Special Law Alert - Back to the Drawing Board: The Use of Ethnicity-Based Statistics to Determine Economic Loss in Tort Cases Held Unconstitutional

by John J. Hare, Esquire

In a significant ruling issued on July 30, 2015, U.S. Judge Jack B. Weinstein of the Eastern District of New York held that it is unconstitutional to use ethnicity-based statistics to calculate future economic loss in tort cases. This ruling will likely spawn similar rulings and arguments elsewhere, and the result could be a dramatic change in the way experts calculate economic damages in tort cases.

In G.M.M. v. Kimpson, 2015 U.S. Dist. LEXIS 99715 (E.D.N.Y. July 30, 2015), a Hispanic infant recovered a $2 million verdict for lead poisoning. In developing their respective opinions regarding the infant’s economic loss, two of plaintiff’s experts and a defense expert relied on statistics regarding Hispanics. Acting on his own motion, Judge Weinstein ruled that such reliance on “ethnicity-based statistics” to formulate (and potentially reduce) economic damages violates due process and equal protection.

In tort cases, economic experts routinely bolster their own or undermine their opponents’ predictions of future loss by relying on ethnicity-based statistics, trends and historical data. For instance, in many cases involving serious injuries, the parties utilize such information to contest the amount of future lost earnings and earning capacity. Judge Weinstein has now firmly rejected this practice in a lengthy opinion full of facts and data. Indeed, while his ruling is limited to ethnicity-based statistics, he also suggests that the use of gender-based statistics would be likewise unconstitutional.

While Judge Weinstein’s ruling is precedential only in the Eastern District of New York, and while it will likely face appellate review in the Second Circuit, the strength of Judge Weinstein’s analysis will spawn similar rulings and arguments elsewhere. Counsel with pending cases in which experts rely on ethnicity-based data should be aware of the G.M.M. decision and the potential that it will be replicated in their jurisdictions. If that occurs, both counsel and their experts will have to fundamentally rethink the way economic damages are calculated in tort cases.

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