575 F2d 1175 Reid v. Volkswagen of America Inc

575 F.2d 1175

23 UCC Rep.Serv. 1197

Barbara J. REID, Plaintiff-Appellant,
VOLKSWAGEN OF AMERICA, INC., Defendant-Appellee.

No. 76-2451.

United States Court of Appeals,
Sixth Circuit.

Argued April 5, 1978.
Decided May 5, 1978.

William J. Garlington, Garlington, Smiley & Sluiter, Wyoming, Mich., for plaintiff-appellant.

Peter R. Tolley, Freihofer, Hecht, Oosterhouse & DeBoer, Grand Rapids, Mich., for defendant-appellee.

Before PHILLIPS, Chief Judge, and EDWARDS and LIVELY, Circuit Judges.


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This is the second appeal in a personal injury action based on a products liability claim. Initially, the district court dismissed the complaint by applying a three-year statute of limitations. This court reversed and remanded the decision of the district court in Reid v. Volkswagen of America, Inc., 512 F.2d 1294 (6th Cir. 1975), holding that, under Michigan law, a products liability personal injury action is governed by the four-year statute of limitations of the Uniform Commercial Code (UCC), not the general personal injury limitation of three years. After remand, but prior to trial, the Supreme Court of Michigan stated in strongly worded dicta that the three-year statute of limitations should apply in personal injury actions brought by consumers against manufacturers. See Parish v. B. F. Goodrich Co., 395 Mich. 271, 235 N.W.2d 570 (1975). On the basis of the Parish decision, the district court again dismissed the complaint. Thereafter, in Southgate Schools v. West Side Construction Co., 399 Mich. 72, 247 N.W.2d 884 (1976), the Supreme Court of Michigan held that the three-year statute of limitations would apply in actions similar to the present case.


On appeal, plaintiff argues that the previous decision of this court constitutes the law of the case and that the subsequent rulings by the Supreme Court of Michigan should not apply to the present case. We disagree. In diversity cases, federal courts are bound by the law as declared by the highest state court. Erie R. R. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). In its opinion in Southgate Schools, the Supreme Court of Michigan removed all doubt that may have existed previously as to the controlling rule of law in that State.