Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca8-05-02320/USCOURTS-ca8-05-02320-0/pdf.json

Parties Involved:
Mayo Clinic Rochester
Appellee
Julie M. Steinlage
Appellant

Document Text:

United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 05-2320

___________

Julie M. Steinlage, trustee for the heirs *

of Dolores May Smith, *

*

Plaintiff - Appellant, *

* Appeal from the United States 

v. * District Court for the District of 

* Minnesota.

Mayo Clinic Rochester, a Minnesota *

corporation, *

*

Defendant - Appellee. *

___________

Submitted: 

 Filed: January 30, 2006 

___________

Before 

___________

MELLOY, Circuit Judge.

Dolores May Smith, a citizen of Minnesota, died after doctors who worked for

the defendant allegedly failed to properly diagnose her illness. Ms. Smith’s daughter,

Julie Steinlage, brought this wrongful death action as a court-appointed wrongful

death trustee under Minn. Stat. Ann. § 573.02. Ms. Steinlage is a citizen of Nevada.

During trial, the defendant moved to dismiss for lack of jurisdiction, arguing that 28

U.S.C. § 1332(c)(2) required the court to impute the decedent’s Minnesota citizenship

Appellate Case: 05-2320 Page: 1 Date Filed: 01/30/2006 Entry ID: 2003100
-2-

to Ms. Steinlage for diversity purposes. The district court found that § 1332(c)(2)

applied and dismissed the case. Ms. Steinlage appeals, and we reverse. A Minnesota

wrongful death trustee is a representative of a decedent’s surviving spouse, next of

kin, and certain enumerated creditors, but not a representative of a decedent’s estate

as required by the plain language of § 1332(c)(2). Accordingly, a Minnesota wrongful

death trustee’s own state of citizenship controls for purposes of diversity jurisdiction.

I.

The facts relevant to this appeal are undisputed. If § 1332(c)(2) applies,

complete diversity is destroyed and the federal courts lack jurisdiction. If §

1332(c)(2) does not apply, Ms. Steinlage, as a Nevada citizen, may maintain this

diversity action against the Minnesota defendant. This case presents two questions

of law: first, does a Minnesota wrongful death trustee represent the estate of a

decedent; second, if a Minnesota wrongful death trustee does not technically represent

the estate of a decedent, does 28 U.S.C. § 1332(c)(2) nevertheless apply? We address

these issues in turn. 

A. The Minnesota Statute

Minnesota’s wrongful death statute provides for the appointment of a wrongful

death trustee to sue for the recovery of pecuniary loss suffered by a decedent’s

surviving spouse and next of kin as well as for recovery on behalf of a few specifically

enumerated creditors. Minn. Stat. Ann. § 573.02. The statute specifically provides:

Subdivision 1. Death action. When death is caused by the wrongful act

or omission of any person or corporation, the trustee appointed as

provided in subdivision 3 may maintain an action therefor if the decedent

might have maintained an action, had the decedent lived, for an injury

caused by the wrongful act or omission. . . . The recovery in the action

is the amount the jury deems fair and just in reference to the pecuniary

Appellate Case: 05-2320 Page: 2 Date Filed: 01/30/2006 Entry ID: 2003100
-3-

loss resulting from the death, and shall be for the exclusive benefit of the

surviving spouse and next of kin, proportionate to the pecuniary loss

severally suffered by the death. The court then determines the

proportionate pecuniary loss of the persons entitled to the recovery and

orders distribution accordingly. Funeral expenses and any demand for

the support of the decedent allowed by the court having jurisdiction of

the action, are first deducted and paid. Punitive damages may be

awarded as provided in section 549.20.

If an action for the injury was commenced by the decedent and not

finally determined while living, it may be continued by the trustee for

recovery of damages for the exclusive benefit of the surviving spouse and

next of kin, proportionate to the pecuniary loss severally suffered by the

death. The court on motion shall make an order allowing the

continuance and directing pleadings to be made and issues framed as in

actions begun under this section.

Subd. 2. When injury is caused to a person by the wrongful act or

omission of any person or corporation and the person thereafter dies

from a cause unrelated to those injuries, the trustee appointed in

subdivision 3 may maintain an action for special damages arising out of

such injury if the decedent might have maintained an action therefor had

the decedent lived. 

Subd. 3. Trustee for action. Upon written petition by the surviving

spouse or one of the next of kin, the court having jurisdiction of an

action falling within the provisions of subdivisions 1 or 2, shall appoint

a suitable and competent person as trustee to commence or continue such

action and obtain recovery of damages therein. The trustee, before

commencing duties shall file a consent and oath. Before receiving any

money, the trustee shall file a bond as security therefor in such form and

with such sureties as the court may require.

