STATE BAR OF MICHIGAN Spring/Summer 2002 NEGLIGENCE LAW SECTION Q UARTERLY The Official Newsletter of the State Bar of Michigan Negligence Law Section David R. Getto, Chair Chairperson David R. Getto Sommers, Schwartz, Silver & Schwartz, PC FROM THE CHAIR 2000 Town Center, Suite 900 simply asking one side whether he or she Southfield, MI 48075-1142 liked the outcome. Yet many critics of our Vice-chairperson legal system, such as Mr. Arwady, rely ex- Timothy H. Knecht actly on such anecdotal information when Secretary calling for system “reform.” Third, let us ex- Judith A. Susskind Treasurer amine the features of our legal system that Cynthia E. Merry make it the best system ever devised for fair dispute resolution: Council Peter L. Dunlap • Open and ready access. This encour- Lansing ages individuals, organizations and cor- Lynn M. Foley porations to resolve their differences in a Livonia Barry Goodman David R. Getto civil, non-violent way. Southfield • A settled system of rules all parties Deborah Gordon Recently, the publisher of the Kalamazoo Royal Oak Gazette, George Arwady, published an editorial must follow, thereby placing every- Steven A. Hicks entitled “Don’t Let Your Babies Grow Up To Be one on a level playing field. This in- Lansing Lawyers.” The editorial is a vicious and unjusti- cludes an “umpire” (the judge) who Barbara A. Patek makes sure the rules are followed. No- Detroit fied attack on our noble profession as well as Thomas M. Peters our legal system. Interestingly, Mr. Arwady ac- where else in society do we have this Detroit knowledges a strongly held 20 year bias against except, interestingly, in organized sports Susan Philpott Preketes lawyers and also self-servingly laments the un- and gaming. We don’t have such settled Flint rules in politics or business. Robert P. Siemion fairness of settling so-called meritless claims Southfield filed against his newspaper. One could, of • A built in set of checks and balances. Ex-officio course, merely dismiss Mr. Arwady’s remarks As long as you follow the rules, you will Victor L. Bowman as a combination of bias and ignorance liberally get your day in court. Attempted abuses Lansing sprinkled with a dollop of “poor me.” On the are automatically countered by the oppo- Commissioner Liaison other hand, one can derive from his remarks site party and consequences visited on Jon Feikens some important things to bear in mind about the offending party by a ruling of the Detroit our legal system that Mr. Arwady and those of court in short order. Editor this ilk do not appreciate or understand. • Jury trial. This device affords to a party Chad A. Brown As I see it, attorneys, particularly trial at- the opportunity to make a case or defense East Lansing torneys, seem incredibly ignorant about how to directly to the citizens of our community defend our legal system. Permit me to offer a who by group decision, bring to bear on few suggestions. First, our legal system is de- the dispute their collective experiences, Contents signed to resolve disputes. It is a dispute resolu- common sense and understanding of tion system. Justice is the ideal of the system, community mores. This is the only form Point . 2 something to which the system aspires, but like of “direct democracy” left in our govern- Counterpoint . 6 perfection, cannot realistically be achieved at all ment. Citizens are directly participating in Annual Past Chair- times. Second, the chief characteristic of our a governmental decision that will formally persons’ Dinner . 10 legal system is its overall fairness in resolving resolve the dispute, letting the chips fall Lobbyist’s Report . 11 disputes in a civil and non-violent fashion. One where they may. Legislative Update . 12 cannot evaluate the fairness of the system by Recent Developments In Negligence Law . 14 Continued on page 13 www.michbar.org/sections/neg/ Point Introduction By Timothy P. Smith, Smith & Johnson, P.C. By Chad A. Brown, Editor Hedonic Damages and “How good is man’s life, the mere living! MCL 600.2955 how fit to employ All the heart and the soul and the senses forever in joy!” Every day in courts —Robert Browning (1812-1889) throughout the State, experts are offered by counsel to express opinions on various aspects of cases. Not many experts have As negligence attorneys, we associate dollar values stirred the breadth and intensity of with imprecise losses each and every day. A fractured debate as those economists who femur has an uncertain value, but add a surgery and a are offered to testify regarding couple of pins and screws, and that injury is easily worth hedonic damages, also known as several times more than the initial uncertain value. With all the loss of enjoyment of life. The of this speculation, one would wonder how any claim is economist at the center of this he- ever proven with any