Response to Defendants’ Motion for Order Determining Applicable Law

Henderson v. Alza

Description: This brief was filed in California state court in response to a motion filed by the defendants in a fentanyl pain patch case seeking application of Colorado law. The defendants argued that Colorado law should apply because the case involved the death of a Colorado resident that occurred in Colorado allegedly as a result of the patient’s use of a fentanyl pain patch prescribed, purchased and used in Colorado. Plaintiff responded that the defendant that manufactured the patch had its principal place of business in California and actually designed and manufactured the patch in California. Plaintiff argued that California – not Colorado – had the predominant interest in applying its own laws in order to deter wrongful conduct within its borders. This brief was filed by Heygood, Orr & Pearson on behalf of their client.

SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF SANTA CLARA
TAMMY LYNN HENDERSON, as Surviving Daughter of BONITA SMITH, Deceased, and as Executor of the Estate of BONITA SMITH, Deceased , PERRY TRAVIS RODE, as surviving Son of BONITA SMITH, DeceasedPlaintiffs,v.ALZA CORPORATION, SANDOZ, INC., and DOES 1 through 1000,

Defendants.

CASE NUMBER: 108CV127817PLAINTIFFS’ RESPONSE TO DEFENDANTS’ MOTION FOR ORDER DETERMINING APPLICABLE LAWDate: November 18, 2010
Time: 9:00 a.m.
Dept.: 1

COMES NOW Tammy Lynn Henderson and Perry Travis Rode, Plaintiffs, and hereby file this response to Defendants’ Motion for Order Determining Applicable Law.

 

 

PRELIMINARY STATEMENT

Plaintiffs brought this action to recover for the wrongful death of their mother, Bonita Smith, who died on November 18, 2006 as a result of using defective fentanyl patches made by Defendants. One of ALZA Corporation (“ALZA”) and Sandoz Inc’s (“Sandoz”) 75 mcg fentanyl patches was found on Bonita Smith’s body at the time of death. Ms. Smith’s death certificate indicated that her cause of death was “fentanyl intoxication” due to “absorbed fentanyl.” On November 14, 2008, Plaintiffs commenced this action against Defendant ALZA, the manufacturer of Ms. Smith’s fentanyl patch and Sandoz, the distributor of Ms. Smith’s fentanyl patch. Defendant ALZA is a California corporation with two fentanyl patch manufacturing facilities located in Mountain View, California and Vacaville, California and a principal office in California.

On October 14, 2010 Defendants filed a motion seeking to apply Colorado law to this dispute. This is yet another attempt by Defendants to prevent the legitimate application of California law. Previously, Defendants filed a motion to dismiss on forum non conveniens grounds, claiming that Colorado was a more convenient forum. Their motion was denied. Moreover, Defendants have presented verbatim the same arguments asserted in this motion in other California fentanyl patch cases and courts have met these arguments with sweeping disapproval.[1] Utterly undeterred, Defendants continue to press on with their claim that the application of Colorado law is proper. Plaintiffs respectfully ask that this court deny Defendants’ ALZA and Sandoz’s plea to apply Colorado law for the following reasons:

(a) Under California’s governmental interest analysis, no “true conflict” exists because California has a substantial interest in the application of its own product liability laws to this dispute.

(b) Defendants fail to acknowledge an entire body of case law related to choice of law issues in wrongful death cases, which clearly demonstrate that California’s interests would be more impaired than Colorado’s interests.

(c) Even if a conflict did exist, under a comparative impairment analysis, examining the interests of both state’s product liability laws, California’s interests would be more greatly impaired than Colorado’s interests.

 

EVIDENCE

Exhibit A: Defendants’ Motion for Order Determining Applicable Law, October 14, 2010

Exhibit B: ALZA’s Response to Plaintiffs’ First Set of Requests for Admission

Exhibit C: Notice of Ruling Regarding Defendant’s ALZA Corporation and Sandoz Inc’s Motion for Order Determining Choice of Law Issue, January 14, 2010

Exhibit D: Tentative Ruling Regarding Defendant’s ALZA Corporation and Sandoz Inc’s Motion for Order Determining Choice of Law Issue

LEGAL STANDARD

It is well settled that when examining a choice of law issue, California courts routinely apply the law of the state where the case is filed. Hurtado v. Superior Court, 11 Cal.3d 574, 581 (1974). California utilizes the governmental interest analysis, which requires the court to determine whether the relevant law in California and Colorado conflicts. Kearney v. Salomon Smith Barney, Inc., 39 Cal. 4th 95, 107 (2006). Even under circumstances in which a party requests that the law of a foreign state be applied, California Courts will apply California law unless there is a true and material conflict with the foreign state’s law. Sommer v. Graber, 40 Cal. App. 4th 1455 (1994).

