Court Opinion

ID: 9486367
Source: CourtListenerOpinion
Date Created: 2023-08-05 11:46:15.115236+00
Date Added: 2024-06-11T17:51:41.209917
License: Public Domain

MILBURN, Circuit Judge,
concurring in part and dissenting in part.
I concur in parts I and II B, C, and E of the majority’s opinion, but I respectfully dissent from parts II A and D, and III, because in my view the majority and the district court erred in adopting the Michigan “borrowing statute” and applying the Kentucky statute of limitations instead of the Michigan statute of limitations.
I believe the majority has misread our previous decision in Champion International Corp. v. United Paperworkers International Union, 779 F.2d 328 (6th Cir.1985). In Champion, as in the present case, we were faced with a federal cause of action that lacked a federal limitations statute, and had to decide whether to apply the forum state’s borrowing statute or the most analogous state limitations statute. We held that the district court in Tennessee should apply Tennessee’s statute of limitations rather than its borrowing statute, which would have required it to apply a Mississippi limitations period.
This court in Champion began its analysis by noting that “[i]n federal claim cases federal courts resort to state statutes of limitations primarily as a matter of expedience, not as a matter of mandatory law.” Id. at 333. Thus, state statutes of limitations are adopted only where they “will not frustrate or interfere with the implementation of national policies.” Id. (quoting DelCostello v. International Bhd. of Teamsters, 462 U.S. 151, 161, 103 S.Ct. 2281, 2289, 76 L.Ed.2d 476 (1983)). Because federal law must always govern whether a state’s statute of limitations shall apply,
[fjederal law, rather than a state borrowing statute, should likewise govern the choice between the forum state’s statute of limitations and that of another state in a Section 301 case. A borrowing statute obviously is not tailored to further federal labor policy_ For this reason the application of a state borrowing statute in a Section 301 case will comport with federal labor policy only coincidentally, if at all. In fact, a borrowing statute’s “complex calculus of contacts and interests may produce considerable difficulty in application and uncertainty of outcome without any corresponding improvement of result.”
Id. at 333-34 (quoting Consolidated Express, Inc. v. New York Shipping Ass’n, 602 F.2d 494, 507 (3d Cir.1979), vacated on other *623grounds, 448 U.S. 902, 100 S.Ct. 3040, 65 L.Ed.2d 1131 (1980)).
Champion thus rejected the use of a forum state’s borrowing statute because it served no federal policy and because the additional complexities and confusions attendant to its use were more trouble than they were worth. In so doing, this court approved the use of a federal choice-of-law rule, rather than state choice-of-law rules, including borrowing statutes. The federal choice-of-law rule requires only the direct application of the forum state’s statute of limitations governing the state’s most closely analogous substantive claim.
Use of a federal choice of law rule avoids such confusion. Applying the appropriate federal choice of law rule, we conclude that the forum state’s statute of limitations governing the most closely analogous state substantive claim controls, unless a party can demonstrate that the adoption of the forum state’s limitation period will substantially undermine federal labor policy or cause the parties undue hardship.
Id. at 334 (emphasis added).
The majority reads Champion as merely holding that in a case such as this, where the federal statute does not provide a limitation period and the federal court must look to the forum state’s statutes of limitation to determine the appropriate limitation period for the federal cause of action, the federal court is not required to use the forum state’s borrowing statute if such use “would make applicable a time bar inconsistent with [fjederal policy.” However, I read Champion as holding that in those federal question cases where the federal court looks to the forum state’s statutes of limitation for the appropriate limitation period, the court should not apply the forum state’s borrowing statute unless a party shows that application of the forum state’s statute of limitation will substantially undermine federal policy or cause the parties undue hardship. Therefore, unless Michigan’s six-year statute of limitations for fraud undermines federal policy, the district court should have applied it and not Michigan’s borrowing statute. Accordingly, I would reverse the district court’s grant of summary judgment as to the federal securities fraud claim and, furthermore, would direct the district court to reinstate the pendent state claims.