IN RE AIR CRASH DISASTER NEAR CHICAGO, ILL., ETC.

• Decision Date: 06 December 1979
• Docket Number: No. MDL 391.,MDL 391.
• Parties: In re AIR CRASH DISASTER NEAR CHICAGO, ILLINOIS, ON MAY 25, 1979. This Document Relates To: 79 C 2272, 79 C 2310, 79 C 2311, 79 C 2440, 79 C 2444-79 C 2446, 79 C 2518, 79 C 2551-79 C 2554, 79 C 2573, 79 C 2730, 79 C 2770, 79 C 2822, 79 C 2823.
• Court: U.S. District Court — Northern District of Illinois

480 F. Supp. 1280

In re AIR CRASH DISASTER NEAR CHICAGO, ILLINOIS, ON MAY 25, 1979 This Document Relates To: 79 C 2272, 79 C 2310, 79 C 2311, 79 C 2440, 79 C 2444-79 C 2446, 79 C 2518, 79 C 2551-79 C 2554, 79 C 2573, 79 C 2730, 79 C 2770, 79 C 2822, 79 C 2823.

No. MDL 391.

United States District Court, N. D. Illinois, E. D.

December 6, 1979.

John J. Kennelly, Chicago, Ill., Speiser & Krause, New York City, Speiser, Krause & Madole, Washington, D.C., for plaintiffs.

Thomas D. Allen, Robert E. Haley and Michael Grant of Wildman, Harrold, Allen

& Dixon, Chicago, Ill., for defendant American Airlines, Inc., Norman J. Barry, Joseph P. Della Maria, Jr., and Roger J. Guerin of Rothschild, Barry & Myers, Chicago, Ill., for defendant McDonnell Douglas Corp.

MEMORANDUM OPINION

ROBSON and WILL, District Judges.

The present cases arise from the crash of an American Airlines jet near O'Hare International Airport on May 25, 1979. These and other cases filed in the wake of the crash have been consolidated in this Court for pretrial proceedings. Plaintiffs, administrators or executors of the estates of persons who died in the crash or surviving relatives of crash victims, brought wrongful death actions against American Airlines, the air carrier; McDonnell Douglas, the manufacturer of the aircraft; and other defendants.¹ Federal jurisdiction in this Court is founded on diversity of citizenship under 28 U.S.C. § 1332. Plaintiffs included in their complaints claims for interest on any future judgment from May 25, 1979, the date of the crash, at the rate of ten percent or such other rate as the Court shall determine. The plaintiff in one of the cases has moved for summary judgment on her claim for prejudgment interest. Defendant American Airlines has moved for dismissal of the claims for prejudgment interest in the other cases.

These motions raise three issues: (1) what law the Court should apply in the present cases, (2) whether, under the applicable law, prejudgment interest is available in wrongful death actions, and (3) if prejudgment interest is available, whether it is proper to grant summary judgment at this time. In light of our resolution of these issues, as set forth below, we deny defendant American Airline's motion to dismiss the claims for prejudgment interest, and deny plaintiff Kahmi's motion for summary judgment on her claim for prejudgment interest.

I.

No federal statutory law provides an answer to the question whether prejudgment interest is available in the present cases. The basic federal interest statute, 28 U.S.C. § 1961, deals only with postjudgment interest. It provides:

Interest shall be allowed on any money judgment in a civil case recovered in a district court. . . . Such interest shall be calculated from the date of the entry of the judgment, at the rate allowed by State law.

The statute's silence on the issue of prejudgment interest does not mean, however, that prejudgment interest is unavailable in federal courts. Rather, courts generally have held, and we agree, that prejudgment interest is an item of substantive damages the availability of which in diversity cases customarily is determined by state law. Illinois Central RR. v. Texas Eastern Transmission Corp., 551 F.2d 943, 944 (5th Cir. 1977); Glens Falls Insurance Co. v. Danville Motors, Inc., 333 F.2d 187, 191 (6th Cir. 1964); Oresman v. G. D. Searle & Co., 388 F.Supp. 1175, 1178 (D.R.I.1975). See also Restatement (Second) Conflicts of Laws, § 17, Comment C. But see In re Paris Air Crash of March 3, 1974, 69 F.R.D. 310, 322 (C.D.Cal.1975) (court concluded, without discussion, that 28 U.S.C. § 1961 precluded an award of prejudgment interest in cases brought in federal court).

In cases such as the present ones, which involve parties and events touching a number of states, the question arises as to which state's law applies. For the answer, we look to Illinois' conflict of law rules. Klaxon Co. v. Stentor Electric Mfg. Co., Inc., 313 U.S. 487, 496, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941).

Under Illinois conflicts law, the issue of damages in a wrongful death action is governed by the law of the state where the injury occurred unless some other state has a more significant relationship to the parties and the occurrence, in which case the law of the other state applies. Ingersoll v. Klein, 46 Ill.2d 42, 48, 262 N.E.2d 593, 596 (1970); Semmelroth v. American Airlines, 448 F.Supp. 730, 732 (E.D.Ill.1978). To determine whether another state has a more significant relationship, courts examine the contacts between the case and the state and evaluate these contacts according to their relative importance to the particular issue presented in the case.

