United States District Court, D. Columbia
October 18, 2005.
JOAN BETTY DANZIGER, Plaintiff,
FORD MOTOR COMPANY, Defendant. ALAN MERCADO, Plaintiff, v. FORD MOTOR COMPANY, Defendant.
The opinion of the court was delivered by: ROSEMARY COLLYER, District Judge
Ford Motor Company asks the Court to reconsider and reverse its
ruling permitting Plaintiffs Joan Betty Danziger, individually
and as the representative of her deceased husband, and Alan
Mercado to amend their complaints to seek punitive damages. The
question revolves around which state's punitive damages law shall
apply. Concluding that its initial decision was in error, the
Court will grant Defendant's Motion to Reconsider, vacate its
previous Memorandum Opinion and Order, and deny the Plaintiffs'
Motion to Amend the complaint to add claims for punitive damages. I. BACKGROUND
The facts relevant to this motion can be briefly summarized:
Mrs. Danziger was driving her Ford Explorer on July 12, 2002,
accompanied by her husband and Mr. Mercado. While on Interstate
80 in Keith County, Nebraska, the Explorer rolled over. Ms.
Danziger suffered numerous injuries, some permanent, in the
accident. Ms. Danziger's husband was ejected from the vehicle and
died from his injuries. Mr. Mercado was also ejected from the
vehicle and sustained permanent damage to his spinal cord.
Ms. Danziger and Mr. Mercado reside in the District of Columbia
and Virginia, respectively. At the time of the accident, both
resided in the District. Both also resided in the District at the
time Ms. Danziger purchased the Explorer in Maryland. Ford, the
sole defendant, is incorporated in Delaware but has its principal
place of business in Michigan. Ford designed the Explorer in
Michigan and manufactured it in Kentucky. Thus, any of six
jurisdictions might have an interest in the question of punitive
damages: the District of Columbia, Virginia, Maryland, Delaware,
Michigan and Kentucky. The Court previously determined that
Maryland had the greatest interest. Danziger v. Ford Motor Co.,
Civil Action No. 03-1508 (RMC), Memorandum Opinion and Order at 7
(D.D.C. July 11, 2005). It is that conclusion that Ford asks the
Court to reconsider.
II. LEGAL STANDARDS
Motions to reconsider are routinely construed as motions to
alter or amend a judgment under Federal Rule of Civil Procedure
59(e). Emory v. Sec'y of the Navy, 819 F.2d 291, 293 (D.C. Cir.
1987). Rule 59(e) permits a party to file a motion to alter or
amend a judgment no later than ten days after the entry thereof.
A motion to alter or amend a judgment pursuant to Rule 59(e) is
not, however, "simply an opportunity to reargue facts and
theories upon which a court has already ruled." New York v. United States, 880 F. Supp. 37, 38 (D.D.C. 1995)
(three-judge panel) (per curiam). Nor is it an avenue for a
"losing party . . . to raise new issues that could have been
raised previously." Kattan v. District of Columbia,
995 F.2d 274, 276 (D.C. Cir. 1993). "A Rule 59(e) motion is discretionary
and need not be granted unless the district court finds that
there is an intervening change of controlling law, the
availability of new evidence, or the need to correct a clear
error or prevent manifest injustice." Fox v. Am. Airlines Inc.,
389 F.3d 1291, 1296 (D.C. Cir. 2004) (quoting Firestone v.
Firestone, 76 F.3d 1205, 1208 (D.C. Cir. 1996) (per curiam)).
This fact pattern would present a perfect law-school
examination question were it not so serious. As regards punitive
damages, which is a matter of state law, should the Court apply
the law of the District of Columbia, Virginia, Kentucky,
Maryland, Nebraska or Michigan? There are two basic approaches to
answering this question. At common law, the doctrine of lex loci
delicti "[t]he law of the place where the tort or other wrong
was committed"*fn1 applied. Under that approach, this
question would not be a difficult one: the law of Nebraska would
be used because the accident occurred in Nebraska. More recently,
however, the Second Restatement of Conflict of Laws adopted a
test that applies the law of the state with "the most significant
relationship to the occurrence and the parties." Restatement
(Second) of Conflict of Laws § 145 (1971). Section 145 of the
Second Restatement provides:
(1) The rights and liabilities of the parties with
respect to an issue in tort are determined by the
local law of the state which, with respect to that
issue, has the most significant relationship to the
occurrence and the parties under the principles
stated in § 6. (2) Contacts to be taken into account in applying the
principles of § 6 to determine the law applicable to
an issue include:
(a) the place where the injury occurred,
(b) the place where the conduct causing the injury
(c) the domicil[e], residence, nationality, place of
incorporation and place of business of the parties,
(d) the place where the relationship, if any, between
the parties is centered.
