UNITED STATES DISTRICT COURT, SOUTHERN DISTRICT OF NEW YORK
November 8, 1978
Joan K. JACKSON and John A. Hackett, Plaintiffs,
KONINKLIJKE LUCHTVAART MAATSCHAPPIJ N. V. a/k/a KLM-Royal Dutch Airlines, a Corporation and The Boeing Company, a Corporation, Defendants. Carla JOHNSON and Robert Polin, Plaintiffs, v. KONINKLIJKE LUCHTVAART MAATSCHAPPIJ N. V. a/k/a KLM-Royal Dutch Airlines, a Corporation and The Boeing Company, a Corporation, Defendants. Suzanne C. DONOVAN and Jeffrey B. Rettig, Plaintiffs, v. KONINKLIJKE LUCHTVAART MAATSCHAPPIJ N. V. a/k/a KLM-Royal Dutch Airlines, a Corporation and The Boeing Company, a Corporation, Defendants
The opinion of the court was delivered by: WARD
Defendant KLM-Royal Dutch Airlines ("KLM") moves to dismiss the punitive damage claims in these actions pursuant to Rules 12(b)(6), 12(c), and 56, Fed.R.Civ.P. For the reasons hereinafter stated, the motions are granted.
These diversity actions to recover damages for personal injuries arise from the air crash on March 27, 1977 involving a Pan American World Airways, Inc. 747 aircraft, on which plaintiffs Joan K. Jackson, Carla Johnson and Suzanne C. Donovan
were working as flight attendants, and a KLM 747 aircraft on the airport runway at Santa Cruz de Tenerife, the Canary Islands, Spain. The actions, which were all commenced in the United States District Court for the Central District of California, are among some one hundred cases transferred to this Court by the Judicial Panel on Multidistrict Litigation, pursuant to 28 U.S.C. § 1407, for consolidated and coordinated pretrial proceedings. The issue before the Court in all three cases is which jurisdiction's law applies to determine whether punitive damages may be assessed against KLM.
It is well settled that the choice of law rules of the state in which the action was commenced govern in federal diversity actions. Day & Zimmermann, Inc. v. Challoner, 423 U.S. 3, 96 S. Ct. 167, 46 L. Ed. 2d 3 (1975); Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 61 S. Ct. 1020, 85 L. Ed. 1477 (1941); In re Air Crash Disaster at Boston Mass. on July 31, 1973, 399 F. Supp. 1106 (D.Mass.1975); See Van Dusen v. Barrack, 376 U.S. 612, 84 S. Ct. 805, 11 L. Ed. 2d 945 (1964) (§ 1404 transfer). Since these actions were all filed in the Central District of California, this Court is bound to apply California's choice of law principles.
California courts adhere to an interest analysis approach to choice of law under which that state's law is normally applied unless a party demonstrates that a foreign state has a greater interest in the application of its law to the issue in question. Hurtado v. Superior Court, 11 Cal.3d 574, 579-81, 114 Cal.Rptr. 106, 109-10, 522 P.2d 666, 669-70 (1974) (en banc). KLM asserts that the Netherlands, the place of KLM's incorporation and its principal place of business, and Spain, the country in which the accident occurred, are the only jurisdictions with a significant interest in the issue of punitive damages. Neither the Netherlands nor Spain provides for the imposition of punitive damages in personal injury actions. Plaintiffs contend, however, that their respective domiciles, New York, Pennsylvania, and Tennessee,
under whose laws punitive damages are allegedly recoverable,
have the greatest interest in the punitive damages issue. Neither side suggests that California law is applicable here.
The purpose of punitive damages is to punish the defendant and to deter future wrongful conduct by the defendant and others. Templeton Feed & Grain v. Ralston Purina Co., 69 Cal.2d 461, 469, 72 Cal.Rptr. 344, 349, 446 P.2d 152, 157 (1968) (en banc); In re Paris Air Crash of March 3, 1974, 427 F. Supp. 701, 706 & n.10 (C.D.Cal.1977). Plaintiffs believe that their domiciliary states have the greatest interest in punishing and deterring tortious acts committed against their citizens. However, the California Supreme Court has recognized that the interest in regulation of conduct in tort cases is primarily local in character, and is the concern of the jurisdiction in which the conduct occurred. See Hurtado, supra, 11 Cal.3d at 573-74, 114 Cal.Rptr. at 112, 522 P.2d at 672; Reich v. Purcell, 67 Cal.2d 551, 556, 63 Cal.Rptr. 31, 34, 432 P.2d 727, 730 (1967) (en banc); Accord, Babcock v. Jackson, 12 N.Y.2d 473, 483, 240 N.Y.S.2d 743, 750-51, 191 N.E.2d 279, 284 (1963). Here that jurisdiction is Spain.
Moreover, the domiciliary states have no significant interest in imposing punitive damages in these cases because the conduct in question did not occur there.
Henry v. Richardson-Merrell, Inc., 508 F.2d 28, 32-37 (3d Cir. 1975) ("An alternate purpose of torts suits is to exact compensation from the tortfeasor in order to deter future misconduct. Where the tortious activity took place wholly outside of (the state), however, that policy could not be fostered." Id. at 33); Babcock, supra, 12 N.Y.2d at 483, 240 N.Y.S.2d at 750-51, 191 N.E.2d at 284 (1963) ("Where the defendant's exercise of due care . . . is in issue, the jurisdiction in which the allegedly wrongful conduct occurred will usually have a predominant, if not exclusive, concern."); See Hurtado, supra, 11 Cal.3d at 573-74, 114 Cal.Rptr. at 112, 522 P.2d at 672; Reich, supra, 67 Cal.2d at 556, 63 Cal.Rptr. at 34, 432 P.2d at 730; In re Paris Air Crash of March 3, 1974, 399 F. Supp. 732, 744 (C.D.Cal.1975).
Spain's policy of not imposing punitive damages in tort cases reflects its judgment that its interest in protecting the financial security of those doing business in Spain, such as KLM, Hurtado, supra, 11 Cal.3d at 585, 114 Cal.Rptr. at 113, 522 P.2d at 673, outweighs its interest in imposing punitive damages as a means of regulating conduct. The Netherlands, KLM's place of incorporation and principal place of business, has a similar interest in protecting KLM from excessive financial burdens. Id. at 580-81, 584, 114 Cal.Rptr. at 110, 112, 522 P.2d at 670, 672; Reich, supra, 67 Cal.2d at 556, 63 Cal.Rptr. at 35, 432 P.2d at 731; In re Paris Air Crash, supra, 399 F. Supp. at 743. The interests of Spain and the Netherlands are accentuated under present circumstances, where hundreds of damage claims have been asserted against KLM. Compare Roginsky v. Richardson-Merrell, Inc., 378 F.2d 832 (2d Cir. 1967).
Because application of the laws of plaintiffs' domiciliary states would advance no substantial interest of those states and would impair significant interests of Spain and the Netherlands, the Court concludes that a California court would apply the law of Spain or the Netherlands to the punitive damages issue herein.
Accordingly, KLM's motions to dismiss the punitive damages claims are granted.
It is so ordered.