Opinion
Case No. 1:01-CV-640
March 15, 2004
ORDER
In accordance with the Opinion filed this date,
IT IS HEREBY ORDERED that Defendant Falcon Jet's Motion For Reconsideration Of The Court's September 30, 2003 Choice-Of-Law Ruling (docket no. 124) is GRANTED IN PART AND DENIED IN PART. The motion is granted with respect to the Court's statement in its prior Opinion that the aircraft was designed and manufactured in Arkansas. That statement, on page 8 of the Opinion, is corrected to reflect that based upon the record, the aircraft was designed and manufactured by Dassault Aviation in France. The motion is denied in all other respects.
IT IS FURTHER ORDERED that Defendant Falcon Jet's request for an immediate appeal pursuant to 28 U.S.C. § 1292(b) is DENIED.
OPINION
The Court has before it Defendant Dassault Falcon Jet Corporation's ("Falcon Jet") motion for reconsideration of the Court's September 30, 2003, Opinion and Order regarding the choice of law issue. The Court has permitted Plaintiff to file a response brief addressing the issues Falcon Jet raises in its motion, some of which Falcon Jet raised for the first time in its motion for reconsideration. The Court has reviewed the parties' submissions and, for the reasons set forth below, will deny the motion.I. Standard For Reconsideration
To prevail on a motion for reconsideration, the movant must "not only demonstrate a palpable defect by which the Court and the parties have been mislead, but [must] also show that a different disposition of the case must result from a correction thereof." LCivR 7.4(a). Moreover, a motion for reconsideration may not be used to raise issues that could have been raised in the previous motion. See Kohl v. Murphy. 767 F. Supp. 895, 904 (N.D. Ill. 1991).
II. Analysis
The facts giving rise to this case are sufficiently detailed in the Court's September 30, 2003, Opinion and will not be repeated here except where necessary to the analysis.A. Applicability of M.C.L. § 259.177
Falcon Jet's first ground for reconsideration is that the choice of law issue in this case is governed by M.C.L. § 259.177, which provides:
Sec. 177. Jurisdiction of Crimes and Torts. All crimes, torts and other wrongs committed by or against an airman or passenger while in flight over this state shall be governed by the laws of this state; and the question whether damage occasioned by or to an aircraft while in flight over this state constitutes a tort crime or other wrong by or against the owner of such aircraft, shall be determined by the laws of this state.
Falcon Jet failed to cite this statute in its motion for partial summary judgment, but even if Falcon Jet had done so, the Court would have rejected the argument. The language of the statute suggests that it was intended to cover crimes or torts, such as assault and battery, that occur within Michigan airspace. In In re Disaster at Detroit Metropolitan Airport On Aug. 16.1987, 750 F. Supp. 793 (E.D. Mich. 1989), the court declined to apply § 259.177 in light of Michigan's then-current choice of law doctrine. The court stated:
When the forerunner to this statute was enacted in 1923, see Mich. Pub. Acts, 1923, No. 224, § 7, the lex loci delicti rule was firmly entrenched in Michigan law. In those cases involving air crashes on Michigan soil, the Michigan courts applied its [sic] own substantive law under the lex loci doctrine. This being the case, it would have been redundant for the Michigan legislature to codify the "site of the injury" rule when such a standard was firmly established in the common law doctrine of the state. The literal language of this statute clearly indicates that it was designed to resolve choice of law issues in those cases in which a tort, such as an assault or battery, occurred on board an aircraft while traveling in Michigan airspace. In such a case, it would be difficult to determine where the "site of the injury" occurred under the traditional lex loci approach.
