Unpublished Disposition, 843 F.2d 501 (9th Cir. 1987)

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U.S. Court of Appeals for the Ninth Circuit - 843 F.2d 501 (9th Cir. 1987)

Nos. 86-2234, 86-2843.

United States Court of Appeals, Ninth Circuit.

Before GOODWIN and NELSON, Circuit Judges, and RUDI M. BREWSTER*** , District Judge.


Plaintiffs-appellees ("Chinn") filed an action for wrongful death of decedent Ping Chun, a student who was killed in Illinois in an airplane crash in May of 1979. After this suit was originally filed in Hawaii federal district court, the case was transferred to Chicago, Illinois to consolidate the multi-district litigation arising from the plane crash. Liability had been admitted by the time that this action was remanded to Hawaii district court for trial regarding the damages to be recovered by Hawaii domiciliaries. In Re Aircrash Disaster Near Chicago, Ill., Etc., 644 F.2d 594 (7th Cir.) cert. denied, 454 U.S. 878 (1981). The jury returned a verdict awarding wrongful death damages to the estate and to the parents.

Appellants ("American") raise several issues on appeal. American argues that (1) the district court lacked subject matter jurisdiction over this action; (2) the district court erred in applying Hawaii law to the damages issues presented; (3) the magistrate erred in requiring the simultaneous exercise of peremptory juror challenges; and (4) the district court abused its discretion in admitting various testimony. Additionally, American filed a motion requesting this court to supplement the record on appeal. Chinn cross appealed the denial of his motion to amend the judgment to add prejudgment interest. We affirm the district court's judgment.

A lack of diversity of citizenship defeats subject matter jurisdiction under 28 U.S.C. § 1334 (1982). This court reviews de novo the legal question as to the existence of subject matter jurisdiction. Lew v. Moss, 797 F.2d 747, 750 (9th Cir. 1987). American challenged this court's subject matter jurisdiction because Chinn did not allege facts to prove the Hawaii domicile of the estate administrator. The focus of the jurisdictional inquiry is on the real party in interest; "the citizenship of the real party in interest is determinative in deciding whether the district court has diversity jurisdiction." Wilsey v. Eddingfield, 780 F.2d 614, 615 (7th Cir. 1985) cert. denied, 475 U.S. 1130 (1986) (quoting Betar v. DeHavilland Aircraft of Canada, Ltd., 603 F.2d 30, 32 (7th Cir. 1979). Chinn argues that the real party in interest is Ping Chun or his parents, not the estate administrator. The responsibilities vested in the estate administrator under state law determine whether the administrator is merely a nominal fiduciary or the real party in interest. 3A MOORE'S FEDERAL PRACTICE, p 17.04 (2d ed. 1985).

In applying the nominal party rule, "one who has the legal right to sue to represent those having a beneficiary interest in the recovery usually is not treated as the nominal party; a bona fide representative's citizenship, rather than the citizenship of those represented, is looked to for determining diversity." 13A Wright, Miller & Cooper, FEDERAL PRACTICE AND PROCEDURE, Sec. 3606 at 416 (1984). Hawaii law confers substantial responsibilities on estate administrators, including settling all estate matters and bringing formal testacy proceedings. See 30A Hawaii Rev.Stat. Secs. 560:3-701-721; 801-816 (1985). See generally In re Estate of Ping Chun, 719 P.2d 1114, 1117 (Haw.Ct.App.1986). Therefore, Edwin Chinn is the real party in interest in this litigation, and the state of his domicile determines whether diversity exists.