Id. (emphasis added).

Appellate Case: 05-2320 Page: 3 Date Filed: 01/30/2006 Entry ID: 2003100
1

The Minnesota Supreme Court, in Shumway v. Nelson, 107 N.W.2d 531, 533

(Minn. 1961), stated:

Actions brought under § 573.02 are distinguishable from causes of action

which are said to survive the decedent. This statute creates an entirely

new cause of action for the purpose of compensating the next of kin who

have suffered pecuniary loss by reason of the death of the decedent. It

is not brought for the benefit of the decedent. 

-4-

A companion provision to Minnesota’s wrongful death statute is Minn. Stat.

Ann. § 573.01 regarding the survival of causes of action. Section 573.01 specifically

provides:

A cause of action arising out of an injury to the person dies with the

person of the party in whose favor it exists, except as provided in section

573.02. All other causes of action by one against another, whether

arising on contract or not, survive to the personal representatives of the

former and against those of the latter.

Read together, these two provisions demonstrate that, upon death, the right to

maintain existing actions based on personal injury to the decedent, as well as the right

to institute new actions based on personal injury, belong to the wrongful death trustee.

Any recovery in either type of action under section 573.02 inures exclusively to the

benefit of the surviving spouse and next of kin except for the payment of funeral

expenses and claims related to the support of the decedent. The wrongful death

trustee is not authorized to obtain a judgment for the benefit of general creditors who

may have claims against the decedent’s estate.1

By contrast, if an injured party survives, litigates a personal injury action to

completion, and recovers a judgment, anything recovered is subject to the claims of

general creditors because the judgment is in favor of the injured party. Even where

an aggrieved party dies, causes of action other than personal injury actions may be

maintained post-death by the “personal representatives of the [decedent].” Minn. Stat.

Appellate Case: 05-2320 Page: 4 Date Filed: 01/30/2006 Entry ID: 2003100
-5-

Ann. § 573.01. In Minnesota, a statutory wrongful death trustee is not a personal

representative of the decedent, Shumway, 107 N.W.2d at 533, and has no authority

to maintain the type of actions described in Section 573.01 that might result in

judgments available to satisfy the claims of general creditors. 

Sections 573.01 and 573.02, therefore, operate together to draw a clear

distinction between (1) the personal representatives of the decedent (administrator,

executor, etc.) and (2) the wrongful death trustee as the personal representative of the

decedent’s surviving spouse and next of kin. The decedent’s estate and general

creditors who hold claims against a decedent’s estate cannot collect against judgments

obtained by the wrongful death trustee because the wrongful death trustee is expressly

authorized only to obtain judgments on behalf of persons who are separate from the

estate of the decedent. See Martz v. Revier, 170 N.W.2d 83, 85 (Minn. 1969)

(“recovery for wrongful death is not a part of the decedent’s estate”). 

Prior to a 1951 amendment, Minnesota’s wrongful death statute actually did

permit the “personal representative of the decedent” to bring a wrongful death action.

See Minn. Stat. Ann. § 573.02 (1950). Even then, however, the recovery in such an

action was not in any manner obtained for the benefit of the estate. Rather, it was

obtained exclusively for the benefit of the surviving spouse and next of kin as the

enumerated beneficiaries under the then-controlling version of the wrongful death

statute. Id. In other words, under that prior statute the personal representative of a

decedent was empowered to serve a dual role. 

Even before that time, the Minnesota Supreme Court had clarified that any

recovery in a wrongful death action was separate and distinct from the general estate:

The damages do not go to the estate of the decedent for distribution

under the laws of descent. This money is not liable for debts of [the]

decedent, but belongs exclusively to those named in the statute. The

probate court has no jurisdiction over this money. It must be handled

Appellate Case: 05-2320 Page: 5 Date Filed: 01/30/2006 Entry ID: 2003100
-6-

under the jurisdiction of the district court. The widow cannot select her

$500 worth of personal property, under the statute of descent, from this

money. This money never belonged to the decedent. The statute,

however, regulates the proportion in which damages recovered shall be

distributed. This language is clear.

Masek v. Hedlund, 202 N.W. 732, 732 (Minn. 1925) (internal citation omitted).

Accordingly, under prior law, when a personal representative of the decedent could

bring a Minnesota wrongful death action, the personal representative did not do so as

a representative of the decedent’s estate, but rather, as a representative of the wrongful

death beneficiaries. Further, under current Minnesota law, only a court-appointed

wrongful death trustee may maintain a wrongful death action, and the wrongful death

trustee does not represent the estate of the decedent.

