Second Restatement's "most significant relationship" test will determine the substantive law to be applied to all the other Remaining Cases.
II. WHOSE SUBSTANTIVE LAW APPLIES?
Having identified the proper choice of law rules, we now proceed to apply them to discover the substantive law that will govern on the issue of compensatory damages for pre-impact fear.
A. "Most Significant Relationship" Cases
The Second Restatement "most significant relationship" test applies to almost all of the Remaining Cases. As discussed above, that test is applicable to all of the cases in which jurisdiction is based on the FSIA. The test also governs Shellberg v. AMR Corp., No. 95 C 4957, the diversity-based case in which the choice of law rule of the original forum state (Oklahoma) is the most significant relationship test.
As we noted in Roselawn III, the Second Restatement requires that four factors must be weighed in determining the state having the most significant relationship with a tort claim: (1) the place where the injury occurred; (2) the place where the conduct causing the injury occurred; (3) the domicile of the parties (in the case of corporations, this would include the place of incorporation and principal place of business); and (4) the place where the relationship between the parties is centered, if that can be determined. See RESTATEMENT (SECOND) OF CONFLICT OF LAWS § 145(2). The defendants argue that the place of injury is entitled to presumptive favor for all aspects of personal injury claims, citing § 146 of the Restatement. The plaintiffs generally argue that, for issues of compensatory damages, the interest of the domicile of the injured person is paramount. A few plaintiffs contend that either the law of the defendants' domicile (specifically, Texas) or federal common law should apply.
Section 145(2) of the Restatement expressly provides that the relative importance of the factors its sets out can vary, depending on the particular issue at stake. Id. § 145(2). For instance, in the area of punitive damages, many authorities suggest that the place of the misconduct and the defendants' domiciles have the greatest interest in balancing the deterrence of wrongdoing with the costs of imposing high damages upon resident business defendants. See In re Air Crash Disaster at Stapleton Int'l Airport, Denver, Colorado, on Nov. 15, 1987, 720 F. Supp. 1445, 1453 (D. Colo. 1988); see also Air Crash Chicago, 644 F.2d 594, 613 (7th Cir. 1981).
In the area of compensatory damages, by contrast, much of the existing authority supports the application of the law of the injured person's domicile, on the ground that that state has the greatest interest in ensuring that its residents are appropriately compensated for their injuries. See Air Crash Chicago, 644 F.2d at 613 (the plaintiffs' domiciliary states have "legitimate interests" in "assuring that the plaintiffs are adequately compensated for their injuries and that the proceeds of any award are distributed to the appropriate beneficiaries"); Burgio v. McDonnell Douglas, Inc., 747 F. Supp. 865, 872 (E.D.N.Y. 1990) (as domicile of the decedent and plaintiff, New York had a more substantial interest in the compensation awarded than Louisiana, which had little connection beyond being the site of the crash); In re Air Crash Disaster at Stapleton Int'l Airport, Denver, Colo., on Nov. 15, 1987, 720 F. Supp. 1505, 1528 (D. Colo. 1989) (by agreement, issues of compensatory damages were governed by the law of each plaintiff's domicile because "the domicile state has the most significant interest in placing a value on the injuries suffered"), rev'd on other grounds sub nom. Johnson v. Continental Airlines Corp., 964 F.2d 1059 (10th Cir. 1992); Emmart v. Piper Aircraft Corp., 659 F. Supp. 843, 846-47 (S.D. Fla. 1987) (as the state in which the decedents had resided, Indiana had the greatest interest with respect to the nature and extent of the compensatory relief afforded the decedents' beneficiaries); In re Air Crash Disaster at Boston, Massachusetts, on July 31, 1975, 399 F. Supp. 1106, 1112-14, 1118-19 (D. Mass. 1975) (applying the choice of law rules of the original transferor states; where those rules involved an interest-balancing test, the domiciles of the decedents and most of the plaintiffs had the most substantial interest in having their laws applied to the issue of compensatory damages); Bryant v. Silverman, 146 Ariz. 41, 703 P.2d 1190, 1194 (Ariz. 1985) (under most significant relationship test, domicile of the decedent carried great weight; the place of injury did not have a strong interest in compensation where the decedent was a non-resident). "In sum, the most sensible application of the Restatement's standards is to apply the law of the injured person's domicile to all issues concerning the availability and measurement of compensatory damages." John B. Austin, A General Framework for Analyzing Choice-of-Law Problems in Air Crash Litigation, 58 J. AIR L. & COM. 909, 973 (1993) (discussing the application of the factors listed in Second Restatement § 6 to issues of compensatory damages in air crash cases).
