Attorneys for Appellants Attorneys for Appellee
Karl Mulvaney Peter D. Kiesler
Nana Quay-Smith Assistant Attorney General
Indianapolis, Indiana
Jeffrey S. Bucholtz
Joel S. Perwin Deputy Assistant Attorney General
Michael S. Olin
Miami, Florida Susan W. Brooks
United States Attorney
Arthur Raynes
Stephen Raynes Thomas E. Kieper
Philadelphia, Pennsylvania Assistant United States Attorney
Joseph Lamonaca Terence M. Healy
Chadds Ford, Pennsylvania Rodney Patton
United States Department of Justice
Washington, District of Columbia
In the
Indiana Supreme Court
_________________________________
No. 94S00-0308-CQ-377
Louis Simon, et al.,
Appellants (Plaintiffs below),
v.
United States
Appellee (Defendant below).
_________________________________
John Fare,
Appellant (Cross-Plaintiff
below),
v.
United States
Appellee (Cross-Defendant
below).
_________________________________
On Certification from U.S. Court of Appeals, Third Circuit,
Nos. 02-2945, 02-3997
_________________________________
March 30, 2004
Shepard, Chief Justice.
The U.S. Court of Appeals for the Third Circuit has certified two
questions regarding Indiana’s choice-of-law rules. We hold that there is a
true conflict between the choice of law rules of Indiana and the District
of Columbia because Indiana does not engage in dépeçage and has not adopted
the policy analysis component of the Restatement (Second) of Conflict of
Laws approach. In so saying, we restate the Indiana choice of law analysis
outlined in Hubbard Manufacturing Co. v. Greeson, 515 N.E.2d 1071 (Ind.
1987).
Statement of Facts
This case involves a wrongful death suit brought against the United
States by the estates of individuals killed in the crash of a small private
aircraft. The flight began in Pennsylvania, included an overnight stop in
Ohio, and ended in Kentucky while attempting to land at the Somerset
Airport. The plane never flew through Indiana airspace. Two of the
passengers lived in Pennsylvania and one lived in Georgia; the pilot lived
in New Jersey but worked in Pennsylvania. The plane was owned by a
Delaware-based, wholly-owned subsidiary of a company incorporated in
Pennsylvania, where the plane was hangared.
Relying on a chart published by the Federal Aviation Administration in
Washington, D.C., the pilot sought clearance to complete a Simplified
Directional Facility (SDF) approach due to the poor weather conditions.
FAA air traffic controllers based at Indianapolis cleared the approach
despite the fact that the instrumentation required for the landing at
Somerset Airport had not been operational for several years. While
attempting to land, the plane struck a radio tower and crashed.
Plaintiffs filed four wrongful death complaints in the U.S. District
Court for the Eastern District of Pennsylvania against the United States
under the Federal Tort Claims Act (FTCA). They alleged (1) negligence in
the publication at Washington of a chart incorrectly showing that a long-
inactive instrument landing approach at the airport was active; and (2) the
negligence of Indiana-based air traffic controllers in clearing the pilot
for an approach that was out of service, neglecting to monitor the radar
during the flight's landing approach, failing to alert the pilot that he
was in peril of striking an obstacle, and failing to respond to the pilot's
last-minute radio communications. (App. at 52-57).
Of these cases, two have settled. The remaining two, which were
brought on behalf of the pilot and one of the passengers from Pennsylvania,
are the subject of an interlocutory appeal to the Third Circuit. To
facilitate its resolution of that appeal, the Third Circuit certified the
following questions to us:
1. Whether a true conflict of law exists between Indiana’s and the
District of Columbia’s choice-of-law rules; and
2. If a true conflict exists and Indiana’s choice-of-law rules
therefore control per the “last significant act” test, how should a
split among the choice-of-law factors identified in Hubbard
Manufacturing Co., Inc. v. Greeson, 515 N.E.2d 1071 (Ind. 1987), be
resolved in choosing a jurisdiction’s substantive law when one
factor points toward Indiana, another toward Pennsylvania, and the
third is indeterminate, and which jurisdiction’s substantive law
would Indiana apply under the facts of this case?
Simon v. United States, 794 N.E.2d 1087 (Ind. 2003). We accepted the
certification pursuant to Appellate Rule 64.
