644 F.2d 594 (7th Cir. 1981)
The tragedy occurred on May 25, 1979, when a DC-10 jet airplane designed and built by McDonnell Douglas Corporation and operated by American Airlines crashed shortly after takeoff from O'Hare International Airport in Chicago, Illinois.1 The plane had been scheduled to fly from Chicago to Los Angeles as American's Flight 191 but lost an engine during takeoff, killing all 271 persons aboard the plane and two persons on the ground.2
One hundred eighteen wrongful death actions arising out of the crash were originally filed in Illinois, California, New York, Michigan, Hawaii, and Puerto Rico.3 The plaintiffs and their decedents were residents of California, Connecticut, Hawaii, Illinois, Indiana, Massachusetts, Michigan, New Jersey, New York, Vermont, Puerto Rico, Japan, the Netherlands, and Saudi Arabia.4 Many of the complaints requested awards of both punitive and compensatory damages.5
The defendants are McDonnell Douglas Corporation, a Maryland corporation with its principal place of business in Missouri, and American Airlines, a Delaware corporation whose principal place of business was in New York at the time of the crash but later moved to Texas. Plaintiffs alleged that MDC's conduct in the design and manufacture of the DC-10 in California was egregious and that American's conduct regarding maintenance of the DC-10 at its Oklahoma base was egregious.
Both defendants moved in the district court to strike the claims for punitive damages.6 The Judicial Panel on Multidistrict Litigation transferred the cases to the Northern District of Illinois for pretrial purposes.7 Using the choice-of-law rules of each state where the actions had originally been filed, the district court allowed the motions to strike punitive damage claims against American but denied the motions with regard to MDC in actions filed in Illinois, California, New York, Michigan, Puerto Rico, and Hawaii.8
The defendants appealed the district court's denial of the motions to strike punitive damages claims against MDC.9 The Seventh Circuit heard argument on September 25, 1980, and decided the appeal on January 5, 1981.10
Whether the laws of Illinois, Missouri, California, Oklahoma, New York, Texas, and Hawaii permit recovery of punitive damages in wrongful death actions?11
State law determines whether punitive damages are available in wrongful death actions, requiring examination of each state's statutes and precedents to identify whether recovery is permitted.12
No. Under Illinois law, punitive damages are not permitted in wrongful death actions, as held in Mattyasovszky v. West Towns Bus Co.13 Missouri law permits recovery for aggravating circumstances in death cases, which serve punitive purposes according to longstanding precedent.14 California law limits punitive damages to survival actions and prohibits them in wrongful death cases, as confirmed in Tarasoff and other decisions.15 Oklahoma law allows punitive damages in wrongful death actions.16 New York law prohibits punitive damages in wrongful death actions.17
Texas law permits punitive damages in wrongful death actions by constitutional provision.18 Hawaii law limits recovery to compensation and does not permit punitive damages, as the purpose of the wrongful death act is compensation rather than punishment.19
The laws of Illinois, Missouri, California, Oklahoma, New York, Texas, and Hawaii are divided on the availability of punitive damages in wrongful death actions.20
Whether denial of punitive damages in wrongful death actions while allowing them in other personal injury actions violates the equal protection clause of the federal Constitution?21
Statutory classifications denying punitive damages in wrongful death actions are subject to rational basis review and pass constitutional muster if rationally related to the legitimate state interest of protecting defendants from excessive liability.22
No. The classification involves no suspect class or fundamental right, so rational basis review applies.23 The purpose of avoiding excessive liability is legitimate, and denial of punitive damages is a rational means of achieving that purpose, consistent with precedents such as Huff v. White Motor Corp. and In re Paris Air Crash.24
Denial of punitive damages in wrongful death actions does not violate the equal protection clause.25
Whether, under the choice-of-law rules of Illinois, the law of the place of injury, the place of misconduct, or the principal place of business governs the availability of punitive damages against MDC and American?26
Under Illinois' most significant relationship test from the Restatement (Second) of Conflict of Laws, when the place of misconduct and principal place of business present a true conflict with equal interests, the law of the place of injury applies if it has strong interests in both air safety and protection of air transportation corporations.27
No. The place of misconduct for MDC is California, which does not allow punitive damages, while its principal place of business is Missouri, which does allow them.28 These states have equal and opposing interests, creating a true conflict.29 The same holds for American, with misconduct in Oklahoma allowing punitive damages and its principal place of business in New York disallowing them.30 Because the place of injury is Illinois, which has strong interests in air safety and protecting air transportation corporations doing business in the state, Illinois law prohibiting punitive damages governs the issue for both defendants.31
Illinois law governs and prohibits punitive damages against both MDC and American.32
Related opinions on this issue
Circuit Judge Cudahy joined the result without reservation.33 He questioned whether Missouri would in fact have a strong interest in imposing financial sanctions on its own corporate domiciliary for extraterritorial torts affecting non-residents of Missouri.34 Such a finding may impute an unusual level of altruism to Missouri policy.35
It may also overstate the commitment of Missouri or any other state to corporate accountability when both the misconduct and the injuries took place outside the borders of the domiciliary state.36 The questions raised about state policy toward extraterritorial torts underline the need for a federal law to govern tort liability for these unthinkable air disasters.37
Whether, under California's comparative impairment approach, the law of the place of misconduct, the principal place of business, or the place of injury governs the availability of punitive damages against MDC and American?38
Under California's comparative impairment test, when the place of misconduct and principal place of business have strong and equal commitments to their conflicting policies, the law of the place of injury applies as the factor that tips the scales when all other interests are balanced.39
No. Both the place of misconduct and principal place of business have strong commitments to their policies with no moderate interpretation resolving the true conflict.40 Missouri has a strong current interest in its punitive damages law for a domiciliary corporation.41 California has a strong commitment to its policy disallowing punitive damages in wrongful death cases.42 Oklahoma and New York present the same equal conflict for American.43
Illinois has unique interests in both the awarding and the denial of punitive damages because the crash occurred there and because Illinois has strong interests in the protection of airplane-related industries.44 These interests tip the scales against the allowance of punitive damages.45
California's comparative impairment approach results in application of Illinois law prohibiting punitive damages against both defendants.46
Whether, under the choice-of-law rules of New York, Michigan, Puerto Rico, and Hawaii, punitive damages claims against MDC and American should be permitted in the wrongful death actions arising from the crash?47
Under the choice-of-law rules of New York, Michigan, Puerto Rico, and Hawaii, when a true conflict exists between states with equal interests, the law of the place of injury governs and prohibits punitive damages.48
No. New York's most significant relationship test leads to Illinois law.49 Michigan's weakened lex loci delicti rule, when unresolved, applies the law of the place of injury.50 Puerto Rico applies lex loci delicti, selecting Illinois law. Hawaii, presumed to apply its own law when choice-of-law rules are undetermined, prohibits punitive damages.51 In each instance Illinois law prohibiting punitive damages controls.52
Punitive damages claims are not permitted under the choice-of-law rules of New York, Michigan, Puerto Rico, and Hawaii.53