Finally, we note our disagreement with a statement contained in dicta in James

v. Three Notch Med. Ctr., 966 F. Supp. 1112, 1114 (M.D. Ala. 1997), cited by the

defendant, regarding Minnesota’s wrongful death statute. In that case, the court stated

that wrongful death statutes that allow some recovery on the part of the estate fall

within the scope of § 1332(c)(2). The court proceeded to state that Minnesota’s

wrongful death statute permitted “some recovery on the part of the estate.” This

statement, presumably, was based on that portion of Minn. Stat. Ann. § 573.02 which

specifically allows for the payment of funeral expenses and claims for support of the

decedent along with payment of damages to the surviving spouse and next of kin. The

payment of such expenses does, necessarily, reduce expenses that might evolve into

potential claims against the estate. In this manner, proceeds from a wrongful death

action may reduce potential liabilities of the estate and thereby, indirectly, provide a

gross benefit to the estate. Minnesota’s legislature, however, made the specific choice

to enumerate two specific types of expenses as the sources for potential claims against

wrongful death proceeds. It did not elect to make wrongful death proceeds generally

available for the estate or available to satisfy the claims of general creditors. As such,

it may be appropriate to view the Minnesota wrongful death statute as providing some

Appellate Case: 05-2320 Page: 6 Date Filed: 01/30/2006 Entry ID: 2003100
-7-

indirect benefit to the estate, but we do not believe it is possible to say that the

Minnesota wrongful death statute creates a trustee who represents the estate of the

decedent.

B. The Federal Statute

Because a Minnesota wrongful death trustee does not represent the estate, it is

necessary to determine whether 28 U.S.C. § 1332(c)(2) applies to representatives of

persons other than the estate of the decedent. The federal diversity jurisdiction statute,

28 U.S.C. § 1332, specifically provides:

(c) For the purposes of this section and section 1441 of this title--

(2) the legal representative of the estate of a decedent shall be deemed

to be a citizen only of the same State as the decedent, and the legal

representative of an infant or incompetent shall be deemed to be a citizen

only of the same State as the infant or incompetent.

(Emphasis added). 

The plaintiff argues that we must take the text of the statute as a clear and

controlling statement of congressional intent. The defendant argues that legislative

history reveals a congressional intent to limit the scope of diversity jurisdiction such

that subsection (c)(2) should be interpreted to minimize diversity jurisdiction and

apply to a broad class of representative plaintiffs (not just plaintiffs who technically

represent the decedent’s estate).

The parties agree that, in 1988, Congress passed § 1332(c)(2) and other

amendments to the diversity statute as a means to limit the number of diversity cases

in federal court. See, e.g., H.R. Rep. 100-889, Subtitle B, Diversity Reform at *44-45

(1988) (“The provisions of this subtitle make amendments to reduce the basis for

Appellate Case: 05-2320 Page: 7 Date Filed: 01/30/2006 Entry ID: 2003100
-8-

Federal court jurisdiction based solely on diversity of citizenship.”). In fact, “[a

House Judicial Committee] Subcommittee on Courts, Civil Liberties, and the

Administration of Justice adopted an amendment to generally abolish diversity of

citizenship.” Id. at 45. Congress, however, rejected the subcommittee’s dramatic

proposal to completely eliminate diversity jurisdiction, and instead, adopted §

1332(c)(2) regarding legal representatives. Congress also raised the amount in

controversy from $10,000 to $50,000. PL 100-702 Title II, Sec. 201(a). 

Looking beyond the House Report (there is no Senate Report), the parties agree

that the text of § 1332(c)(2) was based on a 1969 American Law Institute legislative

proposal. American Law Institute, Study of the Division of Jurisdiction Between

State and Federal Courts § 1301(b)(4) at 11 (1969). That proposal provided:

An executor, administrator, or any person representing the estate of a

decedent or appointed pursuant to statute with authority to bring an

action for wrongful death is deemed to be a citizen only of the same state

as the decedent . . . . The purpose is to prevent either the creation or

destruction of diversity jurisdiction by the appointment of a

representative of different citizenship from that of the decedent or person

represented.

Id., reprinted in Richard H. Field, Jurisdiction of the Federal Courts, 46 F.R.D. 141,

143 (1969) (emphasis added). The text that Congress actually adopted in 1988

eliminated the phrase,“[a]n executor, administrator, or any person representing the

estate of a decedent or appointed pursuant to statute with authority to bring an action

for wrongful death” and replaced it with the phrase “the legal representative of the

estate of the decedent.” 28 U.S.C. § 1332(c)(2). 

