PAUL L. MALONEY, Chief Judge.
This is a diversity tort case. Plaintiffs William and Julie Harshaw ("Harshaw"), a married couple proceeding individually and as guardians of their son Roman, are Virginia citizens; both defendants—Bethany Christian Services and Bethany Christian Services International, Inc. (together "BCS") are Michigan corporations with unspecified principal places of business. See Complaint filed January 31, 2008 ("Comp") ¶¶ 1-5. Defendant BCS has filed a motion to dismiss on several legal grounds, or in the alternative for summary judgment on more fact-intensive grounds, as to all four claims. The Harshaws have opposed the motion to dismiss and cross-moved for summary judgment on the negligence-based claims (counts 2-4). In the parties' dispositive-motion briefs, they vigorously argue the choice-of-law issue; the Harshaws contend that Michigan substantive law applies, while BCS contends that Virginia substantive law applies.
More recently, BCS followed up by filing a motion on January 26, 2010 to declare that these claims and motions will be adjudicated under Virginia substantive law. As directed by the court, see Doc. 210, the Harshaws filed an opposition brief on Friday, February 12, 2010. The Harshaws contend that BCS's motion to declare the applicable law is an inappropriate attempt to have a "second bite at the apple", as the parties already had the opportunity to argue the choice-of-law issue, and did argue
In response to a BCS advertisement, the Harshaws attended an informational meeting at BCS's regional office in Virginia Beach, Virginia on June 12, 2003, and the next day they submitted a preliminary application to adopt through BCS in Russia, China or Guatemala. The application stated that they would accept a child with "very minor medical problems and would not consider a child with moderate to severe medical problems." They submitted an Application for International Adoption to BCS on June 18, 2003 which stated that they were "interested in parenting a child that has a positive prognosis for both mental and physical development." Id. ¶¶ 11-15 and Exs A & B.
The Harshaws underwent a pre-adoption family assessment conducted by BCS's regional office in Virginia, during which they signed an International Adoption Services Agreement. Comp. ¶¶ 17-18 & Ex C. Relying on BCS's claimed experience and expertise in international adoption, the Harshaws understood that if the assessment was favorable, BCS would act as intermediary and/or fiduciary on their behalf to effectuate an adoption. Id. ¶¶ 16 & 19. On August 22, 2003, BCS issued an assessment stating that the Harshaws "feel equipped to parent a child who may have a minor, correctable problem with a good prognosis for normal development." It approved them to adopt a Russian child aged 12 to 36 months who had (at most) a
The first page of BCS-HR's pre-adoption family assessment for the Harshaws stated,
Defs' Choice-of-Law Br, Ex L (Aug. 22, 2003 assessment) at 1-2; see also id. Ex M (Julie Harshaw deposition testimony that Harshaws had the assessment document before the adoption) at pp. 22-24.
After completion of the favorable preadoption family assessment, BCS-HR referred the Harshaws to Dr. Dubrovsky, who forwarded the assessment to Russia for translation and submission to the Russian federal Department of Education, which at that time was responsible for approving adoptions and orphanage visits by prospective adoptive parents. See Defs' Choice-of-Law Br, Ex O (Dubrovsky Dep) at pp. 57-58, 62 and 72.
BCS representative Jeannie Walton initially referred a Russian child for the Harshaws, but the child had been severely burned by his mother and suffered medical problems as a result. The Harshaws declined and emphasized to BCS that they could only accept a child with minor, correctable conditions and a prognosis for normal development.
