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IN RE AIR CRASH DISASTER NEAR CHICAGO

May 29, 1980

IN RE AIR CRASH DISASTER NEAR CHICAGO, ILLINOIS, ON MAY 25, 1979.


Before Robson and Will, Senior District Judges.

  MEMORANDUM OPINION

This cause is before the Court on the Motion of defendants American Airlines, Inc. and McDonnell Douglas Corporation to strike all pending claims for punitive damages for wrongful death by plaintiffs in these consolidated actions.*fn1 The present motion concerns only punitive damages incident to wrongful death claims, and does not concern punitive damages ancillary to claims for property damage, personal injury or other claims. For the reasons stated, the motion is granted in part and denied in part.

The relevant facts for the purposes of this motion are primarily undisputed. The crash and consequent deaths occurred in Illinois. Plaintiffs and their decedents were and are residents of California, Connecticut, Hawaii, Illinois, Indiana, Massachusetts, Michigan, New Jersey, New York, Puerto Rico, and Vermont, as well as Japan, the Netherlands and Saudi Arabia. At the time of the crash, American Airlines, Inc. [hereinafter referred to as American], a Delaware corporation, had its principal place of business in New York. In August 1979, American moved its principal place of business to Texas. At the time of the crash, American's operations base was in Texas, and its maintenance department was headquartered in Oklahoma. Defendant McDonnell Douglas Corporation [hereinafter referred to as MDC], a Maryland corporation, had its principal place of business in Missouri. The DC-10 aircraft was designed and built by MDC in California.

Defendant MDC argues that this Court should apply the law of Illinois, the place of the injury, to all actions, and that Illinois law does not allow punitive damages. Defendant American argues that the law of Illinois should be applied to actions originally filed in Illinois and Michigan, and that of New York should be applied to actions originally filed in New York and California. American contends that neither Illinois nor New York permits punitive damages in a wrongful death action.

The plaintiffs take various positions. Some contend that the conflict of law rules of all the forum states require us to apply the law of defendants' principal place of business or the law of the state where the alleged wrongful conduct occurred. Other plaintiffs, notably those from Michigan and Hawaii, assert that the conflict of law rules of those forums require the Court to apply the law of the plaintiff's domicile. All plaintiffs contend that under the applicable state law, punitive damages are recoverable in a wrongful death action. Additionally, plaintiffs contend that to deny punitive damages in wrongful death actions, while permitting them in personal injury actions, violates the equal protection clauses of the United States Constitution, and the Illinois, California and Michigan state constitutions.

CONFLICTS OF LAWS

Since the jurisdiction of this Court is based on diversity of citizenship, we must apply the choice of law rules of the state where the actions were originally filed. Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941); Van Dusen v. Barrack, 376 U.S. 612, 84 S.Ct. 805, 11 L.Ed.2d 945 (1964). Therefore, we will consider the choice of law rules of Illinois for actions originally filed in Illinois, and the choice of law rules of California, Michigan, New York, Puerto Rico and Hawaii for actions originally filed in those jurisdictions. We have already decided that the liability in these actions is to be determined under Illinois law, and compensatory damages probably are to be governed by the law of the domicile of the plaintiffs or their decedents. In Re Air Crash Disaster Near Chicago, Illinois, 480 F. Supp. 1280 (N.D.Ill. 1979). However, the conflict of law rules require a different result as to punitive damages.

ACTIONS FILED IN ILLINOIS

Illinois courts apply the "most significant relationship" test of the Restatement (Second) of Conflict of Laws to determine the applicable law in a tort action. Ingersoll v. Klein, 46 Ill.2d 42, 262 N.E.2d 593 (1970). Under this test, four "contacts" generally are considered most important in determining which law applies: (1) the place of the injury; (2) the place where the conduct causing injury occurred; (3) the domicile, residence, nationality, place of incorporation, and place of business of the parties; and (4) the place where the relationship, if any, of the parties is centered. Ingersoll, supra, at 47-48. Illinois courts consider the purpose of the tort rule involved when determining the relative importance of the various contacts to the issue under consideration.