In Roselawn III, this Court followed this approach, treating the domicile of the plaintiffs and decedents as the paramount factor in determining the substantive law to be applied to compensatory damages available in the wrongful death and survival actions at issue there. Although in that decision the domicile of the plaintiffs and decedents (Indiana) was the same as the place of injury, our opinion made it clear that we gave more weight to the former factor than the latter. See Roselawn III, 926 F. Supp. at 743, 745 (the place of the crash was somewhat, although not wholly, fortuitous, and so the place of injury did not "deserve the full presumptive force to which it [was] due" under Second Restatement § 146; the domiciliary state's "interest in determining and providing for the appropriate recovery for survivors and estates of . . . decedents" was a more important factor).
In Roselawn III we acknowledged that today's international economy results in millions of miles being logged by today's air passengers. "Simply put, today's air travelers could be seen to have a relationship with numerous states in their air travel but their 'most significant relationship' for compensatory damage purposes will usually be with their own state of domicile." Id. at 746. Upon re-weighing the importance of the various state contacts relevant to the choice of law motion currently before us, we find no reason to depart from our previous focus in Roselawn III on the domicile of the injured persons.
The language of § 146 of the Second Restatement does not require a different result. That section prescribes that the law of the place of injury should be applied to "determine the rights and liabilities of the parties" in a personal injury claim, "unless, with respect to the particular issue, some other state has a more significant relationship under the principles stated in § 6." SECOND RESTATEMENT § 146 (emphasis added). Section 146 thus expressly recognizes that some other state may have a more compelling interest in the action as to a particular narrow issue. Comment c of this section recommends that "the extent of the interest of each of the potentially interested states should be determined on the basis, among other things, of the purpose sought to be achieved by their relevant local law rules and of the particular issue," and refers the reader to § 145. The comments to § 145 explicitly note that in some situations, "the place of injury will not play an important role in the selection of the state of the applicable law. This will be so, for example when the place of injury can be said to be fortuitous or when for other reasons it bears little relation to the occurrence and the parties with respect to the particular issue . . . ." SECOND RESTATEMENT § 145, comment e.
This Court found in Roselawn III that the fact that the injury occurred in Indiana was somewhat, although not entirely, fortuitous. Roselawn III, 926 F. Supp. at 743. This is even more true where, as in the Remaining Cases, none of the injured persons was an Indiana resident. On the specific issue of compensation for the injuries sustained, the place of injury has relatively little interest in the relief afforded non-residents. See Bryant v. Silverman, 146 Ariz. 41, 703 P.2d 1190, 1194 (Ariz. 1985). Indeed, the fact that all of the decedents and defendants are nonresidents itself makes the place of injury "fortuitous," and renders its interest attenuated. See Forty-eight Insulations, Inc. v. Johns-Manville Prods. Corp., 472 F. Supp. 385, 392 (N.D. Ill. 1979).
A state's laws regarding damages generally rest on two sometimes competing goals: the compensation of resident plaintiffs' injuries, and the protection of resident defendants from excessive claims. See Chicago Air Crash, 644 F.2d at 610; Burke v. J.B. Hunt Transp., Inc., 1992 U.S. Dist. LEXIS 8167, No. 91 C 3459, 1992 WL 137153 at *4 (N.D. Ill. June 10, 1992) ("Wrongful death damages . . . reflect a state's balance between the need to compensate and the desire to protect resident defendants"). Here, neither of these two principles is involved: none of the decedents nor defendants before us on this motion are residents of Indiana. A state where an injury occurs has very little interest in insuring the compensation of the victim or protecting the tortfeasor when neither one is a state resident. See Burke, 1992 U.S. Dist. LEXIS 8167, 1992 WL 137153 at *4 (where neither plaintiff nor defendant was an Indiana resident, Indiana's interests as the place of injury were subordinate to the interests of the plaintiff's domicile). Cf. Maroon v. Indiana, 411 N.E.2d 404, 410-412 (Ind. Ct. App. 1980) (mere fact that Illinois laws regarding wrongful death and survival actions are more liberal than those of Indiana does not demonstrate any public policy of Indiana that would prevent the Illinois laws from being applied).
