Summary
holding products-liability place of conduct is where product designed
Summary of this case from Sulak v. Am. Eurocopter Corp.Opinion
Civil Action No. 3:00-CV-1036-M.
September 12, 2001
MEMORANDUM OPINION AND ORDER
Before the Court is Defendant's Motion for Reconsideration of the Court's Order denying Defendant's Motion for Summary Judgment, filed on July 26, 2001 in the above-entitled case. Having considered the Motion, the Court is of the opinion that Defendant's Motion for Reconsideration should be GRANTED. Having reconsidered Defendant's Motion for Summary Judgment, however, this Court stands by its previous Order denying Summary Judgment for the following reasons.
I. Factual Predicate
Plaintiffs in this case are the widow and parents of Brian Sloss, who was killed in California on April 6, 1998, when the Saturn automobile in which he was riding caught fire. They instituted this products liability action on March 22, 2000, more than a year after Mr. Sloss died. On October 25, 2000, Defendant General Motors Corporation ("GMC") filed a Motion for Summary Judgment, arguing that the applicable statute of limitations precluded the suit. It contended that California's one-year statute of limitations applied in this action under Texas's "borrowing statute," Texas Civil Practice Remedies Code § 71.031(a)(3), which provides:
(a) An action for damages for the death or personal injury of a citizen of this state, of the United States, or of a foreign country may be enforced in the courts of this state, although the wrongful act, neglect, or default causing the death or injury takes place in a foreign state or country, if:
. . .
(3) for a resident of a foreign state or country, the action is begun in this state within the time provided by the laws of the foreign state or country in which the wrongful act, neglect, or default took place. . . .
TEX. Civ. PRAC. REM. CODE ANN. § 71.031(a)(3) (Vernon 1997 Supp. 2001). On June 6, 2001, this Court entered its Order denying GMC's Motion to Dismiss, finding that (1) Mr. Sloss was a California resident, so that § 71.031(a)(3) applied, and (2) the "wrongful act, neglect, or default" took place in Michigan, where the Saturn was designed, rather than in California, where the accident occurred. Therefore, the Court reasoned, the applicable statute of limitations in this case was that of Michigan, not California. Since Michigan provides for a three-year limitations period for product liability suits, Plaintiffs were not barred from bringing suit against GMC.
In its Motion for Reconsideration, GMC presents two main arguments: first, that this Court's reading of the borrowing statute leads to unconstitutional results; and second, that the Court's interpretation of the statute is in disaccord with Texas case law. Although GMC did not raise the first argument in its original Motion to Dismiss or in its Reply to Plaintiffs' Response to the Motion to Dismiss, the latter contention is merely an expansion of the arguments GMC raised in its Reply.
II. Privileges and Immunities Clause
GMC's argument that the Court's decision renders the borrowing statute violative of the Privileges and Immunities Clause of Article Four of the U.S. Constitution proceeds as a series of hypotheticals. GMC asks the Court to assume that
The Privileges and Immunities Clause of Article Four reads, "The Citizens of each State shall be entitled to all Privileges and Immunities of Citizens in the several States." U.S. CONST. art. 4, cl. 2.
John Doe, a citizen of Texas, is killed while using a power tool. Doe was a Texas resident at the time. The power tool was designed and manufactured in Michigan. Two and a half years after the accident, Doe's widow decides to bring a products liability action against the power tool manufacturer in Texas. The widow's action is barred under Texas'[s] two-year limitations period.
Next, GMC asks that this Court compare the above result with the following:
Jane Smith [is instead] a resident and citizen of California. Two and a half years after the accident, Smith's widow decides to bring a products liability action against the power tool manufacturer in Texas. Again, her widow's action is not barred, because Michigan (the place where the product was manufactured and designed) has a three-year statue [ sic] of limitations. The result: under the Court's interpretation of the language of the Texas borrowing statute, the California citizen would have greater rights than the Texas citizen.
Thus, Defendant argues, this Court's interpretation of the borrowing statute, which leads to the above result, forces the statute to run afoul of the Privileges and Immunities Clause of Article Four because it would allow a noncitizen to attain a more lenient statute of limitations than a Texas resident.
