Vicki Pounders v. Enserch E&C Inc , 232 Ariz. 352 ( 2013 )

IN THE
SUPREME COURT OF THE STATE OF ARIZONA
_______________
VICKI L. POUNDERS, INDIVIDUALLY, AND AS SURVIVING WIFE OF DUDLEY
W. POUNDERS, DECEASED,
Plaintiff/Appellant,
v.
ENSERCH E&C, INC. NKA EECI, INC.; RILEY POWER, INC. FNA RILEY STOKER
CORPORATION; BW/IP, INC., AND ITS WHOLLY OWNED SUBSIDIARIES,
Defendants/Appellees.
_______________
No. CV-12-0173-PR
Filed August 21, 2013
_______________
Appeal from the Superior Court in Maricopa County
The Honorable Joseph B. Heilman, Judge
No. CV2008014007
AFFIRMED
Opinion of the Court of Appeals, Division One
229 Ariz. 433, 276 P.3d 503 (App. 2012)
AFFIRMED
_______________
COUNSEL:
Steven I. Leshner, Steven I. Leshner, P.C., Phoenix and Charles S. Siegel,
Mark A. Linder (argued), Waters & Kraus, L.L.P., Dallas, TX, for Vicki L.
and Dudley W. Pounders
Edward M. Slaughter, Robert Brooks Gilbreath (argued), Hawkins Parnell
Thackston & Young LLP, Dallas, TX and Larry J. Wulkan, Stinson
Morrison Hecker LLP, Phoenix, for Enserch E&C, Inc., nka EECI, Inc.
Larry J. Crown (argued), Hillary P. Gagnon, Jennings, Haug &
Cunningham, L.L.P., Phoenix, for BW/IP, Inc.
POUNDERS V. ENSERCH
Opinion of the Court
David P. Herrick (argued), Herrick & Associates, P.C., Dallas, TX and
Larry J. Crown, Travis A. Pacheco, Jennings, Haug & Cunningham, L.L.P.,
Phoenix, for Riley Power, Inc., fna Riley Stoker Corporation
Stanley G. Feldman, Haralson, Miller, Pitt, Feldman & McAnally, P.L.C.,
Tucson and David L. Abney, Knapp & Roberts, P.C., Scottsdale, for Amici
Curiae Arizona Association for Justice and Arizona Trial Lawyers
Association
J. Michael Low, Low & Cohen, PLLC, Phoenix and Mark A. Behrens,
Shook, Hardy & Bacon, L.L.P., Washington, D.C., for Amici Curiae
Coalition for Litigation Justice, Inc., et al.
Charles M. Callahan, Christian Dichter & Sluga PC, Phoenix and Andrew
J. Petersen, Humphrey & Petersen, P.C., Tucson, for Amicus Curiae
Arizona Association of Defense Counsel
JUSTICE BRUTINEL authored the opinion of the Court, in which CHIEF
JUSTICE BERCH, VICE CHIEF JUSTICE BALES, JUSTICE PELANDER,
and JUDGE ESPINOSA* joined.
JUSTICE BRUTINEL, opinion of the Court:
¶1 We consider whether a wrongful death claim based on exposure to
asbestos in New Mexico, which resulted in mesothelioma diagnosed thirty
years later in Arizona, is subject to the substantive law of New Mexico or
Arizona. Because New Mexico has the more significant relationship to
this claim, that state’s law applies.
I.
¶2 Dudley Pounders, a New Mexico resident, worked as a welder for
Arizona Public Service (“APS”) at the Four Corners Power Plant in New
Mexico from approximately 1969 to 1974 and again from 1979 to 1983.
While performing repair and maintenance work on valves and other
equipment at the Plant, he inhaled asbestos fibers.
¶3 Mr. Pounders moved to Arizona in the late 1980s. In May 2008, he
was diagnosed with mesothelioma, a type of cancer associated with
asbestos exposure. The following month, Mr. and Mrs. Pounders filed
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POUNDERS V. ENSERCH
Opinion of the Court
suit in Arizona against Enserch E&C, Inc., the successor-in-interest to the
architect and construction manager for three units at the Plant; BW/IP,
Inc., a parent company to the manufacturer, designer, and supplier of ten
of the pumps used at the Plant; and Riley Power, Inc., the designer and
manufacturer of industrial boilers used at the Plant (collectively
“Enserch”). After Mr. Pounders died in August 2008, Mrs. Pounders
amended the complaint to assert claims for wrongful death.
