## Facts

- Peter McCarthy, an Australian citizen and resident, was injured on April 5, 2010 while operating a Yamaha WaveRunner in Queensland, Australia.
- Maureen McCarthy asserted a derivative claim arising from Peter McCarthy’s injuries.
- The WaveRunner was manufactured in Georgia by Yamaha Motor Manufacturing Corporation of America (YMMC), a Georgia corporation.
- The McCarthys sued YMMC in federal court in Georgia under diversity jurisdiction, asserting product-liability-type tort claims and seeking compensatory and punitive damages.
- YMMC moved for a determination of what substantive law governed the claims, contending Australian law applied because the injury occurred in Australia.
- Plaintiffs argued Georgia law should apply, asserting Australian limits on damages, punitive damages, fee shifting, and statutory defenses conflicted with Georgia public policy.

## Issues

1. Under Georgia choice-of-law rules in a diversity case, whether Australian substantive tort law or Georgia substantive law governs claims for an injury occurring in Australia involving a product manufactured in Georgia.
2. Whether differences between Australian tort remedies/defenses and Georgia law trigger Georgia’s narrow public-policy exception, permitting application of Georgia law despite lex loci delicti.

## Decision

- The court granted YMMC’s motion for a determination of substantive law.
- The court held Australian substantive law governs because Georgia follows lex loci delicti, applying the law of the place where the injury occurred.
- The court held Georgia’s public-policy exception did not apply; the identified differences in damages, punitive damages, fee shifting, and defenses were not so offensive to Georgia policy as to bar application of Australian law.
- The order set the substantive-law framework for the case and did not decide the merits of liability or causation.

## Legal Principles

- In diversity cases, federal courts apply the forum state’s choice-of-law rules.
- Georgia applies lex loci delicti in tort cases: substantive rights and liabilities are governed by the law of the place where the injury was sustained.
- Georgia recognizes a narrow public-policy exception to applying foreign law; it applies only when the foreign rule is palpably offensive to Georgia’s strong, clearly expressed public policy, not merely because it is less favorable to a party.
- Differences such as damages caps, more restrictive punitive-damages standards, prevailing-party attorney’s-fee rules, and statutory affirmative defenses generally reflect permissible legislative policy choices and do not alone establish a public-policy bar.
- Choice-of-law determinations typically apply foreign law to substantive issues (including damages and defenses) while forum law governs procedural matters.

## Conclusion

Applying Georgia’s lex loci delicti rule, the court held Australian substantive tort law governed claims arising from an injury in Australia, and it rejected plaintiffs’ effort to invoke Georgia’s narrow public-policy exception based on Australian limits on damages, punitive damages, fee shifting, and statutory defenses.


McCarthy v. Yamaha Motor Mfg. Corp. of Am., 994 F. Supp. 2d 1329 (N.D. Ga. 2014)