These contacts are to be evaluated according to their
relative importance with respect to the particular
Id. In turn, § 6 of the Second Restatement provides that a
court should follow the statutory directive of its own state on
choice of law or, where none exists, look to, as pertinent here,
the "relevant policies of the forum" and the "relevant policies
of other interested states and the relevant interests of those
states in the determination of the particular issue." Id. at §
All parties agree that the District of Columbia employs a
two-step "modified `governmental interest analysis'" to
determine which state's law applies to a claim. Long v. Sears
Roebuck & Co., 877 F. Supp. 8, 10 (D.D.C. 1995) (quoting
Bledsoe v. Crowley, 849 F.2d 639, 641 (D.C. Cir. 1988), and
Moore v. Ronald Hsu Const. Co., 576 A.2d 734, 737 (D.C. 1990)).
First, the Court must "evaluate the governmental policies
underlying the applicable laws" of the interested states. Id.
Second, if those interests conflict, the Court must determine
"which jurisdiction's policy would be most advanced by having its
law applied to the facts in the case." Id.; see also In re Air
Crash Disaster at Washington, D.C. (In re Washington Air
Crash), 559 F. Supp. 333, 341-342 (D.D.C. 1983) ("The District
of Columbia method of `governmental interest analysis' directs
the court first to identify the state policies underlying each
law in conflict and second to decide which state's policy would
be advanced by having its law apply.") (citing Semler v.
Psychiatric Inst. of Washington, D.C., 575 F.2d 922, 924 (D.C.
Cir. 1978)). While the specific analysis adopted in the District of Columbia predates the 1971 publication of the Second
Restatement,*fn2 the two approaches are similar, and the
D.C. Circuit has looked to the Restatement factors in applying
D.C. law. See, e.g., Hitchcock v. United States, 665 F.2d 354,
360-61 (D.C. Cir. 1981).
Here, most of the potentially interested states have an
insufficient interest to affect the analysis. Kentucky, the place
of manufacture, has no interest in the question of punitive
damages because the instant claim lies with allegedly poor
design, not manufacturing defects. The District of Columbia, home
of the Plaintiffs both when the Explorer was purchased and when
the accident occurred, is interested in their compensatory
recoveries but not punitive damages. See Keene Corp. v. Ins. Co.
of N. Am., 597 F. Supp. 934, 938-39 (D.D.C. 1984) ("Once the
plaintiffs are made whole by recovery of the full measure of
compensatory damages to which they are entitled under the law of
their domiciles, the interests of those States are satisfied.")
(quoting In re Air Crash Disaster near Chicago, Illinois,
644 F.2d 594, 613 (7th Cir. 1981)). Virginia, Mr. Mercado's home
state both now and when suit was brought, might be thought to
have some interest in Mr. Mercado's recovery if a shortfall would
render his care a state responsibility; however, no party argues
for application of Virginia law and it has no connection to the
alleged actions giving rise to the lawsuit. Delaware is the state
in which Ford is incorporated, but it has no other connection to
any relevant activity. Nebraska is the where the injury occurred,
but under the interest analysis applied in the District of
Columbia, this fact is of minimal importance in a "fortuitous
crash" case absent other connections or interests to tie the
issue of punitive damages to that forum. See In re Washington
Air Crash, 559 F. Supp. at 349 (recognizing that although "the
state where the injury occurred does have some interest in imposing liability on the wrongdoer," it is of
"relatively minor importance" when a vehicle is merely "passing
through" and the injury "might well have occurred in one of any
number of states").