Interestingly, this Court has not found, and the parties have been unable to cite, any case authority in which a Michigan court has applied § 259.177 to resolve choice of law issues in cases containing a foreign element which results from an aircraft accident. It would be improvident to adopt MDC's construction given (1) the historical context in which it was enacted, and (2) the dearth of Michigan case authority to support such a proposition.750 F. Supp. at 797 n. 9: see also EPPS Flying Servs., Inc. v. Hartzell Propeller Inc., No. 94CV4863, 1995 WL 612590, at *3-4 (ED. Pa. Oct. 13, 1995) (considering a Pennsylvania statute virtually identical to § 259.177 and choosing instead to follow current Pennsylvania law by applying the law of the state with the most significant contacts with the occurrence); Johnson v. Pischke, 108 Idaho 397, 399-400, 700 P.2d 19, 21-22 (1985) (declining to apply a virtually identical Idaho statute and instead applying the most significant contacts test under Section 145 of the Restatement 2d of Conflict of Laws). The Court agrees with the Disaster at Detroit court's analysis and therefore declines to apply M.C.L. § 259.177 in this case.
B. Commerce Clause Argument
Falcon Jet next argues that reconsideration is appropriate because this Court's application of Michigan's choice of law rules, which Falcon Jet terms a "Favor State Benefactors" test, violates the Commerce Clause. In particular, Falcon Jet contends that the Court's determination that Michigan has little or no interest in applying its tort reform measures to Falcon Jet because Falcon Jet "is not domiciled in Michigan" and failed to show "that it conducts business in Michigan, generates sales tax, has employees, owns property, or otherwise contributes to Michigan's economy," (9/30/03 Op. at 10), causes an impermissible burden upon interstate commerce because it discriminates against companies that do not contribute to Michigan's economy. Falcon Jet points out that it raised this argument in its January 24, 2003, reply brief. The Court notes that Falcon Jet did raise an argument — buried in a footnote and unsupported by any case citations — that Michigan's refusal to extend its tort reform protections to a company because it did not spend enough money in Michigan would violate "[t]he Equal Protection Guaranties of the U.S. Constitution," (Falcon Jet's Reply Br. at 11 n. 7), but there was no suggestion that such an outcome would also violate the Commerce Clause. Nonetheless, the Court will consider the argument.
In concluding that Michigan has little or no interest in applying its tort reform measures to Falcon Jet, the Court essentially applied the same analysis as the court in Disaster at Detroit applied to the out-of-state manufacturer in that case. In that case, the court observed that application of Michigan's producer-protective laws would not encourage the manufacturer to conduct business in Michigan and that the policies behind the strict liability laws of the state of the manufacturer's principal place of business and the state of design and manufacture provided a sufficient basis to displace Michigan law. Id. at 801. This Court also cited In re Aircrash Disaster Near Monroe, Michigan on January 9, 1997.20 F. Supp.2d 1110 (E.D. Mich. 1998), and Farrell v. Ford Motor Co., 199 Mich. App. 81, 501 N.W.2d 567 (1993), both of which examined the defendant's economic ties to the state as part of the calculus of the state's interest in having its law applied to the particular defendant.
Falcon Jet's argument is based upon the dormant implication of the Commerce Clause, which prohibits state taxation or regulation that discriminates against or unduly burdens interstate commerce. Gen. Motors Corp. v. Tracy. 519 U.S. 278, 287, 117 S.Ct. 811, 818 (1997). A state's law or regulation will be held unconstitutional under a dormant Commerce Clause analysis if it is discriminatory on its face or, even if it does not discriminate against interstate commerce, if the burden it imposes on interstate commerce exceeds the local benefits secured. Heald v. Engler, 342 F.3d 517, 524-25 (6th Cir. 2003); Freedom Holdings Inc. v. Spitzer. No. 02-7492, 2004 WL 26498, at *6 (2d Cir. Jan. 6, 2004).
