The Standard Fire Insurance Co v. Ford Motor Company
723 F.3d 690
6th Cir.2013Background
- In 2007 a 1997 Lincoln Town Car assembled in Wixom, Michigan, owned and registered in Tennessee, allegedly caught fire in Tennessee damaging the car and the owner’s Tennessee home and property.
- Two Connecticut insurance companies, as subrogees of Tennessee resident John Lombard, sued Ford in the Eastern District of Michigan in 2010 asserting products liability, breach of warranty, and negligence, alleging a defective cruise-control switch.
- Ford moved for summary judgment arguing Tennessee law applies and Tennessee’s 10-year products-liability statute of repose bars the suit (first purchase was in 1996; suit filed in 2010).
- The district court applied Michigan choice-of-law rules, concluded Tennessee had the greater interest, applied Tennessee law, and granted summary judgment for Ford.
- Plaintiffs appealed, arguing the district court misapplied Michigan’s choice-of-law principles; the Sixth Circuit reviews de novo and must predict how the Michigan Supreme Court would decide.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Which state’s law governs the tort claims under Michigan choice-of-law rules? | Michigan should apply lex fori; Michigan’s presumption favors Michigan law. | Tennessee law governs because injury, plaintiff residence, vehicle registration and insurance are all Tennessee-based. | Tennessee law governs; Michigan’s presumption is overcome because Tennessee has a substantial interest. |
| Does Tennessee have an interest in applying its statute of repose? | Plaintiffs rely on Mahne to argue a foreign state may lack an interest even if plaintiff/residence/injury are there. | Tennessee has a clear interest in applying its statute to limit open-ended manufacturer liability. | Tennessee has a substantial interest; Mahne is distinguishable. |
| If a foreign state has an interest, do Michigan’s interests mandate applying Michigan law despite that? | Michigan’s significant contacts to Ford (headquarters, manufacture) and expectations/predictability favor Michigan law. | Michigan’s contacts are minimal relative to Tennessee’s direct connection to the injury and plaintiff; forum shopping is implicated. | Michigan’s interests were not sufficient to override Tennessee’s substantial interest. |
| Is plaintiffs’ suit time-barred under the applicable law? | If Michigan law applies, claims survive; if Tennessee law applies, claims are barred. | Tennessee statute of repose bars the claims. | Tennessee’s statute of repose applies and bars the action; summary judgment affirmed. |
Key Cases Cited
- Olmstead v. Anderson, 400 N.W.2d 292 (Mich. 1987) (establishes Michigan’s presumption favoring forum law and two-step interest analysis)
- Sutherland v. Kennington Truck Serv., Ltd., 562 N.W.2d 466 (Mich. 1997) (refines Michigan’s two-step test for whether foreign law should displace lex fori)
- Farrell v. Ford Motor Co., 501 N.W.2d 567 (Mich. Ct. App. 1993) (applied foreign state law where plaintiff/residence/injury were in that state; guided district court analysis)
- Hall v. General Motors Corp., 582 N.W.2d 866 (Mich. Ct. App. 1998) (applied out-of-state law in products-liability case involving Michigan defendant and out-of-state injury/resident)
- Mahne v. Ford Motor Co., 900 F.2d 83 (6th Cir. 1990) (held Michigan law applied where court found the foreign state had no interest; distinguished here)
- Hampshire v. Ford Motor Co., 399 N.W.2d 36 (Mich. Ct. App. 1986) (interest-weighing approach applying lex loci delicti in cases with strong foreign-state contacts)
- Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487 (1941) (federal courts in diversity must apply forum state choice-of-law rules)