The Standard Fire Insurance Co v. Ford Motor Company , 723 F.3d 690 ( 2013 )

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 13a0191p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
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X
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THE STANDARD FIRE INSURANCE COMPANY
and TRAVELERS PERSONAL SECURITY -
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No. 12-1583
INSURANCE COMPANY, as subrogees of John
,
>
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Lombard,
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Plaintiffs-Appellants,
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v.
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Defendant-Appellee. -
FORD MOTOR COMPANY,
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Appeal from the United States District Court
for the Eastern District of Michigan at Detroit.
No. 2:10-cv-11164—Bernard A. Friedman, District Judge.
Argued: June 12, 2013
Decided and Filed: July 24, 2013
Before: COLE and McKEAGUE, Circuit Judges; ZOUHARY, District Judge.*
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COUNSEL
ARGUED: W. Ransom Pipes, HANNAH, COLVIN & PIPES, LLP, Baton Rouge,
Louisiana, for Appellants. Clay A. Guise, DYKEMA GOSSETT PLLC, Bloomfield
Hills, Michigan, for Appellee. ON BRIEF: W. Ransom Pipes, HANNAH, COLVIN &
PIPES, LLP, Baton Rouge, Louisiana, for Appellants. Clay A. Guise, Matthew Mitchell,
DYKEMA GOSSETT PLLC, Bloomfield Hills, Michigan, Timothy M. Kuhn,
DYKEMA GOSSETT PLLC, Detroit, Michigan, for Appellee.
*
The Honorable Jack Zouhary, United States District Judge for the Northern District of Ohio,
sitting by designation.
1
No. 12-1583 Standard Fire Ins. Co., et al.v. Ford Motor Co. Page 2
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OPINION
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McKEAGUE, Circuit Judge. Plaintiff insurance companies filed this products
liability action against Ford Motor Company in the Eastern District of Michigan as
subrogees of their insured, John Lombard. Lombard is a Tennessee resident whose
personal property and Tennessee home were damaged when his 1997 Lincoln Town Car
caught fire in his driveway in 2007. The car was licensed, registered, and insured in
Tennessee. Ford moved for summary judgment contending that plaintiffs’ claims are
governed by Tennessee law and that Tennessee’s statute of repose for products liability
actions bars plaintiffs’ claims. The district court granted Ford’s motion. On appeal,
plaintiffs contend the district court misapplied Michigan’s choice of law rules. This case
offers the opportunity to resolve an apparent split of authority between the Sixth Circuit
and the Michigan Court of Appeals as to how the Michigan choice of law rules are to be
applied. For the reasons explained below, we affirm the judgment of the district court.
I. BACKGROUND
Tennessee resident John Lombard owned a 1997 Lincoln Town Car that he
acquired in 2004. Lombard’s Lincoln was partially manufactured, and its final assembly
completed, in November 1996 at Ford Motor Company’s Wixom, Michigan plant. The
original purchaser bought the car in December 1996.
Plaintiffs, The Standard Fire Insurance Company and Travelers Personal Security
Insurance Company, both Connecticut corporations, insured Lombard’s Tennessee home
and personal property. On March 29, 2007, the Lincoln allegedly caught fire in
Lombard’s driveway, causing damage to the car, Lombard’s residence, and his personal
property. Plaintiffs reimbursed Lombard for his losses and, as subrogees under their
insurance contracts, commenced this action in March 2010 in the Eastern District of
Michigan, asserting products liability, breach of warranty and negligence claims.
Plaintiffs allege the fire was due to a defective cruise control system in the Lincoln. The
No. 12-1583 Standard Fire Ins. Co., et al.v. Ford Motor Co. Page 3
case was subject to an intra-district transfer and made part of a multi-district litigation
action involving potentially defective speed control deactivation switches manufactured
by Ford. See MDL No. 1718, In re Ford Motor Company Speed Control Deactivation
Switch Products Liability Litigation.
Ford filed a motion for summary judgment contending that although the lawsuit
was filed in Michigan, Tennessee law applies and bars the insurers’ claims.1 In
Tennessee, any action seeking to recover for personal injuries, death or property damage
caused by a defective or unreasonably dangerous product “must be brought within ten
(10) years from the date on which the product was first purchased for use or
consumption . . . .” Tenn. Code § 29-28-103(a); Damron v. Media Gen., Inc., 3 S.W.3d
510, 512 (Tenn. Ct. App. 1999).
