                                                       United States Court of Appeals
                                                                Fifth Circuit
                                                             F I L E D
                 UNITED STATES COURT OF APPEALS             December 27, 2006
                          FIFTH CIRCUIT
                                                         Charles R. Fulbruge III
                                                                 Clerk
                Nos. 04-41362, 04-41764, 05-40686


               JAMES EDWIN HODGES; BEVERLY HODGES,
                          Plaintiffs-Appellees, Cross Appellants,

                             versus

                        MACK TRUCKS INC.,
                             Defendant-Appellant, Cross Appellee,

               JAMES EDWIN HODGES; BEVERLY HODGES,
                                           Plaintiffs-Appellants,

                             versus

           INDIANA MILLS & MANUFACTURING INC., ET AL,
                                                         Defendants,
                        MACK TRUCKS INC.,
                                              Defendant-Appellee,

               JAMES EDWIN HODGES; BEVERLY HODGES,
                                            Plaintiffs-Appellees,

                             versus

              INDIANA MILLS & MANUFACTURING; ET AL,
                                                         Defendants,

                    ABF FREIGHT SYSTEM INC.,
                                            Intervenor-Appellant.


          Appeals from the United States District Court
                for the Eastern District of Texas
                           (2:03-CV-183)




Before DAVIS, BARKSDALE, and DeMOSS, Circuit Judges.
RHESA HAWKINS BARKSDALE, Circuit Judge:

       These   three    appeals      arise      out   of   a    product-liability,

diversity action for injuries sustained because of a secondary

collision in Texas, involving a tractor-trailer manufactured by

Mack Trucks, Inc. (Mack).           Mack seeks judgment as a matter of law

and, in the alternative, a new trial, claiming, inter alia, the

district     court    improperly     both      admitted    expert   testimony     and

excluded evidence concerning the use, or nonuse, of his seatbelt by

James Hodges (Hodges), the injured driver of the truck.                      Hodges

received a multi-million dollar verdict.               He and his wife, Beverly

Hodges (the Hodges), contest her not also being awarded damages and

seek a new trial on that issue.           Finally, ABF Freight Systems, Inc.

(ABF),      Hodges’    employer     and     workers’-compensation          provider,

challenges the district court’s rulings on its subrogation claim.

A new trial and ABF’s claim’s being reconsidered are required.

VACATED AND REMANDED.

                                          I.

       On 1 November 2002, a 16-year-old drove her vehicle into the

path of an oncoming Mack truck, driven by Hodges, a 34-year veteran

driver of large trucks.           His cab was pulling two trailers, and the

other vehicle hit the right front wheel of Hodges’ truck, causing

extensive damage.       The truck swerved into the path of an oncoming

car, breached a guard rail, and jack-knifed down an embankment. It

came   to    rest    with   the   nose    of    the   tractor    pointed    up;   the



                                          2
passenger-side door was damaged but the door frame and the cab were

not deformed.

     Hodges was ejected through the passenger side and sustained

severe and permanent injuries, including paraplegia.                     (It is

undisputed that, had he remained in the cab, his injuries would

have been far less serious.)             ABF, Hodges’ employer, was self-

insured and began paying Hodges workers’ compensation.

     ABF owned the truck.              Its seatbelts were manufactured by

Indiana Mills & Manufacturing (Indiana Mills).                Its door latches,

manufactured by KSR International, were installed by Mack.

     In May 2003, the Hodges filed this action against Indiana

Mills and Mack, claiming a design defect in the seatbelt caused

Hodges to be ejected.     (The Hodges had settled with the 16-year-old

driver for $50,000.)          In early 2004, the Hodges added a design-

defect claim for the passenger-side door latch, asserting the

defect caused the latch to fail after Hodges’ truck was hit.                That

June, ABF intervened to protect its subrogation interests in

workers’ compensation paid to Hodges.

     Prior    to     trial,     Mack     repeatedly,    and     unsuccessfully,

challenged some of the Hodges’ proposed expert witnesses being

permitted    to    testify.      Notwithstanding       the    district   judge’s

concomitant extensive involvement and knowledge about the issues,

the case was reassigned approximately two weeks before trial




                                         3
commenced on 23 August 2004.     (Jury selection was during the week

of 16 August.)

     On 14 August, Indiana Mills settled with the Hodges on the

seatbelt claim for $1.4 million. The settlement structure provided

for James and Beverly Hodges to each receive half of the settlement

amount.     Accordingly, only the defective-door-latch issue remained

for trial, with Mack as the sole defendant.

     On the eve of trial, as a result of that settlement, the

Hodges moved to exclude all evidence of Hodges’ use, or nonuse, of

his seatbelt, pursuant to § 545.413(g) of the Texas Transportation

Code, claiming the statute proscribed introducing such evidence in

civil trials (seatbelt evidence).       The motion was granted without

written reasons being given.

     During trial, the Hodges introduced expert testimony by Steven

Syson.    He testified:   the door latch failed; and there was a safer

alternative design available that would have substantially reduced

the likelihood of Hodges’ injuries.        Mack’s pretrial motions to

exclude this testimony had been denied.

     On 26 August, following approximately two and one-half days of

testimony, the jury returned its verdict, finding Mack and the 16-

year-old driver 60% and 40% liable, respectively, for Hodges’

injuries.    It awarded $7.9 million in damages, but awarded the

entire amount to Hodges. In short, the jury awarded Beverly Hodges

no damages for loss of household services and consortium.



                                    4
     That September, Mack moved for judgment as a matter of law (as

it had done during trial) and, in the alternative, a new trial.

The Hodges moved for a new trial on Beverly Hodges’ damages claim.

That November, the court denied those motions, without providing

written reasons.

     In October, Indiana Mills had interpled its $1.4 million in

settlement funds into the court’s registry.     As noted, under the

agreed settlement terms, James and Beverly Hodges were to each

receive $700,000.      ABF claimed it was entitled to the entire

amount, not just the $700,000 Hodges was to receive, for workers’

compensation it had paid, as well as would pay in the future.   That

December, the district court held an evidentiary hearing on the

funds’ disbursement.    Among other rulings, it denied ABF’s request

for reapportionment of the settlement amount, holding, inter alia,

the intent of the settlement scheme was not to deprive ABF of its

rights to subrogation or future credit.        The funds have been

disbursed.

                                 II.

     For this diversity-jurisdiction action, arising out of an

accident in Texas, its substantive law applies.    Erie R.R. Co. v.

Tompkins, 304 U.S. 64 (1938).     At issue is whether the district

court erred in:     (1) admitting Syson’s expert testimony; (2)

denying Mack judgment as a matter of law (JML); (3) excluding the

seatbelt evidence; (4) failing to grant a new trial on Beverly


                                  5
Hodges’ damages; (5) approving the apportionment of the Indiana

Mills settlement amounts between the Hodges; and (6) assessing

attorney fees and litigation expenses out of ABF’s subrogation

recovery and calculating its right to future credit.

