United States District Court, W.D. Kentucky, Owensboro Division
MEMORANDUM OPINION AND ORDER
H. McKinley Jr., Senior Judge.
matter is before the Court on motions by Defendants Suzuki
Motor Corporation (SMC) and Nissin for an order determining
that Japanese law governs Plaintiff Derek Schall's
claims. [DN 188; DN 198]. Fully briefed, the matter is ripe
for decision. For the following reasons, Defendants'
motions are DENIED. Kentucky substantive law shall apply.
has lived in Kentucky for a few years. [DN 198-2 Pl. Dep.
6:25-7:22]. He purchased a used 2007 Suzuki GSX-R600
motorcycle. [Id. at 53:20-25]. Schall was in an
accident while riding the motorcycle. [DN 5 ¶ 39]. He
asserts that when he approached a curve and applied the
brakes, he was unable to slow the motorcycle and ran off the
road. [Id.]. Schall sued Defendants SMC, Nissin, and
Suzuki Motor of America, Inc. (SMA) alleging that the front
brake master cylinder (FBMC) and brake system in his
motorcycle were defective. [Id. at ¶ 38].
Schall brings negligence and strict liability claims against
Defendants. [Id. at ¶¶ 41-52].
a Japanese corporation. [DN 188 at 2]. SMC designs,
assembles, and manufactures motor vehicles. [Id.].
SMC sells its products to distributors such as SMA, the
exclusive distributor for Suzuki motorcycles in the U.S. [DN
188 at 3]. SMA is SMC's wholly-owned subsidiary but is a
separate and independent legal entity. [Id. at 4].
SMC previously sold its products to American Suzuki Motor
Corporation (ASMC), which is now defunct and dissolved.
[Id. at 3]. When ASMC existed, it was a wholly-owned
subsidiary of SMC that was separate and independent.
[Id. at 4]. SMC designed and manufactured the Suzuki
GSX-R600 in Japan and sold the motorcycle to ASMC in Japan.
[Id.]. Nissin is a Japanese corporation that
manufactures brake master cylinders and other brake
components. [DN 198-2 at 1]. Nissin designed the brake
components in Japan, manufactured the components in Japan and
China, sold the brake component parts to SMC in Japan, and
delivered the components in Japan. [DN 198 at 3]. Nissin did
not install the component parts on the motorcycle-SMC did.
Nissin now ask the Court to determine whether Kentucky or
Japanese law is applicable to this case. [DN 188; DN 198].
Nissin make several arguments in their motions: (1) they
argue that there is a material conflict between Japanese and
Kentucky law; (2) they argue that under Kentucky's torts
choice-of-law rule, the Court must apply Japanese law to
Schall's products liability claims; and (3) they argue
that the Due Process Clause of the Fourteenth Amendment of
the U.S. Constitution bars application of Kentucky law. [DN
188 at 6-15; DN 198 at 5-15].
Conflict of Laws Between Kentucky and Japanese Products
Court must first determine if Kentucky law conflicts in any
material way with Japanese law because there can be no injury
in applying Kentucky law if it does not conflict with
Japanese law. Phillips Petrol. Co. v. Shutts, 472
U.S. 797, 816 (1985). “[A]bsent any material
differences in the law, the Court would confront a
‘false conflict' in which there is no conflict
between the law of the two states. In such an instance the
Court should simply apply the law of the forum state.”
Allstate Imaging, Inc. v. First Indep. Bank, No.
08-cv-11363, 2010 WL 1524058, at *3 (E.D. Mich. Apr. 15,
2010) (citations omitted).
parties seem to agree that there are material differences
between Kentucky and Japanese products liability law. [DN 188
at 6-7; DN 198 at 6-7; DN 223 at 10]. Defendants identify
five conflicts: (1) Japanese law prohibits jury trials in
products liability civil actions, whereas Kentucky law
permits a jury trial; (2) Japan requires a plaintiff in a
products liability lawsuit to prove beyond a reasonable doubt
that a manufacturer defectively designed or manufactured its
product and that the defect caused the plaintiff's
injuries, whereas Kentucky requires proof by a preponderance
of the evidence; (3) Japan recognizes an exemption for
component-parts manufacturers in products liability lawsuits,
whereas Kentucky does not; (4) if a plaintiff succeeds in
obtaining a judgment against a Japanese entity located in
Japan, Japan requires that the plaintiff obtain an
“execution judgment” from a Japanese court to
enforce that judgment on the entity; and (5) Kentucky
recognizes punitive damages, but Japan does not. [DN 188 at
1, 6-7; DN 198 at 1, 6-7; DN 223 at 10]. The Court finds that
there is a conflict in Kentucky and Japanese products
liability law on the identified issues.
Kentucky's Torts Choice-of-Law Rule
Court must engage in a choice-of-law analysis to decide
whether Kentucky or Japanese substantive law
applies. “Federal courts sitting in diversity
must apply the choice-of-law rules of the forum state.”
Muncie Power Prods. v. United Techs. Auto., Inc.,
328 F.3d 870, 873 (6th Cir. 2003) (citing Klaxon Co. v.
Stentor Elec. Mfg., 313 U.S. 487, 496 (1941)).
“First, as a starting presumption, there is ‘no
doubt Kentucky prefers the application of its own laws over
those of another forum.'” Custom Prods., Inc.
v. Fluor Daniel Can., Inc., 262 F.Supp.2d 767, 771 (W.D.
Ky. 2003) (citation omitted). “Second, although this
principle should generally dictate the outcome, there are
occasions when a careful examination of the facts reveals
that the case's actual connection to Kentucky is simply
too remote to justify applying Kentucky law.”
the Kentucky torts choice-of-law rule, “any significant
contact with Kentucky is sufficient to allow Kentucky law to
be applied.” Id. at 772 (citation omitted). In
other words, “if there are significant contacts-not
necessarily the most significant contacts-with Kentucky, the
Kentucky law should be applied.” McGinnis v.
Taitano,3 F.Supp.2d 767, 769 (W.D. Ky. 1998) (citation
omitted). “Kentucky courts have ‘held the fact
that [an] accident occurred in Kentucky, was, standing alone,
enough contact to justify the ...