Doran, William J., Jr.

English

Louisiana State University: DigitalCommons @ LSU Law Center

Louisiana Law ReviewVolume 15 | Number 4June 1955The Effect of Changes in the Purchasing Power ofthe Dollar on the Quantum of Damages inPersonal Injury and Wrongful Death CasesWilliam J. Doran Jr.This Comment is brought to you for free and open access by the Law Reviews and Journals at LSU Law Digital Commons. It has been accepted forinclusion in Louisiana Law Review by an authorized editor of LSU Law Digital Commons. For more information, please contact kreed25@lsu.edu.Repository CitationWilliam J. Doran Jr., The Effect of Changes in the Purchasing Power of the Dollar on the Quantum of Damages in Personal Injury andWrongful Death Cases, 15 La. L. Rev. (1955)Available at: https://digitalcommons.law.lsu.edu/lalrev/vol15/iss4/91955] COMMENTSThe Effect of Changes in the Purchasing Powerof the Dollar on the Quantum of Damages inPersonal Injury and Wrongful Death Cases'Some Louisiana decisions state that there is no fixed rulefor determining the quantum of damages in personal injury andwrongful death cases and that the question of quantum is ad-dressed largely to the discretion of the judge.2 Others, however,indicate that the courts should look to earlier cases involvingcomparable damage to aid them in arriving at just awards.3 Tworecent decisions, one by a state and the other by a federal court,recognize that Louisiana judges look to prior cases to maintainuniformity among recoveries. 4 In other jurisdictions, appellatecourts frequently consider prior recoveries for similar types ofdamage to determine whether or not a jury verdict is excessive.5But some courts have abandoned this practice, reasoning thatthe fluctuation in the purchasing power of the dollar is such01. See Comment, Damages for Personal Injuries and the Shrinking Dol-lar, 7 LOUISIANA LAW REVIEW 580 (1947); Annot., 12 A.L.R.2d 611 (1950).2. Hecht v. Toye Bros. Yellow Cab Co., 62 So.2d 520 (La. App. 1953);Ernst v. New Orleans Public Belt R.R., 55 So.2d 657 (La. App. 1951); Grissomv. Heard, 47 So.2d 108 (La. App. 1950); Hare v. New Amsterdam Casualty Co.,1 So.2d 439 (La. App. 1941); LeBlanc v. Checker Cab Co., 8 La. App. 472(1928); Parks v. Hall, 182 So. 347 (La. App. 1938).3. Grissom v. Heard, 47 So.2d 108 (La. App. 1950); Eleazar v. IllinoisCentral R.R., 24 So.2d 387 (La. App. 1946); Hare v. New Amsterdam CasualtyCo., 1 So.2d 439 (La. App. 1941); Hobbs v. Employers Liability Assur. Corp.,188 So. 191 (La. App. 1939); Wilcox v. B. Olinde & Sons, 182 So. 149 (La. App.1938); Matheny v. United States Fidelity & Guaranty Co., 181 So. 647 (La.App. 1938).4. Gillen v. Phoenix Indemnity Co., 198 F.2d 147 (5th Cir. 1952); Wain-wright v. Globe Indemnity Co., 75 So.2d 554 (La. App. 1954).5. See, e.g., Aetna Oil Co. v. Metcalf, 300 Ky. 817, 190 S.W.2d 562 (1945);cases are collected in Annot., 16 A.L.R.2d 3, 27 (1951).6. The following table illustrates the changes in the purchasing power ofthe dollar for the period from 1913 to the present. It is the United StatesBureau of Labor Statistics Consumer Price Index which was originated asan aid in the settlement of wage negotiations. It is still widely used for thispurpose. The index is obtained by combining six group indexes: (1) food;(2) clothing; (3) rent; (4) fuel, electricity, and ice; (5) house furnishings;(6) miscellaneous goods and services. As the price index rises, the purchas-ing power of the dollar falls proportionately. The base figure of 100 iscomputed on the price level of 1947-1949.CONSUMER PRICE INDEX-UNITED STATES AVERAGEALL ITEMSYear Price Index Year Price Index1913 42.3 1934 57.21914 42.9 1935 58.71915 43.4 1936 59.3744 LOUISIANA LAW REVIEW [VOL. XVthat comparison of cases from different periods is of little value.7It has recently been held that, in diversity of citizenship cases,federal district courts sitting in Louisiana may not instruct thejury to consider, in arriving at the amount of damages, priorstate court awards for comparable damage. 