Morel v. Daimlerchrysler Ag, 08-1195.

• Decision Date: 06 May 2009
• Docket Number: No. 08-1195.,08-1195.
• Citation: 565 F.3d 20
• Parties: Carmen MOREL et al., Plaintiffs, Appellants, v. DAIMLERCHRYSLER AG, Defendant, Appellee.
• Court: U.S. Court of Appeals — First Circuit

565 F.3d 20

Carmen MOREL et al., Plaintiffs, Appellants, v. DAIMLERCHRYSLER AG, Defendant, Appellee.

No. 08-1195.

United States Court of Appeals, First Circuit.

Heard March 2, 2009.

Decided May 6, 2009.

David C. Indiano, with whom Seth A. Erbe and Indiano & Williams, P.S.C. were on brief, for appellants.

David M. Rice, with whom Troy M. Yoshino, Carroll, Burdick & McDonough LLP, Diego A. Ramos, Roberto Camara Fuertes, José L. Ramírez Coll, and Fiddler, González & Rodriguez, PSC were on brief, for appellee.

Before LYNCH, Chief Judge, TORRUELLA and SELYA, Circuit Judges.

SELYA, Circuit Judge.

This appeal turns on a nuanced question that lurks at the intersection of federal and state law: Does an amended complaint that changes the identity of a named defendant after the expiration of the applicable limitations period relate back to the date of the commencement of the action? The district court, after first concluding that the Puerto Rico relation-back rule controlled the analysis, answered this question in the negative and jettisoned the action.¹ We hold that the federal relation-back rule applies; that because the conditions to the operation of the federal rule are satisfied, the amendment relates back to the date of the commencement of the action; and that, therefore, the judgment below must be reversed.

I. BACKGROUND

The pertinent facts are largely undisputed. On November 29, 2004, a 1987 Mercedes-Benz 300SDL parked on an inclined street in Puerto Rico began rolling downhill and crushed a six-month-old child, Johnathan Román Morel. The infant died that evening. Alleging that the death resulted from the vehicle's flawed design, the decedent's family members repaired to court.

Invoking diversity jurisdiction, 28 U.S.C. § 1332(a), the family members (whose names and exact relationships are immaterial here) commenced their action in the United States District Court for the District of Puerto Rico on November 4, 2005. Their complaint alleged a gallimaufry of product liability theories and named as a defendant "Daimler-Chrysler," which the complaint described as "an automobile company incorporated, operated, and with its principal place of business in Michigan. ..." The plaintiffs served Daimler-Chrysler Corporation (DCC) on December 12, 2005, in Auburn Hills, Michigan.

On February 9, 2006, DCC responded to the complaint by moving for summary judgment on the ground that it had never manufactured or sold Mercedes-Benz vehicles; and that, therefore, the plaintiffs had sued the wrong party. DCC noted that a different entity, Daimler-Benz AG, had manufactured the vehicle described in the complaint and that DaimlerChrysler AG (DCAG), a German company, was the successor in interest to Daimler-Benz AG.²

On February 16, 2006, the plaintiffs amended their complaint as of right, see Fed.R.Civ.P. 15(a), substituting DCAG as the party defendant. DCAG received a copy of the amended complaint on March 6, 2006. The company was formally served under the Hague Convention later that month.

The newly-designated defendant moved for partial summary judgment, see supra note 1, asserting that the adult plaintiffs' claims were time-barred. The plaintiffs countered that, under Rule 15(c) of the Federal Rules of Civil Procedure, the amended complaint related back to the date of the commencement of the action and, thus, their suit was timely.

The district court concluded that a Puerto Rican statute of limitations conferred substantive rights and that Rule 15(c) could not be allowed to trump those rights. Morel v. Daimler Chrysler AG, 557 F.Supp.2d 240, 246 (D.P.R.2008) (unpublished). Instead, the court applied Puerto Rico's relation-back rule and determined that the amendment did not relate back. Id. at 247 (citing P.R. Laws Ann. tit. 32, App. III, R. 13.3). Accordingly, the court granted DCAG's motion and entered a final (though partial) judgment under Rule 54(b). This appeal ensued.

II. ANALYSIS

We afford de novo review to a district court's entry of summary judgment. See Dávila v. Corporación de P.R. Para La Diofusión Pública, 498 F.3d 9, 12 (1st Cir.2007). Because this is a diversity case featuring an array of tort claims rooted in local law, we look to the law of the forum (here, Puerto Rico) for the applicable statute of limitations. See Guaranty Trust Co. v. York, 326 U.S. 99, 110, 65 S.Ct. 1464, 89 L.Ed. 2079 (1945). Under Puerto Rico law, the limitations period for tort claims is one year. P.R. Laws Ann. tit. 31, § 5298. Since the fatal accident took place on November 29, 2004, the limitations period expired on November 29, 2005.

