# Petition for Writ of Certiorari — Ford Motor Co. v. Mahne

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 1990
- **Citation:** 498 U.S. 941

## Text

ie,

Supreme Court, U.S,

90-4 48 FILED

| SEP 14 3m

oad

No. CLARK

WOSEPH F. SPAMIOL, JR,

IN THE

Supreme Court of the United States

OcTOBER TERM, 1990

FORD MOTOR COMPANY, ET AL.,
PETITIONERS

v.

CHRISTINE MAHNE,
RESPONDENT

PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT

ARTHUR R. MILLER STEPHEN M. SHAPIRO
Langdell Halil Counsel of Record
1545 Massachusetts Avenue KENNETH S. GELLER
Cambridge, Massachusetts 02188 MARK I. LEVY
(617) 495-4111 JAMES C. SCHROEDER

Mayer, Brown & Platt
190 South LaSalle Street
JOHN M. THOMAS Chicago, Illinois 60603
Ford Motor Company (312) 782-0600
One Parklane Boulevard
Suite 300, Parklane Towers West
Dearborn, Michigan 48126
(313) 322-6743 Counsel for Petitioners

Midwest Law Printing Co., Chicago 60611, (312) 321-0220

oy

i
QUESTION PRESENTED

Whether the court of appeals in this diversity case de-
parted from settled principles governing federal-court de-
terminations of state law by (1) not following decisions
of the state supreme and intermediate appellate courts,
thereby encouraging forum shopping by federal diversity
plaintiffs, (2) not deferring to the district court’s inter-
pretation of the law of the state in which it sits, and (3)
not certifying the controlling state-law issues to the state
supreme court.

‘3

PARTIES TO THE PROCEEDING
AND RULE 29.1 STATEMENT

In addition to the parties named in the caption, Donald
Peterson and Harold MacDonald, who are present or re-
tired officers of Ford Motor Company, were defendants-
appellees in the courts below and are petitioners in this
Court.

The subsidiaries of Ford Motor Company required to
be disclosed under Sup. Ct. R. 29.1 are listed in Appen-
dix F, infra, 24a-32a.

ill

TABLE OF CONTENTS

Gee Ce cyevdct reeds hbase ssccss
A. Background And Prior Proceedings ...
B. District Court Proceedings And Decision . .
C. The Court Of Appeals’ Decision ......

REASONS FOR GRANTING THE PETITION .

THE COURT OF APPEALS PLAINLY
VIOLATED THE FUNDAMENTAL PRIN-
CIPLES ESTABLISHED BY THIS COURT
FOR DETERMINING STATE LAW UN-
ee ere

I.

II.

A.

B.

The Court Of Appeals Ignored Con-
trolling State-Court Decisions ....

The Court Of Appeals Failed To Ac-
cord Due Deference To The Dis-
trict Court’s Determination Of State
oe owe i kaya wees ses

The Court Of Appeals Failed To Fol-
low Available State Certification Pro-
ew

THE COURT OF APPEALS’ EGREGIOUS
DISREGARD OF THIS COURT’S DIREC-
TIVES FOR DETERMINING STATE LAW
UNDER ERIE WARRANTS REVIEW ..

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TABLE OF AUTHORITIES

CASES: | PAGE
Abramson v. Brownstein, 897 F.2d 389 (9th Cir.

EE 44.046: ben nh he ens em if Michigan is not the place of the wrong”); com-
pare Bonelli v. Volkswagen of America, Inc., 421 N.W.2d 218, 225
n.6 (Mich. App.) (“Michigan tort law controlled * * * since Michigan
was the site of the alleged injury and of plaintiff's residence’’),
lv. denied, 430 Mich. 896 (1988).

-_)

In these circumstances, the Sixth Circuit doubly erred
under Erie by (1) deviating from the Michigan Court of
Appeals’ decision in Hampshire without any basis in Mich-
igan law for doing so, and (2) disregarding the Michigan
Supreme Court’s approval of Hampshire in Olmstead (as
well as the other decisions that have followed Hampshire
after Olmstead). “If the present suit had been brought
in [Michigan state] court no reason is advanced for sup-
posing that the [Michigan Court of Appeals] would depart
from its previous ruling or that the Supreme Court of
the state would grant the review which it withheld be-
fore.”” West, 311 U.S. at 238.

The sole rationale offered by the Sixth Circuit for de-
parting from Hampshire was that Florida had “no inter-
est” in applying its statute of repose to out-of-state man-
ufacturers (App., infra, lla), and therefore that it was
unnecessary to “make a comparative analysis of the in-
terests of Michigan and the foreign state as was done in
Hampshire.” Id. at 9a. Here again, however, the Sixth
Circuit disregarded this Court’s Erie rulings that require
obedience to state-court decisions on the meaning of state
law. Numerous decisions of the Florida courts, including
those of the Florida Supreme Court, have applied the stat-
ute of repose to out-of-state manufacturers in general and
Ford in particular. Under Erie, the Sixth Circuit was not
at liberty simply to ignore, as it did, this consistent line
of Florida decisions settling the state-law issue.

The Florida courts repeatedly have applied the Florida
statute of repose to out-of-state manufacturers doing busi-
ness in the State. In 1987 and 1988 alone (the two years
preceding briefing and argument in the Sixth Circuit), the
Florida Supreme Court applied the Florida statute of re-
pose in at least seven cases to bar actions against corpo-
rations that (according to Moopy’s INDUSTRIAL MANUAL)

=~ =

were neither incorporated nor headquartered in Florida.®
In addition, a number of courts in Florida, both state and
federal, have applied the Florida statute of repose specifi-
cally to actions against Ford.” Thus, until this case, there
never has been the slightest doubt under Florida law that
the Florida statute of repose extends to in-state and out-
of-state manufacturers alike. The Sixth Circuit’s contrary
interpretation cannot be squared with this unbroken string
of decisions.

In refusing to follow these Florida decisions on Florida
law, the court of appeals did not suggest that the lan-
guage of the Florida statute of repose (App., infra, 22a)
applied only to Florida manufacturers and excluded out-
of-state manufacturers doing business in Florida. Nor did
the court of appeals refer to any legislative history sup-
porting its unprecedented and unnatural interpretation of
the statute. On the contrary, it expressly disavowed any
such support, correctly noting that the legislative history
was “scarce.” Jd. at 10a.

Instead of relying on the usual authoritative sources
of Florida law—state precedent, the text of the statute
of repose, and relevant. legislative history—the court of

® Diaz v. Curtiss-Wright cog 519 So. 2d 610 (Fla. 1988); Shaw
v. General Motors Corp., 518 So. 2d 900 (Fla. 1987); Brockenridge
v. Ametek, Inc., 517 So. 2d 667 (Fla. 1987), app. dismissed & cert.
denied, 109 S. Ct. 30 (1988); Pait v. Ford Motor Co., 515 So. 2d
1278 (Fla. 1987); Wallis v. Grumman Corp., 515 So. 2d 1276 (Fla.
1987); Purty v. McDonnell Douglas Corp., 515 So. 2d 983 (Fla.
1987); Keyes v. Fulton Mfg. Corp., 515 So. 2d 979 (Fla. 1987).

7 Pait v. Ford Motor Co., 515 So. 2d 1278 (Fla. 1987); Perez v.
Ford Motor Co., 508 So. 2d 1339 (Fla. App. 1987), review denied,
520 So. 2d 585 (Fla. 1988); ig v. Firestone Tire & Rubber
Co., 495 So. 2d 801 (Fla. App. 1986), review denied, 506 So. 2d
1040 (Fla.), app. dismissed & cert. denied, 484 U.S. 802 (1987); ,
fin v. Ford Motor Co., No. TA 85-7244-WS (N.D. Fla. 1986), aff'd
sub nom. Eddings v. Volkswagenwerk, A.G., 835 F.2d 1369 (11th
Cir.), cert. denied, 109 S. Ct. 68 (1988).

tiie

appeals relied entirely on a more dubious authority: a stu-
dent law review note that in fact does not even arguably
support the court’s conclusion. App., infra, 10a, citing
Note, Products Liability Statute of Repose—A Florida
Perspective, 11 Nova L. Rev. 849 (1987). At the page

cited by the court, the note simply observes that:
Although legislative history is scarce concerning
Florida’s enactment of the products liability statute
of repose, manufacturers’ expanded liability appears
to be the primary influence in its enactment. Flor-
ida, as wa as the rest of the country, experienced
a liability revolution” in the past two

es.

Id. at 852 (emphasis added). Not a word of that explana-
tion confines the statute to Florida manufacturers; the stu-
dent author refers without limitation to “manufacturers.”
Indeed, on the very next page, the note explains the pol-
icies of the statute in terms that are equally applicable
to out-of-state manufacturers doing business in Florida:
A perceived liability “crisis” in the 1970’s appears
to have also given credence to the idea of a statute
of repose. Because courts permitted a greater number
of claims to be brought against manufacturers, as well
as frequent and large recoveries, products liability
litigation increased nationwide. Authorities claimed
that the increased litigation led to unaffordable insur-
ance rates and, in some instances, unobtainable cov-
erage at any price. In response, legislative proposals
advocated the enactment of statutes of repose to rein-

edy the insurance market.

