## Facts

- California residents were injured in a motor vehicle collision on an Arizona highway on May 13, 1981, allegedly caused by a tractor driven by an Arkansas resident and owned by an Oklahoma corporation and an Oklahoma resident.
- Plaintiffs filed a diversity personal-injury action in the U.S. District Court for the Eastern District of California on April 7, 1983.
- Defendants moved to dismiss under Rule 12(b)(6), arguing the claim was barred by California’s one-year personal-injury statute of limitations.
- The district court applied California’s one-year period and dismissed the action as time-barred.
- On appeal, plaintiffs argued that Arizona’s two-year limitations period governed under California choice-of-law rules; alternatively, they argued California’s limitations period was tolled due to defendants’ nonresidency.

## Issues

1. Under California choice-of-law rules, should the court apply Arizona’s two-year statute of limitations for a personal-injury claim arising from an accident in Arizona rather than California’s one-year limitations period?
2. If California’s one-year statute applies, is it tolled because defendants were nonresidents/absent from California under Cal. Civ. Proc. Code § 351?

## Decision

- The Ninth Circuit reversed the dismissal and remanded.
- Applying California’s governmental interest choice-of-law framework, the court held Arizona’s two-year limitations period controlled.
- Because the action was timely under Arizona’s statute, the court did not reach the tolling question under Cal. Civ. Proc. Code § 351.
- The court reviewed de novo both the choice-of-law determination and the Rule 12(b)(6) dismissal.

## Legal Principles

- In diversity cases, federal courts apply the forum state’s choice-of-law rules.
- California uses a three-step “governmental interest” analysis: (1) determine whether the laws differ, (2) identify each jurisdiction’s interest in applying its law, and (3) if there is a true conflict, apply the law of the state whose interest would be more impaired if subordinated.
- Under California choice-of-law methodology, statutes of limitations may be selected based on comparative state interests rather than treated as automatically procedural.
- Where an accident occurs in another state and defendants are nonresidents of California, California’s interest in applying its shorter limitations period to protect resident defendants is reduced, and the foreign state’s interest in applying its limitations period to incidents within its borders may predominate.

## Conclusion

The Ninth Circuit held that California choice-of-law rules required application of Arizona’s two-year personal-injury statute of limitations to an accident occurring in Arizona involving non-California defendants, reversed the district court’s time-bar dismissal, and remanded for further proceedings.


Ledesma v. Jack Stewart Produce, Inc., 816 F.2d 482 (9th Cir. 1987)