Chen v. L.A. Truck Centers, 1/18/17, 2DCA/8
Indiana company manufacturers tour bus, sells bus to California dealer, who in turn sells it to a California tour bus company. The tour bus is being driven in Arizona by a California resident, carrying Chinese nationals, when there is an accident. (Deep breath suggested here.) After a lawsuit is filed, California tour bus company and driver settle. Indiana manufacturer and its California dealer make a choice of law motion, arguing that (the more defendant friendly) Indiana law should apply. The trial court agrees. The Indiana manufacturer settles and, before trial, Plaintiff asks the trial court to reconsider the earlier ruling and apply California law instead. The trial court denies motion. Plaintiffs then lose jury trial and appeal. Held: Reversed.
The trial court said that choice of law motion was not a proper motion in limine; that the requirements to make a motion for reconsideration had not been met; and that the choice of law analysis still favored applying Indiana law. The 2DCA disagreed. A choice of law motion is in the nature of a in limine motion, which can be revisited by the trial court any time and as the record develops, without regard to the stricter requirements of CCP 1008. Second, the choice of law analysis has to be done with respect to each conflicting legal issues (called the doctrine of dépeçage). For example, in a personal injury case, that would include issues related to liability, damages and comparative fault. Finally, in terms of the choice of law analysis, 2DCA had no problem concluding that California had an interest in applying its strict liability rules against a California business, and that Indiana had no such interest on the facts as they stood at trial.
California choice of law rules encompass a three step process, applied to each law at issue: To over simplify, the test exploures whether the states’ laws are different, the interest of each state in applying its own law to the facts of the case at bar, and then weighs those interests to determine whose interest would be more impaired if their law was not applied. Ultimately, the trial court must apply the law of the state whose interests would otherwise be most impaired. Further, if the interests of the foreign state will not be furthered by the application of its law to the case, then the “conflict” is a false conflict.
The court examined California’s interests in its strict liability standard, like insuring that the costs of injury are borne by the manufacturer and improving product safety. The court said: California’s interest in imposing its rules of strict products liability in this case, in which a California dealership ordered an allegedly defective product, imported it into the state, and sold it to a California tour company, for use on California roads, is strong. While Indiana’s interest in a more difficult liability standard for defective products tips in favor of manufacturers, an Indiana company was no longer part of the case. The court rejected dealer’s argument that it effectively did business in Indiana, or that Indiana had an interest in applying its law in favor of dealer simply because dealer bought products from an Indiana manufacturer.
Finally, the court disagreed with some DCAs who have suggested that Hurtado v. Superior Court (1974) 11 Cal.3d 574 stands for the proposition that California has an interest in limiting the damages California defendants must pay.