Court Opinion

ID: 9484219
Source: CourtListenerOpinion
Date Created: 2023-08-05 09:44:14.648433+00
Date Added: 2024-06-11T17:50:05.505930
License: Public Domain

*648RIPPLE, Circuit Judge,
dissenting.
This ease gives new meaning to the familiar maxim that hard cases make bad law. It requires that we deal with the always difficult area of constitutional limitations on choice of law. It also requires that we apply those principles to the issue of contribution among tortfeasors, an area in which choice of law rules are underdeveloped. Lastly, we must accomplish this task in the always cumbersome procedural context of federal transfer jurisdiction under 28 U.S.C. § 1404(a). The task of our colleague in the district court and of my colleagues on this appellate panel has consequently been a formidable one and it is with a great deal of respect for their efforts that I reluctantly file this dissenting opinion. While I believe that my colleagues have labored with great skill in the “dismal swamp,”1 I respectfully disagree with both their analysis and their conclusion.
At the outset, it is worth noting that this case is not only important to the parties; it is also important to the development of the law of this circuit. This is the first case since the Supreme Court’s latest guidance in Allstate Insurance Co. v. Hague, 449 U.S. 302, 101 S.Ct. 633, 66 L.Ed.2d 521 (1981), and Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 105 S.Ct. 2965, 86 L.Ed.2d 628 (1985), in which this circuit has struck down, on constitutional grounds, a state choice of law rule. It must provide, therefore, meaningful guidance for the courts of this circuit in future cases. In my view, the court’s disposition establishes an approach that is incompatible with the current jurisprudence of the Supreme Court in this area and therefore sets the wrong vector for this circuit’s compliance with the mandate of that Court.
1. ■
Before we begin our assessment of the issue decided by the majority, I suggest that we ought to examine more closely an assumption at the heart of the analysis of the district court and of the majority. In both instances, it is assumed that Minnesota would in fact insist on the application of its own law with respect to the matter of contribution. This assumption is predicated on the general inclination of Minnesota to favor the application of its own law on tort matters. I suggest that it was incumbent on the district court to engage in a more precise inquiry into that issue, rather than simply making that assumption. In this area, as in all instances in which constitutional issues are involved, a federal court ought to reach the constitutional issue only out of necessity.2
The Supreme Court did not have to consider this problem in either Allstate or Shutts. Both cases came to the Court on direct review from the state supreme courts. Those courts had already applied their own .state’s law in the face of the defendants’ arguments that there were insufficient contacts with the forum state. It is worth noting, however, that, in Shutts, 472 U.S. at 816, 105 S.Ct. at 2976, the Court did indicate that it was required to determine initially whether there was a conflict in the laws of the several states which would affect materially the outcome of the litigation.
2.
Before we turn to the court’s resolution of the constitutional issue, we ought to pause to recall why this controversy over the appropriate choice of law is important to the outcome of this litigation. Minnesota and Indiana tort law differ in several respects, alternately favoring and disfavoring each of the parties here. First, as noted, Minnesota permits contribution, while Indiana does not. On the other hand, while Minnesota makes each co-defendant initially liable, as a joint tortfeasor, for the entire amount of the plaintiffs injury, Indiana would make each tort-feasor only liable for the percentage of its own fault in causing the plaintiffs injury.3 Finally, as noted, the amount of damages a *649plaintiff may recover for a wrongful death action is substantially higher under Minnesota law than under Indiana law.4
It is also important that we keep in mind that we are dealing not with the fashioning of choice of law rules but simply with setting the outer limits, imposed by the constitution, on the formulation of those choice of law rules. In this complex and murky area, it is indeed easy to lose one’s bearings and to slip from a focus on the constitutional limitations on choice of law to the choice of law rules themselves. In this case, the distinction is crucial. If we were engaged in the second inquiry and attempting to decide what state’s law to apply as a matter of conflict of laws jurisprudence, a respectable ease could be made for the application of Indiana law. See Consolidated Rail Corp. v. Allied Corp., 882 F.2d 254, 257 (7th Cir.1989); Restatement, Second, Conflict of Laws § 173, comment a (“Most cases to date have held that the question of contribution between joint tortfeasors is determined by the local law of the state of conduct and injury.”). Here, however, we are dealing only with constitutional limitations on a state’s authority to fashion such a rule.
3.
Discernment of the constitutional limitations on state choice of law decisions has always been a difficult task for the bench and bar. As Justice Jackson so eloquently stated in his famous Cardozo Lecture to the Association of the Bar of the City of New York,5 the guideposts established by the Supreme Court are vague and indistinct. Indeed, as the Justice also suggested, the lack of constitutional decision-making in this area may constitute a deliberate choice on the part of the Court. In the early days of this century, the Court attempted to forge a jurisprudence that inevitably would have resulted in making almost all our conflict of law constitutional rules.6 However, since that time, the Court has made it clear that, in this area, the states have a great deal of flexibility in the fashioning of choice of law rules. Neither Allstate nor Shutts attempts to cabin, beyond the most basic requirements of fairness to the litigants and the maintenance of interstate comity, the ability of a state to fashion choice of law rules. Therefore, a state’s approach need not be the majority rule or even the minority rule. It simply must conform to constitutional constraints.
The limits on the ability of a state to apply its own law to particular litigation with which it may have limited contacts have been considered by the Supreme Court in a line of cases dating back to the early part of the century.7 The substantial majority of these eases upheld the right of the state to apply its own law to the transaction, in the face of challenges of insufficient contacts. The core doctrine developed in these cases was recently reiterated in Allstate as follows:
In deciding constitutional choice-of-law questions, whether under the Due Process Clause or the Full Faith and Credit Clause, this Court has traditionally examined the contacts of the State, whose law was applied, with the parties and with the occurrence or transaction giving rise to the litigation____
449 U.S. at 308, 101 S.Ct. at 637-38 (footnote omitted).
