This document discusses proving loss of earning capacity for unconventional workers. It defines earning capacity as potential to earn income rather than actual lost wages. Two case studies are presented: (1) A self-employed farmer who suffered a mild traumatic brain injury, where an agricultural expert compared his pre- and post-injury productivity. (2) A college football player whose shoulder injury prevented an NFL career, where an expert estimated probabilities and lengths of NFL careers to calculate lost earnings. The document stresses laying proper foundations for expert testimony on earning capacities.

1. PROVING LOSS OF EARNING
CAPACITY FOR THE
UNCONVENTIONAL WORKER
Rich Mrazik and Mike Young
April 8, 2014
parsonsbehle.com

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―It doesn't matter what I believe.
It only matters what I can prove.‖
- Lt. Daniel Kaffee, A Few Good Men
Overview

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1. What is earning capacity?
2. How do we prove a loss of earning
capacity?
– Admissibility of expert testimony
– Two case studies
Overview

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―Loss of earning capacity is not the same as lost
wages. Rather, earning capacity refers to a
person's potential. Earning capacity is not
necessarily determined by actual loss. While the
plaintiff's earnings at the time of the accident may
be relevant, such figures are not necessarily
indicative of her past or future lost earning
capacity.‖
Corbett v. Seamons, 904 P.2d 229, 233 n.2 (Utah Ct. App. 1995)
Utah Law Recognizes
Loss of Earning Capacity

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Lost earning capacity is not the same as lost earnings.
Lost earning capacity means the lost potential to earn
income. In determining lost earning capacity, you should
consider:
(1) Plaintiff‘s actual earnings;
(2) his work before and after the injury;
(3) what he was capable of earning had he not been
injured; and
(4) any other facts that relate to Plaintiff‘s employment.
MUJI 2d CV2006

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A. The self-employed
B. The ―closely‖ employed
C. The under-employed
D. The unemployed
1. Actual wages may not equal
EARNING CAPACITY

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A. Unrecognized income
B. Over-recognized costs
2. Business tax profits may not
equal real profits

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A. Profit (loss) on other‘s
labor
B.Profit (loss) on capital
3. Real business profits may not
equal the owner’s actual earnings

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(b) Scientific, technical, or other specialized
knowledge may serve as the basis for expert
testimony only if there is a threshold showing
that the principles or methods that are underlying
in the testimony
(1) are reliable,
(2) are based upon sufficient facts or data, and
(3) have been reliably applied to the facts.
Utah Rule of Evidence 702

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LOW THRESHOLD
―That ‗threshold‘ requires only a basic foundational
showing of indicia of reliability for the testimony to
be admissible, not that the opinion is indisputably
correct. . . . Contrary and inconsistent opinions
may simultaneously meet the threshold; it is for the
fact finder to reconcile—or choose between—the
different opinions.‖
Gunn Hill Dairy Properties, LLC v. Los Angeles Dept. of Water & Power, 2012 UT App 20, ¶33
Utah Rule of Evidence 702

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A witness who is qualified as an expert by knowledge,
skill, experience, training, or education may testify in the
form of an opinion or otherwise if:
(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 principles and
methods to the facts of the case.
Federal Rule of Evidence 702

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HIGHER THRESHOLD… but still just a threshold showing.
Federal Rule of Evidence 702

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Case #1:
Mild TBI to a Self-Employed Farmer

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Case #1: Plaintiff’s Annual Income
as Shown on Tax Returns
• 2001: $12,994
• 2002: $12,994
• 2003: $6,000
• 2004: $6,000
• 2005: $12,000
• 2006: $6,000
• 2007: $9,746
• 2009: $7,038
• 2010: $13,331
• 2011: $21,198
Accident occurred
in April 2006

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Case #1: Plaintiff’s Verdict

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Case #1: The Method
 Observe what plaintiff accomplished
before the collision
– Compare to market for that kind of labor
 Observe what plaintiff accomplished after
the collision
– Compare to market for that kind of labor
 Compare values of pre-collision and post-
collision labor

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Case #1: Lessons Learned
 Choose the right expert
– Agricultural experience
 Get your expert involved early
– All the facts
– Hands dirty
 Lay foundation for expert‘s opinion through
lay witness testimony
– ―He‘s not like he was . . .‖

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Case #2: Shoulder Injury Alters a College
Player’s NFL Trajectory

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Case #2: The Method
1. Estimate the probability of becoming an
NFL player
2. Estimate the probable length of NFL
career
3. Estimate the average annual earnings
4. Discount for position and injury history
throughout

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Case #2: Foundation for Probability of
Becoming an NFL Player
 Assume attendance at NFL Scouting
Combine
– Powerful testimony from college coach
 Look to published medical literature for
probability of being drafted from the NFL
Scouting Combine
– Discount for position and injury history

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Case #2: Foundation for Probability of
Becoming an NFL Player

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Case #2: Foundation for Length of Career
 Average career length varies according to
position and injury history
– Brophy study
 Comparison of two scenarios:
– Drafted in rounds 1-3
– Drafted in rounds 4-7
 Discounts for position and injury history

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Case #2: Foundation for Length of Career

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Case #2: Foundation for Average
Earnings
 Analyze total career earnings of 2004-
2005 draftees by position and draft round

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Case #2: Total Economic Damages

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 Follow your gut and keep investigating.
 Recognize the value of unique non-
retained experts.
 Be conservative. Apply discounts to
bombproof your damages model.
Case #2: Lessons Learned

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 Mike Young
– myoung@parsonsbehle.com
– 801.536.6963
 Rich Mrazik
– rmrazik@parsonsbehle.com
– 801.536.6931
THANK YOU