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SCHALLIOL v. FARE

United States District Court, Eastern District of Pennsylvania


June 13, 2002

MARY SCHALLIOL, PLAINTIFF,
V.
JOHN FARE, JR., ET AL., DEFENDANTS. LOUIS SIMON, ET AL., PLAINTIFFS, V. THE UNITED STATES OF AMERICA, DEFENDANTS.

The opinion of the court was delivered by: Katz, Senior Judge.

  MEMORANDUM AND ORDER

Now before the court are two motions by the United States for the determination of the choice of law. Each motion pertains to one of the above-captioned lawsuits, both of which arise from a fatal plane crash.*fn1 In both suits, the United States is a defendant under the Federal Tort Claims Act, 28 U.S.C.A. §§ 1346(b), 2671 et al. (FTCA), for the alleged negligence of its air traffic controllers and its allegedly negligent publication of materials listing an approach to an airplane runway that was, in fact, not in service. Upon consideration of the parties' submissions, including the parties' stipulation of facts necessary to decide the conflicts of law issue, the court finds that Indiana substantive law applies to all claims pled against the United States under the FTCA. The court further certifies this ruling for immediate appeal pursuant to 28 U.S.C. § 1292 (b).

Background

On January 18, 2000, while attempting to land at an airport near Somerset, Kentucky, an airplane collided with a guy wire on a microwave communications tower, and crashed.*fn2 All four people aboard were killed,*fn3 including the pilot John Fare, Sr. (Pilot Fare), and B. Kenin Hart (Passenger Hart), Dennis Schalliol (Passenger Schalliol) and Loy D. Thompson, IV, who were traveling on behalf of a real estate brokerage conglomerate known as Hart Corporation.

While in flight, Pilot Fare contacted an air traffic controller at the Indianapolis Air Route Traffic Control Center,*fn4 who cleared him landing via the Simplified Directional Facility approach at Runway 4 (SDF 4) at the Somerset airport.*fn5 Pilot Fare also possessed an Instrument Approach Procedure (IAP) for SDF 4, which was published by the United States,*fn6 and allegedly contained information stating that that approach was in service. However, the navigational facility supporting the SDF approach was out of service indefinitely.*fn7 This was indicated on the Airport Directional Facility (MD) published by the Federal Aviation Administration (FAA).*fn8

In their various claims against the United States, plaintiffs contend that the publication of the IAP was negligent, and all parties agree that any such negligence occurred in Washington, D.C.*fn9 Plaintiffs also allege that the air traffic controllers were negligent, and all parties agree that any such negligence of the controllers, including any failure to monitor the aircraft or to supervise personnel, occurred in Indiana.*fn10 Finally, all parties agree that any negligence of Pilot Fare occurred in Ohio and Kentucky,*fn11 and that any negligence of the United States with respect to the publication of the MD occurred in Washington, D.C.*fn12

The parties to this case include plaintiff Mary Schalliol as personal representative of the estate of Dennis Schalliol (Plaintiff Schalliol), who brings claims of negligence against the United States under the FTCA, and also brings claims of negligence on the part of Pilot Fare against the estate of Pilot Fare (Defendant Fare) and against Pilot Fare's employer, Hart Corporation/Delaware Division*fn13 (Defendant Hart Delaware).*fn14 The estate of Pilot Fare, under separate representation, has also brought a cross-claim of negligence against the United States (Cross-Plaintiff Fare).*fn15

In a separate action, four personal representatives of the estate of B. Kenin Hart, his three children and his 88-year-old mother (collectively, the Simon Plaintiffs), also bring claims against the United States.

The United States has filed a separate motion for a determination of the choice of law in each of these cases, and in each motion seeks the application of Indiana substantive law to the claims pled against it under the FTCA. Plaintiff Schalliol, Defendants Fare/Hart Delaware, and the Simon Plaintiffs have each responded separately,*fn16 and each seek the application of Pennsylvania substantive law to these claims.*fn17

Discussion

The Third Circuit requires courts to engage in a complex choice-of-law analysis when FTCA claims are based on allegedly tortious conduct that occurred in more than one state. According to the Third Circuit,