Falcon Jet's principal authority for its argument that this Court's choice of law analysis, which Falcon Jet terms the "Favor State Benefactors" rule, violates the Commerce Clause is Bendix Autolite Corp. v. Midwesco. Enterprises, Inc., 486 U.S. 888, 108 S.Ct. 2218 (1988). At issue in Bendix was Ohio's 4-year statute of limitations for breach of contract actions. The statute was subject to tolling based upon a defendant's absence from the state. The plaintiff filed suit in Ohio alleging breach of contract by the defendant, an Illinois corporation, based upon the defendant's installation of a boiler system at the plaintiffs plant in Ohio. The defendant raised the statute of limitations as a defense, and the plaintiff responded that the limitation period was tolled because the defendant was not within the state and had not designated an agent for service of process. The Supreme Court agreed with the defendant that the tolling provision violated the Commerce Clause because the burden on interstate commerce outweighed any benefit to the state or its residents. Id. at 894-95, 108 S.Ct. at 2222. The Court observed that the tolling statute placed a significant burden on interstate commerce because an out-of-state company such as the defendant could benefit from the limitations period only by appointing a resident agent for service of process in Ohio and subjecting itself to general jurisdiction in Ohio. Id. at 891-92, 108 S.Ct. at 2221. Thus, the statute had the effect of forcing foreign corporations to choose between being subjected to general jurisdiction in Ohio or forfeiting the limitations defense. Id. at 893, 108 S.Ct. at 2221.
In spite of any similarities between this case and Bendix. Falcon Jet's reliance on Bendix for its Commerce Clause argument is unpersuasive. Bendix involved a state statute that discriminated against foreign corporations and burdened interstate commerce in all instances. Falcon Jet's argument here does not concern a state law or regulation, but rather the Court's identification of the various states' interests and determination of whether any state's interest is significant enough to displace Michigan's law. Contrary to Falcon Jet's assertion, this Court's analysis is not tantamount to a rule that a manufacturer is entitled to the protection of Michigan's laws only if it provides a significant economic benefit to the state. Rather, the Court's interest analysis focused upon the specific relationships of the parties to each state having an interest and assessed whether there was any reason to displace Michigan's interests. In reaching its decision, the Court merely found that Michigan would have little or no interest in the application of its producer-protective law to Falcon Jet because of Falcon Jet's minimal economic impact in Michigan. Similarly, the Court found that New Jersey had a substantial interest in having its law applied to Falcon Jet because Falcon Jet — the seller of the aircraft — is domiciled in New Jersey. In the absence of any authority to the contrary, this Court fails to see how its choice of law analysis violates the Commerce Clause. Therefore, this argument is rejected.
Falcon Jet cites Justice Stevens' concurring opinion inAllstate Insurance Co. v. Hague, 449 U.S. 319, 101 S.Ct. 633 (1981), for the proposition that a state's application of its own law may be unconstitutional if application would be fundamentally unfair, such as where the law favored residents over nonresidents. Falcon Jet has failed to demonstrate any unfairness in this case because the Court has not applied any Michigan law that favors residents over nonresidents.
C. Proper Application of Michigan's Interest Analysis
Falcon Jet next argues that the Court incorrectly concluded that there is a rational reason to displace Michigan law in this case because Michigan has a strong interest in applying its law and New Jersey has no interest in having its law applied in this case. To the extent that Falcon Jet asserts that the Court's interest analysis was wrong, Falcon Jet is merely re-hashing the same arguments previously presented to, and considered and rejected by, the Court. Moreover, the Court is not persuaded that it erred in concluding that New Jersey has an interest sufficient to displace Michigan law. Therefore, the Court will adhere to its original ruling.
As part of its motion for reconsideration Falcon Jet has presented an affidavit from Peter Rothwell, the corporate secretary for Falcon Jet, regarding the issue of Falcon Jet's generation of commerce within Michigan. Falcon Jet had ample opportunity to present such evidence prior to the Court's ruling but failed to do so. In fact, Honeywell submitted a supplemental brief and affidavit detailing its economic activities within Michigan several months after the initial motion and briefs were filed. Falcon Jet did not follow suit. Nonetheless, the Court has reviewed the Rothwell affidavit and is not persuaded that the facts stated therein show that Falcon Jet "generates substantial commerce within the State of [Michigan]." Farrell v. Ford Motor Co.. 199 Mich. App. 81, 93, 501 N.W.2d 567, 572(1993).