¶4 The trial court granted Enserch’s motion to apply New Mexico
substantive law to Mrs. Pounders’ claims, including New Mexico’s statute
of repose. Based on that statute, which bars actions arising from
improvements to real property filed more than ten years after their
completion, N.M. Stat. Ann. § 37-1-27, the court granted summary
judgment in favor of Enserch.
¶5 The court of appeals affirmed. Pounders v. Enserch E&C, Inc., 229
Ariz. 433, 444 ¶ 33, 276 P.3d 502, 513 (App. 2012). Applying § 175 of the
Restatement (Second) of Conflict of Laws (the “Second Restatement”), the
court concluded that New Mexico was the place of injury, id. at 436–39
¶¶ 9–17, 276 P.3d at 505–08, and had the “most significant relationship” to
the litigation under the factors listed in the Second Restatement §§ 145 and
6, id. at 439–41 ¶¶ 18–24, 276 P.3d at 508–10. As a result, the court agreed
with the trial court that New Mexico’s statute of repose applied to Mrs.
Pounders’ wrongful death claim and affirmed summary judgment. Id. at
441 ¶ 25, 444 ¶ 34, 276 P.3d at 510, 513.
¶6 We granted review to consider issues of statewide importance
regarding the choice of law in wrongful death actions involving long-
latency diseases. We declined, however, to review the ruling that the New
Mexico statute of repose, if applicable, bars the wrongful death claim. We
have jurisdiction pursuant to Article 6, Section 5(3) of the Arizona
Constitution and A.R.S. § 12-120.24. We review choice-of-law questions
de novo. Swanson v. Image Bank, Inc., 206 Ariz. 264, 266 ¶ 6, 77 P.3d 439,
441 (2003).
II.
¶7 The choice of law is dispositive because New Mexico and Arizona
differ in their limitation periods for bringing certain personal injury
claims. New Mexico’s statute of repose, N.M. Stat. Ann. § 37-1-27, bars
personal injury claims arising out of construction of improvements on real
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POUNDERS V. ENSERCH
Opinion of the Court
property when such claims are brought more than ten years after the
completion of the improvement. This bar applies even if the injury has
not yet been discovered. In contrast, Arizona does not have a similar
statute of repose; instead it has a statute of limitations, which bars
personal injury claims asserted more than two years after the claim is
discoverable. See A.R.S. § 12-542(1); see also Doe v. Roe, 191 Ariz. 313, 322
¶ 29, 955 P.2d 951, 960 (1998).
¶8 Arizona is the forum state, and thus its law will govern both
procedural issues and the choice of law regarding substantive issues. See
Cardon v. Cotton Lane Holdings, Inc., 173 Ariz. 203, 206, 841 P.2d 198, 201
(1992). Statutes of repose are matters of substantive law. Albano v. Shea
Homes Ltd. P’ship, 227 Ariz. 121, 127 ¶ 24, 254 P.3d 360, 366 (2011). Hence,
Arizona’s choice-of-law rules will determine whether New Mexico’s or
Arizona’s substantive law applies.
¶9 Arizona follows the Second Restatement. Jackson v. Chandler, 204
Ariz. 135, 136 ¶ 5, 61 P.3d 17, 18 (2003). Section 175, entitled “Right of
Action for Death,” initially directs us to look to
the “local law of the state where the injury occurred . . .
unless, with respect to the particular issue, some other state
has a more significant relationship under the principles
stated in § 6 to the occurrence and the parties, in which event
the local law of the other state will be applied.
¶10 Thus, we must first determine whether the injury occurred in
Arizona or New Mexico. Enserch urges us to find that the place where the
plaintiff was exposed to harmful materials is the place of injury. It relies,
in part, on the fact that mesothelioma is a dose-response disease in which
each inhalation of asbestos dust “takes effect” on the lungs causing tissue
damage. See Ins. Co. of N. Am. v. Forty-Eight Insulations, Inc., 633 F.2d 1212,
1222 (6th Cir. 1980). According to Enserch, each inhalation of asbestos
fibers began damaging Mr. Pounders’ lung tissues; thus he was injured in
New Mexico.
