EDUARDO C. ROBRENO, J.
DECEMBER 7, 1995
Plaintiff Joseph Austin ("Austin") is a New Jersey resident employed by Philadelphia Newspapers, Inc., ("PNI") in Pennsylvania. He was injured in an automobile accident in Pennsylvania while on personal business. As a result of the accident, Austin sought lost wages through his automobile insurance policy and through supplemental payments for wage benefits under his PNI disability insurance policy.
Defendant Charles Dionne ("Dionne") has filed a motion in limine seeking to preclude plaintiffs from introducing at trial evidence of lost wages which have been paid or are payable to Austin under his automobile and disability insurance policies. Dionne argues that collecting benefits from a tortfeasor as well as from Austin's insurance policies constitutes double recovery, a practice barred under Pennsylvania law.
On the other hand, plaintiffs contend that New Jersey law applies in this case, and that, under New Jersey law, double recovery is permitted in cases involving automobile accidents. Furthermore, plaintiffs argue that, even if Pennsylvania rather than New Jersey law applies, ERISA preempts Pennsylvania law because Austin's benefits have been paid pursuant to a self-funded disability insurance policy provided by PNI under a collective bargaining agreement. Finally, plaintiffs contend that, under ERISA, unlike Pennsylvania law, Austin is entitled to collect from more than one source.
The Court finds that, under Pennsylvania's choice of law rules, Pennsylvania law applies to the interpretation of first party payments under plaintiffs' PIP automobile insurance policy, as well as the employer's disability insurance policy. In addition, the Court concludes that ERISA does not preempt the Pennsylvania law barring double recovery. Under the facts of this case, Pennsylvania law neither interferes with nor regulates a claim by or against the PNI disability insurance policy operating under ERISA.
The following facts are undisputed. Plaintiffs Joseph and Mary Austin are New Jersey residents. Austin is employed as a pressman at the Philadelphia Inquirer. At the time of the accident, Dionne was a resident of Pennsylvania.
On February 10, 1993, at approximately 4:45 p.m., Austin was proceeding south on Interstate Route 95 in Philadelphia, Pennsylvania, in his pick-up truck. At the same time, Dionne was travelling south on Interstate Route 95 in his own vehicle. Dionne's car collided with the back of Austin's truck, causing Austin to suffer soft tissue injuries to his neck and back.
Following the accident, Austin missed approximately 52 weeks of work. He sought lost wages in the amount of $ 5,200 under his automobile personal injury protection ("PIP") coverage with Prudential Insurance Company, which have not been paid to date, but which plaintiffs contend are payable. In addition, Austin received $ 520.57 per week from February 10, 1993, to January 9, 1994, from his PNI disability insurance. This coverage is provided under the collective bargaining agreement between Philadelphia Newspapers Union Local 16 and the Philadelphia Inquirer.
Plaintiffs contend that New Jersey law applies to this case. Defendant disagrees, arguing instead that the law to be applied is that of Pennsylvania. Because the case involves contacts which impact more than one jurisdiction, the Court must choose between the relevant laws of the two jurisdictions. See Robert A. Leflar, American Conflicts Law § 2, at 3 (3d ed. 1977).
In a diversity action, "the choice of law rules of the forum state [determine] which state's law will be applied." Shuder v. McDonald's Corp., 859 F.2d 266, 269 (3d Cir. 1988) (citing Klaxon v. Stentor Electric Mfg. Co., 313 U.S. 487, 496, 61 S. Ct. 1020, 1021, 85 L. Ed. 1477 (1941)). Accordingly, the Court will apply Pennsylvania's choice of law rules.
In Griffith v. United Air Lines, Inc., 416 Pa. 1, 203 A.2d 796 (Pa. 1964), the Pennsylvania Supreme Court abandoned the traditional lex loci delicti conflicts rule for "a more flexible rule which permits analysis of the policies and interests underlying the particular issue before the court." Id. at 805. In commenting on the development of the rule set forth in Griffith, the Third Circuit stated,
This new conflicts methodology has evolved into a hybrid approach that "combines the approaches of both Restatement II (contacts establishing significant relationships) and 'interest analysis' (qualitative appraisal of the relevant States' policies with respect to the controversy)."
Lacey v. Cessna Aircraft Co., 932 F.2d 170, 187 (3d Cir. 1991) (quoting Melville v. Am. Home Assurance Co., 584 F.2d 1306, 1311 (3d Cir. 1978)).
Under Pennsylvania choice of law rules and the method of analysis established in Griffith, three outcomes may obtain. First, if the law of either jurisdiction may be applied without impairing the governmental interests of the jurisdiction whose law is not being applied, no conflict exists between the respective laws of each jurisdiction and the court should apply the law of the forum. See Eugene F. Scoles and Peter Hay, Conflict of Laws § 2.6, at 17 & n.8 (2d ed. 1992).