The Lincoln was first purchased in November 1996. The insurers’ complaint,
filed in March 2010, was filed more than ten years after the Lincoln was first purchased.
If Tennessee law applies, as the district court concluded, the claims are barred by the
Tennessee statute of repose and summary judgment for Ford must be upheld. Michigan,
on the other hand, does not have a statute of repose that would bar the claims. If
Michigan law applies, the summary judgment ruling would be vacated and the case
remanded for further proceedings.
II. ANALYSIS
We review the district court’s grant of summary judgment de novo, “using the
same Rule 56(c) standard as the district court.” Bowling Green v. Martin Land Dev. Co.,
Inc., 561 F.3d 556, 558 (6th Cir. 2009). A federal court exercising diversity jurisdiction
applies the choice of law rules of the state in which it sits. Klaxon Co. v. Stentor Elec.
Mfg. Co., 313 U.S. 487, 496 (1941). Further, “a federal court in a diversity action is
obligated to apply the law it believes the highest court of the state would apply if it were
1
As subrogees, plaintiff insurers stand in the shoes of, and have no greater rights than, their
insured. Yerkovich v. AAA, 610 N.W.2d 542, 544 (Mich. 2000). Hence, although plaintiffs are not
residents of Tennessee, they recognize that, for purposes of the choice of law analysis, it is Tennessee’s
interests in the litigation that must be weighed against Michigan’s.
No. 12-1583 Standard Fire Ins. Co., et al.v. Ford Motor Co. Page 4
faced with the issue.” Mahne v. Ford Motor Co., 900 F.2d 83, 86 (6th Cir. 1990). The
sole issue on appeal is whether the district court erred in its determination, under
Michigan’s choice of law rules, that Tennessee’s interests in having its law applied to
plaintiffs’ claims against Ford outweighed Michigan’s interests.
A. District Court Ruling
The parties agree that Michigan’s choice of law framework is established in two
Michigan Supreme Court decisions: Olmstead v. Anderson, 400 N.W.2d 292, 302
(Mich. 1987), and Sutherland v. Kennington Truck Serv., Ltd., 562 N.W.2d 466, 471
(Mich. 1997). In a tort action, Michigan courts recognize a presumption in favor of lex
fori and apply Michigan law “unless a ‘rational reason’ to do otherwise exists.”
Sutherland, 562 N.W.2d at 471. The two-step test for determining whether such a
rational reason exists was distilled in Sutherland from Olmstead as follows:
First, we must determine if any foreign state has an interest in having its
law applied. If no state has such an interest, the presumption that
Michigan law will apply cannot be overcome. If a foreign state does
have an interest in having its law applied, we must then determine if
Michigan’s interests mandate that Michigan law be applied, despite the
foreign interests.
Id.
In ruling that Tennessee law applies in this case, the district court did not cite
Sutherland, but did undertake the same interest-weighing analysis, relying on Olmstead
and Farrell v. Ford Motor Co., 501 N.W.2d 567 (Mich. Ct. App. 1993). The court
summarized its analysis as follows:
Accordingly, after thorough review, the Court is satisfied that
Tennessee has an obvious and substantial interest in shielding Defendant
from open-ended products liability claims. In addition to the facts
regarding the incident [i.e., involving property damage sustained in
Tennessee by a Tennessee resident caused by a vehicle registered and
insured in Tennessee], the Court finds it compelling that Defendant
generates substantial commerce within Tennessee, and directly employs
numerous Tennessee residents.
No. 12-1583 Standard Fire Ins. Co., et al.v. Ford Motor Co. Page 5
While Tennessee has a substantial interest in applying its law,
Michigan has little or no interest in this Tennessee incident involving a
Tennessee resident. Further, “Michigan has no interest in affording
greater rights of tort recovery to a [Tennessee] resident than those
afforded by [Tennessee]. Michigan is merely the forum state and situs
of Defendant’s headquarters. Such minimal interests are insufficient to
justify the result-oriented forum shopping that has been attempted.”
R. 25, Opinion at 5, page ID # 320 (quoting Farrell, 501 N.W.2d at 572-73 (internal
alterations in original)).
