Opinion
Case No. 4:04-cv-058.
August 10, 2006
ORDER DENYING PLAINTIFFS' MOTION FOR LEAVE TO FILE AMENDED COMPLAINT TO INCLUDE CLAIM FOR PUNITIVE DAMAGES
Before the Court is the Plaintiffs' Motion for Leave to File Amended Complaint to Include Claim for Punitive Damages filed on June 2, 2006. For the reasons set forth below, the Plaintiffs' motion is denied.
I. BACKGROUND
This dispute arises from the death of Kristen Poitra. On July 15, 2003, seven-year-old Christopher Poitra and his five-year-old sister, Kristen, were playing in a 1990 Dodge Grand Caravan minivan, manufactured by the Defendants, DaimlerChrysler Corporation and DaimlerChrysler Motors Company, LLC, ("Chrysler"). Christopher was in the driver's seat and Kristen was in the front passenger's seat. The keys were not in the ignition, and it is assumed that the vehicle was in park. Nevertheless, Christopher started the van and put it into gear. When it began to roll, the children attempted to jump out. Christopher was able to get out of the way, but Kristen was not. The minivan rolled over Kristen's head, crushing her skull. Christopher allegedly witnessed the accident.
On May 12, 2004, the plaintiffs Tammie Poitra and Michael Greene, individually and as parents and next friends of Kristen Poitra deceased, and Christopher Poitra, a minor ("the Poitras") filed suit alleging (1) negligence, (2) strict products liability, (3) negligence infliction of emotional distress as to Christopher Poitra, and (4) breach of warranty. On June 2, 2006, the Poitras sought leave to amend the complaint to include a claim for punitive damages.
II. LEGAL DISCUSSION
Section 32-03.2-11(1) of the North Dakota Century Code provides as follows:
In any action for the breach of an obligation not arising from contract, when the defendant has been guilty by clear and convincing evidence of oppression, fraud, or actual malice, the court or jury, in addition to the actual damages, may give damages for the sake of example and by way of punishing the defendant. Upon commencement of the action, the complaint may not seek exemplary damages. After filing the suit, a party may make a motion to amend the pleadings to claim exemplary damages. The motion must allege an applicable legal basis for awarding exemplary damages and must be accompanied by one or more affidavits or deposition testimony showing the factual basis for the claim. The party opposing the motion may respond with affidavit or deposition testimony. If the court finds, after considering all submitted evidence, that there is sufficient evidence to support a finding by the trier of fact that a preponderance of the evidence proves oppression, fraud, or actual malice, the court shall grant the moving party permission to amend the pleadings to claim exemplary damages. For purposes of tolling the statute of limitations, pleadings amended under this section relate back to the time the action was commenced.
N.D.C.C. § 32-03.2-11(1). In addition, Section 32-03.2-11(6) of the North Dakota Century Code provides as follows:
Exemplary damages may not be awarded against a manufacturer or seller if the product's manufacturer, design, formulation, inspection, testing, packaging, labeling, and warning complied with:
a. Federal statutes existing at the time the product was produced;
b. Administrative regulations existing at the time the product was produced that were adopted by an agency of the federal government which has responsibility to regulate the safety of the product or to establish safety standards for the product pursuant to a federal statute or;
c. Premarket approval or certification by an agency of the federal government.
N.D.C.C. § 32-03.2-11(6). These statutes provide a substantive right and, therefore, apply to this action. See Lowell v. Zurich Ins. Co., Civ No. A3-91-72, 1992 WL 212233 at *2 (D.N.D. Aug. 20, 1992) (applying North Dakota's punitive damage statute in a case where jurisdiction was predicated upon diversity of citizenship); see also Myers v. Richland County, 288 F. Supp. 2d 1013, 1021 (D.N.D. 2003) ("Exemplary damages statutes provide a substantive right and therefore state law applies.").
In support of the request for punitive damages, the Poitras allege that Chrysler consciously disregarded the safety of the public by failing to install a brake transmission interlock device to prevent this type of accident. The Poitras also assert that Chrysler acted fraudulently by not reporting the complaints of injuries resulting from similar accidents to the National Highway Transportation Safety Administration. Finally, the Poitras assert that Chrysler acted maliciously by failing to install the brake transmission interlock device for purely financial reasons.
Chrysler contends that the Poitras should not be allowed to amend the complaint to include a claim for punitive damages for three reasons: (1) punitive damages are unavailable in this case as a matter of North Dakota law because Chrysler's minivan design complied with applicable federal safety regulations at the time of manufacture; (2) under North Dakota law, punitive damages cannot be imposed in a wrongful death case, and (3) the Poitras' evidence falls short of satisfying North Dakota's exacting standard for punitive damages liability. A. COMPLIANCE WITH FEDERAL SAFETY REGULATIONS
Chrysler asserts that North Dakota law prohibits the imposition of punitive damages against a manufacturer if its product complied with applicable federal safety regulations at the time of production. The Poitras contend that because Christopher was able to start the vehicle without the key in the ignition and place it in gear, Chrysler did not comply with the applicable federal safety regulations.
At the time the 1990 Dodge Grand Caravan minivan in question was manufactured, Standard No. 114 entitled Theft Protection promulgated by the National Highway Safety Administration (NHTSA) provided in part as follows:
In the absence of objection from either party, the Court finds that NHTSA is "an agency of the federal government which has responsibility to regulate the safety of the product or to establish safety standards for the product pursuant to a federal statute."
S1 Purpose and Scope. This standard specifies requirements for theft protection to reduce the incidence of accidents resulting from unauthorized use.
. . .