*650[F]or a State’s substantive law to be selected in a constitutionally permissible manner, that State must have a significant contact or significant aggregation of contacts, creating state interests, such that choice of its law is neither arbitrary nor fundamentally unfair.
Id. at 312-13, 101 S.Ct. at 640.
In Allstate, that requirement was satisfied by three factors: (1) the plaintiffs decedent’s status as a member of the forum state’s work force; (2) the defendant insurance company’s presence and substantial (albeit unrelated) business activities in the forum state; and (3) the plaintiffs post-transaction, pre-litigation move to the forum state. Notably, all three of these factors involved contacts between the forum and the parties; there were no contacts between the forum and the underlying occurrence.
Shutts was a class action brought in a state court in Kansas, asserting claims in behalf of plaintiffs, 97% of whom did not have connections with Kansas, and involving property, 99% of which was outside of Kansas. Distinguishing Allstate, the Supreme Court held that the connections of these parties and the transactions were too slight to allow the Kansas court to apply forum law to this litigation. The application of Kansas’ law to a transaction which involved an overwhelming majority of parties and transactions with no Kansas contacts, merely because the nominal class-action plaintiff had those connections, would have allowed the tail to wag the dog in a way inconsistent with constitutional limitations.
These two decisions embody the same core considerations. The different result was the product of the absence in Shutts of any meaningful connection between the overwhelming majority of plaintiffs and them claims with the forum state. Shutts, moreover, refines the policy concerns underlying the constitutional limitations on the ability of a state to apply its own law to a dispute. In Shutts, the Court implicitly incorporated, see 472 U.S. at 818-19, 105 S.Ct. at 2977-78, the importance given in Justice Powell’s dissent in Allstate to the two policy factors underlying the constitutional limitations on application of forum law. Quoting from that opinion, the Court emphasized these two concerns. First, “the contacts between the forum State and the litigation should not be so ‘slight and casual’ that it would be fundamentally unfair to a litigant for the forum to apply its own State’s law.... The touchstone here is the reasonable expectation of the parties.” 449 U.S. at 333, 101 S.Ct. at 651 (citations omitted). Second, “the forum State must have a legitimate interest in the outcome of the litigation before it.” Id. at 334, 101 S.Ct. at 651. Finally the Court noted that the mere fact that a plaintiff would prefer application of forum law is “rarely, if ever controlling.” Shutts, 472 U.S. at 820, 105 S.Ct. at 2978.
4.
Allstate and Shutts, as well as their doctrinal ancestors,8 do not reduce the constitutional inquiry to mere contact counting. Resolution of this dispute must turn on an analysis of the relevant constitutional policy considerations that restrict a state’s otherwise unfettered choice of its own law to apply to a dispute.
The first inquiry suggested by Shutts is whether it is “fundamentally unfair” to apply Minnesota law to Mr. Overton. This inquiry requires, in the context of this case, a pragmatic assessment of a somewhat unusual litigation situation. It is unrealistic, I suggest, to ignore Mr. Overton’s relationship with the underlying action. Although he was not a party, his wife, as trustee for their deceased son’s next of kin, brought the underlying tort action in Minnesota. Mr. Overton appears, it should be remembered, as executor of that son’s estate. While the Minnesota court had not yet made a definitive ruling that Minnesota law (which was favorable to Mrs. Over-ton) would apply, its denial of Soo Line’s forum non conveniens motion was a good indication that, if the matter had gone to trial, that state’s law would have been applied. No doubt, the ensuing settlement agreement took the probability that Minnesota law would apply very much into account. Under these circumstances, it hardly seems fair to Soo Line to give Mr. Overton (as his *651son’s representative) the benefit of the Minnesota law on remedies in a wrongful death action, but then to allow him to avoid the Minnesota rule regarding the sharing of responsibilities among joint tortfeasors.
. Next, we ought to inquire if Minnesota has a “legitimate interest” in the outcome of the litigation. Here, our focus ought to be not on Minnesota’s interest in the underlying tort action but its interest in the impáct of the settlement agreement on a domestic corporation (Soo Line) which had been sued in Minnesota by an out of state litigant seeking to take advantage of the favorable law. Shutts stated that the mere choice of a forum by a plaintiff is “rarely, if ever controlling.” 472 U.S. at 820, 105 S.Ct. at 2978. However, here, unlike Allstate and Shutts, it is the defendant in the original action, rather than the plaintiff, as in those two cases, who seeks application of forum law. The proposition in Shutts makes sense; the plaintiff ought not, by choosing a forum, also have that be a “contact” for purposes of allowing application of the forum’s law. On the other hand, when it is the defendant who wants to apply the forum’s law, it is not unfair to say that the forum has an interest in protecting him from an inequitable application of its judgment. Mr. Overton was not the plaintiff in the original litigation. However, constitutional limitations on the choice of law should not turn on litigation strategies, including the fact that Mrs. Overton, rather than her husband, was named as the trustee for their son. We need not ignore the unity of interest between the original plaintiff and the third-party defendant. It is appropriate to view her contact with the forum as a constitutionally sufficient basis for permitting Minnesota to apply its own law to this dispute, if it would chose to do so.
Indiana and Minnesota follow different approaches to joint liability of tortfeasors and to contribution between tortfeasors. As noted, Minnesota permits contribution; while Indiana does not. On the other hand, while Minnesota makes each co-defendant initially liable, as a joint tortfeasor, for the entire amount of the plaintiffs injury, Indiana would make each tortfeasor only liable for the percentage of its own fault in causing the plaintiffs injury. Finally, as noted, the amount of damages a plaintiff may recover for a wrongful death action is substantially higher under Minnesota law than under Indiana law. The result of both approaches, however, is to reduce the likelihood that one tortfeasor will be subject to complete liability for the plaintiffs entire claim; the sharing of responsibility is consistent with both states’ approaches. The result of Mr. Overton’s position is a “mix-and-match” of legal rules, which is inconsistent with the result that either an Indiana or a Minnesota court would have reached. Application of Indiana law to the second half of this dispute is not required by the Constitution. Allowing Minnesota to apply its own law to this portion of the dispute, is consistent with Allstate and Shutts.

