Cal Biz Lit

Cal Supremes Resolve Important Conflict of Laws Issue

    Cal Biz Lit blogged here on McCann v. Foster Wheeler (2008), ___Cal.Rptr.___, Superior Court of Los Angeles County; BC336869.  The case dealt with a conflict between Oklahoma’s pro-business statute of repose, which would bar the plaintiff’s claim, and Code of Civil Procedure section 340.2, California’s pro-plaintiff statute of limitations for asbestos claims, which would have allowed it.  Plaintiff was exposed to asbestos related to the defendant’s product for two weeks in the late 1950’s in Oklahoma.  The defendant was a resident of New York.  And the plaintiff moved to California in 1975, living here until his mesothelioma diagnosis more than thirty years later.

    California uses a three-part “governmental interest” method for resolving conflicts. Reich v. Purcell (1967) 67 Cal.2d 551.  First, it looks at whether there is actually a conflict.  Second, it looks at whether both states have an interest in applying their own laws.  Finally, if there is a conflict and if both states have interests, it looks at which interest will be more significantly impaired  by application of the other’s law.

    The Court of Appeal had ruled that Oklahoma had no interest in protecting a New York defendant, so that California’s pro-plaintiff statute of limitations applied. 

    Yesterday, the Supremes reversed in McCann v. Foster Wheeler LLC (February 18, 2010) ___ Cal.___ (S162435).   The court held 7-0 that Oklahoma had an interest in business-friendly legislation both as applied to local businesses and to out-of-state businesses.  Furthermore, the interest in creating a more business-friendly environment in Oklahoma would be more severely impaired by applying California law than would California’s pro-plaintiff interest be impaired by applying the Oklahoma bar.

    It is not unusual for non-California plaintiffs to sue non-California defendants in toxic tort cases where the primary nexus between the case and California is that the plaintiff’s attorneys are located here.  CBL can imagine a number of situations where this sort of conflict of laws arises, and the McCann decision could well apply to any number of situations involving toxic exposures in plaintiff-unfriendly jurisdictions.

Cal Supremes Hear Argument On Choice of Law In Toxic Tort Case

    The plaintiff is exposed to a toxic product way back in the 1950's in Oklahoma, where he is then living. Many toxic exposures cause disease (if at all) only many years later.  And so, fifty years after the exposure, and after he has moved to California, the plaintiff is diagnosed with a disease allegedly caused by the exposure.  Under Oklahoma's statute of repose, his case is time-barred.  Under California's delayed accrual statute of limitations for asbestos-related cases, he has lots of time.  Which law applies?

    In McCann v. Foster Wheeler, Superior Court of Los Angeles County; BC336869, the trial court ruled that Oklahoma law governed and the case was time barred.  The Court of Appeal reversed based on choice of law principles.  The decision, which you can read here, is now not citeable as authority because . . . . the Cal Supremes granted a hearing.  Which they held on Friday.  The Supremes summarized the issue as follows:

This case presents the following issue: Where plaintiff’s exposure to asbestos in Oklahoma in 1957 (when plaintiff was a resident of Oklahoma) assertedly led to plaintiff’s developing mesothelioma in 2005 (when plaintiff was a resident of California), is the timeliness of plaintiff’s action against defendant (a company that designed and manufactured the boiler upon which the asbestos was being installed in Oklahoma) properly governed by Oklahoma or California law?

    I've often thought Cal Supremes oral argument in this state was akin to a press conference for the outcome, but according to Legal Pad, this one was hard to call.  Justice Corrigan, one of the court's more conservative justices, was quoted by Legal Pad as raising "the specter of California becoming a 'litigation magnet' if people figure out they could move to the Golden State and sue for injuries that might have actually occurred decades ago." 

    On the other hand, Justices Werdegar and Kennard seemed to want to give the plaintiff some relief under Code of Civil Procedure section 361, California's "borrowing statute." While the Court of Appeal had ruled in plaintiff's favor, it had also held that section 361 was of no help.

    We should know the outcome in sixty days.

Tort Plaintiffs Be Warned: Contra Costa and Santa Clara Counties Are Not Friendly Places

    To help you get your weekend off to a rousing start, here's a bunch of statistics.  Just what you were hoping for, right?

    About a year ago, Cal Biz Lit reported here on the U.S. Department of Justice's 2005 survey of state court civil jury and bench trials.  The link to that report is no longer  alive.  The report was revised in April, 2009, and is now available here.

    In the earlier post, CBL expressed surprise at the small number of cases tried to completion in some California courts.  Santa Clara County, with 89 judges or commissioners, tried a grand total of 54 cases to verdict or judgment (that's .606 trials per judicial officer). Contra Costa, Northern California's largest suburban county with over a million residents and 59 judges, had 29 civil trials go to verdict or judgment, about half a trial per judicial officer.

