La Plante v. American Honda
Case Date: 06/29/1994
Court: United States Court of Appeals
Docket No: 93-2314
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UNITED STATES COURT OF APPEALS UNITED STATES COURT OF APPEALS FOR THE FIRST CIRCUIT FOR THE FIRST CIRCUIT ____________________ Nos. 93-2314 94-1015 ARTHUR H. LA PLANTE, Plaintiff, Appellee, v. AMERICAN HONDA MOTOR CO., INC., Defendants, Appellants. ____________________ APPEALS FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF RHODE ISLAND [Hon. Ernest C. Torres, U.S. District Judge] ___________________ ____________________ Before Breyer,* Chief Judge, ___________ Bownes, Senior Circuit Judge, ____________________ and Stahl, Circuit Judge. _____________ ____________________ Andrew L. Frey, with whom Evan M. Tager, Adam C. Sloane, Mayer, _______________ _____________ _______________ ______ Brown & Platt, Gerald C. DeMaria, and Higgins, Cavanagh & Cooney were _____________ _________________ __________________________ on brief for defendants. Mark B. Decof, with whom Vincent T. Cannon, Howard B. Klein, ______________ ___________________ ________________ Decof & Grimm were on brief for plaintiff. _____________ Hildy Bowbeer, Lezlie Ott Marek, Darin D. Smith and Bowman and ______________ _________________ _______________ __________ Brooke on brief for Product Liability Advisory Council, amicus curiae. ______ ____________________ June 29, 1994 ____________________ ___________________ *Chief Judge Stephen Breyer heard oral argument in this matter but did not participate in the drafting or the issuance of the panel's opinion. The remaining two panelists therefore issue this opinion pursuant to 28 U.S.C. 46(d). BOWNES, Senior Circuit Judge. Plaintiff-appellee BOWNES, Senior Circuit Judge. _____________________ Arthur LaPlante was rendered quadriplegic from a fall sustained while riding an all-terrain vehicle (ATV) designed, manufactured, and distributed by defendants-appellants Honda R&D Co., Ltd., Honda Motor Co., Ltd., and American Honda Motor Co., Inc. (collectively "Honda"). A jury found Honda liable and awarded plaintiff $9,652,000 in compensatory damages. This amount was reduced to $8,204,200 to account for plaintiff's comparative negligence. In a separate proceeding, the district court granted judgment as a matter of law for Honda on plaintiff's claim for punitive damages. Honda appeals from the judgment of liability and compensatory damages. Plaintiff cross-appeals on its punitive damages claim. Finding reversible error, we vacate the judgment of liability and remand for a new trial as to all liability issues. If Honda is found liable on retrial, the award of damages stands. As for plaintiff's cross-appeal, the judgment of the district court is affirmed. I. I. BACKGROUND BACKGROUND __________ On Saturday, March 11, 1989, the course of Arthur LaPlante's life was dramatically and irreversibly altered. On that morning plaintiff, a twenty-four year-old army mechanic stationed at Fort Carson, Colorado, and three -2- 2 friends, Kelly Kallhoff, Randy Leib, and Mike Mohawk, ventured to nearby Pikes Peak in order to ride Kallhoff's three-wheel ATV, a 1982 Honda ATC200. This ATV is a three- wheeled motorized vehicle intended for off-road use. The vehicle has handlebar steering and large low-pressure tires, two in the rear, and one in front. Plaintiff, who had never before ridden an ATV, was the third to ride after Kallhoff and Leib. After climbing to the top of a knoll, plaintiff began to descend at a speed of 5-10 m.p.h. When plaintiff was unable to negotiate a left- hand turn onto a twelve foot wide dirt road, he fell over a steep embankment and broke his neck, resulting in permanent paralysis from the neck down. On January 11, 1991, plaintiff, who lived in Rhode Island before enlisting in the Army in 1983 and returned there after the accident, commenced this diversity action in the United States District Court for the District of Rhode Island. The complaint delineated six causes of action: (1) breach of warranty; (2) false advertising; (3) negligent failure to advise how to operate the vehicle; (4) negligent failure to warn; (5) strict liability design defect; and (6) willful, wanton and reckless conduct (i.e., punitive ____ damages). The trial was bifurcated so that the issue of punitive damages could be tried after the issues of liability and compensatory damages. The parties agree that the -3- 3 substantive law of Rhode Island governs the liability issues in this action. A twenty-three day trial on liability and compensatory damages began in July 1993. At the close of plaintiff's case Honda moved for judgment as a matter of law. Only the claims for negligent failure to warn and strict liability design defect survived the motion. Ultimately the jury found Honda liable on these two claims, and awarded plaintiff $3,652,000 for medical expenses and lost wages, and $6,000,000 for physical injuries and pain and suffering. The jury also found that plaintiff was comparatively negligent, and reduced his award by