     We hold, inter alia: JML was properly denied; the court

reversibly erred, however, by excluding the seatbelt evidence; and,

therefore, a new trial is required.       Accordingly, we need not

address Beverly Hodges’ damages claim, nor fully address ABF’s

claims.   ABF’s claims are remanded to the district court for it,

inter alia, to consider whether the effect of the settlement was to

settle around ABF’s subrogation lien.

                                A.

     Mack maintains: Syson’s testimony should have been excluded,

pursuant to Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579,

593-95 (1993); and, even if admissible, it failed, as a matter of

law, to prove the requisite safer alternative design for the Mack

door latch.   Therefore, Mack contends judgment should be rendered

in its favor.   In the alternative, it seeks a new trial.    (In a

footnote to its opening brief, Mack also addresses the testimony of

the Hodges’ accident-reconstruction expert, stating it should have

also been excluded under Daubert.       It is unclear whether Mack

presents this as an issue for appeal.     In any event, because we

reverse based on the district court’s exclusion of the seatbelt

evidence, it is not necessary to address that expert’s testimony.)


                                 6
     JML is proper when “a party has been fully heard on an issue

during a jury trial and the court finds that a reasonable jury

would not have a legally sufficient evidentiary basis to find for

that party on that issue ... ”.               FED. R. CIV. P. 50(a) (as amended

effective 1 Dec. 2006); see also FED. R. CIV. P. 50(b) (as amended

effective 1 Dec. 2006) (post-trial JML).                   An appellate court, in

deciding whether JML should have been awarded, must first excise

inadmissible evidence; such evidence “contributes nothing to a

legally sufficient evidentiary basis”.                 Weisgram v. Marley, 528

U.S. 440, 454 (2000) (internal quotations omitted).                   Therefore, we

first   address     the    contested   admission           of   Syson’s    testimony.

(Obviously,   in deciding whether JML should be awarded Mack, the

seatbelt evidence is not in play because it was excluded, not

admitted.   Instead, it comes into play in deciding whether, in the

alternative, Mack is entitled to a new trial.)

                                       1.

     The admission of expert testimony is reviewed for an abuse of

discretion. E.g., Stolt Achievement, Ltd. v. Dredge B.E. Lindholm,

447 F.3d 360, 366 (5th Cir. 2006).                  “District courts enjoy wide

latitude in determining the admissibility of expert testimony, and

the discretion of the trial judge and his or her decision will not

be disturbed on appeal unless manifestly erroneous.”                       Watkins v.

Telsmith,   Inc.,    121    F.3d   984,       988   (5th    Cir.   1997)    (internal

citations and quotations omitted; emphasis added).


                                          7
     Daubert     interpreted      Federal      Rule     of      Evidence    702

(admissibility of expert testimony) and assigned the trial court a

gatekeeper role to ensure such testimony is both reliable and

relevant.     Daubert, 509 U.S. at 598.        In determining whether the

proferred testimony is reliable,          the district court must first

“assess[] ... whether the reasoning or methodology underlying the

testimony is scientifically valid”. Curtis v. M&S Petroleum, Inc.,

174 F.3d 661, 668 (5th Cir. 1999).          The court should “make certain

that an expert, whether basing testimony upon professional studies

or personal experiences, employs in the courtroom the same level of

intellectual rigor that characterizes the practice of an expert in

the relevant field”.       Kumho Tire Co. v. Carmichael, 526 U.S. 137,

152 (1999).

     Rule 702 was amended in 2000, in response to the Supreme

Court’s   decisions   in    Daubert   and    Kumho    Tire.      See   Advisory

Committee Notes on FED. R. EVID. 702 (2000 Amendments).                A party

seeking to introduce expert testimony must show “(1) the testimony

is based upon sufficient facts or data, (2) the testimony is the

product of reliable principles and methods, and (3) the witness has

applied the principles and methods reliably to the facts of the

case”.    FED. R. EVID. 702.

     In analyzing the Mack latch at issue,                   Syson:    reviewed

relevant Mack cab and door designs; examined numerous patents for

latches and door designs in order to provide a safer alternative


                                      8
design; directed a third-party engineering firm to conduct force

tests on the Mack latch; and analyzed the Federal Motor Vehicle

Safety Standards (FMVSS) data published by the National Highway

Traffic Safety Administration to determine the strength of the Mack

latch as compared to an alternate design.                     (In addition, he

calculated the deformation to the Mack cab door frame and its

effect   on   the    Mack     latch    in   order   to   analyze   Mack’s   theory

concerning Hodges’ injuries — that, after Hodges was outside the

cab, his body somehow opened the passenger door.                   Mack abandoned

this theory during oral argument here.)

      Mack challenges Syson’s testimony as unreliable for a number

of reasons, including:          he is not a door-latch specialist; he was

previously found to be an unreliable expert witness by a Texas

court; he has not published any peer-reviewed articles purporting

to show the weaknesses in the Mack latch; and he did not conduct

his own tests or force calculations on the latches, but instead

relied upon third-party testing.

      Of course, whether a proposed expert should be permitted to

testify is case, and fact, specific.                Kumho Tire Co., 526 U.S. at

150-51. Trial judges retain “broad latitude” both in deciding how

to   determine      whether    an     expert’s   testimony   is    reliable,   and

ultimately, whether the testimony is, in fact, reliable.                    Id. at

142. Syson, an engineer with many years experience working in, and

testifying against, the automobile industry, presented very complex


                                            9
and technical testimony about the Mack latch and how it failed.               He

opined:       Hodges was injured because Mack’s passenger-side door

latch failed (Mack does not dispute the latch failed at some

point); and a safer alternative design existed which would not have

broken and, thus, would have prevented Hodges’ injuries.

     As discussed, Mack and Indiana Mills filed numerous Daubert

motions prior to trial challenging some of the Hodges’ experts.                A

magistrate      judge     held   hearings    on    evidentiary     matters   and

questioned counsel in detail.           Mack’s challenge to the magistrate

judge’s ruling was considered, and denied, by the district judge

then assigned to the case.          A month before trial, that judge denied

additional      Daubert    motions    concerning    Syson    and   the   Hodges’

accident-reconstruction expert.

     At trial, many of Mack’s challenges to Syson’s testimony were

developed by its cross-examination of him; the judge and jury were

able to determine his credibility. The trial (second) judge denied

Mack’s renewed request to exclude that testimony and denied Mack’s

two JML requests during trial based in part on that challenge.

(During   Syson’s       extensive    testimony,    despite   Mack’s      numerous

challenges to the bases for it, it objected only once.                Along that

line,   the    Hodges’    counsel    continuously    asked    Syson   extremely

leading questions.)

     Based on our review of the record, and as reflected infra, it

was not manifestly erroneous for the district court to find Syson’s


                                        10
testimony relevant and reliable.             Therefore, it did not err in

admitting it pursuant to Rule 702.

                                       2.

     As noted, Mack next contends:           even if Syson’s testimony was

properly admitted, Mack should be awarded JML because the testimony

failed to prove the existence of a safer alternative design.              Mack

preserved this issue by moving for JML at the close of the Hodges’

evidence,   at   the   close    of   all    the   evidence,   and   post-trial.