To meet the burden of proving citizenship in a diversity case, the party asserting jurisdiction must be domiciled in a state of the United States as well as be a citizen of the United States. Lew, 797 F.2d at 749. Hawaii probate statutes require that a "natural person must be eighteen years of age or above and be a resident of this State ..." to be qualified to serve as a personal representative of a decedent's estate. 30A Haw.Rev.Stat. Sec. 560:3-601 (1985). Because Hawaii probate statutes require that one who is appointed an administrator of an estate be a Hawaii domiciliary, the burden of production shifts to American to show that a presumption of Hawaii domicile is in fact false. This court has shifted the burden of production to the opposing party when a presumption in favor of domicile existed through prior knowledge or operation of law. Lew, 797 F.2d at 751 (shifting burden of production requires opponent to produce enough evidence to avoid a directed verdict); Lowe v. City of Monrovia, 775 F.2d 998, 1006 n. 5 (9th Cir. 1985). Therefore, we can rely on Hawaii's statutory requirements for the appointment of estate administrators absent an evidentiary showing by American that this requirement has not been met.

"The whole record may be searched to determine if diversity existed. If the record supports a finding that diversity was present, we need not vacate the district court's judgment." Dist. of Columbia v. Transamerica Ins. Co., 797 F.2d 1041, 1044 (D.C. Cir. 1986). See also Hahn v. United States, 757 F.2d 581 (3rd Cir. 1985) (appeals court may consider whether jurisdiction was proper on grounds not asserted below). Thus, because Hawaii probate statutes required that Edwin Chinn be domiciled in Hawaii as a prerequisite to his appointment as administrator, the record supports a finding of diversity.

II. Hawaii Choice of Law Rules.

This court reviews the trial court's resolution of the choice of law issue de novo. Jenkins v. Whittaker, 785 F.2d 720, 724 (9th Cir. 1986) (applying Hawaii conflicts of law analysis to determine that Hawaii law applied to accident on military reservation) cert. denied, 107 S. Ct. 324 (1986). Hawaii uses the modern interest analysis approach to choice of law issues introduced by Professor Leflar. See DeRoburt v. Gannett Co., Inc., 558 F. Supp. 1223, 1226 (D. Hawaii 1983); R. Leflar, AMERICAN CONFLICTS LAW, Sec. 131 (3d ed. 1977). Under interest analysis, the place of the injury does not necessarily provide the proper law to use; this court must examine the interest of each state with regard to the specific issue before the trial court.

In this case the specific issue concerns the amount of damages to which the appellees are entitled under each state's wrongful death statute. See, Chicago Aircrash Disaster, 644 F.2d at 610-11.1  Using the Leflar choice of law factors Hawaii courts would apply Hawaii law in the present case. See California Fed. Savings & Loan Ass'n v. Bell, 735 P.2d 499, 505 (Haw.Ct.App.1987; Peters v. Peters, 634 P.2d 586, 591-95 (Haw.1981). The pivotal Leflar consideration is the advancement of the forum's governmental interest, and examination of this factor weighs in favor of applying Hawaii's wrongful death statutes.

Hawaii enacted a wrongful death statute which compensates injured persons more liberally than the majority compensation rule. See Greene v. Texeira, 505 P.2d 1169 (Haw.1973). Because this action involves the specific issue of compensation and not liability, Illinois has no regulatory interest in shielding companies that do business in Illinois from damages liability. Illinois' regulatory interest in preventing aircrashes within the state has been served by litigation of the liability issue, which was properly conducted under Illinois law in federal court sitting in Illinois. See Chicago Aircrash Disaster, 644 F.2d at 594.

The Seventh Circuit's analysis of the significance of domicile for compensation purposes supports the application of Hawaii law.

The legitimate interest of these states [including Hawaii], after all, are limited to assuring that the plaintiffs are adequately compensated for their injuries and that the proceeds of any award are distributed to the appropriate beneficiaries. Those interests are fully served by applying the law of the plaintiffs' domiciles as to issues involving the measure of compensatory damages (insofar as that law would enhance a plaintiff's recovery) and the distribution of any award.

Chicago Aircrash Disaster, 644 F.2d at 613. In other cases arising from this aircrash, courts have applied the law of the decedent's domicile to determine compensatory damages. See Shatkin v. McDonnell Douglas Corp., 727 F.2d 202 (2d Cir. 1984); Shu-Tao Lin v. McDonnell Douglas Corp., 574 F. Supp. 1407 (S.D.N.Y. 1983), aff'd in part and rev'd in part, 742 F.2d 45 (2d Cir. 1984). Therefore, utilizing Leflar's choice of law considerations, we affirm the district court's application of Hawaii law.