Id. at 853. What is more, the principal focus of the note
is a case that applied the Florida statute of repose to an
out-of-state automobile manufacturer. See Lamb v. Volks-
wagenwerk Aktiengeselischaft, 631 F. Supp. 1144 (S.D.
Fla. 1986), aff'd sub nom. Eddings v. Volkswagenwerk,

= =

A.G., 835 F.2d 1369 (11th Cir.), cert. denied, 109 S. Ct.
68 (1988).®

In sum, the Sixth Circuit flatly disregarded this Court’s
precedents under Erie, leading to an interpretation of both
Michigan and Florida law that is irreconcilable with con-
trolling authority in those states. As a consequence, “a
suit by a non-resident litigant in [Michigan] federal court
instead of in a State court a block away [will] lead to a
substantially different result.” Guaranty Trust, 326 U.S.
at 109. This palpable departure from “(t]he nub of the
policy that underlies Erie” (ibid.) calls for correction by
this Court.

B. The Court Of Appeals Failed To Accord Due Def-
erence To The District Court’s Determination Of
State Law

As demonstrated above, the district court correctly ap-
plied Michigan choice-of-law rules. To the extent, however,
that there may have been room for reasonable doubt, the

* Of course, if the Florida statute were construed, as the Sixth
Circuit may Sot nny pmo its face against out-of-state manufac-
turers b iting its protection to in-state companies, it- would
violate the Commerce Clause and the Equal Protection Clause.
See, e.g., Bendix Autolite . v. Midwesco Enterprises, 486 U.S.
888 (1908); Metropolitan “go ms. Co. V. Ward, 470 U.S. 869 (1985);

Juzwin v. Asbestos C: Ltd., 900 F.2d 686 (3d Cir. 1990), peti-
tion for cert. pending, 0 USLW. 3074 (filed July 10, 1990) (No.
90-76); Abramson v 897 F.2d 389 (9th Cir. 1990). Since

Florida courts, like the federal courts, construe a statute ‘“[wJhen-
ever possible * * * not to conflict with the constitution” (Firestone
v. News-Press Pub. Co., 588 So. 2d 457, 459 (Fla. 1989)) and “avoid
declaring a statute unconstitutional if such statute can be fairly
construed in a constitutional manner” (Sandlin v. Criminal Justice
Standards & Training Comm'n, 531 So. 2d 1344, 1346 (Fla. 1988)),
the Sixth Circuit plainly departed from established principles by
construing the Florida statute of repose to raise rather than to
avoid constitutional issues.

= Ss

appellate court should have deferred to the district court’s
interpretation of Michigan law. By failing to do so, the
court of appeals committed a second fundamental error
of federal law.

As Ford demonstrates in greater detail in its brief
as amicus curiae in Salve Regina College v. Russell,
there are two principal reasons why courts of appeals
should defer to the district court’s construction of the law
of the state in which it sits. First, as a practical matter,
district judges are more likely to be familiar with state
law and thus better able to discern and apply that law.
Frequently a district judge has been a leading practitioner
in his or her state or a state-court judge before appoint-
ment to the federal bench;® court of appeals judges, by
contrast, are chosen from the many states within the cir-
cuit and therefore are less likely to be experienced in the
law of the state at issue in any particular case. Likewise,
given the nature and volume of their dockets, district
judges normally are confronted with a larger number and
-a wider range of issues under state law than is true for
appellate judges. Accordingly, deference to the district
court’s determination of state law will serve to promote
informed application of forum state law as mandated by
Erie.

Such deference also will promote federal judicial econ-
omy. A federal-court determination of unsettled state law,
while of considerable practical importance for an interim
period, is not binding on the state courts and can be re-
jected as incorrect by even the lowest court in the state.

® In this case, District Judge La Plata previously had served as
a Michigan state trial judge for six years and had spent more than
20 years as a trial lawyer in private practice in Michigan. In ad-
dition, he attended both college and law school in Michigan and
was a professor at the Detroit College of Law. See 1 ALMANAC
OF THE FEDERAL JUDICIARY (Prentice Hall Law & Business 1990).

<alliitins

For that reason, it is highly inefficient for increasingly
burdened appellate courts to devote the substantial re-
sources necessary to render de novo interpretations of
often unfamiliar state law. What the American Law In-
stitute pointed out with respect to diversity jurisdiction
in general is equally applicable to de novo appellate review
of state law:
From the point of view of the federal courts, the task
of deciding such cases under state law imposes espe-
cially laborious burdens, often greater in fact than
involved in resolving issues of federal law on which
those courts may speak with their own authority.
And although they may occasionally contribute to the
development of state law, those heavy labors are es-
sentially wasteful. Lacking the status of authorized
precedent and avowedly aiming to project state court
decisions, they go for the most part only to the ad-
judication of the particular dispute between the ac-
tual parties.

American Law Institute, STUDY OF THE DIVISION OF
JURISDICTION BETWEEN STATE AND FEDERAL COURTS
99-100 (1968). Unless the district court demonstrably has
erred in interpreting state law, therefore, its decision
should not be overturned by the court of appeals.

This Court has recognized that deference is due a dis-
trict court’s determination of its own state law. In United
States v. Hohri, 482 U.S. 64, 74 n.6 (1987), the Court re-
cently noted that federal cases involving state-law issues
“are tried before local federal district judges, who are like-
ly to be familiar with the applicable state law. Indeed,
a district judge’s determination of a state-law question
usually is reviewed with great deference’ (emphasis add-
ed). See also, e.g., Bernhardt v. Polygraphic Co., 350 U.S.
at 204 (“[s]ince the federal judge making those findings
[of Vermont law] is from the Vermont bar, we give special
weight to his statement of what the Vermont law is’’);

— *

—20—

Gardner v. New Jersey, 329 U.S. 565, 575 (1947) (“(tJhat
construction of New Jersey law made by a federal judge
of the New Jersey District Court is entitled to special
weight”). In the present case, however, the Sixth Circuit
inexplicably gave no deference whatsoever to the district
court’s application of Michigan choice-of-law rules and
simply substituted its judgment for that of the district
court.

In Salve Regina College v. Russell, this Court granted
review of the question “(wJhether a party is entitled to
de novo review of a federal district judge’s determina-
tion of state law in a case in which federal jurisdiction is
founded upon diversity of citizenship.”’ The same question
is presented in this case, and review should be granted
here as well. Alternatively, the Court may wish to hold
this petition pending its decision in Salve Regina College
and then dispose of the pues as appropriate in light
of that ruling.

C. The Court of Appeals Failed To Follow Available
State Certification Procedures

Insofar as the court of appeals entertained substantial
doubts about the correctness of the district court’s rul-
ing notwithstanding the state decisions supporting it and
the deference it was due, the appropriate course was not
to reverse the district court but rather to certify the
dispositive state-law questions to the Michigan and Florida
Supreme Courts. The Sixth Circuit’s refusal to do so con-
stitutes another important error that warrants this Court’s
review.

Both Michigan and Florida have provided procedures
for certification to their state supreme courts. See Mich.
Ct. R. 7.305(B) (West Supp. 1989), and Fla. R. App. P.
9.030(aX2XC), 9.150(a) (West 1983) (App., infra, 22a-23a).

-

A certification procedure offers an efficient means of ob-
taining a definitive resolution of state law—something that
only the highest court of the state, not a federal court
of appeals, can provide.

This Court has recognized the advantages of state-law
certification procedures and encouraged their use in a
variety of circumstances. In Lehman Brothers v. Schein,
416 U.S. 386, 391 (1974), the Court explained that certifi-
cation “in the long run save{s] time, energy, and resources
and helps build a cooperative judicial federalism,” and that
it is “particularly appropriate” for state-law questions that
are “novel{ ]” and “unsettle[d].’”’ The Court later elabo-
rated upon the important federalism and efficiency consid-
erations that underlie certification:

In a federal system, it is obviously desirable that
questions of law which * * * are both intensely local
and immensely important * * * be decided in the first
instance by state courts. This may not always be
possible nor is it always required, but where as here
there is an efficient method for obtaining a ruling
from the highest court of a State we do not hesitate
to avail ourselves of it.

Elkins v. Moreno, 435 U.S. 647, 663 n.16 (1978) (sua
sponte certification by this Court).!° See also 17A Wright,
Miller, & Cooper, supra, § 4246 at 113, § 4248 at 164-165.

Lower courts have agreed that certification is a salutary
procedure for resolving significant and undecided state-

10 See also, e.g., Virginia v. American Booksellers Ass’n, 484
U.S. 383 (1988) (Supreme Court ordered certification to state su-
preme court); Zant v. Stephens, 456 U.S. 410 (1982) (same); Mills
v. Rogers, 457 U.S. 291, 305-306 (1982) (vacating court of appeals’
decision and remanding for consideration of certification); Massa-
chusetts v. Feeney, 429 U.S. 66 (1976) (swa sponte certification);
Bellotti v. Baird, 428 U.S. 132 (1976) (renianding with instructions
to certify); Aldrich v. Aldrich, 375 U.S. 249 (1963) (swa sponte cer-
tification); Clay v. Sun Ins. Office, Ltd., 363 U.S. 207 (1960) (va-
cating and remanding for certification).