[t]he FTCA waives sovereign immunity and grants district courts jurisdiction over tort claims against the United States "under circumstances where the United States, if a private person, would be liable to the claimant in accordance with the law of the place where the act or omission occurred." 28 U.S.C. § 1346(b)(1) (emphasis added). . . . When a case involves multiple alleged acts or omissions occurring in more than one state, the FTCA, as construed by [Richards v. United States, 369 U.S. 1 (1962)], requires the District Court to engage in a complex conflict of laws analysis to determine which state law governs the jurisdictional inquiry. . . . Because Richards interpreted the "law of the place where the act or omission occurred" to mean the "whole law" of the state where the act or omission occurred, including that state's choice of law rules, a two step choice of law analysis is required when multiple acts or omissions have occurred in more than one state. First, the court must select between the states' respective choice of law rules. See Richards, 369 U.S. at 11; Ducey v. United States, 713 F.2d 504, 509 n. 2 (9th Cir. 1983); Bowen v. United States, 570 F.2d 1311, 1318 (7th Cir. 1978); James A. Shapiro, Choice of Law Under the Federal Tort Claims Act: Richards and Renvoi Revisited. 70 N.C.L. Rev. 641, 669-75 (1992). Second, the court must apply that state's choice of law rules to determine which state's substantive tort law applies. See Richards, 369 U.S. at 11, 82 S.Ct. 585; Tyminski v. United States, 481 F.2d 257, 265 (3d Cir. 1973). Because of this bifurcated analysis, the state whose choice of law rules are selected in the first step may or may not be the same state whose substantive law is chosen in the second step.

Before proceeding to the conflict of laws analysis, it is prudent to ensure that there is not a "false conflict" in the underlying choice of law rules or the underlying contribution and indemnity law making it unnecessary to engage in this complex bifurcated analysis. See Williams v. Stone, 109 F.3d 890, 893 (3rd Cir. 1997).

Gould Electronics. Inc. v. United States, 220 F.3d 169, 179-80 (3d Cir. 2000). In sum, in this case the court must first determine whether there is a true conflict in the underlying choice of law rules of the states in which the act or omission of negligence occurred or in the substantive law that might apply; if there is such a conflict the court must next determine which jurisdiction's choice-of-law rules apply; and finally the court must determine which jurisdiction's substantive rules apply. See id.

In this case, the allegedly tortious "acts or omissions" of the United States occurred both in Washington, D.C. and perhaps Oklahoma, where the IAP and MD were published, and also in Indiana, where the air traffic controllers who instructed Pilot Fare in landing were located.*fn18 With respect to the choice-of-law rules of these jurisdictions, Indiana employs a modified lex loci delicti test that applies the substantive law of the place where the tort was committed, that is, where the last event necessary to make an actor liable for the alleged wrong takes place, Hubbard Manufacturing Co., Inc. v. Greeson, 515 N.E.2d 1071, 1073 (Ind. 1987), whereas D.C. employs a governmental interest test, see Raflo v. United States, 157 F. Supp.2d 1, 4-5 (D.D.C. 2001)*fn19, and thus there exists a true conflict between the two.*fn20 See generally id. at 8 (finding true conflict between Virginia's lex loci delicti approach and District of Columbia's governmental interest approach).

As to whether there is a true conflict in the potentially applicable substantive law, a court must first determine which substantive law might apply. As discussed infra, under Indiana choice of law rules, the most likely jurisdictions are Indiana and D.C.; under the D.C. "interest" analysis, the possible jurisdictions are, at minimum, D.C., Indiana and Pennsylvania, the latter two being the only jurisdictions whose substantive law are endorsed by any party in this case.*fn21 There is a true conflict as to the substantive law, since Indiana and Pennsylvania embrace comparative fault, that is, proportional allocation of fault,*fn22 whereas D.C. follows the rule that contributory negligence will bar recovery except in cases where the last clear chance doctrine applies.*fn23 Furthermore, Indiana has barred joint and several liability by statute,*fn24 whereas D.C. and Pennsylvania embrace it.*fn25 Also, Indiana does not permit survivor claims in addition to wrongful death claims in cases involving negligence, see IND. CODE § 34-9-3-4, and for wrongful death cases Indiana awards damages including net lost earnings of the decedent, see id. § 34-23-1-1; Elmer Buchta Trucking, Inc. v. Stanley, 744 N.E.2d 939, 943 (Ind. 2001) (lost earnings minus maintenance),*fn26 and damages for nonpecuniary loss of love and companionship, see IND. CODE. § 34-23-1-1, 34-23-1-2, but specifically prohibits awards of punitive damages or for pain and suffering, see id. § 34-23-1-2. Furthermore, in Indiana lost earnings awards are only provided to the decedent's spouse and to dependent children or dependent next of kin. See id. § 34-23-1-1. In contrast, Pennsylvania permits wrongful death claims as well as survivor claims, see. e.g., Stecyk v. Bell Helicopter Textron, Inc., 53 F. Supp.2d 794, 798 n. 4 (E.D. Pa. 1999), and although damages in Pennsylvania also may be based on the decedent's net earnings until death, see Incollingo v. Ewing, 444 Pa. 24 (Pa. 1971), significantly, awards may also be given for pain and suffering, see In Re Consolidation Coal Co., 296 F. Supp. 837 (W.D. Pa. 1968), and furthermore in a case such as this where there are no minor dependents, damages may be awarded to the decedent's adult, nondependent children. See 42 PA. CONS. STAT. § 8301; Burchfield v. M.H.M. Partnership, 43 Pa. D. & C. 4th 533, 542-43 (Pa. Com. Pl. 1999) (in wrongful death action, loss of services damages are recoverable by damaged adult, as well as by a minor); Krause v. B & O Railroad, 33 Pa. D. & C. 3d 458, 462 (Pa. Com. Pl. 1983) (settlement proceeds of a survival action to be distributed without regard to pecuniary loss). Finally, D.C. permits wrongful death damages for loss of support to spouses and next of kin, as well as survivor claims, but excluding pain and suffering. See D.C. CODE §§ 16-2701, 12-101; see also Strother v. District of Columbia, 372 A.2d 1291, 1295 (D.C. 1977). Thus, there exist true conflicts among all three jurisdictions that must be resolved.