The Harshaws argue that it was in reliance on the video and the purported summary of Roman's medical records that they told BCS they were willing to adopt Roman so long as BCS first provided any additional medical information about the boy. See Comp. ¶ 30. BCS, in contrast, has pointed out that they did consult their own pediatrician before deciding whether to go forward with the adoption. At Walton's invitation, the Harshaws visited a BCS office to discuss the adoption. When they asked Walton whether Roman and the other Russian children they were considering were medically healthy, Walton responded that they were healthy,
Comp. ¶ 31. Relying on Walton's assurances regarding Dr. Dubrovsky's purported regular examination of Roman et al., the Harshaws traveled to the orphanage in Krasnoyarsk, Russia in December 2003, with BCS representatives Aleksandr "Alex" Vladimirovich and Yelena Vladimirovna acting as interpreters and guides. They were permitted to see Roman for only about one hour. Noting that Roman looked thin and perhaps ill, the Harshaws asked interpreter Alex if Roman was okay; after consulting orphanage staff, Alex told the Harshaws that Roman had had bronchitis. The Harshaws asked for more information about Roman and his mother's social and medical background, but Alex said none was available. They saw Roman for an hour the next day, then returned to America and met again with BCS's Jeannie Walton. See Comp. ¶¶ 32-38.
When Walton asked how Roman looked and the Harshaws responded that he "appeared as if he might have been sick but otherwise appeared okay", she reassured them that what they saw was common in institutionalized children, and his issues were minor and often resulted from malnutrition and crowded conditions. Walton asked if they wished to proceed, and they said yes. Id. ¶¶ 38-40.
The next month, January 2004, the Harshaws returned to Russia to attend the final adoption hearing. When they took physical custody of Roman at the orphanage, they asked if there were any more medical records regarding Roman or his mother and were told there were none, and BCS never provided any additional medical information from then until after the adoption. See Comp. ¶¶ 41-44.
After the Krasnoyarsk Regional Court entered an Order of Adoption on January 27, 2004, the Harshaws took Roman home to America, where they soon noticed that he was not developing and acting normally for his age and reported health. They spent about a year and a half taking Roman to physicians and mental-health professionals to figure out what might be
The Harshaws allege that throughout the 24 months following the January 2004 adoption, they expressed concerns to BCS's social worker, during post-placement visits, about Roman's medical, emotional and psychological condition and behavior. The BCS social worker responded that Roman's problems were frequently associated with being institutionalized and that children adopted from such settings could "grow out of" the problems with a loving family. See Comp. ¶ 59.
At an unspecified time in or after June 2006 (when Dr. Federici examined Roman), the Harshaws informed BCS of Federici's diagnosis and asked for more medical information, which BCS stated would be difficult to retrieve. See Comp. ¶¶ 52-53. After the Harshaws repeated their requests, in October 2006 BCS provided two items which they had not previously provided: a ten-page Russian-language extract of Roman's medical records and history, and a six-page English translation. See Comp. ¶¶ 54-55 and Ex F. The Harshaws allege that BCS either had these two documents in its possession all along (i.e., before the adoption was completed) or could and should have obtained them for review, translation and delivery to the Harshaws before they made their decision whether to adopt Roman. Id. ¶¶ 56-57. The Harshaws allege that they relied on BCS to provide all information reasonably available to it and if BCS had done so, they would not have pursued Roman's adoption. Id. ¶¶ 58 and 64-66. They also state that if BCS had provided complete, accurate medical information and appropriate post-placement assistance, they could have diagnosed Roman's condition earlier and started providing more-appropriate treatment earlier. Id. ¶ 67.
The Harshaws assert three claims on their own behalf:
Count 1 Fraud / intentional misrepresentation (Comp ¶¶ 68-83)
Count 2 Negligent misrepresentation (Comp ¶¶ 84-94)
Count 3 Negligent failure to disclose (Comp ¶¶ 95-99)
They assert one claim on behalf of Roman, who is still a minor: count four, negligence (Comp. ¶¶ 100-104). They allege that after Roman's adoption, BCS admitted it had "misinformed" the Harshaws by providing "unclear" medical information during the adoption process, and that Dr. Dubrovsky never examined Roman as it had represented. Id. ¶¶ 60-61. On each count, the Harshaws seek $75,000 in compensatory damages plus punitive damages, interest, and attorneys' fees, and demand a jury trial. Id. at 15-19 (prayers for relief).
