Friday, February 19, 2010
S.C. Tosses Ruling Favoring Plaintiff in Asbestos Suit
Law of State Where Exposure Occurred May Bar California Claim—Justices
By KENNETH OFGANG, Staff Writer
A longtime California resident’s claim for asbestos-related cancer may be subject to a statute of repose in the state where the alleged exposure occurred, the California Supreme Court unanimously ruled yesterday.
In holding that the interests served by the Oklahoma statute of repose are sufficiently weighty to apply them to a suit brought in California, at least in a case where the plaintiff was an Oklahoma resident at the time of the exposure, the justices reversed a decision by Div. Eight of this district’s Court of Appeal.
The Court of Appeal had reinstated a suit by Terry McCann and his wife against manufacturer Foster Wheeler. McCann, a California resident since 1975, contends that his asbestos-related cancer, or mesothelioma, is a result of exposure during the installation of a boiler 50 years ago.
Foster Wheeler, a New York company, allegedly designed and manufactured the boiler, which was installed at the Oklahoma refinery where McCann worked in the late 1950s. McCann’s condition was diagnosed in 2005, four years after he retired as executive director of Toastmasters International.
Los Angeles Superior Court Judge Jon Mayeda—now retired—granted summary judgment in favor of Foster Wheeler based on an Oklahoma law barring tort claims for injury arising from “the design...of an improvement to real property” more than 10 years after substantial completion of the improvement.
In doing so, Mayeda rejected the plaintiffs’ contentions that California choice-of-law rules, as well as the California borrowing statute, preclude application of Oklahoma law to the case, and that the Oklahoma statute was inapplicable in any event because Foster Wheeler was not the designer of a real property improvement.
In reversing, the Court of Appeal agreed with the plaintiffs that California’s interest in protecting state residents who are tort victims and whose claims are filed within the period of the statute of limitations outweighed any interest of Oklahoma’s, particularly since Foster Wheeler does business worldwide and has no particular ties to Oklahoma.
Chief Justice Ronald M. George, however, writing for the high court, said Oklahoma had an interest in protecting commercial activity that took place within the state, regardless of where the particular defendant is based.
“Although here it is clear that plaintiff’s move to California was not motivated by a desire to take advantage of the opportunities afforded by California law and cannot reasonably be characterized as an instance of forum shopping...the displacement of Oklahoma law limiting liability for conduct engaged in within Oklahoma, in favor of the law of a jurisdiction to which a plaintiff subsequently moved, would—notwithstanding the innocent motivation of the move—nonetheless significantly impair the interest of Oklahoma served by the statute of repose,” the chief justice wrote.
“If Oklahoma’s statute were not to be applied because plaintiff had moved to a state with a different and less ‘business-friendly’ law, Oklahoma could not provide any reasonable assurance—either to out-of-state companies or to Oklahoma businesses—that the time limitation embodied in its statute would operate to protect such businesses in the future. Because a commercial entity protected by the Oklahoma statute of repose has no way of knowing or controlling where a potential plaintiff may move in the future, subjecting such a defendant to a different rule of law based upon the law of a state to which a potential plaintiff ultimately may move would significantly undermine Oklahoma’s interest in establishing a reliable rule of law governing a business’s potential liability for conduct undertaken in Oklahoma.”
George rejected the argument that California had a heightened interest in applying its law because McCann lived here when he was diagnosed. The situation is no different than an auto accident case where the plaintiff is injured in another state—whose law California would apply—but returns here for treatment.
The case must go back to the Court of Appeal, George said, to address the issue of whether “the boiler in question constituted an improvement to real property within the meaning of the relevant Oklahoma statute of repose.”
The case, McCann v. Foster Wheeler LLC, 10 S.O.S. 874, was argued in the Supreme Court by Paul C. Cook of El Segundo’s Waters Kraus & Paul for the plaintiffs and by Frederick D. Baker of the San Francisco office of Sedgwick, Detert, Moran & Arnold for Foster Wheeler.
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