GALLAGHER v. KOPPERS COMPANY INC (1983)

Defendant in a wrongful death action appeals from a judgment entered on a jury verdict which awarded plaintiffs damages in the amount of $450,000.

Plaintiffs are the widow and minor child of decedent who died as a result of inhaling toxic fumes emitted by a paint manufactured by defendant.   The incident occurred in the State of Oregon where decedent was domiciled and employed as a painter.   Plaintiffs were at the time also domiciled in Oregon.

After the death, the decedent's widow, a former California resident, moved to California where she gave birth to the child and initiated this action on behalf of herself and as guardian ad litem of the child.

Although the death was the result of an industrial accident, the action filed in California sought to establish defendant's liability as a third party tortfeasor on the basis of negligence, breach of warranty and strict product liability.

Defendant has its principal place of business in Pittsburg, Pennsylvania, and distributes its products nationwide.   It maintains manufacturing plants in New Jersey, Texas, Georgia and California.   As a result of its commercial activities, it was of course subject to the jurisdiction of both Oregon and California courts.

We have concluded, however, that the trial court erred in applying California law to the trial of the case and the judgment must therefore be reversed.

Decedent was hired to paint the inside of a large water storage tank in Winston, Oregon.   The contract under which decedent worked called for the use of defendant's products to coat the interior of the tank.   Decedent's employer purchased the subject products in Roseburg, Oregon, where they had been shipped from Portland, Oregon.   Despite his employer's directions not to attempt the job without a continuous supply of fresh air, the apparatus therefor being provided, decedent elected to coat the tank's interior wearing only a filter mask.   Though advised it was dangerous to breathe the fumes from the coating products, decedent insisted that he knew what he was doing and did not need the special breathing equipment provided.   After decedent began spraying the interior of the tank, he was forced to come out every 10 or 15 minutes as his employer would shut off the painting equipment and make inquiries about his physical condition.   Later in the day, the employer noticed that decedent was glassy-eyed and groggy.   After being ordered out of the tank, decedent began to vomit.   He was taken home, then to a hospital, then moved to another hospital where he eventually slipped into a coma and died.

There is no evidence that the product being used by decedent was manufactured in California.   In fact, uncontroverted evidence established that a special formula of defendant's product is manufactured and distributed in the Los Angeles area, which special formula was not that being used by the decedent.

In summary then, plaintiffs and decedent were domiciled in Oregon, the incident occurred in Oregon, decedent was treated in Oregon, decedent died in Oregon, the alleged defective product was sold in Oregon, with no evidence that it was manufactured in California.   Plaintiffs were able to invoke the jurisdiction of the California courts simply because they moved to California after the incident and because defendant happened to do business in California, as well as a number of other states.

Before discussing the primary issue of the choice of applicable law, we first dispose of plaintiffs' contention that defendant waived any claim to the application of Oregon law.

Defendant did not demur to the complaint and moved unsuccessfully for a summary judgment under applicable California law.   The issue of the application of Oregon law to the trial of the matter was first raised by defendant on a motion filed prior to trial.   That motion was denied.

 The issue of choice of law may be raised by way of demurrer or motion for summary judgment (Code Civ.Proc., §§ 430.10 subd. (c), 437c;  Beech Aircraft Corp. v. Superior Court (1976) 61 Cal.App.3d 501, 132 Cal.Rptr. 541), but plaintiffs have cited to no authority to support their contention that the failure to raise the issue by way of either such procedure constitutes a waiver.

 The rule is that the forum state will generally apply its own rule of decision unless a litigant invokes the law of a foreign state in a timely fashion.  (Reich v. Purcell (1967) 67 Cal.2d 551, 63 Cal.Rptr. 31, 432 P.2d 727;  Hurtado v. Superior Court (1974) 11 Cal.3d 574, 114 Cal.Rptr. 106, 522 P.2d 666.)   Hence the test is timeliness and not the form in which the issue is raised.   The key to timeliness is prejudice to the opposing party.   Plaintiffs suffered no prejudice from the fact that defendant did not raise the issue earlier.   The law to be applied to a given case, whether it be that of the forum state or another jurisdiction becomes significant only during the actual trial process.   Further, under the circumstances of the case at bench, plaintiffs could have had no reasonable or realistic expectation that other than Oregon law would apply.

As pertains to the type of case under consideration, Oregon law varies markedly from that of California.   In Oregon, a wrongful death action can only be initiated by the personal representative of the decedent (Ore.Rev.Stats. § 30.020) rather than by the heirs as in California (Code Civ.Proc., § 377).   Oregon thus provides a protection for creditors of the decedent, not available under California law.

 Under Oregon's rule of comparative negligence, the conduct of each party is first compared to a hypothetical standard of faultless conduct.   If it is thereafter determined that plaintiffs' (or decedent's) fault is greater than the combined fault of defendant, plaintiffs are barred from recovery.   (Ore.Rev.Stats. 18.470;  Resser v. Boise-Cascade Corp. (1978) 284 Or. 385, 587 P.2d 80;  Dixon v. Southern Pacific Transp. Co. (9th Cir.1978) 579 F.2d 511, 514.)   California of course has adopted a “pure” form of comparative negligence.  (Li v. Yellow Cab Co. (1975) 13 Cal.3d 804, 809–813, 119 Cal.Rptr. 858, 532 P.2d 1226;  Zavala v. Regents of University of California (1981) 125 Cal.App.3d 646, 650, 178 Cal.Rptr. 185.)

