Court Opinion

ID: 9428121
Source: CourtListenerOpinion
Date Created: 2023-08-02 23:22:52.524172+00
Date Added: 2024-06-11T17:23:11.931630
License: Public Domain

Justice Stevens,
concurring in the judgment.
As I view this unusual case — in which neither precedent nor constitutional language provides sure guidance — two separate questions must be answered. First, does the Full Faith and Credit Clause1 require Minnesota, the forum State, to apply Wisconsin law? Second, does the Due Process Clause 2 of the Fourteenth Amendment prevent Minnesota from applying its own law? The first inquiry implicates the federal interest in ensuring that Minnesota respect the sovereignty of the State of Wisconsin; the second implicates the litigants’ interest in a fair adjudication of their rights.3
*321I realize that both this Court’s analysis of choice-of-law questions4 and scholarly criticism of those decisions5 have treated these two inquiries as though they were indistinguish*322able.6 Nevertheless, I am persuaded that the two constitutional provisions protect different interests and that proper analysis requires separate consideration of each.
I
The Full Faith and Credit Clause is one of several provisions in the Federal Constitution designed to transform the several States from independent sovereignties into a single, unified Nation. See Thomas v. Washington Gas Light Co., 448 U. S. 261, 271-272 (1980) (plurality opinion); Milwaukee County v. M. E. White Co., 296 U. S. 268, 276-277 (1935).7 The Full Faith and Credit Clause implements this design by directing that a State, when acting as the forum for litigation having multistate aspects or implications, respect the legitimate interests of other States and avoid infringement upon their sovereignty. The Clause does not, however, rigidly *323require the forum State to apply foreign law whenever another State has a valid interest in the litigation. See Nevada v. Hall, 440 U. S. 410, 424 (1979); Alaska Packers Assn. v. Industrial Accident Comm’n, 294 U. S. 532, 546-548 (1935); Pacific Employers Ins. Co. v. Industrial Accident Comm’n, 306 U. S. 493, 501-502 (1939).8 On the contrary, in view of the fact that the forum State is also a sovereign in its own right, in appropriate cases it may attach paramount importance to its own legitimate interests.9 Accordingly, the fact that a choice-of-law decision may be unsound as a matter of conflicts law does not necessarily implicate the federal concerns embodied in the Full Faith and Credit Clause. Rather, in my opinion, the Clause should not invalidate a state court’s choice of forum law unless that choice threatens the federal interest in national unity by unjustifiably infringing upon the legitimate interests of another State.10
*324In this case, I think the Minnesota courts’ decision to apply Minnesota law was plainly unsound as a matter of normal conflicts law. Both the execution of the insurance contract and the accident giving rise to the litigation took place in Wisconsin. Moreover, when both of those events occurred, the plaintiff, the decedent, and the operators of both vehicles were all residents of Wisconsin. Nevertheless, I do not believe that any threat to national unity or Wisconsin’s sovereignty ensues from allowing the substantive question presented by this case to be determined by the law of another State.
The question on the merits is one of interpreting the meaning of the insurance contract. Neither the contract itself, nor anything else in the record, reflects any express understanding of the . parties with respect to what law would be applied or with respect to whether the separate uninsured motorist coverage for each of the decedent’s three cars could be “stacked.” Since the policy provided coverage for accidents that might occur in other States, it was obvious to the parties at the time of contracting that it might give rise to the application of the law of States other than Wisconsin. Therefore, while Wisconsin may have an interest in ensuring that contracts formed in Wisconsin in reliance upon Wisconsin law are interpreted in accordance with that law, that interest is not implicated in this case.11
*325Petitioner has failed to establish that Minnesota’s refusal to apply Wisconsin law poses any direct12 or indirect threat to Wisconsin’s sovereignty.13 In the absence of any such *326threat, I find it unnecessary to evaluate the forum State’s interest in the litigation in order to reach the conclusion that the Full Faith and Credit Clause does not require the Minnesota courts to apply Wisconsin law to the question of contract interpretation presented in this case.
II
It may be assumed that a choice-of-law decision would violate the Due Process Clause if it were totally arbitrary or if it were fundamentally unfair to either litigant. I question whether a judge’s decision to apply the law of his own State could ever be described as wholly irrational. For judges are presumably familiar with their own state law and may find it difficult and time consuming to discover and apply correctly the law of another State.14 The forum State’s interest in the fair and efficient administration of justice is therefore sufficient, in my judgment, to attach a presumption of validity to a forum State’s decision to apply its own law to a dispute over which it has jurisdiction.