The Harshaws filed the instant complaint in January 2008, and the defendants answered in April 2008. See Docs. 1, 6 & 8. From October 2008 through June 2009, the parties conducted discovery and the Magistrate resolved discovery disputes, see Docs. 17-78. In September 2009, the Harshaws filed a motion to compel production of documents requested in their second and third sets of requests for production, BCS filed an opposition brief, and pursuant to 28 U.S.C. § 636(b)(1)(A) the matter was referred to the Magistrate, who held a hearing and granted in part the Harshaws' motion to compel. See Docs. 112, 113, 125 & 128. On October 21, 2009, the Harshaws
In September 2009, BCS filed a motion to dismiss or for summary judgment on counts one, two and three—the parents' common-law claims for fraud/intentional misrepresentation, negligent misrepresentation, and negligent failure to disclose— on the ground that they are barred by the statute of limitations in Michigan and Virginia. This court denied BCS's unjustifiably late request for leave to amend their answer to assert the defense that counts 1-3 are barred by statutes of limitation, determining that BCS did not show good cause for failing to move for leave to amend before the deadline which the CMSO imposed. In January 2010, this court denied the defendants' motion for reconsideration as untimely and meritless. See Harshaw v. Bethany Christian Servs., Inc., No. 1:08-cv-104 Doc. 179, 2009 WL 5149925 (W.D.Mich. Dec. 15, 2009) (Maloney, C.J.) ("Harshaw 2"), recon. denied, Doc. 205, 2010 WL 331708 (W.D.Mich. Jan. 22, 2010) ("Harshaw 3").
On October 1, 2009, BCS moved to dismiss for failure to state a claim and/or for summary judgment on the merits of all four claims, urging application of Virginia substantive law; the Harshaws filed an opposition, and BCS replied. See Docs. 130-31, 138 & 166. The Harshaws cross-moved for summary judgment on the merits of claims 2-4, urging application of Michigan substantive law; BCS filed an opposition, and the Harshaws replied. See Docs. 132-33, 139 and 166.
"`In applying state law, we anticipate how the relevant state's highest court would rule in the case and are bound by controlling decisions of that court.'" Appalachian Railcar Servs. v. Boatright Enters., Inc., 602 F.Supp.2d 829, 846 (W.D.Mich.2008) (Maloney, J.) ("ARS") (quoting NUFIC v. Alticor, Inc., 472 F.3d 436, 438 (6th Cir.2007) (Griffin, J.) (cite omitted)). If the state supreme court has not conclusively decided the issue, a federal court presumptively looks to decisions of the state's appellate courts: "In anticipating how the state supreme court would rule, `we look to the decisions of the state's intermediate courts unless we are convinced that the state supreme court would decide the issue differently.'" ARS, 602 F.Supp.2d at 846 (citing (US v. Lancaster, 501 F.3d 673, 679 n. 3 (6th Cir.2007))); see also West v. AT & T Co., 311 U.S. 223, 236-37, 61 S.Ct. 179, 85 L.Ed. 139 (1940) ("A state is not without law save as its highest court has declared it. There are many rules of decision commonly accepted and acted upon by the bar and inferior courts which are nevertheless laws of the state although the highest court of the state has never passed upon them. [T]he federal court is not free to reject the state rule merely because it has not received the sanction of the highest state court . . . ."), followed by Mroz v. Lee, 5 F.3d 1016, 1019 (6th Cir.1993) and Dairy, Bakery & Food Workers Local Union Local Union No. 386 v. Grand Rapids Milk Div., 160 F.Supp. 34, 39 (W.D.Mich.1958).
In determining the controlling law of the State, a federal court also "may give weight" to the decisions of a State trial court, Lakeland Reg. Health Sys. v. Walgreens Health Initiatives, Inc., 604 F.Supp.2d 983, 989 (W.D.Mich.2009) (Maloney, C.J.) (citing Bradley v. GMC, 512 F.2d 602, 605 (6th Cir.1975)), especially when it is consistent with state appellate decisions, Bradley, 512 F.2d at 605. But the federal court is not obligated to follow state trial-court decisions. See Krakoff v.
