IN RE AIR CRASH DISASTER AT STAPLETON INTERN.

• Decision Date: 15 November 1988
• Docket Number: No. 87-F-1922,88-F-346,MDL No. 751,88-F-348,88-F-990,88-F-663 to 88-F-665,88-F-671,88-F-787,88-F-661,88-F-898,88-F-668,88-F-830 to 88-F-832,88-F-667,88-F-670,88-F-991 and 88-F-1358.,87-F-1922
• Citation: 720 F. Supp. 1445
• Parties: In re AIR CRASH DISASTER AT STAPLETON INTERNATIONAL AIRPORT, DENVER, COLORADO, ON NOVEMBER 15, 1987. Hugh FORD and Julia Ford v. CONTINENTAL AIRLINES CORP. and Texas Air Corp. Brenda A. SELLEH and J. Mark Selleh v. CONTINENTAL AIRLINES CORP. and Texas Air Corp. Diane Mae McELHENEY and Gary McElheney v. CONTINENTAL AIRLINES CORP. and Texas Air Corp. Libby SMOOT v. CONTINENTAL AIRLINES CORP. Kathleen A. COOPER and Dale Cooper, husband and wife v. CONTINENTAL AIRLINES CORP. and Texas Air Corp. Karen Svea JOHNSON and Robert Cooke, Jr., wife and husband v. CONTINENTAL AIRLINES CORP. and Texas Air Corp. Shirley Jean WELTZ and Marvin Richard Weltz, wife and husband v. CONTINENTAL AIRLINES CORP. and Texas Air Corp. Christopher DAVIS, a minor, by Jerry DAVIS and Linda Davis, and Jerry Davis, individually v. CONTINENTAL AIRLINES CORP. and Texas Air Corp. Angela TLUCEK, a minor, by Jerry TLUCEK and Mary Lou Tlucek, and Jerry Tlucek and Mary Lou Tlucek, individually v. CONTINENTAL AIRLINES CORP. and Texas Air Corp. Wayne DAVIS v. CONTINENTAL AIRLINES CORP. and Texas Air Corp. David DANIEL v. CONTINENTAL AIRLINES CORP. and Texas Air Corp. Robert O. LINCK and Joanne Linck, his wife v. CONTINENTAL AIRLINES CORP. and Texas Air Corp. Deborah PASCHKOV, for herself, and as guardian ad litem for Melissa Richard v. CONTINENTAL AIRLINES CORP. and Texas Air Corp. Patti L. HALFORD and Donald M. Halford v. CONTINENTAL AIRLINES CORP. and Texas Air Corp. Jeffrey HOAGLAND, a minor, by Mark W. HOAGLAND and Marie Hoagland v. CONTINENTAL AIRLINES CORP. and Texas Air Corp. Ann C. STEWART, for John McCabe STEWART, a minor, Donald Douglas Stewart, Lueann Stewart, and Linda Butterfield, widow v. CONTINENTAL AIRLINES CORP., Texas Air Corp. Keith SMITH and Loretta Smith v. CONTINENTAL AIRLINES CORP. and Texas Air Corp. v. Byron OWENS (subject to realignment). Micheal SPICER v. CONTINENTAL AIRLINES CORP. Douglas SELF and Debbie Self v. CONTINENTAL AIRLINES CORP. and Texas Air Corp., jointly and severally.
• Court: U.S. District Court — District of Colorado

720 F. Supp. 1445

In re AIR CRASH DISASTER AT STAPLETON INTERNATIONAL AIRPORT, DENVER, COLORADO, ON NOVEMBER 15, 1987.

Hugh FORD and Julia Ford v. CONTINENTAL AIRLINES CORP. and Texas Air Corp.

Brenda A. SELLEH and J. Mark Selleh v. CONTINENTAL AIRLINES CORP. and Texas Air Corp.

Diane Mae McELHENEY and Gary McElheney v. CONTINENTAL AIRLINES CORP. and Texas Air Corp.

Libby SMOOT v. CONTINENTAL AIRLINES CORP.

Kathleen A. COOPER and Dale Cooper, husband and wife v. CONTINENTAL AIRLINES CORP. and Texas Air Corp.

Karen Svea JOHNSON and Robert Cooke, Jr., wife and husband v. CONTINENTAL AIRLINES CORP. and Texas Air Corp.

Shirley Jean WELTZ and Marvin Richard Weltz, wife and husband v. CONTINENTAL AIRLINES CORP. and Texas Air Corp.