fifteen percent. The district court denied Honda's motions for postjudgment relief. The punitive damages phase of this action commenced on September 16, 1993. On the same day, at the close of plaintiff's evidence, the district court granted Honda's motion for judgment as a matter of law. These cross-appeals ensued. II. II. DISCUSSION DISCUSSION __________ A. Rhode Island's Subsequent Alteration Statute A. Rhode Island's Subsequent Alteration Statute ____________________________________________ Honda argues that the district court committed reversible error by not instructing the jury on the affirmative defense provided by Rhode Island's "subsequent alteration" statute, R.I. Gen. Laws 9-1-32 (1985). -4- 4 Rhode Island law provides that "[n]o manufacturer or seller of a product shall be liable for product liability damages where a substantial cause of the injury, death, or _________________________________________ damage was a subsequent alteration or modification." R.I. Gen. Laws 9-1-32(b) (emphasis added). The statute defines "subsequent alteration or modification" as an alteration or modification of a product made subsequent to the manufacture or sale by the manufacturer or seller which altered, modified, or changed the purpose, use, function, design, or manner of use of the product from that originally designed, tested or intended by the manufacturer, or the purpose, use, function, design, or manner of use or intended use for which such product was originally designed, tested or manufactured. Id. 9-1-32(a)(2). Honda contends that it presented ___ evidence that the ATV ridden by plaintiff was altered or modified after its original sale, and therefore the trial court's failure to instruct the jury in accordance with 9- 1-32 was reversible error. In support of its position Honda points to evidence that, at the time of the accident, the ATV's front brakes were inoperable, its rear brakes were faulty, its right rear tire was overinflated, its front forks were bent, and it pulled to the right. Plaintiff's response is fourfold. First, he maintains that "lax maintenance" cannot constitute a "subsequent alteration or modification" under the statute. Rather, plaintiff insists that 9-1-32 was intended to -5- 5 "provide a defense when someone has deliberately altered a machine. . . ." Next, he argues that the statute merely codified comment g of Section 402A of the Restatement (Second) of Torts. Third, plaintiff contends that the jury charge adequately apprised the jurors of Rhode Island law. Finally, he argues that any error was harmless because Honda failed to present sufficient evidence that any of the alleged subsequent alterations was a substantial cause of plaintiff's injuries. With respect to the scope of the statute, we have been unable to find any support for plaintiff's contention that the scope of 9-1-32 is limited to deliberate alterations, such as the removal of safety guards, and does not reach "alterations" or "modifications" that have resulted from inadequate maintenance. It is well settled under Rhode Island law that "[i]n the event that a statute is unambiguous, it is necessary for this court to apply its terms literally." Keenan v. Vose, 634 A.2d 866, 868 (R.I. ______ ____ 1993); see also Costello v. American Univ. Ins. Co., 633 A.2d ___ ____ ________ _______________________ 260 (R.I. 1993) (where statute "has a plain and unambiguous meaning . . . this court is bound to construe the statute in accordance with that meaning"); Levesque v. Rhode Island ________ ____________ Dep't of Transp., 626 A.2d 1286, 1289 (R.I. 1993) (when _________________ statute is clear and unambiguous on its face courts "must give the words of the statute their plain and obvious -6- 6 meaning"). Here, plaintiff's proposed limitation directly contradicts the unambiguous and broad language of the statute. No exception has been drawn by the Rhode Island legislature for alterations resulting from inadequate maintenance as opposed to deliberate changes, and we can find no principled reason for reading such an exception into the statute. Several states have enacted comparable statutes that specifically include "failure to observe routine maintenance" within the meaning of subsequent alteration or modification. See, e.g., Ky. Rev. Stat. Ann. 411.320(1) ___ ____ ("product alteration or modification shall include failure to observe routine care and maintenance, but shall not include ordinary wear and tear"); N.C. Gen Stat. 99B-3 (same); see ___ also Lamb By Shepard v. Sears, Roebuck & Co., 1 F.3d 1184, ____ ________________ _____________________ 1188 (11th Cir. 1993) (under Georgia, law failure to observe routine care and maintenance can constitute a material alteration or modification insulating defendant from liability for defective design). We have failed, however, to uncover a single statute that excludes inadequate maintenance from the category of subsequent alteration or modification for purposes of this defense. Finally, given the apparent purpose of 9-1-32, i.e., to protect manufacturers