United States District Court, C.D. Illinois, Rock Island Division
BETH A. STOKES, Plaintiff,
JOHN DEERE SEEDING GROUP, a subsidiary of DEERE & COMPANY a/k/a JOHN DEERE COMPANY; and JIM GUNNISON, Defendants.
SARA DARROW, District Judge.
As a result of Defendants' alleged workplace harassment and discrimination, Plaintiff Beth A. Stokes ("Stokes") claims she has suffered a loss of enjoyment of life ("LEL") and offers the expert testimony of forensic economist Dr. Stan V. Smith regarding the value of resulting damages. Defendants have each moved to exclude Dr. Smith's testimony under Federal Rules of Evidence 702 and 403 and Daubert v. Merrill Dow Pharm., Inc., 509 U.S. 579 (1993). Because the parties' briefings exhaustively present the issue, Plaintiff Stokes's request for a Daubert hearing, Pl.'s Resp. Mot. Exclude Expert Test. 15, ECF No. 71, is DENIED. Defendant John Deere Seeding Group's ("Deere") Unopposed Motion for Leave to File a Reply in Support of its Motion to Exclude, ECF No. 73, is GRANTED. For the following reasons, Defendants' motions to exclude Dr. Smith's testimony, ECF Nos. 65, 67, are GRANTED.
Dr. Smith is a forensic economist with a Ph.D. in economics and an MBA from the University of Chicago. He has published over fifty articles, including in peer-reviewed journals; co-authored a textbook on LEL, or hedonic damages; taught a forensic-economics-based course on damages at DePaul University College of Law; and testified in over two hundred cases nationwide as an expert on value-of-life issues. He is currently president of Smith Economics Group, Ltd. Pl.'s Resp. Mot. Exclude Expert Test. at 2-3 & Ex. 2.
LEL damages are authorized by 42 U.S.C. § 2000 and under Illinois law, see Knight v. Lord, 648 N.E.2d 617, 623 (Ill.App.Ct. 1995) (observing that "loss of a normal life" damages may be awarded when plaintiff suffers "diminished ability to enjoy life") (citation omitted). While expert testimony is not necessary to support an award of hedonic damages, Stokes seeks to have Dr. Smith provide the jury with a formula for mathematically calculating the value of Stokes's alleged LEL. The basis of Dr. Smith's methodology lies in research on the value of statistical life ("VSL"). The VSL studies that Dr. Smith relies on assign a value to life based on data such as (1) consumer behavior studies, e.g., how much a person would pay for protective measures, like installing a smoke alarm, against a risk of death; (2) wage risk differentials, i.e., extra compensation paid to workers because they are performing higher risk jobs; and (3) government cost benefit analyses, i.e., calculations performed by regulators of the marginal costs of reducing risk and saving lives by employing various safety measures. Pl.'s Resp. Mot. Exclude Expert Test., Ex. 5 at 3-4.
To derive a hedonic value, Dr. Smith (1) averages VSL estimates generated by selected VSL "meta-analyses"-each analyzes multiple VSL studies-which "stem from a review of the great majority of literature" on VSL; (2) subtracts the value of "human capital, " i.e., economic productivity; and (3) subtracts a conservative reduction factor. Def.'s Mem. Supp. Mot. Exclude Expert Test., Ex. 1 at 12-14, 15-16, ECF No. 66-1. For example, to develop an average VSL for Stokes's case, Dr. Smith selected five VSL meta-analyses-analyses of multiple VSL studies-whose mean yields a VSL of $5.9 million for the statistically average person. Pl.'s Resp. Mot. Exclude Expert Test., Ex. 6 at 33. Dr. Smith the removes the "human capital" component by subtracting future expected wages and benefits, and value of household services, for the statistically average person with 45 years remaining life expectancy. Id. In Stokes's case, this produces a VSL net of human capital of $5, 187, 615 in 2013 dollars.