This argument presents an incorrect reading of the borrowing statute itself and this Court's interpretation of it. For a nonresident plaintiff to file a personal injury or wrongful death suit in Texas, the borrowing statute requires that the action be "begun in this state within the time provided by the laws of this state for beginning the action" and additionally be "begun in this state within the time provided by the laws of the foreign state or country in which the wrongful act, neglect, or default took place." § 71.031(a)(2)-(3) (emphasis added). Therefore, two statutes of limitations apply in the case of a nonresident plaintiff (regardless of whether the plaintiff is or is not also a citizen of Texas): the applicable Texas statute of limitations and the statute of limitations of the state in which the wrongful act took place. A nonresident filing suit in Texas could thus never attain a more lenient statute of limitations than a Texas resident, because either type of plaintiff would ultimately be subject to the applicable Texas statute of limitations regardless of whether a longer statute of limitations also applied to the action.
This Court's interpretation of the borrowing statute does not conflict with these provisions. Although the Court explained in its Order that Michigan's statute of limitations, rather than California's, applied in this case because the wrongful conduct occurred in Michigan, the Court never stated that the Texas statute of limitations did not operate as a minimum. It does, but it did not run before Plaintiffs filed suit. Therefore, GMC's constitutional argument is erroneous, and does not support a reversal of this Court's decision to deny Defendant's Motion to Dismiss.
III. Texas Case Law
Defendant GMC additionally argues that this Court's finding — that the Michigan statute of limitations applies — contradicts Texas case law. Defendant included the same argument in its Reply Brief to GMC's Motion for Summary Judgment. In its Motion for Reconsideration, GMC adds citations from the Texas Supreme Court and the Fifth Circuit to bolster its argument that the borrowing statute requires application of the statute of limitations of the state in which Mr. Sloss died, not the state where Defendant designed the vehicle. Defendant urges that, "[w]hen discussing the `wrongful act, neglect[,] or default' language of the borrowing statute, Texas courts have repeatedly spoken of the `place of injury,' or the place where the case of action `arose' or `accrued.'" In support of this argument, GMC quotes Dubai Petroleum Co. v. Kazi, 12 S.W.3d 71 (Tex. 2000), in which the Texas Supreme Court explained that the borrowing statute mandated "that actions for out-of-state injuries to nonresidents be brought within the limitations period provided by the law of the place of injury." Id. at 77. Although these are the words the Texas Supreme Court used, the court made the statement only in passing, as it described the history of the full statute. No analysis or discussion was proffered by the Dubai court on this point, and it appears in the opinion merely as an aside totally unrelated to the issues the court was confronting in the case, which were whether the "equal treaty rights" provision within § 71.031(4) constituted a jurisdictional limitation on Texas courts and whether the United States had equal treaty rights with India. Id. at 71-83. The only support the Dubai court proffered for the statement was a citation to Owens Corning v. Carter, 997 S.W.2d 560, 566 (Tex. 1999), in which the Texas Supreme Court described the substance of the borrowing statute in the following way:
The context of the statement is as follows:
The "equal treaty rights" requirement first appeared in a 1913 statute allowing Texas courts to hear wrongful death or personal injury actions for injuries occurring outside the state. This statute allowed suits for out-of-state injuries to Texans or citizens of countries having equal treaty rights with the United States if the law of the place of injury provided for such an action and the action was filed within the limitations period provided for by Texas law. In 1917, the Legislature passed a similar statute allowing suits for out-of-state injuries to citizens of other states. The two statutes were combined in the Revised Statutes of 1925 as article 4678. In 1975, the Legislature amended article 4678 to relax the requirement that the law of the place of injury provide for a cause of action by allowing an action if either Texas law or the law of the place of injury supported it. In 1985, article 4678 was recodified as section 71.031. Finally, in 1997, the Legislature added the additional requirement to section 71.031 that actions for out-of-state injuries to nonresidents be brought within the limitations period provided by the law of the place of injury.Dubai Petroleum, 12 S.W.3d at 77-78 (citations omitted).