Falcon Jet contends that the Court's analysis was flawed because it incorrectly assumed the facts of In re Aircrash Disaster Near Monroe, Michigan on January 9.1997, 20 F. Supp.2d 1110 (E.D. Mich. 1998). In its September 30, 2003, Opinion, this Court rejected Falcon Jet's reliance on Disaster Near Monroe because in that case the manufacturer's subsidiary's only contact with Florida was that it was a Florida corporation. That observation was based upon the following statement by the court: "The mere fact that an Embraer subsidiary is incorporated in Florida, standing by itself, has no nexus to the present cases and is insufficient to give Florida an interest in having its law applied." 20 F. Supp.2d at 1112. This Court declined to applyDisaster Near Monroe because it "does not mention the location of the subsidiary's headquarters, nor does it even suggest that the subsidiary was involved in the design, manufacture, or sale of the airplane to Comair." (9/30/03 Op. at 7.) Although Falcon Jet recognizes that the opinion in Disaster Near Monroe discloses no more than that Florida was the subsidiary's place of incorporation, Falcon Jet has offered briefs and exhibits filed in that case showing that Florida was also the location of the subsidiary's headquarters and that the subsidiary conducted significant operations in Florida. Falcon Jet asserts that the court did not mention this evidence in its opinion because it felt no need to mention every insufficient contact. This Court declines to speculate about why that court did not mention that information in its opinion. Nonetheless, Falcon Jet fails to argue that the Florida subsidiary was the manufacturer or the seller of the aircraft of issue. This is an important point, because it distinguishesDisaster Near Monroe from this case in that Falcon Jet was actually the seller of the aircraft at issue. This fact is sufficient to give New Jersey " both contact with the lawsuit and a significant relationship to [Falcon Jet]." Id. (emphasis in original).
D. Court's Statement Regarding Manufacture of the Aircraft
Falcon Jet contends that the Court's Opinion contains erroneous factual statements which must be corrected. In particular, Falcon Jet contends that the following statement is inaccurate:
Moreover, New Jersey's interest in having its law applied is not diminished by the fact that the jet was designed and manufactured in Arkansas (which the parties agree was the state of design and manufacture), because a corporation's headquarters is usually the place where important decisions affecting corporate conduct are made.
(9/30/03 Op. at 8.) Falcon Jet asserts that this statement is inaccurate because the only evidence before the Court is that the aircraft was designed and manufactured by Falcon Jet's parent company, Dassault Aviation, in France. The Court agrees with Falcon Jet that this statement is inaccurate, as the evidence presented thus far shows that Dassault Aviation designed and manufactured the aircraft in France and delivered it to Falcon Jet in France. Although this statement was not necessary to the Court's determination on the choice of law issue, the Court will order that this factual statement be corrected. However, such correction will not conclusively establish that Falcon Jet did not perform any manufacturing function in light of Plaintiffs assertion that Dassault Falcon completes the manufacture of "green" Dassault jets at its facility in Arkansas. (Pl's Reply to Defs.' Br. Opp'n Pl's Mot. for Leave to Amend at 4 n. 1.) What Falcon Jet does at its Arkansas facility may ultimately be shown to be irrelevant to Plaintiffs claim, but at this point in the case the issue remains open.
Although Falcon Jet may not have actually designed and manufactured the aircraft, the Court notes that Falcon Jet falls within New Jersey's statutory definition of "Manufacturer", which includes "a United States domestic sales subsidiary of a foreign manufacturer if the foreign manufacturer has a controlling interest in the domestic sales subsidiary." N.J.S.A. 2A:58C-8.
E. Practical Problems of Applying Different States' Laws
Falcon Jet contends that the Court's ruling will create confusion and prejudice because Falcon Jet must cross-claim against Honeywell for contribution under New Jersey Law. Falcon Jet argues that application of two different laws may produce an anomaly because Falcon Jet could be held derivatively liable for the sale of Honeywell's product while Honeywell may not be liable under Michigan's more favorable law. Falcon Jet posits that on the one hand, it will be deprived of a substantial right under New Jersey law unless the Court determines that it has a contribution claim against Honeywell, but on the other hand, Honeywell will be deprived of the benefits of Michigan law because the Court would be applying a harsher, non-Michigan substitute law to the claims against Honeywell.
