Final Exam
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BIPUL GOKHALE, State Bar # 554473 FLAGG, WEBER & BOCK LLP A Limited Liabilities Partnership 100 Court Street San Francisco, CA 94111 Telephone: (415) 555-3333 Attorneys for Defendant KING LIMO 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF SAN FRANCISCO LEWIS, ) ) Plaintiff, ) ) vs. ) ) KING LIMO, INC., ) ) Defendants. ) ) ) ) ) ) CV-10-5262 DEFENDANT KING'S MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO APPLY MEXICAN LAW Cal. Civ. Proc. Code Ann. § 418.10 Date: March 25, 2011 Time: 10:00 a.m. Dept.: 11 (Judge Cook) Filing Date: Trial Date:
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Questions Presented Does the "governmental interest analysis" indicate that Mexico has the overriding interest in applying its respective law on damages? I. Are the laws on damages in Mexico and California substantively different given that the former limits the amount 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 awarded while the latter imposes no such limit? II. Is there a true conflict of interests given that CA aims to compensate victims while Mexico aims to protect defendants? III. Is Mexico's interest overriding given that the plaintiffs are very affluent, the accident occurred in Mexico and King's business helps Mexico's economy? Statement of the Case Affluent plaintiffs have sued King in SF Superior Court for damages resulting from an accident that occurred in Mexico. King has moved this Court to apply Mexico's law on damages as it limits the awardable amount while CA law places no such limit. Choice of law is the issue at bar. Statement of the Facts Plaintiffs entered Mexico to determine whether decedent husband would take a position as CEO of a new, innovative technology company in Mexico City. Plaintiff's decedent earned 2.2 million dollars a year before he was tragically killed in a freak automobile accident. Plaintiffs sued King, the limousine service that shuttled them around the city, for damages arising out of wrongful death and injuries sustained. Defendant King is an international company, incorporated in CA but with substantial business in Mexico. The law on damages is substantively different in Mexico than it is in California. The limitations placed by Mexican law protect the
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defendant while the limitless awards in CA protect the plaintiff. The competing interest between jurisdictions is the underlying concern. King has motioned for application of Mexico's law while wealthy plaintiffs want more money and object. Argument 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MEXICAN LAW SHOULD GOVERN THE ADJUDICATION OF DAMAGES AS THE GOVERNMENTAL INTEREST ANALYSIS USED BY CALIFORNIA COURTS SO CLEARLY INDICATES.
Choice of law decisions in CA are structured by the "governmental interest analysis." Reich v. Purcell, 67 Cal. 2d 551 (1967). There are two thresholds that must be met before reaching the third step of the analysis. Id. First, the laws of the various jurisdictions must be substantively different with respect to the issue at hand and second, there must be a true conflict of interests in applying either jurisdictions respective law. Id. Once both elements are met, a comparative impairment test examines the competing interests to determine whose interest would be most impaired if their law is not applied. Id. I. Mexico's law on calculating damages is different than California's. The first requirement to proceed in the analysis is whether the substantive law on damages is different in Mexico than it is in California. The law in California allows recovery without limitation to "compensate for all the detriment proximately caused." Cal. Civ. Code Ann. § 3333 (West 1997). On the other hand, Mexico substantially limits the amount of recovery to the daily minimum wage in the region. C.C.F. art. 1915. As a result, with respect to the issue of
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damages, under CA law the affluent plaintiff's will likely receive a very large payout while Mexican law would limit that payout to a more appropriate amount. Given that the laws of both jurisdictions are different, this Court must determine what interests either jurisdiction has in applying their own rule to determine if a true 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 conflict exists. II. Mexico and CA have competing interests in applying their respective law on damages. Given the difference in law, this court must examine the interests of either jurisdiction to determine whether each state has a "legitimate but conflicting interest in applying its own law." Offshore Rental Company, Inc. v. Continental Oil Company, 22 Cal. 3d 157, 165 (1978). If either jurisdiction has a veritable interest, then the analysis proceeds to the third step of comparative impairment. In Offshore, a CA corporation sued "for the loss of a 'key' employee whom defendant negligently injured on defendant's premises in Louisiana." Id. at 160. CA law allowed plaintiff a cause of action to sue while Louisiana law did not. Id. at 160. Thus, the question of which law to apply rested on the interests each state had in applying their respective law. If only one state had a viable interest then the analysis stops there and the "law of the interested state should be applied." Id. at 163. Louisiana's interest in applying their law was to avoid extending financial hardship to a negligent defendant as well as "promoting freedom of investment and enterprise within Louisiana's borders." Id. at 165, 168. CA's interest was to protect CA employers from economic harm since California's economy and tax revenues would be affected. Id. at 165. The court determined that