I. Does a true conflict exist between the choice-of-law rules
of Indiana and the District of Columbia?
Under the FTCA, a court should apply the whole law, including choice-
of-law rules, of the place where the acts of negligence occurred. 28
U.S.C. §§ 1346(b), 2674; Richards v. United States, 369 U.S. 1 (1962). In
this case, acts of negligence occurred in both Indiana and D.C. The Third
Circuit held that if there is a true conflict between the choice-of-law
rules of the two jurisdictions, it will apply the law of the place where
the last significant act or omission occurred, in this case Indiana. Simon
v. United States, 341 F.3d 193, 203-04 (3rd Cir. 2003). The first
certified question asks whether such a conflict exists. The Third Circuit
identified two areas of potential conflict: (1) the use of dépeçage and
(2) the role of policy. We conclude that a true conflict exists between
the rules of the two jurisdictions.
A. Dépeçage
Dépeçage is the process of analyzing different issues within the same
case separately under the laws of different states. Although Indiana
allows different claims to be analyzed separately, it does not allow issues
within those counts to be analyzed separately. For example, an Indiana
court might analyze a contract claim and a tort claim independently but
would not separately analyze and apply the law of different jurisdictions
to issues within each claim. Dépeçage has not been part of Indiana’s
lexicon.[1]
Under our history as a lex loci delecti state, Indiana courts applied
the law of the state in which the tort was committed. Hubbard
Manufacturing Co. v. Greeson, 515 N.E.2d 1071, 1073 (Ind. 1987). Courts
did not consider whether the law of a different state might be more
relevant to the claim, much less to individual issues within the claim.
Plaintiffs argue that our liberalization of the lex loci rule in Hubbard
implicitly adopted dépeçage. (Appellants Br. 24-25.) They say that
because the opinion employs language similar to that used in the
Restatement (Second) of Conflict of Laws and cites the Restatement for
factors courts might consider when the place of the tort is insignificant,
Hubbard must have also adopted the Restatement’s use of dépeçage. Id.
This argument is unpersuasive. First, our opinion in Hubbard made it
clear that the Second Restatement factors listed in Hubbard were mere
examples of factors that courts might consider. We cited the Restatement
as the source of the listed contacts, but the list was not an exclusive
one. We did not adopt the Restatement’s approach to resolving conflicts.
Second, the Hubbard language relied on by plaintiffs, though similar to the
language used in the Restatement, does not amount to an adoption of
dépeçage, a matter not even contemplated in the resolution of that appeal.
The language at issue is the Court’s instruction that “[t]hese factors
should be evaluated according to their relative importance to the
particular issues being litigated.” Hubbard, 515 N.E.2d at 1074. Read
alone or in the context of the opinion, the statement recognizes that the
relevance of the various factors will vary from case to case due to the
particular issues being litigated and instructs courts to analyze the
factors according to their relative importance. It does not suggest that a
court apply different law to individual issues. Any ambiguity is easily
eliminated by the Court’s application of the test to the facts of Hubbard:
the Court applied the factors to the wrongful death action and found that
Indiana law applied; it did not make separate determinations for individual
issues within the action.[2]
Moreover, because Indiana is still primarily a lex loci state and lex
loci analysis does not allow for the application of dépeçage, most cases
necessarily would not deploy dépeçage. It would be illogical, therefore,
to incorporate it into the second step of the Hubbard analysis.
On the simple merits of dépeçage as a judicial technique, we find
ourselves unimpressed. By making separate determinations for each issue
within a claim, the process amalgamates the laws of different states,
producing a hybrid that may not exist in any state. This is a problem for
several reasons. First, legislatures “may enact a given law only because
of its expected interaction with a complementary law.” Erin A. O'Hara &
Larry E. Ribstein, From Politics To Efficiency In Choice Of Law, 67 U. Chi.
