APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA-PITTSBURGH (D.C. Civil No. 79-1597)
Before Aldisert, Van Dusen and Garth, Circuit Judges. Before Seitz, Chief Judge, and Aldisert, Adams, Gibbons, Hunter, Weis, Garth, Higginbotham, Sloviter, Becker and Van Dusen, Circuit Judges.
Jones & Laughlin Steel Corporation appeals from a judgment in favor of plaintiff Howard E. Pfeifer in a third-party negligence action under the Longshoremen's and Harbor Workers' Compensation Act. The major question presented is whether the district court erred in applying the "total offset method" as a federal rule of damages, wherein the discount factor used to reduce future earnings to present worth is presumed offset by future inflation. We find no error and affirm.
Pfeifer was employed by appellant Jones & Laughlin (J&L) as a landing helper on its coal barges. On January 13, 1978, he slipped and fell because of ice and snow that had accumulated on the gunnel of a barge on which he was working. He struck a barge rail and landed on his tailbone, and a heavy electric motor that he was carrying fell in his lap. He has not returned to work since the accident. He has been examined by a number of physicians, several of whom testified at the trial, and he has undergone extensive physical therapy.
The district court found that appellant was negligent and that its negligence was the proximate cause of Pfeifer's accident and resulting injury. It determined further that Pfeifer was completely disabled from the date of the accident until July 1, 1979, and that thereafter he was capable of doing "light work" and lifting weights of up to twenty-five pounds, but that he could not work on the river. Appellant has not offered Pfeifer a job of any type since his injury, and the parties have not discussed the availability of a light duty position.
Relying on our decisions in Griffith v. Wheeling-Pittsburgh Steel Corp., 610 F.2d 116 (3d Cir. 1979), vacated, 451 U.S. 965, 101 S. Ct. 2038, 68 L. Ed. 2d 343 (1981), reinstated on remand, 657 F.2d 25 (3d Cir. 1981), petition for cert. filed, 50 U.S.L.W. 3377 (1981) (No. 81-826); and in Blair v. United States Steel Corp., 444 F.2d 1390 (3d Cir. 1971) (per curiam), cert. denied, 404 U.S. 1018, 92 S. Ct. 681, 30 L. Ed. 2d 666 (1972), the district court determined that as a vessel owner pro hac vice, appellant was liable for negligence under § 5(b) of the Longshoremen's and Harbor Worker's Compensation Act (LHWCA), 33 U.S.C. § 905(b). In measuring damages, it declined to consider future wage increases or to discount the award to present value, citing Kaczkowski v. Bolubasz, 491 Pa. 561, 421 A.2d 1027 (1980). The court multiplied Pfeifer's 1978 annual wage by his work life expectancy, deducted the amount of compensation Pfeifer had received under LHWCA, and subtracted his projected earnings at minimum wage from July 1, 1979, until his sixty-fifth birthday, taking judicial notice that the federal minimum wage at the time of the accident was $2.90 per hour.
On appeal, J&L does not challenge the district court's findings that it was negligent and that its negligence was the proximate cause of Pfeifer's injury, nor does it contend that it was not correctly found to be an owner pro hac vice under the standards set forth in Blair, 444 F.2d at 1391. It argues, however, that because Pfeifer was its employee he does not have a cause of action for negligence under § 5(b) of LHWCA. It argues also that the district court erred in applying the Pennsylvania damages test of Kaczkowski, and further in factoring damages on the basis of the minimum wage rate instead of wages for light duty.
We quickly dispose of appellant's argument that the district court erred in allowing Pfeifer to proceed in a negligence action against his own employer under § 5(b) of LHWCA. J&L reads § 5(a) as an absolute limitation on a longshoreman's right to sue his employer under § 5(b): unless the employer has failed to secure payment of compensation as required by § 4 of LHWCA, 33 U.S.C. § 904, it cannot be held liable as a third party under § 5(b). We carefully considered the identical argument in light of the 1972 LHWCA amendments in Griffith v. Wheeling-Pittsburgh Steel Corp., 521 F.2d 31, 38-44 (3d Cir. 1975), cert. denied, 423 U.S. 1054, 96 S. Ct. 785, 46 L. Ed. 2d 643 (1976) (Griffith I); and we concluded that we remain bound by the Supreme Court's decision in Reed v. The Yaka, 373 U.S. 410, 83 S. Ct. 1349, 10 L. Ed. 2d 448 (1963), which held that § 5(a) (then § 5) does not bar a suit against an owner pro hac vice who also is an employer liable for compensation. Griffith I requires us to reject J&L's argument in this case.
Appellant next argues that the district court erred in its calculation of damages by applying the rule announced in Kaczkowski v. Bolubasz, 491 Pa. 561, 421 A.2d 1027 (1980). It contends that damages in an LHWCA case must be computed according to a uniform federal standard; and that federal law requires that a lump sum award for lost future earnings be reduced to present value, a practice effectively abolished in Pennsylvania by the decision in Kaczkowski. To meet this contention, we must explore the developing law of damages in state and federal decisions in light of controlling legal precepts and prevailing economic conditions.
But first we must make the preliminary determination of what precise aspect of the damage issue has been preserved for appeal. Our examination of the record persuades us that appellant has not preserved for review its contention that the court erred in applying Pennsylvania law because it felt obliged to apply state law, rather than federal law. It was the plaintiff's position at trial that federal law controlled damages and that inflation was a valid consideration under federal law. Appellant did not seem to challenge this position except to suggest that evidence of inflation had to be introduced by expert testimony and that future earnings had to be reduced to present worth:
MR. MURDOCH: We're here today under a Federal statute under Federal law and I don't think that the finding of the Pennsylvania Supreme Court in the recent case regarding not reducing damages to ...