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there was a viable conflict of interest and a comparative impairment approach was necessary to determine which law to apply. Similar to Offshore, this Court will likely find that the interests of CA and Mexico are at odds with each other. CA's interest is to fully compensate victims of unintentional tort with 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 unrestricted awards in damages and to deter future tortuous conduct. Conversely, Mexico wants to protect defendants from overly burdensome damage awards as a way to attract foreign business in the region. CA's interest here is echoed in Offshore and Mexico's interest is parallel to Louisiana's. Given the conflict, this Court must proceed to the third step of the governmental interest analysis just as the Supreme Court did in Offshore. In doing so, this Court will determine who has the controlling interest and what the appropriate law is to apply. III. The interests of Mexico would be most impaired if CA's rule on damages is applied. The final step, the 'comparative impairment' approach, "seeks to determine which state's interest would be most impaired if its policy were subordinated to the policy of the other state." Id. at 166. In a landmark case that has henceforth controlled choice of law adjudication, the California Supreme Court held that Ohio law was the appropriate rule to apply. Reich, 67 Cal. 2d 551. The suit involved the wrongful death of plaintiff's wife and child that occurred after a head-on collision of two automobiles in Missouri. Id. at 552. Three states were involved in that suit: Ohio, where the plaintiffs and their decedent resided, Missouri as the place of wrong, and CA, the forum as well as the residence of the defendant. Id. at 555. There, the court analyzed the various states interest in applying their
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respective law on damages and determined Ohio's was most compelling. Id. The court in Reich reasoned that CA's interest in applying its limitless damages law was to compensate resident victims, and since plaintiffs were from Ohio, CA had no compelling interest. Id. at 556. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 The court then looked to the competing interests of Ohio and Missouri. Though the accident occurred in Missouri who "had the predominant interest" in the conduct within her state, the court waived this interest asserting that "limitations on damages . . . have little or nothing to do with conduct." Id. at 556. As a result, "Ohio's interest in affording full recovery to injured parties" was most compelling since plaintiffs were from Ohio. Id. at 556. The analysis in Reich reveals the necessary considerations to take when choosing a particular law over its alternate. It is imperative to note that Reich compared the relevant interests of each state with respect to the facts of the case. In spite of the accident occurring in Missouri, her interest in conduct was attenuated in light of her law on damages. Id. And even though CA and Ohio had the same law, the court applied Ohio's based on the facts. Id. It is very important that the same analysis of interest with respect to fact be applied here. Like Reich, the prevailing interest will dictate the applicable law. Plaintiff will reasonably argue that CA implements a limitless recovery on damages so as compensate victims for tortuous conduct. However, given plaintiff's incredible wealth in the amount of 2.2 million a year, compensation is a tenuous argument at best. The interests of the state must be evaluated with respect to the facts as it were in Reich. In Reich, Missouri had an obvious interest in