L. Rev. 1151, 1193 (2000). For example, a legislature may allow recovery
for certain injuries or impose a low standard of proof for liability but
place a cap on the damages that might be recovered or adopt immunities for
certain potential defendants. Id. Consequently, applying the law outside
the context of the other laws in the jurisdiction may contravene
legislative intent. In addition, applying a law in isolation increases the
likelihood that its purpose and importance will be misconstrued, thereby
thwarting state policy. William H. Allen & Erin A. O'Hara, Second
Generation Law And Economics Of Conflict Of Laws: Baxter's Comparative
Impairment And Beyond, 51 Stan. L. Rev. 1011, 1033 (1999). Ultimately, by
applying dépeçage a court may hinder the policy of one or more states
without furthering the considered policy of any state.
Dépeçage may also produce unfair results because the hybrid law may be
more favorable to one party than another, allowing a result that could not
be reached if the laws of any one state were applied. As Brainerd Currie
said, a party “should not be allowed to put ‘together half a donkey and
half a camel, and then ride to victory on the synthetic hybrid.’”
Christopher G. Stevenson, Depecage: Embracing Complexity to Solve Choice-of-
Law Issues, Note, 37 Ind. L. Rev. 303, 320 (2003) (quoting Frederick K.
Juenger, How Do You Rate a Century?, 37 Williamette L. Rev. 89, 106 (2001)
(quoting Brainerd Currie)). Moreover, dépeçage compounds the advantage of
parties with greater access to legal resources because it requires a
separate analysis of each issue for each state involved.
Because D.C.’s choice-of-law rules permit dépeçage[3] and Indiana’s do
not, there is a true conflict between the choice-of-law rules used by D.C.
and Indiana.
B. Role of Policy
Although Indiana and the District of Colombia consider the same basic
contacts when analyzing a conflict-of-law problem, we approach the problem
from different perspectives. “D.C. implements a hybrid of the
‘governmental interest’ and Restatement (Second) methodologies that
identifies the governmental policies underlying the applicable laws and
determines which state’s policy would be most advanced by having its laws
applied to the facts of the case.” Simon, 341 F.3d at 200 (citing Raflo v.
United States, 157 F. Supp. 2d 1, 4 (D.D.C. 2001)). Indiana does not
require that courts undertake the difficult and ultimately speculative task
of identifying the policies underlying the laws of multiple states and
weighing the potential advancement of each in the context of the case.[4]
Indiana courts, assuming they reach the second step of the Hubbard
analysis, simply look at the contacts that exist between the action and the
relevant states and determine which state has the most significant
relationship with the action.[5]
This difference in approach may or may not lead to the selection of
different states in a given case. We need not determine whether the
difference is a false conflict in this case, however, because the
difference between the jurisdictions’ stances on dépeçage is sufficient to
create a true conflict between the laws of Indiana and D.C.
II. Indiana’s Choice-of-law Rules
The second certified question asks us to determine whether the
substantive law of Indiana or Pennsylvania would apply under Indiana
conflicts law. Assuming that Indiana’s choice-of-law rules apply, the
court should apply Indiana substantive law.
As Judge Calabresi said so famously, we live in an age that is
“choking on statutes.” Guido Calabresi, A Common Law for the Age of
Statutes 1 (1982). Rules about choice of law are among the few fields
still dominated by judge-made doctrine. Some seventeen years ago, this
Court concluded that Indiana’s tradition of adherence to lex loci served
well in many cases, but not in all. Saying that rigid application of lex
loci could lead to absurd results, we set out to liberalize our approach.
Hubbard, 515 N.E.2d at 1073. One way to do that, of course, would have
been to adopt the Restatement (Second) of Conflict of Laws. It seemed an
unattractive path then, as it does now. The Second Restatement has been an
inviting target for critics who assert that it supplies little real
guidance to courts (much less to actors). As Professor Shreve observed,
“The Second Restatement has attracted many judges (if fewer commentators),
but it has not prevented the subject of choice of law from reaching what
many believe is a state of crisis.” Gene R. Shreve, Introduction,
Symposium: Preparing for the Next Century—A New Restatement of Conflicts?,
75 Ind. L.J. 399, 399 (2000). Another commentator noted:
The second Restatement thus was a hodgepodge of all theories. A
court was to compare apples, oranges, umbrellas, and pandas, and
determine which state's law to apply by the relative importance
assigned to these factors. The supposed virtue of the second
Restatement was the freedom it provided courts to weigh all
conceivably relevant factors and then tailor the choice of law
to the circumstances of the case. That very flexibility was,
however, equally its vice: courts could arrive at any outcome
applying its factors, and no one could predict in advance what
state's law governed their actions. The problem was not merely
that courts were afforded the opportunity to be manipulative;
the problem was that even a court without such desire could find
in the second Restatement no guidance as to how it was to decide
a case after identifying the factors in play.