Unitherm Food Sys., Inc. v. Swift-Eckrich, Inc., 126 S. Ct. 980,

986 (2006) (holding appellate court cannot review JML claim unless

JML requested both pre- and post-trial); FED. R. CIV. P. 50 (pre-

2006 Amendments); see also Advisory Committee Notes on FED. R. CIV.

P. 50(b) (2006 Amendments).           (In this regard, Mack’s extremely

brief and conclusory JML motion at the close of the Hodges’ case

was, at best, barely sufficient.              To make matters worse, Mack

simply “renew[ed] it on the same points” at the close of the

evidence.   Although we conclude dubitante that Mack preserved the

alternate-design issue for appeal, issues presented in such a

perfunctory manner run the risk of being forfeited.                 See, e.g.,

Bridas S.A.I.P.C. v. Gov’t of Turkm., 345 F.3d 347, 356 n.7 (5th

Cir. 2003); United States v. Berkowitz, 927 F.2d 1376, 1384 (7th

Cir. 1991), cert. denied, 506 U.S. 1083 (1993).)

     A JML motion challenges the legal sufficiency of the evidence

to support the verdict.        E.g., Ford v. Cimarron Ins. Co., 230 F.3d


                                       11
828, 830 (5th Cir. 2000).         Our review is de novo, using the same

standard as the district court.            E.g., Aetna Cas. & Sur. Co. v.

Pendleton Detectives of Miss., Inc., 182 F.3d 376 (5th Cir. 1999).

In reviewing the evidence, we draw all reasonable inferences in the

non-movant’s favor, and “disregard all evidence favorable to the

moving party that the jury is not required to believe”.            Green v.

Adm’rs of the Tulane Educ. Fund, 284 F.3d 642, 653 (5th Cir. 2002)

(internal quotation omitted).

     To establish a design-defect claim under Texas law, the

following must be proved by a preponderance of the evidence:              (1)

a safer alternative design existed; and (2) the design defect

caused the injury. TEX. CIV. PRAC. & REM. § 82.005.                 A safer

alternative design is

           a product design other than the one actually
           used that in reasonable probability
           (1) would have prevented or significantly
           reduced the risk of the claimant’s personal
           injury ... without substantially impairing the
           product’s utility; and
           (2) was economically and technologically
           feasible at the time the product left the
           control of the manufacturer or seller by the
           application   of    existing   or   reasonably
           achievable scientific knowledge.

Id. § 82.005.

     A   design   is   not   a   safer     alternative   if,   “under   other

circumstances, [it would] impose an equal or greater risk of harm”

than the design at issue.        Uniroyal Goodrich Tire Co. v. Martinez,

977 S.W.2d 328, 337 (Tex. 1998), cert. denied, 526 U.S. 1040

                                      12
(1999); see Costilla v. Crown Equip. Corp. D/B/A Crown Lift Trucks

Co.,    148   S.W.3d   736,   739   (Tex.   App.   2004).   Similarly,     the

plaintiff must show “the safety benefits from [the] proposed design

are foreseeably greater than the resulting costs, including any

diminished usefulness or diminished safety”.           Uniroyal, 977 S.W.2d

at 337; see also Smith v. Louisville Ladder Co., 237 F.3d 515, 520

(5th Cir. 2001) (reversing verdict where plaintiff “conceded ... he

made no risk-benefit analysis, including what additional hazards”

his new design would have caused).

       Mack relies upon Louisville Ladder, which concerned whether an

extension ladder’s cable-hook assembly mechanism was defective.

Louisville Ladder Co., 237 F.3d 515. As reflected above, our court

held:     the plaintiff’s expert’s testimony was insufficient to

establish a safer alternative design; and, therefore, as a matter

of Texas law, the plaintiff was unable to prove the ladder was

defective.     Id. at 520.    The action at hand, however, differs.         In

Louisville Ladder, the expert testified that the proposed design

“was a preliminary concept” not currently in use and “not ready to

[be] recommend[ed] [] to a manufacturer”.            Id. at 519.   Moreover,

as noted supra, the expert never evaluated the risk associated with

the proposed design and did not conduct a risk-benefit analysis.

Id.     Ultimately, he was unable to opine whether the proposed

alternative would have prevented the injury in question.             Id.



                                       13
     Unlike the expert’s testimony in Louisville Ladder, Syson’s

was not mere speculation.      Instead, he described in detail the

latch at issue and how, and why, the proposed alternative latch

would be safer.   Syson examined several hundred door-latch patents

on file with the Patent and Trademark Office to determine whether

suitable   alternative   designs   existed.   When   he   found   possible

alternative designs, he examined how they performed compared to the

Mack latch in the FMVSS-206 test, which examines the maximum

longitudinal and transverse forces a door latch will maintain

before it breaks.   Based on that information and an analysis of the

accident, Syson calculated the maximum amount of force required

before deformation of the Mack latch would break it.

     Syson concluded:    the door latch used by Mack was defective;

and another latch, the Eberhard latch, was a safer alternative and

would have prevented Hodges’ injuries.        Among other things, Syson

noted the Eberhard latch is 25% thicker at the stress point and

provides 12,000 pounds of additional holding strength compared to

the Mack latch, all factors that, in his opinion, would have

prevented it from breaking in the accident.

     Syson also testified that, based on his review of the above-

discussed FMVSS-206 tests, Mack’s latch was weaker than the latches

used by 75 to 80% of similar vehicles.         Based on his experience

working with, and designing, parts for vehicles, Syson testified it

would be easy, and inexpensive, for Mack to switch to the Eberhard


                                   14
latch.     Along that line, he noted that, at the time of the

accident, the Eberhard latch existed and was used in fire trucks.

      Syson also conducted the requisite risk-utility analysis.           He

testified:     a driver faces a significant risk if a door opens

during an accident; engineers do not, and cannot, design for one

particular accident; and the Eberhard latch would not impair the

door’s usefulness.       In other words, part of a latch’s utility is

its ability to keep a door shut during a vehicle crash and using

the   Eberhard   latch    would   not    diminish     the   door’s   utility.

Therefore, there was sufficient evidence for a jury to find Syson’s

testimony satisfied the requisite risk-utility test.

      Syson provided the analysis required to allow the Hodges’ to

establish, by a preponderance of the evidence, that, under Texas

law, a safer alternative design existed.            See GMC v. Sanchez, 997

S.W.2d 584, 591-92 (Tex. 1999) (holding that more than a “bald

assertion” that the alternative design is safer is required).

Based upon his testimony, and drawing all reasonable inferences in

the non-movant’s favor, the evidence was sufficient to support the

verdict.     Accordingly, the district court did not err in denying

JML to Mack.

                                    B.

      Concerning Mack’s contesting the seatbelt-evidence exclusion,

Texas began mandating seatbelt use in 1985.             See Act of 15 June

1985, 69th Leg., R.S., ch. 804, 1985 Tex. Sess. Law Serv. 6062


                                    15
(Vernon 1985) (current version at TEX. TRANSP. CODE ANN. § 545.413

(Vernon 2006)).    A person greater than 15 years of age is guilty of

a traffic violation if he or she “is riding in the front seat of a

passenger car while the vehicle is being operated ... and ... is

not secured by a safety belt”.          TEX. TRANSP. CODE § 545.413(a).        The

statute    provides     defenses   for       failure   to   wear   a   seatbelt,

including, inter alia, a medical reason evidenced by a doctor’s

note.    Id. at § 545.413(e)(1).