The interest of the place of injury is in ensuring that persons who cause injury in its state do not escape liability. See SECOND RESTATEMENT § 145, comment e. The issue presently before the Court concerns damages, not liability, however, and there is no indication that applying the compensatory damages law of a state other than Indiana would allow the defendants to "escape liability." The Court finds that with regard to compensatory damages, Indiana's interest must yield to the interest of the injured person's domiciliary state in ensuring that the wrong done to the injured person is appropriately compensated.
We likewise reject the request of some parties to apply the law of Texas and/or "federal common law" to this issue. Texas has no interest in the compensation granted to any injured person other than its own residents, or in seeing that liberal compensatory damages are imposed upon defendants whose principal place of business is in Texas. As for federal common law, the only reason cited in favor of creating and applying a federal common law of pre-impact fear damages is uniformity. This bare desire to achieve an identical result in every case is insufficient to override the interest of each injured person's domiciliary state. As our appellate court has noted, "achievement of a uniform treatment of plaintiffs and defendants through federal law is a task for Congress, not a federal court." Air Crash Chicago, 644 F.2d at 637.
Applying the law of the injured person's domicile to issues of compensatory damages advances the principles of predictability and the protection of justified expectations set out in Second Restatement § 6, in that it respects the decedent's deliberate choice to make his or her home in a state and be governed by the laws of that state. Especially with respect to the claims of a decedent's estate, which are traditionally governed by the laws of the decedent's domicile,
this deliberate decision to submit the daily affairs of life to the laws of a particular state may create justifiable expectations worthy of protection.
The § 6 principle of serving the needs of the interstate system is also upheld by applying the law of the injured person's domicile. As in Roselawn III, we agree with the reasoning of the court in Gordon v. Eastern Air Lines, Inc., 391 F. Supp. 31 (S.D.N.Y. 1975), which held that applying the law of the decedent's domicile to the issue of compensatory damages best served the needs of the interstate commerce system. "The failure to apply [the domicile's] law . . . would 'impair . . . the smooth working of the multi-state system (and) produce great uncertainty for litigants by sanctioning forum shopping . . . thereby allowing a party to select a forum which could give him a larger recovery than the court of his own domicile.'" Id. at 34 (quoting Neumeier v. Kuehner, 31 N.Y.2d 121, 286 N.E.2d 454, 458, 335 N.Y.S.2d 64 (N.Y. 1972)).
Because significant law supports the application of the law of the injured person's domicile to the issue of pre-impact fear damages, and because the alternative states proposed by the parties have little or no interest in this particular issue, the Court finds that the law of the injured person's domicile must be applied to claims for compensatory damages for pre-impact fear for all cases in which the choice of law rule is the Second Restatement's "most significant relationship" test.
B. Lex Loci Delicti Case: Anglemyer
The only case in which a choice of law rule other than the "most significant relationship" test applies is the diversity-based case Anglemyer v. AMR Corp., No. 95 C 4959, to which the North Carolina choice of law rule lex loci delicti applies. That rule looks to the place of the tort. The Fourth Circuit has explained how that place is to be identified:
In determining the place of the tort, North Carolina courts apply the generally accepted interpretation of the lex loci rule that the tort is deemed to have occurred where the last event takes place, that is necessary to render the actor liable. Injury being the last element of a tort, [the] North Carolina rule, in a nutshell, is the law of the place of injury.
Santana, Inc. v. Levi Strauss & Co., 674 F.2d 269, 272 (4th Cir. 1982). There can be no serious dispute that Indiana is the place where the specific "injury" at issue here--the passengers' pre-impact fear and terror--as well as all their personal injuries and their deaths, took place. As noted in Roselawn III, Flight 4184 crashed in Indiana, having flown primarily if not solely in Indiana airspace after leaving Indianapolis. Thus, Indiana substantive law will govern plaintiff Anglemyer's claims in case No. 95 C 4959.
The Court grants in part and denies in part the defendants' motion for a choice of law ruling applying Indiana law to the issue of pre-impact fear damages [229-1]. The motion is granted only as to the case Anglemyer v. AMR Corp., No. 95 C 4959, and is denied as to all other cases. As to those cases,
the law of the injured person's domicile will govern the availability of pre-impact fear damages. As to the case Wright v. AMR Corp., No. 95 C 1018, cthe Court holds that its previous ruling in Roselawn III applies, and that Indiana law governs all compensatory damages issues in that case.
United States District Judge
November 22, 1996