Roy v. Star Chopper Co., Inc., 77-1567

• Decision Date: 03 October 1978
• Docket Number: No. 77-1567,77-1567
• Citation: 584 F.2d 1124
• Parties: Paula H. ROY, Plaintiff-Appellee, v. STAR CHOPPER COMPANY, INC., Defendant and Third-Party Plaintiff-Appellant, v. Ashok HINGORANY and Advanced Materials Systems, Inc., Third-Party Defendants-Appellees.
• Court: U.S. Court of Appeals — First Circuit

Page 1124

584 F.2d 1124

Paula H. ROY, Plaintiff-Appellee, v. STAR CHOPPER COMPANY, INC., Defendant and Third-Party Plaintiff-Appellant, v. Ashok HINGORANY and Advanced Materials Systems, Inc.,

Third-Party Defendants-Appellees.

No. 77-1567.

United States Court of Appeals, First Circuit.

Argued June 7, 1978.

Decided Oct. 3, 1978.

Raymond A. LaFazia, Providence, R. I., with whom Gunning, LaFazia & Gnys, Inc., and George E. Healy, Jr., Providence, R. I., were on brief, for defendant and third party plaintiff-appellant, Star Chopper Co., Inc.

Harry W. Asquith, Providence, R. I., with whom Edward W. Moses, and Swan, Jenckes, Asquith & Davis, Providence, R. I., were on brief, for third party defendants-appellees.

Leonard Decof, Providence, R. I., with whom Martin W. Aisenberg and Elizabeth D. Rode, Providence, R. I., were on brief, for plaintiff, appellee, Paula H. Roy.

Before COFFIN, Chief Judge, CAMPBELL and BOWNES, Circuit Judges.

BOWNES, Circuit Judge.

Paula H. Roy, plaintiff-appellee, then a seventeen year old girl, received severe injuries to her hand while inspecting electroplating finished work at Advanced Materials Systems, Inc. (AMS), third-party defendant. The machine which caused the injury, a take-up unit which had two motor-driven pinch rolls and a spool at the opposite end, was manufactured by defendant-appellant, Star Chopper Company, Inc., to specifications provided by AMS. The machine was designed to allow continuous electroplating, at a constant speed, of aluminum and other metal. AMS, through its then Vice President Hingorany, contacted one Michael Cabassa to design a machine capable of performing the desired functions. Cabassa did the engineering drawings for the job, which included pinch rollers, and recommended that Star Chopper manufacture the machine. A draftsman from Star Chopper prepared more detailed drawings. No safety guards were provided in the drawings nor discussed by anyone. There was no warning on the machine of the dangers presented by the pinch rollers.

Plaintiff's hand required eleven operations; extensive surgical repair was performed to attempt to reconstruct the hand. Even following surgery, her hand retains only 5% Of its functioning ability and is severely deformed. Plaintiff received benefits under the Massachusetts Workmen's Compensation Act for her injury. She brought suit against defendant manufacturer, Star Chopper, originally on three counts: negligence, warranty, and strict liability. She dropped the negligence count prior to the charge to the jury and dropped the warranty count after the jury returned a verdict in her favor of $348,000 based on strict liability.

Defendant brought a third-party action against Advanced Materials Systems, Inc., and its president, Ashok Hingorany for contribution and indemnity. The court dismissed the count for contribution and noncontractural indemnity; the jury found against Star Chopper on the implied indemnity count. Star Chopper now brings this appeal, asserting sundry errors by the district court.

CONFLICTS QUESTION

Star Chopper complains of the court's choice of law rulings, both in the case in chief and in the third-party complaint. Under the rule enunciated in Klaxon Co. v. Stentor Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941), a federal court, sitting in diversity cases, must follow the conflict of laws rules of the state in which it sits. The Rhode Island Supreme Court articulated the conflicts rules which should apply to this case in Woodward v. Stewart, 104 R.I. 290, 243 A.2d 917, Cert. dismissed, 393 U.S. 957, 89 S.Ct. 387, 21 L.Ed.2d 371 (1968). That case suggested that Rhode Island's choice of law rules reflect the modern trend toward a textured, flexible approach; it set out five guidelines for helping to determine which state's law should apply. They are:

"(1) Predictability of results.

(2) Maintenance of interstate and international order.

(3) Simplification of the judicial task.

(4) Advancement of the forum's governmental interests.

(5) Application of the better rule of law."

Id. 243 A.2d at 923. Prior to applying these guidelines, the court must first determine (a) whether there are sufficient contacts with each of the states so as to make application of either state's law constitutionally permissible, and (b) what the nature of the conflict between the laws of those states is. Id. 243 A.2d at 921 & 923; Tiernan v. Westext Transport, Inc., 295 F.Supp. 1256, 1263 (D.R.I.1969).

