California to Apply Sharia Law in an Asbestos Exposure Case!…Sort Of

A judge in the southern California coordinated asbestos matters issued an order applying Iranian law where all of a California plaintiff’s alleged exposure to asbestos occurred in Iran. In Sabetian v. Air and Liquid Systems Corporation, Judge John Kralik applied Iranian law on (1) punitive damages, (2) strict liability, and (3) joint and several liability. However, the court declined to apply the Iranian (1) standard of negligence, (2) the cap on general damages, and (3) the formula to determine loss of consortium damages.

Other judges in this court when presented with a similar issue have declined to apply Iranian law due to the religious influence on Iranian law. Judge Kralik nevertheless stated that “these provisions of law appear well-established, civil, and secular in nature…and these laws do not radically or offensively differ from traditions in the law of the various United States.”

Judge Kralik’s decision to apply Iranian law is a step forward for defendants who often face plaintiffs who now reside in California but allegedly were injured elsewhere. Judge Kralik’s decision relies heavily on McCann v. Foster Wheeler, LLC (2010) 48 Cal.4th 68, in which one of this post’s authors persuaded the trial court to apply Oklahoma law to a California resident suing a New York manufacturer for injuries caused by alleged exposure from asbestos-containing products in Oklahoma. In both McCann and Sabetian, plaintiff was a resident of California at the time of suit, but alleged exposure to asbestos elsewhere.

I. The governmental interest analysis

Similar to other jurisdictions, California applies the governmental interest analysis to determine choice-of-law inquiries. The analysis involves three steps: First, the court determines whether the applicable rules of law are different. Second, the court analyzes each jurisdiction’s interest in having its own law applied to the dispute. Third, the court determines which jurisdiction’s interest would be more significantly impaired if its law were not applied, and applies that jurisdiction’s law.

Here, Judge Kralik determined that Iranian law was materially different from California law. Both California, where plaintiff has lived for decades, and Iran, the “locus” of the injury, have an interest. Judge Kralik also determined that Iran’s interest would be more significantly impaired if Iranian law was not applied. The government of Iran would have a “strong interest in applying its own laws to a refinery it owned and an employee that it employed…California has little interest in legislating behavior at such refineries and oil fields.”

II. Iranian law applied

Because neither punitive damages or strict liability are recognized by Iranian law, the court ruled that defendants would be subject to neither in this case.

Iranian law does not recognize joint and several liability unless there is an explicit statutory exception. Plaintiff argued that a statutory exception existed for those determined to be an “employer” under the Civil Responsibility Act. Here, the court decided that it would apply Iranian law, but that it would issue a post-verdict determination of whether plaintiff has shown whether any of the defendants were “joint employers” for the exception to apply.

III. Iranian law not applied

The court declined to apply Iranian law in three areas, not because the “government interest” analysis was different but because either the court could not satisfy itself as to what Iranian law was on that point, or because the Iranian law offended American norms.

For example, the Iranian negligence standard of care is based on “custom and usage” rather than the California reasonable person standard. The court declined to apply the Iranian standard because there was a lack of authority explaining “custom and usage.”

Similarly, although Iran generally prohibits loss of consortium damages, the court ruled that “the prohibition is not established with sufficient clarity ion Iranian law to allow for application in this case.”

Iranian law has a cap on general damages that is set by reference to a memorandum prepared by unnamed Iranian government lawyers who have the power to alter the cap as they see fit. Judge Kralik declined to apply the Iranian limit because its apparently arbitrary nature could “offend fundamental due process if applied in an American court.”

IV. Conclusion

This decision offers hope that defendants will be able to apply the law of the jurisdiction in which the injuries allegedly occurred, rather than the law of a more plaintiff-friendly jurisdiction like California. Judge Kralik conceded that this issue had substantial grounds for difference of opinion and expressly invited appellate resolution. However, as of the posting of this article, plaintiff had not sought any appellate review.

Survivor (Survival Action): Doe and Gratuitous Care Edition

In the recent decision Williams v. The Pep Boys Manny Moe & Jack of Cal., a California court of appeal addressed four important topics that defendants frequently confront:

  1. How to defeat a plaintiff’s attempt to name defendants late as “Does.”
  2. A not-so-welcome restatement that economic damages include nursing services gratuitously provided by family members.
  3. A welcome ruling that recoverable damages in a survival action are limited to damages incurred before death.
  4. A reminder that a settlement offer to multiple plaintiffs will not qualify for cost-shifting, even if plaintiffs fail to “beat” the offer at trial, unless the offer is apportioned among plaintiffs and is not conditioned on acceptance by all.