Under the borrowing statute, foreign plaintiffs must commence their suits both within the time provided by Texas law and "within the time provided by the laws of the foreign state . . . in which the wrongful act, neglect, or default took place." The borrowing statute applies to all personal injury and wrongful death actions. Thus, a foreign plaintiff whose cause of action for personal injury or wrongful death arose in a foreign state with a shorter limitations period than Texas's must file within the limitations period prescribed by that state's law.Id. Although both the Dubai court and Defendant rely on this passage in Owens Corning, nowhere does it equate the location of the wrongdoing with the place of injury. In fact, the statement appears to be in harmony with this Court's analysis of the borrowing statute.
The only other Texas state case proffered by Defendant in support of its interpretation of § 71.031 is Tulles v. Georgia-Pacific Corp., 45 S.W.3d 118 (Tex.App.-Fort Worth 2000, no pet. h.), which simply paraphrased the description of § 71.031 used by the Texas Supreme Court in Dubai. Id. at 123-25. Thus, although the Dubai and Tulles courts' descriptions of the borrowing statute appear contradictory to the holding of this Court, any conflict is resolved by recognition of the fact that neither of these cases presented an issue requiring the courts to draw a distinction between the place of injury and the location of the defendant's allegedly wrongful act. As the courts were not asked to decide such an issue, their paraphrasing of the borrowing statute shows that they were conflating the two loci without considering that, in some cases, a defendant may commit the wrongful act in a forum different from the plaintiff's place of injury.
The fact remains that, in products liability cases such as the one at hand, Texas courts have taken note of the difference between the place of a defendant's wrongful act — the state in which the defendant defectively designed the product — and the location of injury. See Perry v. Aggregate Plant Prods. Co., 786 S.W.2d 21 (Tex App. — San Antonio 1990, writ denied); Crisman v. Cooper Indus., 748 S.W.2d 273 (Tex.App.-Dallas 1988, writ denied). In Perry, the Texas Court of Appeals had to determine the "place where the conduct causing the injury" occurred, which was one of the factors the court had to consider in deciding, under the most significant relationship test, which state's substantive law applied in the case. Perry, 786 S.W.2d at 24. The case dealt with the issue of whether Indiana or Texas law applied; the victim had been injured by the allegedly defective silo in Indiana, but the defendants had designed and manufactured the silo in Texas. See id. at 22-23. In concluding that Texas was the place in which the conduct causing the injury occurred, the court explained, "since the silo was designed and manufactured in Texas [and] the cause of action is directed at the design and manufacture of the silo . . . it seems that Texas is the place where the conduct causing the injury occurred." Id. at 25.
The Restatement (Second) of Conflict of Laws § 6, cited by the Perry court in its decision, distinguishes between the "place where the injury occurred" and "the place where the conduct causing the injury occurred." In summarizing the most significant relationship test, it states,
[t]he rights and liabilities with respect to an issue in tort are determined by the local law of the state which, with respect to the issue, has the most significant relationship to the occurrence and the parties. . . . Contacts to be taken into account . . . include:
(a) the place where the injury occurred,
(b) the place where the conduct causing the injury occurred. . . .
RESTATEMENT (SECOND) OF CONFLICT OF LAWS § 6 (1971).
Similarly, the Crisman court had to utilize the most significant relationship test in the context of a products liability and wrongful death case. See Crisman, 748 S.W.2d at 275. The basis for the suit was a traffic accident in which the plaintiff's car ran into a truck that was pulling an air compressor trailer. The plaintiff alleged that the trailer "was defectively designed and unreasonably dangerous because it was marketed without tail lights, stop lights, brake lights, turn signals or license plate lights." Id. at 275. Although the accident happened in Florida, the trailer was made and designed in other states. See id. In applying the most significant relationship test, the court necessarily had to determine the state in which the conduct causing the death had occurred. See id. at 276-277. In regard to this prong of the test, the court concluded that "the conduct allegedly causing the injury is the design and manufacture of this trailer in 1963." Id. at 277. Thus, in these Texas cases in which the courts were required to determine where the conduct causing the injury occurred, they found that the wrong occurred at the actual place of defective design, not at the location of the injury.
