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engaging in a Delaware choice of law analysis to determine whether Michigan or Delaware law should apply
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C.A. No. N14C-09-241 CEB
11-24-2015
JENNIFER L. JACKSON and JACK W. JACKSON, Plaintiffs, v. BRIDGESTONE AMERICAS TIRE OPERATIONS, LLC, f/k/a BRIDGESTONE FIRESTONE NORTH AMERICAN TIRE, LLC, a Delaware corporation, and FORD MOTOR COMPANY, a Delaware corporation, Defendants.
Ryan D. Hurd, Esquire, ANAPOL WEISS, Philadelphia, Pennsylvania and Joseph M. Jachetti, Esquire, SHUSTER JACHETTI, LLP, Wilmington, Delaware. Attorneys for Plaintiff. Somers S. Price, Jr., Esquire, POTTER ANDERSON & CORROON LLP, Wilmington, Delaware. Attorney for Defendant Bridgestone Americas Tire Operations, LLC. Timothy S. Martin, Esquire, WHITE & WILLIAMS LLP, Wilmington, Delaware. Attorney for Defendant Ford Motor Company.
MEMORANDUM OPIONION
Upon Consideration of Defendant Bridgestone Americas Tire Operations, LLC's Motion to Determine Choice of Law.
DENIED. Upon Consideration of Defendant Ford Motor Company's Motion to Determine The Applicable Law as to Plaintiff's Claims for Punitive Damages.
DENIED. Ryan D. Hurd, Esquire, ANAPOL WEISS, Philadelphia, Pennsylvania and Joseph M. Jachetti, Esquire, SHUSTER JACHETTI, LLP, Wilmington, Delaware. Attorneys for Plaintiff. Somers S. Price, Jr., Esquire, POTTER ANDERSON & CORROON LLP, Wilmington, Delaware. Attorney for Defendant Bridgestone Americas Tire Operations, LLC. Timothy S. Martin, Esquire, WHITE & WILLIAMS LLP, Wilmington, Delaware. Attorney for Defendant Ford Motor Company. BUTLER, J.
A Delaware driver took her Delaware owned and registered car to New Jersey, where some mishap occurred involving her vehicle. She has brought suit against the manufacturer of the vehicle and a tire manufacturer claiming defects in the design and manufacture of each. The manufacturer ("Ford") asks us to effectively preclude punitive damages by applying the law of Michigan, which has none, but only as to the punitive damages claim in the complaint. The tire company ("BATO") asks us to apply the law of Ohio to Plaintiff's strict products liability claim, in addition to the punitive damages claim. So the question presented is: whose law applies: Delaware, where the plaintiff resides, Michigan, where the car was designed, or Ohio, where the tire was designed?
BATO concedes that Delaware law should govern compensatory damages, since Ms. Jackson's continuing medical treatment occurs here.
Other candidates could logically include New Jersey, where the accident occurred, Missouri, where the car was built, or Canada, where the tire was actually manufactured. Neither side has argued for application of the laws of any of these jurisdictions.
The facts are not yet fully fleshed out. This motion comes to us before discovery has been completed. But the operative facts as understood by the parties thus far are these: the plaintiff is a Delaware resident. On September 19, 2012, she was driving a 1999 Ford Explorer on Route 295 southbound in New Jersey when a tire lost its tread, causing a loss of control of the vehicle and an accident that put the plaintiff in a New Jersey hospital for 17 days, followed by outpatient treatment in Delaware since then.
The 1999 Ford Explorer Ms. Jackson was driving was designed in Michigan and built in Missouri. It was sold in Oklahoma in 1999, Alabama in 2000, Pennsylvania in 2010 and Delaware later in 2010. By the time of the accident in New Jersey, the car was owned and registered in Delaware.
The tire has its own history. It was a "Firestone Wilderness" model, designed in Akron, Ohio and manufactured in Bridgestone's Quebec, Canada plant in 1997. Bridgestone tells us the tire was manufactured for original use on a Ford F-150 pickup, not a Ford Explorer. Exactly how a Ford F-150 tire wound up 15 years later on a Ford Explorer is not yet known. The plaintiff says it was not an F-150 tire at all but rather the spare tire that came with the original manufacture.
Indeed, the tire manufacturer itself has a history: Firestone was sold to Bridgestone, by then a Japanese company, in 1988. Plaintiff urges that the "real" nerve center of decision making was Tokyo, Japan, not Akron, Ohio. Because of the Court's disposition of the motion, it need not decide which side is right as to this dispute.