¶11 Mrs. Pounders counters that a “manifestation” theory better
comports with Arizona’s case law regarding compensability of asbestos-
related claims. Citing Burns v. Jaquays Mining Corp., 156 Ariz. 375, 376–
78, 752 P.2d 28, 29–31 (App. 1987), and DeStories v. City of Phoenix, 154
Ariz. 604, 605, 744 P.2d 705, 706 (App. 1987), she maintains that Arizona
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Opinion of the Court
does not recognize mere exposure to a toxic substance, without apparent
effects, to be an actionable “injury,” even if such exposure produces
cellular changes. Because Mr. Pounders developed the requisite
compensable injury, mesothelioma, while residing in Arizona, Mrs.
Pounders argues that Arizona is the place of injury.
¶12 As the court of appeals noted, courts that have considered this
question have reached opposing conclusions. See Pounders, 229 Ariz. at
438 ¶ 13, 276 P.3d at 507. In Rice v. Dow Chemical Co., the Washington
Supreme Court rejected the plaintiff’s manifestation argument and held
that the plaintiff was “injured” in Oregon, where he was primarily
exposed to dangerous pesticides, rather than in Washington, where he
eventually developed leukemia. 875 P.2d 1213, 1217–18 (Wash. 1994); see
also Celotex Corp. v. Meehan, 523 So. 2d 141, 145–46 (Fla. 1988) (applying
New York law where decedent was exposed in New York, but manifested
asbestos-related disease in Florida). Conversely, in Wyeth v. Rowatt, the
Nevada Supreme Court held that the plaintiffs were injured “where the
slow-developing disease [was] first ascertainable,” because before
manifestation, “there is no legally compensable injury to sue upon.” 244
P.3d 765, 776–77 (Nev. 2010). The Wyeth court emphasized the
compensability of the injury because a plaintiff’s damages are not based
on subcellular injuries occurring at exposure, but rather arise from the
development of a diagnosable disease. Id. at 776 (discussing Renfroe v. Eli
Lilly & Co., 686 F.2d 642, 647 (8th Cir. 1982)).
¶13 We agree with Mrs. Pounders that the state where the disease first
manifests is the “place of injury,” but our reasoning rests on tracing the
Restatement’s evolution in analyzing conflict-of-laws questions and the
“elements of continuity [between the First and Second Restatements].”
See 1 Second Restatement (Introduction) IX.
¶14 The First Restatement adopted the rule of lex loci delicti, or “place of
wrong,” as the controlling factor when determining which state’s law
applied. It defined the “place of wrong” as where the “last event
necessary to make an actor liable for an alleged tort takes place.”
Restatement (First) of Conflict of Laws § 377. Note 1 to § 377 explains that
the place of wrong is where the “harmful force takes effect upon the
body.” Read in conjunction with § 377’s last-event-necessary rule, Note 1
clarifies that the harmful force takes effect upon the body when the force
takes legal effect. Comment (a) to § 377 confirms this view, explaining:
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POUNDERS V. ENSERCH
Opinion of the Court
Although by statute, the state in which any event in the train
of consequences, starting with the act of the wrongdoer and
continuing until the final legal consequences thereof, may
make the event a wrong, the situation is, in most cases,
governed by the common law. The common law selects a
particular point in the train of events as the place of wrong.
¶15 The Second Restatement recognized that “[s]ituations arise where
the state of the last event (place of injury) bears only a slight relationship
to the occurrence and the parties with respect to the particular issue.”
Introductory Note, Second Restatement, Ch. 7, Wrongs, Topic 1, Torts.
For that reason, the Second Restatement rejected the lex loci rule in favor of
a multi-factored contacts analysis. Although the Second Restatement
deemphasized the primacy of the place of injury, it maintained the
definition of the place of injury as the place of the last event necessary.
Indeed, the Second Restatement equated the state of the last event with
the place of injury. See id. Accordingly, the place of injury for purposes of
§ 175 is where the last event necessary for liability occurs.
¶16 The court of appeals based its analysis on comment (b) to § 175,
finding that the title of that comment — Place of Injury — provided
guidance as to the meaning of the phrase “where the injury occurred” in
§ 175. Pounders, 229 Ariz. at 437 ¶ 10, 439 ¶ 15, 276 P.3d at 506, 508.
