Opinions of the United
2000 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


6-22-2000

Calhoun v. Yamaha Motor Corp
Precedential or Non-Precedential:

Docket 99-1378




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"Calhoun v. Yamaha Motor Corp" (2000). 2000 Decisions. Paper 136.
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Filed June 23, 2000

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

No. 99-1378

LUCIEN B. CALHOUN;
ROBIN L. CALHOUN,
individually and as Administrators
of the Estate of Natalie K. Calhoun, deceased

v.

*YAMAHA MOTOR CORPORATION, U.S.A.;
YAMAHA MOTOR CO., LTD.;

       Lucien B. Calhoun;
       Robin L. Calhoun,

       Appellants

(*Amended as per the Clerk's 6/1/99 Order)

On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Civil No. 90-cv-04295)
District Judge: Honorable Louis H. Pollak

Argued Thursday, November 4, 1999

BEFORE: NYGAARD and McKEE, Circuit Judges;
and GARTH, Senior Circuit Judge.

(Opinion filed: June 23, 2000)
       William J. Taylor (Argued)
       William A. DeStefano
       Patrick J. Wolfe, Jr.
       Saul, Ewing, Remick & Saul
       3800 Centre Square West
       1500 Market Street
       Philadelphia, PA 19102

       Attorneys for Appellants

       Jonathan Dryer (Argued)
       Wilson, Elser, Moskowitz
       Edelman & Dicker LLP
       The Curtis Center - Suite 1130 East
       Independence Square West
       Philadelphia, PA 19106

       Attorneys for Appellees

OPINION OF THE COURT

GARTH, Circuit Judge:

Admiralty law is considered one of the most complex
areas of American law. See 1 Thomas J. Schoenbaum,
Admiralty & Maritime Law, S 1-1, at 2 (2d ed. 1994). In an
earlier appeal in this matter, the United States Supreme
Court held that Lucien and Robin Calhoun ("the Calhouns")
may assert a cause of action based upon a state wrongful
death or survival statute to obtain relief for the death of a
non-seaman killed in United States territorial waters. See
Yamaha Motor Corp., U.S.A. v. Calhoun, 

, 216
(1996). We are now asked to resolve some of the problems
arising from the Supreme Court's holding -- problems that
the Court itself recognized -- by ruling upon two distinct
questions that the Court expressly declined to decide.

In particular, we must determine (1) which state's law
governs the type of damages available, and (2) whether
state or federal law governs the standards by which the
liability of appellees Yamaha Motor Corporation, U.S.A. and
Yamaha Motor Company, Ltd. will be defined. As a result,
this appeal concerns the extent to which state law may co-

                                  2
exist in the admiralty arena that historically has been the
exclusive domain of federal legislative and regulatory
entities. See generally David R. Lapp, Note, Admiralty &
Federalism in the Wake of Yamaha Motor Corp. U.S.A. v.
Calhoun: Is Yamaha a Cry by the Judiciary for Legislative
Action in State Territorial Waters?, 41 Wm. & Mary L. Rev.
677 (2000).

With regard to damages, the District Court for the
Eastern District of Pennsylvania held that the law of
Pennsylvania would govern the issue of compensatory
damages and that the law of Puerto Rico would govern that
of punitive damages. The District Court further held that
the law of Puerto Rico would govern the issue of Yamaha's
liability. We will affirm in part and reverse in part, affirming
the District Court's holding with respect to damages (both
compensatory and punitive), yet reversing the District
Court's disposition concerning liability, holding instead that
federal maritime law must govern the standards by which
Yamaha's liability will be evaluated.

I

In July 1989, Natalie Calhoun ("Natalie"), then twelve
years old, traveled to Puerto Rico with her parents'
permission to vacation with a friend and that friend's
family. Tragically, however, on July 6, 1989, Natalie died
when the Yamaha1 "WaveJammer"2 she was operating in
the water bordering the resort at which she was staying
struck an anchored vessel. The Calhouns, as Pennsylvania
_________________________________________________________________

1. We will refer to both Yamaha entities that are the subject of this
action collectively as "Yamaha." Yamaha Motor Company, Ltd. is the
manufacturing arm of the corporation, and is both incorporated and has
its principal place of business in Japan. Yamaha Motor Corporation,
U.S.A., is the distributing arm of the corporation, and is both
incorporated and has its principal place of business in California.

2. Although Yamaha apparently no longer manufactures the
"WaveJammer," both this Court and the Supreme Court previously have
described the vehicle as a class of jet ski. See Yamaha Motor Corp.,
U.S.A. v. Calhoun, 

, 202 (1996); Calhoun v. Yahama Motor
Corp., U.S.A., 

, 624 (3d Cir. 1994). At oral argument, counsel
for the Calhouns referred to the WaveJammer as a"watertoy."

                               3
residents, filed the present action against Yamaha on June
27, 1990, seeking relief pursuant to the Pennsylvania
wrongful death and survival statutes, 42 Pa. Cons. Stat.
Ann. SS 8301-8302 (West 1995). The Calhouns' complaint,
which alleged defects in the WaveJammer, is grounded in
theories of strict liability, negligence, and breach of implied
warranties of merchantability and fitness for a particular
purpose. The complaint seeks both compensatory and
punitive damages. Because the law of Puerto Rico does not
allow a plaintiff to recover punitive damages, the Calhouns
asserted that all questions concerning the appropriate form
of remedy be governed by the law of Pennsylvania. For the
same reason, on the other hand, Yamaha argued for the
application of the law of Puerto Rico for resolution of all
damages issues.

Yamaha filed a motion for partial summary judgment on
November 27, 1991, alleging that because Natalie died in
United States territorial waters,3 federal maritime law
provided the Calhouns' sole remedy for the circumstances
surrounding Natalie's death.4 The District Court granted
Yamaha's motion in part, and dismissed that portion of the
Calhouns' complaint that sought punitive damages and the
loss of future earnings. See Calhoun v. Yamaha Motor Corp.,
U.S.A., No. CIV. A. 90-4295, 

, at *12 (E.D.
Pa. June 22, 1993). After the Calhouns took an
interlocutory appeal, we affirmed in part and reversed in
part. See Calhoun v. Yahama Motor Corp., U.S.A. , 40 F.3d
_________________________________________________________________

3. The term "territorial waters" refers to"all inland waters, all waters
between line of mean high tide and line of ordinary law water, and all
waters seaward to a line three geographical miles distant from the coast
line." Black's Law Dictionary 1473 (6th ed. 1990); see also 

(quoting William C. Brown, III, Problems Arising from the
Intersection of Traditional Maritime Law and Aviation Death and Personal
Injury Liability, 68 Tul. L. Rev. 577, 581 (1994)). The parties do not
dispute that Natalie's death occurred in the territorial waters
surrounding the Commonwealth of Puerto Rico.