III. The Simultaneous Blind Exercise of Peremptory Challenges.

The district court did not abuse its discretion in following its local court rules requiring the simultaneous exercise of peremptory juror challenges. "The method chosen by the district court must not unduly restrict the defendant's use of his challenges, and, whatever may be the method chosen, the defendant must be given adequate notice of the system to be used." United States v. Turner, 558 F.2d 535, 538 (9th Cir. 1977).

The Eleventh Circuit has held that a district court does not abuse its discretion in requiring simultaneous peremptory challenges resulting in overlap. United States v. Roe, 670 F.2d 956, 961 (11th Cir.) cert. denied, 459 U.S. 856 (1982). The Eleventh Circuit's reasoning is persuasive in this case because the happenstance of an overlap does not rise to the level of a constitutional violation. Here, each party actually struck four jurors from the jury panel. Their peremptory challenge choices were removed. The simultaneous choice met the Turner requirements because the parties were informed of the procedures prior to exercising their challenges, simultaneous challenges were part of the local rules of the Hawaii district court, and the defendant was not restricted from challenging or removing any potential juror under consideration. The requirements of the statute have been met here, and the district judge did not abuse his discretion in regulating the method in which those challenges were to be used.

IV. Trial Testimony as to Future Employment and Earnings.

This court's review of the trial court's decisions regarding evidentiary issues under Fed.R.Evid. 403, 601 and 702 is deferential. "We review the district judge's evidentiary decisions only for an abuse of discretion." Taylor v. Burlington Northern R. Co., 787 F.2d 1309, 1315 (9th Cir. 1986). See also Fed. R. Civ. P. 43(a). "The trial court has broad discretion to admit expert testimony, and we will sustain the court's action unless it is 'manifestly erroneous.' " Bergen v. F/V St. Patrick, 816 F.2d 1345, 1352 (9th Cir. 1987) (quoting Taylor, 787 F.2d at 1315).

Here the district judge allowed testimony by Ping Chun's sister, a China consultant, as to salary ranges and probability of employment. The data provided by the sister was then used by the economic expert to calculate the present value of the lost earnings. Because many issues once considered too speculative to estimate are actually capable of measurement through expert testimony, Norfolk & Western Railway Co. v. Liepelt, 440 U.S. 490, 493 (1980), the trial judge did not abuse his discretion in either qualifying Chinn's expert or in permitting his testimony concerning the present value of lost future earnings. See McGowne v. Challenge-Cook Bros. Inc., 672 F.2d 652, 667-68 (8th Cir. 1982).

Similarly, the district court did not abuse its discretion under Fed.R.Evid. 403 or 601 because the testimony of family members and friends was relevant to the issue of Ping's future employment plans. These witnesses were competent to testify as to family connections and Ping's intentions. The trial judge also allowed American to present counter evidence as to Ping Chun's employment plans. This court in dicta has approved of admitting even possibly hearsay or speculative evidence from witnesses as long as opposing counsel is permitted to cross examine the witness as to the reliability or relevance of their statements. Noting that the trial judge did not abuse his discretion in requiring hearsay testimony to be disregarded, we have commented, " [i]t would not have been an abuse of discretion for the trial court to admit the evidence and then permit an inquiry on cross-examination as to the reliability of the hearsay upon which [the witness] relied in forming his opinion." Bergen, 816 F.2d at 1352, n. 5. Cross-examination opportunities were provided and used in this case, mitigating the possibility that lay witnesses' testimony was unfairly prejudicial or misleading.