 In product liability actions, Oregon has adopted the Restatement of Torts (2d) § 402A, which provides that a manufacturer is not liable for harm caused by a product unless the product was “unreasonably” dangerous.   (Heaton v. Ford Motor Co. (1967) 248 Or. 467, 435 P.2d 806, 807–808;  Phillips v. Kimwood Machine Co. (1974) 269 Or. 485, 525 P.2d 1033, 1036–1040.)   The policy behind this rule was stated in Phillips v. Kimwood Machine Co., supra, 525 P.2d at p. 1036:  The problem with strict liability of products has been one of limitation.  “ ‘No one wants absolute liability where all the article has to do is to cause injury ․ [a] test for unreasonable danger is therefore vital.’ ”

 By contrast, California law requires only that a design or manufacturing defect causing injury be proven and expressly rejects the Restatement approach.  (Barker v. Lull Engineering Co. (1978) 20 Cal.3d 413, 143 Cal.Rptr. 225, 573 P.2d 443;  Cronin v. J.B.E. Olson Corp. (1972) 8 Cal.3d 121, 104 Cal.Rptr. 433, 501 P.2d 1153.)

 Oregon law provides that the adequacy of a warning on a product be determined according to the knowledge and reasonable expectations of the communities of the manufacturer and intended user.  (Roach v. Kononen (1974) 269 Or. 457, 525 P.2d 125, 128–129;  Phillips v. Kimwood, supra, 525 P.2d at p. 1039.)   In California, on the other hand, “the jury's focus is properly directed to the condition of the product itself, and not to the reasonableness of the manufacturer's conduct.”  (Barker v. Lull Engineering Co., supra, 20 Cal.3d at p. 434, 143 Cal.Rptr. 225, 573 P.2d 443;  Ault v. International Harvester Co. (1974) 13 Cal.3d 113, 121, 117 Cal.Rptr. 812, 528 P.2d 1148.)

The objective of the proper choice of law is to select the law which is most appropriate to the issue considering the interests of the litigants and the states involved.  (Reich v. Purcell, supra;  4 Witkin, Summary of Cal.Law (8th ed.) Torts, § 182, p. 2472.)

 Generally speaking in tort actions, the law of the state where the injury occurred will be applied unless some other state has a more significant relationship to the occurrence and the parties.  (Rest.2d, Conf. of Laws, § 146.)

One of the considerations advanced by the Restatement in determining the issue of choice of law is the “justified expectation of the parties.”  (Rest.2d, Conf. of Laws, § 6.)   While Professor Witkin has observed that this consideration is of lesser importance in torts than in other fields of law because “[t]he tortfeasor usually acts without giving thought to the law determining the legal consequences of the conduct,” (4 Witkin, supra, § 181, at p. 2469) that observation would not seem to apply to a manufacturer engaged in a multi-state distribution of its products who undoubtedly would be cognizant of the laws and the requirements of the state to which the products are shipped.   Such a manufacturer would be justified in expecting to be judged by the law of the state where its product is alleged to have caused injury.

Another consideration which is of prime importance is the “governmental interest” of the states.  (Reich v. Purcell, supra;  Hurtado v. Superior Court, supra.)   However, the analysis of the “governmental interest” involved is required only when there is a true “conflict” in that two or more states have a legitimate interest in having their laws applied.  (Hurtado v. Superior Court, supra.)

 When such “conflict” exists, the test is “which state's interest would be more impaired if its policy were subordinated to the policy of the other state.”  (Bernhard v. Harrah's Club (1976) 16 Cal.3d 313, 320, 128 Cal.Rptr. 215, 546 P.2d 719.)

Oregon, through its statutes and case law, has exhibited its interest in deterring certain conduct by manufacturers who do business in Oregon, while at the same time protecting its resident tortfeasors against excessive financial burdens.   In its wrongful death statute, Oregon has also demonstrated its interest in protecting local creditors.   The application of California law to the present case would substantially impair the efficacy of Oregon's law and the enforcement of its policy.

Even if it could be argued that the fact that defendant manufactures in California gives California some interest in the matter, Oregon's interest in the matter demonstrably outweighs that of California if for no other reason than that decedent's patently negligent conduct occurred in Oregon.   It is manifest that Oregon has a strong interest in having that conduct and its effect on the recovery tested by Oregon law.

 In the case at bench, California in fact has no interest in the present litigation.   Plaintiffs had no plan to come to California prior to the death of the decedent.   Their subsequent move to this state and their present residence here is of no consequence.   Nor does the simple fact that defendant maintains a manufacturing plant in California, without more, give California any interest in seeing that plaintiffs are compensated or that stricter liability is imposed on defendant than would be the case in Oregon.   California is absolutely neutral as to the issues in this dispute.   Thus there is no true “conflict” to be resolved.   It was error as a matter of law for the trial court to apply California law.

In view of our holding on this issue, we need not reach defendant's other claims of error.   The judgment is reversed and the matter is remanded to the trial court for further proceedings consistent with our opinion.

COMPTON, Acting Presiding Judge.

BEACH and GATES, JJ., concur.