8Awards in personal injury and wrongful death cases purportto be indemnifications for two types of damages, pecuniary andnon-pecuniary in character. In fixing the amount of recovery forsuch items of pecuniary damage as medical expenses and the lossof past earnings, the relevance of prior cases is questionable.The amount of recovery for this type of damage can be deter-mined simply by considering the actual loss of expenditure ofmoney. The same is true of the loss of probable future earnings,Year Price Index Year Price Index1916 46.6 1937 61.41917 54.8 1938 60.31918 64.3 1939 59.41919 74.0 1940 59.91920 85.7 1941 62.91921 76.4 1942 69.71922 71.6 1943 74.01923 72.9 1944 75.21924 73.1 1945 76.91925 75.0 1946 83.41926 75.6 1947 95.51927 74.2 1948 102.81928 73.3 1949 101.81929 73.3 1950 102.81930 71.4 1951 111.01931 65.0 1952 113.51932 58.4 1953 114.41933 55.3 1954 115.1** A yearly index is not yet available. The index for June 1954 is used.Source: U.S. Bureau of Labor Statistics, Dep't of Labor, 77 MONTHLY LABORRaV. 1185 (October 1954).In order to find the number of 1953 dollars necessary to equal the pur-chasing power of $1000 in 1933, a proportion can be set up as follows:$1000 is to 55.3 as $x is to 114.41000 x55.3 114.455.3x = 114.400x = 2068It would take approximately $2068 in 1953 in order to equal $1000 in 1933.7. See, e.g., Taylor-Green Gas Co. v. Newcomb, 302 Ky. 564, 195 S.W.2d307 (1946); Koenigs v. Thome, 226 Minn. 14, 31 N.W.2d 534 (1948); cases arecollected in Annot., 12 A.L.R.2d 611, 627 (1950).8. Gillen v. Phoenix Indemnity Co., 198 F.2d 147 (5th Cir. 1952); StateFarm Mutual Auto Ins. Co. v. Scott, 198 F.2d 152 (5th Cir. 1952) (no error intrial judge's refusal to allow counsel to argue to the jury quantum of awardsmade in similar Louisiana cases).1955] COMMENTSwhich should be calculated on the basis of life expectancy andtypical occupational experience. However, there may be justifi-cation for consulting prior cases involving comparable damageto determine the amount of recovery for pain and suffering, forthe loss of limbs and human faculties, and for the family's be-reavement in wrongful death cases. This type of non-pecuniarydamage does not readily lend itself to measurement in terms ofmoney, and the courts may need the guidance of prior cases toarrive at a just award. Moreover, the practice maintains a cer-tain uniformity among similar cases, and this result may bedesirable. Many Louisiana decisions take into account this im-portant difference in the relevancy of prior cases to differenttypes of damagef In others, the courts have simply comparedthe trial court's award as a whole to the judgments in similarcases without segregating the items of pecuniary and non-pecuniary damage.10 Even when the use of prior cases is limitedto the determination of the quantum of damages for non-pecuni-ary harms, however, injustice will result if the change in thepurchasing power of the dollar since those cases were decided isnot taken into consideration.In view of this possible injustice, Louisiana courts do con-sider increases and decreases in the value of the dollar." This9: Morgan v. Kreppier, 60 So.2d 139 (La. App. 1952); Eleazar v. IllinoisCentral Ry., 24 So.2d 387 (La. App. 1946); Brown v. Homer-Doyline BusLines, 23 So.2d 348 (La. App. 1945); Stromer v. Dupont, 150 So. 32 (La. App.1933). See also Hawkins v. Fidelity & Casualty Co., 74 So.2d 323 (La. App.1954); Richey v. Service Dry Cleaners, 28 So.2d 284 (La. App. 1946) (award towife for injuries, to husband for expenses; award to wife raised on appeal);Hero v. Toye Bros. Yellow Cab Co., 19 So.2d 887 (La. App. 1944); Weadock v.Eagle Indemnity Co., 15 So.2d 132 (La. App. 1943); Killian v. Modern IronWorks, 15 So.2d 532 (La. App. 1943); Hartman v. Aschaffenburg, 12 So.2d282 (La. App. 1943).10. Schneller v. Louisiana State Rice Milling Co., 148 La. 88, 86 So.663 (1920); Cross v. Lee Lumber Co., 130 La. 66, 57 So. 631 (1912) (no refer-ence to specific prior cases); Dole v. New Orleans Ry. & Light Co., 121 La.945, 46 So. 929 (1908) (no reference to specific prior cases); Jakubec v.Southern Bus Lines, 31 So.2d 282 (La. App. 1947); Bell v. First Nat. LifeIns. Co., 141 So. 484 (La. App. 1932) (prior cases cited).11. Schneller v. Louisiana State Rice Milling Co., 148 La. 88, 86 So. 663(1920); Cross v. Lee Lumber Co., 130 La. 66, 57 So. 631 (1912); Rogers v.Allen Lumber Co., 129 La. 900, 57 So. 166 (1912); Dole v. New Orleans Rail-way & Light Co., 121 La. 945, 46 So. 929 (1908); Short v. Central LouisianaElectric Co., 36 So.2d 658 (La. App. 1948); Jakubec v. Southern Bus Lines,31 So.2d 282 (La. App. 1947); Richey v. Service Dry Cleaners, 28 So.2d 284(La. App. 1946); Eleazar v. Illinois Central R.R., 24 So.2d 387 (La. App. 1946);Brown v. Homer-Doyline Bus Lines, 23 So.2d 348 (La. App. 1945); Levy v.New Orleans & N.E.R.R., 20 So.2d 559 (La. App. 1945); Hero v. Toye Bros.Yellow Cab Co., 19 So.2d 887 (La. App. 1944); Killian v. Modern Iron Works,15 So.2d 532 (La. App. 1943); Weadock v. Eagle Indemnity Co., 15 So.2d 132(La. App. 1943); Kelly v. Neff, 14 So.2d 657 (La. App. 1943); Scott v. ClaiborneElectric Cooperative, 13 So.2d 524 (La. App. 1943); Hartman v. Aschaffen-burg, 12 So.2d 282 (La. App. 1943); Kaough v. Hadley, 165 So. 748 (La. App.746 LOUISIANA LAW REVIEW [VOL. XVis the view taken in other American jurisdictions 1 2 and also inCanada.13 It is clear that without the use of former cases, thequantum of damages in a personal injury or wrongful death casewould naturally be based upon the amount of money requiredto indemnify plaintiff in terms of the purchasing power of thedollar at the moment of judgment. Consequently, since in diver-sity of citizenship cases, federal courts sitting in Louisiana maynot instruct the jury to consider prior awards, there is no needfor instructing them to consider changes in the purchasing powerof the dollar.14 It would seem that the Louisiana courts maytake judicial notice of official statistics compiled by such govern-ment agencies as the Bureau of Labor Statistics, 5 but they willnot accept figures arrived at by writers in ordinary tradejournals. 6Although the Louisiana courts have frequently consideredthe change in the purchasing power of the dollar,17 their treat-ment of this factor has not been uniform. In many cases thecourt has merely mentioned the change without reference to any1936); Van Baast v. Thibaut Feed Mills, 151 So. 226 (La. App. 1933); Donald-son v. Riddling's Succession, 145 So. 804 (La. App. 1933); Stromer v. Dupont,150 So. 32 (La. App. 1933); Wyble. v. Putfork, 141 So. 776 (La. App. 1932);Bell v. First National Life Insurance Co., 141 So. 484 (La. App. 1932); NewAmsterdam Casualty Co. v. Soileau, 167 F.2d 767 (5th Cir. 1948).12. Purchasing power of the dollar is an element to be considered:American Bus Lines v. Merritt, 221 Ark. 596, 254 S.W.2d 963 (1953); Gaster v.Hicks, 181 Ark. 299, 25 S.W.2d 760 (1930); Barnett v. Furst, 99 Cal. App.2d767, 222 P.2d 470 (1950); Hayward v. Yost, 72 Idaho 