Southern Pacific Transp. Co. v. United States
| Decision Date | 05 December 1978 |
| Docket Number | No. Civ. R-77-0180.,Civ. R-77-0180. |
| Citation | 462 F. Supp. 1227 |
| Parties | SOUTHERN PACIFIC TRANSPORTATION CO., Plaintiff, v. UNITED STATES of America, Defendant. |
| Court | U.S. District Court — Eastern District of California |
James V. Diepenbrock, Jack V. Lovell, Jr., Carol A. Huddleston, Charity, Kenyon, Diepenbrock, Wulff, Plant & Hannegan, Sacramento, Cal., for plaintiff.
Herman Sillas, U. S. Atty., Robert Browning Miller, James S. Joiner, Asst. U. S. Attys., Sacramento, Cal., for defendant.
This is the second of a series of decisions1 on the choice of law questions presented by this action brought by Southern Pacific Transportation Company (Southern Pacific) under the Federal Tort Claims Act, 28 U.S.C. §§ 1346(b), 2671 et seq., against the United States. The issue to be resolved in this decision is the choice of law rule of Nevada. The facts may be stated briefly. On April 28, 1973, 18 DODX railcars owned by the United States laden with bombs being transported by Southern Pacific from Nevada to Port Chicago, California under a contract with the Department of the Navy exploded in Southern Pacific's Antelope trainyard near Roseville, California. The explosions caused major damage to the trainyard and the surrounding area. As a result, hundreds of lawsuits were filed against Southern Pacific, the United States, and various other defendants. In addition, Southern Pacific sued the United States under the Federal Tort Claims Act (FTCA) to recover, inter alia, for damage to the trainyard, railcars and their lading, loss of freight revenues, loss of use of property and capital, and sums paid in settlement of third-party claims. The United States counterclaimed for the loss of its boxcars and the bombs. In the intervening years, all lawsuits arising from the explosions have been settled except for the FTCA action by Southern Pacific and the United States' counterclaim. Trial on that action began on November 7, 1977 and is continuing at this time.
Choice of law problems have permeated the various questions presented to this court by the litigation. Alleged negligent acts and omissions occurred in Nevada and California, and to a significantly lesser extent in other states. The FTCA provides a choice of law rule governing this action in section 1346(b):
the district courts . . . shall have exclusive jurisdiction of civil actions on claims against the United States, for money damages, . . . for injury or loss of property, or personal injury or death caused by the negligent or wrongful act or omission of any employee of the Government while acting within the scope of his office or employment, under circumstances where the United States, if a private person, would be liable to the claimant in accordance with the law of the place where the act or omission occurred.
As the Supreme Court held in Richards v. United States, 369 U.S. 1, 82 S.Ct. 585, 7 L.Ed.2d 492 (1962), this section requires the application of the whole law, including the choice of law rules, of the state where the negligent act or omission occurred. In the usual case, the negligent act or omission and the resulting injury all occur in a single state, and there is generally no dispute as to the applicable law. In this instance, negligent acts or omissions are said to have occurred in a number of states, although the parties concede that the only real dispute is between the states of Nevada and California. Acts and omissions in other states, even if determined to be negligent, are relatively few in number and are also scattered among a variety of states. For these reasons, the parties have long operated on the assumption that application of the Richards test would result in the selection of either Nevada or California as the state whose whole law would be applied.
The difficulty with which the parties and the court have been faced is that Richards requires the application of the whole law of the state where the negligent act or omission occurred. That test necessitates a decision as to the negligence vel non of the various acts. Thus, in this case, although there is little dispute either as to the fact that certain acts occurred in the chain of events leading to the explosions or as to the location of those acts, there has been strong disagreement as to the question whether the acts were negligent. The evidence necessary to determine the negligence of the acts amounts, in effect, to the major portion of the evidence to be presented during the trial. For that reason, it has not been possible to reach even a tentative choice of law decision under the Richards test. As the Southern Pacific's case-in-chief neared its close, the parties and the court concluded that it would be possible to reach an interlocutory decision on choice of law based on the evidence presented in the case-in-chief as to the negligent character of the relevant acts. This decision, of course, would be subject to amendment depending on the evidence presented by the United States in defense.2 Accordingly, the parties prepared to brief the choice of law issues in the context of the evidence so far presented. At that time, a question arose as to the applicable choice of law rules of the state of Nevada, the question which is to be resolved in this decision.
