Comments:

The grading key reproduced below proved nearly useless.  Answers to this question were graded without much use of the key.  Students were credited with out-of-the-box solutions.  Those who confused jurisdiction with choice of law did poorly.

Students generally failed to consider jurisdictions other than Louisiana, Alabama and Illinois.  Many students labored under the mistaken notion that a state needs some interest in the litigation or some "minimum contact" to adjudicate the case.  That notion utterly ignores Hughes v. Fetter, wherein the Supreme Court of the United States said that a state may not constitutionally close the doors of its courts to actions arising elsewhere.

This test question is difficult, as there is something "wrong" with each of the three obvious fori.

We should start by asking the relative liability or fault of Jack and Bubba.  One of these persons may not have any fault and may not even be needed as a defendant.  Indeed, if the policy limits are high enough, neither motorist may be needed!  It would suffice to bring the action in a state such as New York (Collins v. American Automobile Ins. Co.) which, even though not having a direct action statute of its own, is willing to view the Louisiana direct action statute as substantive and therefore creating a transitory cause of action that may be enforced wherever Everystate Insurance may be found.  Everystate, like Ford and Blazerock, may be found in every state either through having qualified to do business and having appointed a registered agent there, or through sufficient minimum contact to support general jurisdiction.

Jurisdiction obviously exists in Illinois as to all defendants except Bubba.  Perhaps Illinois is willing to view LRS 22:655 as substantive.  If so, Bubba is not even necessary as his insurer clearly can be sued in Illinois.

Jurisdiction obviously exists in Alabama as to all defendants except Jack.  Perhaps Alabama is willing to view LRS 22:655 as substantive.  If so, Jack is not even necessary as his insurer clearly can be sued in Alabama.

If suit is brought in Louisiana, prescription is a problem.  But Louisiana Civil Code article 3549 "borrows" the prescriptive period of the state whose law "is applicable to the merits of the cause of action."  It can be argued, using Louisiana's governmental interests test, that that state is Illinois (or Illinois/Alabama taken as an undifferentiated whole).  In such case, the Illinois (or Illinois/Alabama) prescriptive period would be applicable.  But, if Jack might be at fault, the plaintiff has just painted herself into a corner.  If Illinois law (or Illinois/Alabama law) applies, the guest passenger statute of Illinois and/or Alabama arguably applies also.

If suit is brought in Illinois, prescription may also be a problem.  This depends on whether the Illinois borrowing statute borrows the statute of limitations of the place where the accident occurred, or of the place whose law is applicable to the merits.  If the latter, it can be argued that Illinois should apply Illinois law to the case, including Illinois's statute of limitations, but then the plaintiff is back in the same guest-passenger corner.

If suit is brought in Alabama (under this hypothetical, Alabama has no borrowing statute), prescription is no problem.  The plaintiff is thereby free to claim either that Louisiana is the center of gravity, or that Louisiana is the state having the greatest interest, or that Louisiana is the locus of the delictus.  Even if Alabama follows center-of-gravity or governmental interests, it can also be argued that there is no one clear center of gravity, no one clear state having the greatest interest.  In such a case, lex locus delicti would apply.  Louisiana law favors the plaintiff on all substantive issues.

The issue of whether a direct action can be maintained against Everystate does not depend on choice of law.  The Louisiana direct action statute by its own terms applies when the accident occurred in Louisiana.  Some states treat this as creating a substantive cause of action.  Hence the attractiveness of New York, subject only to any borrowing-statute issue there.

This case might be a good candidate for use of depeçage, arguing that while Illinois's prescriptive period should apply, Louisiana law should govern on the guest-passenger issue.