The relevance of this disputed fact may become crucial later, but need not delay our consideration of the choice of law question.
We do know that the Firestone Wilderness tire and the Ford Explorer have been the subject of some controversy. Plaintiff says the tire design suffered so many "tread separations" that it ultimately resulted in a recall of the tire brand in 2000. And, we are told, the "Firestone Wilderness" tire in question in this accident was subject to the recall by Bridgestone. So it is not a stretch to suspect that the scope and effectiveness of the recall may well be the subject of some dispute at trial. Because the Firestone Wilderness tire was marketed and sold all over the country, an argument could be made for the applicability of the law of any of the United States to which the recall was addressed.
See In re Bridgestone/Firestone, Inc., 288 F.3d 1012, 1016 (7th Cir. 2002) (reversing certification of a nationwide litigation class where the law of the place where injury occurred - i.e. where the defective tires were purchased or resold - would govern buyers claims, conceivably implicating the laws of any of the 50 states in which the buyers live). Cf. Shields v. Bridgestone/Firestone, Inc., 2004 WL 546883 (Dist. Tex. Mar. 12, 2004) (approving settlement for nationwide settlement class).
ANALYSIS
The current framework for analyzing choice of law issues traces its lineage in Delaware to Travelers Indemnity Co. v. Lake. In that case, the Delaware Supreme Court departed from the historical lex loci delecti doctrine traditionally applied in tort cases and adopted the position of the Restatement Second of Conflict of Laws ("the Restatement"): that choice of law issues should be determined by reference to the state's laws with the "most significant relationship" to the dispute. In determining the most significant relationship in a tort case, section 145 of the Restatement directs us to consider four factors: 1) the place where the injury occurred, 2) the place where the tortious conduct occurred, 3) the domicile of the parties, and 4) the place where the relationship between the parties is centered.
594 A.2d 38 (Del. 1991).
Id. at 40.
Restatement (Second) of Conflict of Laws § 145(2).
And the four factor test of section 145 is not all the Restatement has to say about the choice of law issue. We are further directed to consider section 6 of the same Restatement, which contains the broad framework for resolving disputed conflict of law issues generally. These considerations include 1) the needs of the interstate and international systems of laws, 2) the relevant policies of the forum state, 3) the relevant policies of other interested states and the relative interests of those states in the determination of the particular issue, 4) the protection of justified expectations, 5) the basic policies of the body of law under consideration, and 6) the certainty, predictability and uniformity of result, and 7) ease in the determination and application of the law to be applied.
Id. § 145(1).
Id. § 6(2).
And so, with due regard to the many, sometimes conflicting considerations that must be applied, we undertake a review of the four principal criteria of section 145 of the Restatement:
1. The place where the injury occurred.
As noted previously, the tread loss and consequent accident occurred in New Jersey. The plaintiff was hospitalized initially in New Jersey, but later moved back to Delaware where she has continued to recuperate.
No party has argued that the law of New Jersey should apply. Perhaps that is just as well, for the Restatement instructs that the place where the injury occurred should not be considered "when the place of injury can be said to be fortuitous or when for other reasons it bears little relation to the occurrence and the parties with respect to the particular issue." There is no reason to think the particular stretch of roadway on Interstate 295 in New Jersey contributed in any way to the tire losing its tread or the plaintiff sustaining her injuries. Rather it is far more likely that the place where the injury occurred was destined to be wherever the vehicle and its tire were located when the tire lost its tread. Therefore, the parties have not urged application of New Jersey law as the occurrence in New Jersey was, in the words of the Restatement, "fortuitous."
Id. § 145, cmt. e.
See Caballero v. Ford Motor Co., 2014 WL 2900959, at *3 (Del. Super. June 24, 2014) ("When the location of the injury bears little relation to the occurrence or the parties, that factor becomes less persuasive when selecting the applicable law").
2. The place where the tortious conduct occurred.
When the place of the injury is fortuitous and therefore not the appropriate jurisdiction whose laws ought to be applied to the dispute, we consider next the place where the tortious conduct occurred. BATO says Plaintiffs' complaints against it all relate to the design of the Firestone Wilderness tire, which was designed by the Passenger and Light Truck Tire Development Department, located in Akron, Ohio. Therefore, it argues, the substantive law of Ohio should apply.