The plaintiffs sued on November 4, 2005, well within the one-year period. But that complaint did not mention DCAG. They filed their amended complaint—the first pleading targeting DCAG as a defendant— on February 16, 2006. That was after the expiration of the one-year period. Thus, the question reduces to whether the amended complaint relates back to the time of filing the initial complaint.

In the first instance, the answer to this question hinges on whether federal or state law furnishes the controlling relation-back rule. Consequently, we start there.

DCAG maintains that Puerto Rico's statute of limitations is substantive. See, e.g., Rodriguez Narváez v. Nazario, 895 F.2d 38, 43 (1st Cir.1990). Building on that foundation, it reasons that because an application of a federal relation-back rule would allow the plaintiffs to skirt that temporal bar, Puerto Rico's relation-back rule must control. Its argument boils down to the following construct: if relation back under a federal standard would require a party to defend a claim that would otherwise be barred by operation of a substantive state rule, then the state rule must take precedence. We do not decide, but accept arguendo, that the claim would otherwise be barred by the Puerto Rico rule (regardless of whether that rule is characterized as substantive or procedural).

This mode of "outcome determination" analysis has some footing in the Supreme Court's diversity jurisprudence. See, e.g., York, 326 U.S. at 109, 65 S.Ct. 1464. But "`[o]utcome determination' analysis was never intended to serve as a talisman." Hanna v. Plumer, 380 U.S. 460, 466-67, 85 S.Ct. 1136, 14 L.Ed.2d 8 (1965) (citing Byrd v. Blue Ridge Rural Elec. Coop., 356 U.S. 525, 537, 78 S.Ct. 893, 2 L.Ed.2d 953 (1958)).

In fact, the Supreme Court has held that a federal rule controls notwithstanding that an inconsistent state rule would, if applied, have resulted in a different outcome. Id. at 463-64, 85 S.Ct. 1136. Although Chief Justice Warren acknowledged that a federal court "need not wholly blind itself to the degree to which the Rule makes the character and result of the federal litigation stray from the course it would follow in state courts," id. at 473, 85 S.Ct. 1136, he made clear that such a Civil Rule ordinarily should take precedence. His opinion stated:

To hold that a Federal Rule of Civil Procedure must cease to function whenever it alters the mode of enforcing state-created rights would be to disembowel either the Constitution's grant of power over federal procedure or Congress' attempt to exercise that power in the [Rules] Enabling Act.

Id. at 473-74, 85 S.Ct. 1136 (footnote omitted).

Hanna held that the "substance/procedure" dichotomy, derived from the decision in Erie R.R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), and York's "outcome determination" test do not apply to matters covered by the Federal Rules of Civil Procedure. Hanna, 380 U.S. at 466-73, 85 S.Ct. 1136. Rather, as long as a Rule is consonant with both the Constitution and the Rules Enabling Act, 28 U.S.C. § 2072, that Rule must be given effect "regardless of contrary state law." Gasperini v. Ctr. for Humanities, Inc., 518 U.S. 415, 427 n. 7, 116 S.Ct. 2211, 135 L.Ed.2d 659 (1996); see also Hoyos v. Telecorp Comm., Inc., 488 F.3d 1, 5 (1st Cir.2007).

In the case at hand, Rule 15(c) is squarely on point. For aught that appears, the Rule was properly promulgated and there is no credible basis for impugning its constitutionality. Nevertheless, DCAG asseverates that applying Rule 15(c) in the circumstances of this case would contravene the Rules Enabling Act, which declares in part that a Federal Rule of Civil Procedure "shall not abridge, enlarge, or modify any substantive right." 28 U.S.C. § 2072. We reject that asseveration.

This language does not preclude the use of Rule 15(c) in the instant case. The test of whether a challenged Rule violates the statutory prohibition turns on the characterization of that Rule; if the Rule relates directly to the practice and procedure of the district court, it does not violate that section of the statute. See Hanna, 380 U.S. at 464, 85 S.Ct. 1136.

Rule 15(c) is of that genre. It "is a truly procedural rule because it governs the in-court dispute resolution processes rather than the dispute that brought the parties into court; consequently, it does not transgress the Rules Enabling Act." Johansen v. E.I. Du Pont De Nemours & Co., 810 F.2d 1377, 1380 (5th Cir.1987); accord Brown v. E.W. Bliss Co., 818 F.2d 1405, 1409 (8th Cir.1987); Santana v. Holiday Inns, Inc., 686 F.2d 736, 740 (9th Cir.1982). Indeed, "no federal court has suggested that [Rule 15(c)] ... is beyond the scope of the Rules Enabling Act." 6A Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice & Procedure § 1503, at 171 (2d ed.1990). The commentators' statement, published in 1990, remains true today. We decline DCAG's invitation to break ranks and disregard Rule 15(c)'s quintessentially procedural nature.

Sound policy considerations support this point of view. The federal policy behind the Rules Enabling Act aspires to the creation of a system of procedure in the federal courts that is uniform, comprehensive, and rational. The desirability of such a system substantially outweighs any countervailing state interest that might be served by...