Here, Defendants have identified differences between California and Colorado’s wrongful death, design defect and damages laws. These supposed differences between California and Colorado law serve only as a smoke screen to mask Defendants’ true intentions, which is to prevent Plaintiff from lawfully litigating her claims in a venue that they perceive to be more favorable to injured Plaintiffs. Moreover, Defendants ignore the fact that when faced with conflict of law issues, California’s general preference is to apply its own law. Strassberg v. New England Mut. Life Ins. Co., 575 F.2d 1262, 1264 (9th Cir. 1978). If applying its law over California law will not significantly further the interests of a different state, then California law should apply. Hurtado, 11 Cal. 3d at 580. If the foreign state’s interests would be furthered by the application of its own law, then the Court must undertake a “comparative impairment analysis” by comparing the nature and strength of each state’s interest in the application of its own law to determine “which state’s interest would be more impaired if its policy were subordinated to the policy of the other state.” Kearney, 39 Cal. 4th at 108; Bernhard v. Harrah’s Club, 16 Cal. 3d 313, 320 (1976).

 

ARGUMENT

A. Under the governmental interest analysis test, California has a stronger interest in applying its product liability law to this dispute and its interests would be more impaired than Colorado’s interests
1. Conflicting law in California and Colorado

When determining choice of law issues, California follows the governmental interest analysis test, which requires (1) the Court to determine whether the relevant law in California and Colorado conflicts, (2) the Court to determine whether a true conflict exists by analyzing the interests each state has in the application of its own law to this dispute and (3) in the event that a true conflict does exist, the Court must determine which state’s interests would be more impaired if its policy were subordinated to the policy of another state. Kearney v. Salomon Smith Barney, Inc., 39 Cal. 4th 95, 107, 108 (2006). Here, Defendants identify three main differences between California and Colorado law, namely, design defect, wrongful death and damages law. Ex. A. at 2. Defendants allege that California law precludes a strict product liability claim for defective design, whereas, Colorado law permits strict liability design defect claims. Id. In regard to wrongful death cases, Defendants state that California does not permit recovery for general pain and suffering in a wrongful death action but there is no limit on the amount of non-economic damages that are recoverable. Id. at 3. Under Colorado law, recovery for pain and suffering is permissible but non-economic damages are limited to $250,000. C.R.S. § 13-21-102.5(3)(b). Finally, with respect to damages, under Colorado law, exemplary damages may not exceed the amount of actual damages awarded to the injured party. Ex. A. at 3. In contrast, California law does not permit punitive damages in a wrongful death action. Id. Although Plaintiff concedes there is a difference between the laws of California and Colorado, the remaining section of the governmental interest analysis test will demonstrate that not only does California have a greater interest in the application of its product liability law, but that its interests will be significantly impaired by the application of Colorado law.

2. No “true conflict” exists because California has a substantial interest in the application of its own product liability laws to this dispute.

The second prong of the governmental interest analysis test entails the Court analyzing the interests each state has in the application of its own law to this dispute. Kearney, 39 Cal. 4th at 108. If each of the subject states has an interest in the application of its own law, a “true conflict” exists and the Court must then examine the third prong of the test and compare the nature and strength of each state’s interest to determine “which state’s interest would be more impaired if its policy were subordinated to the policy of the other state.” Kearney, 39 Cal. 4th at 108; Bernhard v. Harrah’s Club, 16 Cal. 3d 313, 320 (1976).

Defendants litter their motion with blanket statements claiming that California has “no interest” in applying its own product liability law to Plaintiffs’ case simply because Decedent was a resident of Colorado. Such an argument ignores the extensive facts related to California’s connection to this case and is plainly illogical. If Defendants’ contention were true, California law would seemingly never apply to the personal injury claims of a non-resident killed or injured in their home state. Indeed, California courts have neglected to follow such logic and do not determine choice of law issues solely from the perspective of the injured victim. Rather, courts also assess the interests of the defendant as well as the broader interests of the State of California. See, e.g., Hurtado, 11 Cal.3d at 583-584 (“[T]he creation of wrongful death actions is not concerned solely with plaintiffs. As to defendants, the state interest in creating wrongful death actions is to deter [the] kind of conduct within its borders which wrongfully takes life.”). For this reason, set forth more fully below, California has a paramount interest in applying its law to a dispute involving a defective product designed, manufactured and distributed in California by a California corporation.

