Barrett v . Ambient Pressure Diving 06-CV-240-SM 11/17/08 P UNITED STATES DISTRICT COURT

DISTRICT OF NEW HAMPSHIRE

Stephanie B . Barrett, individually; and as Administratrix of the Estate of Robert C . Barrett, deceased; and as natural mother of Madison Hope Barrett, a minor, Plaintiff Civil N o . 06-cv-240-SM v. Opinion N o .

Ambient Pressure Diving, Ltd., Defendant

O R D E R

Defendant has filed a supplemental motion for application of

English law. Defendant concedes that English law and New

Hampshire law are substantially similar with regard to the

liability aspects of plaintiff’s various causes of action, and

agrees to the application of New Hampshire law to all liability

questions.1 But, based on differences between the damages

available under the two legal schemes, defendant asks the court

t o : “(1) bar the request for hedonic damages on any of the

Plaintiff’s claims; and (2) bar the request for multiplied

damages on the Plaintiff’s Unfair Trade Practices claim, as no

such multiplication of damages is permitted under English

1 Defendant’s proposed jury instructions on strict liability, negligent design, and unfair and deceptive trade practices all describe New Hampshire law. Consumer Protection statutes.”2 Defendant has subsequently

identified two additional aspects of English law from which it

seeks to benefit — the unavailability of damages for loss of

consortium, see Massaquoi v . Virgin Atl. Airways, 945 F . Supp.

5 8 , 61 ( S . D . N . Y . 1996), and the English cost-shifting rule under

which “the prevailing party can generally recover its attorneys’

fees from the losing party,” R L S Assocs., L L C v . United Bank of

Kuwait P L C , 464 F . Supp. 2d 206, 210 ( S . D . N . Y . 2006).

Plaintiff objects, and asks the court to apply New Hampshire

law, which: ( 1 ) permits the recovery of hedonic damages in

wrongful death cases, see Marcotte v . Timberlane/Hampstead Sch.

Dist., 143 N . H . 3 3 1 , 336-345 (1999); ( 2 ) allows for an award of

double or treble damages in private actions brought under the

Consumer Protection Act, see N . H . R E V . S T A T . A N N . ( “ R S A ” ) § 358-

A : 1 0 , I ; ( 3 ) permits spouses and minor children to recover in

wrongful-death cases, see R S A 556:12, I I & I I I ; and ( 4 ) follows

the American rule, under which “each party is responsible for

paying his or her own counsel fees” unless there is “statutory

authorization [to the contrary], a court rule, an agreement

2 English law does, indeed, bar the recovery of hedonic damages in wrongful death cases, see Administration of Justice Act, 1982, c. 5 3 , § 1(1)(a), and would appear to bar the recovery of punitive or exemplary damages in product liability cases, see Broom v . Cassell & Co., (1972) App. Cas. 1027 (citing Rookes v . Barnard, (1964) App. Cas. 1129)).

2 between the parties, or an established exception [to the general

rule].” In re Martel,

3 , 63 (2008) (citing In re

Hampers,

(2006)).

The choice-of-law question presented here is somewhat

complicated. The plaintiff’s decedent, a Maryland resident, died

while diving in Pennsylvania, using a rebreather manufactured in

England, imported to North America through Canada, and purchased

by the decedent through a New Hampshire dive shop. Plaintiff

initially brought this suit in the District of Pennsylvania.

Venue was subsequently transferred to this court, given the lack

of personal jurisdiction over Ambient in Pennsylvania.

There are substantive differences between English damages

law and New Hampshire law. Accordingly, a choice-of-law analysis

is necessary. See Royal Bus. Group, Inc. v . Realist, Inc.,

(1st Cir. 1991). New Hampshire’s choice-of-law

rules apply. See Klaxon C o . v . Stentor Elec. Mfg. Co.,

(1941). (While there is some authority for the

proposition that a court adjudicating a case that has been

transferred to it should apply the choice-of-law rules of the

jurisdiction from which the case was transferred, see CPC Int’l,

Inc. v . Northbrook Excess & Surplus Ins. Co.,

(1st Cir. 1995), that proposition would seem inapplicable where,

3 as here, the transferring court lacked personal jurisdiction over

the defendant.)