According to Gould, after establishing a true conflict the court must next "select the choice of law rules of the state where the `acts or omissions' occurred, not where the injury occurred." Gould, 220 F.3d at 181. Gould delineated five different approaches that have been taken in choosing between "conflicting choice of law rules when the alleged acts or omissions occur in more than one state." Id. Gould did not express a preference for any of the five approaches, but found that because under the facts of that case one of the approaches did not apply and the remaining four led to the application of the choice of law rules of Indiana, Indiana's law was indeed appropriate. Id. at 183.

"In the first approach, when the injury can be parsed by the acts or omissions in the different states, one court applied the choice of law rules on an act-by-act basis, applying the relevant state's choice of law rules for each act or omission." Gould, 220 F.3d at 182 (citing Kohn v. United States, 591 F. Supp. 568, 572 (E.D.N.Y. 1984)). That approach, however, required that "each act by the [defendant United States] Army was a distinct tort that, absent the others, could have caused an emotional distress injury," Gould, 220 F.3d at 183, and here, as in Gould, this approach is unworkable because the plaintiffs' injuries are "indivisible and cannot be parsed based on the separate alleged acts by the united States."*fn27 Id.

A second approach is to "elect the choice of law rules of the place of the last act or omission having a causal effect." Id. (citing Bowen v. United States, 570 F.2d 1311, 1318 (7th Cir. 1978)) (punctuation omitted). Here, the last act or omission having a causal effect clearly was committed by the air traffic controllers in Indiana.

A third approach is to elect the choice of law rules of "the place of the act or omission having the most significant causal effect." Gould 220 F.3d at 182 (citing Bowen, 570 F.2d at 1318 (punctuation omitted)). In Bowen, "the plaintiff sued the Federal Aviation Administration for failure to advise the pilot of icy conditions at various points along the route in Arkansas, Illinois, and Indiana," id. (citations omitted), and the plane ultimately crashed while attempting to land with the instructions of Indiana air traffic personnel. Despite the numerous alleged acts of negligence in different states, the court held that Indiana law applied because "the close relationship of the Indiana events to the crash itself and the fact that what was said there could have prevented the crash seem to us to give that state the edge as the situs of the acts or omissions having the greatest causal significance." Bowen, 570 F.2d at 1318. In this case, as in Bowen, a direct nexus exists between the conduct of the controllers and the crash, giving Indiana the "edge" as the site of the conduct having the greatest causal significance.*fn28

"Under a fourth approach, the court selects the choice of law rules of the state in which `physical acts' could have prevented the injury." Gould, 220 F.3d at 183 (citing Ducey v. United States, 713 F.2d 504, 509 n. 2 (9th Cir. 1983)). In Ducey and in Gould's application of Ducey, this approach helped to choose between a site where physical acts caused the tort and a site where the decision to implement those physical acts was made. Ducey, 713 F.2d at 509 n. 2 (numerous alleged omissions "may have stemmed in part from decisions made in San Francisco, California" but "could have been prevented only by the doing of such physical acts as the posting of signs, the erection of barbed wire, and the tearing up of boat slips and trailer spaces in Nevada."); Gould, 220 F.3d at 183 (decisions were made in Pennsylvania to construct and operate plant located in NY). Here, since physical acts in both Indiana and D.C. could have prevented the tort, this approach is indeterminate.

