Lakes v. Bath & Body Works, LLC

Filing 152

MEMORANDUM AND ORDER signed by District Judge Morrison C. England, Jr. on 8/8/2019 DENYING 122 Motion to Apply Ohio Law to Plaintiffs Punitive Damages Claim. (Michel, G.)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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CRYSTAL LAKES, an individual,

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Plaintiff,

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No. 2:16-cv-02989-MCE-AC

v.

MEMORANDUM AND ORDER

BATH & BODY WORKS, LLC, a
Delaware limited liability company,
Defendant.

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Through the present lawsuit, Plaintiff Crystal Lakes (“Plaintiff”) alleges that a

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candle manufactured by Defendant Bath & Body Works, LLC (“BBW”) malfunctioned

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such that she sustained burns from molten wax. Plaintiff filed her lawsuit in state court

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as a California resident, and BBW subsequently removed the action to this Court, citing

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diversity of citizenship pursuant to 28 U.S.C. §§ 1332(a) and 1441(a) between Plaintiff, a

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California resident, and BBW, a Delaware corporation with its principal place of business

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in Ohio.

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Presently before the Court is BBW’s Motion to Apply Ohio Law to Plaintiff’s

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Punitive Damage Claim. ECF No. 122. According to BBW, in the face of a conflict

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between California and Ohio law concerning the extent of punitive damages, Ohio law

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should control because the circumstances of this matter show little, if any, California
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involvement suggesting that California law should apply. As set forth below, BBW’s

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Motion is DENIED.

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BACKGROUND

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On October 15, 2015, Plaintiff was burned by a three-wick aromatherapy candle

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that she lit some thirty minutes beforehand at her home in Dominical, Costa Rica.

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According to Plaintiff, she saw the candle “flash over” with flames shooting some seven

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to ten inches from the rim of its glass container. Dep. of Crystal Lakes, 61:4-64:23.

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After unsuccessfully trying to blow the candle out, and as she tried to pick the candle up,

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Plaintiff heard a “popping noise” and became aware than her hands had been burned by

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molten wax. Id. at 65:20-67:24.

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Plaintiff had been living back and forth between Newcastle, California, and Costa

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Rica for several years and, while she described herself as essentially living “full time” in

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Costa Rica during 2015 and 2016, it also appeared that she had been travelling regularly

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between Northern California and Central America. Plaintiff’s domestic partner, Michael

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Parker, Jr., operated a mineral processing/liquid solid separation business named Tons

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Per Hour, Inc. that was apparently headquartered in California. Beginning in 2013, after

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the business established an additional office in Costa Rica, Plaintiff and Parker began

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travelling back and forth between California and Costa Rica.

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While in California, the couple continued to live in a house located in Newcastle,

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where they had resided together since 2010. According to Plaintiff’s Declaration,

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between April 2013 and April 2016 she made some 14 separate trips between Costa

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Rica and California, staying at a house in Dominical while in Costa Rica and continuing

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to live at the same house in Newcastle when in the United States. Pl.’s Decl., ECF

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No. 132-9, ¶ 11. Nonetheless, in 2015 and 2016 it appears that the couple spent most

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of their time in Costa Rica and considered Costa Rica to be their primary residence

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during that time period.
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On September 20, 2015, Plaintiff flew from San Juan, Costa Rica, to Sacramento

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(via Houston, Texas) where she lived in the same Newcastle house for approximately

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three weeks until she returned to Costa Rica on October 9, 2015. During this stay, on

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September 30, 2015, Plaintiff ordered four BBW aromatherapy candles, including the

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candle implicated in the October 15, 2015 incident, that were delivered to her in

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California on or about October 3, 2015.

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The treatment Plaintiff initially obtained in Costa Rica consisted of the application

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of an antibiotic burn cream she obtained from a local pharmacy. Plaintiff applied the

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cream to both hands and used gauze bandages for approximately six weeks. On

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February 15, 2016, she returned to California and was seen on February 26, 2016, by an

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internist, Dr. Norman Panting, at the request of her attorney. Dr. Panting referred

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Plaintiff to the University of California, Davis, Medical Center Burn Clinic for a follow-up

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visit on March 16, 2016. According to Plaintiff, she returned to California permanently on

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April 16, 2016, and has lived there since.

