The fact that our federal courts must often apply only one of our 50 states' laws, when each state has its own unique laws, can drastically change a lawsuit. For the parties in a lawsuit, the difference in a state's laws can mean the difference between a win or a loss. For attorneys, this should mean carefully analyzing choice of law rules to advocate which laws should apply for your client. In Standard Fire Insurance Co. v. Ford Motor Co., the Sixth Circuit recently published a case clarifying how Michigan's choice of law rules apply to a products liability case.
In 2004, Tennessee resident John Lombard bought a used 1997 Lincoln Towncar. The car was manufactured by Ford in Michigan and originally purchased in 1996. Years later, Mr. Lombard's car caught fire and caused damage to his car and home; in 2010, he filed suit against Ford alleging that the car was defectively designed. Although the case was filed in federal court in Michigan, the district court found that Tennessee law applied. Tennessee law only allows a products liability claim to be brought within ten years after a product is originally purchased—so in this case ten years from 1996. Mr. Lombard's complaint—filed in 2010—would thus be barred if Tennessee law applied. Michigan, however, does not have a similar statute (called a statute of repose).
The Sixth Circuit pointed out that two similar Michigan Court of Appeals decisions with similar facts found that the law of the foreign state (i.e., the state of the plaintiff's residence and where the injury occurred) applied. On the other hand, a similar Sixth Circuit case found that Michigan law applied. The Sixth Circuit said that the presumption in favor of applying Michigan law is overcome because the foreign state (Tennessee) has an interest in applying its law since a Tennessee citizen filed the lawsuit stemming from an injury sustained in Tennessee. Second, the court found that Tennessee had an interest in applying its law to protect all manufacturers, like Ford, from products liability claims filed beyond the statute of repose. Michigan, on the other hand, had minimal interest because it is merely where Ford has its headquarters and is the forum state of the lawsuit.
In the end, the Sixth Circuit found that Tennessee law applied, and therefore Mr. Lombard could not maintain his lawsuit since his car had been purchased more than ten years before the lawsuit.