The plaintiff in this action argues that because Congress specifically omitted

from the ALI’s proposed legislation the express language that listed representatives

appointed under wrongful death statutes, it is clear that Congress did not intend to

Appellate Case: 05-2320 Page: 8 Date Filed: 01/30/2006 Entry ID: 2003100
2

The defendant raises an additional argument in favor of applying § 1332(c)(2)

in actions brought by persons who are not technically the legal representatives of the

estate of a decedent, namely, the need to prevent manipulation and collusive

appointments of representatives merely to create or destroy diversity. See, e.g., Liu

v. Westchester County Med. Ctr., 837 F. Supp. 82, 83 (S.D. N.Y. 1993) (“Holding the

citizenship of the decedent, not the representative, controlling in diversity suits based

on wrongful death makes a pre-existing non-manipulable fact determinative for

diversity purposes.”). In fact, at least one senator stated that such concerns motivated

the 1988 changes to 28 U.S.C. § 1332(c)(2). 134 Cong. Rec. S16284-01 at S16299

(1988). This argument is unconvincing, however, because Congress provided a

separate statutory provision to address this issue. See 28 U.S.C. § 1359 (“A district

court shall not have jurisdiction of a civil action in which any party, by assignment or

otherwise, has been improperly or collusively made or joined to invoke the

jurisdiction of such court.”). Accordingly, where a federal court finds that the

representative plaintiff has been improperly or collusively appointed, jurisdiction is

-9-

apply the restrictions of § 1332(c)(2) to such persons. Looking at the same change of

language, the defendant argues that Congress did not intend to limit the reach of §

1332(c)(2) through its facially more narrow word choice. Instead, the defendant

argues, Congress meant the statute to apply to the same, broad list of representative

plaintiffs set forth in the ALI proposal but elected the umbrella term “legal

representative of the estate of the decedent” as an efficient means of drafting. 

Under either party’s interpretation, § 1332(c)(2) achieves the congressional goal

of reducing the number of diversity cases. The difference in the caseload reduction

brought about by the different interpretations is merely one of degree. Given this fact,

it cannot be said that Congress’s clear statement of general intent provides any

guidance as to how broadly or narrowly we should interpret the statute. It certainly

cannot be said that the undisputed, general statement of congressional intent

contradicts the plain language of the statute. Because the plain text is unambiguous

and the legislative history is equivocal at best, we are unwilling to depart from the text

and ignore the express congressional election to limit application to “legal

representative of the estate of the decedent.”2

Appellate Case: 05-2320 Page: 9 Date Filed: 01/30/2006 Entry ID: 2003100
lacking regardless of § 1332(c)(2). Also, where the trustee is actually the decedent’s

next of kin, as in the present case (and therefore is, herself, one of the statutory

wrongful death beneficiaries) there is no reason to presume collusion or manipulation.

Compare County of Todd, Minn. v. Loegering, 297 F.2d 470, 473-74 (8th Cir. 1961)

(refusing to apply 28 U.S.C. § 1359 in a case where the out-of-state daughter of the

deceased served as the wrongful death trustee, stating, “[W]e find no acts of collusion

or improprieties . . . where as here the daughter, under the Wrongful Death Statute,

was duly appointed by the State District Court, and where in the process her

qualifications were finally settled and determined”), with Bartnick v. Reader Co., 487

F.2d 1021, 1022 (8th Cir. 1973) (dismissing a case brought by a South Dakota citizen

as a wrongful death trustee on behalf of the Minnesota widow and Minnesota next of

kin of a deceased Minnesota citizen, stating, “Under these circumstances, an

appointment solely to create diversity jurisdiction will not be recognized by federal

courts.”) (emphasis added).

-10-

The Seventh and Tenth Circuits agree. In Tank v. Chronister, 160 F.3d 597,

599-600 (10th Cir. 1998), the court analyzed the application of § 1332(c)(2) in a case

brought under a Kansas wrongful death statute. Importantly, we find no material

difference between the Kansas and Minnesota wrongful death statutes. Both provide

for a representative plaintiff who represents the interests of statutory beneficiaries

other than the decedent’s estate. The court in Tank concluded that since the action

was not for the benefit of the estate, the wrongful death trustee was not a legal

representative of the estate, and the wrongful death trustee’s citizenship controlled for

purposes of diversity jurisdiction. Id. at 609. In Milam v. State Farm Mut. Auto. Ins.

