58 N.Y.2d 1088 (1983)
In Federal Employers’ Liability Act (FELA) cases, the trial judge must instruct the jury that any award to the plaintiff is not subject to federal income taxation.
Summary
Davis, a railroad engineer, sued Consolidated Rail Corp. (Conrail) under FELA for injuries sustained when he stepped into scalding water. Conrail admitted liability, and the trial proceeded solely on damages. The trial court refused Conrail’s request to instruct the jury that any award would not be taxable. The jury awarded Davis a total of $1,250,000. The Appellate Division reduced the award for future lost earnings, and the New York Court of Appeals reversed, holding that the trial court erred by failing to instruct the jury that the award was not taxable, as required by Norfolk & Western Ry. Co. v. Liepelt. This failure could have led the jury to inflate the award under the mistaken belief that it would be taxed.
Facts
Plaintiff Davis, an engineer employed by Conrail, was injured after stepping off a locomotive and into scalding water used to heat switches. Davis sustained severe burns and suffered medical complications. Conrail conceded liability under the Federal Employers’ Liability Act (FELA). The trial was limited to the issue of damages.
Procedural History
The trial court refused Conrail’s request to instruct the jury that any award would not be subject to taxation. The jury awarded Davis $450,000 for loss of future earnings, $50,000 for loss of past earnings, and $750,000 for general damages. The Appellate Division reversed and ordered a new trial unless Davis agreed to a reduction in the award for future lost earnings to $360,000, the amount suggested by counsel in summation. Davis stipulated to the reduction. Conrail appealed, and the New York Court of Appeals reversed the Appellate Division’s order.
Issue(s)
Whether, in a case arising under the Federal Employers’ Liability Act (FELA), the trial judge is required to instruct the jury that any recovery is not subject to taxation.
Holding
Yes, because in a case arising under FELA, the Trial Judge is required to instruct the jury that any recovery is not taxable.
Court’s Reasoning
The Court of Appeals relied on the U.S. Supreme Court’s decision in Norfolk & Western Ry. Co. v. Liepelt, 444 U.S. 490 (1980), which mandates that juries in FELA cases be instructed that awards are not taxable. The court reasoned that without such an instruction, jurors might erroneously believe that a portion of the award would be subject to taxation, leading them to inflate the award. The court noted that the jury awarded Davis a sum exceeding that requested by his counsel in summation, suggesting the potential for such error. The court quoted Liepelt, stating, “[i]t is surely not fanciful to suppose that the jury erroneously believed that a large portion of the award would be” taxable.” The failure to give the instruction constituted reversible error, warranting a new trial limited to the issue of damages.