from ____ unanticipated risks created by alterations or modifications occurring after a product leaves their control, we can see no -7- 7 reason why the Rhode Island legislature would provide a defendant with a complete defense where an ATV owner disconnected his front brakes, but not where the front brakes were inoperative due to the owner's failure to perform routine maintenance. Next, plaintiff argues that 9-1-32 merely codifies the essence of comment g to Section 402A of the Restatement (Second) of Torts which provides, in pertinent part, that "[t]he seller is not liable when he delivers the product in a safe condition, and subsequent mishandling or other causes make it harmful by the time it is consumed." Plaintiff points to no language in 9-1-32 to support this argument. Rather, plaintiff relies solely upon the presence of 9-1-32 in two string citations, i.e., Model Uniform ____ Product Liability Act 112(D), analysis (1979) (citing 9- 1-32 among statutes that have "enacted the essence of . . . comment [g] into law"); Robinson v. Reed-Prentice Div., 403 ________ __________________ N.E.2d 440, 443 (N.Y. 1980) (citing 9-1-32 for proposition that "[s]ubsequent modifications of a product from its original condition by a third party which render a safe product defective are not the responsibility of the manufacturer"), as support for this statutory interpretation. The plain meaning of 9-1-32 simply does not support the proposition for which it is cited by either of the above sources. Neither authority explains the inclusion -8- 8 of 9-1-32 in its respective string citation, nor does the text of the statute bear even a modest resemblance to comment g of the Restatement. The statute means what it says and must be applied. Plaintiff's attempt to limit the statute's breadth by relying on these two citations is unavailing. The next question is whether the jury charge was deficient. We examine jury instructions with an eye towards determining if "they adequately explained the law or `whether they tended to confuse or mislead the jury on controlling issues.'" Davet v. Maccarone, 973 F.2d 22, 26 (1st Cir. _____ _________ 1992) (quoting Brown v. Trustees of Boston Univ., 891 F.2d _____ _________________________ 337, 353 (1st Cir. 1989), cert. denied, 496 U.S. (1990)). _____ ______ The judge's instructions on strict liability were that the plaintiff must prove, inter alia, that the product was _____ ____ defective, and "that the defect existed at the time the product left the Defendant's hands." In elaborating on the latter point, the judge stated: The manufacturer or seller is not responsible for defects resulting from changes made to its product by other persons over whom it had no control after the product left the Defendant's possession. Therefore, in order for the Plaintiff to prevail on his strict liability claim, the Plaintiff must prove that the defect that caused his injuries existed at the time the product left the Defendant's control. That does not necessarily mean that the product must have been in exactly the same condition at the time of the injury that it was when it left the Defendant's control. -9- 9 What it does mean is that the particular defect for which the Plaintiff seeks to hold the manufacturer responsible, must have existed at the time the product left the Defendant's control. Trial Transcript of August 19, 1993 at 12-13. The judge then instructed the jury that the plaintiff was required to prove that the defect proximately caused his injuries: That does not mean that a defect must be the only or the last cause of an injury in order to be considered a proximate cause. It may be considered a proximate cause if it operates together with some other contemporaneous cause to produce the injury. In such cases, both causes may be considered proximate causes. If the two of them act together to produce the injury, you could have two proximate causes. [A] defect must be, at least, a substantial contributing factor in producing the injury in order for it to be considered a proximate cause of that injury. In other words, there must be a reasonable connection between the defect and the injury that is being claimed. Id. at 14. ___ Although consistent with the prevailing common law rule governing strict liability design defect actions in Rhode Island, see Ritter v. Narragansett Elec. Co., 283 A.2d ___ ______ ______________________ 255, 262-63 (R.I. 1971), the judge's instructions directly contradict 9-1-32. Under the statute, where a subsequent alteration or modification to a product is a "substantial cause" of a plaintiff's injuries, the defendant is completely immune from a products liability claim even if the product was defective at the time it left the defendant's control, -10- 10 and the defect was a proximate cause of the plaintiff's injuries. Despite the evidence in this case that changes had been made to the ATV between the time of its initial sale and the time of plaintiff's accident, this defense was not communicated to the jury. Under the circumstances, the