Where, as here, the principal issue is damages in a wrongful death action, the domicile of the decedent and beneficiaries may also be important. The domicile state has an interest in the litigation since it is concerned with the administration of the decedent's estate and with the provision of adequate compensation to the decedent's surviving relatives. Gordon v. Eastern Air Lines, Inc., 391 F.Supp. 31, 33 (S.D.N.Y. 1975); Manos v. Trans World Airlines, Inc., 295 F.Supp. 1170, 1173 (N.D.Ill.1969).

As regards the majority of the present cases, it is clear that no state other than Illinois could have a more significant relationship to the occurrence or the parties. In Spicuzza v. American Airlines, Inc., No. 79 C 2310, LaSalle National Bank v. American Airlines, Inc., No. 79 C 2311, Haider v. McDonnell Douglas Corp., No. 79 C 2551, Schade v. McDonnell Douglas Corp., No. 79 C 2552, Schade v. McDonnell Douglas Corp., No. 79 C 2553, Schade v. McDonnell Douglas Corp., No. 79 C 2554, First Bank and Trust Company of South Bend v. McDonnell Douglas Corp., No. 79 C 2573, Bennett v. McDonnell Douglas Corp., No. 79 C 2730, Davis v. McDonnell Douglas Corp. No. 79 C 2770, Huth v. McDonnell Douglas Corp., No. 79 C 2445, Huth v. McDonnell Douglas Corp., No. 79 C 2446, and Sheridan v. McDonnell Douglas Corp., No. 79 C 2440, the administrators or executors of the estates of air crash victims are citizens of Illinois and the estates are being administered in Illinois.²

With regard to one of the other cases, however, California may have a more significant relationship to the parties than does Illinois. The plaintiffs in Blake v. McDonnell Douglas Corp., No. 79 C 2518, surviving relatives of a victim of the crash, are citizens of California. Similar considerations lead us to conclude that Wisconsin may have a more significant relationship than Illinois to First Wisconsin Bank v. McDonnell Douglas Corp., No. 79 C 2823, since the First Wisconsin Bank is the administrator of the estate of a Wisconsin resident who died in the crash.

We find, however, that we need not decide which state's law applies in any of these cases with respect to the issue of prejudgment interest. Only in cases where a conflict exists between the laws of the various states would it be necessary for us to decide which state's law applies. Manos v. Trans World Airlines, Inc., supra at 1173. Where all of the states whose laws might apply have substantially the same law, no conflict is presented. As our discussion below indicates, prejudgment interest is available in these cases under Illinois, California and Wisconsin law. No true conflict of laws therefore exists in these cases; consequently, there is no need to decide which state's law applies.

II.

Cal.Civil Code, § 3288, provides:

IN ACTIONS OTHER THAN CONTRACT. In an action for the breach of an obligation not arising from contract, and in every case of oppression, fraud, or malice, interest may be given, in the discretion of the jury.

California courts have held that § 3288 allows a trier of fact³ to award prejudgment interest if the plaintiff's damages were liquidated or reasonably ascertainable prior to trial. See Bullis v. Security Pacific National Bank, 21 Cal.3d 801, 814, 148 Cal.Rptr. 22, 29, 582 P.2d 109 (1978); Nicholson-Brown, Inc. v. City of San Jose, 62 Cal.App.3d 526, 534, 133 Cal.Rptr. 159, 164-65 (1976). Thus it appears that prejudgment interest is available under California law in the present cases.⁴

It also appears that prejudgment interest is available under Wisconsin law in the present cases. Wisconsin courts generally award interest on a judgment from the time the plaintiff presents his demands to the defendant or, if no demand is made, from the time the plaintiff files his suit if the claim is liquidated or reasonably ascertainable and if there are "no other factors which prevented the withholding party from determining the amount which should be tendered." Pappas v. Jack O. Nelson Agency, Inc., 81 Wis.2d 363, 374, 260 N.W.2d 721, 726-27 (1978); Wyandotte Chemicals Corp. v. Royal Electric Mfg. Co., Inc., 66 Wis.2d 577, 584, 225 N.W.2d 648, 652 (1975).

One factor which may prevent a defendant from determining the damages he owes, and thus may keep a court from awarding prejudgment interest, is the presence of multiple defendants. Wyandotte Chemicals Corp. v. Royal Electric Mfg. Co., supra at 585, 225 N.W.2d at 654; City of Franklin v. Badger Ford Truck Sales, Inc., 58 Wis.2d 641, 654-55, 207 N.W.2d 866, 874 (1973). In cases involving multiple defendants, under the applicable Wisconsin law, damages are apportioned among the defendants depending upon each defendant's relative responsibility for the loss. Id. at 657, 207 N.W.2d at 871. Because a defendant in a multi-defendant case cannot ascertain in advance of judgment to what degree he will be held liable, he cannot determine the proportion, if any, of the damages he owes. Thus, Wisconsin courts have decided that it is unfair to subject a defendant in such a case to liability for prejudgment interest. Wyandotte Chemicals Corp. v. Royal Electric Mfg. Co., supra at 585, 225 N.W.2d at 654; City of Franklin v. Badger Ford Truck Sales, Inc., supra at 657, 207 N.W.2d at 874. Apparently, however, under Wisconsin law, a...