4. As we discuss infra, the Calhouns opposed the application of federal
maritime law to the substantive liability issues presented in the
litigation
because as opposed to the law of Pennsylvania, federal maritime law
would allow Yamaha to introduce evidence of Natalie's negligence. See
infra n.16.

                               4
622 (3d Cir. 1994). We concluded that although the
Supreme Court, in Moragne v. States Marine Lines, Inc.,

(1970), had eliminated the use of state law
causes of action for deaths of seamen in territorial waters,
state causes of action still remained available as relief for
the death of non-seamen in territorial waters. The Supreme
Court granted certiorari, see Yamaha Motor Corp., U.S.A. v.
Calhoun, 

(1995), and affirmed in an
unanimous opinion. See Yamaha Motor Corp., U.S.A. v.
Calhoun, 

(1996).

Neither the original panel of this Court nor the Supreme
Court, however, answered the questions that emerged from
their respective holdings. See 

n.14; 

. First , if the Calhouns
could utilize Pennsylvania's wrongful death or survival
statute to obtain relief for Natalie's death, which law5 --
Pennsylvania's or Puerto Rico's -- governs the form of the
remedy (or remedies) available to the Calhouns? Second,
even understanding that Pennsylvania's wrongful death or
survival statute provides the vehicle through which this
action may proceed, does federal maritime law or state law
provide the standards by which Yamaha's substantive
liability will be determined? If the answer to this latter
question is state law, will such liability standards be
derived from the law of Pennsylvania or Puerto Rico?

On remand from the Supreme Court, the District Court
issued a preliminary ruling on the first of these questions
during a hearing held on September 23, 1998, a ruling that
the District Court finalized in an opinion and order filed on
March 22, 1999. See Calhoun v. Yamaha Motor Corp.,
U.S.A., 

(E.D. Pa. 1999). Specifically, the
District Court held that because the present action"sounds
in admiralty," federal choice-of-law rules6 would be
employed to determine whether Pennsylvania or Puerto
_________________________________________________________________

5. Although Puerto Rico is technically classified as a "commonwealth"
and not a "state," we, as did the District Court, will use the term "state
law" to describe the law of both Pennsylvania and Puerto Rico.

6. As we discuss in detail infra, federal choice-of-law analysis in the
admiralty arena is governed by the Supreme Court's opinion in Lauritzen
v. Larsen, 

(1953). See infra Part III-B.

                               5
Rico's law on damages would govern the present action.
Invoking the doctrine of depecage,7 the District Court held
that Pennsylvania law would govern the Calhouns' claim for
compensatory damages and the law of Puerto Rico would
govern their claim for punitive damages. Insofar as the law
of Puerto Rico did not provide for the recovery of punitive
damages, the District Court granted partial summary
judgment in favor of Yamaha and dismissed that portion of
the Calhouns' complaint that sought punitive damages. As
for the second issue, the District Court determined that
state law would govern the standards of liability, and, more
specifically, that the law of Puerto Rico would be the source
of such standards.

The District Court again certified these issues to this
Court through an interlocutory order pursuant to 28 U.S.C.
S 1292(b). On April 12, 1999, we permitted the Calhouns to
take this appeal.

II

The District Court's order requires us to address and
answer three different questions:

       1. Did [the District Court] err in deciding, on remand,
       that partial summary judgment should be granted to
       Yamaha, precluding any claim by the Calhouns for
       punitive damages, on the ground that (a) the
       availability of punitive damages should be determined
       by the remedial law of Puerto Rico, the situs of the
       tragic accident giving rise to the suit, and (b) the law of
       remedies of Puerto Rico makes no provision for
       punitive damages?

       2. Did [the District Court] err in deciding, on remand,
       that the Calhouns' entitlement to seek particular
       categories of compensatory damages should be
       determined by the law of remedies of Pennsylvania, the
       state of residence of Lucien and Robin Calhoun and of
       their daughter Natalie, rather than by the law of
_________________________________________________________________

7. "Depecage" refers to the use of the law of different states to resolve
different issues in the same case. See, e.g., Ruiz v. Blentech Corp., 

, 325 (7th Cir. 1996).

                                6
       remedies of Puerto Rico, the situs of Natalie's fatal
       accident, and hence that Yamaha's motion for partial
       summary judgment should be denied insofar as it
       sought to preclude the Calhouns from seeking
       compensatory damages in conformity with the law of
       remedies of Pennsylvania?

       3. Did [the District Court] err in deciding, on remand,
       that the jurisdiction whose substantive liability law is
       the source of the Calhouns' claims is Puerto Rico?

.

III

We turn first to the questions concerning damages. In
issuing its ruling, the District Court reached three separate
conclusions: (1) because the action instituted by the
Calhouns concerned a death occurring in the "navigable
waters" of the United States, the action "sound[ed] in
admiralty," and therefore implicated federal choice-of-law
rules; (2) given the differing (yet significant) interests of
both Pennsylvania and Puerto Rico in the proper mode of
recovery in this matter, the use of the depecage doctrine
was appropriate; and (3) because Pennsylvania has a
stronger interest in providing compensation for its citizens,
Pennsylvania's law would govern as to compensatory
damages, and because Puerto Rico has a stronger interest
in punishing Yamaha for tortious acts occurring in its
territorial waters, Puerto Rico's law would govern on
punitive damages. The significance of the District Court's
punitive damage ruling is that the law of Puerto Rico does
not allow for the recovery of punitive damages in a wrongful
death or survival action.8
_________________________________________________________________

8. The District Court's interlocutory order also inquires if it erred with
respect to its more substantive holding that law of Puerto Rico would not
provide the Calhouns with the opportunity for punitive damages on the
facts presented in their complaint. We hold that the District Court did
not err, and therefore answer this portion of the interlocutory order in
the negative. See, e.g., Barreto v. Citibank, N.A., 

, 15 (1st
Cir.
1990); Shelley v. Trafalgar House Public Ltd. , 

, 96 & n.1
(D.P.R. 1997); In re San Juan Dupont Plaza Hotel Fire Litig., 

, 84 (D.P.R. 1990).

