In re Air Crash at Detroit Metropolitan Airport

• Decision Date: 04 October 1991
• Docket Number: No. 88-2347,89-3699 and 87-3263.,MDL No. 742,88-2347
• Citation: 776 F. Supp. 316
• Parties: In re AIR CRASH AT DETROIT METROPOLITAN AIRPORT, DETROIT, MICHIGAN ON AUGUST 16, 1987. Mary Ann RATLIFF, et al., Plaintiffs, v. NORTHWEST AIRLINES, INC., et al., Defendants. Richard F. CORONA, Jr., Personal Representative of the Estate of Jean C. Corona, deceased, Plaintiff, v. NORTHWEST AIRLINES, INC., et al., Defendants. Carlos VALASQUEZ, Plaintiff, v. NORTHWEST AIRLINES, INC., et al., Defendants.
• Court: U.S. District Court — Western District of Michigan

776 F. Supp. 316

In re AIR CRASH AT DETROIT METROPOLITAN AIRPORT, DETROIT, MICHIGAN ON AUGUST 16, 1987.

Mary Ann RATLIFF, et al., Plaintiffs, v. NORTHWEST AIRLINES, INC., et al., Defendants.

Richard F. CORONA, Jr., Personal Representative of the Estate of Jean C. Corona, deceased, Plaintiff, v. NORTHWEST AIRLINES, INC., et al., Defendants.

Carlos VALASQUEZ, Plaintiff, v. NORTHWEST AIRLINES, INC., et al., Defendants.¹

MDL No. 742, Nos. 88-2347, 89-3699 and 87-3263.

United States District Court, E.D. Michigan, S.D.

October 4, 1991.

Jerry Skinner, Cincinnati, Ohio, for plaintiffs in No. 88-2347.

Robert Parks, Miami, Fla., for plaintiff in No. 89-3699.

Richard F. Schaden, Bruce Wilson, David Katzman, Birmingham, Mich., for plaintiff in No. 89-3263.

Carroll E. Dubuc, Michael Selter, Washington, D.C., for defendants.

ORDER

JULIAN ABELE COOK, Jr., Chief Judge.

The Plaintiffs in these cases have filed similar motions for partial summary judgment, Fed.R.Civ.P. 56(c), against the Defendant, Northwest Airlines, Inc. (Northwest) (filed on 6/26/91 (Ratliff); 6/27/91 (Corona); and 7/2/91 (Bystander Plaintiffs)).² The issue is whether these Plaintiffs, who were not parties to the underlying joint liability trial in which Northwest was found liable by a jury for the crash of its aircraft (Northwest Airlines Flight 255) on August 16, 1987 at Detroit Metropolitan Airport, should be permitted to apply the doctrine of offensive collateral estoppel and obtain a finding of liability against Northwest.³ For the following reasons, this court will grant the motions.

I.

On August 16, 1987, Northwest Flight 255, a DC-9 aircraft that had been manufactured by the McDonnell Douglas Corporation (MDC), crashed on takeoff at the Detroit Metropolitan Airport. During the takeoff, the airplane did not attain an altitude that was sufficient to avoid hitting a light pole in the parking lot of the National Car Rental Company (NCR). Upon impact, the airplane crashed on Middlebelt Road and slammed into a highway overpass. One hundred and fifty-six (156) people died in this tragedy and numerous others were injured. The Ratliff and Corona Plaintiffs represent the Estates of two passengers who died in the crash.

The first case arising out of this accident was filed with this court on August 28, 1987, charging Northwest and MDC with being responsible for the accident. Both of the Defendants denied the Plaintiff's contention.⁴ Thereafter, Northwest filed cross-claims and third-party complaints for contribution and indemnity against MDC, Texas Instruments (TI), NCR, the United States,⁵ and CAE Electronics, Inc. MDC filed cross-claims and counterclaims for contribution and indemnity against Northwest. In turn, Northwest filed complaints against MDC and the third-party defendants, seeking damages from them for the loss of the aircraft hull.

On December 9, 1987, the Judicial Panel on Multidistrict Litigation ordered the transfer of all Flight 255 federal cases to this district for consolidated pretrial proceedings. On August 18, 1989, all of the multidistrict litigation cases were transferred to, and consolidated in, this court for trial. Order, In re Air Crash Disaster at Detroit Metropolitan Airport, Detroit, Michigan on August 16, 1987, 737 F.Supp. 391 (E.D.Mich.1989).

On April 18, 1988, this court appointed a Plaintiffs' Steering Committee (PSC) to pursue pretrial matters on behalf of all the multidistrict federal Plaintiffs. See Practice and Procedure Order No. 2, MDL No. 742, at 3-4 (E.D.Mich. April 18, 1988); see also Order, MDL No. 742, at 10 (E.D.Mich. August 18, 1989) (stating intention of court to appoint PSC to serve as trial counsel for prosecuting joint liability trial on behalf of all Plaintiffs).

