## Facts

- Sophia Trevino suffered severe, permanent birth injuries during labor and delivery at a United States Army hospital.
- Sophia and her parents sued the United States under the Federal Tort Claims Act (FTCA) for negligent obstetrical care.
- After a bench trial, the district court found the United States liable and awarded more than $6.3 million in damages, including large amounts for future medical care and lost earning capacity.
- In calculating the present value of future economic losses, the district court used a “negative discount rate,” based on evidence that wage and medical-cost growth had exceeded safe investment returns.
- The United States conceded liability on appeal and challenged only the amount and methodology of the damages award.

## Issues

1. What standard of appellate review applies to damages awarded after a bench trial in an FTCA case.
2. Whether the district court erred in computing the present value of future economic losses using a negative discount rate grounded in historical inflation and investment-yield data.
3. Whether any component of the damages award was excessive or otherwise legally improper under the applicable state law incorporated through the FTCA.

## Decision

- The Ninth Circuit applied clear-error review to the district court’s damages findings.
- The court rejected the government’s categorical challenge to the negative discount rate and held the district court did not clearly err in using that method where supported by record evidence.
- The court concluded the overall award was not legally excessive under the governing state-law standard.
- The court modified the judgment in part to correct discrete errors in particular components of the damages calculation and remanded for limited recalculation consistent with its opinion.

## Legal Principles

- In FTCA cases, the governing state’s substantive law controls the measure of damages, including standards for determining whether an award is excessive.
- Damages awarded after an FTCA bench trial are factual findings reviewed on appeal for clear error; reversal is warranted only when the reviewing court has a “definite and firm conviction that a mistake has been committed.”
- Present-value calculations may account for both expected inflation (including wages and medical costs) and expected returns on safe investments; a net negative real discount rate is permissible if supported by credible evidence and consistent with state damages law.
- An award is not “excessive” merely because it is large; it must fall outside the range that reasonable factfinders could reach under the evidence and applicable state law.

## Conclusion

The Ninth Circuit largely affirmed a substantial FTCA birth-injury damages award, holding that the district court’s negative discount-rate approach to present value was not clearly erroneous when supported by evidence, while ordering limited corrections to specific calculation errors on remand.


Trevino v. United States, 804 F.2d 1512 (9th Cir. 1986)