- =

law questions. As Judge John R. Brown, one of the lead-
ing proponents of certification, wrote for the Eleventh Cir-
cuit: “(Rjather than risk pronouncing a result which [the
state supreme] court might ultimately elect not to follow,
we follow the course—often pursued by this * * * court,
with enthusiastic support of the U.S. Supreme Court—of
certifying the significant issues to the Supreme Court of
Florida for an authoritative answer.” Ageloff v. Delta
Airlines Inc., 860 F.2d 379, 388-389 (11th Cir. 1988). Cer-
tification is a “potentially enormously helpful procedure
under which * * * unresolved and important questions of
state law may be referred to the court best equipped to
provide answers to them.” Jones v. Heckler, 754 F.2d 519,
520 (4th Cir. 1985). Thus, ‘“‘the certification procedure is
a valuable device for securing prompt and authoritative
resolution of unsettled questions of state law.” Kidney v.
Kolmar Laboratories, Inc., 808 F.2d 955, 957 (2d Cir.
1987). By invoking certification, “ ‘both federal and state
judicial systems are the beneficiaries of a procedure rooted
in cooperative federalism.’ * * * [Certification is supported
by] our Erie duty * * * [and] principles of federalism.”
Boardman v. United Services Auto. Ass’n, 742 F.2d 847,
848 n.1, 851 (5th Cir. 1984) (citation omitted), cert. denied,
474 U.S. 980 (1985).

For these reasons, the “use [of certification] should be en-
couraged.” R. Stern, APPELLATE PRACTICE IN THE UNITED
STATES 172 (2d ed. 1989). “Lehman is a clear direction
to the courts of appeals to look favorably on the use of
certification procedures in diversity cases which present
difficult issues of state law.” 1A MOooRE’s FEDERAL PRAC-
TICE ¢ 0.203[5] at 2159 (2d ed. 1990). See also C. Wright,
THE LAW OF FEDERAL Courts 313 (4th ed. 1983) (“t]he
certification procedure has been regarded with quite an
extraordinary enthusiasm by the commentators”); P. Bator,
et al., HART AND WECHSLER’S THE FEDERAL COURTS AND

—~23—

THE FEDERAL SYSTEM 1382 (8d ed. 1988) (“{tJhe majority
of commentators have been enthusiastic about certifica-
tion’’); Note, Erie R.R. and State Power to Control State
Law: Switching Tracks to New Certification of Questions
of Law Procedures, 18 HorstrRa L. REv. 421, 484 (1989)
(“{w]hen a court fails to avail itself of the process of cer-
tification, the resulting burden may include unsettled areas
of law, inconsistent holdings [by state and federal courts]
and a return to the pre-Erie days of forum-shopping’’).
The decision below is conspicuously out-of-step with the
prevailing trend favoring a liberal utilization of state cer-
tification procedures.1!

In this case, the court of appeals failed to certify the
state-law issues to either the Michigan or the Florida Su-
preme Court. Before reversing the district court’s con-
sidered decision, the court of appeals on its own motion
should have certified any unresolved issues of state law
to the appropriate state supreme court. See Lehman
Brothers, 416 U.S. at 390-391. In fact, respondent moved
for certification, which the court of appeals denied. App.,

11 The practical advantages of certification have been confirmed
by a study prepared by the Federal Judicial Center. See C. Seron,
CERTIFYING QUESTIONS OF STATE LAW: EXPERIENCE OF FEDERAL
JUDGES (Federal Judicial Center 1983). As the report summarizes
(at v), “most judges suggested that the disadvantage of possible
delay is outweighed by the procedure’s advantages, specifically
that an accurate answer from the appropriate tribunal avoids fur-
ther litigation and that relations between state and federal courts
are improved.” The study also concludes that certification is rea-
sonably expeditious, with a median time to obtain the state-court
answer of six months (id. at 15)—a period that “must be set off
against the time that would be required for the federal court to
research and reach its own answer to the question certified to the
state court.” Jd. at 16. And certification actually may result “in
some economies of time. * * * [TJhe delay attending certification
is more than compensated by subsequent expedition of other cases
involving the same or related questions of state law.” Jd. at 17.

witless

infra, 19a.12 Furthermore, once the court of appeals dis-
agreed with the district court’s decision, thus indicating
that state law was not as clear as Ford (and the district
court) had believed, Ford filed a petition for rehearing
and for certification of state-law issues; although the court
denied the petition for rehearing, it simply ignored the
request for certification. Jd. at 20a-21la.

In these circumstances; review by this Court is war-
ranted. The Court has never established guidelines to
govern federal courts’ use of state-law certification pro-
cedures and, as this case compellingly demonstrates, the
Court’s guidance is urgently needed. The availability of
certification has grown enormously in recent years; at
least 38 states have now adopted certification procedures,
and a uniform state law has been promulgated (which has
been enacted in 26 states). See Stern, supra, at 171-172
& nn.80-82; see also 17A Wright, Miller, & Cooper, supra,
§ 4248 at 164, 167 & n.30. Certification represents an ef-
fective and efficient means for implementing the policies
of Erie and ensuring that the decisions of the lower fed-
eral courts accord with applicable state law. This Court’s
review is thus essential to enable state certification pro-
cedures to achieve their full benefits for cooperative fed-
eralism, informed decisionmaking, and judicial efficiency.
As an alternative to plenary review, the Court may wish
to vacate and remand the case to the court of appeals
to have it certify the state-law issues to the state supreme
court. See cases cited at page 21 & note 10, supra.

12 At the time, Ford —_— respondent’s motion for certifica-
tion on the ground that the district court’s ruling clearly was cor-
rect in light of Hampshire and should be However, given
the subsequent disagreement between the Sixth Circuit and the
district court over state law, certification became Bs sn in the
court of appeals and, as explained in the text, Ford promptly so
moved. See Lehman Brothers, 416 U.S. at 392-393 (Rehnquist, J.,
concurring) (losing party in court of appeals first sought certifica-

tion at rehearing stage).

—25—

II. THE COURT OF APPEALS’ EGREGIOUS DISREGARD
OF THIS COURT’S DIRECTIVES FOR DETERMINING
STATE LAW UNDER ERIE WARRANTS REVIEW

For the reasons discussed above, the court of appeals’
approach to the state-law issues in this important tort case
is not even arguably correct under Erie. The Sixth Cir-

cuit flouted all three principles established by this Court
for determining state law in diversity actions: it refused
to follow state-law decisions directly on point; it refused
to give any deference to the district court’s interpreta-
tion of state law; and it refused to certify the controlling
issues of state law to the state supreme court. Not sur-
prisingly, the court of appeals thereby fell into manifest
error in interpreting the law of two states.

The court of appeals’ decision unquestionably is of con-
siderable practical importance. To begin with, diversity
actions are a staple of federal litigation and require the
federal courts regularly to ascertain state law that is com-
plex and uncertain. The most recently published statistics
show that diversity cases have accounted for more than
25% of the docket of the federal district courts and ap-
proximately 15% of that of the courts of appeals; indeed,
the number of diversity cases filed in the district courts
nearly doubled between 1979 and 1988. See ANNUAL RE-
PORT OF THE DIRECTOR OF THE ADMINISTRATIVE OFFICE OF
THE UNITED STATES Courts 8-9 & Table 4, 145-146 Table
8-1A (1988). Thus, the way in which federal courts deter-
mine issues of state law under Erie has an enormous im-
pact on the federal judicial system.'* It is imperative that

13 Moreover, diversity cases put a disproportionate strain on the
resources of the federal judicial system. As the Federal Courts
Study Committee recently reported:

The problem is not merely that diversity cases misuse federal
judicial resources. It is that they misuse a lot of federal judicial

(Footnote continued on following page)

EE

—26—

the Erie rules not only be clear in theory but scrupulously
observed in practice.

The application of Erie principles to state statutes of
repose is itself a significant and recurring problem. Stat-
utes of repose are a common and critically important fea-
ture of state legal systems. The most recent survey of
the area found that 48 states had enacted a total of 98
product liability statutes of repose. See McGovern, The
Variety, Policy and Constitutionality of Product Liability
Statutes of Repose, 30 Am. U. L. REv. 579, 580 (1981). Our
research indicates that the situation is little different today.

Moreover, the court of appeals’ erroneous decision is not
confined to statutes of repose. On the contrary, the court’s
analysis would “‘presumfe]’’ (App., infra, 10a) that any
foreign state statute that does not expressly apply to out-
of-state companies is limited to in-state businesses. For
example, Florida recently adopted tort reform legislation
that limits defendants’ liability in various respects. See
Fla. Stat. Ann. §§ 768.73 et seq. (West Supp. 1990). This
legislation, like the Florida statute of repose at issue here,
is silent on the scope of its application and does not ex-
pressly include or exclude non-Florida companies. Under

13 continued
resources. * * * And the volume of filings understates diver-
sity jurisdiction’s impact. Diversity cases account for about half
the civil trials in federal court, and they frequently generate
complex procedural and jurisdictional problems, making them
more time-consuming and expensive to process than similar
claims in the state courts.

x * *&* * *
Diversity is. a source of friction between state and federal

courts * *
REPORT OF THE FEDERAL Courts Stupy CoMMITTEE 39-41 (1990).
The burdens of diversity cases are icularly significant for the

courts of appeals, which, as the Federal Courts Study Committee
found (at 10, 110), have “(tThe most accute problems of overload’’
and are facing a “crisis of volume” that “is beyond dispute.”