For purposes of the instant motion, the Court will assume that Falcon Jet's liability is derivative of Honeywell's liability because Plaintiff is alleging that the digital flight guidance computer manufactured by Honeywell was defective, although derivative liability is by no means a foregone conclusion at this stage in the case. In addition, the Court concludes that Falcon Jet is required to assert a cross-claim against Honeywell in this action, otherwise any subsequent claim would likely be barred under New Jersey's "entire controversy doctrine." See Harley-Davidson Motor Co. Inc. v. Advance Die Casting. Inc., 150 N.J. 489, 497, 696 A.2d 666, 670 (1997) (stating that "in the generality of products liability cases, `upstream' claims for contribution or indemnity are within the reach of the doctrine"). However, the Court believes that Falcon Jet's concerns are overstated for two reasons. First, under both New Jersey and Michigan law, the jury is permitted to apportion fault. See N.J.S.A. 2A: 15-5.3; M.C.L.A. § 6 00.2957(1). The jury can therefore determine the relative percentages of fault and assign liability for damages accordingly. Moreover, under New Jersey law, fault maybe apportioned in strict liability claims. Gennari v. Weighert Co. Realtors, 148 N.J. 582, 608-609, 691 A.2d 350, 367 (1997). Second, any contribution claim will be subject to a separate choice of law analysis in which the Court must examine Michigan's and New Jersey's respective interests. See Muncie Power Prods.. 328 F.3d 870, 874-78 (6th Cir. 2003) (engaging in choice of law analysis between Ohio law, which allows a claim for contribution among joint tortfeasors, and Indiana law, which does not permit actions for contribution). Thus, the choice of law analysis for any contribution claim will likely involve an entirely separate set of considerations from those pertaining to the choice of law analysis for Plaintiffs claims.
Falcon Jet also contends that application of both Michigan and New Jersey law in this case will create confusion for the jury in both the jury instructions and verdict forms. In particular, Falcon Jet notes that under Michigan law, a jury is directed to apportion liability to "empty chair" defendants as well as to parties at trial, whereas under New Jersey law liability must be apportioned only to parties present at trial. Falcon Jet contends that given this difference, it will be difficult, if not impossible, to instruct the jury in the proper application of both laws because the Court will have to extrapolate Falcon Jet's liability based upon the jury's assignment of liability for "empty chair" defendants. Falcon Jet contends that this can be done only by applying arbitrary assumptions. Similarly, Falcon Jet contends that the instructions will be confusing because Honeywell is entitled to a presumption under Michigan law of non-defect for its autopilot if it has complied with all applicable government regulations, but Falcon Jet receives no such presumption under New Jersey law. Thus, the jury would be instructed to presume lack of defect with respect to the manufacturer but not with respect to the seller. Falcon Jet also contends that the jurors will be confused by an instruction requiring them to find Honeywell liable to indemnify Falcon Jet for damages if the jury concludes that Honeywell is not liable under Michigan law but that Falcon Jet is liable under New Jersey law.
While Falcon Jet has raised some valid concerns, the Court is not convinced that instructing the jury under both Michigan law and New Jersey law will be confusing to the jury or unfair to either Falcon Jet or Honeywell. For example, as Plaintiff notes with respect to apportionment of damages, if the jury is instructed to allocate fault among all potential tortfeasors and it determines that Honeywell and Falcon Jet are each 25% at fault and the non-party is 50% at fault, Honeywell and Falcon Jet would each be 50% at fault for purposes of New Jersey law. Moreover, the Court finds no reason why the jury could not be instructed to allocate fault on alternative bases including and excluding non-party fault. In short, while the application of two different states' laws may present some special challenges in this case, the Court does not believe that instructing the jury would be so difficult or unmanageable that either Falcon Jet or Honeywell would be denied their rights under the applicable state law.