The present facts are not materially distinguishable from those addressed in
Farrell, where Michigan’s presumption in favor of lex fori was deemed overcome and
Farrell’s claims were held governed by North Carolina law. Although Farrell was
decided before Sutherland, it applied the teaching of Olmstead in a manner entirely
consistent with the two-step analysis prescribed in Sutherland. The district court found
Farrell’s application of Michigan’s choice of law framework “controlling.”
The Farrell analysis became the template for another post-Sutherland decision
of the Michigan Court of Appeals, Hall v. General Motors Corp., 582 N.W.2d 866(Mich. Ct. App. 1998). In Hall, too, the court was faced with a products liability action
against a Michigan manufacturer by a plaintiff who was a resident of North Carolina
when he was injured in North Carolina while working on a vehicle registered, licensed
and insured in North Carolina. Hall had moved to Michigan before he filed the action
in Michigan, but for purposes of the choice of law analysis, his residence at the time of
injury, not at the time of filing, was deemed determinative. Following Farrell’s lead,
the Hall court held that North Carolina’s “substantial interest” in applying its law to the
dispute outweighed Michigan’s “minimal interest.” Id. at 869. The presumption in
favor of lex fori having been overcome, the Hall court applied North Carolina’s statute
of repose and Hall’s claim was held time-barred. See also Mitchell v. McNeilus Truck
& Mfg., Inc., No. 304124, 2012 WL 5233630 (Mich. Ct. App. Oct. 23, 2012) (applying
Sutherland test in manner consistent with Farrell and Hall).
No. 12-1583 Standard Fire Ins. Co., et al.v. Ford Motor Co. Page 6
Thus, under circumstances similar to those presented here, the Michigan Court
of Appeals has consistently applied the Olmstead/Sutherland analysis to hold the lex fori
presumption overcome and has instead applied the law of a foreign state (i.e., the state
of the plaintiff’s residence, where the injury occurred). The district court was convinced
that the analysis employed by Michigan’s intermediate appellate court is indicative of
how Michigan’s highest court would rule if faced with the issue. R. 25, Opinion at 3-4,
Page ID #318-19 (citing Monette v. AM-7-7 Baking Co., Ltd., 929 F.2d 276, 280 (6th
Cir. 1991) (noting that decision of intermediate state appellate court, though not
controlling, is not to be disregarded unless other persuasive data demonstrates highest
state court would decide otherwise)). Plaintiffs disagree for several reasons.
B. How Would Michigan’s Highest Court Rule?
Plaintiffs point out that in Olmstead and Sutherland, unlike the Michigan Court
of Appeals decisions, the Michigan Supreme Court upheld the presumption favoring the
law of the forum. Moreover, consistent with Olmstead and Sutherland, plaintiffs note
that the Sixth Circuit, when confronted with circumstances analogous to this case in
Mahne v. Ford Motor Co., 900 F.2d 83 (6th Cir. 1990), also applied Michigan law.
Plaintiffs contend these authorities represent better indicators of how the Michigan
Supreme Court would rule. We are not persuaded.
In both Olmstead and Sutherland, the court never reached the second step of the
choice of law analysis, the interest-weighing step, because the court found in each case
that no foreign state had an interest in having its law applied. The lex fori presumption
was left undisturbed because no other competing state law was shown to meet even step
one of the analysis. In Olmstead, a Michigan resident caused an accident in Wisconsin
that killed a Minnesota resident. Wisconsin, the state of the injury, was deemed to have
no interest in having its law applied because no citizen of Wisconsin was a party to the
action. Olmstead, 400 N.W.2d at 304. The court also found there were no forum
shopping concerns that counseled against applying the law of the forum. Id. at 303. The
court thus found no rational reason to displace Michigan law.
No. 12-1583 Standard Fire Ins. Co., et al.v. Ford Motor Co. Page 7
In Sutherland, an Ohio resident driving a truck licensed in Ohio collided on a
Michigan highway with a truck owned and leased by Canadian corporations, and driven
by a resident of Ontario, Canada. The Ohio resident brought a negligence action in a
Michigan court more than two years after the accident. In both Ohio and Ontario, a two-
year statute of limitations applied to a negligence action. Michigan’s statute of
limitations was three years. The court concluded that Ohio had no interest in having its
law apply because the plaintiffs’ residency in Ohio, with nothing more, was insufficient
to support the choice of a state’s law. Sutherland, 562 N.W.2d at 472. The court next
concluded that Ontario had no interest in having its law apply because the choice of law
rule in Ontario was lex loci delicti, so that even if plaintiffs had filed suit in Ontario, the
Ontario court would have applied Michigan law and the Michigan three-year statute of
limitations. Id. at 472-73. Because no foreign state had an interest, the court applied the
law of the forum without having to assess Michigan’s interests.
