d 1336, 1344 n.14.

(27.) Id.; see also Marcel v. Placid Oil Co., 11 F.3d 563, 568 (5th Cir. 1994); Wheat, 860 F.2d 1256, 1259.

(28.) 279 F.3d 321, 326.

(29.) 2 LESTER S. JAYSON & ROBERT C. LONGSTRETH, HANDLING FEDERAL TORT CLAIMS: ADMINISTRATIVE AND JUDICIAL REMEDIES [section] 10.04[2], at 10-58.4 (2001).

(30.) Wheat, 860 F.2d 1256, 1259.

RELATED ARTICLE: Try your Federal Tort Claims Act case with documents from the ATLA Exchange.

The documents listed below and many others on topics pertaining to government liability are available from the ATLA Exchange. For more information, phone [phone] or fax [phone].

Benavidez v. United States. The parties' appellate briefs in a case holding that the FTCA's intentional tort exception did not apply to a claim that a government-employed psychologist had mismanaged a patient-therapist relationship. (No. LR3466.)

Bird v. United States. The plaintiff's appellate brief on whether the government is liable for the negligence of a temporary certified registered nurse anesthetist. (No. PN300.)

Borgren v. United States. The plaintiff's trial brief, proposed findings of fact and conclusions of law, closing argument and response to the defendants' brief, and the court's memorandum and order in a case involving an Army hospital's failure to diagnose breast cancer. (No. PN146.)

Hemingway v. United States. The plaintiffs' complaint for damages and stipulation for compromise settlement under 28 U.S.C. [section] 2677 and the court's order in a case alleging failure to separate nonswimmers from swimmers at a summer camp. (No. LR2670.)

Holthaus v. United States. The court's findings of fact and conclusions of law in an FTCA action alleging failure to timely diagnose prostate cancer. (No. LR888.)

Knight v. United States. The court's memorandum of decision in a case alleging FTCA liability for an air traffic controller's error. (No. LR2390.)

Little v. United States. The court's findings of fact, conclusions of law, and unpublished decision in an FTCA action against Army doctors alleging failure to monitor and properly intubate a hypoxic patient. (No. PN172.)

Looper v. United States. The court's findings of fact, conclusions of law, and order in an action alleging that a U.S. Air Force bus failed to yield before entering a roadway. (No. EX10.151.)

Reilly v. United States. The plaintiff's posttrial, reply, and appellate briefs supporting an obstetrical negligence suit under the FTCA. (No. LR698.)

Salas v. United States. The court's decision and order in an FTCA case alleging that an FBI agent failed to heed a stop sign. (No. LR3254.)

LO12 4MMS 

Michael E. J. Archuleta practices with the Michael Archuleta Law Firm in Austin, Texas. Laurie M. Higginbotham practices with Whitehurst, Harkness, Ozmun & Brees in Austin.