to determine the real wage growth of workers over an extended
period of time such as 57 years. (Tr. at 170).
g. She has neither conducted any research, nor consulted any
authorities, pertaining to long-term future economic trends or
projections pertaining to years beyond 1985. (Tr. at 128).
h. She agrees that the United States economy in the 1970's
and into the early 1980's was slow, but did not cite any of
the factors cited by economists for that slow period. (Tr. at
i. Independent of Dr. Sattler's research and testimony, she
has no knowledge of the following:
(1) The average annual real wage growth in the United States
economy since World War II. (Tr. at 126).
(2) Real-wage or productivity growth in the United States
economy for the last three to five years, as opposed to the
last eight to ten years. (Tr. at 126).
(3) The titles or authors of the leadings texts on the topic
of labor economics. (Tr. at 127).
j. The basis of any opinions she might have is personal
experience as a pension actuary and her observation of what
other pension actuaries are doing. (Tr. at 120). While
personal experience may well act as a basis for a witness to
be qualified as an expert, see Fed.R.Evid. 702, in the area of
attempting to determine what the real wage growth will be over
the next 57 years, personal experience alone is simply not
enough, in the Court's opinion, where the experience does not
include some theoretical foundation.
k. Her only research of empirical data involved one article
in the January 1987 issue of the Monthly Labor Journal;
therefore, she had not engaged in research on the economic
issues at hand so as to cure her deficiencies in knowledge of
economics. (Tr. at 127).
6. The Court, having permitted the Defendant to make a full
offer of proof, by question and answer, of the testimony of
its proposed expert, Karen Krist, (Tr. at 146), further finds
that her opinion testimony would have been entitled to little
weight when compared with that of Plaintiff's expert, even if
the Court had found her qualified in the first instance. The
Court is convinced, having heard her testimony, that she is
indeed a very efficient and competent actuary. (Tr. at 144).
However, in addition to the deficiencies in her training,
education, experience, and knowledge, in relation to her
testimony as an expert witness, the cross-examination of
Defendant's expert further disclosed the following:
a. Ms. Krist felt Dr. Sattler's opinion concerning the
annual real wage growth was too high (Tr. at 150-151), and
that she would set it at 0.4%. (Tr. at 151-152, 163).
b. The bases of Ms. Krist's opinion were as follows:
(1) Dr. Sattler's calculations, which showed that real wages
in the United States' economy had only grown at 0.4% from 1979
to 1985. (Tr. at 169).
(2) Her personal experience as a pension actuary, from 1973
to the present, indicated to her that Dr. Sattler's formula
would result in the overfunding of the pension plans with
which she has been involved as an actuary. (Tr. at 150).
c. The only empirical data researched by Ms. Krist covered
the period 1977-1985, and was contained in an article in the
January 1987 issue of Monthly Labor Journal. (Tr. at 127).
d. She made no effort, through research, to check for
empirical data as to the annual wage movements of workers
similar to the personnel who will provide and manage Eric's
C. Conclusions of Law
1. Plaintiffs are entitled to the sum of $2,111,978 for the
present cash value of Eric's future care costs.
2. The testimony of Dr. Sattler is persuasive as to the
method of computation, the values used in the computation, and
the economic justification for the 1.9% annual real wage
increase in the salaries of the care providers, including the
manager. His opinion was clearly stated and well supported
by economic research, empirical data, and leading national
authorities on labor economics. See, Huddell, 395 F. Supp. at
3. The present cash value of Eric's lifetime care, with a
base starting value of $50,100 per year, is a proper element
of damages under Maryland law.
4. With regard to the Defendant's expert, Karen Krist, the
Court is vested with broad discretion in determining her
qualifications to testify on the issue at hand. Although Ms.
Krist is undoubtedly a qualified actuary, she lacks the
training and education necessary to the scientific and
theoretical foundation for an opinion as to the real wage
movement over the next 57 years. Likewise, she has failed to
cure her deficiencies in background knowledge with research.