In Olmstead and Sutherland, the Michigan Supreme Court upheld the
presumption in favor of lex fori under circumstances materially distinguishable from
those presented here and in Farrell, Hall and Mitchell. In Olmstead and Sutherland, the
presumptively applicable law of the forum was applied without any need to undertake
interest-weighing, because there were no competing interests. Here, in contrast, as in
the Michigan Court of Appeals decisions, interest weighing is required because a foreign
state undeniably has an interest in having its law applied to an action filed by one of its
citizens stemming from injury sustained there. That this distinction is material is
confirmed by reasoning contained in Olmstead, as noted in Farrell.
The Olmstead court cited Hampshire v. Ford Motor Co., 399 N.W.2d 36 (Mich.
Ct. App. 1986), lv. denied Jan. 26, 1987, as an example of the interest-weighing
approach used in a growing majority of Michigan cases. In Hampshire, a California
resident’s vehicle was struck in California by a stolen Ford vehicle. The plaintiff sued
in Michigan alleging negligent design of the ignition-locking system. The only
Michigan connections were that Ford’s headquarters were in Michigan and Michigan
was the forum state. Hampshire, 399 N.W.2d at 38. After taking into account the
No. 12-1583 Standard Fire Ins. Co., et al.v. Ford Motor Co. Page 8
plaintiff’s residence, the place where the cars were registered, the place of the accident,
and the minimal Michigan connections, the Hampshire court concluded California law
would govern because California’s interests were superior to Michigan’s. Id.Olmstead noted that Michigan courts, in cases like Hampshire, “in which the
plaintiff was not a resident, but brought suit in Michigan (presumably asserting
jurisdiction over the defendant on the basis of the defendant’s contacts with Michigan)
have generally applied lex loci delicti.” Id. at 302. The court distinguished those cases,
observing that in all of them, like the instant case, “the injury occurred in states in which
the plaintiff had substantial contacts or actually resided in fact at the time of the injury.”
Id. Notably, the Olmstead court did not question, criticize, or even hint at disapproval
of the approach taken in Hampshire and the resultant application of lex loci delicti.
Quite to the contrary, Olmstead’s discussion of Hampshire can only be seen as tacit
approval, for the same Michigan Supreme Court that decided Olmstead denied leave to
appeal in Hampshire eleven days earlier.
The significance of Olmstead’s discussion of Hampshire was not lost on the
Farrell court; it found Hampshire’s analysis persuasive and controlling. Farrell,
501 N.W.2d at 570. The Farrell court rejected the argument that Olmstead overruled
Hampshire or employed a different choice of law methodology. The court found the
different results in Olmstead (applying lex fori) and Hampshire (applying lex loci delicti)
driven by materially different facts. We agree. We find no support in Olmstead or
Sutherland for plaintiffs’ argument that, faced with the instant facts, the Michigan
Supreme Court would decide the choice of law question differently than the Michigan
Court of Appeals did in Hampshire, Farrell, Hall and Mitchell.
Plaintiffs’ reliance on our decision in Mahne, however, presents a different
question. Christine Mahne, a Florida resident, was injured in Florida when the Ford car
in which she was a passenger burst into flames after being rear-ended by another vehicle.
She tried to sue in Florida but was precluded from doing so by the Florida statute of
repose then in effect, which barred products liability actions brought more than twelve
years after the date the product was first purchased. Mahne next filed a diversity action
No. 12-1583 Standard Fire Ins. Co., et al.v. Ford Motor Co. Page 9
against Ford in the Eastern District of Michigan, alleging various design and
manufacturing defects. Ford moved to dismiss, contending Florida law should apply and
that Florida’s statute of repose barred the action. The district court agreed. Mahne,
900 F.2d at 84-85. We reversed, concluding that Florida had no interest in having its
law applied and that lex fori therefore applied, without regard to the nature or quality of
Michigan’s interests. Id. at 88.
