Opinion ID: 2623432
Heading Depth: 3
Heading Rank: 1

Heading: Choice of LawUCC Claims

Text: ¶ 12 The most significant relationship test applies to an action for breach of warranty in a sale of goods under Article 2 of the UCC. See Collins Radio Co. v. Bell, 623 P.2d 1039, 1046-47 (Okl.Civ.App.1980) (The same rationale for accepting the [most significant relationship test] for torts dictates that its application should be made to actions that fall under Article 2 of the Uniform Commercial Code.) See also Bohannan v. Allstate Ins. Co., 820 P.2d 787, 795 (Okla.1991) ([T]he UCC supports the most significant relationship test as applied in Collins Radio. ) This test is guided by principles and contacts from the Restatement (Second) of Conflicts (1971). It determines which state's law is most directly connected to the parties and the transaction. ¶ 13 Under section 6 of the Restatement, the factors relevant to any choice of law decision include: (a) the needs of the interstate and international systems, (b) the relevant policies of the forum, (c) the relevant policies of other interested states and the relative interests of those states in the determination of the particular issue, (d) the protection of justified expectations, (e) the basic policies underlying the particular field of law, (f) certainty, predictability and uniformity of result, and (g) ease in the determination and application of the law to be applied. The contacts to be considered in applying these principles to an issue in contract [5] include: (a) the place of contracting, (b) the place of negotiation of the contract, (c) the place of performance, (d) the location of the subject matter of the contract, and (e) the domicile, residence, nationality, place of incorporation and place of business of the parties. The contacts are to be evaluated according to their relative importance with respect to the particular issue. Id. at § 188(2) (emphasis added). However, a third provision, section 191, applies to a sale of interests in chattel. So in a contract for the sale of goods the most significant contact is the place of delivery unless another state has a more significant relationship. Collins Radio, 623 P.2d at 1047. As comment f. to section 191 explains: On occasion, a state which is not the place of delivery will nevertheless, with respect to the particular issue, be the state of most significant relationship to the transaction, the parties and the chattel and hence the state of the applicable law. The particular dispute in this matter presents such an occasion in which the local law of some state other than that of delivery should be applied in any event because of the intensity of the interest of that state in the determination of the particular issue. Id. ¶ 14 All 50 states and the District of Columbia bear some relationship to the parties and transactions in this dispute by virtue of the nationwide sales of the minivans. The question becomes whether the relationship of each state where the vehicles were purchased is more significant to the parties and this litigation than that of Michigan, the principal place of business of DaimlerChrysler. ¶ 15 The Restatement's section 188(2) contacts of the place of contracting, the place of negotiation and performance, and the location of the subject matter are of diminished significance to the sales of the minivans. The UCC warranties are not something which is negotiated in the purchase of a new car. Thus, the relative interest of each buyer's home state in applying its version of the UCC is more or less equal. By contrast, Michigan's interest in having its regulatory scheme applied to the conduct of a Michigan manufacturer is most significant. Michigan is where the decisions concerning the design, manufacture, and distribution of the minivans were made. Michigan is the only state where conduct relevant to all class members occurred. The principal place of DaimlerChrysler's business is the most important contact with respect to the UCC warranty claims. ¶ 16 The selection of Michigan law furthers the relevant factors stated in section 6 of the Restatement. The needs of the interstate system and the basic policies of predictability and uniformity of result require that the issue of product defect be determined in one forum with one result rather than in 51 jurisdictions with the very real possibility of conflicting decisions. While the interest of each home state in applying its local law is significant, Michigan's interest in the conduct of its manufacturer, and thus its connection to the warranty issues, is greater. Michigan law applies. It should be noted that this conclusion is consistent with the constitutional imperative that for a state's substantive law to be selected in a constitutionally permissible manner, that state must have a significant aggregation of contacts, creating state interests, such that choice of its law is neither arbitrary nor fundamentally unfair. Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 818, 105 S.Ct. 2965, 86 L.Ed.2d 628 (1985) (quoting Allstate Ins. Co. v. Hague, 449 U.S. 302, 312-313, 101 S.Ct. 633, 66 L.Ed.2d 521 (1981)).