The first and second factors are considered significant where the issue concerns the defendant's adherence to standards of conduct. The state in which the conduct occurred and the state of injury have the greatest interest in regulating behavior within their jurisdictions. In the present case, the state in which the wrongful conduct occurred and the state of injury are different. The conduct which allegedly caused the injury, American's improper maintenance of its airplane and MDC's faulty design and construction of the plane, presumably occurred in Oklahoma and California, respectively, although this is not entirely clear. The accident, however, occurred in Illinois. Leschkies v. Playboy Club of Lake Geneva, Inc., 465 F. Supp. 80 (N.D.Ill. 1979); Kramer v. McDonald Systems, Inc., 61 Ill.App.3d 164, 19 Ill.Dec. 21, 378 N.E.2d 522 (1976); Jackson v. Miller-Davis, 44 Ill.App.3d 611, 3 Ill.Dec. 161, 358 N.E.2d 328 (1st Dist. 1976); See Restatement, § 146, comments d and e.

  Where, as here, the conduct causing injury occurs in a state
other than that in which the injury occurred, the importance of
the place where the conduct occurred increases. The purpose of
punitive damages is to punish and deter wrongdoing. Sibley v.
KLM-Royal Dutch Airlines, 454 F. Supp. 425 (S.D.N.Y. 1978);
Jackson v. Koninklijke Luchtvaart Maatschappij N.V., 459 F. Supp. 953
 (S.D.N.Y. 1978). The state in which the wrongdoing actually
occurred has a greater interest than the state where the effect
of the wrongdoing fortuitously manifested itself. See
Restatement, § 146, comment e.

The third factor, the defendant's principal place of business, is also important where the issue is what state's law governs the availability of punitive damages. A state's purpose in granting punitive damages is to insure residents' compliance with standards of conduct; a state's purpose in denying punitive damages is to limit the liability of its domiciliaries in tort actions. Forty-Eight Insulations v. Johns-Manville Products, 472 F. Supp. 385 (N.D.Ill. 1979); Pancotto v. Sociedade de Safaris de Mocambique, S.A.R.I., 422 F. Supp. 405 (N.D.Ill. 1976). Both purposes would be served by applying the law of the state of the defendant's domicile.

In Sibley, supra, and Jackson, supra, the court held that the availability of punitive damages in cases arising from the crash at Tenerife in the Canary Islands of a Pan American 747 and a KLM 747 was governed either by the law of the place of conduct and injury (Spain), or by the law of the principal place of business of KLM (Netherlands), neither of which allowed punitive damages. The court recognized that punitive damages are primarily the concern of the jurisdiction where the conduct occurred or the defendant's business was located. Denial of punitive damages reflects that state's concern with protecting the financial interests of those doing business there and the state of residence's concern with avoiding excessive financial burdens on resident persons and corporations. See Jackson, supra, 459 F. Supp. at 956.

The fourth factor requires a determination of where the relationship, if any, of the parties is centered. Most of the actions filed in Illinois involve Illinois decedents who purchased their tickets in Illinois for a flight which began in Illinois. Although these factors indicate that the relationship between the parties is, to some degree, centered in Illinois, this is not significant for the purpose of this motion. Where the tickets were purchased or where the flight began is irrelevant to the question of the defendants' conduct.

Thus, we conclude that the most significant contacts for the purposes of this motion are the places where the conduct causing injury occurred and the states where defendants' principal places of business are located.

We turn first to the question of what state's law determines the availability of punitive damages as far as American is concerned. At the time of the crash, American's corporate headquarters and principal place of business was New York.*fn2 In August 1979, American moved from New York to Texas. New York clearly does not allow an award of punitive damages in wrongful death actions.*fn3 Robert v. Ford Motor Co., 424 N.Y.S.2d 747 (1980); Barrett v. State, 85 Misc.2d 456, 378 N.Y.S.2d 946 (Ct.Claims 1976); see also N.Y. Estates, Powers & Trusts Law § 5-4.3 (McKinney 1967). Plaintiffs argue that Texas, American's present headquarters, is more significant for the purpose of the punitive damage issue because New York has no interest in shielding a former resident from excessive financial burdens.

In a similar case, Miller v. Miller, 22 N.Y.2d 12, 290 N.Y.S.2d 734 (1968), the New York court found that a defendant who moved from Maine to New York shortly after an automobile accident in Maine involving a New York resident, should be considered a New York resident for the purpose of determining the applicable law. In that action, however, the defendant had previously resided in New York for a substantial period of time prior to a short residence in ...


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