                               7
A

We must first address a threshold question: do federal
choice-of-law rules govern the Calhouns' damage claims?
The appropriate choice-of-law rules to be applied is
controlled by the basis for our federal jurisdiction, or power
to adjudicate the Calhouns' claims. See Steel Co. v. Citizens
for a Better Environment, 

, 89 (1998). It is
axiomatic that a federal court sitting in diversity must
apply the choice-of-law rules of the state in which it sits.
See Klaxon Co. v. Stentor Elec. Mfg. Co., 

, 496-
97 (1941); see also Assicerazoni General, S.P.A. v. Clover,

, 164 (3d Cir. 1999). As such, if our
jurisdiction were to be based upon diversity principles, the
District Court would be bound to apply Pennsylvania
choice-of-law rules insofar as the Calhouns instituted their
action against Yamaha in the Eastern District of
Pennsylvania. If, however, our jurisdiction were to be
grounded in admiralty, federal choice-of-law principles, first
identified in Lauritzen v. Larsen, 

(1953),
would apply. See, e.g., Aqua-Marine Constructors, Inc. v.
Banks, 

, 670 (9th Cir.), cert. denied sub nom,
Polaris Ins. Co. v. Aqua-Marine Constructors, Inc. , 

(1997); Complaint of Kreta Shipping, S.A. , 

, 284-85 (S.D.N.Y. 1998); AGIP Petroleum Co. v. Gulf
Island Fabrication, Inc., 

, 1323 (S.D. Tex.
1996).

The Calhouns initially averred that the District Court
properly could exercise subject matter jurisdiction over
their claim pursuant to 28 U.S.C. S 1333, which provides
the federal courts with jurisdiction over "[a]ny civil case of
admiralty or maritime jurisdiction, saving to suitors in all
cases all other remedies to which they are otherwise
entitled." 28 U.S.C. S 1333(1).9 See 

_________________________________________________________________

9. In this initial appeal, the panel determined that the District Court
could have exercised subject matter jurisdiction over the Calhouns'
action pursuant to the admiralty provision of section 1333. The Supreme
Court issued a similar statement in its opinion. See 

. Insofar as this determination was not necessary to either court's
ultimate holding, however, it properly is classified as dictum. It
therefore
does not possess a binding effect on us pursuant to the "law of the case"
doctrine. See, e.g., In re City of Phila. Litig., 

, 717 (3d
Cir.
1998); Coca-Cola Bottling Co. v. Coca-Cola Co. , 

, 429 (3d
Cir. 1993) (citing Arizona v. California, 

, 618 (1983)).

                               8
n.5. In an attempt to ensure the use of Pennsylvania's
wrongful death and survival statutes, however, the
Calhouns quickly withdrew from this position. Indeed, given
the fact that the accident giving rise to this action involved
the operation of a recreational -- as opposed to a
commercial -- water vehicle, see Ex Parte Easton, 

, 72-73 (1877), an application of admiralty jurisdiction
would appear -- at first blush -- misplaced here. The
Supreme Court's previous holding, authorizing the
Calhouns' use of a state law remedy to obtain damages as
relief for Natalie's death, see 

,
further suggests that the present matter falls outside of our
admiralty jurisdiction.

Before 1972, the Supreme Court adhered to what was
known as the "locality test," which authorized the exercise
of admiralty jurisdiction in all matters in which the incident
giving rise to the cause of action occurred on the navigable
waters of the United States. See, e.g., Victory Carriers, Inc.
v. Law, 

, 205 n.2 (1971); The Plymouth, 70
U.S. (3 Wall.) 20, 35 (1865). In Executive Jet Aviation, Inc.
v. City of Cleveland, 

(1972), however, the
Court abandoned the use of the locality test in a case
concerning an airplane that crashed into Lake Erie shortly
after takeoff. See 

261. The Court replaced the
locality test with an analysis that required a court to
determine whether the incident in question bore a
"significant relationship to traditional maritime activity." 

Holding that an airplane crash did not bear such a
relationship to traditional maritime activity, the Court held
that the exercise of admiralty jurisdiction was not
appropriate. See 

further explained the Executive Jet standard in
Richardson v. Foremost Ins. Co., 

(1982). In
Richardson, two boats that were being used for recreational
purposes -- but had never been utilized for commercial
purposes -- had collided on the Amite River in Louisiana.
See 

Notwithstanding the lack of any nexus to
commercial activity, and citing the need for uniform rules of
conduct and the fact that a pleasure boat collision could
potentially impact maritime commerce, the Court held that
"the negligent operation of a vessel on navigable waters . . .

                               9
ha[d] a sufficient nexus to traditional maritime activity to
sustain admiralty jurisdiction." 

In so
holding, the Court stated that the incident giving rise to the
claim in question must have some impact on maritime
commerce to support admiralty jurisdiction, but that the
collision of two pleasure boats satisfied such a requirement.
See 

The Court reemphasized these principles in Sisson v.
Ruby, 

(1990), where the Court held that
admiralty jurisdiction was available to adjudicate a cause of
action concerning a fire that started on board a pleasure
yacht, and proceeded to damage several other boats as well
as the marina at which the owner docked the yacht. See 

Indeed, the Court held that "the need for uniform
rules of maritime conduct and liability is not limited to
navigation, but extends at least to any other activities
traditionally undertaken by vessels, commercial or
noncommercial." 

(emphasis added).

Turning to the present appeal, the Yamaha WaveJammer
that Natalie was operating at the time of her death is a type
of pleasure craft that is almost exclusively used for
recreational purposes. Nevertheless, the Court's recent
jurisprudence -- namely, Richardson and Sisson --
indicates that so long as the incident in question, and the
vehicles utilized therein, bears some relation to traditional
maritime activity and could, in any way, impact upon the
flow of maritime commerce, admiralty jurisdiction is proper.
See generally 1 U.S.C. S 3 ("The word`vessel' includes every
description of watercraft or other artificial contrivance use,
_________________________________________________________________

10. Although it announced a rule that appeared to sanction the
expanded use of admiralty jurisdiction, the Court cautioned that "[n]ot
every accident in navigable waters that might disrupt maritime
commerce will support admiralty jurisdiction." 

n.5. In this
vein, the Court cited its opinion in Executive Jet, arguing that although
an airplane crash in navigable waters might interfere with maritime
commerce, such an accident did not possess the requisite connection to
traditional maritime activity. See 

have recently
suggested that admiralty jurisdiction would extend even to a simple slip
and fall that occurred on a cruise line. See Fedorczyk v. Caribbean
Cruise Lines, Ltd., 

, 73 (3d Cir. 1996).

                               10
or capable of being used, as a means of transportation on
water." (emphasis added)).