F. Request for Interlocutory Appeal
Falcon Jet requests that the Court certify the choice of law issue for immediate appeal if the Court denies its motion for reconsideration. The authority for certifying interlocutory appeals is contained in 28 U.S.C. § 1292(b), which states:
When a district judge, in making in a civil action an order not otherwise appealable under this section, shall be of the opinion that such order involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation, he shall so state in writing in such order. The Court of Appeals which would have jurisdiction of an appeal of such action may thereupon, in its discretion, permit an appeal to be taken from such order, if application is made to it within ten days after the entry of the order. . . .28 U.S.C. § 1292(b). A party seeking an interlocutory appeal must show that: "(1) the question involved is one of law; (2) the question is controlling; (3) there is substantial ground for difference of opinion respecting the correctness of the district court's decision; and (4) an immediate appeal would materially advance the ultimate termination of the litigation." Vitols v. Citizens Banking Co., 984 F.2d 168, 170 (6th Cir. 1993) (citing Cardwell v. Chesapeake Ohio Ry. Co., 504 F.2d 444, 446 (6th Cir. 1974)).
The Court will deny Falcon Jet's request because it concludes that the question of law is not controlling; there is not substantial ground for difference of opinion regarding the Court's decision; and an immediate appeal would not materially advance the ultimate termination of the litigation. A legal issue is considered controlling if it could materially affect the outcome of the case. In re City of Memphis, 293 F.3d 345, 351 (6th Cir. 2002). As with most court rulings, the Court's decision on the choice of law issue could affect the outcome of the case. However, the Court disagrees that the ruling would materially affect the outcome of the case because regardless of which law applies,
Plaintiff will be left with valid claims against both Falcon Jet and Honeywell which can coexist regardless of the different aspects of Michigan and New Jersey law.
In addition, although Falcon Jet may disagree with the Court's ruling that New Jersey law applies, the Court disagrees with Falcon Jet that there are substantial grounds for differences of opinion regarding the Court's decision. Such a showing is made where the issue is difficult and of first impression, a difference of opinion exists within the controlling circuit, or the circuits are split on the issue. W. Term. Associated Builders v. City of Memphis. 138 F. Supp.2d 1015 .1019 (W.D. Term. 2000). In reaching its decision, the Court relied upon an analogous decision from the Eastern District of Michigan which applied Michigan's choice of law rule as well as several Michigan Court of Appeals decisions applying Michigan's interest analysis. Although Falcon Jet cites several grounds in support of its position that the Court's decision was incorrect, Falcon Jet has failed to cite any factually similar case showing either that the Court's analysis of the respective states' interests was flawed or that its application of Michigan's choice of law rule was plainly wrong. Furthermore, while the Court fully agrees with Falcon Jet that choice of law issues are difficult, the Court does not agree that difficulty alone is a proper justification for an interlocutory appeal.
With regard to the last inquiry, whether an immediate appeal will materially advance the termination of the litigation, Falcon Jet contends that an appeal would materially advance the case because Falcon Jet's financial exposure depends upon whether Michigan or New Jersey law applies and a definitive ruling on the choice of law issue would prevent duplication of judicial time and resources and would save the parties the time and expense that would otherwise be necessitated by a retrial of the case in which Michigan law replaces New Jersey law. An interlocutory appeal is most appropriate in the early stages of the case. Id. at 1026. The utility of an interlocutory appeal is diminished where the case has advanced and the parties have already incurred large expenditures. Id. While there has not been a significant amount of discovery and the case is still months away from trial, the case is now several years old, due in some measure to the issue of personal jurisdiction over Dassault Aviation. Moreover, the Court has been informed that the United States Court of Appeals for the Eighth Circuit has reversed the Arkansas district court's ruling that Dassault Aviation is subject to personal jurisdiction in Arkansas. SeeAnderson v. Dassault Aviation. No. 03-2422, 2004 WL 393801 (8th Cir. Mar. 4, 2004). This ruling raises the obvious question of whether the Court should reconsider Plaintiffs motion to transfer venue. Although at this point the Court cannot say whether transfer is appropriate, an interlocutory appeal would preclude a transfer and would therefore deprive Plaintiff of the opportunity to adjudicate her claim against all potentially liable parties in one forum — a result which would also prevent a waste of judicial resources and save the parties time and expense in litigating in multiple forums. Thus, an immediate appeal may actually delay the final resolution of this case.
III. Conclusion
For the foregoing reasons, the Court will deny Falcon Jet's motion for reconsideration and its request for an immediate appeal.
An Order consistent with this Opinion will be entered.