district court erred in refusing to give Honda's proposed instructions.1 There is one additional step to our analysis. As plaintiff correctly points out, a finding of error does not ____________________ 1. Honda timely objected to the district court's refusal to give several of its proposed jury instructions: [1] [T]he Honda defendants shall not be held liable for product liability damages where a substantial cause of the accident was a subsequent alteration or modification of the all terrain vehicle. [2] [F]ailure to properly maintain the braking system, steering system and other safety related items can constitute alteration or modification of the all terrain vehicle. [3] [I]f you find that certain safety related items on the all terrain vehicle were improperly maintained and this improper maintenance created a danger that was a substantial cause of Mr. LaPlante's injuries . . . then you must find the Honda defendants are not liable for plaintiff's injuries. Appellants' Second Supplemental Jury Instructions at 1-2. Plaintiff argues that the above request was defective because Honda did not label it as an affirmative defense. Assuming plaintiff is correct, the judge still had a duty to submit the statutory defense to the jury. See Jerlyn Yacht Sales v. ___ __________________ Roman Yacht Brokerage, 950 F.2d 60, 69 n.16 (1st Cir. 1991). _____________________ -11- 11 necessarily warrant reversal. An instructional error requires reversal only where the error is determined to be prejudicial based on a whole-record review. Davet, 973 F.2d _____ at 26; Shane v. Shane, 891 F.2d 976, 987 (1st Cir. 1989). An _____ _____ error is prejudicial if it could have affected the result of the jury's deliberations. Allen v. Chance Mfg. Co., 873 F.2d _____ _______________ 465, 469 (1st Cir. 1989). At trial Honda adduced ample evidence that the ATV ridden by plaintiff was in poor condition on the day of the accident. Most significant is the undisputed fact that the ATV's front brakes did not work. In addition, the evidence was sufficient for the jury to have found that, at the time of the accident, the ATV had bent front forks, severely maladjusted rear brakes, unequally inflated rear tires, and pulled to the right.2 A rational jury, presented with Honda's subsequent alteration defense, could have found that any or all of the alleged alterations or modifications "substantially caused" plaintiff's injuries. Consequently, the court's instructional error could have changed the outcome of the trial. Honda was not only entitled to have the jury ____________________ 2. To underscore the poor condition of the ATV, Sergeant James Shirley, its owner prior to Kallhoff, testified that he paid only $25 for the ATV. Trial Transcript of August 2, 1993, Morning Session at 49. In addition, Shirley testified that he did not make any significant repairs to the vehicle, and that the vehicle's condition appeared unchanged when he saw it one week prior to the accident. Id. at 53, 56. ___ -12- 12 instructed on this defense, but it is evident that the court's failure to give the instruction was reversible error. Plaintiff raises one additional argument that warrants brief discussion. He maintains that the district court's failure to give a subsequent alteration charge, even if reversible error, has no bearing on the negligent failure to warn claim. This argument fails for two reasons. First, 9-1-32 expressly covers failure to warn claims as well as design defect claims. R.I. Gen. Laws 9-1-32(a)(1) ("product liability damages" includes damages for personal injuries sustained by reason of an alleged defect in a product or an alleged failure to warn against a danger). Second, the case cited by plaintiff as support for this proposition, Witthauer v. Burkhart Roentgen, Inc., 467 N.W.2d _________ _______________________ 439 (N.D. 1991), is clearly distinguishable. In Witthauer _________ the court held that a North Dakota statute similar to 9-1- 32 did not provide manufacturers with a defense to claims of negligent failure to warn consumers of dangers caused by foreseeable alterations or modifications to a product. Here, plaintiff's claim is that Honda failed to warn him of dangers caused by the ATV's original design defect, not by a foreseeable modification or alteration. Accordingly, Witthauer is inapposite. We have considered plaintiff's _________ other arguments anent 9-1-32 and find them to be without merit. -13- 13 B. Scope of Retrial B. Scope of Retrial ________________ This leaves us with the question of which issues should be retried. It is well settled that "[a]n appellate court has broad discretion to remand for a new trial on all, or only some, of the issues in the case." Dopp v. HTP Corp., ____ _________ 947 F.2d 506, 518 (1st Cir. 1991) (collecting cases); see ___ also Fed. R. Civ. P. 59(a) (permitting a new trial on "all or ____ part of the issues"). A new trial may not, however, be limited to fewer than all the issues unless it clearly appears that the issues to be retried are so distinct