A federal court must accord the same precedential value to a state-court decision as it would be accorded by that state's courts. See ARS, 602 F.Supp.2d at 846 (citing Mutuelle Generale Francaise Vie v. Life Ass. Co. of Pa., 688 F.Supp. 386, 397 n. 15 (N.D.Ill.1988) ("[O]ne Supreme Court decision (Fidelity Union Trust Co. v. Field, 311 U.S. 169, 61 S.Ct. 176, 85 L.Ed. 109 . . . (1940)) . . . required a federal court to ascribe the same precedential force to a New Jersey trial court decision that such a decision would receive in that state's court system under the peculiarities of New Jersey law.")). If a state court would not be bound by a particular state-court decision, then neither is this court. ARS, 602 F.Supp.2d at 847 (citing King v. Order of United Commercial Travelers of America, 333 U.S. 153, 161, 68 S.Ct. 488, 92 L.Ed. 608 (1948) ("a federal court adjudicating a matter of state law in a diversity suit is, in effect, only another court of the State; it would be incongruous indeed to hold the federal court bound by a decision which would not be binding on any state court.") (citation omitted)).
Michigan Court Rule 7.215(C)(2) states that "[a] published decision of the Court of Appeals has precedential value under the rule of stare decisis." This subsection makes no distinction based on when the decision was issued. ARS, 602 F.Supp.2d at 847. However, Michigan Court Rule 7.215(J)(1) provides that "[a] panel of the Court of Appeals must follow the rule of law established by a prior published decision of the Court of Appeals issued on or after November 1, 1990, that has not been reversed or modified by the Supreme Court or by a Special Panel of the Court of Appeals as provided in this rule." ARS, 602 F.Supp.2d at 847 (emphasis added).
Synthesizing Michigan Court Rules 7.215(C)(2) and 7.215(J)(1), the Michigan Court of Appeals accords precedential value to all of its prior published decisions, regardless of when they were issued. ARS, 602 F.Supp.2d at 847. When a post-November 1, 1990 published Court of Appeals decision conflicts with a pre-November 1, 1990 published Court of Appeals decision, however, the post-November 1, 1990 decision prevails. Id.
When there is a conflict between two published decisions of the Court of Appeals that were both issued after November 1, 1990, Michigan courts must follow the first opinion that addressed the matter at issue. ARS, 602 F.Supp.2d at 847 (citing Novak v. Nationwide Mut. Ins. Co., 235 Mich.App. 675, 599 N.W.2d 546, 554 (1999) (citation omitted)).
Ohio ex rel. Skaggs v. Brunner, 549 F.3d 468, 472 (6th Cir.2008).
Accordingly, this court will seriously consider our Circuit's interpretation of state law, or another district court's interpretation of state law, but is not bound by it. See ARS, 602 F.Supp.2d at 847; see also Pack v. Damon Corp., 2006 WL 1156489, *1 (E.D.Mich. May 1, 2006) ("Michigan courts, in turn, are not bound by the Sixth Circuit's interpretation of Michigan law."). See, e.g., MPAS v. Michigan DOC, 581 F.Supp.2d 847, 856 (W.D.Mich.2008) (Maloney, C.J.) (declining to follow U.S. District Court for the Eastern District of Michigan's determination that MDOC is a political subdivision of the State of Michigan, a matter of state law).
