WISEMAN, Chief Judge.
This is a products liability action arising out of a plane crash which occurred on the Kentucky side of the Fort Campbell military installation.
In originally separate but now consolidated suits, the two injured crewmen and the widows of the three deceased seek recovery under theories of negligence, breach of warranty, strict liability in tort and "violation of the Consumer Protection Act."
Defendant Lockheed Corporation, who is at least the original manufacturer of the aircraft, has moved for summary judgment on the grounds that this action is barred by Tennessee's statute of repose for products liability actions.
A. Choice of Law
It is elementary that in a diversity case, this Court is obligated to apply the law of the forum state, including the forum's choice of law rules. See, e.g., Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 822, 82 L.Ed. 1188 (1938); Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496-97, 61 S.Ct. 1020, 1021-22, 85 L.Ed. 1477 (1941); Day & Zimmermann, Inc. v. Challoner, 423 U.S. 3, 4-5, 96 S.Ct. 167, 167-68, 46 L.Ed.2d 3 (1975); Mackey v. Judy's Foods, Inc., 654 F.Supp. 1465, 1468 (M.D.Tenn.1987) (Wiseman, C.J.). Equally as elementary is Tennessee's steadfast adherence to the traditional rule of lex loci delictus in determining which state's substantive law is applicable to actions sounding in tort. See, e.g., Trahan v. E.R. Squibb & Sons, Inc., 567 F.Supp. 505, 507 (M.D.Tenn.1983); Babcock v. Maple Leaf, Inc., 424 F.Supp. 428 (E.D.Tenn.1976) (applying rule to actions based on strict liability theory); Winters v. Maxey, 481 S.W.2d 755, 756-59 (Tenn.1972). Quite simply, lex loci delictus holds that the substantive law of the place where the tort occurs applies. E.g., Winters, 481 S.W.2d at 756. The Tennessee Supreme Court has rejected specifically the "dominant contacts" choice of law rule in favor of lex loci. Trahan, 567 F.Supp. at 507. See Winters, 481 S.W.2d at 756-59; Great Amer. Ins. Co. v. Hartford Acc. & Indemn. Co., 519 S.W.2d 579, 580 (Tenn.1975) (reaffirming viability of Winters and lex loci contractus rule). The lex loci rule is derived from the vested rights doctrine. According to the vested rights doctrine, "a plaintiff's cause of action `owes its creation to the law of the jurisdiction where the injury occurred and depends for its existence and extent solely on such law.'" Trahan, 567 F.Supp. at 508, quoting Winters, 481 S.W.2d at 756; Babcock, 424 F.Supp. at 432. Thus, where the tortious act and the resulting injury occur in different states, the traditional rule in Tennessee is that the substantive law of the state where the injury occurred controls. E.g., Trahan, 567 F.Supp. at 507; Babcock, 424 F.Supp. at 432-33; Koehler v. Cummings, 380 F.Supp. 1294, 1305 (M.D.Tenn.1971).
Nevertheless, defendants argue that this case presents occasion for diverging from the long-standing rule of lex loci. They claim that the language of both Winters, 481 S.W.2d at 758-59, and Great American, 519 S.W.2d at 580, left open the possibility of adopting the "dominant contacts" rule in light of future legal developments. Specifically, the court in Winters stated that the strongest reason for not repudiating lex loci was that the court was unable to discern any "uniform common law of conflicts" which had arisen under the "dominant contacts" approach and which could take the place of the uniform lex loci rule. 481 S.W.2d at 758. Subsequently, in Great American the court found that the dominant contacts rule had made "no significant progress toward uniformity since Winters," and thus refused to adopt the newer rule. 519 S.W.2d at 581.
According to defendants, the uniformity for which the court was waiting has emerged, at least in interstate aviation cases. In addition to calling the court's attention to the number of jurisdictions which have adopted and applied the dominant contacts approach since Winters and Great American,
The Second Circuit affirmed the district court's prediction. It agreed that the particular circumstances of the case presented good reasons to replace lex loci with the dominant contacts test in aviation accidents. Saloomey, 707 F.2d at 674-75. The court stated;
Id. at 675-76 (citations omitted).
Although Saloomey expresses succinctly one court's conclusion that the dominant contacts test is more appropriate than lex loci as a choice of law rule in tort actions arising out of interstate air travel, it does not appear to this court that Saloomey satisfies the concerns expressed by the Tennessee Supreme Court in Winters and Great American. Lex loci results in unpredictability only insofar as one cannot predict beyond a degree of probability before embarking on an interstate journey if and where an accident will occur. On a trip from Dallas to Danbury via West Virginia and a dozen other states, the probability that the accident will occur in West Virginia is no greater or less whether one travels by plane, train or automobile. In other words, taken alone, the mere fact that the locus of an accident may be fortuitous is not sufficient grounds for distinguishing air travel from auto travel.