       Pertinent   to   this   issue,    subsection     (g)   of       §   545.413

provided:     “Use or nonuse of a safety belt is not admissible

evidence in a civil trial, other than a proceeding under Subtitle

A or B, Title 5, Family Code”.           Id. at § 545.413(g) (subsection

(g)) (emphasis added).         In 2003, however, the Texas legislature

repealed subsection (g).        See Acts 11 June 2003, 78th Leg., ch.

204, § 8.01, 2003 Tex. Sess. Law Serv. 863 (Vernon 2003).                  In doing

so, the legislature specified: subsection (g) is not applicable to

“action[s] filed on or after July 1, 2003. [But a]n action filed

before July 1, 2003, is governed by the law in effect immediately

before the change in law        ... and that law is continued in effect

for that purpose.”        Acts 11 June 2003, 78th Leg., ch. 204, §

23.02(c), 2003 Tex. Sess. Law Serv. 898 (Vernon 2003).

       As noted, this action was filed in May 2003, a few weeks

before the 1 July 2003 effective date for the repeal of subsection

(g).    In other words, its repeal is not applicable to this action.


                                        16
Accordingly, Texas statutory law proscribed the use of seatbelt

evidence.

     Nevertheless,   Mack contends such evidence should be admitted

because this action involves a secondary, not a primary, collision.

(A primary collision concerns injuries sustained in the collision

with another vehicle; a secondary collision concerns enhanced

injuries caused by a collision with the interior of the vehicle or

with an exterior object, if ejected.)    This interpretation, Mack

claims, is in line with a Texas Court of Appeals decision that

seatbelt evidence is admissible in secondary-collision cases.   See

Vasquez v. Hyundai Motor Co., 119 S.W.3d 848 (Tex. App. 2003) (en

banc).

     Mack notes subsection (g) was repealed only approximately one

month after the Hodges filed this action and well before they added

the defective-door-latch claim.      At the time of trial on that

claim, according to Mack, the intent of the Texas legislature was

to allow seatbelt evidence, particularly in a crashworthiness

action such as this.    (Crashworthiness involves a claim that a

defect in the automobile caused the plaintiff’s injuries, rather

than the underlying accident causing them.)     According to Mack,

without seatbelt evidence, the jury received a distorted view of

the evidence, especially in the light of the Hodges’ counsel’s

telling the jury: Hodges was ejected from the truck solely due to




                                17
the defective door latch; and he did nothing to contribute to his

injuries.

     In addition, Mack also claims this circuit has affirmed the

introduction of such evidence under other States’ laws, despite

statutory prohibition. Hermann v. GM Corp., 720 F.2d 414 (5th Cir.

1983) (Louisiana law).       Finally, Mack insists it is sound public

policy to permit such evidence because federal law mandates truck

drivers’ wearing seatbelts.

     Noting that, when they filed this action, subsection (g) was

effective, and remained effective for all actions filed prior to 1

July 2003, the Hodges contend the district court properly excluded

the seatbelt evidence because subsection (g) and Texas case law

mandate its prohibition.        They maintain: under Texas law, seatbelt

evidence is admissible only under one rare exception — where the

plaintiff    makes   a   product-liability    claim   against   a   seatbelt

manufacturer    alleging    a    defective   restraint   system     and   must

introduce evidence of his seatbelt use to prove causation.                 See

Bridgestone/Firestone, Inc. v. Glyn-Jones, 878 S.W.2d 132, 134-35

(Tex. 1994).   During trial, the district court stated it had based

its eve-of-trial exclusion ruling on a similar understanding of

Texas law:     it provided only “one statutory exception” to the

seatbelt-evidence prohibition; and, unless that exception was met,

neither side could offer Hodges’ use or nonuse of his seatbelt.




                                      18
     In addition, the Hodges claim: had the district court allowed

seatbelt evidence, they would have offered “substantial evidence”

that Hodges was belted at the time of the accident.         In that

regard, prior to settlement of the seatbelt claim, they contended

the seatbelt was defective because it became unlatched during the

accident.

     The Hodges also insist Mack did not make the required proffer

of its seatbelt evidence after it was excluded.     See FED. R. EVID.

103(a)(2).   Mack did, however, do so at trial: an investigating

officer at the scene of the accident would have testified that

Hodges was not wearing his seatbelt at the time of the accident.

     For their final response, the Hodges dispute, on two bases,

Mack’s claim that subsection (g) is not applicable for secondary-

collision actions.   First, the statute’s plain language does not

support such an interpretation.    Second, the statement in Vasquez

that such evidence was never intended to be excluded for secondary

collisions is dicta, found in a footnote no less.

     Evidentiary rulings are reviewed for an abuse of discretion.

E.g., United States v. Ragsdale, 426 F.3d 765, 774 (5th Cir. 2005),

cert. denied, 126 S. Ct. 1405 (2006); see FED. R. EVID. 103.       A

trial court “abuses its discretion if, inter alia, it bases its

decision on an error of law”.     United States v. Smith, 417 F.3d

483, 486-87 (5th Cir.), cert. denied, 126 S. Ct. 713 (2005).     “If

this court finds an abuse of discretion in admitting or excluding

                                  19
evidence, this court will review the error under the harmless error

doctrine,   affirming   the   judgment,   unless   the    ruling   affected

substantial rights of the complaining party.”        Ragsdale, 426 F.3d

at 774-75 (internal citation and quotation marks omitted); see FED.

R. EVID. 103(a).

     Subsection (g) is substantive, rather than procedural.            See,

e.g., Milbrand v. DaimlerChrysler Corp., 105 F.Supp.2d 601, 604

(E.D. Tex. 2000) (§ 545.413(g) is a substantive law because it

falls under the Texas Transportation Code and is part of the same

section mandating seatbelt use).        Accordingly, we apply Texas law

in interpreting it.     In doing so, we first determine whether it is

clear and unambiguous.     See Glyn-Jones, 878 S.W.2d at 133.         If it

is unclear, we determine      “whether ... any final decisions of the

[Texas] Supreme Court are dispositive”.         Centennial Ins. Co. v.

Ryder Truck Rental, Inc., 149 F.3d 378, 382 (5th Cir. 1998).          If no

final disposition is directly on point, we must make an “Erie-

guess”, predicting how that court would rule.            Id.; see also Am.

Guar. & Liab. Ins. Co. v. 1906 Co., 129 F.3d 802, 807 (5th Cir.

1997).   We make our forecast based on

            (1) decisions of the [Texas] Supreme Court in
            analogous cases, (2) the rationales and
            analyses underlying [Texas] Supreme Court
            decisions on related issues, (3) dicta by the
            [Texas] Supreme Court, (4) lower state court
            decisions, (5) the general rule on the
            question, (6) the rulings of courts of other
            states to which [Texas] courts look when
            formulating substantive law and (7) other

                                   20
            available sources, such as treatises and legal
            commentaries.