Comment (b) provides:
Place of injury. The place where the injury occurs is the
place where the force set in motion by the actor first takes
effect on the person. This place is not necessarily that where
the death occurs. Nor is it the place where the death results
in pecuniary loss to the beneficiary named in the applicable
death statute.
¶17 Based on the language of comment (b), the court of appeals
determined that the Second Restatement “does not tie the initial effect of
an act or omission to compensability or accrual; it merely requires an
‘effect.’” Pounders, 229 Ariz. at 439 ¶ 15, 276 P.3d at 508. But this
conclusion overlooks how comment (b)’s “takes effect” language
functions within the First and Second Restatements.
¶18 Comment (b) reflects that the “place of injury” differs from the
“place of death” — a distinction uniquely applicable to wrongful death
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Opinion of the Court
cases. The remainder of comment (b) supports this interpretation by
providing: “This place [of injury] is not necessarily that where the death
occurs. Nor is it the place where the death results in pecuniary loss to the
beneficiary named in the applicable death statute.”
¶19 Furthermore, comment (b)’s “takes effect” language is noticeably
absent from Second Restatement § 146, § 175’s counterpart governing
personal injury actions. It seems unlikely that the drafters of the
Restatement intended that the state “where the injury occurred” means
one thing for wrongful death cases and another for personal injury cases
or that they intended to have a “first effect” test that applies only to
wrongful death actions, but not to tort claims generally. This is
particularly true in light of § 175’s comment (a), which states that “the law
applicable to wrongful death is selected by the same principles as control
selection of the law applicable to personal injuries in general (see § 146).”
¶20 The court of appeals also held that using comment (b) to “deem[]
the initial effect of conduct, regardless of compensability and accrual, as
the injury for choice-of-law purposes promotes the Restatement goals of
certainty, predictability, and uniformity of result.” Pounders, 229 Ariz. at
439 ¶ 15, 275 P.3d at 508 (citing Second Restatement § 175 cmt. d). But
only the place of the last event necessary for liability, that is — the place of
injury — is certain and predictable. If a defendant exposed a plaintiff to
harmful chemicals in several states during the course of the plaintiff’s
employment, pinpointing where the “injury” occurred would be difficult.
Besides, it is not a foregone conclusion that exposure to harmful chemicals
will cause a compensable injury. Determining that the “place of injury” is
the place where the last event necessary for liability occurred (that is, the
place where the injury manifested), which can only occur in one location,
preserves the Restatement goals of certainty, predictability, and
uniformity of result.
¶21 Noting the continuity between the two Restatements and giving
“place of injury” the same meaning in the Second Restatement’s
Introductory Note, § 146, and § 175, we find that the “place of injury” is
the state where “the last event necessary” for liability occurs.
¶22 With that definition in mind, we address where the last event
necessary occurred for Mr. Pounders. For long-latency diseases, the “last
event” takes place when the disease is discoverable because, until then, a
legally compensable injury does not exist. For asbestos-related diseases
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Opinion of the Court
like mesothelioma, the last event occurs upon manifestation because
manifestation provides the requisite compensable injury to support a
personal injury cause of action. See Burns, 156 Ariz. at 376–78, 752 P.2d at
29–31 (requiring a physical manifestation of bodily injury to sustain a
remedy at law for asbestos exposure); DeStories, 154 Ariz. at 610, 744 P.2d
at 711 (requiring a “medically identifiable effect” in order to bring a cause
of action for asbestos-exposure). Here, the “last event necessary” — the
manifestation of mesothelioma — occurred in Arizona. Accordingly, we
find that Arizona is where the “force set in motion by the actor first [took]
effect” and for purposes of the Second Restatement is thus the place of
injury.
¶23 Having determined that Arizona is the place of injury, we now turn
to the choice-of-law analysis under § 175. The court of appeals construed
§ 175 to “presumptively apply” the law of the place of injury unless
another state has a more significant relationship. Pounders, 229 Ariz. at
436 ¶ 8, 276 P.3d at 505 (citing Phillips v. Gen. Motors Corp., 995 P.2d 1002,
1008 (Mont. 2000)).
