California Court Refuses to Apply Iranian Law, in Part Because It Reflects Religious Ideology Rather Than Economic Interest

Plaintiff had been an Iranian citizen exposed to asbestos in Iran, from 1959 to 1979; he then moved to California (after defendants' negligent conduct took place), and developed mesothelioma and died.


In Sabetian v. Fluor Enterprises, Inc., decided a week ago by the California Court of Appeal (Justices Feuer, Perluss & Segal), Houshang Sabetian worked in Iran from 1959 to 1979, as an Iranian citizen, for the National Iranian Oil Company. He claimed that asbestos exposure at the facility caused testicular mesothelioma, and because of that the loss of his right testicle; the jury agreed, and found that the defendants, who were involved in constructing the facility, were negligent.

One question was what law applied—the law of Iran, or the law of California, the state to which Sabetian eventually moved after the asbestos exposure took place. In McCann v. Foster Wheeler LLC (Cal. 2010), the California Supreme Court dealt with a similar situation but involving Oklahoma law, and concluded Oklahoma law applied:

In light of the relevant facts of this case, we conclude that a failure to apply Oklahoma law would significantly impair Oklahoma's interest. The conduct for which plaintiff contends Foster Wheeler should be held liable—plaintiff's alleged exposure to asbestos during the application of insulation to a boiler designed and manufactured by Foster Wheeler—occurred in Oklahoma in 1957, at a time when plaintiff was present in Oklahoma and was an Oklahoma resident. As already discussed, the circumstance that Foster Wheeler is not an Oklahoma company—the circumstance relied upon by the Court of Appeal—is not a persuasive basis for finding that the failure to apply Oklahoma law would not significantly impair Oklahoma's interest. Oklahoma's interest in the application of its statute of repose applies equally to out-of-state businesses that design improvements to real property located in Oklahoma and to Oklahoma businesses that design such improvements situated within that state.

But here the Court of Appeal refused to apply Iranian law, in this case the Iranian law of damages:

[D]efendants filed a declaration from Mahmoud Katirai, an Iranian lawyer and scholar of Iranian law. On the issue of compensatory damages for personal injury, Katirai opined, "Under Iranian law, [p]laintiffs' remedies are limited to a statutory compensation ('diyeh') pre-determined by the legislature, plus financial damages such as medical expenses and loss of income…. This statutory compensation, which is based on Islamic law, has been codified in the Islamic [Penal Code of Iran], but are of [a] civil nature….

"Statutory compensation … calls for payment in certain commodities[;] … since payment in such commodities is no longer practical, however, the price of such commodities is determined each year by virtue of a decree of the Department of Justice[,] and Iranian courts are required to award [a] remedy based on such decision. Presently, the amount of the statutory compensation in cases of death is 2,310,000,000 Rials. During certain lunar months (i.e., Zel-ghadeh, Zel-hajeh, Rajab, and Moharam) which are called 'haram' (celebratory months), the amount of the statutory compensation in cases of death is 3,080,000,000 Rials." … Sabetian's recovery for his physical injury was … limited to a maximum of two times the amount allowed for a single injury, 5.4 billion Rials (approximately $128,000)….

[Under the California choice of law rule,] we must "examine 'each jurisdiction's interest in the application of its own law under the circumstances of the particular case to determine whether a true conflict exists.'" The Fluor defendants do not dispute California has a legitimate governmental interest in having its law applied. The principal purpose of a damages award under California tort law is "to compensate a wrongfully injured party for injury to person or property." As the McCann court observed, application of California law "to a current California resident who suffers an … illness as a result of his … prior exposure to asbestos in another jurisdiction would assist such residents in obtaining compensation for their injuries and in not becoming dependent on the resources of California for necessary medical, disability, and unemployment benefits." Thus, California's interest is substantial.

We disagree, however, with the Fluor defendants' characterization of Iran's interest as the promotion and protection of foreign investment in Iran. We must evaluate Iran's interest in the context of the particular Iranian law the Fluor defendants seek to apply.

