Cooper v. Tokyo Electric Power Co., No. 19-55295 (9th Cir. 2020)
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The Ninth Circuit affirmed the district court's dismissal of claims brought by U.S. servicemembers and their families against TEPCO and GE, alleging that they were exposed to radiation from the Fukushima Daiichi Nuclear Power Plant. The Japanese Act on Compensation for Nuclear Damage provides that the operator of a nuclear power plant is strictly liable for any damage caused by the operation of the power plant but no other person shall be liable.
The panel held that Japan's Compensation Act was a liability-limiting statute with outcome-determinative implications and was substantive for Erie purposes. In this case, the district court did not err in proceeding with the full choice-of-law analysis at the motion-to-dismiss stage of the litigation. The panel applied California's three step "governmental interest" test in deciding the choice-of-law questions and ultimately concluded that the district court did not err when it decided that the laws of Japan, not California, govern plaintiffs' claims against GE. The panel likewise held that the district court did not err in proceeding with the choice-of-law analysis and finding that Japanese law also applies to plaintiffs' claims against TEPCO. Finally, having decided that Japanese law applies to the case and considering Japan's strong interests in the case being litigated in Japan, the panel held that the district court did not abuse its discretion when it dismissed the claims against TEPCO on international-comity grounds.
Court Description: International Comity / Choice-of-Law. The panel affirmed the district court’s dismissals of claims brought in California by United States servicemembers against Tokyo Electric Power Company (“TEPCO”) and General Electric Company (“GE”), alleging they were exposed to radiation from the Fukushima Daiichi Nuclear Power Plant. The Japanese Act on Compensation for Nuclear Damage provides that the operator of a nuclear power plant is strictly liable for any damage caused by the operation of the power plant but no other person shall be liable. GE argued that Japanese law should apply, and that under Japanese law only the plant operator, TEPCO, could be liable for injuries resulting from the power plant’s failure. The panel held that Japan’s Compensation Act was a liability- limiting statute with outcome-determinative implications, and was substantive for Erie purposes, and subject to a choice-of- law analysis. The panel also held that the district court did not err by conducting a choice-of-law analysis at the motion-to- dismiss stage of the litigation. The panel applied California’s three-step “governmental interest” test in deciding the choice-of-law questions. First, the panel held that the laws of California and Japan differed because under Japanese law, the Compensation Act would 8 COOPER V. TOKYO ELEC. POWER CO. limit liability to TEPCO and require dismissal of all claims against GE; but under California law, GE, as manufacturer, would be strictly liable for design defects. Second, the panel held that both jurisdictions had a legitimate interest. In addition, the panel concluded, as did the district court, that there was a “true conflict” where California had an interest in holding manufacturers of defective products liable in tort to insure compensation for its residents, while Japan had an interest in consistent application of its liability-limiting statute to businesses participating in its nuclear industry. Third, the panel held that Japan’s interests would be more impaired if its law were not applied. Because there was no dispute on appeal that application of Japanese law required dismissal of all claims against GE, the panel affirmed the dismissal of those claims with prejudice. TEPCO argued for dismissal on international-comity grounds. Plaintiffs raised the same challenges to the choice- of-law analysis for TEPCO’s claims. The panel held that for the reasons previously stated, the choice-of-law analysis was not premature or inappropriate at this stage. As to the merits of the choice-of-law analysis, the district court correctly found that Japanese law applied to the plaintiffs’ claims against TEPCO. The panel proceeded to the question of whether, given that Japanese law must apply to the proceedings in the Southern District of California, the district court abused its discretion in dismissing the case on international comity grounds. In deciding whether the doctrine of adjudicative comity applied, courts weigh several factors. The panel held that it was not an abuse of discretion for the district court to take the applicability of Japanese law into consideration. The panel also held that the district court did not abuse its COOPER V. TOKYO ELEC. POWER CO. 9 discretion in considering Japan’s strong interests in the case being litigated in Japan. The panel concluded that the district court did not abuse its discretion when it dismissed the claims against TEPCO on international comity grounds.
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