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In now requesting that the Court apply Ohio law with respect to the availability of

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punitive damages at trial, BBW claims that the injury-producing candle was designed,

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manufactured, and tested in Ohio by a business principally located in Ohio. BBW further

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avers that its alleged knowledge of repeated instances of “flare up” instances concerning

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the three-wick candles stemmed from complaints made to BBW’s customer call center,

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also located in Ohio. BBW argues that California, on the other hand, has virtually no

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interest in this matter since Plaintiff’s injury occurred in Costa Rica while she was living

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in Costa Rica.

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STANDARD

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In a diversity action like the present matter, this Court sits in California and must

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apply California choice of law rules. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487,

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496 (1941). Choice of law issues in California are determined using the so-called
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“governmental interest” analysis. That analysis requires three separate determinations:

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1) whether the involved states’ laws materially differ; 2) if, so, whether there is a true

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conflict with respect to each state’s interest in applying its own law; and 3) if a true

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conflict exists, the relative interests of each jurisdiction are weighed, and “the law of the

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state whose interest would be more impaired if its law were not applied” controls.

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Sullivan v. Oracle Corp., 51 Cal. 4th 1191, 1202 (2011). Different states’ laws may apply

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to different issues because a separate conflict of law analysis must be applied to each

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claim. See Chen v. L.A. Truck Centers, LLC, 7 Cal. App. 5th 757, 767 (2017).

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ANALYSIS

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BBW’s Motion seeks to apply Ohio law only to Plaintiff’s punitive damages claim

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despite the fact that it is not otherwise contesting the propriety of this venue here in

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California. See Def.’s Mot., ECF No. 122, 9:19-22, citing Bank Saderat Iran v. Telegen

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Corp., 30 F. App’x 741, 743 (9th Cir. 2002) (“district court sitting in diversity . . . in

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California . . . must conduct a separate choice of law analysis with respect to each issue

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in a case”).

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BBW correctly points out that there are material differences between the laws of

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Ohio and California regarding punitive damages. The Ohio legislature has decided to

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limit punitive damage to two times any compensatory damages award rendered at trial.

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Ohio Rev. Code Ann. § 2315(D)(2)(a); see Sivit v. Village Green of Beachwood, L.P.,

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143 Ohio St. 3d 168, 170-71 (2015) (requiring remittitur of punitive damages where they

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exceeded twice the compensatory award). California, on the other hand, has enacted

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no statutory cap on punitive damages. Given this clear discrepancy between the

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appropriate breadth of punitive damages award under Ohio and California law, the two

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states’ treatment of punitive damages unquestionably differs.

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Under California’s choice of law analysis described above, the Court must next
assess whether this difference amounts to a “true conflict” given the competing state
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interests involved. Plaintiff asserts that BBW’s claim for Ohio punitive damages law fails

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on this issue alone, without even proceeding to whether, based on the “comparative

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impairment” to either California or Ohio law, one state has a more significant interest in

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applying its own jurisprudence. Plaintiff cites the decision in Scott v. Ford Motor Co.,

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224 Cal. App. 4th 1492 (2014) in support of its argument.

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Like BBW, the defendant in Scott, a manufacturer of brake parts, argued that

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because its conduct occurred in Michigan (the brakes contained asbestos, therefore

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exposing those who worked extensively with the brakes to asbestos-related conditions),

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Michigan law should control any award of punitive damage even though Scott lived and

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worked in California and was exposed to the defendant’s products in California.

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Michigan law, unlike California, prohibited punitive damages.

