Facts
- Gerald L. Morgan, a brakeman and conductor for Monessen Southwestern Railway Company, suffered a permanent back injury while working.
- Morgan returned to work in a less physically demanding job with fewer opportunities for additional compensation.
- Morgan sued Monessen in Pennsylvania state court under the Federal Employers’ Liability Act (FELA), alleging employer negligence and impaired future earning capacity.
- At trial, Morgan sought damages for loss of future earnings.
- The trial judge refused to instruct the jury to reduce any future earnings award to present value, stating there need not be such a reduction and effectively using a “total offset” approach.
- After the jury returned a verdict for Morgan, the court added prejudgment interest as “damages for delay” under Pennsylvania Rule of Civil Procedure 238 (10% per year for a defined pre-verdict period).
- Pennsylvania appellate courts affirmed, treating the discounting question as governed by federal law but upholding the instruction, and treating Rule 238 as procedural and not inconsistent with FELA.
Issues
- Whether a state court may award prejudgment interest (or “damages for delay”) under a state rule in a FELA action, or whether federal law exclusively controls the availability of such damages.
- Whether, in a FELA case, a trial court may refuse to instruct the jury to discount future lost earnings to present value and instead apply a “total offset” method.
Decision
- The Supreme Court reversed and remanded.
- The Court held that the measure of damages in FELA actions, including whether prejudgment interest is available, is a question of substantive federal law.
- The Court held that prejudgment interest is not authorized in FELA actions and state rules cannot add it to a FELA recovery.
- The Court held that FELA requires future economic losses to be reduced to present value and that the trial court erred by telling the jury no reduction was required.
Legal Principles
- In FELA actions, the measure of damages is substantive federal law that state courts must apply.
- Absent congressional authorization, prejudgment interest is not recoverable in FELA personal injury actions, and a state “delay damages” rule cannot be used to increase a FELA award.
- Awards for future loss of earnings in FELA cases must be discounted to present value, and juries must be instructed to perform (or be guided in) that reduction; an instruction eliminating the present-value reduction is improper.
Conclusion
The Court required uniform federal rules for FELA damages: state courts may not add prejudgment interest through state delay-damages provisions, and future earnings awards must be reduced to present value through proper jury instructions.