Numerous California courts have recognized that “California has an important interest in regulating products manufactured in California.” Corrigan v. Bjork Shiley Corp., 182 Cal. App. 3d 166, 180 (1986). As the California Supreme Court explained:

It is manifest that one of the primary purposes of a state in creating a cause of action in the heirs for the wrongful death of the decedent is to deter the kind of conduct within its borders, which wrongfully takes life. It is also abundantly clear that a cause of action for wrongful death without any limitation as to the amount of recoverable damages strengthens the deterrent aspect of the civil sanction . . . .

Hurtado, 11 Cal. 3d at 584; see also Cronin v. J. B. E. Olson Corp., 8 Cal. 3d 121, 132 (1972) (“[Public] policy demands that responsibility be fixed wherever it will most effectively reduce the hazards to life and health inherent in defective products that reach the market.”). It is undisputed that the defective fentanyl patch at issue in this case was manufactured in California by a California corporation having its principal place of business in California. In fact, Defendants admitted that ALZA has a principal office in California, employees located in California and that the “Sandoz Fentanyl Transdermal System” was manufactured in Vacaville, California. See Ex. B. at 7-14. This evidence clearly demonstrates that California has a substantial interest in applying its own laws to this dispute. See, e.g., Clothesrigger, Inc. v. GTE Corp., 191 Cal. App. 3d 605, 614 (1987) (recognizing “California’s interest in deterring fraudulent conduct by businesses headquartered within its borders and protecting consumers from fraudulent misrepresentations emanating from California”).

Defendants cite several cases in their motion to support the argument that California has “no interest” in this dispute, however those cases are inapposite and inapplicable to the facts of this case. The first case cited by Defendants, Reich v. Purcell, involved a car accident case, which took place in Missouri between a California resident and an Ohio resident. 67 Cal. 2d 551 (1967). The facts of Reich are markedly different from those of the present case. Although the court in Reich concluded that California had no interest in applying California law to the issue of damages, the Court lacked any interest in deterring wrongful conduct because the wrongful conduct did not occur in California. In the present case, the tortious and wrongful conduct occurred in California and as such, California has an overriding interest in allowing full compensation to the injured plaintiff. See, e.g., In re Paris Air Crash of March 3, 1974, 399 F. Supp. 732, 742 (C.D. Cal. 1975) (“”[When] the defendant is a resident of California and the tortious conduct giving rise to the wrongful death action occurs here, California’s deterrent policy of full compensation is clearly advanced by application of its own law.”); Hurtado, 11 Cal. 3d at 584 (“one of the primary purposes of a state in creating a cause of action in the heirs for the wrongful death of the decedent is to deter the kind of conduct within its borders which wrongfully takes life.”).

Similarly, Defendants’ reliance on Howe v. Diversified Buyers, Inc. is misplaced given the sole issue addressed in that case concerned damages. 262 Cal. App.2d 741, 746 (1968). In particular, the pivotal issue in Howe involved the availability of damages to a Nevada plaintiff injured in Nevada as a result of conduct occurring solely in Nevada. Id. The case did not involve or address wrongful conduct in California.

In yet another attempt to side step California’s law regarding the applicability of California law in wrongful conduct cases, Defendants cite a series of cases, which are not only factually dissimilar but also irrelevant to the present case. For example, in Ryan v. Clark Equipment, an Oregon plaintiff was injured in Oregon by an allegedly defective front-end loader manufactured in Michigan by a Michigan corporation that did business in California. 268 Cal.App.2d 679, 683 (1969). The sole issue was whether to apply an Oregon statute limiting damages or Michigan law recognizing no such limitations. Id. The case did not address any issue regarding which state’s product liability law to apply. Id. To the extent Defendants claim that Ryan properly held that Michigan had no interest in extending its laws to Oregon residents, they are simply incorrect. As the California Supreme Court explained in Hurtado:

In Ryan, the allegedly tortious conduct was in the manufacture of the loader which had been accomplished in Michigan by a corporation incorporated in that state. Michigan had an interest in applying its rule of compensation without limitation as to amount to all who committed tortious conduct within that state, but particularly to resident defendants, in order to deter such conduct.

. . . . insofar as the defendant was a Michigan corporation and allegedly committed tortious conduct in Michigan, that state had an interest in subjecting the defendant to unlimited liability in order to deter such conduct.

Hurtado, 11 Cal. 3d at 585. As such, California has a substantial interest in applying its product liability law to a California corporation that designed, manufactured and distributed the defective product in California. See also Reich v. Purcell, 67 Cal. 2d 551, 556 (1967) (recognizing that Missouri, the state where the wrongful conduct occurred, was “concerned with conduct within her borders and as to such conduct she has the predominant interest of the states involved.”).