415, 242 P.2d 971 (1952);King's Indiana Billiard Co. v. Winters, 106 N.E.2d 713 (Ind. App. 1952); J. C.Penney Co. v. Livingston, 271 S.W.2d 906 (Ky. App. 1954); Johnson v. St. PaulCity R.R., 67 Minn. 260, 69 N.W. 900 (1897); Gale v. New York Central &H.R.R., 13 Hun 1 (N.Y. 1878); Fort Worth & Denver City Ry. v. Gifford,252 S.W.2d 204 (Tex. Civ. App. 1952). Contra, Canfield v. Chicago R.I. & P.Ry., 142 Iowa 658, 121 N.W. 186 (1909) (the court said that plaintiff's salaryhad not increased with the rise in cost of living, and, therefore, had he livedto his full expectancy, he would not have accumulated as much as he wouldhave before the increase in the cost of living. The court did not considerthe fact that wages will increase generally as prices increase, though at aslower rate).Courts take judicial notice of change in purchasing power: Missouri Pac.R.R. v. Elvins, 176 Ark. 737, 4 S.W.2d 528 (1928); Hooton v. City of Burley,70 Idaho 369, 219 P.2d 651 (1950); Swanson v. J. L. Shiely Co., 234 Minn. 548,48 N.W.2d 848 (1951); Moore v. Public Service Coordinated Transport, 15 N.J.Super. 499, 83 A.2d 725 (1951).13. Donoghue v. Magee & Barron, 1 W.W.R. 70 (1949); Rodzinski v.Modern Dairies Ltd., 2 W.W.R. 456 (1949); Carter, Assessment of Damagesfor Personal Injuries or Death in the Courts of the Common-law Provinces,32 CAN. B. REV. 713 (1954).14. But see New Amsterdam Casualty Co. v. Soileau, 167 F.2d 767 (5thCir. 1948), decided before cases cited in note 8 supra.15. See Armentrout v. Virginian Ry., 72 F. Supp. 997 (S.D. W.Va. 1947).16. Bell v. First National Life Ins. Co., 141 So. 484 (La. App. 1932).17. See cases cited note 11 supra.COMMENTSspecific periods.18 In others, the court has mentioned the changewithout reference to any previous case.19 In still others, priorawards for comparable damage have been considered and thegeneral change in the purchasing power of the dollar from thetime of the prior case to the present has been mentioned. Theusual practice has been to refer to the general change in purchas-ing power instead of specific figures. For example, in Eleazar v.Illinois Central R.R. (1946),20 the court considered the award of$3000 in a 1942 case, Hero v. Toye Bros. Yellow Cab Co.,21 in-volving similar injuries, mentioned the decreased purchasingpower of the dollar, and sustained a trial court judgment of$4000. The court was undoubtedly influenced, however, by thefact that plaintiff's injuries were more serious than those of theplaintiff in the previous case. In the Hero case,22 the court re-viewed prior recoveries for injuries similar to plaintiff's injuriesand upheld a slightly higher trial court judgment 2 3 taking intoaccount the decreased purchasing power of the dollar. Similarly,in Levy v. New Orleans N.E.R.R.24 and Stromer v. DuPont,25consideration of the change in purchasing power led to the up-holding of trial court awards slightly different from those inearlier comparable cases. In these cases, the change in the dol-lar's purchasing power was mentioned in support of the court'srefusal to disturb a trial court award alleged to be excessive orinadequate. In Morgan v. Kreppier,26 decided in 1952, however,the court of appeal, finding that the amount of damages allowed18. Schneller v. Louisiana Rice Milling Co., 148 La. 88, 86 So. 663 (1920);Dole v. New Orleans Ry. & Light Co., 121 La. 945, 46 So. 929 (1908) (uphold-ing a verdict alleged to be excessive); Hawkins v. Fidelity & Casualty Co.,74 So.2d 323 (La. App. 1954); Short v. Central Louisiana Electric Co., 36So.2d 658 (La. App. 1948) (to uphold a verdict alleged to be excessive); Scottv. Claiborne Electric Cooperative, 13 So.2d 524 (La. App. 1943) (to