McCann v. Foster Wheeler LLC - 48 Cal. 4th 68, 105 Cal. Rptr. 3d 378, 225 P.3d 516 (2010)

Rule:

In brief outline, the governmental interest approach generally involves three steps. First, the court determines whether the relevant law of each of the potentially affected jurisdictions with regard to the particular issue in question is the same or different. Second, if there is a difference, the court examines each jurisdiction's interest in the application of its own law under the circumstances of the particular case to determine whether a true conflict exists. Third, if the court finds that there is a true conflict, it carefully evaluates and compares the nature and strength of the interest of each jurisdiction in the application of its own law to determine which state's interest would be more impaired if its policy were subordinated to the policy of the other state, and then ultimately applies the law of the state whose interest would be more impaired if its law were not applied.

Facts:

Plaintiff Terry McCann, then an Oklahoma resident and a newly hired engineering sales trainee employed by a construction company that was installing a boiler, allegedly was exposed to asbestos at various times over a two-week period while he observed the application of asbestos insulation to the boiler by an independent insulation contractor. Eighteen years later, in 1975, after working at various jobs in Minnesota and Illinois, plaintiff moved to California. In 2005, plaintiff, who was still residing in California, was diagnosed with mesothelioma. A few months later, plaintiff filed the present action in California, naming numerous defendants, including Foster Wheeler LLC (Foster Wheeler), a company that specially designed, manufactured, and provided advice regarding the installation of the boiler. Prior to trial, Foster Wheeler moved for summary judgment, alleging that plaintiff’s action against it was governed by, and barred under, an Oklahoma statute of repose that required any cause of action against a designer or constructor of an improvement to real property to be filed within 10 years of the substantial completion of the improvement. In opposing the motion, plaintiff contended that his cause of action for an injury or illness caused by exposure to asbestos should be governed by the relevant California statute of limitations, rather than by Oklahoma law. Plaintiff further contended that Foster Wheeler's boiler was not an improvement to real property within the meaning of the relevant Oklahoma statute of repose. After the trial court initially determined that Oklahoma, rather than California law should apply to the timeliness issue, it found that Foster Wheeler was a designer of an improvement to real property within the meaning of the Oklahoma statute of repose and entered judgment dismissing Foster Wheeler as a defendant in plaintiff's underlying action. On appeal, the Court of Appeal concluded that the trial court erred in determining that Oklahoma law rather than California law should apply in these circumstances, reasoning that California has an obvious interest in providing a remedy to its long-term residents who sustained asbestos-related injuries. Accordingly, the Court of Appeal reversed the trial court’s judgment. Foster Wheeler appealed.

Issue:

Should Oklahoma Law govern plaintiff’s cause of action for an injury caused by exposure to asbestos in Oklahoma, thereby rendering the decision of the appellate court an error?

Answer:

Yes.

Conclusion:

The Supreme Court reversed the judgment of the Court of Appeal and remanded the matter to that court with directions to address whether the boiler was an improvement to real property within the meaning of the Oklahoma statute of repose. The Court noted that California's borrowing statute, Code Civ. Proc., § 361, did not compel application of the California statute of limitations, and that general choice of law principles had to be considered. The laws of the two jurisdictions differed because the comparable California statute of repose, Code Civ. Proc., § 337.15, did not apply to personal injury actions and the suit was timely filed under Code Civ. Proc., § 340.2. Applying a governmental interest analysis, the Court concluded that the law of Oklahoma should apply because Oklahoma's interest in protecting businesses, including out-of-state businesses, from liability was stronger than California's interest in affording a remedy to a California resident injured elsewhere.