Case In Chief

The district court concluded that, since Massachusetts was the site of the injury and the residence of the plaintiff and since Rhode Island was the state of incorporation of the defendant manufacturer, its place of The trial court then applied the Woodward criteria and selected Rhode Island law. We now review the in-depth analysis by the district court of the Woodward Factors.

business and the locus of the alleged tortious conduct, sufficient minimum contacts existed for constitutional application of either state's law. The court then analyzed each state's laws relating to the principal action and found that a true conflict existed. Rhode Island applies strict liability, Ritter v. Narragansett Electric Co., 109 R.I. 176, 283 A.2d 255, 261 (1971), whereas Massachusetts has not yet clearly adopted it. Coyne v. John S. Tilley Co., Inc., 368 Mass. 230, 331 N.E.2d 541 (1975); Tibbetts v. Ford Motor Co., Mass.App., 358 N.E.2d 460 (1976). ¹

(1) It is reasonable to assume that the defendant manufacturer, a Rhode Island corporation, would have purchased insurance commensurate with its potential liability under the Rhode Island strict liability rule. It was foreseeable that the corporation would be placed at risk for its manufacture of products and, as a corporation doing business in Rhode Island, would reasonably guide its actions by the liability imposed under Rhode Island law. Thus, its expectations would not be unfairly overturned by application of the Rhode Island strict liability rule. It is highly unlikely that the defendant would manufacture one set of machinery designed for use in Rhode Island and those states subscribing to strict liability and another separate set destined for states such as Massachusetts where strict liability has not yet been adopted. Predictability of result suggests the appropriateness of applying the Rhode Island rule.

(2) Interstate order is served when application of one state's law offends no law or policy of the other state. Turcotte v. Ford Motor Co., 494 F.2d 173, 178 (1st Cir. 1974). Here, Rhode Island has an interest in promoting a high standard of care in the manufacture of goods by Rhode Island corporations. Massachusetts' interest lies in protecting its corporations from excessive liability. Since defendant is not a Massachusetts corporation, it falls without the class the law was presumably designed to protect. Id. at 179. To the extent that Massachusetts has an interest in encouraging foreign corporations to do business within the Commonwealth, this interest is not incompatible with enforcing strict product liability since, as noted by plaintiff, defendant continues to do business in Rhode Island notwithstanding that state's adoption of strict liability. ² Rhode Island's strong interest in holding its corporations to a high degree of responsibility is served by applying its rule to this case. Massachusetts has little interest in the regulation of conduct of a Rhode Island corporation, except to the extent that the conduct injures Massachusetts' citizens or property. This interest is served by adhering to the stricter standard of liability imposed by Rhode Island. Here, the state of manufacture is also the forum state, which has legitimate interests to be served, See discussion Infra. This is not an instance where the sole point of contact is the place of manufacture. Compare Turcotte v. Ford Motor Co., supra, 494 F.2d at 180 n. 9. Rhode Island's choice of law rules lean toward an interest balancing process. The district court properly weighed place of manufacture as one factor in deciding to apply Rhode Island law.

(3) The court felt that the judicial task would be neither more nor less simplified by application of either state's rule. We cannot find error in this conclusion.

(4) Rhode Island, the forum state, has expressed interest in holding manufacturers of defective products to a standard of strict liability. Ritter v. Narragansett Electric Co., supra, 283 A.2d at 261-262. It chose (5) Rhode Island has stated clearly that it adopted strict liability because it views that rule as the preferable standard to which manufacturers of defective products should be held. Id. at 261-263. See also Turcotte, supra, 494 F.2d at 180 n. 8. Rhode Island's strict liability rule is based on § 402A of the Restatement (Second) of Torts (1965), which explained the rationale behind the rule as follows:

this standard in part out of a desire to place upon the shoulders of the manufacturer the costs of injury from its products rather than upon the hapless plaintiff. Id. at 262. The manufacturer affirmatively chooses to place its product into commerce; Rhode Island has determined that by so doing it will be held to a high degree of responsibility should that product injure someone. This strong policy of the forum state would be thwarted by applying negligence rather than strict liability.

(T)he justification for the strict liability has been said to be that the seller, by marketing his product for use and consumption, has undertaken and assumed a special responsibility toward any member of the consuming public who may be injured by it; that the public has the right to and does expect, in the case of products which it needs and for which it is forced to rely upon the seller, that reputable sellers will stand behind their goods; that public policy demands that the burden of accidental injuries caused by products intended for consumption be placed upon those who market them, and...