Michael H. Gottesman, Draining the Dismal Swamp: The Case for Federal
Choice of Law Statutes, 80 Geo. L.J. 1, 8 (1991) (footnote omitted).[6]
Accordingly, we saw some value in using lex loci as a starting point and
said that it would govern unless the state where the tort occurred “is an
insignificant contact.” Hubbard, 515 N.E.2d at 1073.
Thus, in tort cases Indiana choice-of-law analysis now involves
multiple inquiries. As a preliminary matter, the court must determine
whether the differences between the laws of the states are “important
enough to affect the outcome of the litigation.” Hubbard, 515 N.E.2d at
1073. If such a conflict exists, the presumption is that the traditional
lex loci delicti rule (the place of the wrong) will apply. Id. Under this
rule, the court applies the substantive laws of the “the state where the
last event necessary to make an actor liable for the alleged wrong takes
place.” Id.
This presumption is not conclusive, however. It may be overcome if
the court is persuaded that “the place of the tort ‘bears little
connection’ to this legal action.” Id. at 1074.
If the location of the tort is insignificant to the action, the court
should consider other contacts that may be more relevant, “such as: 1) the
place where the conduct causing the injury occurred; 2) the residence or
place of business of the parties; and 3) the place where the relationship
is centered.” Id. at 1073-74 (citing Restatement (Second) of Conflict of
Laws § 145(2) (1971)). These factors are not an exclusive list nor are
they necessarily relevant in every case. All contacts “should be evaluated
according to their relative importance to the particular issues being
litigated.” Id. at 1074. This evaluation ought to focus on the essential
elements of the whole cause of action, rather than on the issues one party
or the other forecasts will be the most hotly contested given the
anticipated proofs.
The parties argue that either Indiana or Pennsylvania substantive law
should be applied in this case. First, we must determine whether there is
a true conflict between the laws of the two states. Because Indiana does
not employ dépeçage, we consider the wrongful death cause of action as a
whole. The Third Circuit determined that this case is essentially about
damages and identified three areas where the applicable Indiana law
differed from Pennsylvania law: (1) “Pennsylvania allows joint-and-several
liability and right of contribution, while Indiana does not;”[7] (2) unlike
Pennsylvania, “Indiana does not permit recovery for both wrongful death and
survival damages;”[8] and (3) “unlike Indiana, Pennsylvania damages include
the decedent’s conscious pain and suffering from the moment of injury to
the time of death.” Simon, 341 F.3d at 204-05. We associate ourselves
with the conclusion our Third Circuit friends have reached that there are
significant differences between the substantive laws the two states would
apply to the trial of these cases.
Because there is a conflict between the laws of Indiana and
Pennsylvania that is important enough to affect the outcome of the
litigation, we must determine which law to apply. The presumption is that
the law of the place of the tort applies because in a “large number of
cases, the place of the tort will be significant and the place with the
most contacts.” Hubbard, 515 N.E.2d at 1073. Our next inquiry, therefore,
is the location of the tort, or where the last event necessary to make the
United States liable occurred. Id.[9] For the United States to be held
liable in this wrongful death action, the plaintiffs must prove that a
wrongful act or omission caused the deaths of the decedents. Ind. Code
Ann. § 34-23-1-1 (West 1999). In this case, the allegedly negligent acts
of the United States, the publication of the inaccurate chart and
negligence of the air traffic controllers, occurred prior to the plane
crash. Therefore the last event necessary to make the United States liable
was the injury, which occurred when the plane crashed in Kentucky and the
decedents died.[10] Consequently, under lex loci delicti, Kentucky law
would apply.