The court determines that Michigan choice-of-law precedents call for application of Virginia substantive law. "Because this is a diversity action, the law of the forum State, including the choice-of-law rules, apply." Montgomery v. Wyeth, 580 F.3d 455, 459 (6th Cir.2009) (citing Uhl v. Komatsu Forklift Co., 512 F.3d 294, 302 (6th Cir.2008)). "Generally speaking, a tort claim filed in a Michigan court will be governed by Michigan law `unless a rational reason exists to displace it.'" Gass v. Marriott Hotel Servs., Inc., 558 F.3d 419, 425 (6th Cir.2009) (citing Watkins & Son Pet Supplies v. Iams Co., 254 F.3d 607, 611 (6th Cir.2001) (quoting Olmstead v. Anderson, 428 Mich. 1, 400 N.W.2d 292, 303 (Mich.1987))). More precisely, "Michigan choice of law principles provide that Michigan law applies absent a rational reason—such as another State's interest—to
By contrast, when the plaintiff is not a Michigan resident, these interests are absent and the analysis is no longer so strongly presumptively tilted in favor of applying the forum State's substantive law. See, e.g., Ruffin-Steinback v. dePasse, 267 F.3d 457, 463-64 (6th Cir.2001) (because plaintiff was a Mississippi resident when she filed the complaint and a Mississippi or Alabama resident when she died, "[t]he district court did not err in determining that Michigan law did not apply to her cause of action, and under Mississippi law, Earline Ruffin's defamation claim was properly dismissed.").
To determine whether there is a rational reason to displace Michigan law, the court undertakes a two-step analysis. First, the court determines whether any foreign State has an interest in having its law applied: "if no State has such an interest the presumption that Michigan law applies cannot be overcome . . . ." Miller v. Airborne Express, Inc., 2008 WL 2782921, *3 (E.D.Mich. July 17, 2008) (Steeh, J.) (citing Sutherland, 454 Mich. at 286, 562 N.W.2d 466) (citing (Olmstead v. Anderson, 428 Mich. 1, 24, 29-30, 400 N.W.2d 292 (Mich. 1987))). Second, if a foreign State does have an interest in having its substantive law applied, the court must determine whether Michigan's interests mandate that its law be applied despite the foreign State's competing interests. See Sutherland, 454 Mich. at 286, 562 N.W.2d 466 (citing Olmstead, 428 Mich. at 24, 29-30, 400 N.W.2d 292); see also Hall v. GMC, 229 Mich.App. 580, 587, 582 N.W.2d 866 (Mich.App.1998) (describing this "interest analysis").
Here the State of Virginia clearly has a strong interest in having its substantive law applied: the aforementioned interest in protecting its citizens and, where necessary, helping them obtain just monetary
Michigan precedent suggests that the Michigan Supreme Court would apply Virginia law here. While residing in Virginia, the Harshaws reviewed, signed, and submitted their BCS international adoption agreements in Virginia, to an adoption agency licensed and registered as such in Virginia (Bethany Christian Services-Hampton Roads). See Defendants' Brief in Support of their Motion to Declare that Virginia Law Governs ("Def's Choice-of-Law Br"), Ex A (Virginia registration / licensure of BCS-HR); see generally VA. CODE ANN. §§ 63.2-1817 through 63.2-1819.
The office presentation and face-to-face discussions before the Harshaws entered this contract took place in Virginia, as did the communication and contact between the parties for the family adoption assessment (conducted by BCS-Hampton Roads social worker Jeanne Walton). When the Harshaws brought Roman into the United States from Russia, the three of them entered into Virginia; so far as the record reflects, the Harshaws and their son remain residents of Virginia. They executed a contract which expressly recited that
Defs' Choice-of-Law Br, Ex B (July 14, 2003 Agreement) (underlining and boldface on the word "Virginia" in original contract) (italics added by defendants). The Harshaws, however, respond that the defendants' choice-of-law attachment B is not the adoption agreement but merely a contract for BCS-HR to conduct a home assessment of the Harshaws in connection with the pre-adoption family assessment. See Def's Summary of Opp to Choice-of-Law Motion (Doc. 205) at 2 ¶ 2.
Even the Russian court which approved the adoption took care to note that there was no impediment to adoption "[u]nder the laws of Virginia." See Defs' Choice-of-Law Br, Ex C (English translation of Order of Krasnoyarsk Regional Court issued Jan. 27, 2004). Several months after the Harshaws brought Roman to live with them, they petitioned the circuit court for the City of Virginia Beach, Virginia for his adoption, id. Ex D. That court transmitted an order of reference to the Virginia Department of Social Services, id. Ex E, which received a January 2005 Report of Investigation from BCS-Hampton Roads regarding the Harshaws and their adoption of Roman in Russia, id. Ex F, leading the Virginia court to approve the adoption in February 2008, id. Ex G.
