42 Cal.App.5th 488
Cal. Ct. App.2019Background
- Chinese nationals were killed or injured in a rollover tour-bus accident in Arizona; the driver was at fault.
- Bus was manufactured in Indiana by Starcraft/Forest River and ordered without passenger seatbelts by L.A. Truck Centers, LLC (Buswest), a California dealer that transported the bus to California and later sold it to a California tour operator.
- The tour operator and driver settled; Starcraft (Indiana manufacturer) later moved to apply Indiana substantive law and then settled; trial proceeded against Buswest under Indiana products liability law and resulted in a defense verdict.
- Plaintiffs appealed; this Court originally reversed on post-settlement reconsideration grounds, but the California Supreme Court remanded, holding the trial court was not required to revisit its earlier choice-of-law ruling.
- On remand this Court reviewed whether the initial choice to apply Indiana law was correct under California’s governmental interest test and affirmed the trial court’s choice of Indiana law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Which state’s products-liability law governs? | Chen: California law should apply because Buswest is a California defendant that imported and sold the bus in California. | Defendants: Indiana law should apply because the manufacturer is an Indiana resident and Indiana has a legitimate interest in protecting its manufacturers. | Indiana law applies. |
| Whether there is a true conflict of interest between California and Indiana law | Chen: California has a strong interest in imposing its strict products-liability regime on a CA defendant that sold the bus. | Defendants: California’s interest is hypothetical here (no CA injuries/residents); Indiana’s interest is real. | No true conflict: Indiana’s interest is real; California’s is hypothetical. |
| If a true conflict exists, which state’s policy would be more impaired if subordinated? | Chen: California’s policy protecting consumers/manufacturers should control. | Defendants: Subordinating Indiana’s business-friendly rule would significantly impair Indiana’s interest in protecting resident manufacturers. | Indiana’s interest would be more impaired; Indiana law governs. |
Key Cases Cited
- Chen v. Los Angeles Truck Centers, LLC, 7 Cal.5th 862 (2019) (California Supreme Court decision addressing remand and reconsideration of choice-of-law ruling)
- Hurtado v. Superior Court, 11 Cal.3d 574 (1974) (adoption of the governmental interest test for choice of law)
- Reich v. Purcell, 67 Cal.2d 551 (1967) (rejecting rigid lex loci rule; promoting governmental interest analysis)
- Bernhard v. Harrah’s Club, 16 Cal.3d 313 (1976) (forum must identify a real, not hypothetical, interest under the governmental interest test)
- McCann v. Foster Wheeler LLC, 48 Cal.4th 68 (2010) (comparative impairment analysis and respect for foreign states’ business-protective rules)
- Barker v. Lull Engineering Co., 20 Cal.3d 413 (1978) (California strict products-liability principles distinguished from negligence)
- Hubbard Mfg. Co. v. Greeson, 515 N.E.2d 1071 (Ind. 1987) (Indiana’s move away from lex loci; multi-factor choice-of-law analysis favoring contacts significant to the dispute)
- Simon v. United States, 805 N.E.2d 798 (Ind. 2004) (Indiana acknowledging exceptions to lex loci where place of tort bears little connection)