Dr. Smith next makes a conservative reduction of approximately $1 million from VSL. Def.'s Mem. Supp. Mot. Exclude Expert Test., Ex. 1 at 15-16. This reduction occurs, in Dr. Smith's words, for "any and all possible conservative reasons, including anything you would like to add to that; for example, more generous approaches to human capital, variations in the value of life that may cause one side to believe that they are on the high side, et cetera." Id. at 15. According to Dr. Smith, if the VSL meta-analyses yielded a different average estimate, his hedonic value-although derived from the VSL figures-would "not necessarily" change, due to "a different selection of a conservative factor." Id. at 20.
This average hedonic value-VSL minus human capital, conservatively adjusted-is then discounted to present value based on a statistically average remaining life span. In at least his initial calculations for Stokes, this produced a $131, 119 base annual payment for a 59.6-year-old Caucasian female with 24.5 years of remaining life expectancy as of the 2014 anticipated trial date. Id. at 28-29, 34. To arrive at hedonic damages, this value is modified by the percentage loss of enjoyment of life that the jury finds the plaintiff did and will suffer. In an interview with Dr. Smith's firm, Stokes said she has suffered a 60% to 70% LEL as a result of Gunnison and Deere's alleged conduct. Def.'s Mem. Supp. Mot. Exclude Expert Test., Ex. 3 at 11. Based on this subjective assessment, Smith generated two projections of hedonic damages through 2038: an "upper range" that assumes 60% LEL from the 2008 injury date through a projected trial date of 2014 and 40% thereafter- which anticipates that the fact-finder perceives a successful verdict as ameliorative- and a "lower" range assuming a 30% LEL through trial and 20% thereafter. See id. at 7. The upper range yields a cumulative $1, 543, 455 damages figure; the lower range, $771, 719. Id. at 3, 6. In sum, Dr. Smith describes his methodology as "a way of explaining to the jury how to go about calculating the value of a statistical life using the Plaintiff's testimony and some simple assumptions, " allowing the jury to easily determine a damages value by inputting whatever LEL percentage their fact-finding deems appropriate. Id., Ex. 1 at 37-38.
I. Legal Standard
Federal Rule of Evidence 702 permits expert witness testimony where "(a) the expert's scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue; (b) the testimony is based on sufficient facts or data; (c) the testimony is the product of reliable principles and methods; and (d) the expert has reliably applied the principals and methods to the facts of the case." Daubert interpreted Rule 702 to charge district courts with ensuring that expert testimony is reliable and relevant-that is, "whether the reasoning and methodology underlying the testimony is scientifically valid" and "whether that reasoning or methodology can be applied to the facts at issue." 509 U.S. at 589-93.
Factors that may be considered in assessing the reliability of an expert's underlying technique or theory are: (1) whether it can be tested or is falsifiable; (2) whether it has been subjected to peer review and publication; (3) the known or potential rate of error; (4) the existence and maintenance of standards and controls; and (5) whether it has been generally accepted within the scientific community. Daubert, 509 U.S. at 593-94. Courts have looked to additional factors, including whether the expert extrapolates from an accepted premise to an unfounded conclusion. See Gen. Elec. Co. v. Joiner, 522 U.S. 136, 146 (1997). "The critical inquiry is whether there is a connection between the data employed and the opinion offered; it is the opinion connected to existing data only by the ipse dixit of the expert, that is properly excluded under Rule 702." Manpower, Inc. v. Ins. Co. of Pa., 732 F.3d 796, 806 (7th Cir. 2013) (internal quotation omitted). Regarding the relevance of expert testimony, an expert "must testify to something more than what is obvious to the layperson' in order to be of any particular assistance to the jury." Ancho v. Pentek Corp., 157 F.3d 512, 519 (7th Cir. 1998) (citation omitted).
The proponent of expert testimony bears the burden of establishing its admissibility by a preponderance of the evidence under Federal Rule of Evidence 104(a). See Daubert, 509 U.S. at 592 n.10. The principles set forth in Daubert apply to all expert testimony, not just scientific. Manpower, Inc., 732 F.3d at 806 (citing Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137, 152 (1999)). Additionally, courts are admonished to keep Federal Rule of Evidence 403 in mind when considering expert testimony. Daubert, 509 U.S. at 595. Rule 403 permits exclusion of relevant evidence "if its probative value is substantially ...