And significantly, the Harshaws' complaint does not seem to allege that any tortious conduct was committed in Michigan. Contrast Inland Waters Pollution Control Inc. v. Jigawon, Inc., 2008 WL 205209, *7-8 (E.D.Mich. Jan. 22, 2008) (Lawson, J.) ("The defendants suggest that Texas law should apply to the claims of fraud . . . because they are citizens of Texas and that is where the tort took place. Neither of these reasons constitute[s] sufficient interest by a foreign state in having its law apply. [A]t least some of the tortious activity occurred in Michigan . . . ."), recon. denied, 2008 WL 373430 (E.D.Mich. Feb. 12, 2008).
BCS contends that the entire complaint should be dismissed pursuant to Rule 12(b)(6) because the Harshaws allege only that BCS-Hampton Roads committed wrongdoing, not BCSI or BCS, and BCS-Hampton Roads is no longer a party. For example, the alleged misrepresentations in the complaint were made by BCS-HR employee Jeanette Walton. BCS states that "neither William nor Julie Harshaw identified a single misrepresentation by BCS or BCSI through nearly twenty hours of deposition testimony." BCS's M.D. at 22.
Unless the Harshaws establish that BCS or BCSI is an alter ego of BCS-Hampton Roads, it may be appropriate to dismiss the entire complaint. If BCS-Hampton Roads is not an alter ego of these defendants, then a judgment issued in this case ostensibly could not bind BCS-Hampton
Eure, 263 Va. at 634, 561 S.E.2d at 669; see also Barnett v. Kite, 271 Va. 65, 70, 624 S.E.2d 52, 55 (Va.2006) (a corporation is entirely separate and distinct from the shareholders or members who own or compose it, and "[t]his principle is applicable even when the corporation is owned totally by a single person, unless the corporation is held to be the alter ego, alias, stooge, or dummy of the [owner].") (citing O'Hazza v. Executive Credit Corp., 246 Va. 111, 115, 431 S.E.2d 318, 320-21 (Va.1993) and Cheatle, 234 Va. at 212, 360 S.E.2d at 831); Washington & Old Dominion Users Ass'n v. Washington & Old Dominion R.R., 208 Va. 1, 6, 155 S.E.2d 322, 326 (Va.1967).
The earlier Virginia Supreme Court decision in Beale emphasized that before the court may conclude that a corporation should be liable for another corporation's acts as its alter ego, "it is not enough that the subsidiary is so organized and controlled as to make it `merely an instrumentality, conduit or adjunct' of its [parent corporation]. It must further appear that to recognize their separate entities would aid in the consummation of a wrong." Beale, 192 Va. at 397, 64 S.E.2d at 797 (citing Ballantine, 60 A.L.R. 19).
To illustrate the stringency of Virginia's standard for an alter ego finding, BCS rightly point to Cheatle v. Rudd's Swimming Pool Supply Co., 234 Va. 207, 360 S.E.2d 828 (Va.1987). The court is further guided by the Virginia Supreme Court's declaration that "[w]e have consistently held. . . that only an `extraordinary exception' justifies disregarding the corporate entity and piercing the veil." C.F. Trust, Inc. v. First Flight, L.P., 266 Va. 3, 10, 580 S.E.2d 806, 810 (Va.2003) (citing, inter alia, Greenberg v. Commonwealth, 255 Va. 594, 604, 499 S.E.2d 266, 272 (Va.1998)). See also Wood-Dale, Inc. v. R.E. Lee & Son, Inc., 35 Va. Cir. 121, 1994 WL 1031402, *2 (Va.Cir.Ct. Spotsylvania Cty. Oct. 28, 1994) (Ledbetter, Cir. J.) ("If a subsidiary is duly incorporated and is functioning in a corporate capacity, it would appear that the Beale test for piercing the subsidiary's corporate veil in order to hold the parent corporation liable for the subsidiary's contracts or torts is rather difficult to meet."); see, e.g., Wigand v. Wilkes, 65 Va. Cir. 437, 2004 WL 1939074, *2 (Va.Cir.Ct., City of Norfolk, Sept. 1, 2004) (Leafe, Cir. J.) (determining that Hampton Roads Educational Televisions Associations, Inc., a non-profit, non-stock Virginia corporation which was incorporated and given its initial funding by several government-school districts, was not the alter ego of those districts because it had a separate Board of Directors which held regular meetings, had separate bank accounts and did not co-mingle funds, had only a "small minority" of its Board seats filled by representatives of participating school "divisions", did not perform governmental functions for those school divisions and set no policies for those divisions).