and separable from the other issues that a trial of those issues alone may be had without injustice. See Gasoline Products ___ _________________ Co. v. Champlin Refining Co., 283 U.S. 494, 500 (1931); ___ ______________________ Kassel v. Gannett Co., 875 F.2d 935, 953 (1st Cir. 1989). ______ ___________ All of the issues pertaining to liability must be retried, including comparative negligence. On balance, we do not think that a new trial limited to Honda's liability, but excluding the extent of its liability, would be fair. Moreover, comparative negligence is regarded as a liability concept. See Winn v. Lafayette Town House, 839 F.2d 835, 837 ___ ____ ____________________ (1st Cir. 1988); Akermanis v. Sea-Land Serv., Inc., 688 F.2d _________ ____________________ 898, 906-07 (2d Cir. 1982), cert. denied, 461 U.S. 927 _____ ______ (1983), and cert. denied, 464 U.S. 1039 (1984). _____ ______ -14- 14 There is no basis on the record, however, for retrying the jury's damage award.3 The liability issues in this case are so distinct and separable from the damages issue that a partial trial of the former may be had without injustice. See Allen, 873 F.2d at 473-74 (new trial on ___ _____ liability only where error did not affect determination of damages); Winn, 839 F.2d at 837 (retrial on liability only ____ where damages properly determined); see generally 11 Charles ___ _________ A. Wright & Arthur R. Miller, Federal Practice and Procedure ______________________________ 2814 at 95 (1973) (there may be a new trial on liability with the prior determination of damages allowed to stand). This is particularly true here because the trial judge submitted detailed interrogatories to the jury, and thus we know the jury's total damage award to the plaintiff, as well as the amount discounted due to comparative negligence. If the comparative negligence figures are changed as a result of the new trial, the total damage award can be adjusted accordingly. Because we vacate and remand for a new trial on both the strict liability and negligence claims, as well as comparative negligence, it is unnecessary for us to address Honda's remaining arguments regarding these matters. But in ____________________ 3. Honda does not argue that the amount of the jury's unadjusted damage award, $9.6 million, or any component of that award, is excessive or shocking. -15- 15 order to expedite the retrial, we have considered one such argument. C. Evidence of Honda's Profits from ATV Sales C. Evidence of Honda's Profits from ATV Sales __________________________________________ Plaintiff's counsel was permitted, over Honda's objection, to read the following interrogatory and answer to the jury in connection with his negligent failure to warn claim: Q. Please state the total gross revenues, profits and net income from the sale of the all-terrain vehicles for the years 1970 through 1989 in each and every country where ATVs are or were offered for sale to the public. Please respond separately for each listed entity, Honda Motor Company, Inc., American Honda Motor Company, Inc., Honda R&D Company, Limited. A. [I]n 1987 it was calculated for the period January 21, 1979 to June 25, 1985, gross receipts for ATVs approximated $1,722,881,000. Although American Honda does not keep records of net profit by ATV product line it allocated expenses pursuant to reasonable accounting principles to obtain a sum comparable to pre-tax net profits in the approximate sum of $73,371,000. Honda argues that the evidence of its profits from ATV sales was irrelevant and therefore inadmissible. Assuming the evidence was relevant, Honda argues that its probative value was substantially outweighed by its prejudicial effect. "Evidence is relevant if it has any tendency to make the existence of any fact consequential to the determination of the action more or less probable." United ______ -16- 16 States v. St. Michael's Credit Union, 880 F.2d 579, 600 (1st ______ __________________________ Cir. 1989) (internal quotation marks and citation omitted); see also Fed. R. Evid. 401. After plaintiff's counsel read ___ ____ the interrogatory and answer, the trial judge explained to the jury that [t]he evidence [of Honda's profits] is being presented only to assist you in determining what Honda may have known or not known about the particular vehicle that's the subject of this case. In other words, it's to assist you in understanding or reaching conclusions as to what Honda may have known or believed about the ATC 200 or why it acted as it did and so forth. . . . [Y]ou're not being asked to be Robin Hoods here and take money from Honda simply because they may have made money on the sale of this vehicle. The only purpose of this evidence is, as I said, to assist you in reaching whatever conclusions you think are warranted about whether the vehicle as used had means to be dangerous or what Honda may have known about the vehicle or what it might have believed about the safety of the vehicle. Near the end of the trial the court commented that the records