Mahne was decided after Olmstead, but before Sutherland and Farrell. As we
endeavored to discern and apply Michigan’s still evolving choice of law rules, we
recognized (a) that although the rule favoring lex loci delicti had been abandoned in
Michigan, Olmstead had “declined to adopt any other specific choice-of-law
methodology and, instead, left choice-of-law issues to be evaluated on a case-by-case
basis;” (b) that a majority of Michigan courts had employed an interest-weighing
approach; and (c) that the question to be answered in each case was whether “reason
requires that foreign law supersede the law of this state.” Id. at 85-86 (quoting
Olmstead, 400 N.W.2d at 302). It had become clear, we observed, “that Michigan law
as the forum law presumptively controls the litigation; and further, that there must be a
rational reason to displace Michigan law.” Id. at 87.2
We recognized in Mahne that Olmstead did not address facts like those presented
in Mahne (and here), where the non-Michigan plaintiff suing in a Michigan court was
the resident of the state where the injury occurred. Id. We also recognized that lower
courts in Michigan had tended to apply lex loci delicti under such circumstances and that
2
Our statement of the ultimate question in Mahne, drawn directly from Olmstead, whether
“reason requires that foreign law supersede the law of this state,” is slightly different from the formulation
set forth eleven years later in Sutherland. Citing Olmstead, the Sutherland court held the ultimate question
asks whether, if a foreign state has an interest in having its law applied, “Michigan’s interests mandate that
Michigan law be applied, despite the foreign interests.” Sutherland, 562 N.W.2d at 47. This may be a
distinction without a difference. To be sure, the discrepancy has received no attention in the Michigan case
law and may be inconsequential. Yet, the Olmstead formulation (whether the foreign state’s interests are
such that “reason requires” the presumption favoring lex fori be disregarded) undeniably gives more weight
to the presumption than the Sutherland formulation (whether Michigan’s interests “mandate” that the
presumption favoring lex fori be enforced despite the foreign state’s interests).
In Olmstead, lex fori had recently become the presumptive choice, displacing lex loci delicti.
Could it be the strength of the presumption had eroded during the ensuing eleven years of experience, such
that the standard needed slight revision in Sutherland? Any answer would be speculative. Yet, it is
apparent that our opinion in Mahne, issued after Olmstead, but before Sutherland, Farrell, Hall and
Mitchell, accorded the presumption greater weight than have subsequent decisions of the Michigan courts.
No. 12-1583 Standard Fire Ins. Co., et al.v. Ford Motor Co. Page 10
Olmstead had distinguished those cases. We called the point “problematic.” Yet,
consistent with Olmstead, we held that interest weighing was appropriate only if the
foreign state had an interest in applying its law. Id. Based on our review of the
particular facts and foreign state interests at issue in Mahne, we concluded that Florida
had no interest in having its law applied. Hence, like the Michigan Supreme Court in
Olmstead and later in Sutherland, we concluded that the presumption in favor of lex fori
remained intact.
Mahne thus supports plaintiffs’ position, but only if we find Tennessee has no
interest in having its law applied in this case. Mahne held, under the facts presented, that
Florida had no interest, notwithstanding that the plaintiff was a Florida resident and the
injury occurred there. To this extent, Mahne appears to be at odds with Hampshire,
Farrell, Hall and Mitchell, where the fact that the plaintiff was a resident of the foreign
state where the injury occurred contributed significantly to findings that the foreign state
had substantial interest in having its law applied. Yet, in making the choice of law
determination, “each case must be evaluated on the circumstances presented.”
Olmstead, 400 N.W.2d at 302. Mahne’s determination that Florida had no interest was
driven by the presumption that Florida’s particular statute of repose was designed to
protect only Florida manufacturers. We therefore concluded in Mahne that applying
Florida law in an action against an out-of-state manufacturer would not benefit the
interests the law was designed to protect. Mahne, 900 F.2d at 88.
In this case, we find no error in the district court’s determination that Tennessee
had a substantial interest in having its law applied. The district court cited the
uncontested showing that plaintiffs’ insured was a Tennessee resident who sustained
property damage in Tennessee allegedly caused by a defect in a vehicle registered and
insured in Tennessee. The court also noted undisputed evidence that defendant Ford
generated substantial commerce in Tennessee and employed numerous Tennessee
residents. The court concluded that Tennessee had an obvious and substantial interest
in applying its statute of repose to shield manufacturers like Ford from open-ended
liability claims.