The Fluor defendants assert the salient Iranian interest at issue is embodied in its Foreign Investment Act, which protects foreign companies doing business in Iran by applying Iranian law to claims arising from conduct in Iran. But the Fluor defendants seek to impose the limitation on compensation for personal injury actions as codified in the Islamic Penal Code of Iran "based on Islamic law," which provides statutory compensation as "provided in the [holy] religion" to compensate for unintentional conduct resulting in the "loss of a member."

The evidence submitted by the Fluor defendants highlights this interest served by Iranian law. They submitted an Iranian news article characterizing statutory compensation as the amount due to "a Muslim male" in a particular calendar year, as well as evidence showing the amount of statutory compensation depended on whether the victim's loss occurred in one of the "sacred" months of the year. In the case of the loss of a testicle, the Islamic Penal Code of Iran specifies payment of one-third the amount of full statutory compensation for removal of the right testicle, and two-thirds of the amount for the left, plus an additional proportion of the statutory compensation for impairment to general health. There can be no dispute these rules are "based on Islamic standards."

{Evidence submitted in support of the supplemental declaration indicates, without qualification, "during the sacred [haram] months, the [statutory compensation] amount would be increased by one third." Regardless of whether the rule would apply to Sabetian in this case, the variation in prescribed recovery by reference to the sacred months of the Iranian calendar illustrates the essential religious nature of Iran's law of statutory compensation.} …

[O]ur task is not to determine … [which] rule is the better or worthier rule, but rather to decide—in light of the legal question at issue and the relevant state interests at stake—which jurisdiction should be allocated the predominating lawmaking power under the circumstances of the present case."

The Fluor defendants are correct that "a jurisdiction ordinarily has the 'predominant interest' in regulating conduct that occurs within its borders, and in being able to assure individuals and commercial entities operating within its territory that applicable limitations on liability set forth in the jurisdiction's law will be available to those individuals and businesses in the event they are faced with litigation in the future."  McCann. That argument has some force here, where Sabetian's injury was caused by conduct that occurred in Iran while he was a resident of that country.

But the concern in McCann—that applying California's law would prevent Oklahoma from providing "any reasonable assurance … that the time limitation embodied in its statute would operate to protect … businesses in the future"—does not apply with the same force to the present circumstances where the Iranian law at issue does not seek to promote and protect foreign businesses with domestic business dealings, but rather, to ensure damages awards are consonant with state-endorsed religious teachings.

California's interest in protecting recovery of damages for injuries suffered by its residents would be severely impaired if Iranian law applied in light of the significant reduction in recovery under Iran's statutory compensation scheme. Sabetian suffered his injury while a resident of California [presumably because the initial exposure when he was an Iranian citizen led to disease after he moved to California -EV], and California has an interest in ensuring that Sabetian is fully compensated so he does not become dependent on California's resources for necessary medical, disability, and unemployment benefits. By contrast, Iran's interest in limiting damages paid by a foreign company to a California resident in accordance with the tenets of Islamic law (the same as Iranian companies) is relatively weak. Thus, California law applies to the Sabetians' recovery of compensatory damages.

I'm pretty skeptical about this analysis, but in any event I thought some of our readers might find it interesting.

NEXT: Ninth Circuit Lets #TheyLied Suit Against Lawyer Lisa Bloom Go Forward

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. Is this the hostility to religion the Supreme Court has warned against in recent years?

    1. Might be, especially if these judges are Republicans.

      1. From Wikipedia and the court’s home page:

        “Dennis M. Perluss (born May 12, 1948) is the Presiding Justice of the California Second District Court of Appeal, Division Seven, having been appointed to the post by Governor Gray Davis in 2003….

        “Perluss and his wife, Rabbi Emily H. Feigenson, Chaplain at the Harvard-Westlake School, live in Los Angeles with their three children.”

        But I suppose he *could* be Republican.

        John L. Segal, first appointed 2015, during an era of Republicans dominance of California, I presume. His wife was appointed a federal magistrate-judge under George W. Bush.

        Feuer was first appointed by Governor Brown in 2018, and I suppose Brown was some kind of clinger Republican.