Centennial Ins. Co., 149 F.3d at 382.

       Texas law mandates drivers wear a seat belt.   The statute “was

enacted to mandate the use of seat belts and to provide a criminal

penalty for the failure to wear [one]”.    Glyn-Jones, 878 S.W.2d at

134.     The use, or nonuse, of a seatbelt’s not being allowed in

evidence in a civil trial was “to make clear that the sole legal

sanction for the failure to wear a seatbelt [was] the criminal

penalty provided by the statute and that the failure could not be

used against the injured person in a civil trial”.           Id.   As

discussed infra, however, the Texas Supreme Court noted in Glyn-

Jones:    when viewed in the context of the entire statute, there is

“ambiguity about the legislature’s purpose”; this is because the

seatbelt-evidence prohibition for civil trials falls within the

criminal penalties of the Texas Transportation Code, see id. at

133-34, an unlikely place for a provision that has been read to

have such an expansive scope.

       In the light of that ambiguity, we look to Texas Supreme Court

decisions in analogous cases to determine the admissibility of

seatbelt evidence.   In Pool v. Ford Motor Co., 715 S.W.2d 629 (Tex.

1986), the Texas Supreme Court first addressed the admissibility of

seatbelt evidence under subsection (g).     Pool claimed a defective

U-bolt in his automobile’s suspension system failed, causing an


                                  21
accident.   Ford maintained Pool was contributorily negligent for

not wearing his seatbelt.        The court held:       as a matter of law,

plaintiffs “should not have the damages awarded to them reduced or

mitigated because of their failure to wear available seat belts”.

Id. at 633 (internal citations and quotations omitted).            It noted

that the enactment of subsection (g) was a ratification of a prior

Texas Supreme Court decision, Carnation Co. v. Wong, 516 S.W.2d 116

(Tex. 1974), and held:        “[F]ailure to wear a seat belt is not any

evidence of contributory negligence”.         Id. (emphasis added).

     In 1994, however, in Glyn-Jones, the Texas Supreme Court

created an exception to the strictures of subsection (g).                 Glyn-

Jones   claimed     her    seatbelt   and   shoulder    harness   had     been

defectively designed and/or manufactured.          878 S.W.2d at 133.        A

motion for summary judgement against the claim was based on the

assertion   that,    under     subsection   (g),   Glyn-Jones     could    not

introduce evidence she was wearing her seatbelt at the time of the

accident.   Under this theory, however, as a matter of law, the

claimant could not prove the essential element of causation.               The

trial court granted summary judgment.         Id. at 134.

     In the intermediate appellate court, Glyn-Jones “contend[ed]

that the prohibition against the use of seat belt evidence [did]

not apply to products liability cases involving the crashworthiness

of an automobile.         Alternatively, she argue[d] that the statute

violate[d] the open courts provision of the Texas Constitution.”

                                      22
Glyn-Jones v. Bridgestone/Firestone, Inc., 857 S.W.2d 640, 642

(Tex. App. 1993) (emphasis added).             As had the trial court, the

intermediate      appellate   court,    held    subsection        (g)   proscribed

admission    of   such    evidence.     Id.     It    did    so   on    concluding

subsection (g) is unambiguous and “does not differentiate between

negligence actions and products liability cases”.                 Id.

      On the other hand, relief was granted under the open-courts

provision of the Texas Constitution because subsection (g) “is

arbitrary and unreasonable insofar as it prohibits the introduction

of seat belt evidence in a crashworthiness case”.                 Id. at 643-644

(emphasis added).        Earlier, the court noted:          Crashworthiness has

been a recognized cause of action in Texas since” it was adopted by

the Texas Supreme Court in 1979.         Id. at 643.       Moreover, subsection

(g)   “unreasonably      denie[d]     Glyn-Jones     ...    redress     for   [her]

injuries”.     Id at 644.     Therefore, subsection (g) “violate[d] the

open courts provision of the Texas Constitution”.                 Id.

      The Texas Supreme Court affirmed the intermediate appellate

court, but did so on a statutory, not the constitutional, basis.

In beginning its analysis, it stated: “We must initially determine

whether   [subsection       (g)]    actually   precludes       Glyn-Jones      from

offering evidence that she used her seat belt in this case.

Because we conclude that the legislature did not intend to bar use

of such evidence, we need not reach the posed constitutional

question”.     Glyn-Jones, 878 S.W.2d at 133 (emphasis added).

                                       23
       In construing subsection (g), the court stated it could not

apply the usual rules of construction just to that subsection but

instead had to view it in the light of the entire statute.         Id.    It

then stated: “While the context normally provides clarity ... here

it    creates   ambiguity   about   the    legislature’s   purpose”.     Id.

Therefore, it ruled it had to look beyond the language in the

statute “to even determine the true purpose of the provision”.           Id.

(emphasis in original).

       Concerning subsection (g)’s proscription against seatbelt

evidence, the court stated the defendant

            contends this sentence was intended to abolish
            crashworthiness actions against manufacturers
            of seatbelts.     If the legislature did so
            intend, it seems unlikely that it would
            utilize a subsection of a traffic statute to
            effect such a change. Instead, read in the
            context of the entire statute, we hold that
            the legislature did not intend [subsection
            (g)] to preclude evidence necessary to a cause
            of action against a seat belt manufacturer for
            injuries allegedly caused by a defective
            seatbelt.

Id. at 134 (emphasis added).        As it had in Pool, the court further

stated that subsection (g) was not intended “to forge new ground in

tort law, but merely to preserve the status quo [under Carnation]”.

Id.    That status quo, pursuant to Carnation, was a defendant’s not

being “permitted to introduce evidence of a plaintiff’s failure to

wear a seat belt as evidence of contributory negligence”.                Id.

(emphasis added).


                                      24
     The dissent at 2 asserts “the Texas Supreme Court ... had an

excellent    opportunity”       in   Glyn-Jones      to     adopt     the     “broad

crashworthiness exception” urged by Glyn-Jones in the intermediate

appellate court for such cases, but declined to do so.                         This

assertion overlooks the proper, narrow basis on which the Texas

Supreme Court decided Glyn-Jones.          First, in deciding the case by

construing the statute, it was able to avoid the more broad, open-

courts constitutional basis on which the intermediate appellate

court decided the case.          The Texas Supreme Court followed the

longstanding, prudential rule of not deciding constitutional issues

when the case can be resolved on another basis.

     It was that open-courts constitutional basis, properly avoided

by the Texas Supreme Court, that involved the crashworthiness

doctrine that was well-settled law in Texas.                And, in construing

the statute, the Texas Supreme Court properly limited its holding

to the case before it — a plaintiff’s right to introduce seatbelt

evidence    in    a   product-liability     action    against       the     seatbelt

manufacturer.

     The    Texas     Supreme   Court’s    narrow    holding     in    Glyn-Jones

supports     subsection     (g)’s    proscription         not   precluding       the

introduction of seatbelt evidence in the case at hand by Mack, the

defendant.       The Texas Supreme Court held the proscription did not

bar all use of such evidence.         On the other hand, contrary to the

dissent’s analysis, the Texas Supreme Court’s opinion can not be

                                      25
read as holding — or even suggesting — such evidence cannot be

introduced by a defendant, such as Mack.