No. 12-1583 Standard Fire Ins. Co., et al.v. Ford Motor Co. Page 11
Plaintiffs’ contention that these considerations amount to no interest at all is
based almost exclusively on Mahne and is unpersuasive. Mahne evaluated a different
law in a different state at a different stage in the development of Michigan’s choice of
law framework. To the extent our decision in Mahne is construed as reflecting a more
robust view of Michigan’s lex fori presumption than has been given effect in subsequent
Michigan case law, we acknowledge that our discernment of Michigan’s evolving law
may have missed the mark. Our assessment in Mahne, more than twenty years ago, of
how Michigan’s highest court would have answered the choice of law question under
the given facts and circumstances was not binding, of course, on the Michigan Supreme
Court or the Michigan Court of Appeals. See Ohio ex rel. Skaggs v. Brunner, 549 F.3d
468, 472 (6th Cir. 2008) (“No federal court has the final say on what [state] law
means.”). In the absence of specific guidance from the state’s highest court, we are
“obligated to follow published intermediate state appellate court decisions unless we are
convinced that the highest court would decide differently.” Ruth v. Bituminous Cas.
Corp., 427 F.2d 290, 292 (6th Cir. 1970); see also Monette, 929 F.2d at 280-81 (same).
Since our Mahne decision, the Michigan Court of Appeals has consistently applied
Olmstead’s teaching under analogous circumstances to find that the foreign state has a
substantial interest in having its law applied. We, like the district court, are obligated
to follow those authorities because there is no convincing reason to believe Michigan’s
highest court would decide differently.
C. Interest Weighing
Because Tennessee has a substantial interest in having its law applied, interest
weighing is required. The district court compared the interests involved and held that
Tennessee’s substantial interest outweighed Michigan’s minimal interest. The court held
Michigan’s interest “minimal” because Michigan is merely the forum state and situs of
Ford’s headquarters. Michigan was deemed to have no interest in affording greater
rights of tort recovery to a Tennessee resident than would Tennessee law. Such minimal
interest, the court said, was insufficient to justify the result-oriented forum shopping that
had led plaintiffs to file their action in Michigan instead of Tennessee. Again, the
No. 12-1583 Standard Fire Ins. Co., et al.v. Ford Motor Co. Page 12
court’s reasoning is entirely consistent with Hampshire, Farrell, Hall, and Mitchell.
Yet, plaintiffs contend the analysis is wholly inadequate.
Plaintiffs contend the district court over-valued Tennessee’s interests and ignored
some of Michigan’s. Citing Sutherland, 562 N.W.2d at 287, plaintiffs argue that their
insured’s “residence in Tennessee, with nothing more, is insufficient to support the
choice of a state’s law.” True enough, but Tennessee’s interest in applying its law is not
premised solely on John Lombard’s place of residence. The district court, like the
Michigan Court of Appeals in Hampshire, Farrell and Hall, treated the fact that the
plaintiff’s residence was in the foreign state where the injury occurred as a significant
factor.
Plaintiffs acknowledge that loci delicti, “the place of the wrong,” is a legitimate
consideration, but they insist the district court misunderstood the wrong at issue in this
litigation. Although the fire resulting in property damage occurred in Tennessee,
plaintiffs contend the wrongdoing that allegedly gives rise to Ford’s liability (i.e.,
negligent design and manufacture and failure to warn) occurred in Michigan. Michigan,
they argue, is just as much the place of the wrong as Tennessee. The problem with this
argument is that it finds no support in Michigan law. Michigan law recognizes the place
where the injury was sustained as the place of the wrong; the place where the last event
necessary to create liability occurred. Sutherland, 562 N.W.2d at 468; Sexton v. Ryder
Truck Rental, Inc., 320 N.W.2d 843, 848 (Mich. 1982). Plaintiffs cite no contrary
authority. Indeed, in Hampshire, Farrell and Hall, all of which involved analogous
products liability claims against a Michigan automobile manufacturer, the Michigan
Court of Appeals treated the place where the injury occurred as the place of the wrong
and as a significant factor.