S4.2 Each vehicle shall have a key-locking system that, whenever the key is removed, will prevent —
(a) Normal activation of the vehicle's engine or other main source of motive power; and
(b) Either steering or forward self-mobility of the vehicle or both.49 C.F.R. § 571.114 (1989). It is undisputed that this regulation requiring a "key-locking system" was in effect at the time the vehicle in question was manufactured. The requirement of a key-shift interlock, a specific type of key-locking system, was not in effect at the time the 1990 Dodge Grand Caravan was manufactured. Rather such a requirement became effective for vehicles manufactured on or after September 1, 1992. 55 Fed. Reg. 21,868 (May 30, 1990). It is undisputed that the 1990 Dodge Grand Caravan was equipped with a key-shift interlock at the time of production, even though such a feature was not required by federal safety regulations.
The Poitras assert that the key-shift interlock malfunctioned on the date of the accident and that the use of a brake transmission interlock may have prevented the accident. Sections 32-03.2-11(6)(a) and (b) clearly define the relevant time period, i.e., that a product must comply with safety regulations "at the time the product was produced." Whether a product complied with safety regulations at any other time is irrelevant to determining whether punitive or exemplary damages are available. As a result, the Court finds that the 1990 Dodge Grand Caravan complied with the National Highway Traffic Safety Administration's regulations existing at the time the Caravan was produced.
B. EXCEPTION TO REGULATORY COMPLIANCE
Section 32-03.2-11(7) provides that the defense of regulatory compliance does not apply when:
the plaintiff proves by clear and convincing evidence that the product manufacturer or product seller:
a. knowingly and in violation of applicable agency regulations withheld or misrepresented information required to be submitted to the agency, which information was material and relevant to the harm in question, or
b. made an illegal payment to an official of the federal agency for the purpose of securing approval of the product.
The Poitras contend that Chrysler was required to report safety-related defects to the National Highway Transportation Safety Administration under 49 C.F.R. § 579.5 and that Chrysler failed to do so. According to the Poitras, Chrysler never reported to NHTSA that it had complaints of injuries resulting from placing vehicles into gear without first depressing the brake pedal. The Poitras also contend that Chrysler failed to report that its vehicles could be placed into gear without a key in the ignition. Chrysler argues that 49 C.F.R. § 579.5 does not require it to submit information regarding complaints and injuries to the NHTSA.
The purpose of 49 C.F.R. § 579, et. seq., is to
enhance motor vehicle safety by specifying information and documents that manufacturers of motor vehicle and motor vehicle equipment must provide to NHTSA with respect to possible safety-related defects and noncompliance in their produces, including the reporting of safety recalls and other safety campaign that the manufacturer conducts outside the United States.49 C.F.R. § 579.2. Section 579.5 provides:
(a) Each manufacturer shall furnish to NHTSA a copy of all notices, bulletins, and other communications (including those transmitted by computer, telefax, or other electronic means and including warranty and policy extension communiques and product improvement bulletins) other than those required to be submitted pursuant to § 573.6(c)(9) of this chapter, sent to more than one manufacturer, distributor, dealer, lessor, lessee, owner, or purchaser, in the United States, regarding any defect in its vehicles or items of equipment (including any failure or malfunction beyond normal deterioration in use, or any failure of performance, or any flaw or unintended deviation from design specifications), whether or not such defect is safety-related.
(b) Each manufacturer shall furnish to NHTSA a copy of each communication relating to a customer satisfaction campaign, consumer advisory, recall, or other safety activity involving the repair or replacement of motor vehicles or equipment, that the manufacturer issued to, or made available to, more than one dealer, distributor, lessor, lessee, other manufacturer, owner, or purchaser, in the United States.
(c) If a notice or communication is required to be submitted under both paragraphs (a) and (b) of this section, it need only be submitted once.
(d) Each copy shall be in readable form and shall be submitted not later than five working days after the end of the month in which it is issued. However, a document described in paragraph (b) of this section and issued before July 1, 2003, need not be submitted.
(emphasis added). A plain reading of the regulation reveals that a manufacturer is required to provide the NHTSA with a copy of any material the manufacturer sends to more than "one manufacturer, distributor, dealer, lessor, lessee, owner, or purchaser, in the United States," which discusses defects in the manufacturer's product. No part of the regulation requires the manufacturer to report communications received from others (i.e., customer complaints).
The Court finds that the Poitras have failed to establish by clear and convincing evidence that Chrysler failed to submit information required by the NHTSA. As a result, the Court finds that the exception set forth in Section 32-03.2-11(7) is not applicable. In addition, the Court finds it unnecessary to address the Poitras' claims that Chrysler acted maliciously by failing to install the brake transmission interlock device for purely financial reasons or Chrysler's assertions that punitive damages cannot be imposed in a wrongful death action in North Dakota. III. CONCLUSION
The Poitras did not contend that Chrysler "made an illegal payment to an official of the federal agency for the purpose of securing approval of the product." See 49 C.F.R. § 579.5.
Chrysler argued in its responsive brief that in 1937 the North Dakota Supreme Court squarely held that punitive damages are not recoverable in wrongful death actions, and that the Supreme Court has never revisited this holding. The reason is that tort law in North Dakota underwent dramatic changes in 1987 with the passage of Chapter 32-03.2 of the North Dakota Century Code. Section 32-03.2-11(1) clearly provides that punitive damages are recoverable in tort actions if the requirements of that statutory provision are met. As a result, since 1987 counsel for plaintiffs have pursued claims of punitive damages in wrongful death actions in both state and federal court when the evidence may support such a claim.
For the reasons set forth above, the Court finds that the Poitras are precluded from seeking an award of exemplary or punitive damages. The Plaintiffs' Motion for Leave to File Amended Complaint to Include Claim for Punitive Damages is DENIED. (Docket No. 57). The Court DENIES as moot Defendants' Motion for Hearing. (Docket No. 65).
IT IS SO ORDERED.