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MURPHY v. ACME MKTS.

December 8, 1986

JOHN MURPHY and DONNA MURPHY, Plaintiffs,
v.
ACME MARKETS, INC., Defendant; ACME MARKETS, INC., Third-Party Plaintiff, v. STELLA D'ORO BISCUIT COMPANY, Third-Party Defendant



The opinion of the court was delivered by: MCLAUGHLIN

MEMORANDUM AND ORDER

McLAUGHLIN, District Judge

 In this case based on diversity of citizenship, 28 U.S.C. § 1332(a), the Court is "called upon to wade into New York's choice-of-law quagmire." O'Rourke v. Eastern Air Lines, 730 F.2d 842, 847 (2d Cir. 1984).

 Facts

 Plaintiffs John and Donna Murphy are married and are domiciled in New York. They assert that, due to the defendant's negligence, Mr. Murphy was injured at defendant's loading dock in Jersey City, New Jersey during the course of his employment.

 Defendant, a Pennsylvania corporation authorized to do business in New York and New Jersey, asserts that the injuries were due, entirely or partially, to Mr. Murphy's own culpable conduct. In addition, defendant, as third-party plaintiff, has impleaded plaintiff's employer, New York corporation. The question is whether New York's or New Jersey's law on comparative negligence should apply.

 Under New York law, a plaintiff's contributory negligence, no matter how overwhelming, merely reduces his damage in proportion to his share of fault. See N.Y.C.P.L.R. § 1411 (McKinney 1976). *fn1" Under New Jersey law, a damages award is also reduced in proportion to the plaintiff's share of fault; if, however, plaintiff's fault is greater than defendant's, recovery is barred altogether. See N.J. Stat. Ann. § 2A:15-5.1 (West Supp. 1986). *fn2"

 Not surprisingly, plaintiff argues that New York law should apply. Defendant and third-party defendant, of course, invoke New Jersey law. Plaintiffs emphasize that New York has a strong interest in applying its loss allocation rules to this case because plaintiffs' own domicile and that of third-party defendant is in New York, and because the defendant is authorized to do business in New York. Defendant and third-party defendant counter that New Jersey's comparative negligence statute is conduct-regulating, and because New Jersey was the locus of the injury and the defendant is authorized to do business in New Jersey, New Jersey has the greater interest.

 Discussion

 In a diversity case, this Court must apply the choice-of-law principles of New York, the state in which the Court sits. See Klaxon Co. v. Stentor Electric Manufacturing Co., 313 U.S. 487, 496, 85 L. Ed. 1477, 61 S. Ct. 1020 (1941); Entron, Inc. v. Affiliated FM Insurance Co., 749 F.2d 127, 131 (2d Cir. 1984).

 In Schultz v. Boy Scouts of America, Inc., 65 N.Y.2d 189, 480 N.E.2d 679, 491 N.Y.S.2d 90 (1985), the New York Court of Appeals reviewed New York's choice-of-law principles for tort actions. There, as here, the parties' domiciles had different rules, and the locus of the tort was a third jurisdiction.

 The Schultz court noted that New York used to apply the traditional rule of lex loci delicti to determine choice-of-law conflicts in tort actions. In Babcock v. Jackson, 12 N.Y.2d 473, 191 N.E.2d 279, 240 N.Y.S.2d 743 (1963), however, the court abandoned this approach, holding that an action between New York domiciliaries arising from an automobile accident in Ontario, Canada would be governed by New York law, not by Ontario's guest statute, which could have barred recovery.

 The Schultz court observed that Babcock employed both a "grouping of contacts" approach and an "interest analysis" approach. Schultz, supra, 65 N.Y.2d at 197, 480 N.E.2d at 684, 491 N.Y.S.2d at 95. Upon examining Babcock's progeny, however, Schultz characterized the grouping of contacts approach as "indiscriminate," and stated that it had been rejected by these later cases because "it bore no reasonable relation to the underlying policies of conflicting rules of recovery in tort actions." Id., 480 N.E.2d at 684, 491 N.Y.S.2d at 95. As a result, Schultz held, "[i]nterest analysis became the relevant analytical approach to choice of law in tort actions in New York." Id., 480 N.E.2d at 684, 491 N.Y.S.2d at 95.

 Under an interest analysis approach, the court determines which jurisdiction has the greatest interest in applying its law to the litigation. In such an examination, "the [only] facts or contacts which obtain significance in defining State interests are those which relate to the purpose of the particular law in conflict." Id., 480 N.E.2d at 684, 491 N.Y.S.2d at 95 (brackets in original) ...


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