Court Clarifies Choice of Law in Nevada

You live in Arizona. You're driving in Nevada. You hit something in the road and your car flips. You're seriously injured and you sue the auto manufacturer (a Deleware company) and the car dealer (an Arizona company). Does Nevada law govern the case or Arizona law?

The Nevada Supreme Court clarifed this issue in General Motors Corp. v. Dist. Ct. 122 Nev. Adv. Op. No. 41(2006), a decision published a few weeks ago.

The Court overturned previous law and applied the Second Restatement of Conflict of Laws, section 145.

The Court stated that the Second Restatement's most significant relationship test begins with a general principle

that: the rights and liabilities of parties with respect to an issue in tort are governed by the local law of the state that, "with respect to that issue, has the most significant relationship to the occurrence and the parties under the principles stated in section 6." Section 6 identifies the following principles:

(1) A court, subject to constitutional restrictions, will follow a statutory directive of its own state on choice of law.

(2) When there is no such directive, the factors relevant to the choice of the applicable rule of law 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.

These principles are not intended to be exclusive and no one principle is weighed more heavily than another.]

Upon this basis, the Court held that in a scenario such as that presented above, Nevada law would apply against the manufacturer and Arizona law would apply against the seller.