Opinion
1:99cv207-T
January 5, 2000
ORDER
THIS MATTER is before the court upon defendant's Motion for Court's Determination of Applicable Law. Having considered that motion, the initial briefs, and supplemental briefs, and having conducted a hearing, the court enters the following findings, conclusions, and Order.
At the initial pretrial conference, respective counsel informed the court that a motion would be filed seeking a determination as to applicable law which was necessary to the progression of the case. Inasmuch as defendant's motion is not made in conjunction with a dispositive motion, such as one to dismiss for failure to state a claim, an order is being entered, rather than a memorandum and recommendation.See 28 U.S.C. § 636(b).
Findings and Conclusions
I. BackgroundFor the limited purpose of making the choice-of-laws determination, the court makes the following findings of fact. Such findings are not intended to be binding on the court or the parties.
Plaintiff is a resident of the State of Mississippi and was at all relevant times employed by Asplundh Tree Expert, a Pennsylvania corporation. The court takes judicial notice that Asplundh is a national tree removal and maintenance business, primarily serving the needs of local governments and utilities in maintaining their respective rights of way.
Defendant, a North Carolina corporation, manufactures and sells wood chippers in Shelby. The court further finds that the wood chipper at issue in this matter was sold by defendant to Asplundh, which took delivery at defendant's place of business in Shelby.
On May 9, 1997, plaintiff was working in Paulding County, Georgia, as part of an effort to remove debris left behind by a hurricane. He alleges that he was making ordinary use of the chipper that day when his arm was caught by a branch that had twisted while being fed into the chipper. Further, he contends that his arm was progressively severed up to his left elbow, he was unable to employ a kill switch or other device to prevent his injury, and another worker finally stopped the machine. Complaint, ¶¶ 7 8.
This action was originally filed in the United States District Court for the Northern District of Georgia. There, defendant timely moved to dismiss for lack of personal jurisdiction and improper venue and filed a conditional motion for transfer of venue, a conditional motion to conduct discovery, and a conditional request for transfer in lieu of dismissal. Briefly, the district court in Georgia found that "defendant's alleged manufacturing occurring in North Carolina which resulted in a tort injury in Georgia is no longer sufficient to establish [personal] jurisdiction in this forum." Docket entry 1, at 16-17 (citation omitted). Rather than dismiss the case, the Georgia court transferred the matter to this court, where personal jurisdiction could be exercised over defendant. The Georgia district court's findings concerning in personam jurisdiction constitute law of the case.
II. Discussion
A. Introduction
The issue squarely presented by defendant is what law is applicable to plaintiff's personal injury claim: North Carolina products-liability law, which does not provide for strict liability, or Georgia products-liability law, which does? Defendant first argues that North Carolina would not apply the substantive law of Georgia because Georgia's product-liability law is contrary to that of North Carolina, which forbids strict liability. Defendant next argues that even if North Carolina would apply Georgia law, such application would violate defendant's rights to due process, as guaranteed by the fifth and fourteenth amendments to the United States Constitution. This court will first determine whether North Carolina's choice-of-law rules would require application of Georgia substantive law to plaintiff's product-liability claim and, if so, whether such application would be violative of defendant's federal constitutional rights.
B. North Carolina's Choice-of-Law Rules
In support of its argument that North Carolina products-liability law should apply to an injury that allegedly occurred in Georgia, defendant contends that a North Carolina court would not apply the Georgia substantive law in these circumstances because such application of foreign law which is contrary to the law of North Carolina would be against the public policy of this state. For such proposition, it relies upon Robinson v. Leach, ___ N.C. App. ___, 514 S.E.2d 567 (1999), wherein the North Carolina Court of Appeals held, as follows:
(1) lex loci governs the substantive issues of liability and damages;
(2) lex fori governs the procedural rights of the parties; and
(3) a statute of the state where the tort occurred — which barred subrogation suits — was inapposite to the North Carolina scheme which allowed subrogation suits.