of Honda's ATV profits "seemed to be probative of the, shall we say, the credibility of the explanation by Honda; and the Court gave a limit[ing] instruction to the jury at that time." The first question is whether the challenged evidence was relevant to plaintiff's negligent failure to warn claim. In Rhode Island, a defendant has a duty to warn if he knew or should have known about the product's dangerous -17- 17 propensities which caused plaintiff's injuries. Thomas v. ______ Amway Corp., 488 A.2d 716, 722 (R.I. 1985); Scittarelli v. ____________ ___________ Providence Gas Co., 415 A.2d 1040, 1043 (R.I. 1980). Failure __________________ to properly perform this duty as a reasonably prudent manufacturer would have under the same or similar circumstances, constitutes actionable negligence. Scittarelli, 415 A.2d at 1043. ___________ A defendant's motive for its action or inaction is, generally speaking, immaterial to the question of whether the defendant acted negligently. See Kunz v. Utah Power & Light ___ ____ __________________ Co., 913 F.2d 599, 605 (9th Cir. 1990). This is because the ___ negligence inquiry measures behavior against an objective standard, without reference to the defendant's state of mind. See Sparks v. Gilley Trucking Co., 992 F.2d 50, 52 (4th Cir. ___ ______ ___________________ 1993); Jones v. Wittenberg Univ., 534 F.2d 1203, 1211 (6th _____ ________________ Cir. 1976); see generally W. Page Keeton, Prosser and Keeton ___ _________ __________________ on Torts, 31 at 169-70 (5th ed. 1984). Here, however, ________ whether or not Honda had a duty to warn plaintiff of the ATV's dangerous propensities depended upon its subjective knowledge of those dangers. Consequently, the evidence of Honda's profits from ATV sales was, as we demonstrate in the ensuing paragraph, relevant to plaintiff's negligent failure to warn claim. With respect to his negligence claim plaintiff alleged that, prior to his accident, Honda knew that its ATVs -18- 18 would "plow" (i.e., continue in a straight line even when the ____ handlebars are turned) under normal riding conditions unless the rider shifted his or her weight in a counterintuitive manner. Honda denied that it had any knowledge of this danger. Honda's profits from ATV sales was introduced as evidence that Honda's failure to provide adequate warnings about plowing resulted from greed, not from lack of knowledge. Therefore, proof of profits as evidence of motive, while not material to any element of the failure to warn claim, was probative of an issue relevant to the case: the credibility of Honda's explanation for its inaction. Generally speaking, "[a]ll relevant evidence is admissible." Fed. R. Evid. 402. Under Rule 403, however, relevant evidence may be excluded if the probative value of the evidence "is substantially outweighed by the danger of unfair prejudice" to the party against whom it is offered. Fed. R. Evid. 403; see also Raymond v. Raymond, 938 F.2d ___ ____ _______ _______ 1518, 1523-24 (1st Cir. 1991); St. Michael's Credit Union, ___________________________ 880 F.2d at 601. Although the evidence of Honda's profits from ATV sales was of some probative value, we believe the danger that this evidence would unfairly prejudice the jury was overwhelming. The evidence was, at best, marginally relevant and of scant probative value to plaintiff's failure to warn claim. On the other hand, the risk that the jury would be -19- 19 prejudiced by this reference to the enormous profitability of Honda's ATVs was almost inescapable. The potentially prejudicial nature of this "motive" evidence in the liability phase of the trial was one of the factors that prompted the district court to try the issue of punitive damages separately. While the court did give a limiting instruction to the jury warning against equalizing wealth between rich and poor, it did not alert the jury to the impropriety of punishing Honda for an unsavory motive. The inadequacy of the limiting instruction coupled with the highly attenuated relevance of the evidence leads us to believe that the district court miscalibrated its Rule 403 scales. Honda argues that the admission of this evidence was reversible error, as it skewed the jury's allocation of fault, and infected its liability determinations. Because we have already ordered a new trial on both of these matters, we need not decide whether the district court's error in admitting the evidence of Honda's profits from ATV sales warrants a new trial. Nevertheless, we hold that this material should not be admitted on retrial. In addition, any references to that information, such as the one made by plaintiff at closing argument, should not be allowed.4 ____________________ 4. The following remarks were made, albeit without objection, during plaintiff's summation: Well, I told you at the beginning of this case that the very disturbing, . . . -20- 20 On appeal Honda has raised two arguments relating to the damages award that should be addressed at this time. D. Choice-of-Law D. Choice-of-Law _____________ Honda argues that the district court's decision to apply Rhode Island, rather than Colorado law, to the issue of compensatory damages was erroneous.5 We disagree. ____________________ one of the most disturbing aspects of this case is something that I believed throughout my work on this case. . . . Honda's actions or more truthfully their inactions in this case were motivated by greed. They were motivated by greed. Do you remember when I stood before you on the last day of Plaintiff's case and I read to you that interrogatory answer concerning the amount of money that Honda made in a six-year period from 1979 to 1985 from ATVs, and I stood here and I read it, and you may have been able to notice, I almost became overwhelmed with emotion when I was reading that because it sunk into me at that point what really was the reason Honda didn't do anything to warn people about this machine. It was money. It was a business decision. They were making just between 1979 and 1985 $1.7 billion selling these machines in this country. . . . I submit to you that Arthur LaPlante's accident would not have happened if this company had thought about people before money. Had they thought about people before money. 5. The difference between the two is substantial. While neither state limits a plaintiff's recovery of "economic" damages, or damages for physical impairment and disfigurement, Colorado sets a $250,000 cap on damages for "noneconomic loss or injury," (i.e., pain and suffering), ____ Colo. Rev. Stat. 13-21-102.5 (1987 & 1993 Supp.). Rhode Island has no such limit. -21- 21 At the outset, we reject plaintiff's contention that Honda failed to preserve the choice-of-law issue. This matter was timely and squarely presented to the district court prior to trial, and was decided in plaintiff's favor. Honda was under no obligation to renew its motion later in the proceedings. See Union Mut. Life Ins. Co. v. Chrysler ___ __________________________ ________ Corp., 793 F.2d 1, 17 (1st Cir. 1986) (no waiver where _____ choice-of-law matter was "brought with sufficient clarity to the [district] court's attention"); see also Jaurequi v. John ___ ____ ________ ____ Deere Co., 986 F.2d 170, 173 (7th Cir. 1993) (to preserve _________ choice-of-law issue for appeal party only needs to timely notify court of the applicability of another state's law). A federal court sitting in diversity must apply the conflict of law rules of the state in which it sits. Klaxon ______ Co. v. Stentor Elec. Manuf. Co., 313 U.S. 487 (1941); Crellin ___ ________________________ _______ Technologies, Inc. v. Equipmentlease Corp., 18 F.3d 1, 4 (1st __________________ ____________________ Cir. 1994). Therefore we turn our attention to Rhode Island's choice-of-law principles. In resolving conflict of law disputes arising out of tort actions, Rhode Island employs an interest-weighing approach. Blais v. Aetna Cas. & Sur. Co., 526 A.2d 854, 856 _____ ______________________ (R.I. 1987); Pardey v. Boulevard Billiard Club, 518 A.2d ______ ________________________ 1349, 1351 (R.I. 1986); Woodward v. Stewart, 243 A.2d 917, ________ _______ 923 (R.I.), cert. dismissed, 393 U.S. 957 (1968). Under this _____ _________ approach various interests are weighed in order to decide -22- 22 which jurisdiction has the most significant relationship with reference to a particular substantive issue. Pardy, 518 A.2d _____ at 1351; Woodward, 423 A.2d at 923. The first set of factors ________ to be taken into account are (1) the place where the injury occurred; (2) the place where the conduct causing the injury occurred; (3) the place that the parties call home (e.g., ____ their domicile, residence, place of incorporation, or place of business); and (4) the place where the relationship, if any, between the parties is centered. See Brown v. Church of ___ _____ _________ the Holy Name, 252 A.2d 176, 179 (R.I. 1969); Putnam _______________ ______ Resources v. Pateman, 958 F.2d 448, 464 (1st Cir. 1992). _________ _______ The resolution of choice-of-law problems may not always turn on the number of contacts, but rather, the qualitative nature of those contacts affected by the following factors: (1) predictability of results; (2) maintenance of interstate order; (3) simplification of the judicial task; (4) advancement of the forum's governmental interest; and (5) application of the better rule of law. See ___ Brown, 252 A.2d at 178; Blais, 526 A.2d at 856. _____ _____ Our review of the district court's ruling is plenary. Pateman Resources, 958 F.2d at 464; Quaker State _________________ ____________ Oil Refining Corp. v. Garrity Oil Co., 884 F.2d 1510, 1515 ___________________ ________________ (1st Cir. 1989). In the present case, Honda wants Colorado and not Rhode Island law to apply to the measure of compensatory damages available to plaintiff, but not to the -23- 23 substantive rules of liability governing plaintiff's claims. There is no reason that this cannot be done. Under the doctrine of depecage, different substantive issues in a tort case