= =

the court of appeals’ reasoning, Ford and all other cor-
porations incorporated or headquartered outside Florida
would be denied the protections of this tort reform legisla-
tion if they are sued in Michigan federal district court
under diversity—even though, as in this case, the accident
occurred in Florida and the plaintiff is a Florida resident.

The Sixth Circuit’s interpretation of Michigan choice-of-
law rules for tort cases is a matter of particular practical
concern. Ford, General Motors, and Chrysler, as well as
other large corporations with headquarters in Michigan,
are involved in thousands of cases growing out of accidents
that occur across the country. Because these companies
are amenable to suit in Michigan, the court of appeals’
decision means that non-Michigan plaintiffs can routinely
bring their claims in Michigan federal court, thereby
avoiding whatever limitations have been imposed on such
claims by the state where they reside and where the ac-
cident happened.!* Indeed, within a week of the court of
appeals’ decision in this case, a plaintiffs’ lawyer in Miami
commented that the ruling “alerts the victims of car ac-
cidents in the other 49 states, where liability claims may
be limited by law, that they can now sue the manufac-
turer” in federal court in Michigan. Palm Beach Review,
Apr. 16, 1990, at 1, col. 1.

14 As respondent acknowledged in her motion for certification in
the court of appeals (at 6-7):

The conflict of laws issue presented in the present case is
a very important one, and one that may be e d to arise
with some frequency as out-of-state Plaintiffs bring products -
liability suits against Michigan manufacturers in federal courts
in Michigan. * * * Such suits may always be brought in a fed-
eral court in ee on the basis of diversity of citizenship.
* * * (Tyhe federal courts in Michigan would be weil-served

by a definitive decision by the Supreme Court of Michigan,
resolving the question of whether in such a case, Michigan’s
product liability law will be displaced in favor of the manufac-
turer-protecting law of the state where the accident occurred.

~28—

Accordingly, the court of appeals’ decision has severe ad-
verse consequences for both the federal district courts and
manufacturers within the Sixth Circuit. The decision be-
low iS a license for plaintiffs around the country to circum-
vent the statute of repose or other tort reform legislation
that is applicable in the state with the predominant inter-
est in the case. The result will be a substantial and unwar-
ranted burden on the federal courts and opens the door to
widespread nullification of state law and policy. This dis-
turbing development is squarely inconsistent with fun-
damental principles of federalism and plainly merits this
Court’s review.

CONCLUSION

The petition for a writ of certiorari should be granted,
and (1) the judgment below should be summarily reversed,
(2) the judgment below should be vacated and the case
remanded to the court of appeals for certification of the
state-law issues, or (3) the case should be set for brief-
ing and oral argument. In the alternative, the Court may
wish to hold the petition pending decision in Salve Regina
College v. Russell, No. 89-1629.

Respectfully submitted.

ARTHUR R. MILLER STEPHEN M. SHAPIRO
Langdell Hall Counsel of Record
1545 Massachusetts Avenue KENNETH S. GELLER
Cambridge, Massachusetts 02138 MARK I. LEVY
(617) 495-4111 JAMES C. SCHROEDER

Mayer, Brown & Platt
190 South LaSalle Street
JOHN M. THOMAS Chicago, Illinois 60603
Ford Motor Company (312) 782-0600
One Parklane Boulevard
Suite 300, Parklane Towers West
Dearborn, Michigan 48126
(313) 322-6743 Counsel for Petitioners

SEPTEMBER 1990

APPENDICES

—j1la—
APPENDIX A

No. 88-2137

UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT

CHRISTINE MAHNE, )
)
Plaintiff-Appellant, ) ON APPEAL from the
) United States District
v. ) Court for the Eastern
) District of Michigan.
FORD MOTOR COMPANY; _)
DONALD PETERSEN; and _ )
)
)
)

HAROLD MacDONALD,
Defendants-Appellees.

Decided and Filed April 9, i990

Before: NELSON and RYAN, Circuit Judges; and
MEREDITH, District Judge.*

RYAN, Circuit Judge. This case presents a choice of law
problem well-suited for a law school civil procedure ex-
amination. It requires us to decide whether Michigan or
Florida law governs the plaintiff's product liability action.
We conclude that Michigan law controls and, therefore,
reverse the judgment of the district court.

* The Honorable Ronald E. Meredith, United States District Judge
for the Western District of Kentucky, sitting by designation.

—2a—

I.

On April 16, 1985, Marlo Mahne, a Florida resident, was
a passenger in a 1967 Ford Mustang that was rear-ended
by another vehicle and burst into flames. The accident
occurred in Florida. As a result of the accident, Miss
Mahne, then 15 years old, was severely burned. Her
mother and next friend, Christine Mahne, brought a prod-
ucts liability action against defendant Ford Motor Com-
pany in a Michigan state court. Defendant’s headquarters
and principal place of business are located in Michigan and
the design, testing, and manufacture of the 1967 Ford
Mustang occurred there. The Michigan lawsuit was dis-
missed on forum non conveniens grounds, following which
plaintiff brought suit in a Florida state court. She volun-
tarily dismissed that action when defendants argued that
the suit was foreclosed by the Florida statute of repose
which bars product liability actions brought twelve years
after the date of delivery of the completed product to its
original purchaser. Fla. Stat. § 95.031(2) (1985) (amended
1986).

Plaintiff then brought the prese1.t action against Ford
and two of its officers in the District Court for the East-
ern District of Michigan, pursuant to the court’s diversity
jurisdiction. 28 U.S.C. § 1332. Plaintiff alleged that defen-
dants breached an implied warranty of fitness and negli-
gently designed, manufactured, and tested the vehicle’s
fuel system and rear-end structure. Defendants filed a mo-
tion to dismiss, maintaining that the law of Florida, the
place of the accident, controlled, and that Florida’s statute

1 Florida’s statute of repose was amended effective October 1,
1986. The amendment abolished the period of repose in product
liability actions. The amendment was not made retroactive. Melen-
dez v. Dreis & Krump Mfg. Co., 515 So.2d 735 (1987).

ilies

of repose barred plaintiff's suit. Plaintiff responded that
Michigan, not Florida, law governed the question of the
timeliness of the lawsuit in the federal court. The district
court, relying upon Hampshire v. Ford Motor Co., 155
Mich. App. 143, 399 N.W.2d 36 (1986), lv. denied, 428
Mich. 852 (1987), determined that Florida law was con-
trolling and that its statute of repose, as substantive law,
barred plaintiff's products liability action.2 This appeal
followed.

The sole issue before us is whether Michigan’s choice-
of-law rules would require that Florida’s statute of repose
be applied in favor of a Michigan manufacturer, thus bar-
ring plaintiffs products liability claim.

II.

It is elemental that when jurisdiction is based on diver-
sity of citizenship, a federal court must apply the choice-
of-law rules of the state in which it sits. Klaxon Co. v.
Stentor Electric Mfg. Co., 313 U.S. 487 (1941). Since plain-
tiff’s action was brought in the United States District Court
for the Eastern District of Michigan, Michigan choice-of-
law rules apply.

Prior t 1992, Michigan courts, in deciding choice-of-law
issues, applied the substantive law of the jurisdiction

2 The district court also held that even if Florida’s statute of
repose was considered procedural law, Michigan’s borrowing stat-
ute, M.C.L. § 600.5861, would require that Florida’s statute of
repose be applied. Since both ies on appeal agree that the stat-
ute of repose is substantive law and the Olmstead analysis con-
trols, we do not address the troublesome questions whether the
Florida statute of repose is a statute of limitations for purposes
of Michigan’s borrowing statute or whether under Michigan’s bor-
rowing statute a cause of action can accrue in a state, such as
Florida, where the suit would be barred.

—4g-—

where the wrong occurred, the so-called lex loci delicti
rule. Abendschein v. Farrell, 382 Mich. 510, 170 N.W.2d
137 (1969). However, in Sexton v. Ryder Truck Rental,
Inc., 413 Mich. 406, 320 N.W.2d 843 (1982), a majority
of the court, speaking through multiple opinions, was criti-
cal of the rigidities of lex loci and abandoned it as an ab-
solute rule.* Sexton, supra, at 433. Unfortunately, the
Michigan court, having jettisoned lex loci, 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. Id. at 433. The lead opinion in Sexton,
signed by three of the seven justices, concluded that lex
fori, the law of the forum, rather than lex loci, the law
of the place of the wrong, applied when Michigan resi-
dents, or corporations doing business in Michigan, were
involved in an accident in another state and appeared as
plaintiffs or defendants in a tort action in Michigan courts.
413 Mich. at 439.