It appears, however, that the foreign law was not part of the substantive tort law of the state where the tort occurred and could not by its terms apply to the North Carolina insurance contract at issue. Id. As noted above, it is defendant's contention that because Georgia's products-liability law is in conflict with that of North Carolina, Georgia law should not be applied, as it would be against the public policy of North Carolina. In Bordreau v. Baughman, 322 N.C. 331 (1988), the North Carolina Supreme Court, rejecting a similar argument, held, as follows:
[T]he mere fact that the law of the forum differs from that of the other jurisdiction does not mean that the foreign statute is contrary to the public policy of the forum. To render foreign law unenforceable as contrary to public policy, it must violate some prevalent conception of good morals or fundamental principle of natural justice or involve injustice to the people of the forum stateId at ___. The Bordreau Court went on to describe some of the natural injustices and the injustices to the people of the forum state, which included unlawful "marriages, wagers, lotteries, racing, gaming, and the sale of liquor." In light of case law that has developed in the last 12 years, this court can discern that the subset of injustices would now be enlarged to include unlawful discrimination and sexual harassment.
This court cannot find that applying a foreign product-liability law, which provides for strict liability, would be recognized as an injustice by the State of North Carolina where the tort allegedly occurred in a state with such an otherwise lawful remedy. Moreover, the court cannot find that such application would impinge upon North Carolina's "conception of good morals or fundamental principle[s] of natural justice . . . ." Id.
Chapter 99B-1.1 of the North Carolina General Statutes has explicitly provided since January 1, 1996, that "[t]here shall be no strict liability in tort in product liability action"; however, the North Carolina Court of Appeals, two years after the effective date, held in Gbye v. Gbye, 130 N.C. App. 585 (1998), that "under North Carolina law, when the injury giving rise to a negligence or strict liability claim occurs in another state, the law of that state governs resolution of the substantive issues in controversy." Id., at ___ (emphasis added). Finding no reason to depart from the well-settled choice-of-law rule in North Carolina, lex loci, and that such application in this case does not offend the public policy of the State of North Carolina, this court determines that North Carolina would apply the substantive products-liability law of the State of Georgia to plaintiff's claim.
C. Due Process
At the constitutional level, whether to exercise jurisdiction is a question of fairness. International Shoe Co. v. Washington, 326 U.S. 310, 317-20 (1945). Determining what is fair requires review of the quantity and quality of the defendant's contacts with the forum state.
[I]f the . . . corporation carries on, in that state, other continuous and systematic corporate activities . . . those activities are enough to make it fair and reasonable to subject the corporation to proceedings in personam in that state, at least insofar as the proceedings in personam seek to enforce causes of action relating to those very activities or to other activities of the corporation within the state.Perkins v. Benguet Mining Co., 342 U.S. 437, 445-46 (1952). In transferring this matter to this court, the district court in the Northern District of Georgia has determined that defendant did not have contacts with the State of Georgia sufficient to justify haling defendant into that forum. Defendant's contacts with Georgia, therefore, were insufficient to support personal jurisdiction under Georgia's longarm statute, as found by the district court. With such determination being law of the case, the issue raised is whether contacts exist that, while not supporting an exercise of personal jurisdiction over defendant in Georgia, would satisfy due process in a lex loci delecti application of law to plaintiff's claims in this forum.
In its supplemental brief, defendant has relied upon World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980), which involved an issue of in personam jurisdiction. Not unlike the plaintiff in this case, the plaintiff in World-Wide Volkswagen contended that it was reasonably foreseeable that (1) an automobile distributed by defendant in the tri-state area of New York would find its way to Oklahoma, (2) that it could be involved in an accident, and (3) that defendant could reasonably be expected to be haled into an Oklahoma forum. In determining that the car distributor could not be haled into the Oklahoma forum, the Court emphasized that it was "defendant's conduct and connection with the forum State" upon which a defendant could reasonably anticipate being brought into an Oklahoma court. Id., at 297. Woodson, however, did not have before it the issue which defendant has presented herein, i.e., whether, absent minimum contacts to satisfy personal-jurisdiction analysis, contacts can be found that satisfy due process for application of foreign law, lex loci delecti.