degree of certainty, but somehow donic debate is Stan Smith, a fo- they are. Timothy P. Smith rensic economist from Chicago, While the law tells us that a broken bone has value as Illinois. Mr. Smith is a nationally a loss to the victim, this proposition becomes a bit hazier recognized economist whose expert economic testimony on when we look generally at a human life and the simple joy the issue of the value of life in the United States has been ad- associated with living. How do we put a dollar value on mitted into evidence in over 125 State and Federal Court cases. something so inherently unquantifiable as a human life? He has been admitted by no less than 13 Circuit Courts in the Even more so, how do we prove that value? State of Michigan. He has been published in numerous peer Black’s Law Dictionary defines hedonic damages as, reviewed journals on the topic of hedonic damages and is the “damages awarded in some jurisdictions for the loss of author of 37 published articles regarding hedonic damages and enjoyment of life, or for the value of life itself, as mea- other damage issues which have appeared in the Journal of sured separately from the economic productive value that Forensic Economics, the ABA Journal and the Federation of an injured or deceased person would have had.” With Insurance and Corporate Counsel Quarterly, amongst other such a nebulous concept, the practical difficulties associ- periodicals. He authored a text book with Economist Michael ated with removing these damages from the realm of Brookshire entitled “Economic Hedonic Damages” which is speculation are obvious. used in a number of college courses in forensic economics throughout this country. He also authored the 1988 Supple- At the forefront of this debate is Dr. Stan V. Smith, a ment to Volume 13 Am. Jur. Proof of Facts 2d on Hedonic forensic economist who has authored numerous works Damages. on the subject and has testified in many state and federal courts throughout the nation. While it’s hard to imagine Smith’s methodology has been accepted not only in the an argument that would denigrate the value of human life above mentioned peer viewed literature, but also in widely ac- to a nullity, the methodologies for determining such a cepted text books in the field of economics such as Economics value also leave a great deal of wiggle room and bestow by David C. Collander, which is an introduction to economics upon juries a tremendous amount of discretion. textbook and the third most widely used textbook in college economics courses nationwide. The standard advanced text- In this month’s Point/Counterpoint, our distinguished book in labor economics, the Economics of Work and Pay by authors explore not only the theoretical propriety of he- Hammermesh and Rees, also discusses with approval the donic damages, but also the strengths and weaknesses of methodology of Dr. Smith for valuing a life. the current methods of valuation. While this issue is certain to remain a point of contention in the courtroom, I hope Further, and probably most significant, Smith’s methodol- that this forum spurs productive contemplation, in both ogy, which involves a “willingness to pay” model, is endorsed practical and theoretical respects, on this heated subject. by the U.S. Government as the standard and recommended approach for use by all U.S. Agencies in the valuing of life for policy purposes as mandated in President Clinton’s Executive 2 Point Order No. 12866 and by the Office of Management and Bud- f. Whether the basis for the opinion is reliable and get. Prior Presidents and subsequent Presidents have signed whether experts in that field would rely on the same similar orders mandating this methodology for valuing life for basis to reach the type of opinion being proffered; and policy purposes. g. Whether the opinion or methodology is relied upon by The first court to adopt the methodology of Smith was experts outside of the context of the litigation. the Northern District of Illinois in Sherrod v Berry, later af- firmed by the 7th Circuit in 1987. The entire panel of 11 Looking specifically to the requirements of MCL judges of the 7th Circuit not only recognized the expertise of 600.2955, the first question for a reviewing court would be Smith, but stated, “whether the opinion and its basis have been subjected to sci- entific testing or application.” “The testimony of expert Economist Stan Smith was invaluable to the court, enabling it to perform its As stated earlier, Dr. Smith’s methodology is endorsed by function of determining the most accurate and the US Government as the standard and recommended ap- probable estimate of the damages recoverable for the proach for use by all US agencies regarding life for policy pur- hedonic value of (decedents life).” poses as mandated in President Clinton’s Executive Order # 12866.