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Arno v. Club Med Inc

filed: May 4, 1994.

CAROLYN ARNO, PLAINTIFF-APPELLANT,
v.
CLUB MED INC; CLUB MED SALES INC; CLUB MED BOUTIQUE INC; CLUB MEDITERRANEE INTERNATIONAL INC; CLUB MEDITERRANEE S A; CLUB MED MANAGEMENT SERVICES INC, AND DOES TWO THROUGH FIFTY INCLUSIVE, DEFENDANTS-APPELLEES.



Appeal from the United States District Court for the Northern District of California. D.C. No. CV-89-20656-SW. Spencer M. Williams, District Judge, Presiding.

Before: Alex Kozinski and Diarmuid F. O'Scannlain, Circuit Judges, and Lloyd D. George, District Judge.*fn* Opinion by Judge Kozinski; Partial Concurrence and Partial Dissent by Judge O'Scannlain.

Author: Kozinski

KOZINSKI, Circuit Judge.

Carolyn Arno alleges she was raped by her boss while employed as a gentile organisateure (G.O.) or hostess, at the Club Med resort in Guadeloupe, France.*fn1 Based on this incident, she raises a variety of tort and contract claims, as well as a claim under Title VII of the Civil Rights Act of 1964. We consider which of these claims she may maintain and - as a preliminary matter - what law applies.

I. Facts

After vacationing at a Club Med resort, Arno decided to apply for a G.O. position. She sent the paperwork to Club Med's New York office and eventually was offered a job at a Club Med resort in the Bahamas. Once there, she signed a six-month employment contract. A few months after she returned to her home in California, the New York office proposed another assignment at the Club Med resort in Bermuda. Arno agreed, flew to Bermuda and there signed her six-month employment contract. Shortly after she returned to the U.S., Arno accepted what turned out to be her last G.O. job at the resort on Guadeloupe. The day after Arno arrived in Guadeloupe, however, she learned that her mother may have had a heart attack, and she quickly made plans to return to the U.S.

The sordid events that give rise to Arno's claims occurred the night before Arno was scheduled to leave Guadeloupe, when she walked with her boss, Chef de Village Jeff Planteblat, towards his apartment in the resort. The parties agree that Arno wanted to discuss certain employment-related matters, such as the possibility of returning to work at that resort, but Planteblat could not or would not meet with her earlier in the day. They disagree about what happened when they reached the apartment: Arno claims that Planteblat invited her in and then forced himself on her; Planteblat and Club Med claim the encounter was consensual. Because the case was dismissed on summary judgment, we must accept Arno's version of the facts. Lopez v. Continental Can Co., 961 F.2d 147, 148 n.1 (9th Cir. 1992).*fn2

II. Discussion

Arno concedes that the district court in California cannot assert personal jurisdiction over Planteblat because he lacks sufficient contacts with the state.*fn3 Arno therefore raises a variety of claims against "Club Med" as their common employer.*fn4 Because the parties disagree as to the choice of law for the state law claims, we resolve that question first.

A. Choice of Law

Although virtually all of the relevant conduct occurred outside California, we still must apply California's choice of law rules in deciding which jurisdiction's law governs Arno's state-law claims. Klaxon Co. v. Stentor Electric Mfg., Co., 313 U.S. 487, 496, 85 L. Ed. 1477, 61 S. Ct. 1020 (1941); Ledesma v. Jack Stewart Produce, Inc., 816 F.2d 482, 484 (9th Cir. 1987). California has jettisoned the relatively predictable choice of law rules based on the place where the transaction occurred (lex locus) in favor of a three-part governmental interest test. Reich v. Purcell, 67 Cal. 2d 551, 63 Cal. Rptr. 31, 432 P.2d 727 (1967). Under this amorphous and somewhat result-oriented approach, we must first consider whether the two states' laws actually differ; if so, we must examine each state's interest in applying its law to determine whether there is a "true conflict"; and if each state has a legitimate interest we must compare the impairment to each jurisdiction under the other's rule of law. McGhee v. Arabian American Oil Co., 871 F.2d 1412, 1422 (9th Cir. 1989) (citing Offshore Rental Co. v. Continental Oil Co., 22 Cal. 3d 157, 161-165, 148 Cal. Rptr. 867, 583 P.2d 721 (1978).

When it comes to torts, the laws of California and France do differ. While California allows punitive damages and recognizes vicarious liability based on a ratification theory, French law does not. Thus, we must consider the respective interests of California and Guadeloupe. California claims an interest in providing compensation to its residents, Kasel v. Remington Arms Co., 24 Cal. App. 3d 711, 734, 101 Cal. Rptr. 314 (1972),*fn5 while Guadeloupe has an interest in encouraging local industry, Offshore Rental Co., 22 Cal. 3d at 168, and reliably defining the duties and scope of liability of an employer doing business within its borders, id. at 163-64; McGhee, 871 F.2d at 1425-26.

Both we and the California Supreme Court have resolved these competing interests in favor of the foreign jurisdiction. In McGhee, 871 F.2d at 1425-26, we held that California's connection was insufficient to justify application of California law where a California resident sued his Saudi employer for injuries suffered in Saudi Arabia. Offshore Rental Co., 22 Cal. 3d at 168, concluded that Louisiana, not California law, should govern where the plaintiff was a California resident, but the tort occurred in Louisiana on the premises of the defendant corporation. Louisiana's "vital interest in promoting freedom of investment and enterprise within Louisiana's borders " prevailed over California's interest in compensating residents. Id. By close analogy, we conclude that Arno's tort claims are governed by French law, which prevails in Guadeloupe.

Arno's contract claim is based on what she alleges was an implied-in-fact contract with the Club Med office in New York: She was entitled to continue receiving six-month assignments at Club Med resorts throughout the world so long as she performed satisfactorily. Arno asserts that this contract was separate from the written six-month employment contract she signed at each resort where she worked, and that it was breached when ...


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