citizens. Consequently, the deterrence goals of Virginia's
damages law would not be served by the application of Virginia
In comparing New Jersey's interest in having New Jersey law
apply in this case with Virginia's interest in having Virginia
law apply, I conclude that New Jersey's interest is greater. If
the only governmental interests in this case were New Jersey's
interest in limiting the damage liability of its defendants and
Virginia's interest in securing full compensation for its
plaintiffs, the choice-of-law decision I must make would be more
difficult than it is. It would be impossible to say whether New
Jersey had a greater interest in protecting its defendants or
Virginia had a greater interest in safeguarding its plaintiffs.
See Pollock v. Barrickman, 610 F. Supp. 878, 879-880 (D.N.J.
1985) (Gerry, J.). New Jersey's damage law is motivated in part,
however, out of the concern that excessive tort awards levied
against New Jersey defendants harm all New Jersey citizens. The
costs of tort liability are passed on to all New Jersey citizens
by the insurance companies who are forced to pay such awards. New
Jersey has an interest in having its law applied — for the
benefit of all of its citizens — in cases like this one where a
defendant-domiciliary faces tort liability. At the same time, the
deterrence objectives of Virginia's law of damages would not be
furthered by the application of Virginia law in this case. As
between New Jersey law and Virginia law, therefore, I hold that
New Jersey's law of damages should be applied in this case.
(3) Michigan's Law of Damages
Comparing New Jersey's interest in having its law applied in
this case with Michigan's interest in having its damages law
applied, I conclude that I must apply New Jersey law. Michigan
has two connections to this litigation. First, it was the situs
of the injury. Second, S.D. Warren is a Michigan company, who,
although dismissed as a direct defendant in this case, see
Slater, 187 F.R.D. at 199, remains as a Third-Party Defendant,
subject to Skyhawk and Young's claims for contribution and
indemnification. To begin with, I note that although "New Jersey
has rejected the rule for determining choice of law based on the
place where the wrong occurred," Veazey, 103 N.J. at 247, 510
A.2d at 1189, the place of injury may still be an important
factor in resolving choice-of-law questions. See Amoroso, 901
F. Supp. at 904-05; Mowrey, 260 N.J.Super. at 413, 616 A.2d at
1305. Whether or not the law of the place of injury should be
applied depends largely on the type of relationship that exists
between the parties involved in the case and the place of injury.
For example, if the fact that the injury in this case occurred in
Michigan is merely fortuitous, then Michigan's law of damages
likely should not be applied in this case, whereas if Slater or
Skyhawk had some regular contact with Michigan or if one of them
was a Michigan domiciliary, then Michigan's law of damages more
likely should be applied. See Amoroso, 901 F. Supp. at 905
(citing Moye, 263 N.J.Super. at 292, 622 A.2d 935 at 938;
Veazey, 103 N.J. at 250, 510 A.2d at 1190-91). In other words,
a decision to apply or not to apply the law of the place of
injury requires an analysis of the relationship between the place
of injury, its laws, and the parties involved in an action.
That being said, Michigan has only a limited interest in having
its damages law applied in this case. The goal of Michigan's law
of damages is to prevent double recovery on the part of
plaintiffs. See Heinz, 216 Mich.App. at 306, 549 N.W.2d at 55.
The plaintiff in this case, however, is a Virginia domiciliary.
Michigan has little interest in whether a Virginia domiciliary
receives a windfall in this case.
Moreover, while it might be argued that Michigan has an
interest in deterring unsafe property conditions and unsafe
conduct by Michigan property owners, see O'Connor, 255
N.J.Super. at 549, 605 A.2d at 775, this interest would not be
significantly furthered by the application of Michigan damages
law in this case. In O'Connor, Virginia law was applied in a
case involving a New Jersey plaintiff injured
on a ride at Busch Gardens, a Virginia amusement park. See id.
at 559-50, 605 A.2d at 775. The O'Connor court had to decide
whether to apply New Jersey's comparative negligence law or
Virginia's contributory negligence law. The choice of law
decision that had to be made was intimately tied to Virginia's
deterrence interests since the application of Virginia's
contributory negligence rule could insulate Busch Gardens from
all liability on a showing that O'Connor, the plaintiff, was
Michigan's deterrence interest is much less closely tied to the
choice of law decision to be made in this case. First, the
deterrence interest in imposing liability at all is much greater
than the deterrence interest in awarding a greater or lesser
amount of damages once liability has already been decided.
Second, the direct defendant in this case is a domiciliary of New
Jersey, not of Michigan. While S.D. Warren is still involved in
this litigation, the primary burden of a damage award will be
borne by Skyhawk and Young. This burden may or may not be passed
on to S.D. Warren. Michigan's interest in having its damages law
apply in this case is diminished by the fact that none of the
primary parties to the litigation are Michigan domiciliaries.
Comparatively speaking, New Jersey's interest in having its law
of damages applied in this case is stronger than Michigan's
interest in having Michigan law applied. While Michigan has no
interest in the amount of compensation Slater receives as part of
a damage award and a limited deterrence interest, New Jersey has
a strong interest in not only protecting the defendant
domiciliaries from excessive damages liability but also in
safeguarding all New Jersey residents from the costs which they
all incur when New Jersey domiciliaries are required to pay tort
It should be noted New Jersey's damages law can be applied in
this case even if the law of liability applied is Michigan's.
Slater states in his papers (and Skyhawk and Young do not object)
that the parties to this litigation have agreed that Michigan law
will apply with respect to liability. See Slater Br. Opp'n New
Jersey Law at 4, 16. Federal courts interpreting New Jersey
choice-of-law rules have held that it is the policy of New Jersey
courts to apply the damages law of the state whose liability law
controls. See Draper v. Airco, Inc., 580 F.2d 91, 97-98 (3d
Cir. 1978); A-S Development, Inc. v. W.R. Grace Land Corp.,
537 F. Supp. 549, 556 n. 6 (D.N.J. 1982) (Thompson, J.). But see
Pollock, 610 F. Supp. at 879-80 (applying New Jersey negligence
law and Pennsylvania damages law). That being said, there is an
exception to this rule in cases where neither the plaintiff nor
the defendant are domiciliaries of the state in which the injury
occurred. See Draper, 580 F.2d at 97. This exception comports
with New Jersey's general rule that choice-of-law determinations
should be made on an issue-by-issue basis, see Veazey, 103 N.J.
at 248, 510 A.2d at 1189, and my observation that no matter what
agreement was made in this case concerning liability, a
governmental interest analysis requires that New Jersey's damages
law should be applied. Moreover, this case fits this exception.
For the reasons set forth above, I find that Skyhawk and Young
are barred from seeking recovery against Reco by New Jersey,
Virginia, and Michigan's workers' compensation statutes. I also
find that New Jersey has the greatest interest in having its law
of damages applied in this case and that under New Jersey's
choice-of-law rules, I am required to apply New Jersey's law of
damages. Accordingly, I shall grant Reco's motion for summary
judgment and Skyhawk and Young's motion to have New Jersey law
applied in this case.
I will enter an appropriate order.