Opinion ID: 6986485
Heading Depth: 2
Heading Rank: 3

Heading: Choice of Law: Joint and Several Liability

Text: It is undisputed that New York law governed the issue of Crane’s liability. Crane argues that the district court erred when it failed to apply New York law, rather than Rhode Island law, to the issue of joint and several liability as well. We review the district court’s choice-of-law determinations de novo. See United States v. Funds Held in Name or for Benefit of Wetterer, 210 F.3d 96, 106 (2d Cir.2000) (citing Sheldon v. PHH Corp., 135 F.3d 848, 852 (2d Cir.1998)). Given the parties’ domiciles, as discussed below, this issue could be governed by the law of one of four states: Delaware, Illinois, New York or Rhode Island. It is undisputed that both Rhode Island and Delaware law impose full joint and several liability on tortfeasors; Illinois law imposes joint and several liability only upon a tortfeasor that is at least 25% at fault, see 735 Ill. Comp. Stat. 5/2-1117; Hills v. Bridgeview Little League Assoc., 306 Ill.App.3d 13, 239 Ill.Dec. 85, 713 N.E.2d 616, 623 (Ill.App.Ct.1999); and New York law provides that a tortfeasor found to be less than 50% liable pays only its proportionate share of non-economic loss, see N.Y. C.P.L.R. 1601(1); Van Vlack v. Baker, 242 A.D.2d 704, 663 N.Y.S.2d 49, 50 (2d Dep’t 1997). Our choice is governed by the New York choice-of-law rules first set forth in Neumeier v. Kuehner, 31 N.Y.2d 121, 335 N.Y.S.2d 64, 69-70, 286 N.E.2d 454 (1972). See Barkanic v. General Admin. of Civil Aviation of the People’s Republic of China, 923 F.2d 957, 963 (2d Cir.1991) (stating that New York courts “now apply the Neu-meier rules to all post-accident loss distribution rules.”). Neumeier established three rules that take into account the domicile of the parties, the conduct at issue, and the purposes of the substantive law. See Neumeier, 335 N.Y.S.2d at 70, 286 N.E.2d 454. The first Neumeier rule governs cases between co-domiciliaries. The second rule specifies that if the parties are domiciliar-ies of different states, and the accident occurs in one of the domiciliary states, the law of that state should be applied in the absence of special circumstances. The third rule specifies that when parties are domiciliarles of different states, and the accident occurs in a non-domieiliary state, “[n]ormally, the applicable rule of decision will be that of the state where the accident occurred but not if it can be shown that displacing that normally applicable rule will advance the relevant substantive law purposes without impairing the smooth working of the multi-state system or producing great uncertainty for litigants.” Id. We must therefore determine: (i) where the parties are domiciled; and (ii) where Caruolo’s injury occurred.
The plaintiffs were domiciled in Rhode Island throughout this action. Crane is incorporated in Delaware and its principal place of business is in Illinois. This Court has not yet decided whether, for choice of law purposes, a corporate defendant is domiciled in its state of incorporation or in its principal place of business. We need not answer that question, however, to consider a false conflict. See Sheldon, 135 F.3d at 853 (identifying question but declining to answer it under the facts of the case because although each state triggered the application of a different Neumeier rule, the resulting choice of law was the same). Regardless of whether Crane is domiciled in Illinois or Delaware, Rhode Island law governs because, as discussed below, Caruolo’s dominant exposure to Crane’s products occurred in that state, thereby requiring application of the second Neumeier rule.
The district court found that Rhode Island was “the situs of Caruolo’s most regular and prolonged exposure.” Caruolo, 1999 WL 147740, at . In support of this finding, the district court reviewed Caruolo’s testimony regarding his work history: Caruolo was exposed to Crane’s asbestos products in the following locations: (1) on the high seas while serving aboard the U.S.S. Missouri from 1944 to 1946; (2) in the Brooklyn Navy Yard during overhauls of the U.S.S. Missouri; (3) on the high seas while serving aboard the U.S.S. Hawkins from 1947 to 1949; (4) on the high seas while aboard the U.S.S. Leary from 1949 to 1950; (5) in the Norfolk Navy Shipyard during overhauls of the U.S.S. Hawkins and the U.S.S. Leary; and (6) from 1950 to 1988 at Rhee Elastic in Rhode Island. Id. We review the district court’s finding for clear error. See Advani Enters., Inc. v. Underwriters at Lloyds, 140 F.3d 157, 162 (2d Cir.1998). It is unclear where Caruolo was domiciled during his Navy years. He testified that he reported for basic training in Samson, New York, so Caruolo may have been a citizen of New York at that time, in which case we can assume that he was a citizen of New York while on the high seas. However, even if Caruolo was a New York domiciliary for the five to six years of his Navy service, that period of asbestos exposure was substantially shorter than the period of his exposure to Crane’s asbestos-containing products in Rhode Island. Car-uolo testified that he did not work with Crane’s products for the first 10 years of his work at Rhee; however, he did occasionally work with Crane’s products for his remaining 28 years at Rhee. The district court’s finding that Caruolo’s most “regular and prolonged” exposure occurred in Rhode Island is not clearly erroneous. Because we find that the district court did not err in determining the situs of Caruolo’s injury, we uphold the district court’s application of the second Neumeier rule. Regardless of Crane’s domicile, plaintiffs were domiciled in Rhode Island and the injury occurred there. It therefore was appropriate to find that Rhode Island law applies under the second Neu-meier rule. Analysis of Rhode Island’s contacts to this case confirms that it has the greatest interest in the joint and several liability issue. Crane sold its asbestos products in Rhode Island, and plaintiffs were Rhode Island domiciliaries; so both parties have “purposefully associated themselves” with Rhode Island. Cooney v. Osgood Mach., Inc., 81 N.Y.2d 66, 595 N.Y.S.2d 919, 923, 612 N.E.2d 277 (1993). Moreover, because plaintiffs were Rhode Island domiciliaries, Rhode Island has a significant interest in ensuring that they are adequately compensated under Rhode Island’s joint and several liability regime. See Sheldon, 135 F.3d at 853-54. New York, on the other hand, has at best a lesser interest in applying its joint and several liability rule to this case because neither party is a New York domiciliary; New York’s only significant connection to this case is that some (but by no means all) of Caruolo’s asbestos exposure occurred within its borders. Under New York choice of law rules, “the locus jurisdiction has at best a minimal interest in determining the right of recovery or the extent of the remedy.” Id. at 854 (internal quotation marks and citations omitted). Accordingly, the district court properly applied Rhode Island law to the issue of joint and several liability.