Arizona Supreme Court Holds that a Wrongful Death Claim Based on Exposure to Asbestos in New Mexico, Which Resulted in Mesothelioma Diagnosed Thirty Years Later in Arizona, is Subject to the Substantive Law of New Mexico.

Dudley Pounders, a New Mexico resident, worked as a welder for Arizona Public Services at the Four Corners Power Plant (the “Plant”) in New Mexico from 1969 to 1974 and again from 1979 to 1983.  While performing repair and maintenance work at the Plant, he inhaled asbestos fibers.

Mr. Pounders moved to Arizona in the late 1980s.  In May 2008, he was diagnosed with mesothelioma, a type of cancer associated with asbestos exposure.  The following month, Mr. and Mrs. Pounders filed suit in Arizona against several individuals and entities associated with the Plant.  After Mr. Pounders died in August 2008, Mrs. Pounders amended the complaint to assert claims for wrongful death. 

The trial court subsequently granted the defendants’ motion to apply New Mexico substantive law to Mrs. Pounders’ claims, including New Mexico’s statute of repose.  Based upon that statute – which bars actions arising from improvements to real property filed more than ten years after their completion – the trial court granted summary judgment in favor of the defendants.  The court of appeals affirmed, and the Supreme Court granted review to consider the choice of law in wrongful death actions involving long-latency diseases. 

Arizona follows the Restatement (Second) of Conflicts of Laws (the “Second Restatement”), which directs courts to look to “the local law of the state where the injury occurred . . . unless, with respect to the particular issue, some other state has a more significant relationship under the principles stated in § 6 to the occurrence and the parties, in which event the local law of the other state will be applied.”  Second Restatement at § 175.

The Court first held that the “place of injury” is the state where “the last event necessary” for liability occurs.  For long-latency diseases, the “last event” takes place when the disease is discoverable because, until then, a legally compensable injury does not exist.  For asbestos-related diseases like mesothelioma, the last event occurs upon manifestation.  Here, the “last event necessary” – the manifestation of mesothelioma – occurred in Arizona. 

The Court then considered whether New Mexico had a more significant relationship to the parties and the issue than does Arizona in light of the contacts specified in § 145(2) and the choice-of-law principles in § 6(2) of the Second Restatement.  Section 145(2) outlines four contacts that are particularly relevant when resolving choice of law issues in tort cases:  (a) the place where the injury occurred, (b) the place where the conduct causing the injury occurred, (c) the domicile, residence, nationality, place of incorporation and place of business of the parties, and (d) the place where the relationship, if any, between the parties is centered.  Although Arizona was the place of injury, that factor held little significance in the Court’s view because the injury’s occurrence in Arizona was fortuitous.  The second contact – where the conduct causing the injury occurred – was New Mexico.  The Court assigned particular weight to this contact.  The Court determined that the third contact was minimally relevant because the parties were domiciled and resided in various states across the country.  The fourth contact was also inapplicable because the parties did not have an ongoing relationship entered in a particular state. 

Section 6(2) provides basic policy considerations that apply in every choice-of-law case:  (a) the needs of the interstate and international systems, (b) the relevant policies of the forum, (c) the relevant policies of other interested states and the relative interests of those states in the determination of a particular issue, (d) the protection of justified expectations, (e) the basic policies underlying the particular field of law, (f) certainty, predictability and uniformity of result, and (g) ease in the determination and application of the law to be applied.  The Court agreed with the parties that the first, fifth, and seventh factors would not be materially affected by the application of either Arizona or New Mexico law.  The Court also determined that the sixth factor had minimal relevance because that principle is primarily concerned with deterring forum shopping, which was not an issue here.  With respect to the second and third factors, the Court concluded that New Mexico’s policy of enforcing its statute of repose was entitled to deference because the § 145 contacts reflect that New Mexico has a substantial interest in the case. 

Weighing the relevant policies of the two states and considering the other principles in light of the § 145 contacts, the Court concluded that § 6 favors applying New Mexico law.  Because the Court agreed that New Mexico substantive law applies, the Court affirmed the trial court’s summary judgment.

Justice Brutinel authored the opinion, in which Chief Justice Berch, Vice Chief Justice Bales, Justice Pelander, and Judge Espinosa joined.