This Court's reasoning in its Order denying Defendant's Motion for Summary Judgment follows a similar vein. The Order explains that "the allegedly wrongful act of GMC occurred in Michigan, the place where Plaintiffs allege GMC designed a defective and unreasonably dangerous vehicle." No argument or authority Defendant proffers in its Motion for Reconsideration negates the logic of that conclusion. Although Defendant also discusses Cox v. McDonnell-Douglas Corp., 665 F.2d 566 (5th Cir. 1982), which found the place of the wrong to be the location of the injury instead of the location of the wrongdoing, Cox applied the now-defunct principle of lex loci delicti, which was overruled in Gutierrez v. Collins, 583 S.W.2d 312 (Tex. 1979). Cox was a wrongful death action in which the plaintiffs alleged the defective design and manufacture of a plane that had crashed. 665 F.2d at 567. Although the defendant had designed and manufactured the aircraft in Missouri, the actual crash occurred in Idaho. See id. In the case, the Fifth Circuit was forced to apply the pre-1975 version of Texas's statute of limitations, which provided that
Although the Fifth Circuit handed down Cox three years after the Texas Supreme Court overruled the doctrine of lex loci delicti in Gutierrez, the Cox court had to interpret the pre- Gutierrez version of the Texas statute of limitations, so it applied the principle of lex loci delicti even though the doctrine was no longer operative at the time the Cox court decided the case.
[w]henever a death has been caused by "the wrongful act, neglect or default of another in any foreign State . . . for which a right to maintain an action and recover damages thereof is given by the statute or law of such foreign State . . ., such right may be enforced in the courts of this State within the time prescribed by the statutes of this State."Id. at 568-69. In its discussion of the proper interpretation to be given the statute, the Cox court explained,
The issue of statutory interpretation before us is whether "the wrongful act, neglect or default" in a foreign state refers to the place of the negligence or to the place of the wrongful death. . . . [F]or purposes of the pre-1975 version of this statute, the Texas courts have considered the wrongful act as giving rise to a cause of action in the place of the injury [under the lex loci delicti rule]. So to speak, "the wrongful act, neglect[,] or default" is not considered an actionable "wrong" until it results in injury.Id. at 569. As the opinion makes clear, the Fifth Circuit expressly limited its interpretation to the pre-1975 version of this statute. See id. at 570 ("In pre-1975 wrongful death actions, [the Texas statute of limitations provision] `compels the application of the lex loci delicti rule . . .'"). In fact, the Texas Supreme Court overruled the doctrine of lex loci delicti in 1979. See Gutierrez, 583 S.W.2d at 318. In its place, the Texas Supreme Court mandated that Texas courts adopt the most significant relationship test, which recognized the difference between the place where the injury occurred and the location of a defendant's wrongful conduct. See id. at 319. Thus, the well-established law at the time the Texas Legislature added the borrowing provision to § 71.031 in 1997 distinguished between the place of injury and the site of a defendant's wrongful act. In accordance with established canons of statutory construction, this Court presumes that "[a]ll statutes are . . . enacted by the legislature with full knowledge of the existing condition of the law and with reference to it." McBride v. Clayton, 166 S.W.2d 125, 128 (Tex. 1943), cited in Phillips v. Beaber, 995 S.W.2d 655, 658 (Tex. 1999) ("[W]e presume that the Legislature acted with knowledge of the common law and court decisions.").
In conclusion, Defendant's Motion for Reconsideration fails to place before this Court any new arguments or authorities that mandate reversal of its Order denying Defendant's Motion for Summary Judgment. Therefore, this Court is of the opinion that its decision of June 8, 2001 is correct, but substitutes this more detailed opinion for it.
Defendant presents a last argument in its Motion that can be dispensed with summarily. GMC contends that the Court's application of the Michigan statute of limitations conflicts with Texas limitations law, because, in Texas, the statute of limitations begins to run in a products liability suit when the defective product causes harm, not when a defendant defectively designs the product. Although Defendant presents a correct summary of the law — it is axiomatic that statutes of limitation do not begin to run against a putative plaintiff until he or she is legally damaged — GMC's argument that the Court's Order somehow conflicts with this principle is inapposite. The point at which a limitations period begins to run does not affect this Court's reading of the plain language of the statute, which clearly provides that the statute of limitations of the state in which the wrongful act occurred must be applied by this Court.
SO ORDERED.