Calhoun v. Yamaha Motor Corp. U.S.A.

• Citation: 216 F.3d 338
• Decision Date: 23 June 2000
• Docket Number: No. 99-1378,99-1378
• Parties: (3rd Cir. 2000) LUCIEN B. CALHOUN; ROBIN L. CALHOUN, INDIVIDUALLY AND AS ADMINISTRATORS OF THE ESTATE OF NATALIE K. CALHOUN, DECEASED v. <A HREF="#fr1-*" name="fn1-*">* YAMAHA MOTOR CORPORATION, U.S.A.; YAMAHA MOTOR CO., LTD.; LUCIEN B. CALHOUN; ROBIN L. CALHOUN, APPELLANTS
• Court: United States Courts of Appeals. United States Court of Appeals (3rd Circuit)

Page 338

216 F.3d 338 (3rd Cir. 2000)

LUCIEN B. CALHOUN; ROBIN L. CALHOUN, INDIVIDUALLY AND AS ADMINISTRATORS OF THE ESTATE OF NATALIE K. CALHOUN, DECEASED v. ^*YAMAHA MOTOR CORPORATION, U.S.A.; YAMAHA MOTOR CO., LTD.;

LUCIEN B. CALHOUN; ROBIN L. CALHOUN, APPELLANTS

No. 99-1378

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

Argued Thursday, November 4, 1999

Opinion Filed June 23, 2000

On Appeal from the United States District Court for the Eastern District of Pennsylvania (D.C. Civil No. 90-cv-04295) District Judge: Honorable Louis H. Pollak

[Copyrighted Material Omitted]

William J. Taylor (Argued) William A. DeStefano Patrick J. Wolfe, Jr. Saul, Ewing, Remick & Saul 3800 Centre Square West 1500 Market Street Philadelphia, PA 19102 Attorneys for Appellants

Jonathan Dryer (Argued) Wilson, Elser, Moskowitz Edelman & Dicker Llp The Curtis Center - Suite 1130 East Independence Square West Philadelphia, PA 19106 Attorneys for Appellees

Befor: Nygaard and McKEE, Circuit Judges; and Garth, Senior Circuit Judge.

OPINION OF THE COURT

Garth, Circuit Judge.

Admiralty law is considered one of the most complex areas of American law. See 1 Thomas J. Schoenbaum, Admiralty & Maritime Law, S 1-1, at 2 (2d ed. 1994). In an earlier appeal in this matter, the United States Supreme Court held that Lucien and Robin Calhoun ("the Calhouns") may assert a cause of action based upon a state wrongful death or survival statute to obtain relief for the death of a non-seaman killed in United States territorial waters. See Yamaha Motor Corp., U.S.A. v. Calhoun, 516 U.S. 199, 216 (1996). We are now asked to resolve some of the problems arising from the Supreme Court's holding -- problems that the Court itself recognized -- by ruling upon two distinct questions that the Court expressly declined to decide.

In particular, we must determine (1) which state's law governs the type of damages available, and (2) whether state or federal law governs the standards by which the liability of appellees Yamaha Motor Corporation, U.S.A. and Yamaha Motor Company, Ltd. will be defined. As a result, this appeal concerns the extent to which state law may co-exist in the admiralty arena that historically has been the exclusive domain of federal legislative and regulatory entities. See generally David R. Lapp, Note, Admiralty & Federalism in the Wake of Yamaha Motor Corp. U.S.A. v. Calhoun: Is Yamaha a Cry by the Judiciary for Legislative Action in State Territorial Waters?, 41 Wm. & Mary L. Rev. 677 (2000).

With regard to damages, the District Court for the Eastern District of Pennsylvania held that the law of Pennsylvania would govern the issue of compensatory damages and that the law of Puerto Rico would govern that of punitive damages. The District Court further held that the law of Puerto Rico would govern the issue of Yamaha's liability. We will affirm in part and reverse in part, affirming the District Court's holding with respect to damages (both compensatory and punitive), yet reversing the District Court's disposition concerning liability, holding instead that federal maritime law must govern the standards by which Yamaha's liability will be evaluated.

I.

In July 1989, Natalie Calhoun ("Natalie"), then twelve years old, traveled to Puerto Rico with her parents' permission to vacation with a friend and that friend's family. Tragically, however, on July 6, 1989, Natalie died when the Yamaha¹ "WaveJammer"² she was operating in the water bordering the resort at which she was staying struck an anchored vessel. The Calhouns, as Pennsylvania residents, filed the present action against Yamaha on June 27, 1990, seeking relief pursuant to the Pennsylvania wrongful death and survival statutes, 42 Pa. Cons. Stat. Ann. SS 8301-8302 (West 1995). The Calhouns' complaint, which alleged defects in the WaveJammer, is grounded in theories of strict liability, negligence, and breach of implied warranties of merchantability and fitness for a particular purpose. The complaint seeks both compensatory and punitive damages. Because the law of Puerto Rico does not allow a plaintiff to recover punitive damages, the Calhouns asserted that all questions concerning the appropriate form of remedy be governed by the law of Pennsylvania. For the same reason, on the other hand, Yamaha argued for the application of the law of Puerto Rico for resolution of all damages issues.