Similarly, in McCann v. Foster Wheeler, LLC, an asbestos injury case in which the court performed a choice of law analysis to determine which state’s statute of limitations law should apply, all of the Defendant’s wrongful conduct took place in Oklahoma. 48 Cal.4th 68 (Cal. 2010). Specifically, the assembly, installation, advice and decisions regarding the asbestos insulation placed within the boiler all took place in Oklahoma. Id. Additionally, Plaintiff was exposed to the asbestos in Oklahoma. Id. No evidence was presented that the asbestos was manufactured, assembled, installed, packaged or labeled in California. Id. In fact, the only connection to California asserted in that case was Plaintiff’s residency there after exposure to asbestos. Id. Although Defendants cite this case to support their proposition that Colorado law should apply, it actually confirms the fact that when determining choice of law issues California does not look solely to the residency of the Plaintiff. Id. Indeed, California provides great importance to the state where the wrongful conduct was performed. See Hurtado, 11 Cal.3d at 583-584.

Finally, Hernandez v. Burger also involved the issue of damages as opposed to liability or wrongful conduct. In fact, liability was admitted. 102 Cal. App. 3d 795, 797 (Cal. App. 1980). Moreover, the wrongful conduct at issue occurred in Mexico and not California. Id. Based on those facts, the court decided to apply Mexican damages law. Id. at 799. (“The accident occurred in Mexico, and California has no legitimate interest in the possible deterrent effect of its unlimited recovery rule on conduct in Mexico.”)

A cursory reading of the above cases demonstrates vastly different factual scenarios from the case presently before the Court. The Court should not be led astray by Defendants’ restrictive interpretation of case law and contrived factual premises. The primary issue in this case is the applicability of Colorado or California’s substantive product liability law in light of wrongful conduct performed within the state. Not a single case cited by Defendants address these issues.

 

3. Under California case law, California’s interests would be more impaired than Colorado’s interests by a failure to apply California products liability law to a wrongful death action.

A fundamental flaw in Defendants’ choice of law analysis is that it is deceptively narrow and fails to acknowledge an entire body of California case law related to choice of law issues in wrongful death cases. Indeed, the arguments below will demonstrate that California’s interests would be greatly impaired if Colorado products liability law is applied to this wrongful death action. In Hurtado, the California Supreme Court explained that there are three distinct purposes of a cause of action for wrongful death that must be considered when undertaking a choice of law analysis: (1) compensation for survivors, (2) deterrence of conduct and (3) limitation, or lack thereof, upon the damages recoverable. Hurtado, 11 Cal. 3d at 584. The court explained that the first two aspects both relate to the creation of a wrongful death cause of action. Id. at 583. The last aspect relates solely to the issue of damages.

When conducting a choice of law analysis, the court held, “these three aspects of wrongful death must be carefully separated. The key step in this process is delineating the issue to be decided.” Id.; see also Kearney, 39 Cal. 4th at 110 (“This discussion in Hurtado teaches the importance, in applying the governmental interest analysis, of carefully examining what might at first blush appear to be a single subject or rule of law in order to identify the distinct state interests that may underlie separate aspects of the issue in question.”). In other words, “the objective of proper choice of law in conflict cases [is] to determine the law that most appropriately applies to the issue involved.” Reich, 67 Cal. 2d at 555.

a. Deterrence of wrongful conduct.

The court in Hurtado stated that the interest in creating a wrongful death cause of action “insofar as defendants are concerned, reflects the state’s interest in deterring conduct, said interest extending to all persons present within its borders.” Hurtado, 11 Cal. 3d at 584. Here, all of the wrongful conduct occurred in California. It is undeniable that the fentanyl patch at issue in this case was designed and manufactured in California. Defendants performed all business decisions, including crafting warnings related to the patch, in California. Defendants do not deny these facts but merely claim that this wrongful conduct is insufficient to permit the application of California law.

Courts in California have long held that California has a substantial interest in the deterrence of wrongful conduct occurring within its borders and has applied California law to countless cases involving those factual scenarios. See, e.g, Castro v. budget Rent-A-Car System, Inc., 154 Cal. App. 4th 1162, 1182 (Cal App. 2007) (“Based on the respective governmental interests of Alabama and California, Alabama’s interest in allocating liability and deterring negligent driving within its borders would be more impaired by the application of California’s permissive user statute than would California’s interests if Alabama law is applied. The trial court therefore correctly ruled that Alabama’s permissive user law applied to the issue of Budget’s responsibility for Diaz’s negligence.”); Stonewall Surplus Lines Co. v. Johnson Controls, 14 Cal. App. 4th 637, 649 (Cal. App. 1993) (“In contrast, failure to apply California’s rule would severely impair California’s interests. As we have seen California’s paramount interest is in protecting its residents by deterring tortfeasors. Here, the liability imposed grew out of severe injury suffered by a California resident while he was in California and caused by manufacturing and marketing activities which occurred exclusively in this state. It is difficult to imagine circumstances where California would have a greater interest in altering the future behavior of a defendant by compelling payment directly from the defendant rather than its insurers.”); Clothesrigger, 191 Cal. App. 3d at 631 (“California’s interest in deterring fraud is satisfied by maintaining the case as a class action on behalf of allegedly defrauded California residents.”).