The forum State’s interest in the efficient operation of its judicial system is clearly not sufficient, however, to justify the application of a rule of law that is fundamentally unfair to one of the litigants. Arguably, a litigant could demonstrate such unfairness in a variety of ways. Concern about the fairness of the forum’s choice of its own rule might arise *327if that rule favored residents over nonresidents, if it represented a dramatic departure from the rule that obtains in most American jurisdictions, or if the rule itself was unfair on its face or as applied.15
The application of an otherwise acceptable rule of law may result in unfairness to the litigants if, in engaging in the activity which is the subject of the litigation, they could not reasonably have anticipated that their actions would later be judged by this rule of law. A choice-of-law decision that frustrates the justifiable expectations of the parties can be fundamentally unfair. This desire to prevent unfair surprise to a litigant has been the central concern in this Court’s review of choice-of-law decisions under the Due Process Clause.16
Neither the “stacking” rule itself, nor Minnesota’s application of that rule to these litigants, raises any serious question of fairness. As the plurality observes, “[s] tacking was *328the rule in most States at the time the policy was issued.” Ante, at 316, n. 22.17 Moreover, the rule is consistent with the economics of a contractual relationship in which the policyholder paid three separate premiums for insurance coverage for three automobiles, including a separate premium for each uninsured motorist coverage.18 Nor am I persuaded that the decision of the Minnesota courts to apply the “stacking” rule in this case can be said to violate due process because that decision frustrates the reasonable expectations of the contracting parties.
Contracting parties can, of course, make their expectations explicit by providing in their contract either that the law of a particular jurisdiction shall govern questions of contract interpretation,19 or that a particular substantive rule, for instance “stacking,” shall or shall not apply.20 In the absence *329of such express provisions, the contract nonetheless may implicitly reveal the expectations of the parties. For example, if a liability insurance policy issued by a resident of a particular State provides coverage only with respect to accidents within that State, it is reasonable to infer that the contracting parties expected that their obligations under the policy would be governed by that State’s law.21
In this case, no express indication of the parties’ expectations is available. The insurance policy provided coverage for accidents throughout the United States; thus, at the time of contracting, the parties certainly could have anticipated that the law of States other than Wisconsin would govern particular claims arising under the policy.22 By virtue of doing busi*330ness in Minnesota, Allstate was aware that it could be sued in the Minnesota courts; Allstate also presumably was aware that Minnesota law, as well as the law of most States, permitted “stacking.” Nothing in the record requires that a different inference be drawn. Therefore, the decision of the Minnesota courts to apply the law of the forum in this case does not frustrate the reasonable expectations of the contracting parties, and I can find no fundamental unfairness in that decision requiring the attention of this Court.23
*331In terms of fundamental fairness, it seems to me that two factors relied upon by the plurality — the plaintiff’s post-accident move to Minnesota and the decedent’s Minnesota employment — are either irrelevant to or possibly even tend to undermine the plurality’s conclusion. When the expectations of the parties at the time of contracting are the central due process concern, as they are in this case, an unanticipated postaccident occurrence is clearly irrelevant for due process purposes. The fact that the plaintiff became a resident of the forum State after the accident surely cannot justify a ruling in her favor that would not be made if the plaintiff were a nonresident. Similarly, while the fact that the decedent regularly drove into Minnesota might be relevant to the expectations of the contracting parties,24 the fact that he did so because he was employed in Minnesota adds nothing to the due process analysis. The choice-of-law decision of the Minnesota courts is consistent with due process because it does not result in unfairness to either litigant, not because Minnesota now has an interest in the plaintiff as resident or formerly had an interest in the decedent as employee.
Ill
Although I regard the Minnesota courts’ decision to apply forum law as unsound as a matter of conflicts law, and there *332is little in this record other than the presumption in favor of the forum’s own law to support that decision, I concur in the plurality’s judgment. It is not this Court’s function to establish and impose upon state courts a federal choice-of-law rule, nor is it our function to ensure that state courts correctly apply whatever choice-of-law rules they have themselves adopted.25 Our authority may be exercised in the choice-of-law area only to prevent a violation of the Full Faith and Credit or the Due Process Clause. For the reasons stated above, I find no such violation in this case.

