life insurance, medical and dental insurance, and pension
benefits. At trial, plaintiff claimed a total of $1,589,930 in
economic loss, of which approximately $1,000,000 represented
lost income. Defendant, on the other hand, argued that any
amount in excess of $1,000,000 for economic loss would be
unfair and excessive. See Tr. 525.
Under Arizona law, Lora Lux' non-economic loss includes her
"loss of love, affection, companionship, consortium, and her
personal anguish, sorrow, suffering and pain, and shock which
resulted from her husband's death." Southern Pacific
Transportation Co. v. Lueck, 111 Ariz. 560, 535 P.2d 599, 611
(1975). Lora Lux testified as follows regarding her noneconomic
Walter and Lora Lux had been married 24 years at the time of
the accident. Walter was killed six months before their 25th
anniversary. The Luxes had bought a summer home in Wisconsin
and later remodeled the home into a year-round residence.
Walter performed all of the electrical and plumbing work on
the house. The Lux family lived year-round in the Wisconsin
residence from 1965 until 1972. In 1972, they moved to
Phoenix, Arizona. After 1972, the Luxes continued to use the
Wisconsin home for vacations and holidays.
On the morning of Walter's death, Lora accompanied her
husband to work at the airport in Phoenix. Walter was
scheduled to pilot a plane from Phoenix to Chicago. Lora
understood that Walter would fly to Chicago and then travel to
the Wisconsin home to spend the Memorial Day weekend putting
up wallpaper and carpeting the house. At about 1:00 p.m. that
afternoon, Lora received a call at work from Walter's sister.
Walter's sister informed Lora that a plane had crashed in
Chicago. Lora responded that Walter was safe because he was on
his way to the Wisconsin home. Unknown to Lora, however,
Walter had been reassigned at the last minute to pilot Flight
# 191 from Chicago to Los Angeles. Minutes after Lora spoke
with Walter's sister, a friend called and told Lora that
American Airlines had just informed her that Walter was the
pilot on the airline which crashed. Lora immediately went home
and was met by a sales representative of American Airlines.
At the house, Lora took a tranquilizer and watched reports
of the crash on the television. Michael soon arrived and the
sales representative then drove Lora and Michael to the
Phoenix airport. Michael and Lora flew to Chicago, arriving at
6:30 a.m. on Saturday. They were met by the chief pilot for
American Airlines and immediately they were introduced to the
pilot originally scheduled to pilot Flight # 191. Later that
morning, Lora and Michael traveled to their Wisconsin home.
In Wisconsin, Lora made plans for a memorial service for
Walter because she understood that Walter's body had been
burned in the crash. The evening before the scheduled service,
however, the funeral director informed Lora that American
Airlines had sent Walter's remains for burial. Upon such short
notice, Lora decided to have Walter's remains cremated.
About one month after the funeral, Lora returned to her work
in Phoenix as a realtor. During this period Lora became
depressed and began grinding her teeth. Lora's dentist first
prescribed braces for her teeth and later surgery was
required. After the surgery, however, Lora continued to grind
her teeth. Lora was also treated by a psychiatrist for about
one year. The psychiatrist prescribed tranquilizers in an
effort to control Lora's depression.
On one occasion after the accident, Lora was flying from
Chicago to Phoenix and was seated next to the Chicago fireman
who first arrived at the scene of the crash. Not knowing
Lora's identity, the fireman mentioned that he was the first
fireman at the crash and that he "found the captain's body."
On several occasions since the accident, Lora has been
reminded of the crash by news reports and conversations with
friends and acquaintances.
Since the accident, Lora has incurred about $13,000 in
dental expenses and $1,900 in psychiatric expenses. She also
has incurred the expense of hiring outside help for
maintaining the Wisconsin house.
A. Improper Argument to the Jury
Defendant argues that a new trial is warranted because the
Court "repeatedly throughout the trial instructed the jury or
permitted plaintiff to argue that defendant's liability for
the accident was at issue, when in fact defendant had only
stipulated not to contest liability for compensatory damages."
Defendant's Motion at ¶ 1. This argument, however, is without
Before trial, defendant amended its Answer to state:
"[Defendant] does not contest liability for compensatory
damages in this action." Defendant's Amendment to Answer,
filed December 8, 1981. In addition, at Attachment G of the
Final Pretrial Order, defendant states: "The defendant has
abandoned and waives its denial of liability for compensatory
damages and does not contest such liability." (emphasis
supplied) Therefore, to the extent that plaintiff's counsel, or
the Court in plaintiff's Instruction No. 1, referred to
defendant's admission of liability, no error occurred. In fact,
defendant's counsel repeatedly informed the jury that his
client has admitted liability in this case. See, e.g., Tr. 28
(". . . we acknowledge responsibility to Mrs. Lux. . . .")
(defendant's opening; Tr. 473 ("There has been an admission of
liability.") (Defendant's closing argument).
Defendant also argues that plaintiff's counsel improperly
argued to the jury that defendant should punish defendant for
its conduct and that the jury should return a punitive
verdict. Defendant refers primarily to the following
statements made by plaintiff's counsel during closing
The nature of this lawsuit is what I would call a
consumer protection type case.
. . . the defendant has now admitted their [sic]
responsibility for having caused this accident.