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While the Scott court recognized the difference between the two states’ laws in

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finding that a facial conflict in that regard existed, it nonetheless declined to find that any

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“true” conflict was present. The court reasoned that “[w]hile Michigan has a strong

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interest in seeing its view of the appropriate policy carried outs in its own courts, it has a

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correspondingly minimal interest in seeing the same implemented in the courts of

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California.” Id. at 1506. While the defendant claimed that Michigan law reflected “an

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interest in protecting Michigan-domiciled defendants from excessive financial liability”

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(id.), Scott found that “Michigan has no interest in shielding its resident corporations from

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punitive damages when those corporations chose to do business in states permitting the

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imposition of punitive damages,” id. at 1508.

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Scott’s reasoning applies squarely here. BBW unquestionably manufactured and

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designed candles to be sold throughout the country, including in places like California

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where punitive damages are permitted. To the extent BBW made the choice to do

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business outside of its Ohio hub, Scott stands for the proposition that BBW’s decision in

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that regard overcomes any interest on Ohio’s part in protecting resident corporations

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operating within its borders. As Scott pointed out, it would be nonsensical to permit a

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defendant “to carry a nationwide shield from punitive damages liability [simply] because
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the state in which it maintains its headquarters” has prohibited such damages. Id. at

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1506. To further illustrate the illogic of any such position, the court remarked that it

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would be equally ill-advised to expect a court where no punitives are permitted to impose

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punitive damages on a California-based corporation simply because California has made

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a different policy judgment in permitting exemplary damages. Id.

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Consequently, this Court follows Scott in finding no “true conflict” present under

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the facts of this matter. Even if the Court were to find that a true conflict existed,

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however, the ensuing “comparative impairment” analysis (for determining whether Ohio

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or California law has a bigger stake in whether punitive damages should apply) would

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not produce a different outcome. This is because BBW understates the California

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connections in this matter while at the same time downplaying its own decision to

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manufacture and market products for use throughout the United States, including in

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jurisdictions like California.

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While BBW argues that the only connection with California is that the candle in

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question happened to ship to a California address on its way to Costa Rica, the truth is

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not so simple. The evidence shows that Plaintiff continued to maintain California ties

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and owned a home here throughout the period in question even if she may have been

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spending most of her time in Costa Rica at the time the accident occurred. Her claim

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that she travelled constantly between Costa Rica and California is underscored by the

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fact that she ordered the BBW candle while in California, during a three-week period she

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was staying in California, which period ended just six days before the candle allegedly

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malfunctioned. In addition, BBW’s claim that she obtained no treatment in California is

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incorrect, since after returning to California several months after the accident she sought

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medical evaluation in California at the advice of her attorney and thereafter was seen at

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the Burn Center of the University of California, Davis, Medical Center, also in California.

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Significantly, too, Plaintiff not only maintained the same residence in Newcastle between

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2010 and 2016, but since selling that house in early 2016 she has continuously lived in

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California with the exception of two trips to Costa Rica in early 2017. All of these facts
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point to longstanding California ties both before and after the accident. BBW, on the

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other hand, argues that given the design and manufacture of the candle in Ohio by an

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Ohio-headquartered corporation, and since the accident itself occurred in Costa Rica,

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any California connection is minimal.

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Analyzing comparative impairment for choice of law purposes requires the Court

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to determine which jurisdiction should have the predominant lawmaking authority for the

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issue at stake as being more “committed” to its laws. See Waggoner v. Snow, Becker,

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Kroll, Klaris & Krauss, 991 F.2d 1501, 1507 (9th Cir. 1993). According to BBW, Ohio’s

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interest in limiting punitive damage awards is to protect “its resident corporations

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conducting business inside its borders” and to prevent the “financial ruination” of a

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defendant while at the same time deterring certain conduct. Def.’s Mot., ECF No. 122,

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10:15-19, citing Dardinger v. Anthem Blue Cross & Blue Shield, 98 Ohio St. 3d 77, 102

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(2002). BBW maintains that under Ohio law, “limit[ing] the amount of punitive damages

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that can be awarded against a defendant [will] make the civil justice system more

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predictable.” Sivit v. Village Green of Beachwood, L.P., 65 N.E. 3d at 175. BBW further

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cites Ohio authority supporting the proposition that “such predictability will aid the state

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economy.” Arbino v. Johnson & Johnson, 116 Ohio St. 3d 468, 489 (2007).

