2) Allstate — The Fairness Test
The second prong of the Court's choice of law analysis is the
application of the "fairness test" which the Supreme Court set
forth in Allstate Ins. Co. v. Hague, 449 U.S. 302, 101 S.Ct.
633, 66 L.Ed.2d 521 (1981). Under Allstate, a state may apply
its own substantive law and refuse to apply a sister state's
(or territory's) law when that State has "a significant contact
or significant aggregation of contacts, creating state
interests, such that choice of its law is neither arbitrary nor
fundamentally unfair." 449 U.S. at 313, 101 S.Ct. at 640.
Therefore, the Court must look at whether plaintiffs have
sufficient contacts with the New York forum to warrant
application of New York law rather than Virgin Islands law,
It is axiomatic that a federal district court deciding a
diversity case applies the same choice of law rules as the
state in which it sits. Lund's Inc. v. Chemical Bank,
870 F.2d 840 (2d Cir. 1989); Klaxon v. Stentor Elec. Mfg. Co.,
313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941). Since this is a
diversity action commenced in the Southern District of New
York, New York choice of law rules govern. "The New York choice
of law rule for tort cases is to give `controlling effect to
the law of the jurisdiction which has the greatest concern
with, or interest in, the specific issue raised in the
litigation.'" Lund's, supra, 870 F.2d at 845 (citing Neumeier
v. Kuehner, 31 N.Y.2d 121, 127, 286 N.E.2d 454, 457, 335
N YS.2d 64, 69 (1972)).
New York's interest in having its own law applied to this
action is in avoiding the "injustice of turning out of court,
remediless citizens who ha[ve] been injured by negligence on
the part of agents of the [government]." Williams v. City of
New York, 185 Misc. 876, 57 N.Y.S.2d 39, 40 (Sup.Ct., N.Y.Cty.
1945); see also Schultz v. Boy Scouts of America, 65 N.Y.2d
189, 196-197, 480 N.E.2d 679, 688, 491 N.Y.S.2d 90, 94-95
(1985). Nine of the plaintiffs in the instant cases are
residents of the State of New York. See Plaintiff Ashley's Mem.
of Law at p. 7. A number of other plaintiffs in this action are
employed in New York or were attending schools in New York at
the time of the incident. See Plaintiff Davis' Mem. of Law at
p. 5; Plaintiff Gamboni's Mem. of Law at p. 7-8. In addition,
this Court has previously established that defendant GVI's
operation of a New York tourist office, employment of a New
York staff and maintenance of a New York bank account create
sufficient contacts with the forum to confer personal
jurisdiction over GVI. See Ashley, et al. v. American Airlines,
supra, 1988 U.S.Dist. LEXIS 11612 at 7. Therefore, New York
State has a substantial connection with both plaintiffs and
defendant GVI in this action.
Defendant GVI argues that this Court's prior Order applying
Virgin Islands law to American Airlines' third party complaint
warrants application of the same law to plaintiffs' complaints.
However, factual differences in the status of the parties at
issue mandate a different result in this motion. The Order held
that, under Allstate, it would be unfair to bar the application
of VITCA to American Airlines' claims in the third party
action. Id. at 21. That holding was predicated upon an
insufficient connection between American Airlines and the New
York forum to require application of New York's public policy
to compensate fully persons injured through governmental
negligence. However, plaintiffs here have established a
sufficient nexus with the forum state based upon their
residential and employment contacts with New York.
Under these circumstances, the Court's disregard of VITCA is
consistent with New York's public policy of providing parties
with a fair and full opportunity to recover for negligent acts
by government agents. Under Allstate, application of New York
law to plaintiffs' claims is neither arbitrary nor
fundamentally unfair, in light of plaintiffs' significant
contacts with the New York forum. Therefore, the Court will not
give effect to Virgin Islands law, specifically GVI's limited
sovereign immunity under VITCA, as to plaintiffs claims against
GVI.*fn5 Accordingly, the Court does not lack subject matter
jurisdiction over plaintiffs' action against GVI.
B) Joinder Of Indispensable Parties
Defendant GVI alleges that plaintiffs failed to join
indispensable parties to this action in accordance with
Fed.R.Civ.P. 19,*fn6 and therefore, plaintiffs' complaints
should be dismissed pursuant to Fed.R.Civ.P. 12(b)(7). The
alleged necessary parties to the action include the convict
LaBeet, his collaborator(s), the Virgin Islands Port Authority,
the government of the United States of America and the
subcontractor(s) of defendant American Airlines at the Virgin
When deciding a Rule 12(b)(7) motion, a court must initially
determine if the absent person should be joined as a party. A
court should consider whether proceeding without the person
would prejudice those parties already before the court.
See Wright & Miller, 5 Federal Practice and Procedure § 1359.
The burden is on the moving party to show the nature of the
material interests of the absent person in the subject matter
of the suit. Wright & Miller, Id. at § 1359. Rule 19(a),
governing compulsory joinder, protects existing parties by
requiring joinder of all parties who have an interest in the
litigation so that any relief awarded will fairly and
completely adjudicate the dispute. See Johnson v. Kay,
860 F.2d 529, 539 (2d Cir. 1988).
Defendant GVI has failed to provide any significant support
for its arguments on this issue. GVI has neither identified the
factual bases for its assertion of this defense, nor presented
any supporting evidence as to the absent persons' interests in
this action or the reason why relief cannot be fully accorded
without their presence. Nevertheless, the Court has examined
the status of the alleged indispensable parties and has
concluded that proceeding without these persons would not
prejudice the parties already before the Court, nor would it
prevent complete relief from being accorded among the existing
parties in the case. Therefore, the Court finds that plaintiffs
have not failed to join indispensable parties to this action.
Defendant GVI's motion to dismiss plaintiffs' complaints for
lack of subject matter jurisdiction and failure to join
indispensable parties to the action is denied.