Both BATO and Ford find appealing arguments in the jurisprudence of this Court, and more specifically in a line of cases involving Mexican nationals who brought suit in Delaware over allegedly defective products that injured them in Mexico. In each case, the plaintiffs sought application of laws other than those of Mexico. The cases must be reviewed in some detail as they inform both the important decision of the Delaware Supreme Court in Bell Helicopter Textron v. Arteaga and, consequently, our decision here.
113 A.3d 1045 (Del. Supr. 2015).
In Pena v. Cooper Tire & Rubber Co., a Mexican citizen filed a claim in Delaware against a Delaware corporation with its principal place of business in Ohio. The lawsuit was over a tire tread separation and thus has its parallels to this one. The trial court ruled that the factors in section 6 of the Restatement favored application of U.S., as opposed to Mexican law. After ruling initially that Delaware law would apply, the Court granted reargument and ruled that the laws of the states of design and manufacture of the tire, respectively, would apply.
2010 WL 1411709 (Del. Super. Jan. 27, 2010).
Id. at *3.
Id. at *4. It appears that Cooper Tire argued only that Mexican law should apply and did not argue for the application of any particular state's law in the event that the Court were to find the application of Mexican law improper.
Pena v. Cooper Tire & Rubber Co., C.A. No. 07C-06-059 (Del. Super. June 9, 2010) (ORDER).
In Alvarez v. Cooper Tire & Rubber Company, the Court had another Mexican citizen with a complaint about Cooper tires. The Court determined that "Ohio is where Cooper designed, manufactured, and placed the alleged defective tire into the stream of commerce." Referencing its final Pena decision, the Court held again that the law of Ohio, where the product was designed and manufactured, would apply.
Alvarez v. Cooper Tire & Rubber Co., 2013 WL 226970 (Del. Super. Jan. 18, 2013).
Alvarez v. Cooper Tire & Rubber Co., C.A. No. 10C-03-151 (Del. Super. Sept. 26, 2011) (ORDER).
Id.
In Cervantes v. Bridgestone/Firestone North Tire Co., the driver of a Ford Explorer was killed in a rollover accident in Mexico. His estate brought suit in Delaware alleging defective tires manufactured by the defendant. Both Ford and Bridgestone/Firestone moved to apply the law of Mexico. Ultimately, the Court applied the law of Illinois as to the manufacturing claims and Ohio as to the design claims.
2010 WL 431788 (Del. Super. Aug. 14, 2008).
Cervantes v. Bridgestone/Firestone N. Amer. Tire Co., C.A. No. 07C-06-249 (Del. Super. May 26, 2009) (ORDER).
Thus we can clearly see the developing law of Superior Court was to look primarily - almost exclusively - to the place where the design or manufacturing occurred, rather than the domicile of the parties or the place where the injury occurred.
Next comes Caballero v. Ford Motor Company, a case involving Mexican citizens in a car that crashed after suffering a tread separation. Ford moved to apply Michigan law and exclude punitive damages - much as it has done here. The Court agreed that because the alleged design misconduct had occurred at Ford's Michigan headquarters and Michigan's public policy was to disallow punitive damages in order to foster a friendlier business climate, Michigan law should apply.
2014 WL 2900959 (Del. Super. June 24, 2014).
Id. at *6.
There can be no question but that if Ms. Jackson were a Mexican citizen, Cervantes and Caballero would virtually dictate the result sought by defendant Ford and very likely the one sought by BATO.
But that was then. This is now.
In this Court's view, the Delaware Supreme Court's 2015 decision in Bell Helicopter Textron, Inc. v. Arteaga, marked a sea change in choice of law analysis for Delaware Courts. Bell Helicopter was a case involving a helicopter crash in Mexico, killing a number of Mexican nationals, the cause of which was alleged to be a defective part designed and manufactured in Texas. Suit was brought in Delaware. The trial court held that Texas - the place of design and manufacture of the defective part - was the law that should be applied. In light of the discussion above, the trial court's ruling was unremarkable in that it followed precisely the position of the Court in each of the cases discussed above - that the place of design and manufacture was the most critical consideration in choice of law analysis.
Arte[a]ga v. Bell Helicopter Textron, Inc., 2014 WL 2600092 (Del. Super. June 10, 2014), rev'd, 113 A.3d 1045 (Del. 2015).
