St. Louis Southwestern Railway Co. v. Dickerson

Background

A railroad policeman fell from a car on December 11, 1978, and was permanently disabled. He sued the railroad under the federal law that governs railroad workplace injuries and produced evidence that his future wage losses could total about $1 million. The railroad asked the judge to tell the jury to convert any future-loss award into its present value. The judge refused, citing Missouri’s approved jury instructions, and the jury nevertheless awarded $1 million. The Missouri Court of Appeals upheld that decision.

Reasoning

The Court explained that when a federal law governs the substance of a case, the proper measure of damages is a federal question. The Court relied on earlier decisions, including a 1916 ruling, holding that when future payments are expected, a verdict should be based on their present value. The Court also noted a recent decision saying no single calculation method is required but that failing entirely to instruct jurors that present value is the correct measure is legal error. Because Missouri courts would not allow a present-value instruction, the Court reversed.

Real world impact

This ruling means juries in railroad workplace-injury trials must be told to base future-loss awards on present value, not simple dollar aggregation. That affects injured workers and employers because lump-sum awards should reflect the fact that money received now is worth more than the same amount paid over time. The Court left open how to compute present value, noting inflation, wage growth, and interest should be considered.

Dissents or concurrances

Justice Marshall dissented, objecting to deciding the case without giving the parties a chance to argue the merits by brief or oral argument.