1. “Doe” defendants, plaintiff’s knowledge and statute of limitations.

Like most jurisdictions, California allows plaintiffs to amend their complaint to designate a defendant unknown to plaintiff at the time of filing the complaint, usually designated as “Doe.” (Cal. Code Civ. Proc., § 474.) An amendment made pursuant to this section will “relate back,” i.e. be deemed to have been filed at the same time as the original complaint, if made within three years of the original complaint, even if the statute of limitations ran in the interim.

Williams stressed that the Doe defendant procedure is “‘available only when the plaintiff is actually ignorant of the facts establishing a cause of action against the party to be substituted for a Doe.’” In other words, “[i]gnorance of the facts giving rise to a cause of action is the ‘ignorance’ required by section 474, and the pivotal question is ‘did plaintiff know facts’ not ‘did plaintiff know or believe that he had a cause of action based on those facts?’”

In Williams, plaintiffs knew before they filed the original complaint that their father died of mesothelioma, that asbestos was the cause of the mesothelioma, and that the father purchased defendant’s asbestos-containing products. They “knew most of the story.” This was enough that the Court of Appeal affirmed the trial court’s decision to dismiss the wrongful death claims as outside the statute of limitations.

2. Nursing services provided by family members to decedent prior to death are recoverable damages.

Williams reaffirmed that California allows plaintiffs to recover the value of nursing services provided to the injured plaintiff by a family member, even in the absence of an agreement or an expectation of payment.

3. Future home care that would have been provided to a spouse is recoverable up until death, not after.

Under California’s survival law, decedents’ personal representative or successor in interest can recover the decedent’s other pecuniary losses incurred before death. (Cal. Code of Civ. Proc., § 377.34.) Here, plaintiffs sought to recover the value of around the clock nursing care that decedent would have provided to his wife but for his death.

Williams ruled that section 377.34 limited recoverable damages to those incurred prior to death. Plaintiffs relied on Overly v. Ingalls Shipbuilding, Inc. (1999) 74 Cal.App.4th 164, 171, where plaintiffs attempted to recover the value of household services as income post death, even though the dying husband was still alive. The Williams court found Overly inapplicable, because it did not deal with a survival action. Furthermore, the plain language of the statute only allowed for the recovery of penalty and punitive damages incurred after decedent’s death and thus intentionally excluded other categories of damages decedent would have been entitled to had he lived. The Williams court stated that survival action damages are narrowly limited to “the loss or damage that the decedent sustained or incurred before death,” which by definition excludes future damages.

4. Cautions for settlement offers to multiple plaintiffs.

Here, as in many asbestos defense cases, plaintiffs had both a wrongful death and a survival claim. Defendant offered a single unapportioned sum in exchange for dismissal, “contingent upon acceptance by all plaintiffs as it is the intention of defendant to obtain a full and final resolution of all claims asserted by plaintiffs in this matter.” This offer did not qualify for cost-shifting, even though plaintiffs’ recovery was less than the offer amount. (Cal. Code Civ. Proc. § 998; cf. Fed. R. Civ. Proc. 67.)

The offer fell afoul of “the general rule … that a section 998 offer to multiple plaintiffs is valid only if it is expressly apportioned among them and not conditioned on acceptance by all of them.” An exception exists when one or more plaintiffs have a “unity of interest such that there is a single, indivisible injury.” A unity of interest exists for example when spouses suffer injury to community property. There is no such “unity” as between multiple survival and wrongful death claimants.

This does not mean a defendant cannot make such an offer, or that plaintiffs cannot accept one. It does however mean that such an offer will not shift costs to plaintiffs even if they fail to beat it at trial.

Conclusion

The Williams decision is a double-edged sword for defendants. On the one hand, it puts plaintiffs on notice to timely replace “Does” or face statute of limitation issues. On the other, it increases the scope of recoverable damages in survival actions to encompass fees gratuitously provided by family members. It also reminds parties (usually defendants) to carefully draft settlement agreements and appropriately apportion amounts to each cause of action and to each plaintiff without a condition for all to accept. It also shows the proper stance on the application of lost years’ damages, which hopefully shall limit the plaintiffs’ bar’s future attempts in claiming improper damages. So counsel, pay attention to the small facts and don’t cut corner with your settlements. In the famous words of Rodney Lavoie Jr. (survival Boston contestant), “this ain’t a campin’ trip. This is suhvivah!” (at least for your client’s pocket).