Second, if only one of the two jurisdiction's governmental interests would be impaired by the application of the other jurisdiction's law, a "false conflict" arises. Lacey, 932 F.2d at 187. "Although two jurisdictions have nominal contacts with the transaction, only one jurisdiction is truly concerned with the result." Kuchinic v. McCrory, 422 Pa. 620, 624 n.4, 222 A.2d 897, 900 n.4 (1966). In other words, if neither jurisdiction's governmental interests would be harmed when applying the law of the one jurisdiction, whose interests would be impaired if its law were not applied, the conflict is "false."
Third, a "true conflict" arises only if, no matter which jurisdiction's law is applied, the governmental interests of the jurisdiction whose law is not applied would be impaired. Lacey, 932 F.2d at 187 n.15. "If a true conflict exists, the court must determine which state has the greater interest in the application of its law." Id.
The Court shall now apply the Pennsylvania conflict of law analysis to both the automobile and disability insurance policies in question.
Both parties agree that the amount payable to plaintiffs under PIP lost wages benefits in an action against the tortfeasor is excludable under both New Jersey and Pennsylvania law. See Plaintiffs' Pre-Trial Memorandum, doc. no. 20, at 5; Defendant's Memorandum in Support of His Motion in Limine, doc. no. 19, at 3. Because the law of either jurisdiction may be applied without injuring the governmental interests of the other, there is no conflict. See 75 Pa. Cons. Stat. Ann. § 1722 (1995); 39 N.J. Stat. Ann. § 6A-12 (West 1994).
Therefore, the Court must apply the law of Pennsylvania, the forum state.
The Court now turns to whether a conflict exists between New Jersey law and Pennsylvania law regarding the exclusion of wage losses recovered under the PNI disability insurance policy.
Under New Jersey law, in an action by an injured plaintiff against a tortfeasor, collateral source benefits are excluded from damages that may be submitted to a jury. 2A N.J. Stat. Ann. § 15-97 (West 1994).
Yet, all actions brought pursuant to the provisions of Title 39 (actions relating to motor vehicles and traffic regulations) are exempt from this general exclusion of collateral source benefits. Id. The effect of exempting motor vehicle accidents from the general prohibition against double recovery is, as the New Jersey Superior Court has recognized, to make available to a plaintiff in an automobile accident "additional benefits" from an employer's voluntary supplemental insurance plan. O'Boyle v. Prudential Ins. Co. of Am., 241 N.J. Super. 503, 509, 575 A.2d 515, 518 (1990) (declining to "inject some lurking judicial suspicion that a better policy [against double recovery] could or should be engrafted on the statutory scheme"). Thus, under New Jersey law, despite the fact that double recovery is prohibited in all other contexts, in an action against a tortfeasor relating to an automobile accident, the amounts recoverable under an employer's disability insurance policy are not excluded from wage loss calculations.
By contrast, Pennsylvania law prohibits double recovery without exception. Under § 1722 of the Pennsylvania Motor Vehicle Financial Responsibility Law, "in any action for damages against a tortfeasor," a party is precluded from "recovering the amount of benefits paid or payable under . . . any program, group contract or other arrangement for payment of benefits." 75 Pa. Cons. Stat. Ann. § 1722 (1995). As the Third Circuit has recognized, § 1722 reflects the Pennsylvania legislature's goal of preventing double recovery from both an employer's disability insurance fund and a tortfeasor. See Travitz v. Northeast Dep't ILGWU Health and Welfare Fund, 13 F.3d 704, 710 (3d Cir. 1994) (finding that plaintiff attempted to circumvent purpose of both § 1722 and disability insurance contract's exclusion clause). Therefore, application of Pennsylvania law in the present case would result in excluding from plaintiffs' wage loss calculations the amounts already recovered from Austin's PNI disability insurance policy.
In short, if New Jersey's laws were applied, Pennsylvania's interest against double recovery would be impaired. The converse is equally true. If Pennsylvania law were applied, New Jersey's interest in preserving double recovery in automobile accident cases from non-automobile insurance policies would be impaired. The Court finds that this conflict is a "true" one, since the governmental interests of one jurisdiction would be impaired if the other state's law were applied, and vice-versa.
Lacey, 932 F.2d at 187 n.15. The Court must now decide whether New Jersey or Pennsylvania law applies to this case.
Under the Griffith method of analysis, a court must examine both the contacts establishing significant relationships, as set forth in Restatement (Second), and the governmental interests and policies of the states pertinent to the controversy. Lacey, 932 F.2d at 187; Griffith, 203 A.2d at 805. Section 145 of the Restatement (Second) of Conflicts of Law directs a court to consider the following contacts in order to determine the applicable law:
a) the place where the injury occurred,
b) the place where the conduct causing the injury occurred,