Next, we must examine whether the place of the tort “bears little
connection” to the legal action. Hubbard, 515 N.E.2d at 1074. This is one
of the rare cases in which the place of the tort is insignificant. The
negligence at issue occurred in Indiana and the District of Colombia, and
none of the victims or the parties are residents of Kentucky (except to the
extent that the United States is a “resident” of every state). The plane
flew over multiple states during the course of the flight, and the crash
might have occurred anywhere. In addition, unlike in cases involving an
automobile accident, the laws of the state where the crash occurred did not
govern the conduct of the parties at the time of the accident.
Consequently, we conclude that the place of the tort was an insignificant
contact in this case.
Because we hold that the place of the tort is insignificant to this
action, we reach the second step from Hubbard and must consider what other
contacts exist and evaluate them according to their relative importance to
the litigation at hand. Id. We apply the law of the state with the most
significant relationship to the case. Hubbard suggests three factors that
might be relevant: “1) the place [or places ]where the conduct causing the
injury occurred; 2) the residence or place of business of the parties; and
3) the place where the relationship is centered.” Id. This is not a
comprehensive list, of course, and other relevant factors may be
considered, though we see no others that are particularly pertinent in this
case. “These factors should not be applied mechanically; rather, they are
to be ‘evaluated according to their relative importance to the particular
issues before the court.’” Jean v. Dugan, 20 F.3d 255, 261 (7th Cir. 1994)
(quoting Hubbard, 515 N.E.2d at 1074).
As with many difficult choice-of-law cases, in this instance the
contacts are splintered: the injury occurred in a different state than the
allegedly negligent conduct, which occurred in a different state than where
the plaintiffs reside. The gravamen of this case is the allegedly
negligent conduct.[11] Consequently, the most important relevant factor is
where the conduct causing the injury occurred because an individual’s
actions and the recovery available to others as a result of those actions
should be governed by the law of the state in which he acts. [12]
Here, the negligent conduct occurred in both Indiana and D.C. The
conduct in Indiana was more proximate to the harm, and none of the parties
are arguing that D.C. law should apply. The residence or place of business
of a party, while important in cases involving family law or asset
distribution, is not a particularly relevant contact in this case. People
do not take the laws of their home state with them when they travel but are
subject to the laws of the state in which they act. Moreover, it is the
conduct of the FAA and the air traffic controllers that is at issue, not
the conduct of the plaintiffs. Finally, in a case such as this where the
contact between the allegedly negligent party and the injured party is
fleeting, there is no real relationship and therefore no place where that
relationship could be centered.
Consequently, we hold that Indiana has a more significant relationship
with the case and, therefore, under Indiana choice-of-law rules, Indiana
law would apply.
Conclusion
In conclusion, a true conflict exists between the choice-of-law rules
of Indiana and the District of Columbia, and assuming that Indiana choice-
of-law rules apply, Indiana would apply Indiana substantive law.
Dickson, Sullivan, Boehm, and Rucker, JJ., concur.
-----------------------
[1] In fact, we could find only one case decided in Indiana that even
mentions the word, and it was decided by a federal district court applying
Arizona conflict of law rules under the Federal Tort Claims Act. See
Estate of Sullivan v. United States, 777 F. Supp. 695, 698 (N.D. Ind.
1991).
[2] Cases decided since Hubbard have also followed this approach. See
Allen v. Great American Reserve Ins. Co., 766 N.E.2d 1157 (Ind. 2002)
(making choice-of-law determinations for different counts and different
defendants, but not for different issues); Jean v. Dugan, 20 F.3d 255 (7th
Cir. 1994) (evaluating factors according to their relative importance to
the issues before the court then making a determination for the tort as a
whole).
[3] “It is clear that D.C.’s choice-of-law rules permit depeçage.” Simon,
341 F.3d at 201.
[4] The Seventh Circuit calls this approach the “maddeningly indefinite
‘interest-balancing’ approach to conflicts issues.” Carter v. United
States, 333 F.3d 791, 794 (7th Cir. 2003).
[5] See, e.g., Jean v. Dugan, 20 F.3d 255, 261 (7th Cir. 1994); Cap Gemini
America, Inc. v. Judd, 597 N.E.2d 1272, 1282 (Ind. Ct. App. 1992).
[6] See also, Douglas Laycock, Equal Citizens of Equal and Territorial
States: The Constitutional Foundations of Choice of Law, 92 Colum. L. Rev.
