On Appeal from the United States District Court for the Middle District of Pennsylvania (D.C. Civ. No. 03-2404). Honorable Richard P. Conaboy, District Judge.
The opinion of the court was delivered by: Greenberg, Circuit Judge.
Before: ALITO, BECKER, and GREENBERG, Circuit Judges.
I. FACTUAL AND PROCEDURAL HISTORY
This appeal requires us to answer a conflicts-of-laws question. The case arises from a motor vehicle accident in Pennsylvania on February 25, 2002, involving plaintiff-appellee Rodolfo Garcia (hereinafter "Garcia"), a Pennsylvania citizen, and defendant Timothy Gladney (hereinafter "Gladney"), a New York citizen and New York licensed driver. Garcia was driving a Dodge truck registered and insured in Pennsylvania. Gladney was driving a Toyota automobile that he had rented earlier that day in Brooklyn, New York, from defendant-appellant Plaza Oldsmobile (hereinafter "Plaza"), a New York corporation with its principal place of business in that state. Garcia alleged that he suffered permanent and disabling injuries as a result of the accident and that Plaza, as owner of the vehicle, was liable to him for his injuries. Consequently, he brought this diversity of citizenship action, in which the district court had jurisdiction under 28 U.S.C. § 1332, against Gladney and Plaza as well as certain other defendants not involved in this appeal.*fn1 Garcia's wife, plaintiff-appellee Maritza Espinal-Garcia, has joined in the action asserting a claim for loss of consortium but as a matter of convenience we will refer to Garcia as the plaintiff-appellee in the singular. As of the time that Plaza filed this appeal, there had not been a trial on liability for the accident, even as between Garcia and Gladney, and damages had not been determined, and, as far as we are aware, there still has not been a trial in the district court.
In the district court, Plaza and Garcia filed cross motions for partial summary judgment seeking a determination of whether the court should ascertain Plaza's potential liability by application of Pennsylvania's common law or section 388(1) of New York's Vehicle and Traffic Law. The distinction is likely to be critical because under Pennsylvania common law, which is predicated on traditional agency principles, regardless of Gladney's culpability Plaza could not be liable to Garcia whereas, under New York law, if Gladney is determined to be liable to Garcia, Plaza also would be liable to him as New York imposes vicarious liability on a vehicle owner for injuries arising from the negligence of anyone using or operating its vehicle with permission.*fn2 Compare Fried v. Seippel, 599 N.E.2d 651 (N.Y. 1992), with Ferry v. Fisher, 709 A.2d 399 (Pa. Super. Ct. 1998).*fn3 As would be expected, Garcia asserted that New York statutory law applied whereas Plaza contended that Pennsylvania common law applied. Surprisingly, the parties have not been able to direct our attention to any published opinion of any state or federal court in Pennsylvania directly addressing the conflicts-of-laws issue here.*fn4 The district court concluded that there was a false conflict between New York and Pennsylvania law, and that New York law applied and thus on June 4, 2004, granted Garcia's motion insofar as he requested the court to apply New York law. We will explain below what circumstances give rise to a false conflict.
Plaza then moved for certification of the June 4, 2004 order pursuant to 28 U.S.C. § 1292(b) so that it could seek leave from this court to appeal from that order and it moved, in the alternative, for reconsideration of the order. By order dated August 17, 2004, the district court granted Plaza's motion for certification under 28 U.S.C. § 1292(b) but denied its motion for reconsideration. We granted Plaza's petition for permission to appeal on November 4, 2004.
As we have indicated the sole question presented on appeal is a narrow conflicts-of-law issue: whether the court should use Pennsylvania common law or New York's statutory law to determine if Plaza can be liable. We exercise plenary review over the choice of law question raised by this appeal. See Simon v. United States, 341 F.3d 193, 199 (3d Cir. 2003); Shuder v. McDonald's Corp., 859 F.2d 266, 269 (3d Cir. 1988).
In a diversity of citizenship action, we determine which state's substantive law governs by applying the choice-of-law rules of the jurisdiction in which the district court sits, here Pennsylvania. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 1021 (1941); Petrella v. Kashlan, 826 F.2d 1340, 1343 (3d Cir. 1987); Melville v. American Home Assur. Co., 584 F.2d 1306, 1308 (3d Cir. 1978). Griffith v. United Air Lines, Inc., 203 A.2d 796 (Pa. 1964), is Pennsylvania's leading conflicts-of-laws case. In that case, the Pennsylvania Supreme Court abandoned the traditional lex loci delicti conflicts rule in which the law of the place of the wrong governed the substantive rights and liabilities of the parties and substituted "a more flexible rule which permits analysis of the policies and interests underlying the particular issue before the court." Id. at 805. We have indicated that this methodology has evolved into a hybrid approach that "combines the approaches of both Restatement [(Second) of Conflict of Laws] (contacts establishing significant relationships) and 'interest analysis' (qualitative appraisal of the relevant States' policies with respect to the controversy)." Melville, 584 F.2d at 1311.
Under Pennsylvania law, before assessing the governmental interests of the jurisdictions whose law may control and examining their contacts with the dispute, we must determine what type of "conflict," if any, exists between the purported competing bodies of law. See Kuchinic v. McCrory, 222 A.2d 897, 899-900 (Pa. 1966). We begin with an "interest analysis" of the policies of all interested states and then -- based on the result of that analysis -- determine whether the case involves a true or false conflict or whether it is unprovided for. Budget Rent-A-Car Sys., Inc. v. Chappell, 407 F.3d 166, 169-70 (3d Cir. 2005); see also LeJeune v. Bliss-Salem, Inc., 85 F.3d 1069, 1071 (3d Cir. 1996).
There is a true conflict "when the governmental interests of both jurisdictions would be impaired if their law were not applied." Lacey v. Cessna Aircraft Co., 932 F.2d 170, 187 & n.15 (3d Cir. 1991) (emphasis in original). If a case presents a true conflict, Pennsylvania choice-of-law rules "call for the application of the law of the state having the most significant contacts or relationships with the particular issue." In re Estate of Agostini, 457 A.2d 861, 871 (Pa. Super. Ct. 1983). But there is a false conflict "if only one jurisdiction's governmental interests would be impaired by the application of the other jurisdiction's law." Lacey, 932 F.2d at 187. If there is a false conflict, we apply the law of the only interested jurisdiction. See, e.g., Kuchinic v. McCrory, 222 A.2d at 899-900. Finally, there are unprovided-for cases in which neither jurisdiction's interests would be impaired if its ...