Yamaha filed a motion for partial summary judgment on November 27, 1991, alleging that because Natalie died in United States territorial waters,³ federal maritime law provided the Calhouns' sole remedy for the circumstances surrounding Natalie's death.⁴ The District Court granted Yamaha's motion in part, and dismissed that portion of the Calhouns' complaint that sought punitive damages and the loss of future earnings. See Calhoun v. Yamaha Motor Corp., U.S.A., No. CIV. A. 90-4295, 1993 WL 216238, at *12 (E.D. Pa. June 22, 1993). After the Calhouns took an interlocutory appeal, we affirmed in part and reversed in part. See Calhoun v. Yahama Motor Corp., U.S.A. , 40 F.3d 622 (3d Cir. 1994). We concluded that although the Supreme Court, in Moragne v. States Marine Lines, Inc., 398 U.S. 375 (1970), had eliminated the use of state law causes of action for deaths of seamen in territorial waters, state causes of action still remained available as relief for the death of non-seamen in territorial waters. The Supreme Court granted certiorari, see Yamaha Motor Corp., U.S.A. v. Calhoun, 514 U.S. 1126 (1995), and affirmed in an unanimous opinion. See Yamaha Motor Corp., U.S.A. v. Calhoun, 516 U.S. 199 (1996).

Neither the original panel of this Court nor the Supreme Court, however, answered the questions that emerged from their respective holdings. See Yamaha, 516 U.S. at 216 n.14; Calhoun, 40 F.3d at 644-45. First , if the Calhouns could utilize Pennsylvania's wrongful death or survival statute to obtain relief for Natalie's death, which law⁵ --Pennsylvania's or Puerto Rico's -- governs the form of the remedy (or remedies) available to the Calhouns? Second, even understanding that Pennsylvania's wrongful death or survival statute provides the vehicle through which this action may proceed, does federal maritime law or state law provide the standards by which Yamaha's substantive liability will be determined? If the answer to this latter question is state law, will such liability standards be derived from the law of Pennsylvania or Puerto Rico?

On remand from the Supreme Court, the District Court issued a preliminary ruling on the first of these questions during a hearing held on September 23, 1998, a ruling that the District Court finalized in an opinion and order filed on March 22, 1999. See Calhoun v. Yamaha Motor Corp., U.S.A., 40 F. Supp. 2d 288 (E.D. Pa. 1999). Specifically, the District Court held that because the present action "sounds in admiralty," federal choice-of-law rules⁶ would be employed to determine whether Pennsylvania or Puerto Rico's law on damages would govern the present action. Invoking the doctrine of depecage,⁷ the District Court held that Pennsylvania law would govern the Calhouns' claim for compensatory damages and the law of Puerto Rico would govern their claim for punitive damages. Insofar as the law of Puerto Rico did not provide for the recovery of punitive damages, the District Court granted partial summary judgment in favor of Yamaha and dismissed that portion of the Calhouns' complaint that sought punitive damages. As for the second issue, the District Court determined that state law would govern the standards of liability, and, more specifically, that the law of Puerto Rico would be the source of such standards.

The District Court again certified these issues to this Court through an interlocutory order pursuant to 28 U.S.C. S 1292(b). On April 12, 1999, we permitted the Calhouns to take this appeal.

II.

The District Court's order requires us to address and answer three different questions:

1. Did [the District Court] err in deciding, on remand, that partial summary judgment should be granted to Yamaha, precluding any claim by the Calhouns for punitive damages, on the ground that (a) the availability of punitive damages should be determined by the remedial law of Puerto Rico, the situs of the tragic accident giving rise to the suit, and (b) the law of remedies of Puerto Rico makes no provision for punitive damages?

2. Did [the District Court] err in deciding, on remand, that the Calhouns' entitlement to seek particular categories of compensatory damages should be determined by the law of remedies of Pennsylvania, the state of residence of Lucien and Robin Calhoun and of their daughter Natalie, rather than by the law of remedies of Puerto Rico, the situs of Natalie's fatal accident, and hence that Yamaha's motion for partial summary judgment should be denied insofar as it sought to preclude the Calhouns from seeking compensatory damages in conformity with the law of remedies of Pennsylvania?

3. Did [the District Court] err in deciding, on remand, that the jurisdiction whose substantive liability law is the source of the Calhouns' claims is Puerto Rico?

Calhoun, 40 F. Supp. 2d at 295-96.

III.

We turn first to the questions concerning damages. In issuing its ruling, the District Court reached three separate conclusions: (1) because the action instituted by the Calhouns concerned a death occurring in the "navigable waters" of the United States, the action "sound[ed] in admiralty," and therefore implicated federal choice-of-law rules; (2) given the differing (yet significant) interests of both Pennsylvania and Puerto Rico in the proper mode of recovery in this matter, the use of the depecage doctrine was appropriate; and (3) because Pennsylvania has a stronger interest in providing compensation for its citizens, Pennsylvania's law would govern as to compensatory damages, and because Puerto Rico has a stronger interest in punishing Yamaha for tortious acts...