Come to Me If You Want to Talk to Me; Plaintiffs Can’t Haul Corporate Representative to Deposition in California

Alameda County has one of the most active asbestos dockets in California, with defendants from around the country. Recently, an Alameda judge ruled that non-resident corporate representatives of a non-California defendant cannot be hauled to California for deposition. This result is consistent with prior appellate authority, but many trial judges have compelled California depositions for non-California corporate representatives (known as “persons most qualified” or PMQs in California parlance and “persons most knowledgeable” or PMKs in most other jurisdictions). So this decision is welcome news for defendants seeking to avoid that expense, inconvenience and leverage to plaintiffs.

This issue is addressed by conflicting statutes. One says that a witness is not “obliged to attend as a witness before any court, judge, justice or any other officer, unless the witness is a resident within the state at the time of service.” (Cal. Code Civ. Proc., § 1989.) Other statutes allow for depositions of “an officer, director, management agent or employee” of a party to be set at locations “within the county where the action is pending” or other California locations, with no restrictions based on the residence of the witness.” (Cal. Code Civ. Proc., § 2025.250, 2025.260.)

In Brock v. Metropolitan Life Insurance, Alameda Judge Steven Kaus ruled that the first statute governs. He refused to order a California deposition for a Rhode Island witness, and instead ordered the deposition to take place within 75 miles of the defendant’s principal office in Rhode Island.

Judge Kaus relied principally on Toyota v. Motor Corporation v. Superior Court (2011) 197 Cal.App.4th 1107. Most importantly, the court of appeal found that the Discovery Act of 1986 eliminated from section 2025.260, the phrase “Notwithstanding section 1989.” “By removing the words authorizing the trial court to override section 1989 the Legislature presumptively intended to withdraw that authority which had previously existed.”

Judge Kaus rejected Plaintiffs’ argument that Toyota did not apply because the deponent in this case was a PMQ, whereas witnesses in Toyota were named individually. “From a policy viewpoint, the differentiation between named corporate employees and PMQs, who, to coin a phrase, are people too, is form over substance.”

Judge Kaus’ decision is supported by an additional case he did not cite, I-Ca Enterprises, Inc. v. Palram Americas, Inc. (2015) 235 Cal.App.4th 257 in which the California Court of Appeal also affirmed that California superior courts have no power to compel production of defendant’s nonresident PMQ.

This decision is a win for defendants. If this decision becomes a trend, it will be interesting to see how plaintiff counsel will respond. One possibility is that they will be more strategic in whose PMQ to depose. Another could be a more strategic decision in what venue to file; or at best, the decision to dismiss some defendants whose witnesses, officers or not, reside out of state.

California: Statute of Limitations for Prenatal Exposure Tolled Until Adulthood, and (Effectively) Beyond

The California Supreme Court yesterday ruled, contrary to the interest of defendants, that the statute of limitations for alleged in utero exposure to “a hazardous chemical or toxic substance” is tolled while the plaintiff is a minor. Further, the applicable statute is subject to a “discovery rule.” This means that such cases may lie dormant for decades before being sprung on defendants.

In Lopez v. Sony Electronics, the court resolved the question “which statute of limitations applies: that for toxic exposure claims, or that for prenatal injuries?” The court recognized that a claim for prenatal toxic exposure “appears to fall within the ambit of both statutes of limitations.”

“Because the toxic exposure statute was more recently enacted, and its language plainly encompasses prenatal injuries, we conclude it applies here.” The court also found persuasive that the toxic exposure statute included two express exclusions, reasoning that if the legislature had intended to exclude prenatal injuries as well that would have been in the statute. “Under the maxim of statutory construction, expressio unius est exclusio alterius, if exemptions are specified in a statute, we may not imply additional exemptions.”

The effect on defendants is potentially drastic. “The limitations period for toxic exposure suits is two years, but it is tolled while the plaintiff is a minor.” The prenatal injury statute of limitations, in contrast, is six years but with no tolling during minority. That alone is a difference of fourteen years. Further, the toxic exposure suit (but not the prenatal statute) is subject to the discovery rule, meaning that the two-year period may not begin to run until even later, when plaintiff claims first knowledge of “(1) an injury, (2) the physical cause of the injury, and (3) sufficient facts to put a reasonable person on inquiry notice that the injury was caused or contributed to by the wrongful act of another.” Thus, the Lopez decision means more defendants will be faced with suits on stale facts, disappeared witnesses and documents, frayed memories, and everything else that statutes of limitation are supposed to protect against.

Click here and here for previous blog posts on this issue.