      In 2003, Vasquez reiterated the holding in Glyn-Jones that

subsection (g) was intended to preserve the status quo concerning

failure to wear a seatbelt not being contributory negligence.               In

Vasquez, the parents of a child killed by a deploying air bag in an

automobile accident pursued a product-liability action against the

manufacturer on a crashworthiness theory.          See Vasquez, 119 S.W.3d

at 850.   Although the Texas Court of Appeals, en banc, decided the

case on other grounds, and therefore did not reach whether seatbelt

evidence should be allowed in civil trials, it nonetheless noted:

the statute was never intended to exclude evidence of seatbelt use

in   “secondary   collision”     cases;     as   in    Vasquez,   where    the

functionality of the passenger’s passive restraint system (which

included the seatbelt) is at issue, seatbelt evidence is relevant

to   proving   causation   and   the    ultimate      effectiveness   of   the

restraint system; and the manufacturer’s interest in offering

seatbelt evidence was not to mitigate the “product defendant’s

liability for damages, but [was] offered ... to support [its]

defense that the air bag, in conjunction with seatbelt use, was not

defective as designed”.     Id. at 850, n.2. (emphasis added).

      In discussing the above dicta in Vasquez, the dissent at 2

states the seatbelt evidence in that case, which would have been

offered by the defendant, was

                                       26
             arguably ... admissible under the Texas
             Supreme   Court’s   exception   in   Glyn-Jones
             because the plaintiff alleged that the air bag
             component   of   the   restraint   system   was
             defective. The defendant argued that the air
             bag, when used with a seatbelt, was not
             defective. So whether the seatbelt was in use
             was   certainly   closely    related   to   the
             plaintiff’s suit against the manufacturer of
             the restraint system and even more relevant to
             the air bag manufacturer’s defense.

Simply     put,   this    concession      that    seatbelt   evidence   would   be

“arguably admissible” in Vasquez demonstrates why it is admissible

here.

      Just as the seatbelt and air bag were part of the restraint

system in Vasquez, so are a seatbelt and door latch each part of

the restraint system here.          As noted, it is undisputed that, had

Hodges remained in the cab, his injuries, if any, would have been

far less severe.         The seat belt and door latch are each part of the

system for keeping a driver in the truck’s cab in an accident.

      In sum, Pool and Glyn-Jones, together with Vasquez, are

instructive. Subsection (g) prohibits the introduction of seatbelt

evidence to show the plaintiff was contributorily negligent.                    On

the other hand, in secondary—collision product-liability actions,

such evidence may be admissible to show, or, as in this action,

rebut, the essential element of causation.                Seatbelt evidence was

necessary for Mack to rebut the essential element of causation —

whether its door latch was the proximate cause of Hodges’ injuries

—   and,   ultimately,      to   defeat    a     crashworthiness   claim.   Such


                                          27
evidence is not prohibited by subsection (g).                  Arguably, this is

also demonstrated by the repeal of subsection (g), even though that

subsection applies here.

       Therefore, the district court abused its discretion when it

categorically excluded seatbelt evidence.                Needless to say, this

error was not harmless.        Therefore, a new trial is required.

                                        C.

       On   several   bases,     ABF    challenges       the   district    court’s

disbursement of the settlement funds from Indiana Mills (the

seatbelt manufacturer).          As noted, ABF, Hodges’ employer, is a

certified self-insured under Texas’ workers’-compensation laws. It

began paying      such     benefits    to   Hodges    after    the   accident   and

intervened in this action to protect its subrogation rights.                     At

the time it intervened, it had already paid Hodges over $500,000 in

benefits.

       Post-trial, in November 2004, ABF moved for disbursement of

the $1.4 million settlement.                That December, it moved for an

evidentiary      hearing    regarding       its   workers’-compensation      lien,

attorney’s fees and expenses, and credit and offset against future

benefits.    The hearing was held on 21 December.              By order the next

day,   without    providing     its    reasons     for   doing   so,   the   court

disbursed the settlement funds in the following amounts:                        ABF

received    $187,709.67;      James    Hodges,       $512,290.33;    and   Beverly

Hodges, $700,000.


                                        28
                                1.

     Texas law provides:   “The net amount recovered by a claimant

in a third-party action shall be used to reimburse the insurance

carrier for benefits ... that have been paid for the compensable

injury”.    TEX. LAB. CODE ANN. § 417.002(a).    According to the

pretrial settlement agreement between the Hodges and Indiana Mills,

$ 1.4 million was to be distributed equally between James and

Beverly Hodges.   ABF claims that apportionment scheme improperly

reduced its reimbursement, pursuant to § 417.002(a), for past

benefits paid to Hodges.

     “[T]he proper division of a settlement between beneficiaries

and non-beneficiaries presents an issue for the trier of fact based

on the relative merits and worth of the claims involved.”   United

States Fire Ins. Co. v. Hernandez, 918 S.W.2d 576, 579 (Tex. App.

1996).     Because the district court was the trier of fact in

apportioning the settlement, we review for clear error.     FED. R.

CIV. P. 52(a).

     Well-settled Texas law provides:    a “workers’ compensation

carrier has a statutory right to reimbursement from the first

monies paid to an injured employee ... by a third-party tortfeasor,

up to the amount of compensation paid, and can recover the amount

from the employee or the third-party tortfeasor”.   Hernandez, 918

S.W.2d at 578 (citing TEX. LAB. CODE ANN. §§ 417.001, 417.002);

Argonaut Ins. Co. v. Baker, 87 S.W.3d 526, 530 (Tex. 2002).     An


                                29
injured employee does not have any right to receive payment from

that tortfeasor until the carrier has been paid in full.                  Tex.

Workers’ Comp. Ins. Fund v. Travis, 912 S.W.2d 895, 897-98 (Tex.

App. 1995).        The carrier only has rights, however, “over that

portion of an award or settlement which represents ... a workers’

compensation beneficiary[’s interest]”.             Hernandez, 918 S.W.2d at

579.

       It is also well settled that “[t]he carrier’s right to reduce

its    liability    from   a   payment    of   a   third-party   must   not    be

compromised”.      Id. at 578 (emphasis added).         A trial court cannot

arbitrarily compromise this right by structuring the settlement “so

that a non-beneficiary recovers, but a beneficiary does not”.                 Id.

at 579.

       Accordingly, at issue is whether the allocation of half of the

Indiana Mills settlement to Beverly Hodges, a non-beneficiary,

improperly compromised ABF’s subrogation rights. ABF contends: at

the evidentiary hearing, the district court erroneously imposed on

it the burden to show the settlement was an attempt to “settle

around” ABF’s lien; and, because, unlike her husband, the jury

found Beverly Hodges was not entitled to any damages, it was error

to approve a settlement scheme awarding her $700,000.              The Hodges

respond: the court correctly found the settlement was not an

attempt to settle around ABF’s lien; and Beverly Hodges’ award of

$700,000 from the settlement was fair and reasonable.