Nor does such fortuity highlight the concern for predictability expressed in Winters and Great American. In those opinions, the Tennessee Supreme Court allowed that it may change its stance when there emerged from the dominant contacts analysis sufficiently clear principles of decision that two courts presented with similar facts would most likely reach consistent conclusions.
In Day & Zimmermann, Inc. v. Challoner, the Supreme Court stated:
423 U.S. 3, 4, 96 S.Ct. 167, 168, 46 L.Ed.2d 3 (1975). Thus, even if this Court were convinced that the contacts approach is superior to lex loci, we are not the proper mechanism to initiate the divergence from such a clearly established conflict-of-laws rule. Rather, our proper inquiry is whether the circumstances of this case are so unique that the applicability of the traditional rule is questionable, or whether sufficiently uniform rules of decision have emerged to satisfy the concerns expressed in Winters and Great American. This inquiry has led the Court to conclude that in this case lex loci delictus is the applicable conflict-of-law rule under Tennessee law. The accident, injuries and deaths occurred in Kentucky. Therefore, the substantive law of Kentucky controls this claim.
B. Statute of Repose
Deciding that Kentucky substantive law controls is only the first step. The second is determining whether the action is barred nevertheless by Tennessee's statute of repose in products liability actions. This second step is premised on the traditional rule in Tennessee that although the controlling substantive law is lex loci, the law of the forum controls procedure. See, e.g., Sherwin-Williams Co. v. Morris, 25 Tenn. App. 272, 156 S.W.2d 350 (1941). On the question of whether Tennessee's statute of repose applies to this action, the parties join issue on two basic points. First, they dispute whether the court's inquiry should focus on the nature of Tennessee's statute of repose or the analogous Kentucky statute. Second, they disagree as to whether Tennessee's statute of repose is substantive or procedural.
On the first issue, plaintiffs point to a federal case directly on point, where the court was faced with choosing between Illinois and Pennsylvania law. See Anabaldi v. Sunbeam Corp., 651 F.Supp. 1343 (N.D. Ill.1987). The plaintiffs were burned when a hot oil fryer manufactured and sold by defendant tipped over. The plaintiffs were residents of and the injuries occurred in Pennsylvania, but suit was brought in Illinois where the defendant had its principal place of business. Id. at 1344. Illinois has a twelve-year statute of repose in products liability actions which would have barred plaintiffs' claims. Applying Illinois conflicts rules, the court held that Pennsylvania substantive law controlled and that the Illinois statute of repose was substantive. Thus, it prohibited Sunbeam from asserting the statute of repose as an affirmative defense. Id. at 1345.
Defendants argue, on the other hand, that the proper inquiry should focus on the analogous Kentucky statute. They contend
Even assuming arguendo that Ky.Rev. Stat.Ann. § 411.310 is the relevant Kentucky statute and that the defendants have characterized it correctly, the conclusion they draw does not necessarily follow.
Unfortunately, no Tennessee court has decided this issue, nor is there a mechanism for certifying such questions to the Tennessee Supreme Court. Of the courts which have considered this issue, however, the clear majority has held that statutes of repose are substantive. President & Dir. of Georgetown College v. Madden, 660 F.2d 91, 94 (4th Cir.1981). See, e.g., Goad v. Celotex Corp., 831 F.2d 508, 511 (4th Cir.1987); Wayne v. T.V.A., 730 F.2d 392, 401 (5th Cir.1984), cert. denied, 469 U.S. 1159, 105 S.Ct. 908, 83 L.Ed.2d 922 (1985) (addressing Tennessee's products liability statute of repose); Anabaldi v. Sunbeam Corp., 651 F.Supp. at 1345; Nieman v.
Goad, 831 F.2d at 511. (Emphasis added.)