Further, much like the collision at issue in Richardson,
the collision between the two vessels in the instant matter
bears some impact, however remote, on maritime
commerce. In particular, the vessel that Natalie struck
could have been a commercial boat, or the ensuing
investigation into the crash could have made commercial
navigation in and around the marina difficult. 11 Indeed, the
accident at issue here is virtually identical to the accident
that occurred in Richardson, and as such, we hold that we
properly exercise jurisdiction over this matter pursuant to
the admiralty provisions of 28 U.S.C. S 1333(1). We are
therefore satisfied that the District Court was correct in
applying federal choice-of-law principles in determining
which law on damages should be applied to this case. 12
_________________________________________________________________

11. The Court has continuously directed that in examining an incident's
nexus to maritime commerce for the purposes of admiralty jurisdiction,
a court must look not only to the specific impact that the particular
incident had on such commerce, but to "the potential impact of [the]
incident by examining its general character." 

.
For instance, the Richardson Court determined that although the
collision of those particular pleasure boats in the Amite River did not
threaten maritime commerce, if the same collision were to have occurred
in the mouth of the St. Lawrence River, the impact on maritime
commerce would have been serious. See Richardson , 457 U.S. at 675.
This latter conclusion, the Court held, provided the District Court with
admiralty jurisdiction. See 

also hold that the District Court did not err in employing the
doctrine known as "depecage." The Calhouns strongly argue against the
application of this doctrine, offering as support our opinion in Broome v.
Antlers' Hunting Club, 

(3d Cir. 1979). In Broome, sitting in
diversity, we predicted that although the Pennsylvania courts had yet to
issue a definitive opinion either approving or disfavoring the use of
depecage, the Pennsylvania courts would likely approve the use of the
doctrine. See 

Nevertheless, as we are obliged to apply
federal choice-of-law principles, Broome is inapposite. We note that a
number of district courts within this circuit have utilized depecage, see,
e.g., City of Rome v. Glanton, 

(E.D. Pa. 1996);
Chemetron Investments v. Fidelity & Casualty Co., 

,
1199 (W.D. Pa. 1994), and that the doctrine has obtained support in our
sister circuits. See, e.g., Spinozzi v. ITT Sheraton Corp., 

,
848 (7th Cir. 1999); Johnson v. Continental Airlines Corp., 

, 1062 (10th Cir. 1992).

                               11
B

Federal choice-of-law rules in the admiralty arena are
governed by the Supreme Court's opinion in Lauritzen v.
Larsen, 

(1964). In Lauritzen , the Court held
that

       Maritime law, like our municipal law, has attempted to
       avoid or resolve conflicts between competing laws by
       ascertaining and valuing points of conflict between
       contact between the transaction and the states or
       government between the transaction regulated and the
       states or governments whose competing laws are
       involved. The criteria, in general, appear to be arrived
       at from weighing of the significance of one or more
       connecting factors between the shipping transaction
       regulated and the national interest served by the
       assertion of authority.

The Court identified seven factors for courts to weigh in
rendering choice-of-law decisions: place of the wrongful act,
law of the flag, allegiance or domicile of the injured,
allegiance of the defendant shipowner, place of contract,
inaccessibility of a foreign forum, and the law of the forum.
See 

Many of these factors (e.g., law of the
flag, allegiance of the defendant shipowner, and
inaccessibility of a foreign forum), however, do not apply to
the present dispute, which concerns entirely domestic
interests.

Lauritzen itself involved a choice between the law of the
United States and that of Denmark, see 

and,
indeed, the Lauritzen factors are most often applied to
determine whether the admiralty law of the United States or
that of a foreign state should be applied to a particular
dispute. See, e.g., Carbotrade S.p.A. v. Bureau Veritas, 

, 89 (2d Cir. 1996); Zacaria v. Gulf King 35, Inc., 

, 563 (S.D. Tex. 1999). The Lauritzen Court
recognized this focus on international disputes. See

("Generally, the law of the
flag and the defendant shipowner's base of operations
weigh most heavily in the determination." (citing 

)).

                                12
Nevertheless, we had the opportunity to apply the
Lauritzen analysis to a purely domestic tort action in Scott
v. Eastern Air Lines, Inc., 

(3d Cir. 1968). In
Scott, an airplane bound for Atlanta -- with a layover in
Philadelphia -- took off from Logan Airport in Boston only
to crash into Boston Harbor shortly thereafter. See 

The survivors of one of the passengers on board that
flight sued the airline in both tort and contract, and we
determined, with respect to the tort issues, that the
Lauritzen factors would govern whether Massachusetts or
Pennsylvania law would apply. See 

We determined
that the Lauritzen factors, viewed as a whole, represented a
departure from the application -- in admiralty cases -- of
the lex loci delecti13 rule and a move toward analyzing which
state had the most significant relationship to the incident
and the dominant interest in having its law applied. 14 See

We held that because the crash that occurred in Boston
Harbor was purely fortuitous or adventitious,
Massachusetts had a very limited relationship to the
accident that gave rise to the cause of action and therefore
had little interest in having its law applied. See 

On the other hand, because Pennsylvania was the
decedent's domicile, the situs of his ticket purchase, and
the administration of his estate, Pennsylvania had the most
significant relationship to the action, as well as the
dominant interest in having its law applied. See id.
_________________________________________________________________

13. The lex loci delecti doctrine requires courts to apply the law of the
state in which the tort occurred. See Griffith v. United Air Lines, 

, 805 (Pa. 1964).

14. The "most significant relationship" analysis is that which has been
advocated by the American Law Institute's Second Restatement on
Conflicts of Law. See Restatement (Second) of Conflicts of Law S 145
(1971). As we explained in Scott, the Restatement itself had cited
Lauritzen as an example of the "most significant relationship" standard.
See 

n.9 (citing Restatement (Second) of Conflict of
Laws, S 145 Reporter's Note at 20 (Proposed Official Draft, Part II,
1971)). The Second Restatement includes, as a relevant part of this
analysis, an inquiry into which state has the dominant interest in having
its law applied. See Restatement (Second) of Conflicts of Law S 145 cmt.
b.

                               13
The Calhouns argue that because Natalie did not intend
for the WaveJammer she was operating to lose control, the
fact that she was killed in Puerto Rico was just as
fortuitous as the incident that occurred in Scott, and that
therefore Puerto Rico has little, if any, relationship to the
accident and little interest in having its law applied. We
disagree. If we were to accept the Calhouns' interpretation
of the Scott court's concept of fortuity, virtually every
accidental injury would qualify as "fortuitous," thus diluting
to the point of extinction any application of the law of the
state in which an injury or death occurred. Although we
agree that the Supreme Court has expressed a dislike for a
rote application of the lex loci delecti doctrine, we believe
that the Court intended a rule that balanced, rather than
displaced, the various states' interests.