In Browne v. McDonnell Douglas Corp., a case remarkably similar to this case, the court held that a foreign jurisdiction had no interest in restricting the rights of its citizens to recover against a California defendant. 504 F. Supp. 514 (N.D. Cal. 1980). In Browne, the families of victims from England, Germany, Australia and Turkey filed suit in California over a mid-air collision in Yugoslavia between a DC-9 manufactured by McDonnell Douglas and owned by a Yugoslavian airline and another plane owned and operated by British Airways. Id. Plaintiffs argued that California law applied while Defendants argued that Yugoslavian law applied. Id. The court began its choice of law analysis by noting that the relevant governmental interests to examine were: 1) compensation of survivors; 2) deterrence of wrongful conduct; and 3) limitation upon the damages recoverable. Id. at 517. Turning to the issue of deterrence the court noted that wrongful conduct allegedly took place in two jurisdictions, California, where McDonnell Douglas was alleged to have defectively designed the cockpit of the DC-9, and Yugoslavia, where the air traffic controller negligently failed to alert the planes to a potential collision. Id. Despite the allegations of negligence occurring in Yugoslavia and the foreign status of the plaintiffs, as to the issue of which state’s product liability law to apply – the very issue currently before this Court — the court in Browne held that “no compelling reason warrants displacing the products liability law of California for the allegedly faulty design of the DC-9 by a California manufacturer in Long Beach, California” because “[n]o other jurisdiction has been shown to have an interest which would be impaired if its law were not applied on this issue.” Id.; see also Hurtado, 11 Cal. 3d at 582 (“we hold that where as here in a California action both this state as the forum and a foreign state (or country) are potentially concerned in a question of choice of law with respect to an issue in tort and it appears that the foreign state (or country) has no interest whatsoever in having its own law applied, California as the forum should apply California law.”). Consequently, the court should reject Defendants’ arguments and hold that California has a greater interest in applying its own law to deter corporations operating and performing wrongful conduct within its borders.

b. Compensation for survivors.

As the Court held in Hurtado, the creation of a wrongful death remedy “insofar as plaintiffs are concerned, reflects the state’s interest in providing for compensation and in determining the distribution of the proceeds, said interest extending only to local decedents and local beneficiaries.” Hurtado, 11 Cal. 3d at 584. Under this prong, Colorado seemingly has the predominant interest. However, as Defendants delineated in their motion, Colorado’s laws severely limit the recovery of plaintiffs against pharmaceutical companies in wrongful death actions. Thus, the issue is whether Colorado has a legitimate state interest in denying recovery to its residents when the defendant is a non-resident. California courts have repeatedly affirmed that a state simply has no legitimate interest in denying recovery to its residents against a non-resident defendant. See, e.g., Hurtado, 11 Cal. 3d at 581 (“Mexico has no defendant residents to protect and has no interest in denying full recovery to its residents injured by non-Mexican defendants.”); Villaman v. Schee, 1994 U.S. App. LEXIS 912 at, *13-14 (9th Cir. 1994) (“In contrast to the strong interest a state has in seeing that its residents are fully compensated, Mexico’s policy of limiting damages “does not reflect a policy that widows and orphans should be denied full recovery.”). Colorado simply cannot have any legitimate interest in denying recovery to its residents against a foreign defendant for conduct occurring out of state.

c. The interest in the limitation, or lack thereof, of damages – which state’s damage law to apply.

