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Conflict of Laws Keyed to Brilmayer
Watson v. Employers Liability Assurance Corp.
Citation:
348 U.S. 66 (1954)Facts
“Toni Home Permanent” was a hair-waving product that was alleged to have contained a highly dangerous latent ingredient. The product was manufactured by Toni Company of Illinois, a subsidiary of the Gillette Safety Razor Company, which is headquartered in Massachusetts. Defendant, Employers Liability Assurance Corporation (ELAC), issued an insurance policy to Toni Company in Massachusetts that contained a clause prohibiting direct actions against ELAC until a pending tort litigation against Toni Company had been finalized.
Plaintiff, Mrs. Watson, bought and used Toni Home Permanent in the state of Louisiana. Mrs. Watson claimed to have suffered injuries after using the hair product. As a result, Mrs. Watson and her husband, both Louisiana residents, brought suit against ELAC, in Louisiana state court for damages due to the alleged personal injuries she suffered. The Watsons argued that Louisiana’s insurance code permitted direct actions against insurance companies.
On the basis of diversity jurisdiction, the Watsons’ suit was removed to federal district court in Louisiana. ELAC argued that the Louisiana law violated the Due Process and Full Faith and Credit clauses of the U.S. Constitution, and that the laws of Massachusetts or Illinois should be applied because its contract with Toni Company was formed in those states. The district court found in favor of ELAC and dismissed the complaint. The Watsons appealed, and the court of appeals affirmed. The U.S. Supreme Court then granted the Watsons’ petition for certiorari.
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