Opinion ID: 4536271
Heading Depth: 5
Heading Rank: 2

Heading: Both Jurisdictions Have a Legitimate Interest

Text: We must next determine what interest, if any, Japan and California have in the application of their respective laws to this case. Offshore Rental, 583 P.2d at 724–25. Only if each jurisdiction involved has a legitimate but conflicting interest in applying its own law will there be a “true conflict,” requiring us to move on to step three of the analysis. Id. at 725–26. The plaintiffs agree that there is a true conflict, but contend that Japan’s interests are not “strong.” GE argues that there is no true conflict because, while Japan has substantial, legitimate interests in applying its laws, California’s interests are “minimal at best.” It asserts that the plaintiffs’ claims directly implicate conduct that occurred in Japan and is subject to a Japanese liability-limiting statute, giving Japan strong legitimate interests in having its law applied. In contrast, GE contends that California’s only interest is in ensuring compensation for California-resident victims, which would be equally served under Japanese law. At this point in the analysis, our only consideration is whether each jurisdiction has legitimate interests in seeing its own law applied in this case and whether those interests conflict. Weighing the strength of California’s interests 22 COOPER V. TOKYO ELEC. POWER CO. against Japan’s occurs at the third step, which we need only reach if there is a true conflict. (1) Japan’s Interests. The parties generally agree that Japan has legitimate interests in having its law applied to this case. These interests are: (1) adjudicating claims arising from a natural disaster that occurred in Japan, (2) adjudicating claims arising from injuries that occurred in Japan, and (3) providing consistent allocation of liability for nuclear disasters under the Compensation Act. The final interest is of particular importance. As the California Supreme Court has stated: When a state adopts a rule of law limiting liability for commercial activity conducted within the state in order to provide what the state perceives is fair treatment to, and an appropriate incentive for, business enterprises, we believe that the state ordinarily has an interest in having that policy of limited liability applied to out-of-state companies that conduct business in the state, as well as to businesses incorporated or headquartered within the state. McCann v. Foster Wheeler LLC, 225 P.3d 516, 530 (Cal. 2010). Here, Japan’s Compensation Act limits liability for participants in its nuclear industry, in part as an incentive for businesses to participate. This is a “real and legitimate interest” in having Japanese law apply to the case. Id. at 531–32. (2) California’s Interest. California law holds manufacturers strictly liable for products defectively COOPER V. TOKYO ELEC. POWER CO. 23 manufactured or designed. Hufft, 5 Cal. Rptr. 2d at 379. California courts have described the state’s interest underlying this law: [It] is to [e]nsure that the costs of injuries resulting from defective products are borne by the manufacturers that put such products on the market rather than by the injured persons who are powerless to protect themselves. The other purposes, or public policies, behind the creation of the doctrine of strict products liability in tort as a theory of recovery are:
negligence may be present but difficult to prove; (2) to provide an economic incentive for improved product safety; (3) to induce allocation of resources towards safer products; and (4) to spread the risk of loss among all who use the product. Barrett v. Superior Court, 272 Cal. Rptr. 304, 309 (Ct. App. 1990) (internal quotation marks and citations omitted). These interests are certainly legitimate. GE, however, contends that these interests are insignificant in this case, arguing that the plaintiffs “cannot manufacture a true conflict by invoking irrelevant policies and interests.” It argues that policies underlying California’s strict-products-liability law “are immaterial here because there are no ‘products’ at issue.” But that is not the case. While it is true that the district court previously commented that “[t]he FNPP was evidently not a product ‘placed on the market,’” Cooper II, 166 F. Supp. 3d at 1129, the claims against GE do not arise out of the FNPP as a single entity. 24 COOPER V. TOKYO ELEC. POWER CO. GE manufactured particular parts of the Fukushima Daiichi facility—the reactors. The fact that reactors were not marketed broadly to consumers does not detract from the fact that they were designed and built for the FNPP. That is sufficient, in a proper case, to be subject to California’s products liability rules. See Rawlings v. D.M. Oliver, Inc., 159 Cal. Rptr. 119, 122 (Ct. App. 1979) (holding that the fact that a product was not mass produced has no effect on the manufacturer’s responsibilities in manufacturing and selling products). Although there are no California defendants in this case, there are plaintiffs who are California residents. And California has a legitimate interest in ensuring that its injured residents are compensated for injuries resulting from the design and manufacture of faulty products, as well as providing an easy way to prove liability. So, the interests served by California’s strict-products-liability laws are also relevant. We conclude, as did the district court, that there is a socalled “true conflict” here. California has an interest in holding manufacturers of defective products liable in tort to ensure compensation for its residents. Japan, on the other hand, has an interest in consistent application of its liabilitylimiting statute to businesses participating in its nuclear industry. We therefore move to the final step of the analysis.