Christopher DAVIS, a minor, by Jerry DAVIS and Linda Davis, and Jerry Davis, individually v. CONTINENTAL AIRLINES CORP. and Texas Air Corp.

Angela TLUCEK, a minor, by Jerry TLUCEK and Mary Lou Tlucek, and Jerry Tlucek and Mary Lou Tlucek, individually v. CONTINENTAL AIRLINES CORP. and Texas Air Corp.

Wayne DAVIS v. CONTINENTAL AIRLINES CORP. and Texas Air Corp.

David DANIEL v. CONTINENTAL AIRLINES CORP. and Texas Air Corp.

Robert O. LINCK and Joanne Linck, his wife v. CONTINENTAL AIRLINES CORP. and Texas Air Corp.

Deborah PASCHKOV, for herself, and as guardian ad litem for Melissa Richard v. CONTINENTAL AIRLINES CORP. and Texas Air Corp.

Patti L. HALFORD and Donald M. Halford v. CONTINENTAL AIRLINES CORP. and Texas Air Corp.

Jeffrey HOAGLAND, a minor, by Mark W. HOAGLAND and Marie Hoagland v. CONTINENTAL AIRLINES CORP. and Texas Air Corp.

Ann C. STEWART, for John McCabe STEWART, a minor, Donald Douglas Stewart, Lueann Stewart, and Linda Butterfield, widow v. CONTINENTAL AIRLINES CORP., Texas Air Corp.

Keith SMITH and Loretta Smith v. CONTINENTAL AIRLINES CORP. and Texas Air Corp. v. Byron OWENS (subject to realignment).

Micheal SPICER v. CONTINENTAL AIRLINES CORP.

Douglas SELF and Debbie Self v. CONTINENTAL AIRLINES CORP. and Texas Air Corp., jointly and severally.

MDL No. 751, Nos. 87-F-1922, 88-F-346, 88-F-348, 88-F-661, 88-F-663 to 88-F-665, 88-F-667, 88-F-668, 88-F-670, 88-F-671, 88-F-787, 88-F-830 to 88-F-832, 88-F-898, 88-F-990, 88-F-991 and 88-F-1358.

United States District Court, D. Colorado.

November 15, 1988.

ORDER MDL 751-16

MEMORANDUM OPINION AND ORDER ON STATE LAW CONTROLLING ISSUES OF PUNITIVE DAMAGES

SHERMAN G. FINESILVER, Chief Judge.

This multidistrict action deals with damages claimed as a result of injuries and fatalities incurred in an airplane crash on November 15, 1987 in Denver, Colorado. The instant matter involves motions pre-trial determination of the law controlling issues of punitive damages. Through substantial briefing and oral argument, the parties have advanced and criticized contentions that the law of Colorado, Idaho or Texas should prevail. The court conducted independent research of the legal authority regarding the complex choice of law questions and carefully reviewed the submissions of the parties.

We find that Texas has the most significant relationship to punitive damage claims in this litigation and thus hold that Texas law applies to these claims. Defendants' corporate accountability, if any, is best evaluated by the application of Texas law.

I.

By way of background, these cases arise out of the November 15, 1987 crash of a Continental Airlines DC-9 airplane en route from Denver, Colorado, to Boise, Idaho. During a snow storm at Stapleton International Airport, Continental Flight 1713 crashed as it attempted take-off. The aircraft overturned and the passenger compartment broke into several pieces. The accident killed 28 persons and injured 54 others. The pilot, copilot and a flight attendant were among the deceased. Actions pending in this court are for both personal injury and wrongful death.

Plaintiffs are residents of various states, including Arizona, Colorado, Idaho, New Jersey, and Washington. They claim the crash of Flight 1713 was the result of pilot inexperience, ineffectual pilot training and the willful, wanton and reckless disregard for passenger safety exhibited by defendant Continental Airlines. Plaintiffs contend that Continental engaged in a pattern and practice of falsifying pilot training records, check airmen, and other records in order to meet its demand for newhire pilots and to pass Federal Aviation Administration ("FAA") inspections. Plaintiffs further contend that the actions of employees at Continental's dispatch center violated FAA regulations regarding inclement weather operations and that these violations were due to the fact that dispatchers responsible for Flight 1713 and other Denver departures were stationed in Houston, Texas, rather than Denver.¹

Defendants deny that negligence or any wrongdoing caused the crash. Defendants assert that plaintiffs' damages were caused by the acts, omissions, and/or fault of third parties over whom Continental has no control. Specifically, defendants have designated the City and County of Denver and the Federal Aviation Administration as culpable parties pursuant to § 13-21-111.5 of the Colorado Revised Statutes. Defendants also contend that if the acts of any Continental employees caused the crash, those acts were limited to the decisions of the cockpit and de-ice crews stationed in Denver, Colorado.