                                         30
     Our review of the 21 December evidentiary-hearing record

reveals the district court did place an improper burden on ABF to

prove that, at settlement, the Hodges and Indiana Mills intended to

structure it to circumvent ABF’s lien. The court began the hearing

by stating:    “I’m more interested in [whether] the settlement

agreements between the [Hodges and Indiana Mills were] an attempt

to settle around [ABF’s] worker’s compensation carrier’s lien”. It

then asked ABF:      “What proof do you have that at the time that

settlement was made[, it] was an attempt to settle around [ABF’s]

lien?” When ABF responded that the court should look to the effect

of the apportionment, rather than the parties’ intent, the court

replied:

           But, I’m trying to get at what you would tell
           me that I can hang my hat on as a Judge to say
           that I find as a fact, that the settlement
           agreement at the time [it was] entered into
           ... was an attempt to settle around a worker’s
           compensation lien, and [to] deny [ABF its]
           rights to [its] full recovery of [its] lien?

(Emphasis added.)

     The   court’s   inquiries   regarding   intent   were   misdirected.

Under Texas law, the effect of the apportionment, not the settling

parties’ intent at the time of settlement, is the controlling

factor when determining whether the settlement compromised ABF’s

lien. Hernandez, 918 S.W.2d at 579 (“[A settlement] is not binding

upon the carrier for purposes of recovery of its subrogation

interest, regardless of the settling parties’ intent, if the effect

                                   31
of the apportionment is to circumvent the statute and to compromise

the carrier’s right to subrogation.”    (emphasis added)); Travis,

912 S.W.2d at 898 (“It is not the intent of the apportionment, but

the effect of the apportionment, that is the determining factor.”

(emphasis added)).

      Accordingly, on remand, the district court is to reconsider

the reasonableness and fairness of Beverly Hodges’ apportionment

amount by examining whether the effect of the settlement agreement

compromises ABF’s lien.     This remand makes it unnecessary to

consider any of ABF’s remaining contentions on this appointment-of-

settlement point, including its assertion, for which it cites no

authority, that the verdict should control that apportionment.

                                 2.

      ABF also claims the district court erred in:   (1) awarding the

Hodges’ counsel attorney’s fees out of ABF’s subrogation recovery;

(2) calculating the amount of litigation expenses to be deducted

from that recovery; and (3) calculating ABF’s right to future

credit. Such rulings are reviewed for an abuse of discretion.    See

Hartford Accident & Indem. Co. v. Buckland, 882 S.W.2d 440, 447

(Tex. App. 1994).

                                 a.

      As a certified self-insurer, ABF is an “[i]nsurance carrier”

(carrier) under the Texas workers’ compensation laws. TEX. LAB. CODE

ANN   § 401.011(27)(B) (defining “carrier” to include “a certified

                                 32
self-insurer   for   workers’   compensation   insurance”).   Section

417.003 of the Texas Labor Code provides for attorney’s fees for

representation of a carrier’s interest in a third-party action.

The district court awarded Hodges’ counsel attorney’s fees under

subsection (a) of that statute, which states:

          An insurance carrier whose interest is not
          actively represented by an attorney in a
          third-party action shall pay a fee to an
          attorney representing the claimant in the
          amount agreed on between the attorney and the
          insurance carrier.    In the absence of an
          agreement, the court shall award to the
          attorney   payable  out   of  the   insurance
          carrier’s recovery:

                (1) a reasonable fee for recovery of the
                insurance carrier’s interest that may not
                exceed   one-third   of   the   insurance
                carrier’s recovery; and

                (2) a proportionate share of expenses.

TEX. LAB. CODE ANN. § 417.003(a) (emphasis added).

     To determine whether Hodges’ counsel is due such fees, we must

first decide whether ABF actively represented its own interest in

obtaining recovery from Mack and Indiana Mills.        (ABF claims it

should have been awarded attorney’s fees pursuant to § 417.003(c)

(awarding attorney’s fees where carrier is actively represented).

In short, the applicability of subsection (c) versus subsection (a)

turns on whether ABF actively represented its own interests.)      An

attorney engages in active representation in a third-party action

by “tak[ing] steps, adequate when measured by the difficulty of the

case, toward prosecuting the claim”.    Buckland, 882 S.W.2d at 447.

                                   33
Active representation requires more than filing pleadings asserting

the carrier’s subrogation interest.            See Hartford Ins. Co. v.

Branton & Mendelsohn, Inc., 670 S.W.2d 699, 702 (Tex. App. 1984).

     Buckland affirmed the trial court’s finding the carrier’s

counsel did not “actively represent” its interest.               Buckland, 882

S.W.2d at 447.      The court noted the carrier filed only four papers

– “its plea in intervention, its amended plea in intervention, its

motion for summary judgment, and its motion for reconsideration and

motion for summary judgment seeking declaratory relief”.                     Id.

Although the carrier’s counsel reviewed the claimant’s compensation

file and provided a summary of his medical bills, it “did not

generate or send any written discovery or take any depositions in

the case”.    Id.   Furthermore, counsel did not:      participate in the

hearings;    assist   in   hiring   experts;   or   share   in    any   of   the

litigation expenses.       Id.   Accordingly, the court held the trial

court abused its discretion in awarding the claimant’s attorney

one-third of the carrier’s subrogation recovery.            Id.

     On the other hand, Brandon v. Am. Sterilizer Co., 880 S.W.2d

488, 496 (Tex. App. 1994), affirmed the trial court’s finding the

carrier “actively participated” in obtaining its recovery.              There,

its counsel played an active role by, inter alia:                    attending

depositions and responding to time-consuming discovery requests;

arranging for evidence to be examined by various experts; and

ultimately reaching a settlement agreement before trial with the

                                     34
defendant as to its subrogation claim.       Id.    (“[T]he controlling

factor is not who aided in [plaintiff’s] recovery, but rather who

aided in [the carrier’s] recovery.”).

     ABF   claims   it   actively   represented   its   own   interest   in

recovery by filing:      a motion to intervene and brief in support,

pretrial disclosures, a complaint in intervention, and various

other motions and papers.     Although it admits the Hodges’ counsel

took the lead in negotiating the settlement with Indiana Mills, ABF

points to its participation in two prior mediations, which it

contends ultimately culminated in the settlement.             Finally, ABF

claims to have participated at trial by establishing the amount of

workers’-compensation benefits Hodges had received from ABF.

     ABF did not intervene in this action until 15 June 2004, over

one year after it was filed and by which point a large portion of

the discovery had been completed and the 18 May 2004 Daubert

hearing had been held and ruled upon.         ABF’s participation was

limited primarily to filing motions and briefs to protect its

subrogation interest.      Although it claims to have established at

trial the amount of workers’-compensation benefits it had paid, the

record is void of any participation by ABF at trial.           Rather, the

amount of ABF’s lien had been stipulated before trial.            Finally,

ABF does not claim to have been present when the settlement

agreement between the Hodges and Indiana Mills was reached.