¶24 To the extent that such a presumption suggests that the place of
injury is entitled to greater weight than the other Second Restatement
choice-of-law factors, we disagree. We interpret § 175 simply to recognize
a default rule that the law of the place of injury controls unless another
“state has a more significant relationship to the occurrence and the
parties.” See Second Restatement § 175 cmt. d; accord State ex rel. Broglin v.
Nangle, 510 S.W.2d 699, 702 (Mo. 1974) (describing the Second
Restatement’s place of injury methodology as allowing for “certainty of
result absent some local compelling state interest to the contrary”);
Hataway v. McKinley, 830 S.W.2d 53, 59 (Tenn. 1992) (describing the
Second Restatement’s approach as “a ‘default’ rule whereby trial courts
can apply the law of the place where the injury occurred when each state
has an almost equal relationship to the litigation”); see also Sosa v. Alvarez-
Machain, 542 U.S. 692, 709 n.7 (2004) (“Under the Second Restatement, tort
liability is determined ‘by the local law of the state which . . . has the most
significant relationship to the occurrence and the parties,’ taking into
account ‘the place where the injury occurred . . . .’” (first alteration in
original) (emphasis added) (quoting Second Restatement § 145(2))).
¶25 Indeed, Arizona case law has described nearly identical language
in Second Restatement § 146, as only “direct[ing] [the court] initially to the
law of the place where the accident occurred,” and instead focusing on the
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state that has the most significant relationship to the issue. Garcia v. Gen.
Motors. Corp., 195 Ariz. 510, 517 ¶ 20, 990 P.2d 1069, 1076 (App. 1999).
Consequently, the place-of-injury factor suggests that the law of that place
will apply, but it is only one factor to consider in determining which state
has the most significant relationship to the case. Id.A.
¶26 We therefore must consider whether New Mexico has a more
significant relationship to the parties and the issue than does Arizona in
light of the contacts specified in § 145(2) and the choice-of-law principles
in § 6(2). See id.; Second Restatement § 175 cmt. d.
¶27 Section 145(2) outlines four contacts that are particularly relevant
when resolving choice-of-law issues in tort cases:
(a) the place where the injury occurred,
(b) the place where the conduct causing the injury
occurred,
(c) the domicil[e], residence, nationality, place of
incorporation and place of business of the parties, and
(d) the place where the relationship, if any, between the
parties is centered.
¶28 First, although Arizona is the place of injury, this factor holds little
significance in our contacts analysis because the injury’s occurrence in
Arizona is fortuitous; the Pounders could have moved anywhere after
leaving New Mexico. See Second Restatement § 145 cmt. e (“Situations do
arise, however, where the place of injury will not play an important role in
the selection of the state of the applicable law. This will be so, for
example, when the place of injury can be said to be fortuitous or when for
other reasons it bears little relation to the occurrence and the parties with
respect to the particular issue . . . .”); see also Garcia, 195 Ariz. at 517–18
¶ 22, 990 P.2d at 1076–77 (holding that although rollover accident
occurred in Idaho, and was thus the place of injury, this determination
merited little consideration because the accident “just happened to occur
there”); Baroldy v. Ortho Pharm. Corp., 157 Ariz. 574, 579, 760 P.2d 574, 579
(App. 1988) (dismissing the place-of-injury factor because the “[p]laintiffs
could have duplicated their relationship with [the defendant] anywhere,”
and was therefore “mere happenstance”).
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Opinion of the Court
¶29 The second § 145 contact, “where the conduct causing the injury
occurred,” is New Mexico. Mrs. Pounders claims that Enserch negligently
created “hazardous and deadly conditions through the use of asbestos,
asbestos-containing products or machinery requiring or calling for the use
of asbestos or asbestos-containing products in close proximity to
Decedent.” Not only did the use of asbestos occur in New Mexico, but
Enserch correctly points out that “all conduct allegedly causing Mr.
Pounders’ injury centered in New Mexico.”
¶30 Because the place of injury is merely fortuitous, we assign
particular weight to the second § 145 contact in light of comment (e) to
§ 145:
Choice of the applicable law becomes more difficult in
situations where the defendant’s conduct and the resulting
injury occurred in different states. When the injury occurred
in two or more states, or when the place of injury cannot be
ascertained or is fortuitous and, with respect to the
particular issue, bears little relation to the occurrence and the
parties, the place where the defendant’s conduct occurred
will usually be given particular weight in determining the
state of the applicable law.