 Article IV, § 1, provides:
“Full Faith and Credit shall be given in each State to the public Acts, Records, and Judicial Proceedings of every other State. And the Congress may by general Laws prescribe the Manner in which such Acts, Records and Proceedings shall be proved, and the Effect thereof.”

 Section 1 of the Fourteenth Amendment provides, in part:
“No State shall . . . deprive any person of life, liberty, or property, without due process of law . . .

 The two questions presented by the choice-of-law issue arise only after it is assumed or established that the defendant’s contacts with the forum State are sufficient to support personal jurisdiction. Although the choice-of-law concerns — respect for another sovereign and fairness to the liti*321gants — are similar to the two functions performed by the jurisdictional inquiry, they are not identical. In World-Wide Volkswagen Corp. v. Woodson, 444 U. S. 286, 291-292 (1980), we stated:
“The concept of minimum contacts, in turn, can be seen to perform two related, but distinguishable, functions. It protects the defendant against the burdens of litigating in a distant or inconvenient forum. And it acts to ensure that the States, through their courts, do not reach out beyond the limits imposed on them by their status as coequal sovereigns in a federal system.”
See also Reese, Legislative Jurisdiction, 78 Colum. L. Rev. 1587, 1589-1590 (1978). While it has been suggested that this same minimum-contacts analysis be used to define the constitutional limitations on choice of law, see, e. g., Martin, Personal Jurisdiction and Choice of Law, 78 Mich. L. Rev. 872 (1980), the Court has made it clear over the years that the personal jurisdiction and choice-of-law inquiries are not the same. See Kulko v. California Superior Court, 436 U. S. 84, 98 (1978); Shaffer v. Heitner, 433 U. S. 186, 215 (1977); id., at 224-226 (Brennan, J., dissenting in part); Hanson v. Denckla, 357 U. S. 235, 253-254 (1958); id., at 258 (Black, J., dissenting).

 Although the Court has struck down a state court’s choice of forum law on both due process, see, e. g., Home Ins. Co. v. Dick, 281 U. S. 397 (1930), and full faith and credit grounds, see, e. g., John Hancock Mutual life Ins. Co. v. Yates, 299 U. S. 178 (1936), no clear analytical distinction between the two constitutional provisions has emerged. The Full Faith and Credit Clause, of course, was inapplicable in Home Ins. Co. because the law of a foreign nation, rather than of a sister State, was at issue; a similarly clear explanation for the Court’s reliance upon the Full Faith and Credit Clause in John Hancock Mutual Life Ins. cannot be found. Indeed, John Hancock Mutual Life Ins. is probably best understood as a due process case. See Reese, supra, at 1589, and n. 17; Weintraub, Due Process and Full Faith and Credit Limitations on a State’s Choice of Law, 44 Iowa L. Rev. 449, 457-458 (1959).

 See R. Leflar, American Conflicts Law § 5, p. 7, § 55, pp. 106-107 (3d ed. 1977). The Court’s frequent failure to distinguish between the two Clauses in the choice-of-law context may underlie the suggestions of various commentators that either the Full Faith and Credit Clause or the Due Process Clause be recognized as the single appropriate source for *322constitutional limitations on choice of law. Compare Martin, Constitutional Limitations on Choice of Law, 61 Cornell L. Rev. 185 (1976) (full faith and credit), with Reese, supra (due process); see also Kirgis, The Roles of Due Process and Full Faith and Credit in Choice of Law, 62 Cornell L. Rev. 94 (1976).

 Even when the Court has explicitly considered both provisions in a single case, the requirements of the Due Process and Full Faith and Credit Clauses have been measured by essentially the same standard. For example, in Watson v. Employers Liability Assurance Corp., 348 U. S. 66 (1954), the Court separately considered the due process and full faith and credit questions. See id., at 70-73. However, in concluding that the Full Faith and Credit Clause did not bar the Louisiana courts from applying Louisiana law in that case, the Court substantially relied upon its preceding analysis of the requirements of due process. Id., at 73. By way of contrast, in Alaska Packers Assn. v. Industrial Accident Comrn’n, 294 U. S. 532, 544-550 (1935), the Court’s full faith and credit analysis differed significantly from its due process analysis. However, as noted in the plurality opinion, ante, at 308, n. 10, the Court has since abandoned the full faith and credit standard represented by Alaska Packers.