upholda verdict alleged to be excessive); Hartman v. Aschaffenburg, 12 So.2d 282(La. App. 1943);, Kaough v. Hadley, 165 So. 748 (La. App. 1936); Wyble v.Putfork, 141 So. 776 (La. App. 1932) (upholding a verdict alleged to beinadequate).19. Richey v. Service Dry Cleaners, 28 So.2d 284 (La. App. 1946) (theaward would be adequate "if made a few years ago"); Killian v. ModernIron Works, 15 So.2d 532 (La. App. 1943) (the value of the dollar is "approxi-mately 25% less than a few years ago"); Donaldson v. Riddling's Succession,145 So. 804 (La. App. 1933) ("the purchasing power of the dollar now is verymuch greater than it was three years ago").20. 24 So.2d 387 (La. App. 1946).21. 19 So.2d 887 (La. App. 1944).22. Ibid.23. The court sustained an award of $3000. The largest prior award in asimilar case was $2500 in 1933. Selby v. Manning, 145 So. 555 (La. App. 1933).24. 20 So.2d 559 (La. App. 1945).25. 150 So. 32 (La. App. 1933).26. 60 So.2d 139 (La. App. 1952).1955]LOUISIANA LAW REVIEWby the trial court was based on the recovery in a 1938 case,27increased the trial court's award to take into account the inter-vening change in the purchasing power of the dollar. Similarly,in Bell v. First National Life Ins. Co.,28 decided in 1932, the courtof appeal found that the trial court, in allowing $5000 in damages,had based its decision on a 1927 case, 29 and thereupon reducedthe trial court's judgment of $4000 to reflect the change in thevalue of the dollar since 1927.The latest Louisiana decision on the effect of such changeson the quantum of damages in personal injury cases is Wain-wright v. Globe Indemnity Co.30 In that case, the court statedthat "the unprecedented decrease in the purchasing power ofmoney '31 is a factor to be considered in fixing the quantum ofdamages. The court considered eight cases cited by counsel forthe defendant in an effort to have the trial court's judgment of$15,000 reduced, and awarded plaintiff $10,000, stating that thiswould be more in keeping with awards in similar cases.This case seems representative of the manner in which thefactor of change in purchasing power has been treated by theLouisiana courts. Usually, the courts have looked to the priorrecoveries brought to their attention and then mentioned in gen-eral terms the change in purchasing power in support of theirconclusion that an award is proper. Statistics have seldom beencited by the courts. But if counsel can show that a recoverybased on similar cases is excessive or inadequate in view of theexact change in the purchasing power of the dollar, the courtwill probably, in view of the jurisprudence, adjust the awardon that basis. This is especially true if counsel's request is sup-ported by reliable statistics such as those published by the Bu-reau of Labor Statistics. However, whether the courts merelycite the change in purchasing power as a matter of commonknowledge or look to actual figures furnished by counsel, it isapparent that this factor is an important one to consider inarriving at a just award in personal injury and wrongful deathcases.William J. Doran, Jr.27. Coste v. H.G. Hill Stores, 178 So. 512 (La. App. 1938).28. 141 So. 484 (La. App. 1932).29. Gallman v. Young, 6 La. App. 137 (1927).30. 75 So.2d 554 (La. App. 1954).31. Id. at 556.[VOL. XV

The  Effect  of Changes  in  the  Purchasing  Power of  the  Dollar  on  the  Quantum  of  Damages  in Personal  Injury  and Wrongful  Death  Cases

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The Effect of Changes in the Purchasing Power of the Dollar on the Quantum of Damages in Personal Injury and Wrongful Death Cases

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