Court Opinion

ID: 9678942
Source: CourtListenerOpinion
Date Created: 2023-08-24 06:36:55.165707+00
Date Added: 2024-06-11T12:33:43.192675
License: Public Domain

Otis, Justice
(dissenting).
In holding that to confer jurisdiction for purposes of awarding workmen’s compensation it is now only necessary to show that -a contract of employment was entered in this state with a Minnesota resident, we are overruling 50 years of precedent sub silentio. The court has abandoned the requirement that an employer have a localized business in Minnesota as a prerequisite to imposing liability under the Workmen’s Compensation Act. Predictably, the next step will be to apply the Minnesota act regardless of where a Minnesota resident is hired or injured. While this may be constitutionally valid, in the absence of legislation which clearly expresses a purpose to extend the act that far, I cannot agree we should summarily reverse a position to which we have adhered without deviation since 1918. If a majority of the court is of a different opinion, it seems to me that we should expressly overrule our prior decisions.
Where, as here, it is conceded that the employer had no business localized in Minnesota, I fail to see how he has an obligation to submit to our act. Apparently, because of prior activity in this state, this employer did in fact carry workmen’s compensation insurance. Ordinarily, however, this will not be the case where the employer has no connection with this state beyond hiring Minnesota residents for work elsewhere. The burden thus imposed is out of proportion to any reciprocal benefit which this state confers on the employer.
Moreover, there may well be a great many other employers similarly situated outside of this state who, relying on our localization rule, have heretofore failed to secure compensation insurance. As to them our retroactive reversal of policy is manifestly unjust.
By the same token, we certainly do not encourage nonresident employers to seek Minnesota construction workers out of local hiring *356halls if they are saddled with the substantial expense of carrying compensation insurance as the price for giving jobs to Minnesota residents. As a result, our decision will inevitably tend to dry up this source of out-of-state employment.
In State ex rel. Chambers v. District Court, 139 Minn. 205, 166 N. W. 185, we first promulgated the rule that an employer may be liable under the act for injuries sustained by an employee outside of this jurisdiction if the employer’s business was localized in Minnesota. There we stated (139 Minn. 209, 166 N. W. 187):
“* * * when a business is localized in a state there is nothing inconsistent with the principle of the compensation act in requiring the employer to compensate for injuries in a service incident to its conduct sustained beyond the borders of the state. The question of policy is with the legislature. It may enact an elective compensation act bringing such result if it chooses. In the case before us the business of the employer was localized in the state. What the employee did, if done in Minnesota, was a contribution to the business involving an expense and presumably resulting in a profit. It was not different because done across the border in North Dakota. It was referable to the business centralized in Minnesota.”
Every case dealing with the subject since the Chambers decision has found the employer’s business to be localized in this state as a basis for recovery. State ex rel. Maryland Cas. Co. v. District Court, 140 Minn. 427, 428, 168 N. W. 177, 178; Stansberry v. Monitor Stove Co. 150 Minn. 1, 2, 183 N. W. 977, 20 A. L. R. 316; Ginsburg v. Byers, 171 Minn. 366, 214 N. W. 55; Bradtmiller v. Liquid Carbonic Co. 173 Minn. 481, 217 N. W. 680; Rice v. Keystone View Co. 210 Minn. 227, 231, 297 N. W. 841, 843; Fitzgerald v. Economic Laboratory, Inc. 216 Minn. 296, 298, 12 N. W. (2d) 621, 623; Aleckson v. Kennedy Motor Sales Co. 238 Minn. 110, 117, 55 N. W. (2d) 696, 701; Marrier v. National Painting Corp. 249 Minn. 382, 386, 82 N. W. (2d) 356, 358.
As recently as November 1964, we noted in Hubbard v. Midland Constructors, Inc. 269 Minn. 425, 429, footnote 4, 131 N. W. (2d) *357209, 213, that our decision in the Marrier case “should not be construed as dispensing with the necessity for both localization and referability.” A number of authorities have recognized our position in the matter. Langschmidt, Jr., Choice of Law in Workmen’s Compensation, 24 Tenn. L. Rev. 322, 327, states:
“* * * The Minnesota court has developed the ‘business localization’ theory as a test for applicability of the Minnesota Act.”
Wellen, Workmen’s Compensation, Conflict of Laws and the Constitution, 55 W. Va. L. Rev. 131, 134, notes:
“* * * [T]he courts in several states, even in the absence of statutory provisions, have developed conflict of laws principles more adapted to workmen’s compensation problems. The common factor in these theories is the attempt to find some act, relation, or situation within the jurisdiction to which the local act will attach legal consequences. Probably the best known of these theories has been the ‘business localization test’ developed by the Minnesota court. * * *
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“In an increasing number of states, the business localization theory is being regarded as an important factor in determining whether the local act will be applied.” (Italics supplied.)
Professor McClintock made a similar observation in Restatement, Conflict of Laws, Minn. Ann. p. 94. Finally, 2 Larson, Workmen’s Compensation Law, § 87.50, comes to the following conclusion:
“The state in which the employer’s business is localized has a relevant interest in a compensable injury, as shown in the constitutional discussion earlier, since the obligation side of the compensation relation is as much a part of that relation as the benefit side, and since the burden of payment would ordinarily fall most directly on the employer and community where the industry is centered. Minnesota is the only state, however, in which this test [localization] has been fully developed by judicial decision, as the most important test of all, although other jurisdictions have relied upon it in conjunction with other tests. In Minnesota, the decisions seem to indicate that *358the local statute will be applied on the strength of business localization even if the injury and other major factors are outside the state; and, conversely, the presence of such other major factors as employee residence and place of contract within the state does not seem to satisfy the courts unless they can also find some kind of business localization in Minnesota.” (Italics supplied.)
While Alaska Packers Assn. v. Industrial Acc. Comm. 294 U. S. 532, 55 S. Ct. 518, 79 L. ed. 1044, relied on by the majority, dealt with the propriety of applying the law of an injured employee’s residence rather than the law of the state where he was injured, that case is not authority for the proposition that the residence of the employer has no relevance. It seems apparent from a reading of the opinion of the California Supreme Court, 1 Cal. (2d) 250, 34 P. (2d) 716, that the employer was a California company with a business localized in that state. The United States Supreme Court merely held that there were no constitutional impediments to applying California law although the accident occurred in Alaska, noting in its opinion that without a remedy in California the injured employee would be “remediless.” 294 U. S. 542, 55 S. Ct. 521, 79 L. ed. 1049.
For the reasons stated I would not lightly abolish the requirement of an employer’s business localization in this state without stating more compelling reasons for our deviating from the doctrine of stare decisis.