 See also Sumner, The Full-Faith-and-Credit-Clause — Its History and Purpose, 34 Or. L. Rev. 224, 242 (1955); Weintraub, supra, at 477; R. Leflar, supra, § 73, p. 143.

 As the Court observed in Alaska Packers, supra, an overly rigid application of the Full Faith and Credit Clause would produce anomalous results:
“A rigid and literal enforcement of the full faith and credit clause, without regard to the statute of the forum, would lead to the absurd result that, wherever the conflict arises, the statute of each state must be enforced in the courts of the other, but cannot be in its own.” 294 U. S., at 547.

 For example, it is well established that “the Full Faith and Credit Clause does not require a State to apply another State’s law in violation of its own legitimate public policy.” Nevada v. Hall, 440 U. S. 410, 422 (1979) (footnote omitted).

 The kind of state action the Full Faith and Credit Clause was designed to prevent has been described in a variety of ways by this Court. In Carroll v. Lanza, 349 U. S. 408, 413 (1955), the Court indicated that the Clause would be invoked to restrain “any policy of hostility to the public Acts” of another State. In Nevada v. Hall, supra, at 424, n. 24, we approved action which “pose[d] no substantial threat to our constitutional system of cooperative federalism.” And in Thomas v. Washington Gas Light Co., 448 U. S. 261, 272 (1980), the plurality opinion described the purpose of the Full Faith and Credit Clause as the prevention of “parochial entrenchment on the interests of other States.”

 While the justifiable expectations of the litigants are a major concern for purposes of due process scrutiny of choice-of-law decisions, see Part II, infra, the decision in John Hancock Mutual Life Ins. Co. v. Yates, 299 U. S. 178 (1936), suggests that this concern may also implicate state interests cognizable under the Full Faith and Credit Clause. In John Hancock Mutual Life Ins., the Court struck down on full faith and credit grounds a Georgia court’s choice of Georgia law over a conflicting New York statute in a suit on a New York life insurance contract brought after the insured’s death in New York. Central to the decision in that case was the Court’s apparent concern that application of Georgia law would result in unfair surprise to one of the contracting parties. The Court found that *325the New York statute was “a rule of substantive law which became a term of the contract, as much so as the amount of the premium to be paid or the time for its payment.” Id., at 182 (footnote omitted). This statute “determine[d] the substantive rights of the parties as fully as if a provision to that effect had been embodied in writing in the policy.” Id., at 182-183. The insurer had no reason to expect that the New York statute would not control all claims arising under the life insurance policy. The parties to a life insurance contract normally would not expect the place of death to have any bearing upon the proper construction of the policy; by way of contrast, in the case of a liability policy, the place of the tort might well be relevant. For that reason, in a life insurance contract relationship, it is likely that neither party would expect the law of any State other than the place of contracting to have any relevance in possible subsequent litigation. See generally C. Carnahan, Conflict of Laws and Life Insurance Contracts § 15, pp. 51-52, § 47, pp. 26A-265, 267-268, § 60, pp. 325-327 (2d ed. 1958).
Paul Freund has aptly characterized John Hancock Mutual Lije Ins. as perhaps this Court’s “most ambitious application of the full faith and credit clause.” Freund, Chief Justice Stone and the Conflict of Laws, 59 Harv. L. Rev. 1210, 1233 (1946). Like Bradford Electric Light Co. v. Clapper, 286 U. S. 145 (1932), on which the Court relied, see 299 U. S., at 183, John Hancock Mutual Lije Ins. was one of a series of constitutional decisions in the 1930’s that have been limited by subsequent cases. See Carroll v. Lanza, 349 U. S., at 412; Thomas v. Washington Gas Light Co., supra, at 272-273, n. 18 (plurality opinion). See also Traynor, Is This Conflict Really Necessary?, 37 Texas L. Rev. 657, 675 (1959).

