960 F.3d 549
9th Cir.2020Background
- After the 2011 Tōhoku earthquake/tsunami damaged the Fukushima Daiichi Nuclear Power Plant (FNPP), hundreds of U.S. servicemembers who participated in Operation Tomodachi sued TEPCO (operator) and GE (reactor manufacturer) in the Southern District of California alleging radiation exposure injuries.
- Japan’s Act on Compensation for Nuclear Damage creates a compensation scheme and contains a channeling provision that makes the licensed operator strictly liable for nuclear damage and states "no other person shall be liable."
- Plaintiffs sued in California asserting negligence and strict products-liability claims against GE and negligence against TEPCO; subject-matter jurisdiction was diversity.
- On remand from an earlier Ninth Circuit opinion, GE moved to dismiss, arguing California choice-of-law rules required application of Japanese law (which would bar GE liability); TEPCO moved to dismiss on international-comity (and related) grounds.
- The district court, applying California choice-of-law (governmental interest) analysis, held Japanese law governs and dismissed GE with prejudice; it also dismissed TEPCO on adjudicative comity grounds. The Ninth Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is Japan’s channeling provision substantive (subject to choice-of-law) or procedural? | Channeling provision is jurisdictional/procedural and should not be applied via choice-of-law. | The channeling provision is a substantive liability rule that governs who may be held liable. | Held: The provision is substantive and outcome-determinative, thus subject to choice-of-law. |
| Was it premature to resolve choice-of-law at the motion-to-dismiss stage without additional discovery? | Court needed more factual development and discovery to decide choice-of-law. | The choice-of-law issues were fully briefed and turn on legal policies, not discovery. | Held: District court did not err—choice-of-law could be resolved on the motion to dismiss. |
| Which law governs plaintiffs’ claims against GE and TEPCO (California or Japan)? | California law (strict products liability and negligence) should apply to permit plaintiffs’ recovery. | Japanese law (Compensation Act) governs and channels liability to TEPCO, barring suits against GE. | Held: Under California’s governmental-interest test, Japanese law applies (true conflict; Japan’s interest more impaired if its law not applied). |
| Should the court dismiss TEPCO on adjudicative international-comity grounds? | Plaintiffs opposed dismissal; argued U.S. forum proper and comity inappropriate. | TEPCO argued comity and foreign-policy considerations support dismissal in favor of Japanese forum. | Held: Not an abuse of discretion—district court permissibly dismissed TEPCO claims on international-comity grounds after weighing factors (including governments’ statements). |
Key Cases Cited
- Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487 (choice-of-law in diversity cases follows forum state's rules)
- Erie R.R. Co. v. Tompkins, 304 U.S. 64 (federal courts apply state substantive law in diversity cases)
- Gasperini v. Ctr. for Humanities, Inc., 518 U.S. 415 (distinguishing substantive from procedural rules; outcome-determinative test)
- Offshore Rental Co. v. Cont'l Oil Co., 583 P.2d 721 (Cal. 1978) (California governmental-interest test and application of foreign liability-limiting law)
- McCann v. Foster Wheeler LLC, 225 P.3d 516 (Cal. 2010) (applying foreign limitations law where the foreign forum’s interest would be more impaired)
- Cooper v. Tokyo Elec. Power Co., 860 F.3d 1193 (9th Cir. 2017) (prior Ninth Circuit opinion in this litigation)
- Mujica v. AirScan Inc., 771 F.3d 580 (9th Cir. 2014) (factors and standard for adjudicative international comity)