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HAMILTON v. ACCU-TEK

January 22, 1999

FREDDIE HAMILTON, ET AL., PLAINTIFFS,
v.
ACCU-TEK, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Weinstein, Senior District Judge.

MEMORANDUM AND ORDER

  I.   INTRODUCTION ................................................. 333
  II.  FACTS AND PROCEDURAL BACKGROUND .............................. 334
       A. Procedural History ........................................ 334
       B. Out-of-State Shootings .................................... 334
          1. Christopher Malachi .................................... 334
          2. David Johnstone ........................................ 335
  III  LAW .......................................................... 335
       A. Choice of Law ............................................. 335
          1. New York's Choice of Law Rules ......................... 335
          2. Renvoi ................................................. 338
       B. Transfer .................................................. 339
  IV   APPLICATION .................................................. 339
       A. Choice of Law ............................................. 339
          1. Johnstone v. Accu-tek, et al ........................... 339
             a. Significant Contacts ................................ 340
             b. Interest Analysis ................................... 340
             c. Effect of Parties' Stipulation ...................... 343
          2. Costa v. Accu-tek, et al ............................... 345
       B. Transfer .................................................. 346
          1. Convenience of Parties and Witnesses ................... 346
          2. Plaintiffs' Choice of Forum ............................ 346
          3. Practical Considerations ............................... 347
          4. Interest in Local Adjudication ......................... 347
          5. Familiarity with Applicable Law ........................ 347
          6. Interests of Justice ................................... 348
  V.   CONCLUSION ................................................... 348

I. INTRODUCTION

In this case of first impression, relatives of persons killed by handguns, and one crippled survivor, have sued many handgun manufacturers jointly. Defendants' negligent marketing practices, plaintiffs contend, have created a large pool of illegal handguns readily accessible to violent New York criminals. Two of the nine shootings at issue here took place outside the state of New York — one in Virginia and one in California — raising potential conflicts of law.

A conflict between clearly-articulated, well-established legal rules of different jurisdictions is not presented. Each of the issues posed is novel: Did the defendants owe a legal duty to reduce the risk of criminal misuse of their product by exercising reasonable care in marketing and distributing it? Is a given defendant's liability limited to those shootings which involved a handgun made or distributed by it? May defendants be held collectively liable for the harm resulting from all of the shootings on the theory that their contribution to an underground market in fungible illegal handguns was the proximate cause of plaintiffs' injuries? If defendants are collectively liable, shall their liability be calculated based on each defendant's share of the relevant market? Given the novelty of plaintiffs' claims, the laws of New York, Virginia, and California are virtually certain to conflict.

Substantial weight must be accorded the location of the tort under New York's choice of law rules and each state's fundamental interest in the physical safety of citizens and travelers within its geographical boundaries. Application of Virginia and California law to the Virginia and California shootings is mandated.

Transfer of these two cases to the states where the shootings occurred is desirable. The applicable state law is highly unsettled. Interpreting it will require a subtle appreciation of state tort law developments and nuances unique to Virginia and California. This task is best carried out by district courts sitting in those states. In addition, local juries are probably the best arbiters of the unreasonableness of the risk posed by acts with local consequences. The interests of justice will best be served by transfer of Costa v. Accu-tek et al. and Johnstone v. Accu-tek et al. to Virginia and California respectively.

II. FACTS AND BACKGROUND PROCEDURAL

A. Procedural History

Katina Johnstone was one of two plaintiffs who initiated this suit in January 1995. In April 1996, her suit was consolidated with a number of other similar ones, including one filed by Veronica Costa. The complex and novel issues presented have necessitated development of a detailed and lengthy factual record. Defendants' earlier motions for summary judgment on plaintiffs' negligence claims were denied with leave to renew, on the ground that discovery was not yet complete and the issues not fully briefed. See Hamilton v. Accu-tek, 935 F. Supp. 1307, 1315, 1330 (E.D.N.Y. 1996).