The airplane in Scott could have crashed anywhere --
Boston Harbor, the Hudson River, or Long Island Sound --
it was merely chance that the plane went down in the
territorial waters off the coast of Massachusetts, as opposed
to, for instance, New York or New Jersey. Here, however,
Natalie intentionally traveled to Puerto Rico and
intentionally operated the WaveJammer in Puerto Rico's
territorial waters. This being so, there was no possibility
that Natalie's accident could have occurred anywhere other
than in Puerto Rico.

Courts within this Circuit have held that the concept of
"fortuitous injury" cannot be invoked in an effort to avoid
application of the law of state in which the injury occurred
when the injured (or deceased) intentionally traveled to the
location of the accident. See, e.g., Tonkon v. Denny's, Inc.,

, 121 (E.D. Pa. 1986) ("When a party
voluntarily and intentionally travels to another state, the
location of an injury incurred there is not fortuitous."
(citing Blakesley v. Wolford, 

, 249 (3d Cir.
1986)). We have held that once a court classifies an activity
or accident as non-fortuitous in nature," `the place of the
injury assumes much more importance, and in some
instances may be determinative.' " LeJeune v. Bliss-Salem,
Inc., 

, 1072 (3d Cir. 1996) (quoting Shuder v.
McDonald's Corp., 

, 272 (3d Cir. 1988));
Shields v. Consolidated Rail Corp., 

, 401 (3d
Cir. 1987)).

                               14
Here, as we have related, Natalie voluntarily traveled to
Puerto Rico and boarded, as well as operated, the
WaveJammer that ultimately caused her death. The sole
relationship that Pennsylvania enjoys with this incident is
that the Calhouns -- and Natalie prior to her death -- were
Pennsylvania domicilliaries, as well as the fact that
Natalie's estate will be administered in Pennsylvania.
Although these ties are certainly relevant, they do not
outweigh the more prominent relationship that Puerto Rico,
as the situs of the injury, has with this litigation. These
principles therefore counsel in favor of the application of
the law of Puerto Rico on the issue of both compensatory
and punitive damages.

As stated above, however, we must also inquire into
which state has the most dominant interest in having its
law applied to this litigation. Viewed in this manner, and
through the lens of the depecage doctrine, both
Pennsylvania and Puerto Rico each have significant
interests in having its respective law applied to the different
types of damages that the Calhouns seek through their
complaint.

The purpose of compensatory damages is "to make the
plaintiff whole." Feingold v. SEPTA, 

, 1276
(Pa. 1986); see also Saldana Sanchez v. Vega Sosa, 

, 36 (1st Cir. 1999). Given that the individuals who
seek to be made whole -- the Calhouns and Natalie's estate
-- are all Pennsylvania domicilliaries, it appears as if
Pennsylvania has a strong interest in having its law of
compensatory damages apply to the present matter.
Further, it is hard to dispute that Pennsylvania has a
substantial interest in obtaining compensation for its
citizens in order to remedy wrongs that have been
committed against such individuals. See, e.g. , 

n.11. That interest, however, does not
obtain insofar as Puerto Rico is concerned, as the Calhouns
have virtually no connection to Puerto Rico. Accordingly,
Puerto Rico would have very little interest in either making
the Calhouns whole or remedying wrongs that Yamaha may
have committed against them.

Punitive damages, on the other hand, are intended to
punish wrongdoers and deter future conduct. See, e.g.,

                               15
Kirkbride v. Lishon Contractors, Inc., 

, 803 (Pa.
1989); Cass R. Sunstein et al., Assessing Punitive Damages
(with Notes on Cognition and Valuation in Law), 107 Yale
L.J. 2071, 2081 (1999) (quoting a jury instruction regarding
punitive damages as stating "the purpose of such an award
is to punish the wrongdoer and to deter that wrongdoer
from repeating such wrongful acts"). Although Pennsylvania
has an interest in punishing those who harm their citizens,
we are persuaded that Puerto Rico's interest in regulating
the activity that occurs in its territorial waters-- whether
commercial or recreational -- is more dominant. Indeed,
the tragic death that befell Natalie easily could have been
visited upon a Puerto Rican citizen. Cf. Puerto Rico Act No.
48 (1986) ("The State . . . must be watchful for the owners
of vessels, sailors, and water skiers to also be prudent in
their enjoyment and practice of their recreational activities,
for their benefit and that of the bathers."). Puerto Rico also
has an especially strong interest in maintaining the safety
of the waterways surrounding the island to preserve the
economic benefits it derives from both tourism and other
commercial enterprises.15

As a result, we hold that the District Court did not err in
ruling that it would apply the law of Pennsylvania in the
determination of compensatory damages and the law of
Puerto Rico in the determination of punitive damages.

IV

The District Court also ruled that state law --
specifically, the law of Puerto Rico -- would be applied in
order to determine whether Yamaha was substantively
liable for Natalie's death. As earlier noted, the District
_________________________________________________________________

15. The Calhouns argue that Puerto Rico cannot have a dominant
interest in the application of its law on punitive damages because Puerto
Rico has rejected the use of punitive damages as a deterrent measure.
Such an argument, however, miscomprehends the nature of our inquiry.
The appropriate question is not whether Puerto Rico's specific interest in
the application of its law on punitive damages is dominant as compared
to Pennsylvania's, but rather, whether the state in which the injury
occurred has a dominant interest in the application of its law on punitive
damages as compared to the state of the plaintiff 's domicile.

                               16
Court's interlocutory order asked us to answer the
following:

       3. Did [the District Court] err in deciding, on remand,
       that the jurisdiction whose substantive liability law is
       the source of the Calhouns' claims is Puerto Rico?

.16 We hold that the answer
given by the District Court, that the law of Puerto Rico
would govern, was erroneous. Our holding to this effect
obliges us to reverse that part of the District Court's order.