. . . McDonnell Douglas was at fault in bringing
about the crash. . . .
His dad [Walter Lux] was killed because of their
[McDonnell Douglas] responsibility.
Walter Lux went, you know, because of the
responsibility of this company, and that's why he
went, and not as he [defendant's attorney] said,
"Oh, people have heart attacks," or anything.
We're here because of the responsibility of
McDonnell Douglas in the manufacture of this
aircraft. That's why we're here.
It is bad enough that they are responsible for
the death of her husband. . . .
Tr. 473-74; 475; 497; 511; 533; 540. Defendant theorizes that
these statements aroused the passions and prejudices of the
jurors and resulted in "at least" an extra $2.5 million being
awarded in this case.
Having reviewed the record in its entirety, however, the
Court is convinced that the jury's award was not the result of
passion or prejudice. With the exception of the "consumer
protection" statement, plaintiff's argument to the jury simply
stated that defendant had admitted liability for damages, a
fact which defendant stipulated before trial. The jury was
properly instructed on the issue of damages and was further
instructed that neither sympathy nor prejudice should
influence its decision. Tr. 545. Regarding the "consumer
protection" statement, defendant was not prejudiced by this
statement even assuming the statement constitutes an improper
argument. Defendant's counsel had ample opportunity to rebut
any improper inference
the jury might have made from plaintiff's statement. In fact,
during defendant's closing argument, defendant's attorney
Now, there is no issue of consumer protection.
That was thrown out to you, ladies and gentlemen,
in a most unfair fashion to make you think that
by bringing back a large and unfair verdict, this
would protect the consumers. That isn't what this
case is about. The protection of consumers, if,
in fact, McDonnell Douglas had violated the FAA
Regulations, that would have been the FAA's
problem, and they have tremendous ways of
punishing. And that is what [plaintiff's] counsel
asked you to do, quietly and insidiously, but he
asked you to protect the public, and that is not
what we are here for.
Defendant's reliance upon Gonzalez v. Volvo of American
Corp., 734 F.2d 1221, 1222 (7th Cir. 1984), is misplaced.
Plaintiff's argument to the jury comes nowhere close to the
inflammatory and prejudicial statements in Gonzalez, which
required the Seventh Circuit to reverse for a new trial. In
this case, no suggestion of criminality was made against
McDonnell Douglas, no references to defendant's wealth were
made, and plaintiff's counsel did not personally comment on the
credibility of witnesses. Since the facts of Gonzalez are
clearly distinguishable from this case, Gonzalez does not
compel a new trial here.
B. Taxation Instruction
Before trial, the Court granted plaintiff's motion in limine
and refused to instruct the jury that its award would not be
subject to taxation. Lux v. McDonnell Douglas, 579 F. Supp. 1036
(N.D.Ill. 1984).*fn2 Defendant argues that the Seventh
Circuit's decision in In Re Air Crash Near Chicago, Illinois,
701 F.2d 1189 (7th Cir. 1983) ("Air Crash"), mandates the
cautionary instruction. In Air Crash, the Seventh Circuit held
that a federal court sitting in Illinois and applying the
Illinois Wrongful Death Act in a diversity suit should instruct
the jury that its award would not be subject to taxation. The
court reasoned that since the Illinois practice of refusing the
instruction was "either procedural or based on a mistaken view
of federal law," the federal cautionary instruction should be
given. Air Crash, supra, 701 F.2d at 1200.
This Court is convinced that the Arizona courts, unlike the
courts of Illinois, have clearly expressed a "substantive
interest" in this issue. The Court, therefore, adheres to its
original view articulated before trial:
This case, however, is distinguishable from the
Seventh Circuit's comments in Air Crash. Arizona's
concerns are neither procedural nor based on a
mistaken view of federal law. In Mitchell v.
Emblade, 80 Ariz. 398, 298 P.2d 1034 (1956),
opinion modified on other grounds, 81 Ariz. 121,
301 P.2d 1032 (1956), the Arizona Supreme Court
clearly held that the effect of income taxes on an
award has "no part" in the correct measure of
damages under Arizona law. Id. at 1038. This view
remains the law in Arizona today. Young v.
Environmental Air Products, Inc., 136 Ariz. 206,
665 P.2d 88, 95 (Ariz. Ct. App. 1982), modified on
other grounds, 136 Ariz. 158, 665 P.2d 40 (Ariz.
1983). Unlike the Illinois courts, the Supreme
Court of Arizona has clearly expressed a
"substantive" interest in this issue. Having
reviewed the Arizona cases, this Court holds that
Arizona's interest in this issue is "so closely
linked with [Arizona's] view of the measure of
damages," that it binds this Court, under the Erie
doctrine, to follow the Arizona rule. See Air
Crash, 701 F.2d at 1194. The rule against admitting
evidence concerning the income tax consequences of
a judgment, as viewed by the Arizona courts, is "so
`outcome determinative' as
to be inseparable from the substantive law, and
must be applied in diversity cases by federal
courts." Id. at 1200.
Lux v. McDonnell Douglas, 579 P.Supp. 1036, 1036-37 (N.D.Illl.
1984). In summary, the Court correctly refused to instruct the
jury that its award would not be subject to taxation under