The choice-of-law analysis is not, of course, limited to

consideration to the two options suggested by the parties. See

LaBounty v . Am. Ins. Co.,

3 8 , 741 (1982) (“While

Thompson urges that New Hampshire law should be applied and

LaBounty contends that Massachusetts law should control, we will

not be restricted to the choice of the parties where it is clear

that the interests of another State – Maine – are also

involved.”). 3 Because Robert Barrett was a resident of Maryland

at the time of his death, and the plaintiff is currently a

resident of that state, due consideration must be given to the

application of Maryland law, notwithstanding the fact that

neither party seeks its application. See

That Robert

Barrett died in Pennsylvania gives rise to that state’s interest

in the liability aspect of the case, but it is difficult to see

what compelling interest Pennsylvania might have with respect to

3 Pennsylvania appears to follow a similar rule. See Commonwealth v . Eichinger,

(Pa. 2007) (citing Commonwealth v . Ohle,

1 , 68 (Pa. 1983)) (“where more than one state has a substantial connection with the activity in question, the forum state may analyze the interests of all states involved and choose which state’s law to apply”) (emphasis added).

4 the damages a Maryland citizen might recover from an English

defendant.

The New Hampshire Supreme Court “has rejected the

traditional lex loci delicto rule that the law of the forum where

the injury occurs is paramount.” LaBounty, 122 N.H. at 741.

Rather, conflict-of-law questions are resolved by weighing five

choice-influencing considerations:

(1) predictability of results; (2) maintenance of reasonable orderliness and good relationship among the States in our federal system; (3) simplification of the judicial task; (4) advancement by the court of its own State’s governmental interests rather than those of other States; and (5) the court’s preference for what it regards as the sounder rule of law.

Lessard v . Clarke,

(1999) (quoting Ferren v .

Gen. Motors Corp.,

(1993)). 4

4 For its part, Pennsylvania employs a “flexible choice of law rule which weighs the interests [all] states [involved] may have in the transaction.” Eichinger,

(citing Griffith v . United Air Lines, Inc.,

(Pa. 1964)). As the Pennsylvania Supreme Court explained in Griffith:

[A]fter careful review and consideration of the leading authorities and cases, we are of the opinion that the strict lex loci delicti rule should be abandoned in Pennsylvania in favor of a more flexible rule which permits analysis of the policies and interests underlying the particular issue before the court. As said in Babcock v . Jackson, “The merit of such a rule is that it gives to the place having the most interest in the problem paramount control over the legal issues arising out of a particular factual context and thereby allows the forum to apply the policy of the

5 Both parties agree that the liability aspect of each of

plaintiff’s claims should be governed by New Hampshire law.

While the court might, independently, come to a different

conclusion, the parties’ agreement will be honored, as it

simplifies the judicial task.

The parties’ choice-of-law disagreement is about damages.

While it might seem strange to apply the law of one jurisdiction

to resolve liability issues, and the law of another to resolve

damages claims (called “depecage” see Schwartz v . Liberty Mut.

Ins. Co.,

, 153 & n.4 (2d Cir. 2008)), the

application of different states’ laws to different issues is not

uncommon. See RESTATEMENT (SECOND) OF CONFLICT OF LAWS § 145 cmt. d

(“courts have long recognized that they are not bound to decide

all issues under the local law of a single state”). Application

of New Hampshire’s law to the liability issues does not

necessarily foreclose application of the law of a different

jurisdiction to plaintiff’s claims for damages. See Lessard, 143

N . H . at 558 (determining, without reference to the applicable

liability law, that Ontario law of damages applied in negligence

jurisdiction most intimately concerned with the outcome of the particular litigation.”

(footnote, citations, and internal quotation marks omitted). Thus, it seems relatively certain that if the court were to undertake its analysis under Pennsylvania’s choice- of-law rule, the result would be identical.

6 action arising out of motor vehicle accident in New Hampshire).

S o , the choice-of-law analysis described in Lessard determines

whether the damages law of England, New Hampshire, or Maryland

should apply in this case.

The first element of the choice-of-law analysis,

“[p]redictability of results[,] relates primarily to consensual

transactions, in which it is important that parties be able to

know in advance what law will govern a transaction so that they

can plan it accordingly.” Lessard,

-57 (quoting

LaBounty, 122 N.H. at 7 4 2 ) . “This factor ‘emphasizes the

importance of applying to the parties’ bargain or other dealings

the law on which they agreed to rely at the outset.’” Ferren,

(quoting Keeton v . Hustler Magazine, Inc.,

(1988)).

Here, there is evidence that Robert Barrett’s rebreather

owner’s manual included a reference to choice of law that

provided: “All products are sold only on the understanding that

only English law applies in cases of warranty claims and product

liability, regardless of where the equipment is purchased or

where used.” Evidence in the record also establishes that

Barrett read the owner’s manual. While Barrett’s awareness of

the choice-of-law provision in his owner’s manual does not

7 establish that he explicitly agreed to be bound by English law,

it does demonstrate Ambient’s expectation that English law would

apply to at least some of the claims a purchaser might bring

against i t . Barrett’s acknowledgment that he read his owner’s

manual also demonstrates at least his knowledge of Ambient’s

expectation in that regard.