The answer to the District Court's question revolves
around the proper interpretation of a number of Supreme
Court opinions concluding with the Court's opinion in the
instant matter. Prior to 1970, actions for wrongful death in
admiralty were governed by the Supreme Court's decision,
during the Court's 1886 term, in The Harrisburg , 

(1886). In The Harrisburg, the Court held that because
Congress had not seen fit to provide a cause of action for
wrongful death in admiralty cases, it would be
inappropriate for the federal courts to create such a cause
of action from federal common law. See 

In so
ruling, the Court stated that "[t]he rights of persons in this
particular [action] under the maritime law of this country
are not different from those under the common law, and [ ]
_________________________________________________________________

16. This issue is more than a merely academic exercise. As counsel for
the Calhouns indicated at oral argument, Pennsylvania law would bar
any attempt by Yamaha, under a comparative negligence theory, to
introduce evidence of Natalie's negligence in operating the WaveJammer
in order to limit its own liability. See Fray v. Harley Davidson Motor
Co.,

, 10 (Pa. Super. Ct. 1999) ("The general rule [is] that
contributory and comparative negligence are not defenses to a strict
products liability action."), appeal denied , Nos. 924-926, 

(Pa. Jan. 19, 2000); Jara v. Rexworks, Inc., 

, 793 (Pa.
Super. Ct. 1998). On the other hand, a plaintiff 's comparative negligence
is a proper defense to a cause of action sounding in admiralty. See
United States v. Reliable Transfer Co., 

, 411 (1975) ("We
hold that when two or more parties have contributed by their fault to
cause property damage . . . damages [are] to be allocated equally only
when the parties are equally at fault or when it is not possible fairly to
measure the comparative degree of their fault."); see also Farr v. NC
Mach. Co., 

, 1167 (9th Cir. 1999); In re: Sinclair Navigation
Corp., 

(5th Cir. 1976).

                               17
it is the duty of courts to declare the law, not to make it."

The Court's holding in The Harrisburg
therefore forced plaintiffs such as the Calhouns to rely
exclusively upon state causes of action if they sought to
obtain a remedy for an allegedly wrongful death in United
States territorial waters.

After The Harrisburg, a trilogy of Supreme Court opinions
decided between 1959 and 1960 informed lower courts that
when exercising their admiralty jurisdiction, they were
required to apply state law completely -- with respect to
both procedural and substantive issues. See Goett v. Union
Carbide Corp., 

(1960); Hess v. United States,

(1960); The Tungus v. Skovgaard, 

(1959). Representative of this trilogy was The Tungus v.
Skovgaard, 

(1959), in which the Court held
that

       decisions of this Court long ago established that when
       admiralty adopts a State's right of action for wrongful
       death, it must enforce the right as an integrated whole,
       with whatever conditions and limitations the creating
       State has attached.

Importantly, the Court in The Tungus expressly
based this language upon its holding in The Harrisburg. See

federal statute provided a cause of action for
wrongful death in territorial waters, The Harrisburg and The
Tungus suggested that courts entertaining such causes of
action were to apply state law liability standards. Indeed,
the Court explicitly held in Hess v. United States, 

(1960), that "in an action for wrongful death in state
territorial waters, the conduct said to give rise to liability is
to be measured not under admiralty's standards of action,
but under the substantive standards of the state law." 

This principle, through which the states remained a
virtually equal participant in regulating the means by which
an individual could obtain relief for another's death on the
water, seemingly changed as a result of the Supreme
Court's opinion in Moragne v. United Marine Lines, Inc., 

(1970). In Moragne, the Court overruled The
Harrisburg and created a federal cause of action under the

                               18
federal common law for wrongful death to provide a remedy
for survivors of seamen killed in territorial waters. See 

Indeed, The Moragne Court stated that the rule
adopted in The Harrisburg "had little justification except in
primitive English legal history -- a history far removed from
the American law of remedies for maritime deaths." 

The Moragne Court did not, however, expressly overrule
the trilogy of The Tungus, Hess, and Goett. Rather, the
Court stated that the genesis of the jurisprudential
nightmare that resulted in the Court's holding in Moragne
could be found in The Harrisburg, not The Tungus. See 

("[W]e have concluded that the primary source of the
confusion is not to be found in The Tungus, but in The
Harrisburg . . . ."). Although the Court declined to overrule
The Tungus expressly, we could argue, were it not for
subsequent expressions of our Court and the Supreme
Court itself, that with the demise of The Harrisburg, the
Court similarly relegated, sub silentio, opinions such as The
Tungus, Hess, and Goett to the jurisprudential scrapheap of
history, insofar as such rulings were expressly based upon
The Harrisburg. As the District Court recognized, this was
also the position taken by most admiralty commentators
prior to the institution of this litigation. See, e.g., 2 Richard
Ziade, Benedict on Admiralty, S 81e, at 7-17 n. 59 (7th ed.
1999); Grant Gilmore & Charles L. Black, Jr., The Law of
Admiralty, S 6-32, at 367 (2d ed. 1975).

The earlier opinions of both our Court and the Supreme
Court in the Calhoun/Yamaha controversy to which we
have previously referred, however, appear to imply
otherwise. Indeed, in our previous Calhoun opinion, we
observed that the portion of The Tungus that suggested that
the ability of a non-seaman to obtain relief for injury or
death occurring in state territorial waters depended on
state statutory law "retain[ed] vitality post-Moragne."

n.39. The Supreme Court echoed
our reasoning. See 

. The question
therefore becomes whether these statements have revived
the principle for which The Tungus has become most
known -- a court hearing an action in which a party is
using a state wrongful death statute to institute an action

                               19
in admiralty must apply state law to all issues presented.
The District Court answered this question in the
affirmative, reasoning that "in this Circuit, The Tungus,
with all its Harrisburg-era warts, remains good law with
respect to the proposition that `rights of non-seaman [sic]
killed in state territorial waters depend on state wrongful
death statute.' " 

. From this
principle, the District Court extrapolated that"[t]he
substantive rights of those suing derivatively from, or in the
name of, nonseafarers killed in the territorial waters of a
state have their source in state law." 

disagree. We believe that The Tungus
remains good law only with respect to its broader
proposition concerning the role that state regulation may
play in the admiralty arena. The Supreme Court has lent
credence to this broader proposition by authorizing the
Calhouns' use of Pennsylvania's wrongful death/survival
statute only as the vehicle through which they may
prosecute their action. The more specific holding of The
Tungus, however -- that federal courts must apply all facets
of state law when a plaintiff seeks to proceed by way of a
cause of action grounded in state law -- was effectively
overruled in Moragne once the Court invalidated the
reasoning advanced by the Court in The Harrisburg. The
Tungus's emphasis on the usage of the particulars of state
law was specifically trained on the fact that federal law
(both statutory and common law) did not provide a cause of
action for wrongful death on the water. This was the very
precept that was universally struck down in Moragne,
through which the Supreme Court created such a cause of
action. As such, The Tungus's remaining vitality rests only
upon the limited proposition announced by the Supreme
Court earlier in this very litigation -- that state law may
provide a procedure or a vehicle through which a plaintiff
may institute an action to remedy death in territorial
waters.