¶31 The third § 145 contact requires that we look to the “domicil[e],
residence, nationality, place of incorporation and principal place of
business of the parties.” Enserch and Riley have principal places of
business in Massachusetts while BW/IP has its principal place of business
in Texas.
¶32 Mr. Pounders lived in Arizona when his mesothelioma was
discovered. This factor is entitled to little weight because, as noted above,
Mr. Pounders could have moved anywhere at any time after his exposure
to asbestos. See Rice, 875 P.2d at 1219 (residency in the forum state alone is
not considered sufficiently related to the action to warrant applying forum
law because ‘[t]he possibility that the employee might change his
residence at any time, after the injury, and thus shift the burden of
support to another state, makes the fact of present residence less
significant” (quoting Ferren v. Gen. Motors Corp., 628 A.2d 265, 268 (N.H.
1993))); see also Second Restatement § 145 cmt. e (“The fact . . . that one of
the parties is domiciled . . . in a given state will usually carry little weight
of itself.”). Consequently, the third § 145 contact is minimally relevant.
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¶33 The last § 145 contact considers “when the injury was caused by an
act done in the course of [a] relationship, the place where the relationship
is centered.” Second Restatement § 145 cmt. e. This contact is
inapplicable because Enserch and Mr. Pounders did not have an on-going
relationship centered in a particular state. APS, an Arizona company,
employed Mr. Pounders. None of the other parties ever employed Mr.
Pounders.
¶34 In sum, the first, third, and fourth § 145 contacts are of little
relevance, and the second contact — where the injury-inducing conduct
occurred — is entitled to particular weight. See id. We therefore find that
New Mexico has the greater interest in Mrs. Pounders’ wrongful death
claim.
B.
¶35 We must now apply the § 145 contacts in light of the choice-of-law
principles enunciated in § 6. Second Restatement § 145(2), § 175; see also
Garcia, 195 Ariz. at 518 ¶ 23, 990 P.2d at 1077.
¶36 Section 6(2) provides basic policy considerations that apply in
every choice-of-law case:
(a) the needs of the interstate and international systems,
(b) the relevant policies of the forum,
(c) the relevant policies of other interested states and the
relative interests of those states in the determination
of the particular issue,
(d) the protection of justified expectations,
(e) the basic policies underlying the particular field of
law,
(f) certainty, predictability and uniformity of result, and
(g) ease in the determination and application of the law
to be applied.
¶37 We agree with the parties that “the needs of the interstate system,”
the “basic policies underlying the particular field of law,” and the “ease in
the determination and application of the law to be applied,” the first, fifth,
and seventh factors respectively, will not be materially affected by the
application of either Arizona or New Mexico law. Likewise, the sixth
factor, “certainty, predictability, and uniformity of result,” has minimal
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relevance because that principle is primarily concerned with deterring
forum shopping, see Second Restatement § 6 cmt. i, which is not an issue
here.
¶38 The Second Restatement also reflects that the fourth factor, “the
protection of justified expectations,” may be less important in negligence
cases. Second Restatement § 6 cmt. g. In this case, Enserch claimed to
have relied on New Mexico’s limited liability arising from their business
at the Plant if litigation should occur. While an after-the-fact assertion to
have relied on New Mexico law is not particularly persuasive, to the
extent that the justified expectations principle applies, it supports
application of New Mexico law.
¶39 Because of the diminished significance of the listed factors in tort
cases, the remaining § 6 principles — § 6(2)(b), “the relevant policies of the
forum,” and § 6(2)(c), “the relevant policies of other interested states and
the relevant interest of those states in the determination of the particular
issue” — assume greater importance. See Second Restatement § 145 cmt. b
(identifying the policies of the forum and interested states as factors of
relatively greater importance in tort cases).
