Westlands Water District v. Amoco Chemical Co.

953 F.2d 1109
CourtCourt of Appeals for the Ninth Circuit
DecidedDecember 30, 1991
DocketNo. 90-15673
StatusPublished
Cited by9 cases

This text of 953 F.2d 1109 (Westlands Water District v. Amoco Chemical Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Westlands Water District v. Amoco Chemical Co., 953 F.2d 1109 (9th Cir. 1991).

Opinions

ORDER

Request for publication is GRANTED.

The memorandum disposition filed September 30, 1991, is hereby redesignated as an authored Opinion by Judge Brunetti.

OPINION

BRUNETTI, Circuit Judge:

Plaintiff-Appellant Westlands Water District (“Westlands”), a California water district, appeals from an order of the district court dismissing Westlands’ claim for punitive damages under Cal.Civil Code § 3294. We reverse.

I.

On October 13, 1989, Westlands filed a complaint in federal district court against Defendants-Appellees Amoco Chemical Company, Amoco Reinforced Plastics Company, and United Technologies Corporation (collectively “defendants”).1 The complaint alleged that, due to misrepresentations made by defendants and/or their predecessors in interest, a defective pipe was used in Westlands’ pipeline distribution system, causing the system to malfunction and cause physical damage to Westlands’ distribution system and other real and personal property. The complaint asserted causes of action for strict products liability, negligence, breach of express warranty, breach of implied warranty, and fraud, misrepresentation and deceit. The complaint sought $25 million in general damages, and punitive damages.

On November 27,1989, defendant Amoco Reinforced Plastics filed a motion to strike the punitive damages claim, in which the other defendants joined. An oral hearing on the motion was held January 29, 1990. On March 6, the district court entered an order striking the punitive damages claim.

On April 17, the district court issued an order certifying the punitive damages issue for interlocutory appeal. We issued an order granting permission to appeal under § 1292(b) on May 17, 1990, and Westlands filed a timely notice of appeal on May 25, 1990.

[1111]*1111II.

We review the district court’s interpretation of a state law de novo. See State Farm Fire & Casualty Co. v. Abraio, 874 F.2d 619, 621 (9th Cir.1989); In re McLinn, 739 F.2d 1395, 1403 (9th Cir.1984) (en banc).

The question of law before us is subject to the general rule that “[i]n a diversity case, ‘where the state’s highest court has not decided an issue, the task of the federal courts is to predict how the state high court would resolve it.’ ... The decisions of the state’s intermediate appellate courts are data that a federal court must consider in undertaking this analysis.” Air-Sea Forwarders, Inc. v. Air Asia Co., Ltd., 880 F.2d 176, 186 (9th Cir.1989) (citations omitted), cert. denied, 493 U.S. 1058, 110 S.Ct. 868, 107 L.Ed.2d 952 (1990); see also State Farm Fire & Casualty Co. v. Abraio, 874 F.2d 619, 621 (9th Cir.1989) (state appellate decisions provide “guidance” to this court where supreme court has not ruled).

When an intermediate appellate court has ruled on an issue, and the state supreme court has not yet ruled on it, we will follow the intermediate court’s decision “unless there is convincing evidence that the state supreme court would decide differently.” Abraio, 874 F.2d at 621.

III.

In City of Los Angeles v. Shpegel-Dimsey, Inc., 198 Cal.App.3d 1009, 244 Cal.Rptr. 507 (1988), the second district of the California Court of Appeal held that a municipality may not recover punitive damages. The city sued the defendant company, which manufactured plastic materials, for the costs of extinguishing a fire at the plastics plant, as well as for damage to the city’s utility poles and other property. The city also sought punitive damages due to defendant’s repeated violations of the city fire code over a ten-year period prior to the fire.

The court’s opinion noted two bases for its holding that punitive damages were not recoverable: (1) because the purpose of punitive damages is to punish a defendant, and because a municipality may punish by the use of its police powers, punitive damages are not a necessary tool for municipal plaintiffs; and (2) because punitive damages may not be recovered from a municipal entity, to allow municipal entities to recover punitive damages would “raise the spectre of a denial of equal protection of the laws.” Westlands argues that the reasoning on both of these grounds is faulty, and that the opinion goes against the plain language of California Civil Code § 3294(a).

A. Statutory Language

Westlands argues that the holding of City of Los Angeles is inconsistent with the plain language of Civil Code § 3294. The statute reads in relevant part:

In an action for the breach of an obligation not arising from contract, where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice, the plaintiff, in addition to the actual damages, may recover damages for the sake of example and by way of punishing the defendant.

Another California statute defines a “plaintiff” as including “a person who files the complaint or cross-complaint.” Cal.Code of Civ.P. § 481.180. A “person” is “a natural person, a corporation, a partnership or other unincorporated association, and a public entity.” Cal.Code of Civ.P. § 481.170 (emphasis added). Therefore, a water district such as Westlands may, under the language of § 3294, recover punitive damages in appropriate cases.

Courts may not rewrite unambiguous statutory language. People v. Skinner, 39 Cal.3d 765, 775, 217 Cal.Rptr. 685, 691, 704 P.2d 752, 758 (1985). Defendants argue that because § 3294 does not specifically address and include public entities, the conclusion of City of Los Angeles is not contrary to the statutory language. West-lands argues that the use of the term “plaintiff” in § 3294 without any restriction indicates that the recovery of punitive damages in appropriate cases is not limited to private plaintiffs.

In construing statutory language and determining legislative intent, the California [1112]*1112Supreme Court looks first to the words of the statute, “giving them their usual and ordinary meaning.” Committee of Seven Thousand v. Superior Court of Orange County, 45 Cal.3d 491, 501, 247 Cal.Rptr. 362, 367, 754 P.2d 708, 713 (1988). The plain language of § 3294 would allow all plaintiffs, both public and private, to recover punitive damages. We find nothing within the statute itself that we believe would lead the California Supreme Court to a contrary conclusion.

B. Punishment

Under California law,

punitive damages are recoverable “for the sake of example and by way of punishing the defendant.” A private party has no means of punishing a tortfeasor other than an award of exemplary damages. In contrast, a municipality has at its command the full force of its police power. By ordinance, it may impose fines or other penal remedies.

City of Los Angeles, 198 Cal.App.3d at 1023, 244 Cal.Rptr. at 514 (quoting Cal.Civ.

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