The District Court's holding also failed to take account of
the prevailing policy that has guided the advancement of
federal admiralty law and regulation: uniformity. Creating a
uniform system by which activities and events on the
waters of the United States would be adjudicated was such

                               20
a matter of concern to the Framers that they placed
admiralty as among the powers of the newly-created federal
government. See U.S. CONST. art. I, S 8, cl. 10 (granting
Congress the power "[t]o define and punish Piracies and
Felonies committed on the high seas"). The Supreme Court
addressed the importance of uniformity in the maritime
arena in Richardson: "The federal interest in protecting
maritime commerce . . . can be fully vindicated only if all
operators of vessels on navigable waters are subject to
uniform rules of conduct . . . ." Richardson , 457 U.S. at
674-75; see also 

("[T]he need for
uniform rules of maritime conduct and liability is not
limited to navigation, but expands at least to any other
activities traditionally undertaken by vessels.").

Uniformity, as Yamaha forcefully argues, is a rather
strong concern in the instant matter. If we were to adopt
the District Court's holding that the substantive standards
by which an admiralty defendant's liability is adjudged is
governed by the law of the state in which the alleged injury
occurred, there would be no uniformity in such standards.
Cf. Ellis v. Riverfront Enterprises, Inc., 

,
106 (E.D. Ky. 1997) (stating that " `[p]rinciples of federalism
counsel that only when the federal interest in uniformity
outweighs other interests at stake should admiralty
jurisdiction deprive the state of its traditional control over
personal injury claims.' "). Indeed, such uniformity
concerns informed the Moragne Court's decision to overrule
The Harrisburg. See 

("Our
recognition of a right to recover for wrongful death under
general maritime law will assure uniform vindication of
federal policies, removing the tensions and discrepancies
that have resulted from the necessity to accommodate state
remedial statutes to exclusively maritime substantive
concepts." (emphasis added)).

Accordingly, we hold that federal maritime standards
govern the adjudication of a defendant's (here, Yamaha's)
putative liability in an admiralty action brought pursuant
to a state wrongful death/survival statute.17
_________________________________________________________________

17. We note that we are not alone in setting forth the above reasoning in
the wake of the Supreme Court's ruling in the instant matter. Indeed,
the Southern District of New York has held that

                               21
V

We conclude by summarizing our answers to the certified
questions:

       1. Should punitive damages be determined by the la w
       of Puerto Rico? We have answered "yes," and in so
       doing, we affirm the order of partial summary
       judgment entered by the District Court on March 22,
       1999.

       2. Should compensatory damages be determined by
       the law of Pennsylvania? We have answered "yes," and
       in so doing, we affirm the order of partial summary
       judgment entered by the District Court on March 22,
       1999.

       3. Is the law of Puerto Rico to be applied to dete rmine
       the liability of Yamaha? We have answered "no," and in
       so doing, we reverse this portion of the order entered
       by the District Court on March 22, 1999, and remand
       this matter to the District Court for further proceedings
       consistent with this opinion.

Each party will bear its own costs.
_________________________________________________________________

       [t]he thrust of Yamaha [

] is to argue that
       considerations of uniformity in federal maritime wrongful death
       action require only that standards of liability be exclusively
       determined by federal maritime law and that, once such liability
has
       been shown, there is no antagonism to such a policy in
       supplementing federal remedies with those available under
       otherwise applicable state statutes.

O'Hare v. Celebrity Cruise Lines, Inc., 

, 256 (S.D.N.Y.
1997). The O'Hare court termed any indication in Yamaha to the
contrary as "Delphic." See 

n.1.

                               22
NYGAARD, J., concurring and dissenting.

I take little issue with most of the majority's carefully
crafted opinion. I do, however, respectfully part ways with
its choice of Puerto Rican law, and conclusion that the
Estate of Natalie K. Calhoun should be denied punitive
damages.

As the majority correctly points out, a federal court
sitting in diversity applies the forum state's choice of law
rules. See Klaxon Co. v. Stentor Elec. Mfg. Co. , 

(1941). This requires that we weigh the interests of the
jurisdictions involved and consider how these interests are
related to the specific issues involved in the conflict. See
Laurtizen v. Larsen, 

, 582 (1953).

Contacts considered vital in determining the state of most
significant relationship include: place of injury, place of
conduct, domicile of the parties, and the place where the
relationship between the parties is centered. See
Restatement (Second) of Conflict of Laws S145(2) (1971).
The importance of the respective contacts is determined, in
part, by considering the issues, the nature of the tort, and
the purposes of the tort rules involved. 

145
(comments c-f).

The District Court relied exclusively on the fact that
Puerto Rico does not provide punitive damages as part of
its damages scheme:

       [The] purposes [of punitive damages] appear to be the
       community purposes of the state or community in
       which the tortious activity takes place. The fact that
       Puerto Rico does not have a regime of punitive
       damages reflects a community determination that
       Puerto Rico for its reasons does not think that punitive
       damages are the instrument . . . through which it
       wishes to pursue . . . punishment on the one hand and
       deterrence on the other.

Calhoun v. Yamaha Motor Corp., 

, 291
(E.D. Pa. 1999).

The District Court further opined that since the chief
purposes of punitive damages are to deter and punish,
rather than compensate the victims, the public policy of

                               23
Puerto Rico, a Commonwealth that has elected not to
employ punitive damages as an instrument of deterrence
and punishment, should govern as to this aspect of
damages, instead of the public policy of Pennsylvania. See
id.; see also Calhoun v. Yamaha Motor Corp. , 

(E.D. Pa. 1998). However, under the modern
interest-analysis conflict of laws approach that is followed
by the majority of states including Pennsylvania, the law of
the state with the greatest interest in furthering the public
policy behind its punitive damages scheme should govern.

Puerto Rico has little interest in the outcome here. In
contrast, Pennsylvania's interest in the amount of recovery
in wrongful death cases is great. The Constitution of
Pennsylvania, Article III, Section 21 P.S. (cited in Griffith v.
United Air Lines, 

, 807 (Pa. 1964)) states:

       The General Assembly may enact laws requiring the
       payment by employers, or employers and employees
       jointly, of reasonable compensation for injuries to
       employees arising in the course of their employment
       ***; but in no other cases shall the General Assembly
       limit the amount to be recovered for injuries resulting in
       death, or for injuries to persons or property, and in case
       of death from such injuries, the right of action shall
       survive ***. (emphasis added).