A concurring opinion, also signed by three justices, in-
cluding a justice who had signed the lead opinion, found it
insignificant in Sexton that the accident had not occurred
in Michigan and reasoned that Michigan law should apply
since ‘(t]he status of ownership giving rise to the legal
consequence of liability has been regulated in Michigan
by [the owners’ liability statutes].”” 413 Mich. at 440-41.4

3° The author was a member of the Michigan Supreme Court when
Sexton was decided and dissented in the case, finding no reason
to abandon the rule of lex loci delicti as set forth in Abendschein
v. Farrell, 382 Mich. 510, 170 N.W.2d 137 (1969). The chief justice
concurred in the dissent. Sexton, supra, at 443.

4 The issue in the two consolidated cases in Sexton was whether
Michigan’s motor vehicle and aircraft owners’ liability statutes ap-
plied and, therefore, imposed liability on the defendant-owners of
the vehicles for the negligent acts of the operators.

—5a—

The justice who concurred in both the lead opinion and
the concurring opinion wrote still a third opinion, to which
no other justice subscribed, undertaking to explain the
lead and concurring opinions, and expressing the view that
Michigan courts should apply Michigan law in all personal
injury or property damage actions brought in Michigan ~
unless there is a compelling reason to apply the law of
a foreign jurisdiction. 413 Mich. at 442. None of the opin-
ions in Sexton garnered the _—— of a majority of
the seven justices.

Five years later, in Olmstead v. Anderson, 428 Mich.
1, 400 N.W.2d 292 (1987), the Michigan Supreme Court,
which by then included six justices who were not seated
when Sexton was decided, attempted to clarify the deci-
sion in Sexton. Olmstead involved a Minnesota plaintiff
suing a Michigan defendant for injuries suffered in a Wis-
consin automobile accident.

The court noted that Sexton’s plurality lead opinion had
proven difficult for Michigan and federal courts to apply
in that some courts construed Sexton to hold that lex fori
only applied to personal injury actions where the parties
were residents of Michigan, while other courts understood
Sexton to require a weighing of the interests of the in-
volved states to determine which state had the greater
interest in having its law applied. Olmstead, supra, at 22.
The Olmstead court noted that the interest-weighing ap-
proach to determining what law to apply in choice-of-law
cases appeared to be the tack taken by a majority of
courts that had attempted to apply Seaton, and also ap-
peared to reflect “the trend.” Jd.

After formulating a few generalizations from Sexton, the
Olmstead court declared that, consistent with the policy
of Sexton, lex fori rather than lex loci is the presump-

<a

tive rule of thumb for choice of law issues in tort cases,
but that the issue must be decided on a case-by-case basis.
The question to be answered in each case is:

[WJhether [the] case [at hand] presents a situation in
which reason requires that foreign law supersede the
law of this state.

Id. at 24.

The Olmstead court’s answer to that question was as
follows:
[Since] Wisconsin has no interest in seeing its law
applied, we see no rational reason to displace Mich-
igan law in this case. Since there is no reason to
apply Wisconsin law, it is, therefore unnecessary to
undertake an analysis of the interests of Michigan.

However, in another case in which the state of in-
jury does have an interest in having its law applied,
such an analysis might. be necessary and proper.

Id. at 29-30

Unlike the situation in this case, since Olmstead involved
a non-Michigan plaintiff suing a Michigan defendant for
damages suffered in a Wisconsin accident, the lex loci
jurisdiction was not the place of residence of either party.
In this case, to repeat, a Florida resident is suing a Mich-
igan defendant for damages suffered in a Florida accident.
However, we are satisfied that those differences do not
affect the analysis that must govern our decision whether
Florida or Michigan law applies in this case.

Ill.

It is perhaps worth noting, if indeed elemental, that a
federal court in a diversity action is obligated to apply
the law it believes the highest court of the state would

—Ta—

apply if it were faced with the issue. Tennessee River
Pulp & Paper Co. v. Eichleay Corp., 708 F.2d 1055, 1057
(6th Cir. 1983). We think it is very clear from the lengthy
discussion in Olmstead that the Michigan Supreme Ccurt
would hold, in a suit brought in a Michigan court by a
party who is not a citizen of Michigan against a Michigan
resident, arising out of an accident that occurred outside
of Michigan and in the state of the plaintiff's residence,
that Michigan law as the forum law presumptively con-
trols the litigation; and further, that there must be a
rational reason to displace Michigan law. To determine
whether there is such a rational reason, a court’s first
duty is to examine the foreign state’s interest, if any, in
having its law applied. If there is no reason to apply the
foreign state’s laws, there is no need to undertake an
analysis of Michigan’s interests. Olmstead, 428 Mich. at
30. Only where the foreign state is found to have an in-
terest in having its law applied does an analysis of Mich-
igan’s interests become necessary. Jd. at 30. Absent a
finding of some interest on the part of the foreign state,
there is no occasion to examine Michigan’s interest and
the presumption that Michigan applies is controlling.

The Olmstead court noted that regardless of whether
tne foreign law sought to be applied is the law of the
state where the wrong occurred or the law of the state
of plaintiff's residence, the analysis will be the same. /d.
at 29 n.12. However, the court failed to mention whether
the analysis would be the same if the state of plaintiff’s
residence is also the state where the wrong occurred, the
circumstances of the present case. The point is problem-
atic because the Olmstead court distinguished the facts
of that case from a number of post-Sexton cases brought
in Michigan by nonresident plaintiffs whose injuries oc-
curred in states other than where the plaintiffs resided

a heieeeeenll

—8a—

or had substantial contacts and whose contacts with Mich-
igan “could be described as neither fleeting nor fortui-
tous.”’ 428 Mich. at 23. In such cases, the court noted,
lower courts had usually applied lex loci delicti, the place
of the wrong, rule. Jd.

Despite this problem, we believe the court in Olmstead
intended to set forth a general rule for conflicts-of-law
issues. Thus, we presume the Michigan court, if presented
with the facts before us, would hold that even where
plaintiff's injury occurred in the state where plaintiff
resides, the same interest-analysis approach would apply.
Therefore, we assume that Michigan law applies unless
it appears that Florida has an interest in its law being
applied and, if it has, such interest is sufficient that ‘“rea-
son” requires that the Florida statute of repose “displace”
the law of the forum. Olmstead, 413 Mich. at. 24.

As the Olmstead court noted, where the defendant is
a citizen of Michigan he cannot argue that the application
of Michigan law would defeat his expectations. Jd. at 27.
Similarly, where neither party is a citizen of the state
where the wrong occurred, that state has no interest in
the litigation unless the issue is one involving conduct as
opposed to compensation. Jd. at 29. Moreover, where the
statute is designed to protect local interests, there is no
reason to extend its benefits to a nonresident whose state
has no similar statute. Jd. at 29.

IV.

The district court, in granting defendants’ motion to dis-
miss, found the pre-Olmstead case of Hampshire v. Ford
Motor Co., 155 Mich. App. 143, 399 N.W.2d 36 (1986), lv.
denied, 428 Mich. 852 (1987), controlling, largely because
it found the facts presented in Hampshire were “virtually
identical” to the facts in the instant case.

Oa.

In Hampshire, the plaintiff, a California resident, was
seriously injured in California when the car he was driv-
ing was struck head-on by a stolen vehicle. The plaintiff
brought an action in Michigan against the stolen vehicle’s
manufacturer, defendant Ford Motor Company, alleging
that Ford negligently designed the ignition-locking system
because it failed to operate as an anti-theft device. 155
Mich. App. at 145. The Hampshire court held that pur-
suant to Sexton, supra, a comparison of each jurisdiction’s
interests in having its law govern was required. 155 Mich.
App. at 146. The court concluded that California’s interest
was comparatively greater since the plaintiff resided in
California, the accident occurred there, the vehicle was
registered and licensed in that state, and the sole con-
nections to Michigan were that the defendant’s head-
quarters was there and the action was filed in that state.
As a result, the court applied the California substantive
law. 155 Mich. App. at 147. The court also noted that the
plaintiff did not object to the application of California law
at the hearing on the defendant’s motion for summary
judgment. Jd.

The plaintiff insists that the Michigan Supreme Court,
in Olmstead, overruled Hampshire. We do not necessarily
agree, but we need not address that matter because we
are satisfied that, on the facts before us, we need not
make a comparative analysis of the interests of Michigan
and the foreign state as was done in Hampshire.

Under the Olmstead formula, the first step is to deter-
mine what interest, if any, the foreign state has in hav-
ing its law applied, and only if Florida has an interest
of some kind will Michigan’s interest in having its law
applied be examined. Moreover, should we reach the com-
parative interest-analysis step, Olmstead requires con-
sideration of more factors than merely the plaintiff's resi-

1 |

—10a—

dence, the place of the wrong, and the connections with
the forum state, as suggested by defendants in reliance
on Hampshire. It also requires consideration whether the
foreign law sought to be applied will benefit the interests
it was designed to protect. Olmstead, 428 Mich. at 28-29.

¥:

The Florida statute of repose in effect at the time of
plaintiff's accident provides:

Actions for products liability ... must be begun
within the period prescribed by this chapter ... but
in any event within twelve years after the date of de-
livery of the completed product to its original pur-
chaser ..., regardless of the date the defect in the
product ... was or should have been discovered.