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regulating driving behavior within her territory. However, the court waived that interest because Missouri's limitation on damages had no regulatory function on driving behavior. Id. The same mode of reasoning applies here. While CA's law is interested in compensating victims who would otherwise drain the states resources, plaintiff's 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 extraordinary wealth waives that interest. Were plaintiffs impoverished or even "middle-class," compensation may be a relevant interest to consider. However, given plaintiffs massive fortune, CA's interest in compensation must be waived just as Missouri's interest in driver conduct was waived. Moreover, CA's interest in compensation is further attenuated by the likelihood that plaintiff's husband had life insurance. In Offshore, the Supreme Court reasoned that "the policy underlying a statute may also be less 'comparatively pertinent' if the same policy may easily be satisfied by some other means." Offshore, 22 Cal. 3d. at 157, 166. Recall that plaintiff Offshore sued defendant Continental for negligently injuring one of their key employees. Id. In deciding to apply Louisiana law instead of CA law, the court weakened CA's interest in compensation because plaintiff corporation was reasonably expected to have insurance to pay for the losses incurred. Id. at 166. In parity, plaintiff's decedent is reasonably expected to have a life insurance policy that would pay his family handsomely in the event of his death. For those whose income is as high as plaintiffs here, such an expectation is not unreasonable. Since such a policy would more than compensate plaintiffs, the reasoning in Offshore as applied here further weakens any interest CA might have in compensation. Plaintiff's motivation for the trip was to determine whether
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decedent would take the CEO position at a new, innovative technology company in Mexico City, Mexico. Given the business nature of the trip, it is reasonable to expect that plaintiff and decedent would have taken certain precautionary measures, among those a consideration of the law in Mexico. In Offshore the court reasoned 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 that by entering Louisiana, "plaintiff 'exposed (it)self to the risks of the territory,' and should not expect to subject defendant to a financial hazard that Louisiana had not created." Id. at 169. The same reasoning applies here. Plaintiff and decedent entered Mexico for business purposes just as plaintiff in Offshore did in Louisiana. Both exposed themselves to the risks by entering a region with varying laws and both expect a favorable decision. But just as the court in Offshore dismissed plaintiff's interest in applying CA law, so too should that interest be dismissed here. Applying Offshore's reasoning, the onus is on plaintiffs to be aware of the laws in Mexico and as such, should not expect a limitless damages instruction prohibited by Mexican law. A more recent CA court of appeal decision further weakens any legitimate interest in compensation. There, plaintiff was a CA resident who had been injured in an accident in Alabama. Castro v. Budget Rent-A-Car System, Inc., 154 Cal. App. 4th 1162 (2007). While California law provided action, Alabama law did not. Id. Citing to Offshore, the court held that "by entering and driving in Alabama, [plaintiff] voluntarily exposed himself to the risk of 'that' territory, and . . . should not expect to subject [defendant] to a 'financial hazard' that Alabama law had not created." Id. at 1182. There, like Offshore, both courts held that the situs of injury had the controlling interest.
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The reasoning in Castro is applicable here. Plaintiffs entered Mexican territory voluntarily and should not expect to subject King to a "financial hazard" that Mexican law has not allowed. The common theme is that the situs of injury has the predominant interest as corroborated by both Offshore and Castro. In both, CA's interest 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 though reasonable, was less important to the state the accident occurred because the states interest in controlling conduct within her territory was determined to be more important. The same should hold here. Mexico's limit on damages is conducive to businesses in the region and promotes new business ventures, like plaintiffs innovative technology company, as a means of expanding the Mexican economy. The regulatory function of their law is vital to their economic strategy of fostering a business-friendly environment. Conduct was the keyword in both Offshore and Castro and it is the keyword here. Mexico's law directly influences business conduct and as to such conduct they have the prevailing interest. Conduct was given more authority in a last year CA Supreme Court decision which held that California common law gives the predominant interest to the territory that limits liability for the conduct of a defendant therein. McCann v. Foster Wheeler LLC, 48 Cal. 4th 68, 101 (2010). Plaintiff sued defendant for mesothelioma caused by asbestos exposure in Oklahoma. Id. CA law permitted action against defendant while Oklahoma law did not. Id. The court held that Oklahoma's interest would be more impaired if CA law were applied. Id. They reasoned "a jurisdiction ordinarily has 'the predominant interest' in regulating conduct that occurs within its borders." Id. at 97. Since Oklahoma's law disallowing action regulated business conduct, they had the predominant interest.