Federal courts sitting in diversity must apply the conflict-of-law provisions of the forum state if to do so under the facts of the particular case does not violate due process. Thornton v. Cessna Aircraft Co., 886 F.2d 85, 87 (4th Cir. 1989). See also, Allstate Ins. Co. v. Hague, 449 U.S. 302, 308 (1981). In what appears to be controlling law in this circuit, Justice Powell, writing for the Court of Appeals of the Fourth Circuit by designation, squarely addressed in Thornton the issue this court now faces:
Aside from application of rules of the forum regarding conflict of laws, certain due process considerations must also be examined before making a final determination of which state's law to apply. In Hague, the Court stated that "for a State's substantive law to be selected in a constitutionally permissible manner, that State must have a significant contact or significant aggregation of contacts, creating state interests, such that choice of its law is neither arbitrary nor fundamentally unfair."
[T]he Court found that due process was not violated by application of Minnesota law to determine insurance policy coverage on an automobile accident that occurred in Wisconsin. The Court noted three significant contacts with Minnesota which collectively justified application of its law: 1) although the insured was a resident of Wisconsin, he had commuted to work in Minnesota every day; 2) Allstate regularly did business in Minnesota; and 3) the beneficiary became a Minnesota resident after the accident but prior to initiation of the suit. Id. at 313-20, 101 S.Ct. at 640-44.
Thornton contends that the single fact that the crash and resulting death occurred in Tennessee does not constitute a significant contact sufficient to support application of the Tennessee statute of repose. However, both the Supreme Court and this court have applied the law of the state that was the situs of an airplane crash on the basis of such a single contact. In Richards v. United States, 369 U.S. 1, 82 S.Ct. 585, 7 L.Ed.2d 492 (1962), the Court stated that in crash cases, the forum court could apply the law of the place where either the injury or the negligence occurred. Id. at 15, 82 S.Ct. at 594. There, the Court applied the lex loci delicti rule of the forum state Oklahoma in holding that Missouri law applied to actions arising from a crash which occurred in that state. Id. at 16, 82 S.Ct. at 594. In Szantay v. Beech Aircraft Corp., 349 F.2d 60, 64 (4th Cir. 1965), this court held that the substantive law of Tennessee applied to an action brought in South Carolina federal court arising from a crash in Tennessee. Similarly here, the occurrence of the crash in Tennessee is a significant contact sufficient to justify application of the Tennessee statute of repose.Thornton, supra, at 89 (citations omitted). While a chipper accident and the crash of a small plane are different, the court finds that the "significance" upon which the appellate court relied did not correspond to the human drama, but to the significance of the actual tort. The alleged amputation of one's arm while working to clean up storm debris in the State of Georgia is a "significant" contact that would justify application of Georgia law through North Carolina's lex loci delecti rules.
D. Conclusion
The court, having considered carefully the well-reasoned briefs of respective counsel, finds the substantive law of Georgia applicable to plaintiff's product-liability claim. Further, the court has found particularly instructive and compelling the reasoning of the appellate court in Thornton, which speaks to both the "public-policy" exception tolex loci delecti and to constitutional concerns raised by defendant.Thornton clearly provides that even though the underlying basis of liability may be a product defect that occurred in the manufacture of the product in the forum state, due process in applying a foreign law can be satisfied where a significant contact occurs in the foreign state. Here, the court finds that significant contract to be the injury at issue — the amputation of a person's arm from the elbow down in the course of allegedly using defendant's chipping machine for the ordinary purpose it was intended. It appearing that the application of such foreign law in defendant's home forum would not offend traditional notions of fair play or substantial justice, the court determines that Georgia law applies to plaintiff's product-liability claim(s). Woodson, supra.
ORDER
IT IS, THEREFORE, ORDERED that defendant's Motion for Court's Determination of Applicable Law is GRANTED, and having made such determination, the court finds that the law of the State of Georgia is applicable to plaintiff's product-liability claim(s).
This Order is entered in response to defendant's Motion for Court's Determination of Applicable Law (#9).
THIS MATTER is before the court on defendant's Motion for Immediate hearing on Defendant's Motion for Court's Determination of Applicable Law. Having considered defendant's motion and reviewed the pleadings, the court enters the following Order.
ORDER
IT IS, THEREFORE, ORDERED that defendant's Motion for Immediate hearing on Defendant's Motion for Court's Determination of Applicable Law is GRANTED, and the Clerk of this court is instructed to calendar such motion for hearing as soon as possible on or after January 18, 2000 (which is the end of plaintiff's period for filing a response).
This Order is entered in response to defendant's Motion for Immediate hearing on Defendant's Motion for Court's Determination of Applicable Law (#_).