  2. This decision sounds really wrong-headed. It seems to completely ignore the parties’ interest in understanding, ex ante, what law will apply to a given conduct. I do not see how tortious conduct in a given jurisdiction, against a citizen and resident of that jurisdiction, is not governed by that jurisdiction’s law.

    Take a slightly different hypo — State A enacts a cap on medical malpractice damages. A doctor in State A operates on a patient resident of State A in State A. Resident then moves to State B and sues doctor for malpractice in State B. Assuming for the sake of argument that State B has personal jurisdiction over doctor, is there any question that State A’s law would apply to both the malpractice claim and any damages calculation and limitation?

    1. Even better, does Sharia law even recognize product liability in this sense?

      And if not, then why does he get the ability to make a claim merely because of his *subsequent* US citizenship? Could he have made such a claim were he still an Iranian citizen?

    2. “It seems to completely ignore the parties’ interest in understanding, ex ante, what law will apply to a given conduct.”

      The defendant’s misconduct was from 1959 to 1979, ending at around the time the Shah’s rule ended. So what law applied under the Shah? The Sharia law decreed later by the successor regime?

    3. The defendants here are Fluor Enterprises, a California company headquartered in Irving, TX, and its UAE subsidiary Mideast Fluor. A closer hypo then would be if a doctor in State B travels to State A to operate on a resident of State B, and subsequently the patient relocates to State B, suffers the effects of the mistreatment, and sues the doctor there.

      1. => “to operate on a resident of State A”

  3. “In the case of the loss of a testicle, the Islamic Penal Code of Iran specifies payment … for removal of the right testicle, and … for the left,…”

    Damages for testicles. Penal code. The jokes; they write themselves.

    (Aside from my moronic puns; it’s genuinely fascinating that the two testicles are not treated equally, under the law. I hope a devout Muslim reader will post here, explaining why Islam treats them differently. Is this true also for right hand vs left hand? Right leg vs leg leg? Right front tooth vs left front tooth?

    I get the historical justification for treating the right hand differently than the left, and lots of cultures and religions do this…based on the custom that one hand, traditionally, was used for cleaning up after defecation, and the other, “clean” hand, was not. But for the leg? Testicle? Etc.)

    1. Didn’t you take sex-ed in school? Boys come from the right testicle, girls from the left.

      1. That’s an old wives’ tale, like the idea you can go blind from jerking off to an eclipse.

  4. As best I can tell, Fluor Enterprises provided asbestos gaskets and insulation which were purchased by an Iranian company who hired an Iranian citizen who was injured by said asbestos (although the connection between asbestos inhalation and testicular mesothelioma isn’t exactly conclusive).

    He then immigrates to the US and sues Flour in California — could a foreign national do this? He wasn’t a US resident when he was injured. Interesting…

    1. Also, it’s the Iranian National Oil company now — what was it in 1959? A lot of those companies (e.g. Saudi Arabia) nationalized American Oil’s properties over there — and what does that do to whatever liabilities that the company may subsequently have?

  5. This seems pretty obviously wrong. The CA court is using religion as a pretext to undermine the sovereignty of a foreign nation. The origin of their law is as irrelevant as the religious origin of much US law. US laws against murder, thievery or any number of sexual offenses are no less valid merely because such things are also forbidden by the Bible.

    More than that, this case should never have been heard in CA. The offense occurred in Iran and was between an Iranian citizen and an Iranian company. Okay, the guy moved to the US years later. I fail to see why that gives any US court jurisdiction over that incident. If he wants to sue the Iranian company, go back to Iran to do it. Yes, that would be inconvenient for him. But it’s no more inconvenient than haling all the Iranian corporate officers and other witnesses to California. This is international forum shopping that should not be tolerated.

    1. I fail to see why that gives any US court jurisdiction over that incident.

      Jurisdiction is a separate question from choice of law. Also, he wasn’t suing an Iranian company; he was suing multiple defendants, none of which apparently were Iranian.

  6. Seems to be a due process violation and to argue that California has an interest in applying its laws is nonsense. The fact that the Plaintiff was in California is pure happen stands and has no relationship to the parties at the time of the injury or the location of the injury. The Court was result oriented.

Please to post comments