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Comparatively, Mexico's law limiting damage awards is intended to regulate business conduct within their state. This regulatory function of Mexico's law overrides the compensatory function of California's. By imposing CA law there is no preservation of conduct within CA, only a destruction of conduct in Mexico. The reasoning in 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 McCann is applicable here and should direct the outcome of this motion. Plaintiff may argue that King is a CA corporation and Mexico's law is not aimed at protecting a CA corporation. This point was similarly raised in McCann, and it was rejected there as it should be here. Defendant in McCann was headquartered in New York and the Court of Appeals even believed that Oklahoma's law preventing action was only meant to protect Oklahoma-based businesses. Id. at 75. That reasoning was quickly overturned when the Supreme Court held that Oklahoma's interest in the application of its law applied as fully to out-of-state companies as well. Id. at 76. Here, King is incorporated in CA but does business internationally and a substantial portion in Mexico. The law in Mexico is to protect defendants from huge financial losses, especially defendant businesses. Since Mexico relies on foreign ventures to help bolster their economy, this law on damages is meant to protect King specifically in these situations. Mexico's law would likely be invoked and applied by plaintiff's decedent if his company were to be sued for damages in a similar situation. Just as defendants place of incorporation was irrelevant given the purposes of Oklahoma's law in McCann, Kings place of incorporation is irrelevant given Mexico's reason for limiting damages. Finally, plaintiffs may futilely raise CA's interest in
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regulating driving behavior within her territory. As the accident occurred in Mexico, CA's interest is baseless. Had the accident occurred in CA, an argument could be made in applying CA rule on damages. The unlimited award would indeed punish a negligent defendant to drive more carefully. However, given that the accident 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 did not occur in CA, her interest in regulating driving has no merit. This is echoed in Reich whereby CA's interest in applying her law on damages was waived by the court because, among other things, the accident occurred in Missouri. Reich, 67 Cal. 2d 551. This recalls the "predominant interest" CA courts have placed on the state where the accident/injury occurred; the "situs of injury." Id. Therefore, plaintiff's argument for the application of CA law to regulate driving behavior is groundless and like Reich, must be dismissed. Given that the laws of California and Mexico are different, that both have an interest in the application of their respective law, and that a comparative impairment analysis clearly marks Mexico with the overriding interest, this Court has no choice but to reinforce previous CA Supreme Court holdings and grant King's motion to apply Mexican law on damages.
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SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF SAN FRANCISCO LEWIS, ) ) Plaintiff, ) ) vs. ) ) KING LIMO, INC., ) ) Defendants. ) ) ) ) ) ) CV-10-5262 DEFENDANT KING'S MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO APPLY MEXICAN LAW Cal. Civ. Proc. Code Ann. § 418.10 Date: March 25, 2011 Time: 10:00 a.m. Dept.: 11 (Judge Cook) Filing Date: Trial Date:
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Questions Presented Does the "governmental interest analysis" indicate that Mexico has the overriding interest in applying its respective law on damages? I. Are the laws on damages in Mexico and California substantively different given that the former limits the amount 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 awarded while the latter imposes no such limit? II. Is there a true conflict of interests given that CA aims to compensate victims while Mexico aims to protect defendants? III. Is Mexico's interest overriding given that the plaintiffs are very affluent, the accident occurred in Mexico and King's business helps Mexico's economy? Statement of the Case Affluent plaintiffs have sued King in SF Superior Court for damages resulting from an accident that occurred in Mexico. King has moved this Court to apply Mexico's law on damages as it limits the awardable amount while CA law places no such limit. Choice of law is the issue at bar. Statement of the Facts Plaintiffs entered Mexico to determine whether decedent husband would take a position as CEO of a new, innovative technology company in Mexico City. Plaintiff's decedent earned 2.2 million dollars a year before he was tragically killed in a freak automobile accident. Plaintiffs sued King, the limousine service that shuttled them around the city, for damages arising out of wrongful death and injuries sustained. Defendant King is an international company, incorporated in CA but with substantial business in Mexico. The law on damages is substantively different in Mexico than it is in California. The limitations placed by Mexican law protect the
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defendant while the limitless awards in CA protect the plaintiff. The competing interest between jurisdictions is the underlying concern. King has motioned for application of Mexico's law while wealthy plaintiffs want more money and object. Argument 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MEXICAN LAW SHOULD GOVERN THE ADJUDICATION OF DAMAGES AS THE GOVERNMENTAL INTEREST ANALYSIS USED BY CALIFORNIA COURTS SO CLEARLY INDICATES.