V. Appellants' Motion to Supplement the Record.

On July 2, 1987 Appellants filed a motion to supplement the record with the decision and order of the Hawaii state appellate court. Rule 10(e) permits supplementation when the record contains an error or omission. The rule corrects technical defects or omissions in order to accurately represent in the appeals court what actually occurred in the district court. "Rule 10(e) cannot be used to add to or enlarge the record on appeal to include material which was not before the district court." United States v. Walker, 601 F.2d 1051, 1055 (9th Cir. 1979) (denying motion to supplement when affidavits sought to be included were not part of the evidence presented to the district court). American asks this court to consider new information not brought to the attention of the trial court. We deny American's motion because Rule 10(e) "does not grant a license to build a new record." Anthony v. United States, 667 F.2d 870, 875 (10th Cir. 1981) cert. denied, 457 U.S. 1133 (1982).

However, this court can take judicial notice of state court decisions involving the same parties and issues because the proceedings are a matter of public record. See Zaldivar v. Los Angeles, 780 F.2d 823 (9th Cir. 1986). Because the December 31, 1987 state court probate action is a matter of public record, we can properly rely on the state court's domicile determination for purposes of this appeal. Indeed this court is required to do so under res judicata principles.2  Therefore, we deny appellants' motion to supplement, but we acknowledge the state court probate decisions.

Federal courts must follow applicable state law in determining an award of prejudgment interest. United California Bank v. THC Financial Corp., 557 F.2d 1351, 1360-61 (9th Cir. 1977). Hawaii law controls this prejudgment interest issue. The trial court's designation of the commencement date of the injury for interest purposes is reviewed for an abuse of discretion. Locricchio v. Legal Services Corp., 833 F.2d 1352, 1360 (9th Cir. 1987).

Chinn's argument that Hawaii Revised Statutes Secs. 636-16 and 478-2 require that the trial court judge award 10% interest from the date of the accident to the date of judgment is without merit. This court has concluded that "an award of prejudgment interest is, as here, discretionary with the court." See Jenkins, 785 F.2d at 737, n. 41. Here the district court concluded that " [p]laintiffs have not encountered substantial injustice by the delay in obtaining a favorable judgment."

Hawaii law supports the approach to prejudgment interest used by the trial court. " [T]he purposes of the statute were to permit more equitable results and to more speedily resolve cases." Weingand v. Colbert, 718 P.2d 1080, 1084 (Haw.1986) (analyzing the legislative history of Hawaii Rev.Stat. Sec. 636-16). Because Sec. 636-16 gives trial judges "express discretion" regarding awards of prejudgment interest, Weingard, 718 P.2d at 1084, and because the trial court ruling is consistent with the legislative history and purposes of the statute, we affirm the trial judge's refusal to award prejudgment interest.



The panel unanimously agrees that this case is appropriate for submission without oral argument. Fed. R. App. P. 34(a); Ninth Cir. Rule 34-4


This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by Ninth Cir. Rule 36-3


The Honorable Rudi M. Brewster, U.S. District Judge for the Southern District of California, sitting by designation


The Seventh Circuit outlined the choice of law analysis to be conducted in this case. "In general, we must attempt to determine which, if any, of the states having some relationship to the parties or to the crash has the most significant interest in the application of its own substantive law to the merits of the punitive damage issue, the application of choice-of-law rules is not a mechanical process of cranking various factors through a formula. Critical to conflicts analysis is the notion that we must examine the choice-of-law rules not with regard to various states' interests in general, but precisely, with regard to each state's interest in the specific question of punitive damages." Chicago Aircrash Disaster, 644 F.2d at 610-611


28 U.S.C. § 1738 "provides that state judicial proceedings shall have the same full faith and credit in every court within the United States as they have in the courts of the State from which they are taken." Migra v. Warren City School Dist. Bd. of Educ., 465 U.S. 75, 76 (1984). Hawaii defines the doctrine of res judicata according to traditionally accepted definitions as outlined in the Restatement of the Law (Second) Judgements (1980). Marsland v. Intn'l Soc. for Krishna Consciousness, 657 P.2d 1035, 1039 (Haw.), appeal dismissed, 464 U.S. 805 (1983). Therefore, Hawaii law precludes a relitigation of the issue of the domicile of Ping Chun or his heirs by this court