Plaintiff’s argument in support of applying New Hampshire

law is based on multiple contacts between Robert Barrett and

Cliff Simoneau, a New Hampshire resident who sold the rebreather,

as well as contacts between Simoneau and Ambient.5 In

plaintiff’s view, those contacts show that the goal of

predictability of results would be enhanced by applying New

Hampshire law. Plaintiff’s point might be well taken if this

were a suit against Cliff Simoneau, or a dispute between Simoneau

and Ambient. But the issue is what damages are available to a

Maryland plaintiff for the death of a Maryland resident using a

device that was allegedly defectively designed in England. None

of plaintiff’s asserted causes of action arise out of conduct she

5 Plaintiff also notes that in years following this accident, in 2005 and 2007, Silent Diving Systems, Ambient’s North American distributor, used a liability release requiring that any suit against itself or Ambient be brought under the laws of the State of New Hampshire. Plaintiff argues, unpersuasively, that since all future actions against Ambient must be brought under New Hampshire law, it would create confusion to apply the law of another jurisdiction in this suit.

8 identifies as having taken place in New Hampshire (e.g.,

Simoneau’s collecting checks from Robert Barrett or running his

credit card number). With respect to plaintiff’s product

liability claim, the first Lessard factor favors application of

English law.

The choice-of-law provision in Barrett’s owner’s manual says

nothing about consumer protection claims, which could support a

conclusion that even Ambient did not expect consumer protection

claims to be resolved under English law. The owner’s manual

provision is the only relevant discussion of choice-of-law that

has been brought to the court’s attention. With respect to

plaintiff’s consumer protection claim, the first factor points

toward none of the three jurisdictions.

The “second consideration [in the choice-of-law analysis],

the maintenance of reasonable orderliness and good relationship

among the States in our federal system, requires no more ‘than

that a court apply the law of no state which does not have

substantial connection with the total facts and with the

particular issue being litigated.’” Lessard,

(citation omitted). Here, as in Lessard, the court assumes,

without deciding, that this factor applies to nation states as

well. See

9 The operative concern is comity. Plainly, principles of

comity would not be offended by applying either the law of

Maryland or the law of England. Robert Barrett was a citizen of

Maryland at the time of his death, and plaintiff is a citizen of

Maryland. Ambient designed and manufactured Robert Barrett’s

rebreather in England. It seems apparent that New Hampshire is

the forum with the weakest connection to the facts of this case.

The rebreather was not designed, manufactured, or used in New

Hampshire, and may have never been in the state at all. Cliff

Simoneau performed administrative tasks incident to the sale of

the rebreather, but none of Simoneau’s activities are at issue in

any of plaintiff’s asserted causes of action. Finally, if

plaintiff prevails, no damages will be paid by or recovered by a

citizen of New Hampshire. In sum, the second factor disfavors

the application of New Hampshire law and points, about equally,

toward both Maryland law and English law.

The “third consideration is the simplification of the

judicial task.” Lessard,

. Because the only

contested issue is the availability of various types of damages,

and because the relevant law is readily available, this factor

adds little weight in favor of either forum. C f . Benoit v . Test

Sys., Inc.,

7 , 53 (1997) (citing LaBounty, 122 N.H. at

743).

10 The “fourth consideration is the advancement by the court of

its own State’s governmental interest.” Lessard,

. Again, it is important to be clear that in this case, the

inquiry should focus on the relative interests of Maryland,

England, and New Hampshire in the nature and scope of the damages

plaintiff could recover if she prevails.

It is difficult to see any governmental interest that would

tip this factor in favor of applying New Hampshire law. Where no

New Hampshire conduct is advanced as a basis for recovery, and

where any recovery will be paid by an English defendant to a

Maryland plaintiff, New Hampshire does not have an overriding

interest in the application of its law in determining damages.

Plaintiff’s argument to the contrary, based on New Hampshire’s

interest in “protect[ing] its citizens from dangerous and

potentially fatal devices” and its putative “corollary

responsibility to halt the exportation of such devices to its

sister states” and “duty, right and obligation to its sister

states,” is simply not persuasive; the interest plaintiff

ascribes to New Hampshire is no greater than the interest any

other state might have in the outcome of this case. Because the

governmental interest factor substantially weighs against

application of New Hampshire law, as opposed to either English

law or Maryland law, it is unnecessary to consider the final

11 factor before determining that New Hampshire law should not be

applied.

As between Maryland and England, with regard to the question

of damages, Maryland decidedly has the stronger interest.

