Court Opinion

ID: 8880661
Source: CourtListenerOpinion
Date Created: 2022-11-26 20:26:58.054078+00
Date Added: 2024-06-11T17:06:37.949039
License: Public Domain

ANDERSON, Circuit Judge
(dissenting) :
I dissent. As the analysis of Seider v. Roth, 17 N.Y.2d 111, 269 N.Y.S.2d 99, 216 N.E.2d 312 (1966), and related cases in the majority opinion states, the Seider procedure is in effect a judicially created direct action statute that provides a New York plaintiff with a New York forum with respect to an injury suffered elsewhere, provided that in per-sonam jurisdiction is obtained over the insurance company of the defendant. So regarded, the constitutional question presents itself as follows:
May a state, which has in personam jurisdiction over an insurer and is the residence of the injured plaintiff, exercise jurisdiction in a tort case involving an accident which took place in a foreign jurisdiction and which was allegedly caused by a resident of that jurisdiction, to secure the proceeds of a liability policy issued in that foreign jurisdiction?1
The case which must provide the cue for the resolution of the issue is Watson v. Employers Liability Insurance Corp., 348 U.S. 66, 75 S.Ct. 166, 99 L.Ed. 74 (1954). Considerations which governed the decision in that case appear in the following portion of the opinion:
“Louisiana’s direct action statute is not a mere intermeddling in affairs beyond her boundaries which are no concern of hers. Persons injured or killed in Louisiana are most likely to be Louisiana residents, and even if not, Louisiana may have to care for them. Serious injuries may require treatment in Louisiana homes or hospitals by Louisiana doctors. The injured may be destitute. They may be compelled to call upon friends, relatives, or the public for help. Louisiana has manifested its natural interest in the injured by providing remedies for recovery of damages. It has a similar interest in policies of insurance which are designed to assure ultimate payment of such damages. Moreover, Louisiana courts in most instances provide the most convenient forum for the trial of these cases. But modern transportation and business methods have made it more difficult to serve process on wrongdoers who live or do business in other states. In this case efforts to serve the Gillette Company were answered by a motion to dismiss on the ground- that Gillette had no *114Louisiana agent on whom process could be served. If this motion is granted, Mrs. Watson, but for the direct action law, could not get her case tried without going to Massachusetts or Illinois although she lives in Louisiana and her claim is for injuries from a product bought and used there. What has been said is enough to show Louisiana’s legitimate interest in safeguarding the rights of persons injured there. In view of that interest, the direct action provisions here challenged do not violate due process.”2
3
The majority compares the above quoted language with the Seider procedure and concludes that Louisiana’s interest in protecting its medical creditors and in preventing the expenditure of public funds in the case of the injury of one of its residents in an out-of-state accident is as great as in the case of an accident occurring in Louisiana. This might be true if the plaintiff is hardy enough to reach Louisiana before requiring medical aid or public assistance; otherwise the state where the accident occurred would be required to pick up the tab. But I read this portion of Mr. Justice Black’s opinion as stating certain pertinent examples of the interests which the state of the accident has, rather than as an exhaustive catalogue of those interests. It seems to me that there are other substantial interests of the accident state which do not coincide with those of the residence state. For example, one such traditional and significant interest, which the accident state may have in enacting a direct action statute, is to deter tortious conduct within the state.3 Another is the fact that the accident state is often in a very real sense the center of the controversy with at least a greater statistical probability that its residents will be more directly affected by any resolution of disputes arising from an accident within its territorial limits than the residents of any other state.
Moreover, as commentators have noted,4 the second major argument of *115Mr. Justice Black also emphasizes the occurrence of the accident in Louisiana: “Louisiana courts in most instances provide the most convenient forum for trial of these cases.” The opinion places great stress upon considerations of convenience in litigation, which point to the accident state, e. g., the availability of witnesses, the availability of police and medical records, the possibility of affording a jury an opportunity to view the scene of the accident, the ease of ascertaining the governing law, etc. By comparison, the convenience in carrying on the litigation which the majority ascribes to the residence state, is to say the least, a very one-sided accommodation. It would only be in the very small minority of these tort actions, transferred to the United States District Courts, as most of them will be, that the defendant could subpoena witnesses who were within one hundred miles of the New York courthouse, and he would, in most cases be forced to prove his defenses through depositions.