With discovery nearing completion, defendants again moved for summary judgement in November 1998, on the ground that no cause of action existed. Oral argument was heard on December 17, 1998. The motion was denied. See Order December 18, 1998.

A series of motions to dismiss based upon lack of personal jurisdiction were denied, relying on the theory explicated in In re DES Cases, 789 F. Supp. 552 (E.D.N.Y. 1992). See Hamilton v. Accu-Tek, 32 F. Supp.2d 47 (E.D.N.Y. 1998) (affirming the Report and Recommendation of the Magistrate Judge on jurisdiction).

Having determined that Virginia law applied to the claims arising out of the Virginia shooting of Ms. Costa's son, and in serious doubt about the applicability of New York law to Ms. Johnstone's California-based claims, the court severed Costa v. Accu-tek et al. and Johnstone v. Accu-tek et al. from the cases set for immediate trial. See Order dated December 22, 1998. Decision on the issue of transfer was reserved pending final resolution of the choice of law issue. See Order dated December 29, 1998.

B. Out-of-State Shootings

1. Christopher Malachi

Christopher Malachi was shot and killed in Portsmouth, Virginia on April 19, 1994. He was twenty-three years old. Malachi was a New York domiciliary planning to return to New York to live. See Hamilton v. Accu-Tek, 13 F. Supp.2d 366 (E.D.N Y 1998). At the time of his murder, he had resided in Virginia as both college student and house painter for four years.

The Portsmouth police questioned a number of witnesses with possible connections to the gun used in the Malachi shooting, but the gun itself was never recovered. Expended bullets and casings were collected from the crime scene and were analyzed by the Virginia Department of General Services Division of Forensic Science.

2. David Johnstone

David Johnstone was a New York resident and domiciliary. He was shot while visiting San Francisco on July 29, 1992, and died one month later in New York. The shooter, a 16-year old resident of California, ultimately pled guilty to murder. The San Francisco Police Department recovered the gun used to shoot Mr. Johnstone, a Smith & Wesson .38 caliber revolver. It had been registered in California in 1988 and had been stolen from the Mann County home of its lawful owner two weeks before the shooting.

III   LAW

A. Choice of Law

A choice of law question is presented when a dispute implicates the interests of two or more states and application of each state's law would be consistent with the Full Faith and Credit and Due Process Clauses of the Constitution. See Cooney v. Osgood Machinery, 81 N.Y.2d 66, 70-71, 612 N.E.2d 277, 279, 595 N.Y.S.2d 919, 921 (1993); Diehl v. Ogorewac, 836 F. Supp. 88, 91 (E.D.N.Y. 1993). These modest constitutional requirements are met if each state whose law is sought to be applied has "significant contacts or significant aggregation of contacts creating state interests, such that choice of its law is neither arbitrary nor fundamentally unfair." Allstate Ins. Co. v. Hague, 449 U.S. 302, 313, 101 S.Ct. 633, 66 L.Ed.2d 521 (1981). See also Phillips Petroleum Co. V. Shutts, 472 U.S. 797, 818-23, 105 S.Ct. 2965, 86 L.Ed.2d 628 (1985).

Erie R.R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), requires a federal court sitting in diversity to apply the choice of law rules of the forum state. See Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496-97, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941); Curley v. AMR Corp., 153 F.3d 5, 12 (2d Cir. 1998).