Choice of law decisions in CA are structured by the "governmental interest analysis." Reich v. Purcell, 67 Cal. 2d 551 (1967). There are two thresholds that must be met before reaching the third step of the analysis. Id. First, the laws of the various jurisdictions must be substantively different with respect to the issue at hand and second, there must be a true conflict of interests in applying either jurisdictions respective law. Id. Once both elements are met, a comparative impairment test examines the competing interests to determine whose interest would be most impaired if their law is not applied. Id. I. Mexico's law on calculating damages is different than California's. The first requirement to proceed in the analysis is whether the substantive law on damages is different in Mexico than it is in California. The law in California allows recovery without limitation to "compensate for all the detriment proximately caused." Cal. Civ. Code Ann. § 3333 (West 1997). On the other hand, Mexico substantially limits the amount of recovery to the daily minimum wage in the region. C.C.F. art. 1915. As a result, with respect to the issue of
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damages, under CA law the affluent plaintiff's will likely receive a very large payout while Mexican law would limit that payout to a more appropriate amount. Given that the laws of both jurisdictions are different, this Court must determine what interests either jurisdiction has in applying their own rule to determine if a true 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 conflict exists. II. Mexico and CA have competing interests in applying their respective law on damages. Given the difference in law, this court must examine the interests of either jurisdiction to determine whether each state has a "legitimate but conflicting interest in applying its own law." Offshore Rental Company, Inc. v. Continental Oil Company, 22 Cal. 3d 157, 165 (1978). If either jurisdiction has a veritable interest, then the analysis proceeds to the third step of comparative impairment. In Offshore, a CA corporation sued "for the loss of a 'key' employee whom defendant negligently injured on defendant's premises in Louisiana." Id. at 160. CA law allowed plaintiff a cause of action to sue while Louisiana law did not. Id. at 160. Thus, the question of which law to apply rested on the interests each state had in applying their respective law. If only one state had a viable interest then the analysis stops there and the "law of the interested state should be applied." Id. at 163. Louisiana's interest in applying their law was to avoid extending financial hardship to a negligent defendant as well as "promoting freedom of investment and enterprise within Louisiana's borders." Id. at 165, 168. CA's interest was to protect CA employers from economic harm since California's economy and tax revenues would be affected. Id. at 165. The court determined that
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there was a viable conflict of interest and a comparative impairment approach was necessary to determine which law to apply. Similar to Offshore, this Court will likely find that the interests of CA and Mexico are at odds with each other. CA's interest is to fully compensate victims of unintentional tort with 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 unrestricted awards in damages and to deter future tortuous conduct. Conversely, Mexico wants to protect defendants from overly burdensome damage awards as a way to attract foreign business in the region. CA's interest here is echoed in Offshore and Mexico's interest is parallel to Louisiana's. Given the conflict, this Court must proceed to the third step of the governmental interest analysis just as the Supreme Court did in Offshore. In doing so, this Court will determine who has the controlling interest and what the appropriate law is to apply. III. The interests of Mexico would be most impaired if CA's rule on damages is applied. The final step, the 'comparative impairment' approach, "seeks to determine which state's interest would be most impaired if its policy were subordinated to the policy of the other state." Id. at 166. In a landmark case that has henceforth controlled choice of law adjudication, the California Supreme Court held that Ohio law was the appropriate rule to apply. Reich, 67 Cal. 2d 551. The suit involved the wrongful death of plaintiff's wife and child that occurred after a head-on collision of two automobiles in Missouri. Id. at 552. Three states were involved in that suit: Ohio, where the plaintiffs and their decedent resided, Missouri as the place of wrong, and CA, the forum as well as the residence of the defendant. Id. at 555. There, the court analyzed the various states interest in applying their