 

Colorado law places an arbitrary $250,000 limitation on noneconomic damages in wrongful death claims. C.R.S. § 13-21-102.5(3)(b). California has no such cap. In regard to the interest of each state in limiting damages, the California Supreme Court in Hurtado stated that this interest, “insofar as defendants are concerned, reflects the state’s interest in protecting resident defendants from excessive financial burdens.” Hurtado, 11 Cal. 3d at 584 (emphasis added). Here, Defendant ALZA is a California corporation with its principal place of business in California. It designed, developed, manufactured and marketed the defective fentanyl patch in California. See Ex. B. at 7-14. California has an interest in applying its full measure of damages to the conduct of this in-state defendant in order to maximize the deterrent effect of its wrongful death and product liability laws:

It is manifest that one of the primary purposes of a state in creating a cause of action in the heirs for the wrongful death of the decedent is to deter the kind of conduct within its borders which wrongfully takes life. It is also abundantly clear that a cause of action for wrongful death without any limitation as to the amount of recoverable damages strengthens the deterrent aspect of the civil sanction: “the sting of unlimited recovery . . . more effectively [penalizes] the culpable defendant and [deters] it and others similarly situated from such future conduct.” Therefore when the defendant is a resident of California and the tortious conduct giving rise to the wrongful death action occurs here, California’s deterrent policy of full compensation is clearly advanced by application of its own law.

Hurtado, 11 Cal. 3d 574.

Although Defendants allege that Sandoz is a Colorado corporation, this statement is misleading. See Ex. A. at 6. Sandoz is merely organized under Colorado law but has its principal place of business in New Jersey. Moreover, there is no evidence that any wrongful conduct, on the part of either Defendant, occurred in Colorado. As discussed above, defendant ALZA conceded that the fentanyl patch transdermal system was developed and created in California. Ex. B. at 7-14. Therefore, Colorado has no interest in applying its damage limitations in the instant case. In Hurtado, the California Supreme Court, discussing the holding in Ryan v. Clark Equipment, rejected the notion that “the state of [a] plaintiff’s residence has an overriding interest in denying their own residents unlimited recovery” and concluded that “Oregon’s interest in limiting the amount of recovery, as opposed to providing some recovery, is directed at resident defendants, not resident plaintiffs.” Hurtado, 11 Cal. 3d at 586. In the case of In re Paris Air Crash of March 3, 1974, the court held that “[a]s for those countries or states where recovery would be less than by applying California law, surely they have no interest in limiting recovery of their resident plaintiffs as against a nonresident of their country or state.” 399 F. Supp. 732, 746 (C.D. Cal. 1975). Colorado simply has no interest in limiting the damages recoverable by a Colorado plaintiff against a California defendant.

In Hurtado, the plaintiffs in the wrongful death action were residents of Mexico, but the accident that resulted in the decedent’s death occurred in California, each of the defendant drivers was a California driver, and all the vehicles were registered in California. 11 Cal. 3d at 580-581. The issue was which jurisdiction’s law should determine the amount of damages recoverable by the plaintiffs. Id. Whereas Mexico limited the amount survivors could recover in a wrongful death action, California placed no dollar limit on the damages that could be recovered. In conducting a comparative impairment analysis, the court found that Mexico had no interest in having its law applied, explaining that “[t]he interest of a state in a tort rule limiting damages for wrongful death is to protect defendants from excessive financial burdens or exaggerated claims” and that this interest was “primarily local,” that is, it is intended to protect resident defendants. Id. Because Mexico had no interest in applying restrictive damage laws to claims against non-resident defendants, the Court held that California law, the law of the forum, applied:

Since it is the plaintiffs and not the defendants who are the Mexican residents in this case, Mexico has no interest in applying its limitation of damages — Mexico has no defendant residents to protect and has no interest in denying full recovery to its residents injured by non-Mexican defendants.

Id. at 581, 582.

The court in Corrigan v. Bjork Shiley Corp., similarly rejected the argument that another state would have an interest in preventing its citizens from receiving full redress against a California defendant. 182 Cal. App. 3d 166 (Cal. App. 1986). In that case, Australian plaintiffs injured in Australia from a defective product manufactured in California by a California corporation sued in California. Id. In reversing the trial court’s forum non conveniens dismissal, the court undertook a choice of law analysis and determined that California damage law would apply if the case was litigated in California:

It has been repeatedly asserted that California has an important interest in regulating products manufactured in California. While Australia has an interest in applying its law to injuries from products occurring within its borders, that interest would not be impaired by application of California law. Australia would have little interest in prohibiting a complete remedy for injury to its own citizens, whereas “when the defendant is a resident of California and the tortious conduct giving rise to the wrongful death action occurs here, California’s deterrent policy of full compensation is clearly advanced by application of its own law.” Under these circumstances, California law would be applicable if trial were held here, and the analysis of our “governmental interest” in the case argues in favor of a California forum.

Id. (emphasis added). California has a strong interest in applying its product liability law to a defective product manufactured in California by a California corporation.