MTD at 24.
MTD at 24.
P's Opp at 19. Plaintiff's summary-judgment opposition brief, however, does not attempt to analyze Virginia case law or marshal specific, organized evidence to show that BCS-Hampton Roads is the alter ego of defendants BCS and/or BCSI.
BCS Reply at 9-10 with n. 9 (paragraph break added, footnote 10 omitted).
BCS Reply at 8 (boldface in original). BCS Reply at 9-10.
In a supplemental brief, then, it is the Harshaws' burden to do one of the following:
If the Harshaws fail to file this brief or it fails to make one of these two showings, the court may dismiss their entire complaint for failure to state a claim on which relief can be granted.
But if the Harshaws either identify allegations in their complaint that BCS and/or BCSI committed actionable wrong of the sorts described in counts 1-4, or show that they can be held liable as alter egos for BCS-Hampton Roads' alleged wrongdoing, the court would reject that basis for dismissal and move on to the other grounds asserted for dismissal, and finally to the fact-based battle over summary judgment on the merits.
The defendants' motion to declare the applicable law
The court
The parties
The oral argument is
This is not a final and immediately appealable order.
In August 2009, the defendants filed an itemized list of the fees and costs they incurred due to the erroneous inclusion of BCS-Hampton Roads in this suit. On August 28, 2009, the Harshaws filed a notice stating that they agreed to the condition and would electronically transfer $14,805.00 to the account of defense counsel on August 31, 2009. See Docs. 108 & 110.
P's Opp at 12-15 with n. 33 (other footnotes omitted) (citing Ammend v. Bioport, Inc., 322 F.Supp.2d 848 (W.D.Mich.2004)) (applying Mahne to hold that MI law applied where non-residents were injected outside MI with an anthrax vaccine that had been made in MI by a MI corporation).
The Harshaws acknowledge that the Circuit's interpretation of Michigan choice-of-law principles in Mahne calls for the opposite result from the Michigan Court of Appeals's published decisions in Hall and Farrell. The Harshaws accurately states that BCS relies on Hall, which
P's Opp at 17. The Harshaws go on to say that "[f]or federal courts sitting in Michigan, Mahne is controlling in its analysis and application of Michigan choice of law . . . ." P's Opp at 15. That is precisely the opposite of the law. This court's task is only to consider how the Michigan Supreme Court would likely rule in the matter. An interpretation of state law by a federal court—even a Court of Appeals—has no bearing on that question. As our Circuit acknowledged, "No federal court has the final say on what [state] law means. Even the decision of the highest federal court, the United States Supreme Court, about the meaning of [a state] law has no more binding authority on the [state] Supreme Court than the decision of [another State's] Supreme Court or for that matter any other court." Ohio v. Brunner, 549 F.3d 468, 472 (6th Cir. 2008); see also Humphreys v. Bellaire Corp., 966 F.2d 1037, 1042 (6th Cir.1992) ("the district court's reliance on federal cases interpreting Ohio law is only correct if those cases accurately reflect the law of Ohio"); Wilkie v. Schwan's Sales Enters., Inc., 541 F.Supp. 1193, 1197 (W.D.Mich.1982) (Enslen, J.) ("It is well settled that a district court is bound in a diversity case to follow published decisions of intermediate state appellate courts in the absence of any opinion of the highest state court, unless it is convinced by persuasive data that the highest state court would rule otherwise.") (citing, inter alia, Ruth v. Bituminous Cas. Corp. 427 F.2d 290 (6th Cir. 1970)), aff'd, 720 F.2d 680 (6th Cir. 1983).