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respective law on damages and determined Ohio's was most compelling. Id. The court in Reich reasoned that CA's interest in applying its limitless damages law was to compensate resident victims, and since plaintiffs were from Ohio, CA had no compelling interest. Id. at 556. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 The court then looked to the competing interests of Ohio and Missouri. Though the accident occurred in Missouri who "had the predominant interest" in the conduct within her state, the court waived this interest asserting that "limitations on damages . . . have little or nothing to do with conduct." Id. at 556. As a result, "Ohio's interest in affording full recovery to injured parties" was most compelling since plaintiffs were from Ohio. Id. at 556. The analysis in Reich reveals the necessary considerations to take when choosing a particular law over its alternate. It is imperative to note that Reich compared the relevant interests of each state with respect to the facts of the case. In spite of the accident occurring in Missouri, her interest in conduct was attenuated in light of her law on damages. Id. And even though CA and Ohio had the same law, the court applied Ohio's based on the facts. Id. It is very important that the same analysis of interest with respect to fact be applied here. Like Reich, the prevailing interest will dictate the applicable law. Plaintiff will reasonably argue that CA implements a limitless recovery on damages so as compensate victims for tortuous conduct. However, given plaintiff's incredible wealth in the amount of 2.2 million a year, compensation is a tenuous argument at best. The interests of the state must be evaluated with respect to the facts as it were in Reich. In Reich, Missouri had an obvious interest in
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regulating driving behavior within her territory. However, the court waived that interest because Missouri's limitation on damages had no regulatory function on driving behavior. Id. The same mode of reasoning applies here. While CA's law is interested in compensating victims who would otherwise drain the states resources, plaintiff's 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 extraordinary wealth waives that interest. Were plaintiffs impoverished or even "middle-class," compensation may be a relevant interest to consider. However, given plaintiffs massive fortune, CA's interest in compensation must be waived just as Missouri's interest in driver conduct was waived. Moreover, CA's interest in compensation is further attenuated by the likelihood that plaintiff's husband had life insurance. In Offshore, the Supreme Court reasoned that "the policy underlying a statute may also be less 'comparatively pertinent' if the same policy may easily be satisfied by some other means." Offshore, 22 Cal. 3d. at 157, 166. Recall that plaintiff Offshore sued defendant Continental for negligently injuring one of their key employees. Id. In deciding to apply Louisiana law instead of CA law, the court weakened CA's interest in compensation because plaintiff corporation was reasonably expected to have insurance to pay for the losses incurred. Id. at 166. In parity, plaintiff's decedent is reasonably expected to have a life insurance policy that would pay his family handsomely in the event of his death. For those whose income is as high as plaintiffs here, such an expectation is not unreasonable. Since such a policy would more than compensate plaintiffs, the reasoning in Offshore as applied here further weakens any interest CA might have in compensation. Plaintiff's motivation for the trip was to determine whether
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decedent would take the CEO position at a new, innovative technology company in Mexico City, Mexico. Given the business nature of the trip, it is reasonable to expect that plaintiff and decedent would have taken certain precautionary measures, among those a consideration of the law in Mexico. In Offshore the court reasoned 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 that by entering Louisiana, "plaintiff 'exposed (it)self to the risks of the territory,' and should not expect to subject defendant to a financial hazard that Louisiana had not created." Id. at 169. The same reasoning applies here. Plaintiff and decedent entered Mexico for business purposes just as plaintiff in Offshore did in Louisiana. Both exposed themselves to the risks by entering a region with varying laws and both expect a favorable decision. But just as the court in Offshore dismissed plaintiff's interest in applying CA law, so too should that interest be dismissed here. Applying Offshore's reasoning, the onus is on plaintiffs to be aware of the laws in Mexico and as such, should not expect a limitless damages instruction prohibited by Mexican law. A more recent CA court of appeal decision further weakens any legitimate interest in compensation. There, plaintiff was a CA resident who had been injured in an accident in Alabama. Castro v. Budget Rent-A-Car System, Inc., 154 Cal. App. 4th 1162 (2007). While California law provided action, Alabama law did not. Id. Citing to Offshore, the court held that "by entering and driving in Alabama, [plaintiff] voluntarily exposed himself to the risk of 'that' territory, and . . . should not expect to subject [defendant] to a 'financial hazard' that Alabama law had not created." Id. at 1182. There, like Offshore, both courts held that the situs of injury had the controlling interest.