249, 253 (1992) (“Trying to be all things to all people, it produced
mush.”); Friedrich K. Juenger, A Third Conflicts Restatement?, 75 Ind. L.J.
403, 405 (2000) (“Many courts seem to like the ‘mishmash,’ or ‘kitchen-
sink,’ concoction the restaters produced; after all, it enables judges to
decide conflicts cases any which way they wish. To be sure, the Second
Restatement's unprincipled eclecticism has done little to strengthen the
intellectual underpinnings of our discipline.”); Symeon C. Symeonides, The
Judicial Acceptance of the Second Conflicts Restatement: A Mixed Blessing,
56 Md. L. Rev. 1248, 1281 (1997) (“The Restatement (Second) was intended to
be and was ‘a transitional work.’”).
[7] Ind. Code Ann. § 34-51-2-12 (West 1999). To the extent that the long-
standing principle of joint and several liability may have been rejected in
Indiana, this is so only for claims governed by the Indiana Comparative
Fault Act. See Control Tech, Inc. v. Johnson, 762 N.E.2d 104, 109 (Ind.
2002).
[8] Cahoon v. Cummings, 734 N.E.2d 535, 543 (Ind. 2000) (not reversible
error to allow the plaintiff to proceed with both survival and wrongful
death actions because the jury was instructed that it could not award
damages for both).
[9] See, e.g., Allen v. Great American Reserve Ins. Co., 766 N.E.2d 1157,
1164-65 (Ind. 2002) (“if the plaintiffs have a valid claim, the reliance
and consequent damage incurred by the plaintiffs is the ‘last event’
necessary to establish the elements of misrepresentation of a material fact
reasonably relied upon”); Hubbard Mfg. Co. v. Greeson, 515 N.E.2d 1071,
1074 (Ind. 1987) (the last event necessary to make the defendant liable for
wrongful death was the fatal accident); Judge v. Pilot Oil Corp., 205 F.3d
335, 336-37 (7th Cir. 2000) (the last event necessary to make the
defendants liable occurred where victim was shot and killed); Jean, 20 F.3d
at 261 (in a defamation case where the conduct at issue is publication, the
place of the alleged tort is the place of injury, which under most
circumstances is the place of publication).
[10] See Consolidated Rail Corp. v. Allied Corp., 882 F.2d 254, 256 (7th
Cir. 1989) (“the injury is usually, but not always, the last act necessary
to complete the tort”).
[11] Cf. Jean, 20 F.3d at 261 (In a defamation case, the court said
“bearing in mind the Hubbard court's directive to evaluate the factors
‘according to their relative importance to the particular issues being
litigated,’ we think it clear that ‘the place where the conduct causing the
injury occurred’ is the most significant factor and that it favors our
application of Indiana law.” (citation omitted)).
[12] This principle is nearly universal.
Even under the modern methods there are certain issues for which
courts continue to apply the law of the place where the tort
occurred. The most notable of these issues are those concerning
a party's conduct. If the state of conduct has a law regulating
how the tortfeasor or victim is supposed to act in the
particular situation, courts will apply that standard rather
than the law of the parties' residence. In fact, this
preference for the conduct-regulating law of the conduct state
is virtually absolute, winning out even over the law of other
interested states. Courts as a practical matter recognize a
‘conduct-regulating exception' to the normal interest-based
choice-of-law methods.
John T. Cross, The Conduct-Regulating Exception In Modern United States
Choice-Of-Law, 36 Creighton L. Rev. 425, 425 (2003) (footnote omitted).
This is also true in Indiana. As the Seventh Circuit said when applying
Indiana law in Judge v. Pilot Oil Corporation:
The facts of this wrongful death case demonstrate that the last
act necessary to make the defendant liable, the shooting of
David, took place in Indiana. Furthermore, the parties' conduct
in Indiana that resulted in David's death will be the key
element to determine if the defendants should be held
accountable for David's death. The conduct of Pops and David
will be governed by Indiana law; if there is any justification
for Pops shooting David, it will be determined under Indiana
law. With all this, Indiana, the place of injury, cannot be
said to be insignificant.
205 F.3d 335, 337 (7th Cir. 2000) (emphasis added).