In reversing the trial court, our Supreme Court held that "the trend has been instead to look to the place where the injury-causing product was used, as the Superior Court itself has noted previously: 'Modern choice of law considerations suggest that the jurisdiction where the product is marketed has a greater interest than a jurisdiction where a product is manufactured, developed or tested.'"
Bell Helicopter Textron, Inc., 113 A.3d at 1055 (quoting Thompson v. Reinco, Inc., 2004 WL 1426971, at *1 (Del. Super. June 15, 2004)).
The Court does not believe the Bell Helicopter decision was merely another in a line of cases interpreting standard Restatement language. Rather, at least as to "the place where the tortious conduct occurred," the Supreme Court's ruling is a marked shift away from the place of design and manufacture to the place of marketing and distribution. Thus, Ford's and BATO's reliance on Caballero, Pena, Alvarez or Cervantes is not well taken. BATO and Ford are large companies with wide networks of distribution whose products are marketed and available nationwide. In light of the shift in emphasis under this criterion in Bell Helicopter, it is doubtful the Superior Court's prior rulings in the "tire cases" retain their previous vitality. Following Bell Helicopter with fidelity requires that we hold that the "place where the tortious conduct occurred" in this case is the place where Ford and BATO intended their products to be marketed and sold - which is to say nationwide. As such, Delaware has at least as much interest in the dispute as Ohio or Michigan.
One additional observation is in order with respect to Ford's motion to have punitive damages determined under Michigan law. Ford is of course correct that this was the ruling by the Superior Court in Caballero. There, the Superior Court considered Michigan's interest "in protecting the financial integrity of corporations who conduct substantial business within its borders, and, by not imposing punitive damages, [Michigan's] hopes to promote corporate migration to Michigan by insulating those companies. If Michigan did not provide such protections to corporations, such corporations [like defendant] might refuse to locate and conduct business in their state."
Caballero, 2014 WL 2900959, at *6 (internal quotations omitted).
The point is certainly well taken, but whether this Court should advance Michigan's interest in enhancing economic development inside its borders at the cost of regulating punitive damages claims in other, sovereign jurisdictions is another question. The Supreme Court all but specifically repudiated that idea in Bell Helicopter, saying that focusing on the state of design or manufacture "encourages jurisdictions to change their laws to restrict remedies to victims so as to attract manufacturers. That is, there might be a perverse incentive for jurisdictions to restrict tort remedies if those jurisdictions can benefit from the jobs and tax revenues that come with hosting manufacturing by helping the manufacturers to externalize the costs of injuries caused by their products to victims around the globe."
Bell Helicopter Textron, Inc., 113 A.3d at 1054-55.
To that, we would also add that if we are to hold that Michigan is the choice of law for all cases involving the defective design of all Michigan bred automobiles, we effectively immunize all Michigan auto manufacturers from punitive damages liability nationwide, regardless of the willfulness or wantonness of the negligence in the design of the automobile. It seems perverse indeed that, in a free flowing republic, one state could effectively dictate how and whether tort damages - punitive or otherwise - are to be made available to citizens of the forum jurisdiction.
Ford fairly points out that punitive damages are intended to sanction the tortfeasor rather than enhance the compensation to the victim and that the compensation received by the victim for conduct deserving of punitive damages is happenstance. Therefore, Ford argues, the policies favoring application of Delaware law diminish insofar as the purpose of punitive damages is not compensatory as to the plaintiff. We think Ford takes an overly narrow view of the purposes and goals of an award of punitive damages.
See Jardel Co. v Hughes, 523 A.2d 518, 528-29 (Del. 1987) (in addition to punishing the wrongdoer, punitive damages "implicate other societal policies" and serve to deter the wrongdoer and others from similar conduct).
But even if we were to agree that punitive damages do not deserve the same "victim oriented" respect that compensatory damages do, we would remain unpersuaded to apply Michigan law. Delaware's tort remedies rely, at least in part, on the financial disincentives to manufacturers and suppliers to engage in willfully negligent conduct that causes Delaware citizens injuries. Drawing back to the Restatement section 6 admonition to consider the relevant policies of the forum state, we think Delaware's policy of disincentivizing manufacturers from engaging in willful misconduct by allowing for punitive damages in appropriate cases overrides a foreign state's policy of abolishing punitive damages as an economic incentive to attract businesses. Thus, regardless of whether punitive damages are aimed primarily at victim compensation or primarily at creating a financial disincentive from engaging in outrageous conduct, the Court is satisfied that consideration of this factor supports the application of Delaware law in this case.