(Emphasis added.) Although legislative history concern-
ing the statute is scarce, it was presumably designed to
protect Florida manufacturers from liability for injuries
caused by products which had been on the market for
over twelve years. 11 Nova L.J. 849, 852 (1987).5

Defendant argues that Florida’s statute of repose applies
because Florida is where plaintiff resides, the vehicle was
licensed, the accident occurred, and the injuries sustained.
Moreover, defendant points out that it does business in
Florida. However, if applied, the Florida statute of repose
would not benefit the interest it was designed to protect.

. = tably, it was not until the Florida Supreme Court answered

uestion in Pullum v. Cincinnati Inc., 476 So.2d 657,
659 (1985), the Florida statute of repose was upheld as consti-
tutional even if it barred access to the courts. The statute of re-
pose was amended by the legislature the following year and refer-
onan to product liability claims was deleted. 11 Nova L.J. 849, 859

etna I Ot ee

—lla—

Instead of protecting a Florida manufacturer as intended,
the statute of repose would protect an out-of-state manu-
facturer at the expense of a Florida resident.

Plainly, the Florida statute does not benefit plaintiff,
a Florida resident, under the circumstances of this case
since the statute would bar her action against a nonresi-
dent defendant whose own state law, the law of Michigan,
affords no similar protection for a manufacturer. Olmstead,
supra, at 29. Further, defendants cannot argue that apply-
ing Michigan law would defeat their expectations since
the individual defendants reside there and defendant Ford
Motor Company has its headquarters in that state. Olm-
stead, supra, at 27. Thus, there is simply no reason to
extend the benefits of the Florida statute of repose to
the Michigan defendants. Since Florida has no interest in
having its statute of repose applied, Michigan law applies
without regard to the nature or quality of Michigan’s in-
terests. Olmstead, supra, at 30.

We hold, therefore, that since there is no rational reason
to displace Michigan law, the presumptive lex fori rule
directs that Michigan law governs the case.

The judgment of the district court is REVERSED and
the case is REMANDED for further proceedings.

—12a—
APPENDIX B

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

CHRISTINE MAHNE,

Individually and as Parent,
Guardian and Best or Next
Friend of MARLO MAHNE,

a minor,
Plaintiffs,
C.A. No. 87-CV-60110-AA
vs.

FORD MOTOR COMPANY, HON. GEORGE La PLATA

et al.,
Defendants.
J

ORDER GRANTING DEFENDANTS’
MOTION TO DISMISS

I. INTRODUCTION

On August 16, 1985, Plaintiff, Marlo Mahne, then fifteen
years of age, was a rear seat passenger in a 1967 Mustang
manufactured and designed by Defendant, Ford Motor
Company.' The vehicle, which was stopped at a light just
south of Fort Pierce, Florida, burst into flames after it

. eee Rents Save © Se et Teen Pee
ig and as next of friend for Marlo Mahne, for simplicity
sake, Marlo shall be referred to as Plaintiff.

—13a—

was struck in the rear by another vehicle. As a result,
Marlo Mahne suffered severe third and fourth degree
burns over 70% of her body.

Plaintiff, on April 2, 1987, commenced this product lia-
bility action against three named Defendants including
Ford Motor Company, Donald Petersen and Harold Mac-
Donald. In Count I, Negligence, of her two count Com-
plaint, Plaintiff avers that “(Defendants had a duty to de-
sign, manufacture, test and sell the Ford Mustang vehicle
in conformance to Michigan Common Law and Statutes.”
Specifically, Plaintiff contends that the Defendants negli-
gently and carelessly designed, manufactured and tested
the fuel system and rear-end structure in question so that
it could not withstand reasonably foreseeable impact. Al-
leging that the Mustang was defective, unreasonably dan-
gerous, unsafe and unfit for its reasonably foreseeable
uses, Plaintiff maintains in Count II that Defendants
breached an implied warranty.

Il. CHOICE OF LAWS

As a preliminary question, the Court must determine
whether Florida or Michigan substantive law controls this
action. In suits governed by state law a federal court ap-
plies the choice of law rules of the forum state.? Because
of the exhaustive history contained in a multitude of Mich-
igan court decisions regarding the demise of the tradi-
tional lex loci delicti rule, the law of the state where the
wrong occurred governs, the pervasive existing rule will
be discussed.*

® Klazon Co. v. Stentor Electric Manufacturing Co., 313 U.S.
487 (1941).

* See Olmstead v. Anderson, 377 N.W.2d 853 (1987); Sexton v.
Ryder Truck Rental, Inc., 320 N.W.2d 843 (1982).

—l4a—

After the release of numerous decisions by the Court
of Appeals which entertained the choice of laws issue, the
Michigan Supreme Court, realizing the need for uniform-
ity, adopted the interests-balancing approach. Specifical-
ly, the Court stated:

“In sum, Michigan courts have not been entirely con-
sistent in interpreting Sexton as being applicable only
in cases where the parties are all Michigan residents
bringing an action for personal injury. Other courts
have read Sexton to automatically require a balanc-
ing of interests in the event that the case before
them is not on all fours with Sexton. The latter view
appears to be the position in the majority of cases,
as well as the trend.’

The cases in which the plaintiff was not a resident but
brought suit in Michigan have generally applied lex loci
delicti, either through a strict reading of Sexton or by
weighing the interests of the states involved.5

In the instant case, because Plaintiff resides in [Florida]
and Defendant is headquartered in Michigan, the question
to be resolved is whether this case presents a situation
in which reason requires that foreign law supersede the
law of this state. Recently, the Michigan Court of Ap-
peals, in Hampshire v. Ford Motor Company® was pre-
sented virtually an identical set of facts facing this Court.
In Hampshire, Plaintiff, a California resident, was injured
in a motor vehicle accident which occurred in California.
As a result of his injuries, Plaintiff instituted an action
in Michigan against the manufacturer, Ford Motor Com-

4 Olmstead at 298.

. Vogh v. American International Rent-A-Car, Inc., 350 N.W.2d
882 (1984).

6 399 N.W.2d 36 (1986).

ko tw

a ee ee ee ee —_

aii.

pany, alleging negligent design of the ignition locking sys-
tem. Recognizing the need to employ the balance of inter-
est test, the Court, determining that California substan-
tive law applied, considered that:

(1) Plaintiff resided in California;
(2) the accident occurred in California;
(3) the Ford vehicle was registered in California;

(4) at the hearing on Defendant’s Motion for Sum-
mary Judgment, Plaintiff's counsel did not ob-
ject to the application of California law; and

(5) the connections to Michigan are limited to the
fact that Ford’s headquarters are located in
Michigan and the action was filed in this state.

In the instant case, Plaintiff resides in Florida, the acci-
dent occurred in Florida, the vehicles involved were regis-
tered and insured in Florida and the connections to Mich-
igan are limited to the situs of Defendant’s headquarters
and the Plaintiffs choice of forum. While it is true that
no specific methodology for employment of the interest
balancing test has been adopted, leaving each case to be
evaluated on the circumstances presented, the facts in this
action parallel the facts presented in Hampshire. In light
of the Sixth Circuit Court of Appeals decisions in Bennett
v. Enstrom Helicopter Corp.,7 and noting that there is
no general public policy in Michigan to protect all who
buy products manufactured in Michigan,® this Court is
persuaded that the holding in Hampshire is controlling.
Accordingly, Florida substantive law governs this action.

7 686 F.2d 406 (6th Cir. 1982).
8 Buettgen v. Volkswagen A.G., 505 F.Supp. 84 (E.D. Mich. 1980).

_

III. MOTION TO DISMISS

Having determined that Florida substantive law governs
this action, the Court turns to Defendants’ Motion to Dis-
miss or in the Alternative for Summary Judgment.® In
their motions Defendants maintain that the Florida Stat-
ute of Repose bars Plaintiff's suit. Conversely, Plaintiff
contends that the Statute of Repose is a procedural stat-
ute of limitation and thus should not be applied to an ac-
tion filed in Michigan. Specifically, §95.031(2), Florida
Statute (1985), provides in pertinent part:

(2) Actions for products liability and fraud under
§95.11(3) must be begun within the period pre-
scribed by this chapter, with the period running
from the time the facts giving rise to the cause
of action were discovered or should have been
discovered with the exercise of due diligence ...
but in any event within 12 years after the date
of delivery of the completed product to its orig-
inal purchaser ... regardless of the date the de-
fect in the product ... was or should have been
discovered.” (emphasis added)

Whether the Statute of Respose is substantive or pro-
cedural, its effect on this action is consistent. Because the
Court has previously concluded that Florida substantive
law governs this action, if the statute is deemed substan-
tive law its application to a product liability action involv-
ing a vehicle which has been in the stream of commerce
well in excess of twelve years would bar this action. If
the statute is deemed procedural in nature the Michigan

® Each Defendant, Petersen, Ford Motor Company and MacDonald,
filed a separate Motion to Dismiss or in Alternative for Summary
Judgment ad ing basically the same issues. For simplicity sake
all three motions shall be entertained in this opinion.

stoi

ltl =

aunantis

at eRe re ea

othe at nthe BW 2 hotel

pious branes 30

—17a—

borrowing statute would apply. Specifically, M.C.L.A.
§600.5861 provides:

“An action based upon a cause of action accruing
without this state shall not be commenced after the
expiration of the statute of limitations of either this
state or the place without this state where the cause
of action accrued, except that where the cause of ac-
tion accrued in favor of a resident of this state the
statute of limitations of this state shall apply.”