may be resolved under the laws of different states where the choices influencing decisions differ. See Pateman, 958 ___ _______ F.2d at 465; Ashland Oil, Inc. v. Miller Oil Purchasing Co., _________________ _________________________ 678 F.2d 1293, 1304 (5th Cir. 1982) (laws of different states may apply to issues of liability and damages in one action). It follows that, in conducting our choice-of-law analysis, we must consider the states' interests regarding the distinct issue of compensatory damages, and not their interests generally. Rhode Island ascribes to the principles of depecage in tort cases. Pateman Resources, 958 F.2d at 465. _________________ Regarding the number of contacts, we can discern no material difference between Rhode Island and Colorado. Although the injury occurred in Colorado, none of the defendants are domiciliaries of Colorado.6 Furthermore, the tortious conduct allegedly giving rise to plaintiff's injuries occurred in Japan, where the subject ATV was designed and its warnings devised. See Price v. Litton Sys., ___ _____ ____________ Inc., 784 F.2d 600, 604 (5th Cir. 1986) (conduct occurred at ____ place of design in design defect case). Finally, there being ____________________ 6. American Honda is a California corporation with its principal place of business in that state. Honda Motor Co. and Honda R&D Co. are both Japanese corporations and have their principal place of business in that country. -24- 24 no "relationship" between the parties in the ordinary sense of the word, this factor is unhelpful in making a choice-of- law determination. See Allison v. ITE Imperial Corp., 928 ___ _______ ___________________ F.2d 137, 142 & n.5 (5th Cir. 1991) (this factor is not helpful in products liability cases where there was no preexisting relationship between the parties); see also ___ ____ Restatement (Second) of Conflict of Laws 145 (factor in choice-of-law analysis is place where the relationship, "if any", of the parties is centered). Consequently, Colorado, as the place of injury, has a single material contact with the present action. Rhode Island too has one contact with this litigation because, at the time of the accident, plaintiff was a domiciliary of Rhode Island. See Restatement (Second) ___ of Conflict of Laws 17 ("A person does not usually acquire a domicil of choice by his presence in a place under physical or legal compulsion."); Stifel v. Hopkins, 477 F.2d 1116, ______ _______ 1122 (6th Cir. 1973) (presence at a military station does not make the station serviceman's domicile because he is there subject to superiors' orders); Ellis v. Southeast Constr. _____ __________________ Co., 260 F.2d 280, 281-82 (8th Cir. 1958) (same). And, ___ predictably, plaintiff returned home to Rhode Island immediately after the accident.7 ____________________ 7. Honda argues that plaintiff's post-accident return to his home state should not factor into our equation because "a litigant's decision to move to the forum state after the -25- 25 That Rhode Island was plaintiff's domicile at the time of the accident is conceded by the parties, and is amply supported by the record -- throughout his stay in the military plaintiff continued to pay income tax in Rhode Island, and, on his 1987 reenlistment papers, plaintiff listed Rhode Island as his home. That plaintiff was stationed at an army base in Colorado at the time of the accident was a matter of pure chance. In fact, in his six years of service, plaintiff had been stationed in Hawaii, Maryland, Kentucky and Korea prior to arriving in Colorado. Because the number of contacts claimed by each state is equivalent, we examine the additional factors enumerated by the Rhode Island courts, beginning with "predictability of results." This factor militates against the application of Colorado law. Honda, a large multi- national corporation, cannot argue convincingly that it expected Colorado law to apply to a case arising from a product manufactured in Japan and involving a Rhode Island citizen simply because the product was originally sold in Colorado. It would be difficult for Honda to persuade us ____________________ cause of action accrued should be accorded minimal weight in the choice-of-law analysis." Appellants' Brief at 44. As the cases cited by Honda illustrate, see, e.g., Phillips ___ ____ ________ Petroleum Co. v. Shutts, 472 U.S. 797, 820 (1985); Reich v. _____________ ______ _____ Purcell, 432 P.2d 727, 730 (Cal. 1967), this general rule was _______ adopted in order to discourage forum shopping. Where, as is the case here, there is not the slightest hint of forum shopping, plaintiff's return to Rhode Island should not be ignored. -26- 26 that it molded its behavior in reliance on Colorado's damages law, particularly where that law was not enacted until four years after the subject ATV was thrust into the stream of commerce. See Roy v. Star Chopper Co., 584 F.2d 1124, 1129 ___ ___ _________________ (1st Cir. 1978), cert. denied, 440 U.S. 916 (1979). Honda _____ ______ certainly did not purchase |