. Prosser, Interstate Publication, 51 Mich.L.Rev. 959, 971 (1953).

. Cf. Edwardsville Nat'l Bank & Trust Co. v. Marion Labs., Inc., 808 F.2d 648, 651-52 (7th Cir. 1987) (no need to reach issues raised by Allstate and Shutts, since Illinois would decline to apply its law to dispute having only limited contacts with state); see also Ashwander v. Tennessee Valley Auth., 297 U.S. 288, 341, 56 S.Ct. 466, 480, 80 L.Ed. 688 (1936) (Brandéis, J., concurring).

. See supra n. 6 of the majority opinion.

. See supra n. 2 of the majority opinion.

. Jackson, Full Faith and Credit — The Lawyer’s Clause of the Constitution, 45 Colum.L.Rev. 1, 16, 17, 26-27 (1945).

. See Mutual Life Ins. Co. v. Liebing, 259 U.S. 209, 42 S.Ct. 467, 66 L.Ed. 900 (1922); New York Life Ins. Co. v. Dodge, 246 U.S. 357, 38 S.Ct. 337, 62 L.Ed. 772 (1918) (applying the “vested rights" theory of due process to contract choice of law rules).

. See, e.g., Nevada v. Hall, 440 U.S. 410, 99 S.Ct. 1182, 59 L.Ed.2d 416 (1979); Clay v. Sun Ins. Office, Ltd., 377 U.S. 179, 84 S.Ct. 1197, 12 L.Ed.2d 229 (1964); Carroll v. Lanza, 349 U.S. 408, 75 S.Ct. 804, 99 L.Ed. 1183 (1955); Watson v. Employers Liability Assurance Corp., 348 U.S. 66, 75 S.Ct. 166, 99 L.Ed. 74 (1954); Cardillo v. Liberty Mutual Ins. Co., 330 U.S. 469, 67 S.Ct. 801, 91 L.Ed. 1028 (1947); Pacific Employers Ins. Co. v. Industrial Accident Comm., 306 U.S. 493, 59 S.Ct. 629, 83 L.Ed. 940 (1939); John Hancock Mutual Life Ins. Co. v. Yates, 299 U.S. 178, 57 S.Ct. 129, 81 L.Ed. 106 (1936); Alaska Packers Ass’n v. Industrial Accident Comm., 294 U.S. 532, 55 S.Ct. 518, 79 L.Ed. 1044 (1935); Home Ins. Co. v. Dick, 281 U.S, 397, 50 S.Ct. 338, 74 L.Ed. 926 (1930).

. See supra n. 7.