In effect, Ms. Krist was equipped only to perform the
actuarial function of checking Dr. Sattler's methods and
computations. See, Magill, 464 F.2d at 300; and Hoffman, 485
F.2d at 144.
Ms. Krist's personal experience as a pension actuary covers
approximately 14 years. Ten of those years, according to Dr.
Sattler, include a period of severe and unusual recessionary
events, making them a wholly improper and inadequate
statistical basis upon which to base long-term economic
projections. Since that time period was, by and large, the
only period upon which Defendant's expert relied, any
conclusions that she may have drawn from that period are
5. If the Court had ruled differently on the issue of the
qualifications of Defendant's expert, or if the challenge to
her qualifications had not been directly made, her opinion
would nonetheless not have been given significant weight by
the Court, at least in comparison to Dr. Sattler's testimony.
She admittedly relied upon her experience with pension funding
over the last 14 years (most of which involved an abnormally
negative economy) to criticize the percentage for future real
wage movement selected by Dr. Sattler. She cited no
authorities or additional bases which might have elevated her
opinion to a level sufficient to effectively challenge that of
the Plaintiff's expert. Consequently, neither her substantive
experience nor the duration thereof, as established by her
testimony, demonstrates a satisfactory theoretical basis for
her opinion to be given substantial weight by this Court.
6. Most of Ms. Krist's work experience has been with pension
funds. According to the Court's understanding of her work
assignment, she and her colleagues make projections on a
yearly basis as to what funding will be necessary to properly
fund particular pension plans. To the extent that those
predictions are too high or too low, it is possible for the
actuary to adjust the amounts for the following year to
correct any inaccuracies. (Tr. at 131). This Court is not in
a position to do that. The Court can only make this
computation once. Consequently, the basis for making the
calculation must involve the expanded insight and empirical
data which has been given in this case only by the testimony
of Dr. Sattler.
7. Dr. Sattler based his opinion on long-term data going
back to 1949, and provided the Court with authority showing
the rate of economic productivity in the United States economy
for the last 100 years. The Court finds that this background
authority gives substantial weight to his 57 year projection
of 1.9%. Dr. Sattler was well-versed in the opinions of
leading economists and the theoretical tenets of labor
economics projecting future trends bearing on the issue at
IV. THE FUTURE LOST WAGES ISSUE
At 795 F.2d 633-634, n. 2, the Appellate Court discussed
this Court's award of $661,813 in lost wages, and raised some
questions concerning the accuracy of that computation and the
issue of reduction of volatility of future earnings.
After raising the matter with counsel, and discussing it
with them, the Court is of the opinion that it would not be
proper to consider those matters on remand, since they were
not issues on appeal.
As stated in the footnote:
Although the deviation of the award for lost
income is mysterious, we do not pursue
this point as the government has not raised it.
795 F.2d at 634, n. 2.
V. MOTION FOR SANCTIONS
On March 6, 1987, the Court heard oral argument on
Plaintiff's Motion for Order Compelling Discovery and for
Attorney's Fees Pursuant to Rule 37 [Federal Rules of Civil
Procedure]. The government expert, Ms. Karen Krist, was
deposed by agreement in Chicago, Illinois, on February 19,
1987. Plaintiffs complain that her deposition was a waste of
time because she had not formed any opinions or conclusions,
or performed any calculations (other than checking the
accuracy of Dr. Sattler's math). Plaintiffs' counsel, Mr.
Durree, argued that defense counsel's conduct constituted a
violation of the spirit and intent of Federal Rule of Civil
Procedure 37. In addition, at oral argument on this matter, he
asserted that the provisions of 37(a)(2), (a)(3), (a)(4), and
(g) provided additional bases for the Court to impose
sanctions. The sanctions requested were set out in Mr.
1. Hours spent preparing for the
deposition 3.5 hours
2. Time spent on 2-19-87 from
departure to return 5.5 hours
3. Time spent preparing the Motion
for Order to Compel Discovery
and for Sanctions 1.5 hours
TOTAL 10.5 hours
Mr. Durree suggests in his affidavit a customary hourly rate
of $125 per hour. 10.5 hours x $125 per hour = $1,312.50.