The Fifth Circuit has found Tennessee's statute of repose to be substantive and, therefore, applicable to an action where Mississippi's conflict-of-law rules dictated that Tennessee substantive law control. See Wayne, 730 F.2d at 400-02. In so holding, the court noted the opinion in Buckner v. GAF Corp., 495 F.Supp. 351, 355 (E.D.Tenn.1979), aff'd, 659 F.2d 1080 (6th Cir.1981), where the district court distinguished Tennessee's statute of repose from a normal statute of limitation. Wayne, 730 F.2d at 401. Nevertheless, defendants argue that authority in the Sixth Circuit contradicts both the majority rule and the holding in Wayne. They contend that Murphree v. Raybestos Manhattan, Inc., 696 F.2d 459 (6th Cir.1982), and Clay v. Johns-Manville Sales Corp., 722 F.2d 1289 (6th Cir.1983), cert. denied, 467 U.S. 1253, 104 S.Ct. 3537, 82 L.Ed.2d 842 (1984), establish that the statute of repose is procedural. The issue in Murphree was whether, under Article I, Section 20 of Tennessee's Constitution, a Tennessee court would apply a vested rights doctrine to prevent the retroactive application of the asbestos exception to the products liability statute of repose. In holding that the Tennessee court will no longer use the doctrine to prevent the legislature from ameliorating the harshness of a rule that bars a plaintiff's claim before he discovers it, the court stated that its decisions brings "Tennessee law in line with federal law on vested rights as applied to statutes of limitation...." Murphree, 696 F.2d at 462.
Mathis v. Eli Lilly Co., 719 F.2d 134, 138 (6th Cir.1983), quoting Duke Power Co. v. Carolina Envir. Study Group, 438 U.S. 59, 88 n. 32, 98 S.Ct. 2620, 2638 n. 32, 57 L.Ed.2d 595 (1978). (Citations omitted.)
Indeed, the change effected by Tennessee's statute of repose was substantive. The original version of the statute was passed in 1978, and allowed no action to be brought more than ten years after the allegedly defective goods were made, regardless of when an injury occurred. Three years earlier, however, the Tennessee Supreme Court had finally settled that the cause of action in a tort or product liability action accrued "when the injury occurs or is discovered, or when in the exercise of reasonable care and diligence, it should have been discovered." McCroskey v. Bryant Air Cond. Co., 524 S.W.2d 487, 491 (Tenn.1975). Therefore, through the statute of repose the legislature ruled that where an injury occurs more than ten years after a product is made, no cause of action accrues. This legislative rule can hardly be characterized as a procedural device limiting the time in which a plaintiff may seek a remedy in court. As the court in McCroskey said:
524 S.W.2d at 489, quoting Dincher v. Marlin Firearms Co., 198 F.2d 821, 823 (2d Cir.1952). Rather, by definition, Tennessee's statute of repose begins to run before a cause of action accrues and reflects the substantive determination that after ten years, no cause of action may accrue.
In short, Tennessee's statute of repose is part of Tennessee's substantive law. Plaintiffs have a cause of action under Kentucky law, but, because of the statute of repose, not under Tennessee law. Lex loci compels this Court to apply Kentucky substantive law. Thus, plaintiffs' cause of action is not barred by the ten-year statute of repose.
C. Public Policy Exception
The final step in the analysis is to determine whether the difference between Kentucky and Tennessee law presents occasion for applying the public policy exception to lex loci. The public policy exception is not a back door through which some form of significant contacts analysis may enter.
The circumstances in Trahan are distinct from those currently before the Court. The policy of both the Kentucky and Tennessee legislatures is the same: both sought to place some restrictions on liability, balanced against concerns for compensating persons injured by defective products. Compare Tenn.Code Ann. §§ 29-28-101 to -108 (1980) with Ky.Rev.Stat.Ann. § 411.300-411.350 (Baldwin 1981). See Ch. 703, 1978 Tenn.Pub. Acts 468, 468-69; Anderson v. Black & Decker U.S., Inc., 597 F.Supp. 1298, 1300-01 (E.D.Ky.1984). Toward that end, both states permit actions based on strict liability, but impose certain rebuttable presumptions in favor of the manufacturers and sellers. See Tenn.Code Ann. § 29-28-104 and Ky.Rev.Stat.Ann. § 411.310. In both states, the manufacturer or seller is not liable if the product is unreasonably dangerous because of plaintiff's improper maintenance or undue alteration.
In these circumstances, the Court finds that lex loci delictus is the proper choice-of-law rule under Tennessee law and that this is not occasion for the public policy exception. Applying lex loci, Kentucky substantive law controls, precluding Tennessee's ten-year statute of repose in product liability actions. Accordingly, defendant Lockheed's motion for summary judgment is denied.
Defendants argue that the aircraft was first purchased in 1957 and therefore no injury occurring after 1967 is actionable under Tennessee law.
Clay simply incorporated this portion of Murphree, 722 F.2d at 1291-92.