"A fifth approach was taken by the District of Columbia Circuit Court of Appeals, which made a choice of choice of law based on where the `relevant' act or omission occurred." Gould, 220 F.3d at 183 (citing Hitchcock v. United States, 665 F.2d 354, 359 (D.C. Cir. 1981)). In Hitchcock, a diplomat's wife developed paralysis due to a rabies vaccination administered to her by the government in preparation for a job relocation to Argentina. See Hitchcock, 665 F.2d at 359-60. The court held that the "relevant" negligent act was the policy decision made in D.C. to vaccinate Argentina personnel without providing them with warnings or other information, and not the inoculation itself administered by a nurse in Virginia who was given little supervision and no directions to supply warnings or other information. See id. Therefore, the "locus" of the negligent conduct was D.C., not Virginia. Id. The relationship of the administrating nurse and the policy-makers in D.C. is clearly different from that of the air traffic controllers in Indiana to chart makers in D.C. in this case, as the former involved non-negligent administration of a negligent policy set by others, and the latter involves two independent actors each alleged to be negligent in their own right. Thus, this approach is indeterminate.

In sum, the court finds that of the five approaches set forth in Gould, one is inapplicable, two are indeterminate on the present record, and two point to the application of Indiana's choice of law rules. Therefore, the court will apply Indiana's choice of law rules.*fn29

Next, the court looks to these rules to determine which jurisdiction's substantive law applies.*fn30 As noted previously, Indiana employs a modified lex loci delicti test, which applies the substantive law of the jurisdiction where the tort was committed, that is, where the last event necessary to make an actor liable for the alleged wrong takes place. Hubbard, 515 N.E.2d at 1073. Generally, in Indiana wrongful death or injury cases, the site of the tort's commission or of the "last event necessary" is the place where the death occurred see Lambert v. Yellowbird, Inc., 496 N.E.2d 406, 409 (Ind. Ct. App. 1986), which in this case is the site of the crash and resulting deaths, Kentucky. However, the inquiry does not end here, as "[i]n those instances where the place of the tort bears little connection to the legal action, this Court will permit the consideration of other factors such as: 1) the place where the conduct causing the injury occurred; 2) the residence or place of business of the parties; and 3) the place where the relationship is centered. Restatement (Second) of Conflicts of Laws § 145(2) (1971). These factors should be evaluated according to their relative importance to the particular issues being litigated." Hubbard, 515 N.E.2d at 1073.*fn31 Thus, the court must ask whether Kentucky bears "little connection to the legal action," and if so, consider the enumerated Restatement factors according to their importance to the alleged negligence of the air traffic controllers in Indiana and of the D.C. publishers.

It seems clear that Kentucky has "little connection to the legal action" concerning the FTCA claims against the United States's air traffic controllers and chart publishers. Although the deaths occurred in Kentucky, the pilot's negligence may have occurred in Kentucky, and Kentucky was the intended destination of the plane that day, none of these facts have any bearing on whether the United States was negligent. In Hubbard, 515 N.E.2d at 1074, Illinois was the site of a death allegedly caused by a faulty mechanical lift, of the inquest, and of decedent's employment at the time of death, as well as the provider of workmen's compensation to decedent's family. However, these factors were insignificant" since "none . . . relates to the wrongful death action," which was premised on "two theories of recovery relat[ing] to the manufacture of the lift in Indiana." Id. at 1074; see also Jean v. Dugan, 814 F. Supp. 1401, 1409-10 (N.D. Ind. 1993) (site of alleged wrongfully terminated was Illinois, but Illinois had "little significant connection to this legal action because nearly every action leading up to [plaintiff]'s allegedly tortious termination occurred in Indiana."), aff'd on other grounds, 20 F.3d 255 (7th Cir. 1994) (choice of law as to wrongful termination claims not contested on appeal). Here, no element of the tort allegedly committed by the United States occurred in Kentucky, nor do any of the other connections of Kentucky have any bearing upon those alleged torts.