As a final, final note on this subject, we pause here for a word about Bridgestone's argument that the Court should employ the "principle of depecage" and apply Delaware law to plaintiff's compensatory damages claim but Ohio law as to her strict liability and punitive damages claims. We note that the concept of splitting the law of the case between jurisdictions has never been endorsed by the Delaware Supreme Court. Indeed, at footnote 28 of its Bell Helicopter opinion, the Court noted that splitting the law of the case "makes no logical sense" and that "[o]nly extraordinary circumstances should justify unraveling the connections between the duties the defendants owe and the remedies afforded to plaintiffs in the event of a tort." 113 A.3d at 1052, n.28. It thus looks like bon voyage to depecage.
3. The Domicile Residence, Nationality, Place of Incorporation and Place of Business.
Surely, the Supreme Court's opinion in Bell Helicopter moved the discussion with respect to the "place where the tortious conduct occurred" to a new place. But the Court also looked at the "domicility" factor in a new way as well. While the trial court had merely noted in passing that the plaintiffs were all Mexican residents, the Supreme Court felt that "the parties' citizenship usually warrants more consideration." The Supreme Court cited with approval the Superior Court's opinion in Laugelle v. Bell Helicopter Textron, Inc. In Laugelle, a Massachusetts pilot and his surviving wife sued a number of companies involved in the manufacture of a helicopter after the pilot was killed in a helicopter mishap in Texas. The Supreme Court found this language from Laugelle worth quoting:
Id. at 1056.
Id. (quoting Laguelle v. Bell Helicopter Textron, Inc., 2013 WL 5460164, at *4 (Del. Super. Oct. 1, 2013)).
Massachusetts, where the Pilot's loved ones experienced and still experience the economic difficulties, the pain, and the suffering his loss has visited upon them, and for which they seek some measure of recovery, holds the contacts far superior in this regard. It is there that
the Laugelle Family lives with the consequences of the Pilot's demise.
Bell Helicopter Textron, Inc., 113 A.3d at 1056 (quoting Laguelle v. Bell Helicopter Textron, Inc., 2013 WL 5460164, at *4 (Del. Super. Oct. 1, 2013)). --------
Similarly in this case, Ms. Jackson has returned to her native Delaware, continues to experience the economic difficulties resulting from the accident in New Jersey, and Delaware holds contacts "superior" to any cited by the defendants. Consideration of the third factor supports resort to Delaware law.
4. The place where the relationship between the parties is centered.
This consideration is difficult to pin down in a tort case involving businesses and conduct that occurred over multiple jurisdictions. BATO expresses some uncertainty exactly when the tire in question was added to the Ford Explorer in question and is therefore dubious that the plaintiff and BATO have any "relationship" at all. Indeed, BATO expresses skepticism that this particular model tire should ever have been placed on this particular Ford, in any jurisdiction. With due regard to its factual doubts, BATO's position does not aid the Court in resolving "where the relationship is centered" for surely, the Restatement asks us to conclude that it is "centered" somewhere. And while it is not a wholly satisfying rationale, we can more easily conclude that the "relationship of the parties" is not centered in either Ohio or Michigan and therefore, at least as to the arguments presented herein, conclude that to the extent the question calls for an answer, the relationship of the parties is centered here in Delaware, where the Ford, the BATO tire, and the plaintiff all "resided" for a time before the tragedy.
In conclusion, the Court must recall that each of these choice of law decisions require a sensitivity to the interests involved. The Court is mindful that this is a Delaware citizen seeking relief in a Delaware Court. We understand suit was brought initially in Pennsylvania and, for whatever reason, was re-filed in Delaware. But if we may engage in some abstraction for a moment, we may suppose that Delaware citizens choose to be Delawareans in order to gain the benefits of, for example its tort laws. So if a Delaware citizen comes to a Delaware court seeking redress for a tort caused by an interstate product designed and manufactured by entities that are well aware that their reach will subject them to the laws of any number of jurisdictions, it seems simply wrong to apply a more restrictive law for her remedies than is available under Delaware law. It is certainly hazardous to make broad observations like that since the next case may call for different considerations and lead to different results, but for all of the reasons stated above, the Court is satisfied that Delaware law should apply to this dispute and the motions of Ford and Defendant BATO to apply the law of Michigan and Ohio respectively are therefore DENIED.
/s/ Charles E. Butler
Judge Charles E. Butler