Punitive damages are appropriate in Pennsylvania when
the act committed, in addition to causing actual damages,
constitutes "outrageous conduct," either through reckless
indifference or bad motive. See McClellan v. Health
Maintenance Org. of Pennsylvania, 

, 1061
(Pa. Super. 1992); see also Feld v. Merriam, 

,
747-48 (Pa. 1984). We have held that three factors should
be considered when awarding punitive damages: (1) the
character of the act; (2) the nature and extent of the harm
caused; and (3) the wealth of the defendant. See Donaldson
v. Bernstein, 

, 557 (3d Cir. 1997)(citing
Kirkbride v. Lisbon Contractors, Inc., 

, 803 (Pa.
1989)). See also Restatement (Second) of Torts S 908(2)
(regarding imposition of punitive damages adopted in
Pennsylvania).

Here, the defendant, a Japanese corporation, (tortious
actor) defectively manufactured a jet ski in Japan (character

                               24
of act), the tortious act resulted in the death of a
Pennsylvania resident while riding the defective jet ski
(extent of harm caused), and the defendant is a very large
multi-national corporation (wealth of the defendant). These
factors indicate Pennsylvania's interest in awarding
punitive damages to the Calhouns. They also evince Puerto
Rico's little interest in the outcome of the lawsuit. The fatal
accident did not occur to a Puerto Rican citizen, the
plaintiff is not Puerto Rican, the outrageous conduct was
not committed by a Puerto Rican, and the only connection
Puerto Rico has is that the accident happened to have
occurred there. The District Court's reliance on the
"community purposes of the state in which the tortious
activity took place" is misplaced, because the"tortious
activity" at issue in this case -- the allegedly defective
design and manufacture of the jet ski -- did not occur in
Puerto Rico. Rather, the jet ski was designed and
manufactured by a Japanese corporation in Japan.

The Supreme Court has held that punitive damages may
properly be imposed to further a state's legitimate interests
in punishing unlawful conduct and deterring its repetition.
See BMW of North America, Inc. v. Gore, 

(1996). By my analysis, Pennsylvania has a more legitimate
interest in getting the punitive damages awarded for the
wrongful death of one of its residents than Puerto Rico has
in protecting one of its citizens from an excessive verdict by
precluding the award of punitive damages.

The Pennsylvania Supreme Court has held that
compensation of an injured plaintiff is primarily a concern
of the state in which the plaintiff is domiciled. 

. The only interest of the state of injury would
be in the compensation of those who rendered medical aid
and other assistance to the injured parties. 

here, immediate death occurs, the state has no such
interest. 

Thus, under Pennsylvania law, Puerto
Rico has no interest in the compensation of this decedent's
estate. Pennsylvania, on the other hand, has a very strong
interest in seeing that one of its residents is compensated
under a wrongful death claim, and that an outrageous and
tortious act be punished to deter the defendant from
continuing its behavior.

                               25
In my view, this result is consistent with Scott v. Eastern
Air Lines, Inc., 

(3d Cir. 1968), cert. denied, 

(1968). In Scott, the following contacts were
crucial to our decision: the decedent was domiciled in
Pennsylvania; the letters of administration were granted by
the Register of Wills of Philadelphia County; the decedent's
personal property was located in Pennsylvania; the
decedent's relationship with the defendant began in
Pennsylvania, and the defendant did business in
Pennsylvania. 

.

The facts in Scott are very similar to the facts here: (1)
the decedent in Scott was in Boston voluntarily and Natalie
was in Puerto Rico voluntarily; (2) the decedent in Scott got
on a plane in Boston voluntarily and Natalie got on the jet-
ski in Puerto Rico voluntarily; (3) the decedent in Scott was
killed in Boston and Natalie was killed in Puerto Rico; (4)
the decedent in Scott was a Pennsylvania resident as was
Natalie; and (5) the decedent's estate in Scott was settled in
Pennsylvania, Natalie's estate is to be settled in
Pennsylvania, and Yamaha does business in Pennsylvania,
including advertising and distributing its products. In
contrast, Puerto Rico's sole contact with the incident in
question is that Natalie's death occurred in its territorial
waters. Thus, under the ratio decidendi of Scott, Puerto Rico
(like Massachusetts in Scott), the state where the accident
occurred, has no interest in the outcome of the litigation.

In LeJeune v. Bliss-Salem, Inc., 

(3d Cir.
1996), a Pennsylvania resident was injured at his regular
workplace in Delaware. In LeJeune the cornerstone of our
conclusion that Delaware was not a fortuitous place of
injury, was the fixed location of the plaintiff 's workplace,
the regularity of his presence there, and the fact that the
majority of the wrongful conduct occurred in Delaware.
Neither Scott nor LeJeune defines the concept of fortuity.
However, as the Calhouns argue and I agree, Natalie's brief
vacation in Puerto Rico is more akin to that of the plaintiff
in Scott than to the status of the plaintiff in LeJeune who
came to Delaware every day to work.

Other Circuits provide some guidance. In airplane crash
cases, for example, the place of injury is much more
fortuitous than the place the defendant selects as his place

                               26
of incorporation and principal place of business or the
place of misconduct. In In re Air Crash Near Chicago, 

, 615 (7th Cir. 1981); cert. denied, 

(1981), the court held that the state where an injury occurs
has less interest in deterrence and less ability to control
behavior by deterrence or punishment than the state where
the plaintiff is domiciled or the state where the misconduct
occurred. In La Plante v. American Honda Motor Co., Inc.,

(1st Cir. 1994), the court applied Rhode Island
law to govern a products liability action brought by an army
mechanic stationed in Colorado against Honda in his home
state of Rhode Island for injuries sustained in Colorado
while operating a vehicle designed and manufactured by
Honda. In rejecting the law of the place of injury, the La
Plante court gave significant weight to the fact that the
tortious conduct that gave rise to the plaintiff 's claim
occurred not in Colorado, but in Japan, where the car was
designed. 

In Villaman v. Schee, 

at *4 (9th Cir. 1994),
the court held that because Arizona tort law was designed
in part to deter negligent conduct within its borders,
Arizona had a stronger interest in the application of its laws
allowing for full compensatory and punitive damages than
Mexico did, whose limitation of tort damages, like Puerto
Rico's, was designed to protect its residents "from excessive
financial burdens or exaggerated claims." If the defendants
in this case were Puerto Rican residents, then Puerto Rico's
interest in protecting its residents from excessivefinancial
burdens might be somewhat compelling. However, Puerto
Rico has no resident to protect and I conclude it has no
interest in denying either punishment or full recovery to
non-residents.

Although punitive damages may be the medium of
deterrence, the result and purpose of punitive damages is
to protect citizens. I would hold that the District Court
erred by concluding that the Calhouns' punitive damages
claim is governed by Puerto Rico law.

                               27
A True Copy:
Teste:

       Clerk of the United States Court of Appeals
       for the Third Circuit

                               28