Stephanie Barrett lost her husband, and her daughter lost a

father. Both are citizens of Maryland. Maryland’s interest in

effecting its policy judgment regarding just compensation for

injuries suffered by its citizens due to tortious conduct

substantially outweighs England’s interest in regulating damages

payable by its citizens whose conduct results in injuries

sustained by foreign citizens in foreign jurisdictions.

Ambient argues that English law ought to be applied because,

absent an enforceable choice-of-law provision, Ambient “would

have little control over which country or principality’s laws

might apply to any claim made against it [and] would, in effect,

need to ensure its compliance with the laws of every country in

the world containing a water body accessible by scuba equipment.”

The foregoing concern might militate against the application of

non-English law to the question of liability, where complying

with the requirements of numerous product liability and consumer

protection schemes could be costly and difficult. But here,

Ambient has agreed to the application of New Hampshire law to the

12 issue of liability. The only English law it seeks to have

applied is law that would, comparatively, limit plaintiff’s

recovery. But it is difficult to see how applying English law

rather than Maryland law on the question of damages would

materially advance Ambient’s interest in simplifying its

compliance responsibilities.

In sum, the fourth factor eliminates New Hampshire law from

consideration, and points strongly in the direction of Maryland

law.

The “final consideration is the court’s preference for what

it regards as the sounder rule of law.” Lessard,

. (citation omitted). In doing s o , the court must compare

English and Maryland law. But, there is a twist. The law in

Maryland is that “where the events giving rise to a tort action

occur in more than one State, [Maryland courts] apply the law of

the State where the injury – the last event required to

constitute the tort occurred.” Erie Ins. Exch. v . Heffernan,

(Md. 2007) (quoting Lab. Corp. of Am. v . Hood,

4 1 , 845 (Md. 2006)). In Erie, Maryland’s highest court

held that “because the automobile collision [at issue] occurred

in Delaware, under Maryland law, a Maryland Court would apply the

substantive tort law of Delaware to determine what the claimants

13 are ‘entitled to recover’ in an action for uninsured motorist

benefits.”

; see also Naughton v . Bankier,

(Md. C t . Spec. App. 1997) (holding that in action

brought in Maryland, against Maryland defendant, plaintiff’s

entitlement to an instruction on punitive damages was governed by

law of Delaware, where plaintiff was injured). Thus, in

analyzing the fifth factor, English law should be compared to

Pennsylvania law because, under Maryland law, the plaintiff in

this case would be entitled to recover those damages available

under the law of Pennsylvania, the state in which Robert Barrett

died.6

Because both England and Pennsylvania bar the recovery of

hedonic damages in wrongful death cases, see Administration of

Justice Act, 1982, c. 5 3 , § 1(1)(a); Willinger v . Mercy Catholic

Med. Ctr. of S e . Pa.,

(Pa. 1978), analysis

of the final factor reduces to the three identified areas of

difference between English and Pennsylvania law: (1) punitive or

exemplary damages in product-liability actions (available under

Pennsylvania law but not under English l a w ) ; (2) damages for loss

6 Applying New Hampshire law to liability and the law of another jurisdiction to damages would be unlikely to trouble a court in Maryland, as Maryland has also embraced the concept of depecage. See Erie,

-50 (citing Bishop v . Twiford,

(Md. 1989); Hauch v . Connor,

(Md. 1983)).

14 of consortium (available under Pennsylvania law but not under

English l a w ) ; and (3) shifting attorneys’ fees to the losing

party (available under English law but not generally available

under Pennsylvania l a w ) . In each area, the court determines that

the law of Pennsylvania provides the sounder rule.

Punitive or exemplary damages. In Pennsylvania, punitive

damages appear to be available in product liability cases. See

Hutchinson v . Penske Truck Leasing Co.,

7 8 , 983 (Pa.

Super C t . 2005) (“In product liability cases grounded in a theory

of strict liability, it appears that a plaintiff may seek

punitive as well as compensatory damages, although our Supreme

Court has not definitively so held.”). Such damages, however,

“are awarded only in rare instances, to punish and deter

outrageous, extreme, egregious behavior.”

(citing Martin v .

Johns-Manville Corp.,

(Pa. 1985),

abrogated on other grounds, Kirkbride v . Lisbon Contractors,

Inc.,

(Pa. 1989)). By making punitive damages

available in product liability actions, Pennsylvania law

discourages the sale of products known to be defective when the

seller is willing to accept the payment of ordinary compensatory

damages for product liability as a reasonable cost of doing

business. Pennsylvania law provides a greater disincentive for

15 manufacturers and sellers to distribute defective and

unreasonably dangerous products.

