McCarthy v. Yamaha Motor Manufacturing Corp., No. 3:12-cv-117, 2014 U.S. Dist. LEXIS 30888 (N.D. Ga. Feb. 28, 2014) [click for opinion]

Plaintiff ("McCarthy"), an Australian citizen, was injured while operating a Yamaha WaveRunner personal watercraft in Australia. McCarthy and his wife brought a products liability action against the WaveRunner manufacturer, Yamaha Motor Manufacturing Corporation ("YMMC"), a Georgia corporation, in the federal court for the Northern District of Georgia.

The parties disagreed as to whether the substantive law of Georgia or Australia governed McCarthy's claims. YMMC contended that the court should apply Georgia's choice-of-law rules, which required application of Australia's substantive law since the injury occurred in Australia. McCarthy agreed that the injury occurred in Australia, that Georgia's choice-of-law rules applied, and that Australian substantive law would normally apply; however, McCarthy argued that under the public-policy exception to Georgia’s choice-of-law rules and the doctrine of renvoi the court should apply Georgia's laws with regards to limits on potential damages, punitive damages, prevailing party fees and expenses and contributory negligence.

McCarthy first argued that Australian statutory limits on potential damages were analogous to statutory limits in Carroll Fulmer Logistics Corp. v. Hines, where the court had found that the public-policy exception was applicable. The court was unpersuaded. Unlike in Carroll Fulmer, McCarthy had failed to show that Queensland's Civil Liability Act ("CLA") or Australia's Trade Practices Act ("TPA") calculated damages from a different perspective or wholly limited an avenue of recovery allowed under Georgia law.

Next, McCarthy argued that Australian law put a cap on punitive damages, which is prohibited under O.C.G.A. § 51-12-5.1(e)(1). The court reasoned that this was a mischaracterization of the CLA and TPA, which did not put caps on these damages but, similar to O.C.G.A § 51-12-5.1(b), merely limited the circumstances when punitive damages would be applicable.

The court then turned to YMMC's assertion that Australia applies the "English Rule," which entitles the prevailing party to recover reasonable expenses and fees. The court did not consider McCarthy's public policy argument with regards to this law. Instead, the court reasoned that Georgia's choice-of-law rules limited the application of another jurisdiction's laws to "statutes and decisions construing statutes," and required the application of Georgia law rather than foreign case law. Here, YMMC had failed to provide a statutory basis for Australia's application of the English Rule, and the court concluded that it would, for the time being, apply Georgia law to any request for fees and costs made by the prevailing party.

McCarthy then argued that the contributory negligence standard under the CLA and TPA, which allowed the court to reduce damages to zero as a result of contributory negligence, was harsher than O.C.G.A. § 51-12-33, which only contemplated a complete bar to recovery if the plaintiff is more than fifty percent at fault. The court disagreed, reasoning that the Australian contributory negligence law was actually more generous than its Georgia counterpart because it would not eliminate a plaintiff's recovery even if the plaintiff were found more than fifty percent at fault. The court concluded that McCarthy had failed to show that the CLA and TPA were sufficiently dissimilar to Georgia's laws for the court to invoke the public-policy exception.

Finally, the court turned to McCarthy's renvoi argument. The court described renvoi as the doctrine whereby "a court in resorting to foreign law adopts as well the foreign law's conflict-of-laws principles, which may in turn refer the court back to the law of the forum." McCarthy asserted that Australia's choice-of-law principles would direct the court to apply Georgia law since the defective WaveRunner was made in Georgia. The court disagreed, concluding that McCarthy had failed to show that Australia's choice-of-law rules would dictate applying Georgia's laws simply because the defective product was manufactured there.

The court concluded that it would apply Australian law with regards to limiting damages, evaluating punitive damages, and evaluating affirmative defenses like contributory negligence, but would apply Georgia law for any requests for fees and costs made by the prevailing party. The court thus granted in part and denied in part YMMC's motion for application of Australian substantive law.