Because the cause of action accrued in Florida, the time
when all elements of the cause of action were present,
and because Plaintiff is not a resident of the State of
Michigan, the Florida statute of limitations must be bor-
rowed and applied to this action.!% !!

In 1986 the Florida legislature amended section 95.031(2)
repealing the Statute of Repose in product liability ac-
tions. The Plaintiff contends that the repeal of this statute
should be applied retroactively. The Supreme Court of
Florida in Melendez v. Dreis and Krum Manufacturing
Company’? recently put this issue to rest. Specifically,
the Court stated that because there was no clear mani-
festation of retroactive effect, the amended statute can-
not operate retrospectively.

In an attempt to circumvent the application of the bor-
rowing statute to this action, Plaintiff maintains that

10 Buettgen, supra at 853.

11 Under this section, the period of limitation applicable to an ac-
tion filed in Michi by a nonresident and based on a cause of
action that accrued outside of Michigan is either that which is pro-
vided by the statute in Michigan or that which is provided by the
state where the cause of action accrued, whichever bars the action.
See, Markarow v. Volkswagen of America, Inc., 403 N.W.2d 563
(1987).

12

—18a—

because Defendants Petersen and MacDonald could not
be sued in Florida the cause of action could not have ac-
crued there and thus the Florida Statute of Repose can
not offer them protection. In light of the primary pur-
pose of the borrowing statute, to prevent forum shopping,
Plaintiff's position at first blush contains merit.1* How-
ever, in Michigan, a cause of action accrues where the
accident occurred.!4 A review of the Michigan cases does
not offer an alternative determination of when or where
an action accrues. Accordingly, the Court is bound by the
interpretation which the Michigan courts have ascribed.

IV. CONCLUSION

While this Court is genuinely sympathetic to the Plaintiff,
the Statute of Repose bars this action. In GRANTING
Defendant’s Motion, Plaintiff's Complaint is DISMISSED.

/s/George La Plata

GEORGE La PLATA
U.S. District Judge

September 28, 1988
Ann Arbor, MI

13 In support of her position, Plaintiff relies on a Second Circuit
Court of Appeals action in which the Court, when interpreting a
similar borrowing statute, opined:
“When it (the borrowing statute, CPLR 202) speaks of ‘“‘ac-
crual” of a cause of action, it must logically refer to a cause
of action upon which a lawsuit may be brought...”

Although the immediate occasion of the reference was to the
time when a cause of action began, the statement reflects the
New York Court’s perceptive awareness that application of
New York’s borrowing statute depends upon the presence of
its key ingredient, “‘a cause of action upon which a lawsuit
may be brought.”

Stafford v. International Harvester Co., 668 F.2d 142, 151 (1981).

14 See Turner v. Ford Motor Co., 265 N.W.2d 400, 402 (1978);
Parish v. B.F. Goodrich Co., 235 N.W.2d 570 (1975).

0 ES SARE BRE PT BBA cd OL Da ET GOLLY BNE aC OL ae catches ae

—19a—

APPENDIX C

No. 88-2137

UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT

CHRISTINE MAHNE, )
Plaintiff-Appellant

vs. ) ORDER
FORD MOTOR COMPANY, ET AL.,
Defendants-Appellees

[Filed August 24, 1989]

Upon consideration of the motion of the appellant for
certification to the Supreme Court of the State of Mich-
igan of a controlling question of law, and the response
of the appellees in opposition thereto,

IT IS ORDERED that the motion be, and it hereby is,
denied.

ENTERED BY ORDER OF THE COURT
Leonard Green, Clerk

/s/Leonard Green/dr

—20a—

APPENDIX D

No. 88-2137

UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT

CHRISTINE MAHNE, PARENT, )
GUARDIAN AND BEST OR NEXT )
FRIEND OF MARLO MAHNE, )
A MINOR, )
Plaintiff-Appellant, )
v. ) ORDER
)
FORD MOTOR COMPANY; DONALD _)
PETERSEN; HAROLD MacDONALD, _)
)
)

Defendants-Appellees

[Filed June 18, 1990]

BEFORE: NELSON and RYAN, Circuit Judges; and
MEREDITH*, United States District Judge.

The Court having received a petition for rehearing en
banc, and the petition having been circulated not only to
the original panel members but also to all other active
judges of this Court, and no judge of this Court having
requested a vote on the suggestion for rehearing en banc,
the petition for rehearing has been referred to the original
hearing panel.

* Hon. Ronald E. Meredith sitting by designation from the West-
ern Discrict of Kentucky.

whe Nate Oe i A RR rely

|
.
.

ee ebraiapd:

—2la—

The panel has further reviewed the petition for rehear-
ing and concludes that the issues raised in the petition
were fully considered upon the original submission and
decision of the case. Accordingly, the petition is denied.

ENTERED BY ORDER OF THE COURT

/s/Leonard Green
Leonard Green, Clerk

—229—

APPENDIX E

STATUTES AND RULES INVOLVED

The Florida statute of repose relevant to this products
liability suit provides:

Actions for products liability and fraud under
s.95.11(3) must be begun within the period prescribed
in this chapter, with the period running from the time
the facts giving rise to the cause of action were dis-
covered or should have been discovered with the ex-
ercise of due diligence, instead of running from any
date prescribed elsewhere in s.95.11(8), but in any
event within 12 years after the date of delivery of the
completed product to its original purchaser or within
12 years after the date of the commission of the al-
leged fraud, regardless of the date the defect in the
— or the fraud was or should have been dis-
covered.

Fla. Stat. Ann. § 95.031(2) (West 1982) (emphasis added).

The Michigan Rules of Court provide the following pro-
cedure for the certification of state-law issues to the Mich-
igan Supreme Court:

When a federal court or state appellate court con-
siders a question that Michigan law may resolve and
that is not controlled by Michigan Supreme Court
precedent, the court may on its own initiative or that
of an interested party certify the question to the
Michigan Supreme Court.

_ Mich. Ct. R. 7.305(B) (West Supp. 1989).

The Florida Rules of Appellate Procedure provide the
following procedure for the certification of state-law issues
to the Florida Supreme Court:

=.

The discretionary jurisdiction of the Supreme Court
may be sought to review * * * questions of law cer-
tified by the Supreme Court of the United States or
a United States Court of Appeals that are determi-
native of the cause of action and for which there
is no controlling precedent of the Supreme Court of
Florida.

* * * * *

Upon either its own motion or that of a party, the
Supreme Court of the United States or the United
States Court of Appeals may certify a question of
law to the Supreme Court of Florida whenever the
answer is determinative of the cause and there is

no controlling precedent of the Supreme Court of
Florida.

Fla. R. App. P. 9.030(aX2XC), 9.150(a) (West 1983).

—24a—

APPENDIX F

RULE 29.1 LIST OF SUBSIDIARY COMPANIES

Ford Motor Company has no parent corporation. The
following is a list of domestic and foreign companies in
which Ford Motor Company owns a significant (not neces-
sarily controlling) interest, but which are not wholly-owned
by Ford:

United States of America

Airlease Ltd.

Aries Technology

AT&T Automotive Services, Inc.
AT&T Fleet Services

Autolatina America, Inc., (Del)
Beech Holdings

Capricorn Investors Ltd.

Carlex Glass Company

Carnegie Group Inc., (Del)
Ceradyne, Inc.

Cimflex Teknowledge Corporation, (Penn)
Dunlop Automotive Composites Inc., (Delaware)
Edelson Technol Partners II
Eveleth Taconite Company, (Minn)
Excel Industries, Inc.

Fairtel Associates

Gecars, Inc.

Humbolt Mining Company
Inference Corporation
Lincoln-Rowe Management, (Mich)
ny my Realty ee
New River Castings Com

Park Ridge Corporation, if
Penstone, Inc.

Renaissance Center Venture

Rouge Steel Com
Seating Systems ; Wadiectede, Inc.

—25a—

Software Productivity Consortium

T.G. Ford Assoc.

U.S. Equipment Income Fund I

U.S. Equipment Income Fund II

U.S. Equipment Income Fund III

The American Road Insurance Company, (Mich)

View Engineering, Inc.

Argentina

Autolatina Argentina S.A.

Autolatina Argentina S.A. de Ahorro Para Fines
Determinacos

Invercred Compania Financiere S.A.

Transax Sociedad Anonima, Comercial, Industrial,

y Financiera

Velhowiaen Inversiones S.A.

Volkswagen Sociedad Anonima de Ahorro Para Fines
Determinados

Australia

Australian Road Credit Limited

Ford Aerospace of Australia Pty., Ltd.
Ford Credit Australia Limited

Ford Credit Australia Wholesale Limited
Ford Motor Company of Australia Limited
Ford New Holland Australia Limited
Ford Sales Company of Australia Limited
New Holland Holdings Pty., Limited

Austria

Ford Bank Aktiengesellschaft (Austria)
Ford Motor Company (Austria) K.G.