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The reasoning in Castro is applicable here. Plaintiffs entered Mexican territory voluntarily and should not expect to subject King to a "financial hazard" that Mexican law has not allowed. The common theme is that the situs of injury has the predominant interest as corroborated by both Offshore and Castro. In both, CA's interest 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 though reasonable, was less important to the state the accident occurred because the states interest in controlling conduct within her territory was determined to be more important. The same should hold here. Mexico's limit on damages is conducive to businesses in the region and promotes new business ventures, like plaintiffs innovative technology company, as a means of expanding the Mexican economy. The regulatory function of their law is vital to their economic strategy of fostering a business-friendly environment. Conduct was the keyword in both Offshore and Castro and it is the keyword here. Mexico's law directly influences business conduct and as to such conduct they have the prevailing interest. Conduct was given more authority in a last year CA Supreme Court decision which held that California common law gives the predominant interest to the territory that limits liability for the conduct of a defendant therein. McCann v. Foster Wheeler LLC, 48 Cal. 4th 68, 101 (2010). Plaintiff sued defendant for mesothelioma caused by asbestos exposure in Oklahoma. Id. CA law permitted action against defendant while Oklahoma law did not. Id. The court held that Oklahoma's interest would be more impaired if CA law were applied. Id. They reasoned "a jurisdiction ordinarily has 'the predominant interest' in regulating conduct that occurs within its borders." Id. at 97. Since Oklahoma's law disallowing action regulated business conduct, they had the predominant interest.
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Comparatively, Mexico's law limiting damage awards is intended to regulate business conduct within their state. This regulatory function of Mexico's law overrides the compensatory function of California's. By imposing CA law there is no preservation of conduct within CA, only a destruction of conduct in Mexico. The reasoning in 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 McCann is applicable here and should direct the outcome of this motion. Plaintiff may argue that King is a CA corporation and Mexico's law is not aimed at protecting a CA corporation. This point was similarly raised in McCann, and it was rejected there as it should be here. Defendant in McCann was headquartered in New York and the Court of Appeals even believed that Oklahoma's law preventing action was only meant to protect Oklahoma-based businesses. Id. at 75. That reasoning was quickly overturned when the Supreme Court held that Oklahoma's interest in the application of its law applied as fully to out-of-state companies as well. Id. at 76. Here, King is incorporated in CA but does business internationally and a substantial portion in Mexico. The law in Mexico is to protect defendants from huge financial losses, especially defendant businesses. Since Mexico relies on foreign ventures to help bolster their economy, this law on damages is meant to protect King specifically in these situations. Mexico's law would likely be invoked and applied by plaintiff's decedent if his company were to be sued for damages in a similar situation. Just as defendants place of incorporation was irrelevant given the purposes of Oklahoma's law in McCann, Kings place of incorporation is irrelevant given Mexico's reason for limiting damages. Finally, plaintiffs may futilely raise CA's interest in
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regulating driving behavior within her territory. As the accident occurred in Mexico, CA's interest is baseless. Had the accident occurred in CA, an argument could be made in applying CA rule on damages. The unlimited award would indeed punish a negligent defendant to drive more carefully. However, given that the accident 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 did not occur in CA, her interest in regulating driving has no merit. This is echoed in Reich whereby CA's interest in applying her law on damages was waived by the court because, among other things, the accident occurred in Missouri. Reich, 67 Cal. 2d 551. This recalls the "predominant interest" CA courts have placed on the state where the accident/injury occurred; the "situs of injury." Id. Therefore, plaintiff's argument for the application of CA law to regulate driving behavior is groundless and like Reich, must be dismissed. Given that the laws of California and Mexico are different, that both have an interest in the application of their respective law, and that a comparative impairment analysis clearly marks Mexico with the overriding interest, this Court has no choice but to reinforce previous CA Supreme Court holdings and grant King's motion to apply Mexican law on damages.
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