1. New York's Choice of Law Rules

More than a third of a century ago, a revolution in choice of law standards was largely started by the seminal case of Babcock v. Jackson, 12 N.Y.2d 473, 191 N.E.2d 279, 240 N.Y.S.2d 743 (1963) (Fuld, J.). See, e.g., Symeon C. Symeonides et al., Conflict of Laws: American, Comparative, International 286-88 (1998) (methodological camps still existing in 1997, analyzed state-by-state); Maurice Rosenberg et al., Conflict of Laws (Teacher's Manual) 86 (10th ed. 1996) ("Babcock is widely regarded as the landmark case that began the change in approaches to choice of law by United States courts."); Harold L. Korn, The Choice of Law Revolution: A Critique, 83 Colum. L.Rev. 772, 827 (1983). The New York Court of Appeals adopted an "interest analysis" for torts conflicts, departing from the American standard application of lex loci delicti, or the law of the place of the wrong. Babcock involved two New York domiciliaries and stemmed from a car crash in Ontario, Canada. New York law afforded the plaintiff passenger a remedy, but Ontario had a "guest statute" precluding her recovery from the defendant driver. The court held that "[j]ustice, fairness and, the best practical result, may best be achieved by giving controlling effect to the law of the jurisdiction which, because of its relationship or contact with the occurrence or the parties has the greatest concern with the specific issue raised in the litigation." Babcock, 12 N.Y.2d at 481, 191 N.E.2d at 283, 240 N.Y.S.2d at 749 (internal quotation marks and citation omitted). It applied New York law, reasoning that New York's interest in a case involving New York parties, a New York automobile, and trip starting from and due to end in New York was certainly greater than Ontario's completely accidental and "at best minimal" interest in the matter. Id. at 482, 191 N.E.2d at 284, 240 N.Y.S.2d at 750.

In a series of subsequent cases the Court of Appeals refined the Babcock court's "grouping of contacts" approach, fashioning an analysis which gives the greatest weight to those contacts which are relevant to the policies animating the particular rules in conflict. See Schultz v. Boy Scouts of America Inc., 65 N.Y.2d 189, 196-97, 480 N.E.2d 679, 683-84, 491 N.Y.S.2d 90, 94-95 (1985). "`Under this formulation, the significant contacts are, almost exclusively, the parties' domiciles and the locus of the tort.'" AroChem Int'l v. Buirkle, 968 F.2d 266, 270 (2d Cir. 1992) (quoting Schultz, 65 N.Y.2d at 197, 480 N.E.2d at 684, 491 N.Y.S.2d at 95).

In connection with this development, New York courts have recognized a conceptual distinction between conduct-regulating and loss-allocating laws. See, e.g., Padula v. Lilarn Properties Corp., 84 N Y2d519, 521, 644 N.E.2d 1001, 1002-03, 620 N.Y.S.2d 310, 311-12 (1994) (choice of law analysis differs depending on whether the purpose of the laws at issue is to regulate conduct or allocate loss); Cooney v. Osgood Machinery, Inc., 81 N.Y.2d 66, 72, 612 N.E.2d 277, 280, 595 N.Y.S.2d 919, 922 (1993) ("An immediate distinction was drawn between laws that regulate primary conduct (such as standards of care) and those that allocate losses after the tort occurs (such as vicarious liability rules)."); AroChem, 968 F.2d at 270 (same).

Loss-allocating rules are "those which prohibit, assign, or limit liability after a tort occurs, such as charitable immunity statutes, guest statutes, wrongful death statutes, vicarious liability statutes, and contribution rules." Padula 84 N.Y.2d at 521, 644 N.E.2d at 1003, 620 N.Y.S.2d at 312 (citations omitted). Under New York's choice of law rules, the interest of the locus jurisdiction in having its loss-allocation rule applied is deemed to be minimal. See Schultz, 65 N.Y.2d 189, 198, 480 N.E.2d 679, 685, 491 N.Y.S.2d 90, 96. Conflicts between loss-allocation rules are analyzed under the rubric first set forth in Neumeier v. Kuehner 31 N.Y.2d 121, 286 N.E.2d 454, 335 N.Y.S.2d 64 (1972) (Fuld, C.J.), in the context of guest statutes and later extended to all loss-allocation rules. See Schultz, 65 N.Y.2d at 198, 480 N.E.2d at 686, 491 N.Y.S.2d at 97 (finding "no logical basis for distinguishing guest statutes from other loss-distributing rules"). The analytical framework is as follows:

1. When the parties are domiciled in the same state, the law of that state controls.

2. When the conduct occurs in the state of defendant's domicile, and he would not be liable under that state's laws, he should not be held liable under the tort law of the plaintiffs domicile. Conversely, when a plaintiff is injured in his own domicile, and the law of that state would permit him to ...


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