McCann v. Foster Wheeler LLC
225 P.3d 516, 48 Cal. 4th 68 (2010)
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Rule of Law:
In a choice-of-law analysis involving a latent injury, the law of the state where the injury-causing conduct occurred is generally applied, as that state has the predominant interest in regulating conduct within its borders and providing predictable liability limits, even if the plaintiff is a resident of and discovers the injury in a different state with more favorable laws.
Facts:
- In 1957, Foster Wheeler, a New York corporation, specially designed and manufactured a large boiler for an oil refinery in Oklahoma.
- The boiler was shipped to Oklahoma, where it was installed by Terry McCann's employer.
- During a two-week period in July 1957, McCann, then an Oklahoma resident, was allegedly exposed to asbestos while observing an independent contractor apply insulation to the boiler.
- In 1965, McCann moved from Oklahoma to Minnesota, and later lived in Illinois.
- In 1975, McCann moved to Dana Point, California, where he became a long-term resident.
- McCann retired in 2001, continuing to reside in California.
- In 2005, while still a California resident, McCann was diagnosed with mesothelioma, an asbestos-related illness.
Procedural Posture:
- Terry McCann filed a personal injury lawsuit against Foster Wheeler LLC and other defendants in a California trial court.
- Foster Wheeler moved for summary judgment, arguing the claim was barred by Oklahoma's statute of repose.
- The trial court determined that Oklahoma law governed the timeliness of the action.
- After the parties agreed to have the court decide a key factual issue, the trial court found that Foster Wheeler's boiler was an 'improvement to real property' under Oklahoma law.
- The trial court entered judgment in favor of Foster Wheeler, dismissing McCann's action against the company.
- McCann, as the appellant, appealed to the California Court of Appeal.
- The Court of Appeal reversed the trial court's judgment, holding that California law, not Oklahoma law, should apply, which would make the action timely.
- Foster Wheeler, as the petitioner, sought review from the Supreme Court of California, which granted the petition.
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Issue:
Does California's statute of limitations, rather than Oklahoma's statute of repose, apply to a personal injury claim filed in California by a current California resident, where the alleged injury-causing conduct occurred entirely in Oklahoma at a time when the plaintiff was an Oklahoma resident?
Opinions:
Majority - George, C. J.
No. The law of Oklahoma, rather than the law of California, should apply because Oklahoma's interest would be more impaired by the failure to apply its law than would be California's interest. The court applied the three-step governmental interest analysis. First, the laws clearly differ, as Oklahoma's 10-year statute of repose would bar the action, while California's statute of limitations for asbestos injuries would permit it. Second, a 'true conflict' exists because both states have legitimate interests: Oklahoma has an interest in protecting all businesses conducting activities within its borders (including out-of-state companies) with predictable limits on liability, and California has an interest in providing a remedy for its residents who become ill and incur medical costs within the state. Third, under the 'comparative impairment' analysis, Oklahoma's interest is more significant. Oklahoma has the predominant interest in regulating conduct within its borders and assuring businesses that its liability rules are reliable. Allowing liability to be determined by the law of a state to which a plaintiff later moves would undermine this interest. California's interest in compensating its resident is legitimate but is accorded less weight when the defendant's conduct occurred entirely in another state with its own liability-limiting laws.
Analysis:
This decision clarifies the application of California's governmental interest analysis in latent injury torts with multi-state contacts. It establishes that the place of the defendant's conduct holds significant weight, reinforcing the principle that a state has a predominant interest in regulating activities and setting liability limits within its own borders. The ruling provides greater predictability for businesses operating in multiple states, suggesting that their potential liability for conduct in a particular state will be governed by that state's laws, regardless of where a plaintiff might later reside. This subordinates California's interest in compensating its residents to the interest of the state where the tortious conduct actually occurred, creating a more restrained view of the reach of California's plaintiff-friendly laws.