¶40 We compare “the relevant policies of other interested states and the
relative interests of those states in the determination of the particular
issue,” Second Restatement § 6(2)(c), in light of § 145’s contacts,
considering particularly the policy of the dominant state. See Second
Restatement § 145 cmt. b (describing that § 6 requires evaluating “the
relevant policies of other interested states and particularly of the state
with the dominant interest in the determination of the particular issue”);
see also Johnson v. Am. Leather Specialties Corp., 578 F. Supp. 2d 1154, 1171
(N.D. Iowa 2008) (when § 145’s contacts establish that a state’s interest is
dominant, the § 6 principles, which consider and compare the policies and
relative interests of the nominee states, also weigh in favor of applying the
dominant state’s law).
¶41 Arizona, the forum state, has an interest in obtaining just
compensation for its residents who suffer injury, Bryant v. Silverman, 146
Ariz. 41, 47, 703 P.2d 1190, 1196 (1985), and deterring wrongs against its
citizens, see Jackson, 204 Ariz. at 139 ¶ 17, 61 P.3d at 21. Mr. Pounders was
an Arizona resident when he was diagnosed with mesothelioma, and Mrs.
Pounders continues to reside in Arizona.
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¶42 Conversely, as provided in its statute of repose, New Mexico seeks
to protect businesses engaging in the improvement of real property from
liability after a fixed number of years. New Mexico enacted § 37-1-27 as a
response to judicial expansion of liability for contractors doing business in
New Mexico. See Howell v. Burk, 568 P.2d 214, 219 (N.M. App. 1977). The
statute was intended “‘to provide a measure of protection against claims
arising years after’ substantial completion of construction projects,”
because the lapse in time may have made asserting reasonable defenses
seemingly impossible. Coleman v. United Eng’rs & Constructors, Inc., 878
P.2d 996, 1000 (N.M. 1994) (quoting Howell, 568 P.2d at 221).
¶43 We conclude that New Mexico’s policy of enforcing its statute of
repose is entitled to deference because the § 145 contacts reflect that New
Mexico has a substantial interest in this case. See Second Restatement § 6
cmt. f (“In general, it is fitting that the state whose interests are most
deeply affected should have its local law applied.”).
¶44 Mrs. Pounders argues that New Mexico has only a de minimus
interest in applying its statute of repose because Enserch is not a
domiciliary of New Mexico. But the lack of New Mexico domicile does
not diminish New Mexico’s interest. “[A]s a practical and realistic matter
the state’s interest in having [its] law applied to the activities of out-of-
state companies within the jurisdiction is equal to its interest in the
application of [its] law to comparable activities engaged in by local
businesses . . . .” McCann v. Foster Wheeler LLC, 225 P.3d 516, 530 (Cal.
2010). A state has a “legitimate interest in attracting out-of-state
companies to do business within the state” and “advance the opportunity
of state residents to obtain employment and the products and services
offered by out-of-state companies.” Id. Thus, we conclude New Mexico
has as great an interest in applying its statute of repose to non-resident
defendants as it does to applying its statute to resident defendants.
¶45 Applying New Mexico’s statute of repose also furthers New
Mexico’s other interests. See Second Restatement § 6 cmt. f. Reflecting the
concern raised in Howell and Coleman, an extensive amount of time —
more than forty years — has passed since Enserch and its affiliates
planned, designed, and supervised the installation and placement of the
pumps and boilers at the Plant. As the court of appeals noted, “[i]f the
New Mexico statute of repose can be readily bypassed by a victim’s
relocation to another state before manifestation of disease, even though
the tortious conduct . . . occurred in New Mexico, the statute has
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POUNDERS V. ENSERCH
Opinion of the Court
diminished application to the types of claims specifically targeted by the
legislature.” Pounders, 229 Ariz. at 441 ¶ 22, 276 P.3d at 510.
¶46 Weighing the relevant policies of the two states and considering the
other § 6 principles in light of the § 145 contacts, we conclude that § 6
favors applying New Mexico law.
III.
¶47 We agree with the trial court and the court of appeals that New
Mexico substantive law applies to Mrs. Pounders’ wrongful death claim
and thus affirm the trial court’s summary judgment and the decision of
the court of appeals. However, because we find that Arizona is the “place
of injury,” we vacate paragraphs 8–17 and 24–25 of the court of appeals’
opinion.
* Pursuant to Article 6, Section 3 of the Arizona Constitution, the
Honorable Philip G. Espinosa, Judge of the Arizona Court of Appeals,
Division Two, was designated to sit in this matter.
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