SW Legal studies in Business

Choice of Law Points to State with Most Interests in a Matter Involving Two States
Description Appeals court held that, in a choice of law conflict for a diversity suit filed in federal court in Arkansas, the court should apply Louisiana law to resolve the case. The plaintiff was from Louisiana, the defendant did business in Louisiana, and the injury occurred in Louisiana. The fact that the defendant is headquartered in Arkansas does not outweigh the other factors.
Topic Court Procedure
Key Words Choice of Law
C A S E   S U M M A R Y
Facts Hughes, a Louisiana resident, bought a gasoline container at a Wal-Mart store in Louisiana. Later, he was using the container, which had diesel fuel in it, to burn tree stumps on his property. When he was pouring fuel the container ignited and exploded, burning his daughter nearby. He sued Wal-Mart in federal court in Arkansas, where Wal-Mart is headquartered, for selling a defective product. Wal-Mart, responding to the suit, contended that Louisiana products liability law, not Arkansas products liability law, should govern the case. Hughes opposed the motion, contending that Arkansas law (which would be more favorable to him) should govern the case. The trial court held that Louisiana law would be applied; Hughes appealed.
Decision Affirmed. Under Arkansas' choice of law rule, courts consider five factors to determine which state's law applies to a tort action: 1) predictability of results; 2) maintenance of interstate and international order; 3) simplification of the judicial task; 4) advancement of the forum's governmental interests; and 5) application of the better rule of law. These factors point to an application of Louisiana law because Louisiana has significant, if not all, contacts with facts relevant to the litigation. The container was bought by a Louisiana resident at a Wal-Mart in Louisiana and the injury occurred in Louisiana. The only contact with Arkansas is that Wal-Mart has its principal place of business there. Applying the factors indicates that they are either neutral or point to Louisiana as having the strongest state interest in the matter.
Citation Hughes v. Wal-Mart Stores, Inc., 250 F.3d 618 (8th Cir., 2001)

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