The pretrial proceedings were extensive, consuming over two years and resulting in over 200 days of depositions, 1,400 docket entries, and 175 written orders by this court. The first witness at trial was sworn on October 12, 1989. The trial proceedings followed the path of the pretrial proceedings in terms of consumption of time, number of issues, docket entries, exhibits, and court orders.

Against this trial background are settlement negotiations and actual settlements. Prior to the start of the joint liability trial, Northwest settled a number of individual cases, some of which involved stipulations not to contest liability in exchange for a compensatory damages-only trial.

After considering various proposals with respect to the procedure for addressing all of the issues in the case, this court determined that it would resolve the litigation through a sequence of trials. First, the court would conduct a joint liability trial involving the claims of all nonsettling Plaintiffs against Northwest and MDC, and of all claims for contribution and indemnity between Northwest and MDC.⁶ Second, damage trials would follow in order to determine the amount of the compensation that would be payable to the nonsettling Plaintiffs and those Plaintiffs who accepted damages-only stipulations. Third, a second liability trial would be held to resolve Northwest's third-party claims.

Jury selection for the joint liability trial began on October 2, 1989. During the voir dire, Northwest advised the court, in camera, that it had reached a settlement with (1) the Plaintiffs whose claims were governed by the Warsaw Convention, workers' compensation statutes, or the provisions of an employee flight pass, and (2) the vast majority of the paying passengers who were injured or deceased as a result of the accident. Subsequent to the consummation of the global settlements, this court permitted those Plaintiffs who had declined to settle with Northwest to sever their claims against the air carrier from the liability trial. As a result of these events, the litigative posture of the joint liability trial commenced with (1) the Plaintiffs pursuing their claims against MDC only, (2) Northwest remaining in the case as a Third-Party Plaintiff and pursuing its claims against MDC, and (3) MDC seeking relief against Northwest through an adjudication of its cross-claims and counterclaims.

On February 14, 1990, MDC reached settlements with an additional wrongful death claimant and the remaining personal injury claimants. On March 28, 1990, this court was advised of the likelihood of settlements with most or all of the remaining Plaintiffs.

On April 6, 1990, the last Plaintiff accepted MDC's offer of settlement. On August 16, 1990, following the final submission of the requisite documentation by the Plaintiffs, the court determined that there were no Plaintiffs remaining in the joint liability trial. On September 4, 1990, this court granted the PSC's motion to be relieved of the responsibility of attending and participating in the trial.

On May 8, 1991, the jury reached a verdict and found Northwest to be responsible for the accident. See Verdict Form (Attachment A). On May 31, 1991, this court issued a final judgment on these claims. See Final Judgment On Claims Between Northwest Airlines and McDonnell Douglas (Attachment B). Ratliff, Corona, and the Bystander Plaintiffs now seek to apply the finding of liability against Northwest in that trial to their respective cases, to which Northwest objects.⁷ During the pendency of these motions, this court denied Northwest's motion for a judgment notwithstanding the verdict and its alternative motion for a new trial but granted in part its motion to amend the judgment. See October 1, 1991 Amended Final Judgment (Attachment C).

Neither Ratliff, Corona, nor the Bystander Plaintiffs was a party to the trial between Northwest and MDC. With the advent of the global settlement between Northwest and most of the Plaintiffs, all Plaintiffs had three choices: (1) settlement, (2) severance, or (3) entering into a stipulation not to contest liability in exchange for a damages-only trial. In a Notice of Election of Severance dated October 31, 1989, Ratliff elected to sever her claims from the consolidated liability trial and preserved her claim against MDC for that trial. The Bystander Plaintiffs also elected to sever their claims against Northwest. Corona did not file his suit against Northwest until December 22, 1989, after the start of the joint liability trial.

II.

A threshold issue is whether federal or state law must be applied in order to determine the collateral estoppel effect of a federal court judgment that is based on diversity jurisdiction in a subsequent federal diversity suit. The Plaintiffs contend that federal law controls. Northwest submits that state law (Michigan)⁸ governs.

This choice of law issue highlights the tensions that arise between state and federal law when a federal court sits in diversity. Not unexpectedly, various courts and commentators have conflicting opinions about the proper analysis and result.

The presumed rationale for applying state law of collateral estoppel to a federal diversity judgment in a successive diversity suit flows from the reasoning of the time-honored case of Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). In Erie, the Supreme Court held that a federal court, sitting in diversity jurisdiction, was required to apply the law of the state in which it sits in resolving questions of substantive law:⁹

Except in matters governed by the Federal Constitution or by Acts of Congress, the law to be applied in any case is the law of the State.

... There is no federal general common law.

Id. at 78, 58 S.Ct. at 822.

In the context of the present motions, the syllogism becomes (1) in a diversity case, questions of substantive law are governed by state law, (2) the issue of collateral estoppel is a question of substantive law, and therefore, (3) state law determines the collateral estoppel effect of a federal diversity judgment that is based on state law in a subsequent diversity suit. See Lane v. Sullivan, 900 F.2d 1247, 1250 (8th Cir.1990) ("Just as the law of...