To the extent that Mahne's interpretation of Michigan choice-of-law is inconsistent with the Michigan Court of Appeals's published decisions in Hall and Farrell, this court must follow the latter. After the Michigan Supreme Court's decisions, the precedential decisions of the State's Court of Appeals are the next-best legitimate and relevant predictor of how the Supreme Court would likely rule— not the decisions of a federal court. Accord Hilburn v. GMC, 958 F.Supp. 318, 320-21 (E.D.Mich.1997) (Cook, J.) (noting direct conflict between Mahne and Farrell, and following Michigan Court of Appeals instead of Sixth Circuit; where NC resident died in automobile accident in NC and brought products-liability claims against the Michigan-based automobile manufacturer, Michigan choice-of-law rules called for application of NC law).
Moreover, BCS provides examples where Virginia tort law appears to differ meaningfully, perhaps markedly, from Michigan tort law. For one, Virginia adheres to the doctrine of contributory negligence as a bar to recovery, see Fultz v. Delhaize America, Inc., 278 Va. 84, 89-90, 677 S.E.2d 272, 275 (Va. 2009), while Michigan does not. "The doctrine of contributory negligence has been abandoned in Michigan and replaced with a rule of comparative fault." Jimkoski v. Shupe, 282 Mich.App. 1, 763 N.W.2d 1, 8 n. 3 (Mich.App.2008) (P.J. Hoekstra, Bandstra, Donofrio) (citing Placek v. Sterling Heights, 405 Mich. 638, 650, 275 N.W.2d 511 (Mich. 1979)).
"From 1979 until the tort reforms of 1995, Michigan courts accepted the common-law concept of `pure comparative negligence.' Under this scheme the plaintiff was entitled to a damages award against a negligent defendant reduced by plaintiff's relative portion of negligence." Romain v. Frankenmuth Mut. Ins. Co., 483 Mich. 18, 32 n. 23, 762 N.W.2d 911, 919 n. 23 (Mich.2009) (Young, J., dissenting on other grounds) (citing Placek, 405 Mich. 638, 275 N.W.2d 511). "The 1995 tort reform package * * * abolished joint and several liability, imposed damages caps on pain and suffering . . . ." Harbour v. Corr. Med. Servs., Inc., 266 Mich.App. 452, 461, 702 N.W.2d 671, 677 (Mich.App.2005), app. denied, 475 Mich. 859, 713 N.W.2d 777 (Mich. 2006). Today in Michigan, "`[d]amages shall be assessed on the basis of cooperative fault, except that damages shall not be assessed in favor a party who is more than 50% at fault.'" Barton v. Gayer, 2008 WL 649785, *3 (Mich.App. Mar. 11, 2008) (per curiam) (P.J. Meter, Sawyer, Wilder) (quoting MICH. COMP. LAWS§ 500.3135(2)(b)).
The outcome of the alter ego issue may provide an independent basis for dismissal of the complaint without reference to the other arguments advanced in the dispositive motions. See, e.g., Hamlett v. Virginia Vascular Assocs., 61 Va. Cir. 468, 2003 WL 22382792, *4 (Va.Cir.Ct. City of Norfolk, Apr. 21, 2003) (Morrison, J.) (treating claim for "negligent misrepresentation", which Virginia law does not recognize, as claim for constructive fraud and noting, "The pleading for constructive fraud, like actual fraud, must show specifically what the fraud consists of. Plaintiffs have failed to identify the agents, officers or employees of Medtronic [who] allegedly perpetrated the fraud. * * * Therefore, Defendant's demurrer to ["negligent misrepresentation" claim] is sustained, and it is unnecessary to consider Defendant's other grounds for its demurrer to Plaintiffs' constructive fraud claim.") (emphasis added).