                                    35
      “By enacting section 417.003, the legislature intended to

compensate    claimants   who    perform     work    for   the   benefit     of    a

subrogated    insurance   carrier      and     to   prohibit     the    worker’s

compensation carrier from obtaining a ‘free ride’ from the efforts

of the claimant’s attorney.”        Caesar v. Bohacek, 176 S.W.3d 282,

285 (Tex. App. 2004) (internal citation omitted).                ABF benefitted

from the efforts of the Hodges’ counsel.            Therefore, the court did

not   abuse   its   discretion    in   proceeding        under   §   417.003(a).

Likewise, it was not an abuse of discretion to charge ABF one-third

of those fees, as authorized by § 417.003(a).                    See Branton &

Mendelsohn, Inc., 670 S.W.2d at 704 (stating that, when determining

the amount of attorney’s fees owed by the insurer, the court

“should take into account the benefit to the insurer” (emphasis

added)).

                                       b.

      Pursuant to § 417.003(a), ABF also claims the district court

erred in calculating the amount of litigation expenses to be

deducted from its subrogation recovery.                  TEX. LAB. CODE ANN. §

417.003(a)(2) (authorizing a court to award “out of the insurance

carrier’s recovery ... a proportionate share of expenses”).                       In

calculating   ABF’s   proportionate         share   of   expenses,     the   court

determined Hodges’ total recovery was the pretrial settlement

amount of $750,000, which reflects his settlements with Indiana

Mills and the 16-year-old driver.               For that calculation, the

                                       36
district court did not include the jury verdict for Hodges.            Under

the district court’s calculations, ABF’s lien of $577,213.83 (for

its compensation payments to Hodges) comprised 76% of the total

$750,000 settlement amount; and, on that basis, ABF’s pro-rata

share of the litigation expenses was 76%.

     ABF contends:        had the court instead considered both the

settlement and the judgement against Mack, its proportional share

of litigation expenses would be much lower.            Restated, ABF claims

the judgment against Mack should have been considered, along with

the pretrial settlement of $750,000. On that basis, it asserts its

lien of $577,213.83 would have comprised only a small percentage of

the total amount Hodges was to have recovered (prior to our

vacating the judgment).

     On remand, when determining the total amount recovered by

Hodges for use in calculating ABF’s pro-rata share of Hodges’

litigation costs, the district court should consider any verdict.

For example, a substantial part of the Hodges’ litigation expenses,

which   at   the   date   of   the   Indiana   Mills    settlement   totaled

$372,220.37, were expended not only in reaching a settlement with

Indiana Mills, but also in obtaining the now-vacated multi-million

dollar verdict against Mack.         Indeed, Hodges’ counsel testified at

the 21 December ABF subrogation-claim evidentiary hearing that it

was impossible to separate the litigation expenses between the




                                       37
claims against Mack and those against Indiana Mills, because “many

of the same experts work[ed] on both defects”.

     Therefore, following the new trial, the district court is to

consider both the total pretrial settlement amount it determines on

remand is due Hodges and any verdict in determining ABF’s pro-rata

share of litigation expenses.      In doing so, it is to state its

underlying reasons for that ruling.

                                  c.

     Finally, ABF contends the district court erred in calculating

its right to a future credit.      As discussed, “[t]he net amount

recovered by a claimant in a third-party action shall be used to

reimburse the insurance carrier for benefits, including medical

benefits, that have been paid for the compensable injury”.       TEX.

LAB. CODE ANN. § 417.002(a).   Subsection (b) provides:   “Any amount

recovered that exceeds the amount of reimbursement required [by §

417.002(a)] shall be treated as an advance against future benefits”

(future credit).   Id. § 417.002(b).

     The $1.4 million settlement, when combined with the verdict,

awarded benefits in excess of ABF’s subrogation lien at the time of

trial.   ABF contests the district court’s calculation of credits,

pursuant to § 417.002(b), against future benefits it owes Hodges.

Needless to say, because we remand for new proceedings, we need not

decide this issue.   On remand, for any future-credit allocation,




                                  38
the district court is to state its underlying reasons for that

determination.

                               III.

     For the foregoing reasons, the judgment as to Mack and the

order as to ABF’s subrogation amount are VACATED and this matter is

REMANDED for a new trial and other proceedings, all consistent with

this opinion.

                                           VACATED AND REMANDED




                                39
W. EUGENE DAVIS, Dissenting

     I agree with the resolution of all the issues in the

majority’s   well-written opinion except for its treatment of the

seat belt issue.

     I start with the plain language of the Texas statute: “Use

or non-use of a safety belt is not admissible evidence in a civil

trial . . .” Tex. Transp. Code § 545.413(g).     When we look to

Texas Supreme Court case law for exceptions to this broad rule,

we find only one narrowly drawn exception in a case brought by an

occupant of a vehicle   against a seat belt manufacturer.    The

seat belt manufacturer sought to exclude evidence proffered by

the plaintiff that she had her seat belt on.     The Texas Supreme

Court held that: “the legislature did not intend section 107C(j)

to preclude evidence necessary to a cause of action against a

seat belt manufacturer for injuries allegedly caused by a

defective seat belt.”   Bridgestone/Firestone, Inc. v. Glyn-Jones,

878 S.W.2d 132, 134 (Tex. 1994).      When this case was before the

Texas Court of Intermediate Appeals, the plaintiff, Glyn-Jones,

argued that an exception should be made to the statute for crash-

worthiness cases and the court declined to adopt this broad

exception.   Glyn-Jones v. Bridgestone/Firestone, Inc., 857 S.W.2d

640, 642 (Tex. Ct. App. 1993).   The Texas Supreme Court also

declined to adopt this broad exception.     As a practical matter,


                                 40
in crash-worthiness cases where an injured occupant of a vehicle

sues various manufacturers of component parts of the vehicle, the

exception to the statute created by the majority would allow the

evidence to be admitted in almost all crash-worthiness cases

because causation is invariably at issue.   If the Texas Supreme

Court wanted to create such a broad exception, it had an

excellent opportunity to do so and declined the invitation.

     Support for the exception to the non-admissibility of use or

non use of a seatbelt the majority creates rests entirely on

dicta in a footnote in a single intermediate Texas Court of

Appeals decision, Vasquez v. Hyundai Motor Co., 119 S.W.3d 848,

851 n. 2 (Tex. Ct. App. 2003).   For a number of reasons this is a

slender reed to support an exception to an exceedingly clear

statute.   First, the Vasquez court expressly declined to reach

the admissibility of the seat belt evidence.   Also, arguably, the

evidence was admissible under the Texas Supreme Court’s exception

in Glyn-Jones because the plaintiff alleged that the air bag

component of the restraint system was defective.   The defendant

argued that the air bag, when used with a seatbelt, was not

defective.   So whether the seatbelt was in use was certainly

closely related to the plaintiff’s suit against the manufacturer

of the restraint system and even more relevant to the air bag

manufacturer’s defense.




                                 41
     In short, the passing reference in the Vasquez decision is

not enough for me to avoid the plain language of the statute.    I

see nothing about the dicta in this factually dissimilar case or

its reasoning that suggests that the Texas Supreme Court would

create such a broad exception, particularly since the Supreme

Court declined to do so when it had the opportunity.

     For these reasons I respectfully dissent from the grant of a

new trial.




                               42