Belgium

Ford Credit N.V.
Ford Motor Company (Belgium) N.V.
Ford Tractor (Belgium) Limited

—26a—

Brazil
Apolo—Administradora de Bens S/C Ltda.
Autolatina Distribuidora de Titulos e Valores
Mobiliaros Ltda.

Autolatina Financiadora S.A.—Credito,
Financiamento e Invest.

Autolatina Leasing S/A—Arrandamento Mercantil

Autolatina Previdencia Privada

Autolatina S.A.

Autolatina—Comercio, Negocios e Participacoes Ltda.

Consorcio Nacional Ford Ltda.

Consorcio Nacional Volkswagen Ltda.

Ford Brasil S.A.

Ford Distribuidora de Productos de Petroleo Ltda.

Inter-Locadora S/A

Sociedade Paulista de Aparelhos Domesticos
“SPAD” Ltda.

Transglobal Corretagem de Seguros Ltda.

Volkswagen de Brasil S/A

Volkswagen Factoring—Fomento Comercial S/A

Canada

Conix Corporation, (Del.)

Ford Motor Company of Canada, Limited
Nascote Industries, Inc., (Del.)

Trans Canada Glass Ltd.

Denmark
Ford Motor Company A/S

England

AC Cars Limited

Aston Martin (RDP) Limited

Aston Martin Finance Limited

Aston Martin Lagonda Design Limited
Aston Martin Lagonda Group Limited
Aston Martin Lagonda Limited

—27a—
Aston Martin gear U.S.A., Ine.

Dunlop Automotive Composites (UK) Limited
Iveco Ford Truck Limited
Lagonda Properties Limited

Ford Investitions-GmbH

Ford Versorgungs-Und Unterstutzungseinrichtung
GmbH

Holland
Ford Nederland B.V.

India
Escorts Tractors Limited

Japan
Autorama, Inc.
ee Ford Tractor “~¥, Ltd.
apan Climate Systems Corporation
Mazda Motor Corporation

Korea

Kia Motors Corporation
Korean Automotive Products Corporation

—28a—

Mexico

Fabrica de Tractores Agricolas S.A. de C.V.
Implementos Agricolas Mexicanos, S.A.
ACONA B.V. |

Nemak S.A. |

Vitroflex S.A.

New Zealand
Vehicle Assemblers New Zealand Ltd.

Norway

Ford Motor Norge A.S.
Ford New Holland A/S

Sweden

Ford Credit AB
Ford Motor Company Aktiebolag

Switzerland
Ford Credit S.A.

Taiwan

Ford Enterprise Company Taiwan, Ltd.
Ford Lio Ho Motor Co. Ltd.

Turkey
Otosan Otomobile Sanayii A.S.

Venezuela

FANATRACTO—Fabrica Nacional de Tractores
y Montores S.A.

—29a—

AMIM Holdings Sdn. Bhd.

Associated Motor Industries Malaysia SDN.BHD.
Ford Taiwan Services, Limited

Halla Climate Control Corporation

Oy Ford Credit Rahoitus

Transcom Insurance Limited

AUTOMOBILE DEALERSHIPS

Al Bennett Ford Sales of Flint, Inc.
Al Neyer Ford, Inc.

Alberts-Johnson Ford, Inc.

Albion Ford-Mercury, Inc.

Alpena Ford Lincoln-Mercury, Inc.
Altoona Ford, Inc.

Baranco Lincoln-Mercury, Inc.

Bear Country Ford Lincoln-Mercury, Inc.
Berea Ford, Inc.

Big Valley Ford Lincoln-Mercury, Inc.
Will Russell Ford, Inc.

Buffalo Ford-Mercury, Inc.

C&L Lincoln-Mercury, Inc.

Campus Ford, Inc.

Canal Ford Lincoln-Mercury, Inc.
Castle Rock Ford-Mercury, Inc.
Champion Ford of Scranton, Inc.
Champion Motors, Inc.

Clinton Ford Lincoln-Mercury, Inc.
Coastal Ford, Inc.

Columbus Ford-Mercury, Inc.
Community Ford-Mercury, Inc.
Cornelia Ford Lincoln-Mercury, Inc.
Courtesy Ford Lincoln-Mercury Sales, Inc.
Courtesy Ford Lincoln-Mercury, Inc.
Cranberry Lincoln-Mercury, Inc.
Crossroads Ford-Mercury, Inc.
Crossroads Ford, Inc.

Crown Lincoln-Mercury, Inc.

Delta Ford Sales, Inc.

—30a—

Duryea Ford, Inc.

Dyersburg Ford Lincoln-Mercury, Inc.
Economy Ford, Inc.

Edgar Ford, Inc.

Elkins Fordland, Inc.

Empire Ford, Inc.

Fairway Ford of Augusta, Inc.
Farmington Ford-Mercury, Inc.

Fort Valley Ford, Inc.

Freedom Ford Sales, Inc.

Friendship Ford, Inc.

Ft. Walton Beach Lincoln-Mercury, Inc.
Gold Star Ford Lincoln-Mercury, Inc.
Greater Cleveland Ford Mercury, Inc.
Green River Ford-Mercury, Inc.
Greenville Ford-Mercury, Inc.

Harbor Lincoln-Mercury, Inc.

Heritage Ford-Mercury, Inc.

Highland LM DBA Tyson LM
Hillsboro Ford-Mercury Sales, Inc.
Hood River Ford-Mercury, Inc.

Hub City Ford-Mercury, Inc.

Hunt County FLM, Inc., DBA Greenville FLM
Illini Lincoln-Mercury Sales, Inc.
Independence Ford, Inc.

Lake County Ford-Mercury, Inc.
Lakeland Ford Lincoln-Mercury, Inc.
Leader Motors Inc., DBA Leader L-M
Los Ramos Ford Lincoln-Mercury, Inc.
M&M Ford Lincoln-Mercury, Inc.
Marino Ford, Inc.

Marksville Ford Lincoln-Mercury, Inc.
McGehee Auto Plaza, Inc.

Metro Ford Automobile Sales, Inc.
Mon Valley Lincoln-Mercury, Inc.
Mountain Home Ford-Lincoln-Mercury, Inc.
lNatchitoches Ford L-M Sales, Inc.
Noble Ford Lincoln-Mercury West, Inc.
Northhampton Ford, Inc.

—3la—

Northwoods Ford-Lincoln-Mercury, Inc.
Osseo Ford, Inc.

Ottawa Ford Lincoln-Mercury, Inc.
Park Ford Sales, Inc.

Pavilion Lincoln-Mercury, Inc.

Pochelon Lincoln-Mercury, Inc.

Red Bluff Ford-Mercury, Inc.

Ripon Ford-Mercury, Inc.

River View Ford-Mercury, Inc.

Royal Lincoln-Mercury Sales, Inc.
Saginaw Ford DBA All American Ford
Shoals Ford, Inc.

Sonoma Ford, Inc., DBA Sonoma Ford-L-M
Spalding Ford Lincoln Mercury Sales, Inc.
Springfield Ford Lincoln-Mercury, Inc.
Suburban Ford Lincoln-Mercury, Inc.
Sun Valley Ford Lincoln-Mercury, Inc.
Sunbelt Ford-Mercury, Inc.

Team Ford, Inc.

Tower Ford Mercury, Inc.

Town & Country Lincoln-Mercury, Inc.
Tropical Ford, Inc.

Ukiah Ford-Lincoln Mercury, Inc.
Union City Ford Lincoln-Mercury, Inc.
Universal Ford Sales, Inc.

University Ford of Peoria, Inc.
Vandalia Ford Lincoln-Mercury, Inc.
Varsity Ford Lincoln-Mercury, Inc.
Verde Valley Ford Lincoln-Mercury, Inc.
Victory Ford, Inc.

Wellington Circle Motors, Inc.

West Covina Lincoln-Mercury, Inc.
Western Ford-Mercury, Inc.

Westwood Ford Lincoln-Mercury, Inc.
Yakima Valley LM DBA Sun City LM
32 Ford-Mercury, Inc.

—32a—

TRUCK DEALERSHIPS

Atlantic Ford Truck Sales, Inc.
Bayou City Ford Truck Sales, Inc.
Beltway Ford Truck Sales, Inc.
Bi-State Ford Truck Sales, Inc.
Bridge-Haven Ford Truck Sales, Inc.
Central Ford Truck Sales, Inc.
Crossroads Ford Truck Sales, Inc.
Delta Trucklease, Inc.

Golden State Ford Truck Sales, Inc.
Keystone Ford Truck Sales, Inc.
Lakeland Ford Truck Sales, Inc.
Mid-Cal Ford Truck Sales, Inc.
Mid-States Ford Truck Sales, Inc.
Miramar Ford Truck Sales, Inc.
Motor City Ford Truck, Inc.
Northside Ford Truck Sales, Inc.
River City Ford Truck Sales, Inc.
Sacramento Valley Ford Truck Sales, Inc.
Shamrock Ford Truck Sales, Inc.
Sooner State Ford Truck Sales, Inc.
Southside Ford Truck Sales, Inc.
Tri-State Ford Truck Sales, Inc.
Truck City Ford Sales, Inc.

West Gate Ford Truck Sales, Inc.

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385020_2815%3A1. Public record. Not legal advice.