Wednesday, January 18, 2017

Chen v. LA Truck Centers (Cal. Ct. App. - Jan. 18, 2017)

I took a Conflict of Laws class in law school.  Not many other people did.  It was interesting.  -Ish.  I learned some concepts that I hadn't heard of before.  Like renvoi.  Or at least the word for it.  And the fact that I still remember this concept places this class slightly above some of the other classes I took in law school.

As I occasionally tell my civil procedure students, sometimes, decisions about the relevant choice of law matters.  A lot.

And now they don't have to just believe me.  They can just read this opinion.

Huge bus accident.  Massive injuries.  Lots of money at stake.  Plaintiffs sue because the passenger bus doesn't have seat belts.  Hence the passenger ejections after the bus rolled over multiple times.  But maybe lap belts are counterproductive in front-end bus accidents, which are much more common.

Defendants prevail at trial, in part because the trial court applied Indiana law.  The Court of Appeal reverses because it concludes that California law should have applied, and is better.

There are a couple of other subsidiary holdings that are important as well.  For example, the Court of Appeal holds that choice of law rulings are always subject to reconsideration (even without new facts or law) because they're just essentially preliminary in limine decisions.  The opinion also holds that in a multidefendant case, the fact that one (or more) defendants settles out -- as here -- may alter the choice of law analysis and result in the application of a different law.  That's important.

One argument the opinion makes seems definitely wrong to me.  Justice Rubin says (in defending the decision that choice of law may potentially change as parties settle) that "We think it unlikely that parties would settle, or hold up a potential settlement, based on the effects a settlement might have on the law to be applied when the remaining parties proceed to trial."

I disagree.  Good lawyers will -- and should -- think about precisely that after today's decision.  If I'm a plaintiff, and I've got multiple defendants, one of whom is more California-centered than the others, I'm definitely going to offer more favorable settlements to some (or all) of the other defendants if I think that'll help me get a more favorable California law applied to the remaining defendants.  I'll be thinking about this too on the defendant's side; among other things, if getting my client out will help the plaintiffs obtain favorable California law for the others, I'll surely be making this argument at the mediation, and probably upping my settlement number (or increasing my resolve) as well.  'Cause it's in fact worth it to buy me off.  (And it goes the other way too; after today's holding, if I'm a plaintiff, I might hold off settling with the California defendant if I think that'll make me lose the benefits of favorable California law -- maybe I'll settle with them after the trial, or do a high low (maybe where the high is $10 higher than the low), or do something else that'll get me the relevant dollars but still keep them in the case.)

Sure, some lawyers won't figure this out.  Or think that deeply.

But the good ones will.