Defendants incorrectly argue that California has no interest in providing a greater recovery to a Colorado resident than they could have under Colorado law. See Ex. A. at 6. However, this argument was expressly rejected by the California Supreme Court in Hurtado. In that case, the court stated:

Defendant’s final contention is that California has no interest in extending to out-of-state residents greater rights than are afforded by the state of residence . . . . Defendant urges seemingly as an absolute choice of law principle that plaintiffs in wrongful death actions are not entitled to recover more than they would have recovered under the law of the state of their residence. In effect defendant argues that the state of plaintiffs’ residence has an overriding interest in denying their own residents unlimited recovery.

Limitations of damages express no such state interest. A policy of limiting recovery in wrongful death actions “does not reflect a preference that widows and orphans should be denied full recovery.”

Because Mexico has no interest in applying its limitation of damages in wrongful death actions to nonresident defendants or in denying full recovery to its resident plaintiffs, the trial court both as the forum, and as an interested state, correctly looked to its own law.

Hurtado, 11 Cal. 3d. at 586-87; see also Clothesrigger, Inc. v. GTE Corp., 191 Cal.App.3d 605, 616 (1987) (“[T]he [lower] court simply erred in stating California has no interest in providing nonresident plaintiffs greater protection than their home states provide. California’s more favorable laws may properly apply to benefit nonresident plaintiffs.”).

California has a strong interest in allowing unlimited recovery in order to strengthen the deterrent effect of its laws on the in-state conduct of an in-state defendant. Colorado has no interest in denying full recovery to a Colorado resident against an out-of-state corporation. For this reason, there is no “conflict” between the two state’s laws. See, e.g., Offshore Rental Co. v. Continental Oil Co., 22 Cal.3d 157, 166 (1978) (“Only if each of the states involved has a ‘legitimate but conflicting interest in applying its own law’ will we be confronted with a ‘true’ conflicts case.”). Under such circumstances, California law must apply. See, e.g., Hurtado, 11 Cal. 3d at 580 (“When one of two states related to a case has a legitimate interest in the application of its law and policy and the other has none, there is no real problem; clearly the law of the interested state should be applied.”).

 

4. Even if a true conflict did exist, examining the interests of both states’ product liability laws under the comparative impairment analysis, California’s interests would be more significantly impaired than Colorado’s interests

 

As set forth above, there is no conflict between the product liability laws of California and Colorado because Colorado has no legitimate interest in denying its resident plaintiffs a recovery against a non-resident defendant. Where there is no conflict, a court applies the law of the forum. Defendants incorrectly claim that Colorado has an interest in denying its residents recovery because its limitation damages in wrongful death cases is designed, in part, to promote the availability and affordability of prescription drugs to its residents. Ex. A. at 8. Assuming such an interest, and a conflict between Colorado and California law, a court undertaking a choice of law analysis “carefully evaluates and compares the nature and strength of the interest of each jurisdiction in the application of its own law ‘to determine which state’s interest would be more impaired if its policy were subordinated to the policy of the other state’ and then ultimately applies ‘the law of the state whose interest would be the more impaired if its law were not applied.’” Kearney v. Salomon Smith Barney, Inc., 39 Cal. 4th 95, 108 (2006).

When applying the comparative impairment analysis, a California court should examine the history, purpose and acceptance of the various states’ laws. Washington Mutual Bank v. Superior Court, 24 Cal. 4th 906, 920 (2001) (“In making this comparative impairment analysis, the trial court must determine ‘the relative commitment of the respective states to the laws involved’ and consider ‘the history and current status of the states’ laws’ and ‘the function and purpose of those laws.’”); Offshore Rental Co., Inc. v. Continental Oil Co., 22 Cal. 3d 157, 166 (1978) (“the comparative impairment approach to the resolution of true conflicts attempts to determine the relative commitment of the respective states to the laws involved. The approach incorporates several factors for consideration: the history and current status of the states’ laws; the function and purpose of those laws.”). For example, the Court should note the fact that California was the first state to recognize strict product liability, doing so in 1963 in the case of Greenman v. Yuba Power Products, Inc., 59 Cal.2d 57, 62-63 (1963) (“A manufacturer is strictly liable in tort when an article he places on the market, knowing that it is to be used without inspection for defects, proves to have a defect that causes injury to a human being. . . . [The] liability is not one governed by the law of contract warranties but by the law of strict liability in tort.”); Jiminez v. Superior Court, 29 Cal. 4th 473, 477 (2002) (“Two decades later, in Greenman v. Yuba Power Products, Inc. (1963) 59 Cal.2d 57, this court embraced Justice Traynor’s view, and California became the first state to allow recovery for strict products liability.”). California courts have applied the theory of strict product liability to drugs since at least the late 1960s. See, e.g., Toole v. Richardson-Merrell, Inc., 251 Cal. App. 2d 689, 710 (Cal. App. 1967) (“where the facts disclose that the drug has not been properly or has been placed upon the market and sold without adequate and proper warning, strict liability for resulting injury may be found.”); Grinnell v. Charles Pfizer & Co., 274 Cal. App. 2d 424 (Cal. App. 1969) (applying strict liability to polio vaccine). Thus, California has recognized the precise claim brought by Plaintiff in this case for more than forty-six years. In so doing, California has been at the forefront of the development of product liability law. Moreover, California does not limit the non-economic damages that are recoverable under a wrongful death action. See Cal. Code Civ. Proc. § 377.61 (“damages may be awarded that, under all circumstances of the case, may be just…”); Allen v. Toledo, 109 Cal. App. 3d 415, 423 (Cal. App. 4th Dist. 1980) (“Damages for wrongful death are not limited to compensation for losses with ‘ascertainable economic value.’”).