Plaintiffs also challenge the district court’s finding that application of the
Tennessee statute of repose would benefit the interests it was designed to protect by
shielding manufacturers like Ford from open-ended product liability claims. The
preamble of the Tennessee Products Liability Act makes clear that the purpose of the
statute of repose is to provide manufacturers with some certainty about potential tort
No. 12-1583 Standard Fire Ins. Co., et al.v. Ford Motor Co. Page 13
liability by blocking liability after ten years to limit costs of product liability insurance
and thereby lessen the costs of products to consumers. Tenn. Code § 29-28-103;
Kochins v. Linden-Alimak, Inc., 799 F.2d 1128, 1139 (6th Cir. 1986) (recognizing
rational relationship between statute of repose and its purpose). Plaintiffs cite no
grounds for finding that enforcement of Tennessee’s statute of repose would not further
its purposes. On the other hand, the district court’s reasoning finds support in Michigan
case law. The Michigan Court of Appeals held that the foreign state had an interest in
enforcing its statute of repose in Farrell, Hall and Mitchell. Again, plaintiffs’ argument
is at odds with Michigan law.
Plaintiffs fault the district court for not explicitly considering, as part of its
interest weighing, the expectations of the parties and the predictability of the results
associated with the choice of law determination. Such factors play little if any role in
modern choice of law analysis under Michigan law. They are not even mentioned in
Sutherland, Farrell, Hall or Mitchell. Rather, the expectations of the parties and
predictability are factors mentioned in Olmstead, along with discouragement of forum
shopping, as justifications for the former preference for lex loci delicti before the
presumption in favor of lex fori was adopted in Michigan. See Olmstead, 400 N.W.2d
at 295, 302-03. When lex loci delicti was the rule, there was a measure of certainty in
the understanding that a tort action would ordinarily be filed in, and governed by the law
of, the state where the injury occurred. A party wishing to avoid lex loci delicti would
be left to argue that an exception to the rule was warranted and that the perceived
advantages of lex loci delicti (e.g., prevention of forum shopping) did not apply. See id.
Here, the district court did not mention the expectations and predictability
associated with applying lex loci delicti because they were not factors in the decision.
Rather, lex loci delicti was applied under Michigan’s two-step choice of law framework
because Tennessee’s interests were found to outweigh Michigan’s and the presumption
in favor of lex fori was overcome. The district court did express concern that plaintiffs’
suit in Michigan had been motivated by “result-oriented forum shopping.” This is an
abuse that the rule favoring lex fori is vulnerable to, as recognized in Olmstead. When
No. 12-1583 Standard Fire Ins. Co., et al.v. Ford Motor Co. Page 14
a plaintiff foregoes the economies afforded by bringing suit at home, suspicions arise as
to whether a different forum was chosen solely to circumvent some policy in one state
and secure some legal advantage in another. Olmstead, 400 N.W.2d at 303-04. The
concern is not as great where, as here, the chosen forum is the defendant’s home state.
See id. Still, the importance of discouraging forum shopping is a legitimate factor in the
interest-weighing analysis under Michigan law and was properly considered by the
district court. See Farrell and Hall.
Finally, plaintiffs contend the district court failed to adequately consider the
substantiality of Ford’s connections with Michigan. The district court did consider
Ford’s extensive commercial activities in Tennessee as supporting Tennessee’s
“substantial interest” in having its law applied. Yet, though Ford’s commercial activities
in Michigan dwarf those in Tennessee, the district court characterized Michigan’s
interest as “minimal.” We agree that Michigan’s interests in this litigation are
understated in the district court’s opinion. Yet, the conclusion that Michigan’s interests
are not such as to “mandate” that Michigan law be applied despite Tennessee’s interests
is not erroneous. It is entirely consistent with the Michigan Court of Appeals rulings in
Hampshire, Farrell and Hall, all of which presented similar products liability actions by
non-resident plaintiffs against a Michigan automobile manufacturer, presented similar
interest-weighing considerations, and resulted in applications of the foreign state’s law.
III. CONCLUSION
Accordingly, we find no error in the district court’s determination, under
Michigan’s choice of law rules, that plaintiffs’ action is governed by Tennessee law.
There being no dispute that Tennessee’s statute of repose bars the action, the summary
judgment in Ford’s favor is AFFIRMED.