Harodite Industries, Inc. v. Warren Electric Corp.

In April 2005, Massachusetts-based Harodite Industries, Inc. (Harodite) (plaintiff) sued Rhode Island-based Warren Electric Corporation (Warren) (defendant) in Rhode Island state court with respect to a 2002 incident at Harodite’s Massachusetts facility. Harodite sought damages relating to property damage, cleanup costs, and lost profits. Harodite did not seek damages for personal injuries. In April 2009, Harodite moved to amend its complaint to add new factual allegations and a new claim. Warren opposed, arguing that the proposed amendments were barred by Massachusetts’s statute of limitations, which was either three years or four years. Harodite responded that Rhode Island’s 10-year statute of limitations for claims seeking recovery for property damage applied. The superior court ruled that Rhode Island’s 10-year limitations period applied. Per the superior court, the tort choice-of-law factors slightly weighed in favor of Rhode Island law because, among other things, the injury-causing conduct occurred in Rhode Island and the Harodite-Warren relationship was centered more in Rhode Island than in Massachusetts. The superior court further concluded that policy considerations favored Rhode Island law because, among other things, (1) a Rhode Island company should be able to predict that it would be subject to Rhode Island law; (2) interstate order would not be impaired by applying Rhode Island law to a Rhode Island company, and Massachusetts would not be offended by giving a Massachusetts company more time to sue; (3) the choice of law would not affect the ease of the judicial task; (4) Rhode Island had a strong interest in applying its statute of limitations to a case in which Rhode Island was the forum and a Rhode Island citizen was a party; and (5) Rhode Island’s law was better than Massachusetts’s law because Rhode Island’s law better balanced the needs of plaintiffs and defendants. With respect to which state had the better law, the superior court further observed that Rhode Island’s 10-year limitations period applied only to property-based claims and that personal-injury claims (which were more subject to proof issues with the passage of time) were subject to a five-year limitations period. Per the superior court, this disparity evidenced Rhode Island’s thoughtfulness in crafting the 10-year period. Nevertheless, the superior court denied Harodite’s motion to amend its complaint for other reasons. Harodite appealed the denial of leave to amend. The Rhode Island Supreme Court instructed the parties to address the choice-of-law issue in their submissions.