 Compare Nevada v. Hall, supra, in which the Court permitted a California court to disregard Nevada’s statutory limitation on damages available against the State. The Court found this direct intrusion upon Nevada’s sovereignty justified because the Nevada statute was “obnoxious” to California’s public policy. Id., at 424.

 It is clear that a litigant challenging the forum’s application of its own law to a lawsuit properly brought in its courts bears the burden of establishing that this choice of law infringes upon interests protected by the Full Faith and Credit Clause. See Alaska Packers Assn. v. Industrial Accident Comm’n, 294 U. S., at 547-548.
It is equally clear that a state court’s decision to apply its own law cannot violate the Full Faith and Credit Clause where the application of *326forum law does not impinge at all upon the interests of other States. Cf. Reese, supra n. 3, at 1601.

 This task can be particularly difficult for a trial judge who does not have ready access to a law library containing the statutes and decisions of all 50 States. If that judge is able to apply law with which he is thoroughly familiar or can easily discover, substantial savings can accrue to the State’s judicial system. Moreover, an erroneous interpretation of the governing rule is less likely when the judge is applying a familiar rule. Cf. Shaffer v. Heitner, 433 U. S., at 225-226 (Brennan, J., dissenting in part) (such concerns indicate that a State’s ability to apply its own law to a transaction should be relevant for purposes of evaluating its power to exercise jurisdiction over the parties to that transaction).

 Discrimination against nonresidents would be constitutionally suspect even if the Due Process Clause were not a check upon a State’s choice-of-law decisions. See Currie & Schreter, Unconstitutional Discrimination in the Conflict of Laws: Equal Protection, 28 U. Chi. L. Rev. 1 (1960) ; Currie & Schreter, Unconstitutional Discrimination in the Conflict of Laws: Privileges and Immunities, 69 Yale L. J. 1323 (1960); Note, Unconstitutional Discrimination in Choice of Law, 77 Colum. L. Rev. 272 (1977). Moreover, both discriminatory and substantively unfair rules of law may be detected and remedied without any special choice-of-law analysis; familiar constitutional principles are available to deal with both varieties of unfairness. See, e. g., Martin, supra n. 5, at 199.

 Upon careful analysis, most of the decisions of this Court that struck down on due process grounds a state court’s choice of forum law can be explained as attempts to prevent a State with a minimal contact with the litigation from materially enlarging the contractual obligations of one of the parties where that party had no reason to anticipate the possibility of such enlargement. See, e. g., Home Ins. Co. v. Dick, 281 U. S. 397 (1930); Hartford Accident & Indemnity Co. v. Delta & Pine Land Co., 292 U. S. 143 (1934); cf. John Hancock Mutual Life Ins. Co. v. Yates, 299 U. S. 178 (1936) (similar concern under Full Faith and Credit Clause, see n. 11, supra). See generally Weintraub, supra n. 4, at 457-460.

 See also Nelson v. Employers Mutual Casualty Co., 63 Wis. 2d 558, 563-566, and nn. 2, 3, 217 N. W. 2d 670, 672-674, and nn. 2, 3 (1974), discussed ante, at 316-317, n. 22.

 The “stacking” rule provides that all of the uninsured motorist coverage purchased by an insured party may be aggregated, or “stacked,” to create a fund available to provide a recovery for a single accident.

 For example, in Home Ins. Co. v. Dick, supra, at 403, and n. 1, the insurance policy was subject, by its express terms, to Mexican law.

 Home Ins. Co., supra, again provides a useful example. In that case, the insurance policy expressly provided a 1-year limitations period for claims arising thereunder. Id., at 403. Similarly, the insurance policy at issue in Hartford Accident & Indemnity Co. v. Delta & Pine Land Co., supra, at 146, also prescribed a specific limitations period.
While such express provisions are obviously relevant, they are not always dispositive. In Clay v. Sun Insurance Office, Ltd., 377 U. S. 179 (1964), the Court allowed the lower court’s choice of forum law to override an express contractual limitations period. The Court emphasized- the fact that the insurer had issued the insurance policy with the knowledge that it would cover the insured property wherever it was taken. Id., at 181-182. The Court also noted that the insurer had not attempted to provide in the policy that the law of another State would control. Id., at 182.
In Watson v. Employers Liability Assurance Corp., 348 U. S., at 68, the insurance policy expressly provided that an injured party could not main*329tain a direct action against the insurer until after the insured’s liability had been determined. The Court found that neither the Due Process Clause nor the Full Faith and Credit Clause prevented the Louisiana courts from applying forum law to permit a direct action against the insurer prior to determination of the insured’s liability. As in Clay, the Court noted that the policy provided coverage for injuries anywhere in the United States. 348 U. S., at 71-72. An additional, although unarticu-lated, factor in Watson was the fact that the litigant urging that forum law be applied was not a party to the insurance contract. While contracting parties may be able to provide in advance that a particular rule of law will govern disputes between them, their expectations are clearly entitled to less weight when the rights of third-party litigants are at issue.