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California on the other hand, has long expressed its policy desire “to punish the

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tortfeasor whose wrongful action was intentional or malicious, and to deter him and other

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from similar extreme conduct.” Scott, 224 Cal. App. 4th at 1504. In that regard

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“California has long endorsed the use of punitive damages to deter continuation or

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limitations of a corporation’s course of wrongful conduct . . . “ Id. California also has a

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strong interest in ensuring “that the cost of injuries of defective products is borne by the

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manufacturers that put such products on the market rather than by injured persons who

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are powerless to protect themselves.” Chen v. L.A. Truck Centers, 7 Cal. App. 5th 757,

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771 ((2017). California’s laws consequently are grounded in policy that both “provide[s]

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an economic incentive for improved product safety” and “induce[s] reallocation of

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resources toward safe products.” Id. at 772.
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With these concerns in mind, BBW does not and cannot dispute that it markets

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and distributes its three-wick candles in California, and to the extent the candles are

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defective given allegations that BBW does not follow its own “best practices” in

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manufacturing the candles, California unquestionably has a strong interest in protecting

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consumers from such behavior. As indicated above, Plaintiff lived in California at least

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part of the time both before and after the accident, continued to maintain a home in

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California, ordered the candle while staying at her California residence for some three

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weeks just before the accident, and sought treatment for her injuries in California. Ohio’s

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interest in protecting an Ohio company from punitive damage outside of Ohio, where the

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company, like BBW here, makes a conscious decision to do business outside of Ohio, is

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minimal by comparison. See Scott, 224 Cal. App. 4th at 1508.

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This district’s recent decision in Hill v. Novartis Pharmaceutical Corp., 2012 WL

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967577 (E.D. Cal. 2012) is instructive. Like this case, plaintiff’s complaint in that case

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alleged she was a resident of California and there was no dispute that the product in

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question was marketed and sold in California. Here, while the evidence concerning

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Plaintiff’s residence may be disputed, the circumstances of this matter as a whole reveal

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strong California ties even though the accident itself happened to occur while Plaintiff

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was staying in Costa Rica. Therefore, while Hill may be even a clearer case since it was

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unquestioned that plaintiff there was a California resident and the accident occurred in

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California, this Court nonetheless finds the logic of Hill to be compelling. Hill held that

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California’s interest, as the forum state, prevailed with regard to punitive damages,

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finding that “the law of the forum will be displaced only if there is a compelling reason for

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doing so. It is applicable unless either the plaintiff or the defendant has been forced into

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a forum devoid of any such contact that would justify application of its own law.” Id. at *7

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(internal citations omitted). Here, there is no dearth of contact supporting application of

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California law. The fact that BBW happens to be headquartered in Ohio and

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manufactured and designed the candle in Ohio does not provide a compelling reason to

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apply Ohio law where BBW chose to do business outside of Ohio. Significantly, too, as
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in Scott, Hill found no evidence to explain how another state’s “interest would be

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advanced by shielding corporations from excessive liability in other states,” or any

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evidence that the economic welfare of the other state “would be significantly impaired if

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California’s punitive damages law were to apply here.” Id. at * 8. That is the same

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argument being advanced here and it is unpersuasive. As Hill noted, to the extent a

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company “presumably does business in all fifty states, [it] cannot reasonably contend it

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expected [the punitive damage law governing its headquarters] to apply in all instances

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where a consumer was injured by its product.” Id. at * 11.

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CONCLUSION

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For all the above reasons, Defendant Bath & Body Works’ Motion to Apply Ohio
Law to Plaintiff’s Punitive Damages Claim (ECF No. 122) is DENIED.
IT IS SO ORDERED.
Dated: August 8, 2019

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