The court has jurisdiction over these civil actions pursuant to 28 U.S.C. § 1332, diversity of citizenship. On April 14, 1988, the Judicial Panel on Multidistrict Litigation conferred jurisdiction upon this court for consolidated pretrial proceedings pursuant to 28 U.S.C. § 1407. In re Air Crash Disaster at Stapleton Int'l Airport, 683 F.Supp. 266 (J.P.M.L.1988).

II.

A transferee court presiding over diversity actions consolidated as multidistrict litigation must apply the choice of law rules of the various jurisdictions in which the transferred actions were originally filed. In re Air Crash Disaster Near Chicago, Illinois, 644 F.2d 594, 610 (7th Cir.), cert. denied sub nom., 454 U.S. 878, 102 S.Ct. 358, 70 L.Ed.2d 187 (1981); In re Eastern Airlines, Inc., Engine Failure, 629 F.Supp. 307, 315 (S.D.Fla.1986); see also Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941) (choice of law of the forum to be applied); VanDusen v. Barrack, 376 U.S. 612, 84 S.Ct. 805, 11 L.Ed.2d 945 (1964) (law applied in 28 U.S.C. § 1404 transfers). The actions pending before this court were commenced in Idaho, Colorado and New Jersey.

New Jersey applies "government interest analysis" to choice of law problems. See Veazey v. Doremus, 103 N.J. 244, 510 A.2d 1187 (1986). Idaho and Colorado apply the "most significant relationship" analysis codified at §§ 145 et seq. of the Restatement (Second) of Conflict of Laws. First National Bank v. Rostek, 182 Colo. 437, 514 P.2d 314 (1973); Johnson v. Pischke, 108 Idaho 397, 700 P.2d 19 (Idaho 1985). Because the latter test is a more formalized approach to the interests considered in the former, we consolidate our analysis under the Restatement approach to identify the state with the most significant relationship to the parties and the occurrence.²

The parties presenting choice of law motions on the issue of punitive damages contend that Idaho, the residence of most of the injured passengers, Colorado, the site of the crash, and Texas, the principal place of business and corporate residence of defendants, each have interests in this litigation. Our analysis begins with a comparison of the punitive damages law of each jurisdiction to determine whether a conflict exists upon which choice of law principles must be brought to bear. Chicago, 644 F.2d at 605. If a conflict exists, the interests of each state in a potential award of punitive damages in this case must be weighed to determine which state bears the most significant relationship to the issue.³

III.

The punitive damage laws of Texas, Idaho and Colorado are in irreconcilable conflict. The laws of Idaho and Texas provide for punitive damages in wrongful death actions as well as contract and personal injury cases.⁴ Colorado law provides for punitive damage awards only in personal injury cases—exemplary damages are prohibited in actions for wrongful death or breach of contract.⁵ While the amount of punitive damages awarded in Texas and Idaho must bear some relation to the circumstances and injury suffered, neither state imposes a maximum on the amount of an award. By statute, Colorado limits the amount to be awarded to the amount of actual damages incurred in the underlying injury unless specific circumstances are proven at trial. While courts in both Texas and Idaho admit evidence of a defendant's wealth as a basis for calculating the size of a punitive damage award, Colorado statutory law prohibits introduction of such evidence. Furthermore, although all three states generally apply similar standards to determine liability for punitive damages, Colorado law requires that the plaintiff prove that standard beyond a reasonable doubt.

During the past decade, the Colorado legislature has substantially reformed the state's tort law. Colorado statutes now limit availability of punitive damage remedies and the amount of such an award. Colorado's tort reform manifests a balancing of the policies of deterrence and punishment against the interests of protecting resident corporations and the local economy. See 1986 Report of the Governor's Task Force on the Insurance Crisis (Colo. Advisory Panel 1986); In re Air Crash Disaster Near Chicago, Illinois, 644 F.2d 594, 613 (7th Cir.), cert. denied sub nom., 454 U.S. 878, 102 S.Ct. 358, 70 L.Ed.2d 187 (1981); see also Peoples Bank & Trust v. Piper Aircraft Corp., 598 F.Supp. 377, 380 (S.D.Fla.1984); Sibley v. KLM—Royal Dutch Airways, 454 F.Supp. 425, 428 (S.D.N.Y.1978).

When such a conflict of policy exists, there can be no "moderate or restrained interpretation" which would serve to avoid a true conflict of laws. Chicago, ...