 In Home Ins. Co., supra, the insurance policy was issued in Mexico by a Mexican corporation and covered the insured vessel only in certain Mexican waters. Id., at 403.

 In Clay v. Sun Insurance Office, Ltd., supra, at 182, and Watson v. Employers Liability Assurance Corp., supra, at 71-72, the Court considered it significant, in upholding the lower courts’ choice of forum law, that the insurance policies provided coverage throughout the United States. See n. 20, supra. Of course, in both Clay and Watson the loss to which the insurance applied actually occurred in the forum State, whereas the accident in this case occurred in Wisconsin, not Minnesota. However, as the dissent recognizes, post, at 336-337, because the question on the merits is one of contract interpretation rather than tort liability, the actual site of the accident is not dispositive with respect to the due process inquiry. More relevant is the fact that the parties, at the time of con-*330traeting, anticipated that an accident covered by the policy could occur in a “stacking” State. The fact that this particular accident did not occur in Minnesota does not undercut the expectations formed by the parties at the time of contracting.
In Hartford Accident & Indemnity Co. v. Delta & Pine Land Co., supra, the Court struck down a state court’s choice of forum law despite the fact that the insurance contract’s coverage was not limited by state boundaries. While Hartford Accident may indeed have “scant relevance for today,” ante, at 309, n. 11, it is nonetheless consistent with a due process analysis based upon fundamental fairness to the parties. One of the statutes applied by the Mississippi courts in Hartford Accident was offensively broad, providing that “[a] 11 contracts of insurance on property, lives or interests in this state shall be deemed to be made therein.” 292 U. S., at 148. No similar statute is involved in this case. In addition, the Mississippi courts applied the law of the forum to override an express contractual provision, and thus frustrated the expectations of the contracting parties. In the present case, the insurance contract contains no similar declaration of the intent of the parties.

 Comparison of this case with Home Ins. Co. v. Dick, 281 U. S. 397 (1930), confirms my conclusion that the application of Minnesota law in this case does not offend the Due Process Clause. In Home Ins. Co., the contract expressly provided that a particular limitations period would govern claims arising under the insurance contract and that Mexican law was to be applied in interpreting the contract; in addition, the contract was limited in effect to certain Mexican waters. The parties could hardly have made their expectations with respect to the applicable law more plain. In this case, by way of contrast, nothing in the contract suggests that Wisconsin law should be applied or that Minnesota’s “stacking” rule should not be applied. In this case, unlike Home Ins. Co., the court’s choice of forum law results in no unfair surprise to the insurer.

 Even this factor may not be of substantial significance. At the time of contracting, the parties were aware that the insurance policy was effective throughout the United States and that the law of any State, including Minnesota, might be applicable to particular claims. The fact that the decedent regularly drove to Minnesota, for whatever purpose, is relevant only to the extent that it affected the parties’ evaluation, at the time of contracting, of the likelihood that Minnesota law would actually be applied at some point in the future. However, because the applicability of Minnesota law was perceived as possible at the time of contracting, it does not seem especially significant for due process purposes that the parties may also have considered it likely that Minnesota law would be applied. This factor merely reinforces the expectation revealed by the policy’s national coverage.

 In Kryger v. Wilson, 242 U. S. 171, 176 (1916), after rejecting a due process challenge to a state court’s choice of law, the Court stated:
“The most that the plaintiff in error can say is that the state court made a mistaken application of doctrines of the conflict of laws in deciding that the cancellation of a land contfact is governed by the law of the situs instead of the place of making and performance. But that, being purely a question of local common law, is a matter with which this court is not concerned.”