According to the Pennsylvania Suggested Standard Civil Jury

Instructions, punitive damages are also available to an estate

that prevails in a survival action (but not to survivors who

prevail in a wrongful death action). Pennsylvania’s remedial

rule aimed at outrageous conduct is generally preferable to a

system of compensation without such disincentives.

Loss of consortium. The death of a loved one represents

both an economic and a non-economic loss to the immediate family

of the deceased. Pennsylvania law provides compensation for

those non-economic losses; English law does not. The sounder

rule (and the rule more consistent with social and policy

expectations of the jurisdictions in which the injury has had an

affect) is that which both recognizes and compensates a

significant injury. Pennsylvania’s is the sounder rule.

Attorneys’ fees. “[Pennsylvania] has consistently followed

the general, American rule that there can be no recovery of

attorneys’ fees from an adverse party, absent an express

statutory authorization, a clear agreement by the parties or some

other established exception.” De Lage Landen Fin. Servs., Inc.

16 v . Rozentsvit,

(Pa. Super. C t . 2007) (quoting

Merlino v . Delaware County,

(Pa. 1999)). The

English cost-shifting rule is generally thought to quite

effectively discourage frivolous litigation, but it also

effectively reduces access to the courts by those with non-

frivolous claims but no means to pay opponents’ legal fees in the

event of an adverse resolution. As the New Hampshire Supreme

Court has explained:

Underlying the rule that the prevailing litigant is ordinarily not entitled to collect his counsel fees from the loser is the principle that no person should be penalized for merely defending or prosecuting a lawsuit. An additional important consideration is that the threat of having to pay an opponent’s costs might unjustly deter those of limited resources from prosecuting or defending suits.

Harkeem v . Adams, 117 N . H . 6 8 7 , 690 (1977) (citing Tau Chapter,

Alpha Xi Delta Frat. v . Durham, 112 N . H . 233, 237 (1972);

Fleischmann Distilling Corp. v . Maier Brewing Co., 386 U . S . 7 1 4 ,

718 (1967)). Moreover, while the American rule generally

requires a defendant to bear the cost of successfully defending

against claims that are ultimately determined to lack merit,

“under Pennsylvania law, a litigant is entitled to attorneys fees

if he [or she] can establish that an action was brought

arbitrarily, vexatiously, or in bad faith.” P . Liedtka Trucking,

Inc. v . James H . Hartman & Son, Inc., 537 F . Supp. 3 8 1 , 382 (E.D.

Pa. 1982) (citing 42 P A . C O N S . STAT. A N N . § 2503(9) (West 1981)).

17 Because the American rule, as practiced in Pennsylvania, does not

“unjustly deter those of limited resources from prosecuting or

defending suits,” Harkeem, 117 N.H. at 6 9 0 , while also providing

protection from bearing the cost of vexatious litigation, see

Liedtka Trucking, 537 F. Supp. at 3 8 2 , Pennsylvania’s version of

the American rule presents a sounder option.

In each of the three areas where English law differs from

Pennsylvania law, Pennsylvania provides the sounder rule. Thus,

as with the governmental-interest factor, the final factor also

favors the application of Maryland law, which, in turn, provides

that plaintiff would be entitled to recover those damages that

are available in Pennsylvania.

New Hampshire’s interest in applying its law to the

determination of damages in this case is insubstantial compared

to that of Maryland and England. As between Maryland and

England, predictability of results (factor one) favors England

slightly; comity (factor two) and simplification of the judicial

task (factor three) favor neither jurisdiction; governmental

interest (factor four) favors Maryland law; and preference for

the sounder rule of law (factor five) favors the Pennsylvania law

that Maryland courts would apply to determine the damages

available in this case. Accordingly, defendant’s supplemental

18 motion for application of English law (document n o . 274) is

denied. The damages available to plaintiff, in the event she

prevails, will be those a Maryland court would award, which are

those available under Pennsylvania law.

SO ORDERED.

____________ St?feven J./McAuliffe 'hief Judge

November 1 7 , 2008

cc: Nannina L . Angioni, Esq. David J. Berardinelli, Esq. Courtney Q . Brooks, Esq. Thomas M . Brown, Esq. David G. Concannon, Esq. Walter P. DeForest, Esq. Mary A . Dempsey, Esq. Richard W . Evans, Esq. John P. Fagan, Esq. Dona Fenney, Esq. Jamie N . Hage, Esq. Samuel Hankin, Esq. Pamela J. Khoury, Esq. Mark L . Mallory, Esq. W . John McNally, III, Esq. Robert H. Miller, Esq. John T . O’Connell, Esq.

19