Thus, the court turns to consideration of other factors, including those specified in Hubbard. As to "the place where the conduct causing the injury occurred," the alleged negligence of the United States occurred in both Indiana and D.C., but the conduct most directly affecting the plane's landing clearly occurred in Indiana. Furthermore, the Indiana controllers were the only governmental actors with direct contact with, and who had immediate supervision and control over, the pilot and the plane. As to "the residence or place of business of the parties," they are various — Indiana (Plaintiff Schalliol, and perhaps the place of business of the United States along with D.C.), Pennsylvania (three of four Simon Plaintiffs), New York (fourth Simon Plaintiff), Delaware (Defendant Fare/Cross-Plaintiff Fare and Defendant Hart Delaware),*fn32 and all states or no state (residency of the United States).*fn33 Although the sheer number of contacts is greatest in Pennsylvania, all three contacts are those of representatives of a single estate plaintiff. As to the place where the relationship is "centered," the decedents' relationship to the government was based on the fact that as plane travelers they were subject to the supervision of air traffic controllers and guided by the government's air traffic publications, so that any relationship arguably was centered, if anywhere at all, to the regulatory acts in Indiana or D.C., or perhaps to the passengers' employers in Pennsylvania or Delaware.*fn34,*fn35 Finally, while the Hubbard/Restatement factors considers the domicile of the parties and not of the decedents, Plaintiff Schalliol and the Simon Plaintiffs correctly argue that a state has an interest in the compensation of its residents' injuries, see. e.g., In re Aircrash Disaster Near Roselawn, Ind. on Oct. 31, 1994, 948 F. Supp. 747, 758 (N.D. Ill. 1996) (deciding choice of law as to compensatory damages alone), and here two decedents, Passenger Hart and Passenger Schalliol, were residents of Pennsylvania.*fn36 However, liability as well as compensation is at stake in this choice of law determination, and the Hubbard/Restatement factors point to Indiana as the place of the immediate injury-causing conduct, as the domicile of Plaintiff Schalliol, and as the possible place of business of the United States in the context of its control and supervision over the plane's landing. Although it is a close question, the court finds that Indiana bears the "edge" as the jurisdiction with the most significant contacts to the negligence claims against the United States. See Cutshall v. Ford Motor Co., 719 F. Supp. 782, 784 (S.D. Ind. 1989) (under Indiana law, Missouri law had most significant contacts where it was the place of tort, place of business of defendant, and place of direct contact between plaintiff and defendant; Indiana law did not apply, although it was residence of tort plaintiffs and also of tort victim's employer, which was responsible for bringing tort victim and defendant together).

This court further certifies this issue for immediate appeal pursuant to 28 U.S.C. § 1292 (b), which requires that 1) the issue involve a controlling question of law 2) as to which there is substantial grounds for difference of opinion, and that 3) an immediate appeal of this order may materially advance the ultimate termination of the litigation. See 28 U.S.C. § 1292 (b); Smith v. Scripto-Tokai Corp., 178 F. Supp.2d 477, 479 (W.D. Pa. 2001). The choice of law determination is a controlling question of law in that reversal of this decision by the Court of Appeals could result in the application of different jurisdiction's substantive law on the primary issues of liability and/or damages. See Trotter v. Perdue Farms, Inc., 168 F. Supp.2d 277, 288 (D. Del. 2001) ("`A controlling question of law must encompass at the very least every order which, if erroneous, would be reversible error on final appeal.'") (citing Katz v. Carte Blanche Corp., 496 F.2d 747, 754 (3d Cir. 1974) (en banc)). Additionally, there is substantial ground for a difference of opinion as to the appropriate application of the complex, multi-step analyses of Gould and Hubbard. Furthermore, an immediate appeal may materially advance the ultimate termination of the litigation by providing the parties with certainty as to the scope of possible financial exposure if the case were to proceed to trial, which differs greatly depending on whether Indiana or Pennsylvania law is applied.

The proceedings in this court are stayed.

An appropriate Order follows.

ORDER

AND NOW, this 13 day of June, 2002, it is ORDERED as follows:

1. Upon consideration of the United States' Motion for Determination of Choice of Law in Civ. No. 01-224, and the responses and reply thereto, the motion is GRANTED;

2. Upon consideration of the United States' Motion for Determination of Choice of Law in Civ. No. 01-5671, and the responses thereto, the motion is GRANTED;

3. The issue of the choice of law is certified for immediate appeal. 28 U.S.C. § 1292 (b) (conferring discretion on the Court of Appeals to exercise jurisdiction if application is made within ten days after the entry of the order); and

4. The proceedings in this court are stayed pending appeal.


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