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Appeals Court Overturns $3 Million Crash Settlement

October 10, 1986

CHICAGO (AP) _ A federal appeals court has overturned a $3 million award to the widow of an American Airlines pilot whose DC-10 jetliner crashed in 1979 near O’Hare Airport in the worst aviation disaster in U.S. history.

A three-judge panel of the 7th Circuit Court of Appeals concluded that income tax information should have been made available to the U.S. District Court jury that awarded the damages.

The panel, in its opinion released Thursday, also said that the judge who presided at the trial erred in barring McDonnell Douglas, makers of the jumbo jet, from introducing evidence in the 1979 trial and in instructing jurors.

In 1984, jurors awarded $4.15 million in damages to Lora Lux, the widow of American pilot Walter Lux. The amount was later reduced to $3 million by the court.

The appellate panel said that the jury should have been made aware that the settlement would be not be subject to federal income taxes.

In an opinion written by Senior Appeals Court Judge Jesse Eschbach, the panel also ruled that the judge, Nicholas Bua, erred in excluding evidence of the income taxes Lux would have paid on his earnings. The two other judges, Harlington Wood Jr. and William Campbell, concurred.

The court, in ordering a new trial, said Lux lived in Phoenix and that under Arizona law, such evidence is pertinent in arriving at a proper assessment of damages in wrongful death cases.

Lux, 52, was the captain the Los Angeles-bound flight that crashed shortly after takeoff on May 25, 1979, killing all 273 aboard.

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