    Well, now the DOB has massaged the same data some more in a new report
available here, and it looks like some plaintiffs will wish fewer tort cases went to verdict.  'Cuz the outcomes weren't so hot for them. Nationwide in 2005, plaintiffs won their tort trials about half the time.  The median tort damage award when they won was $31,000.  But in Contra Costa County, with twelve tort cases tried to conclusion in 2005, plaintiffs won twice -- that's 12%.  And while the win / loss record in Santa Clara County was near the national norm, the median damage award in the fourteen cases the plaintiffs won was a piddling $19,000.  That's right, folks, Santa Clara County jurors in 2005 awarded a thumping total of about $266,000 in tort damages to all plaintiffs against all defendants!

    Here are the plaintiff win rates in some of the other major California counties:  Los Angeles, 42.8%;  Alameda, 56.2%;  San Francisco, 53.2%;  Orange, 41.9%.  This is not particularly surprising.

    Nor are the average plaintiff verdict amounts much of a surprise:  Alameda is right near the national average, $30,000.  San Francisco is higher at $43,000.  And Los Angeles County, the largest in the state, had an average plaintiff tort verdict in 58 cases of $106,000.  CBL suspects this may be heavily skewed by a number of eight figure asbestos verdicts.

    And speaking of asbestos, the DOJ reports that out of 16,359 nation-wide state court tort trials in 2005, 2.2% were product liability trials, and about one in four of those were asbestos cases.  On the other hand, 58% were automobile accident cases -- obviously the largest number by far.  A distant second was medical malpractice, at about 15%.

   

You Didn't Supply The Dangerous Parts? That's OK -- You're Liable Anyway

    Earlier this year, one of our courts of appeal decided Taylor v. Elliott Turbomachinery Co., Inc. (2009) 171 Cal.App.4th 564, a product liability  decision generally considered to be quite pro-defense.  In Taylor, decedent was exposed to asbestos gaskets and

packing used with defendants' ship-board pumps and valves.  The defendants did not supply the gaskets or packing, and moved for summary judgment on the ground that they couldn't be held responsible for injuries caused by products (the gaskets and packing) they neither manufactured or supplied.  The Court of Appeal for the First District affirmed, holding  that (1) because the pumps and valves were not themselves defective, the defendants had no duty to warn about the dangers of other products used with them;  and (2) because the pumps and valves were incorporated into the overall propulsion system of the ship, there was no liability under the "component parts doctrine," sometimes known as the "bulk supplier doctrine."  (E.g., Artiglio v. General Electric Co. (1998) 61 Cal.App.4th 830.)

    Yesterday, the Court of Appeal for the Second District faced the same fact pattern in O'Neil v. Crane Co. (September 21, 2009) ___Cal.App.4th___ (B208225) and reached exactly the opposite conclusions:  First,  the component parts/bulk supplier doctrine applies to

multi-use or fungible products, designed to be incorporated into some other product. The component will be substantially altered by the customer, and the manufacturer of the component will have no control over the design of that finished product, or the warnings or labels on those products.

    Pumps and valves don't fill the bill.  Secondly,

[R]espondents incorporated asbestos-containing products into their products and knew those products would over time be replaced with the same kind of product, and that the products were defective because they required asbestos packing and insulation, and because they had no appropriate warnings. We can see no relevance to the fact that the injury was caused by the operation of its product in conjunction with a replacement part which is no different than the original. If respondents had warned the hypothetical original user, or protected that person by avoiding defective design, subsequent users, too, would have been protected.

    In other words, the fact that the defendants did not supply the asbestos-containing replacement parts did not shield them from liability.  The product could be found defective, and required warning, because it was designed to be used with asbestos.

    So now we have two conflicting decisions on these two questions.  And under the Cal Supremes'  decision in Auto Equity Sales, Inc. v. Superior Court of Santa Clara County (1962) 57 Cal. 2d 450, every trial court in the state is free to choose between them.

This Really Is Ridiculous

    Although I usually represent defendants in tort, consumer and business litigation,  CalBizLit.com is not a tort reform site.  CalBizLit believes in the civil courts and the jury system.  CalBizLit thinks that while there are occasional aberrant, and even shocking, results (which of course get all the headlines), more often than not, courts and juries get it right.

    However.  There are exceptions.  And today, CalBizLit discusses one of them.  It's an  exception that is indefensible, that clearly offended a Los Angeles trial judge, and that needs fixin' at the appellate level.

    More after the jump.