Colorado, by contrast, severely limits recovery of non-economic damages to $250,000 under the “Limitation on Damages for Noneconomic Loss or Injury” incorporated into the Wrongful Death Act. C.R.S. § 13-21-102.5 (3)(b). This portion of the Act was first enacted in 1986, much later than California’s product liability laws. In conducting its comparative impairment analysis, the Court should consider the long history of product liability and wrongful death damages law and the relatively short history of Colorado’s legislative cap on damages. Additionally, the court should take into account the fact that the application of California law in this case will serve the specific purpose of deterring wrongful conduct by California corporations while the application of Colorado’s s law would, at most, serve some vague, amorphous goal of promoting new medicines and controlling the costs of prescription drugs, a goal having nothing to do with the application of the state’s law to the specific non-resident defendants in this case. In light of the foregoing, to the extent the Court finds a true conflict, it is clear that the interests of California in the application of its laws to conduct carried out within its borders by a California corporation would be more impaired than Colorado’s interest in promoting a legislative cap in wrongful death cases and thus protecting drug companies from liability.

B. Courts in California have previously resolved this identical issue in favor of applying California law.

 

Parroting verbatim the exact arguments used in previous motions, Defendants mistakenly allege that no California Court has ever applied California law in a case regarding a non-resident Plaintiff. See Ex. A. at 10. Indeed, several Courts in California have previously applied California law against these same Defendants in fentanyl patch cases. See Ex. C, D. In Meeusen v. Alza Corporation, et. al., Defendants ALZA and Sandoz sought an order applying Michigan law to a case involving a Michigan resident who died in Michigan as a result of using a defective fentanyl patch designed, manufactured and distributed in California by a California corporation. In that case, after considering the briefs of the parties as well as hearing oral argument on the motion, the Court issued a ruling holding that California law applied because the wrongful conduct to be addressed by the court and jury is the manufacture of a defective product that occurred in California:

Def. Alza Motion to Determine Choice of Law Issue – Denied. The “governmental interest test” does not require the application of Michigan law. Although the laws of Michigan and California are different (significantly) in regard to drug manufacturer liability, no true conflict exists. The conduct sought to be deterred in this case is the manufacture of defective product/drug (California), not necessarily wrongful death (Michigan). In this case it is the manufacturing of defective product/drug that is the real wrongful conduct. Therefore, California has the greater interest and California law applies.

See Ex. C. Moreover, in Christensen v. Alza Corporation, et. al, this issue was again addressed a mere couple of months ago against the same Defendants. Specifically, the Court decided:

Michigan has no interest in denying its residents recovery against non-resident defendants. Just as the Court found in McCann (a statute of limitations case), a true conflict exists between these competing laws. The wrongful conduct at issue in this case, manufacture of the Patch by a California resident, occurred in California. California law should apply and control.

Clearly, these orders demonstrate that the Court should disregard Defendants’ disingenuous assertions that “no California case has applied California law where the Plaintiff is not a resident of California and/or the injury did not occur in California.” Ex. A. at 10. Additionally, the Court should reach the same conclusion that other Courts have: California law applies to this product liability case against a California corporation that designed, manufactured and distributed the defective product in California.

CONCLUSION & PRAYER

The Court should deny Defendants’ motion and enter an order confirming that California law is applicable to this dispute.

Respectfully submitted,
HEYGOOD, ORR & PEARSON
2331 W. Northwest Highway
Second Floor
Dallas, Texas 75220
(214) 237-9001 (Telephone)
(214) 237-9002 (Telecopier)


[1] See Ex. C. at 2; Ex. D. at 1-2. Clearly, these orders belie Defendants’ contention that “no California case has applied California law where the Plaintiff is not a resident of California and/or the injury did not occur in California.” See Ex. A. at 10.