Although no decision had ever been reached on the point by this court, both parties had assumed that the applicable Nevada rule was to be found in the Restatement (Second) of Conflicts, based on the Ninth Circuit's decision in a defamation action, Hanley v. Tribune Publishing Co., 527 F.2d 68 (9th Cir. 1975). Southern Pacific recently concluded, however, that this assumption was incorrect and that Nevada would apply the lex loci rule to interstate negligence actions. Application of the Restatement (Second) of Conflicts approach requires consideration of a number of factors specified in the Restatement as they apply to the facts of the case; these factors include the places of the injury and of the negligent conduct, the domicile of the parties, the place where the relationship between the parties is centered, the policies of the forum and of the other interested states, and the basic policies underlying the particular field of law. In contrast, the lex loci, or lex loci delictus commissi, approach requires the application of the law of the place of the wrong, that is, the law of the place where the negligence had its operative effect.
Because of the question as to the applicable Nevada law, the briefing on the application of the evidence so far presented to the choice of law rules of California and Nevada has been suspended pending a decision on the nature of the choice of law rule in Nevada. The only issue before the court at this point is whether Nevada would apply the lex loci rule, the Restatement (Second) of Conflicts approach, or some other choice of law rule to an interstate tort action under the circumstances presented to this court.
(1) The Ninth Circuit's Hanley Decision
The starting place for discussion is the Ninth Circuit's decision in Hanley, a diversity action brought in the Nevada federal district court by a Nevada domiciliary against the defendant-newspaper publishing company which published a newspaper in Oakland, California but distributed and sold the paper in Nevada. The plaintiff sought general damages for an alleged libel published in May, 1969; the complaint did not allege that plaintiff suffered any special damages. Under California law at the time of publication, recovery was limited to special damages unless correction of the alleged libel was demanded and was not provided. The plaintiff alleged no demand for correction of the libel. The law of Nevada was in the process of change: in April 1969, a statute to the same effect as the California limitation was enacted and approved by the Governor of Nevada, but the effective date of the statute was in July 1969. Thus, as of the date of the publication, Nevada had no statute in effect limiting recovery to special damages in the absence of an unfulfilled demand for correction. After providing this factual background, the Ninth Circuit stated:
The district court concluded that the Nevada conflict of laws rule would follow that set forth in the Restatement of the Law (Second), Conflict of Laws § 379e (Tentative Draft No. 9, 1964). We agree. By this rule the law to be applied is that of the state having the most significant relationship with the parties and the communication, and ordinarily would be that of the domicil of the plaintiff.
Id. at 69 (footnote omitted). The Ninth Circuit then proceeded to apply the choice of law approach set forth in the Restatement.
The district court reached the conclusion that application of the Restatement's choice of law rule resulted in a requirement that the substantive law of California apply to the case. The court reached this conclusion in part because California was the state of defendant's incorporation and principal place of business and the state in which the newspaper was composed, printed and published. The "most significant factor" in the district court's view, however, was that the April enactment of the Nevada statute limiting recovery to special damages expressed the public policy of Nevada. Thus, the district court concluded: "it is appropriate that the law of the State of California should be selected to sustain the declared and identical public policies of both states with respect to actionable defamation." Id. Accordingly, when the plaintiff did not amend his complaint to allege special damages or a demand for correction, the district court dismissed the action, and the plaintiff appealed.
After agreeing with the district court that the Nevada choice of law rule was to be found in the Restatement (Second) of Conflicts, the Ninth Circuit stated:
To continue reading
Request your trial
-
Chico Fem. Women's Hlth. Cr. v. Butte Glenn Med. S.
...privacy right.17 While the silence of the California courts on this issue is not dispositive, see Southern Pacific Transportation Co. v. United States, 462 F.Supp. 1227, 1238 (E.D. Cal.1978), in this particular case the court finds it to be In Committee to Defend Reproductive Rights v. Myer......
-
Abbott v. United Venture Capital, Inc.
...not as it ought to be. Klingebiel v. Lockheed Aircraft Corp., 494 F.2d 345, 346-47 (9th Cir.1974); Southern Pacific Transp. Co. v. United States, 462 F.Supp. 1227, 1233 (E.D.Cal. 1978). This Court is not free to predict possible changes in the Nevada law. Moore v. R.G. Indus., Inc., 789 F.2......
-
Kramer v. Monogram Models, Inc.
...a district court should not make too much of the state courts' silence on any particular issue. Southern Pacific Transportation Co. v. United States, 462 F.Supp. 1227, 1238 (E.D.Cal.1978). In the absence of any state court decision on point, I must still endeavor to predict how the state's ......
-
Hubbard Business Plaza v. Lincoln Liberty Life Ins.
...not as it ought to be. Klingebiel v. Lockheed Aircraft Corp., 494 F.2d 345, 346-347 (9th Cir.1974); Southern Pacific Transp. Co. v. United States, 462 F.Supp. 1227, 1233 (E.D.Cal.1978). This Court is not free to predict possible changes in the Nevada law. Moore v. R.G. Indus., Inc., 789 F.2......