Thus, the two states with relevant interests to be considered
are Michigan and Maryland. Michigan's interest arises because it
is the state where Ford is headquartered and where the Explorer
was designed; Michigan law precludes punitive damages in an
effort to protect corporations within its borders, draw
corporations to transact business in the state, and thereby
augment the state's coffers. See McAuley v. Gen. Motors Corp.,
578 N.W.2d 282, 285 (Mich. 1998) ("It is well established that
generally only compensatory damages are available [in Michigan];
punitive sanctions may not be imposed."), overruled on other
grounds by Rafferty v. Markovitz, 602 N.W.2d 367 (Mich. 1999).
Maryland, on the other hand, is interested because it is where
Ford is alleged to have knowingly put a defective product into
commerce. Maryland allows punitive damages in product liability
suits to further its interest in deterring such conduct, and to
protect its consumers from being harmed by known defects in
products sold there. See, e.g., Owens-Illinois, Inc. v.
Zenobia, 601 A.2d 633, 650 (Md. 1992).
Thus it originally appeared to the Court that a true conflict
existed between the law of Michigan and the law of Maryland. Upon
reconsideration, however, the Court realizes its error. Maryland
applies the traditional test of lex loci delicti and not the
"state interest" test reflected in the Second Restatement. If the
instant lawsuit concerning an accident in Nebraska were filed
in Maryland, Maryland would apply the law of Nebraska, where the
accident occurred. Naughton v. Bankier, 691 A.2d 712, 716 (Md.
Ct. Spec. App. 1997) ("Maryland follows the conflict of laws
principle of lex loci delicti. . . . This results in the
application of the procedural law of the forum state, and the application of the substantive law of the place
(state) of the wrong."); Philip Morris Inc. v. Angeletti,
752 A.2d 200, 231-32 (Md. 2000) (noting that under lex loci delicti
as applied in Maryland, "place of injury" is where the injury was
suffered, not where the wrongful act took place); see also
Johnson v. Oroweat Foods Co., 785 F.2d 503, 511 (4th Cir. 1986)
(applying Maryland conflicts law, "[t]he place of injury is the
place where the injury was suffered, not where the wrongful act
took place"); Frericks v. Gen. Motors Corp., 336 A.2d 118,
123-24 (Md. 1975) (applying North Carolina law, under lex loci
delicti, in a products liability action where the alleged
accident occurred in North Carolina). Nebraska does not allow
punitive damages. Miller v. Kingsley, 230 N.W.2d 472, 474 (Neb.
1975) ("It is a fundamental rule of law in this state that
punitive, vindictive, or exemplary damages are not allowed.");
Abel v. Conover, 104 N.W.2d 684, 688 (Neb. 1960) ("This rule is
so well settled that we dispose of it merely by the citation of
cases so holding.").
Thus, if this suit were filed in Maryland, Maryland courts
would apply the law of Nebraska, where the accident occurred, and
no punitive damages would be available to the Plaintiffs. If this
suit were filed in Michigan, Michigan courts would apply that
state's law, and no punitive damages would be available to the
Plaintiffs. Therefore, there is no true conflict. See Long,
877 F. Supp. at 11 (explaining that a "false conflict" occurs when
"laws, though different, produce the same result when applied to
the facts at issue").
In sum, District of Columbia law instructs the Court to apply
the law of the state whose interest in the issue of punitive
damages would be most advanced by having its law applied here.
Although Michigan and Maryland have demonstrable interests, on
these facts their laws do not conflict: Maryland would apply Nebraska law, and both
Michigan and Nebraska preclude punitive damages. Moreover, in
assessing Maryland's interest, the Court notes that its law
expresses no interest in applying its principles to accidents
that occur outside Maryland. Maryland law protects those who have
accidents on Maryland roads but not those Maryland citizen or
stranger whose accidents occur elsewhere and who avail
themselves of Maryland courts.
For these reasons, the Court finds that its initial conclusion
was erroneous, and it will grant the motion to reconsider its
initial decision and reverse its previous ruling. See Fox,
389 F.3d at 1296. Punitive damages are not available under either of
two bases. First, both Maryland and Michigan would deny a
punitive damages claim arising from an accident in Nebraska.
Second, Maryland has no interest in applying its punitive damages
principles to a tort case where the wrong was committed outside
that state; under this latter reasoning, Michigan holds the
greater interest in the question of punitive damages.
A separate Order accompanies this Memorandum Opinion.
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