Co., 972 F.2d 166 (7th Cir. 1992), the court applied Louisiana law and noted that, in

accordance with “an oddity of Louisiana law,” a decedent’s estate was not “an entity

on behalf of which a lawsuit can be brought.” Id. at 168. As a result, a widow of the

decedent brought the action on her own behalf and on her children’s behalf, but not

as the legal representative of the estate of the decedent. Accordingly, § 1332(c)(2) did

not apply and the citizenship of the widow rather than citizenship of the decedent

controlled.

Appellate Case: 05-2320 Page: 10 Date Filed: 01/30/2006 Entry ID: 2003100
3

In James, 966 F. Supp. at 1114, the court adopted the legislative history

argument set forth by the present defendants. That appears to have been unnecessary

dicta, however, because the district court in James ultimately found “no contradiction”

between § 1332(c)(2) and the Alabama Wrongful Death Statute because “a ‘personal

representative’ under Alabama law is ‘the legal representative of the estate of the

decedent.’” Id. at 1116.

-11-

Other courts have followed this mode of analysis, given meaning to the federal

statute’s use of the term “estate,” and examined the identity of the represented party

to determine the applicability of § 1332(c)(2). See, e.g., Vaka v. Embraer-Empresa

Brasileira De Aeronautica, S.A., 303 F. Supp. 2d 1333, 1334 (S.D. Fla. 2003) (finding

§ 1332(c)(2) applicable because, under Fla. Stat. § 768.20, “the action shall be brought

by the decedent’s personal representative, who shall recover for the benefit of the

decedent’s survivors and estate”) (emphasis added); Winn v. Panola-Harrison Elec.

Coop., Inc., 966 F. Supp. 481, 483 (E.D. Tex. 1997) (finding § 1332(c)(2)

inapplicable and noting that Texas, like Minnesota provides that wrongful death

actions are for the benefit of the surviving spouse and children whereas other survival

actions are for the benefit of the estate).3

Other courts have not taken this approach. Instead, these courts expressly

adopted the defendant’s legislative history argument or applied § 1332(c)(2) without

analysis of the underlying wrongful death statute. See Palmer v. Hosp. Auth. of

Randolph County, 22 F.3d 1559 (11th Cir. 1994) (applying § 1332(c)(2) without

analysis where a plaintiff brought suit in multiple representative capacities, including

as the representative of a decedent’s estate); Wheelock v. Sport Kites, Inc., 839 F.

Supp. 730, 734 (D. Haw. 1993) (applying § 1332(c)(2) without analysis of the federal

statute or the state wrongful death statute and stating that “[t]he relevant citizenship

of plaintiffs in a wrongful death action is that of the decedent.”); Liu, 837 F. Supp.

at 84 (adopting the legislative history argument and applying § 1332(c)(2) in a

wrongful death action where the nominal/representative plaintiff was a Maryland

citizen and the deceased and defendants were New York citizens, but not addressing

Appellate Case: 05-2320 Page: 11 Date Filed: 01/30/2006 Entry ID: 2003100
-12-

the specific question of whom the nominal plaintiff represented); Green v. Lake of the

Woods County, 815 F. Supp. 305 (D. Minn. 1993) (finding § 1332(c)(2) applicable

to a Minnesota wrongful death action based on an analysis of the federal legislative

history, but not addressing the specific question of whether the Minnesota wrongful

death trustee represented the estate of the decedent). 

In Green, relied on by the district court below, the court accepted the legislative

history argument and found it “clear that Congress chose the single term ‘legal

representative’ as a simple—and encompassing—term.” Green, 815 F. Supp. at 308.

There, the court focused on the fact that the plaintiff, a Minnesota wrongful death

trustee, was acting in a representative capacity. The court did not address the question

of whether the wrongful death trustee actually represented the estate. Instead, the

court stated that § 1332(c)(2) should apply broadly to representative plaintiffs such

as trustees, administrators, and executors because “the name a given state legislature

chooses for its ‘legal representative of the estate of a decedent’ should not govern

federal diversity jurisdiction.” Id. at 309. We agree with the general thrust of this

statement— substance rather than labels should drive analysis. However, we believe

that it remains necessary to determine whether representative plaintiffs, variously

labeled by a state legislatures, represent the estates of decedents. That is what the

federal statute requires, and what Minnesota law does not provide.

We reverse the judgment of the district court and remand for further

proceedings consistent with this opinion.

______________________________

Appellate Case: 05-2320 Page: 12 Date Filed: 01/30/2006 Entry ID: 2003100