Recognizing inconvenience of trial in New York courts as a vulnerable point in its argument, the majority seeks to offset it by the following a fortiori argument:
“But the Justice’s final consideration —the plaintiff’s difficulty in bringing the defendant before the forum — applies with even greater force to the state of plaintiff’s residence than to that of injury in light of the development of long-arm statutes that will generally allow the state of injury to obtain personal jurisdiction of the insured and so avoid the need for a direct action against the insurer.”
Every plaintiff, however, is not entitled to a legal remedy in the form of a device to bring the defendant into the forum most convenient to the plaintiff and commensurate with the degree of difficulty which that effort entails, regardless of all other considerations. Certainly it must first be determined whether the plaintiff has the right to require defendant’s presence in plaintiff’s forum and the resolution of this question depends upon the fairness and reasonableness of the device as it affects all of the parties involved, the functioning of the courts, and the administration of justice in such an action. Watson and the long-arm statutes are plainly grounded in fairness because the nonresident defendant has of his own volition brought himself within the bounds and jurisdiction of the state where the accident occurred. But, for example, for a resident of Alaska, as the accident state, who had never resided elsewhere and who had never entered the State of New York or had any business there, suddenly to discover that he is under the jurisdiction of the State of New York and must go there to defend himself is quite a different matter. It is apparent from the Supreme Court’s opinion in Watson, that “plaintiff’s difficulty in bringing the defendant before the forum” is manifestly unjust only because the forum in question is “the most convenient forum.” To repeat the passage under discussion:
“Moreover, Louisiana courts in most instances provide the most convenient forum for the trial of these cases. But modern transportation and business methods have made it moire difficult to serve process on wrongdoers who live or do business in other states.”
348 U.S. at 72, 75 S.Ct. at 170.
The legislatures which have enacted long-arm statutes and courts which have interpreted them have been motivated and restrained by considerations of fairness and reasonableness. In deciding *116the due process issue,5 as it relates to the Seider procedure, “traditional notions of fair play and substantial justice,” International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945),6 must be used to determine whether or not it falls within permissible bounds. Weighed in this light, it seems to me that only the long-arm statutes asserting jurisdiction of the state where the accident occurred7 qualify as due process, whereas the assertion of jurisdiction by the state of the plaintiff’s residence does not.
The Seider procedure potentially subjects to liability to out-of-state process, a defendant whose activities, as noted above, may have been entirely local. It, therefore, may come as something of a shock to such a defendant, untutored in New York law, to discover that he is exposed to the traditionally high verdicts returned by New York juries. In Watson, on the other hand, the defendant was engaged in activity across state lines, and it was foreseeable to him that he should insure himself against potential liability in Louisiana. True, recovery in New York could not exceed the insurance proceeds, but if the actual verdict or judgment were in excess of the policy limits, would the defendant be equitably estopped from asserting that the damages were less than those found by the New York court, where the plaintiff sued on the judgment in a court outside of the State of New York?
In terms of fairness to the plaintiff, Seider involves by definition a plaintiff who is able to foresee that he may be injured in a foreign jurisdiction and compelled to litigate there. In Watson, however, the plaintiff’s activity was local, and it was certainly much less foreseeable to her that she might be forced to go to Massachusetts or Illinois in order to recover for her local injuries.
A balancing of considerations of fairness to the parties, of litigational convenience, and of the interests of the *117state (which is to say the interest of its citizens) (1) in compensating the injured party, both for his own sake and to prevent him from becoming a public charge, (2) in compensating its medical and other creditors, and (3) in deterring tortious conduct, leads, on the one hand to a finding that a direct action statute in the state where an accident occurs is fair and reasonable in the due process sense. On the other hand, a similar weighing of interests leads to the conclusion that a direct action statute purporting to provide a New York forum for a New York plaintiff, regardless of other local contacts or considerations, is unreasonable and parochial in the due process sense. It is one thing to require a resident of Alaska to make trips to New York to respond to an action arising out of an accident with a resident of New York in New York state to which the Alaskan had gone, and quite another to make him do so for an accident which occurred in Alaska when the New Yorker elected to go to Alaska and use its highways.
The present case in its application deals only with a New York plaintiff, following the Seider procedure and its impact on a defendant in any of the other forty-nine states which happened to be the accident state. If its constitutionality is upheld, it is quite likely that all fifty states will be compelled to enact like measures. As a result each party will commence suit as quickly as possible in an endeavor to have the litigation in the state where he resides. It would also appear to be a natural and logical consequence of the approval of the Seider procedure that retaliatory laws will be adopted by other states to impose certain conditions upon residents from Seider-procedure states to protect the states’ own residents from being subject to the jurisdiction of the foreign state. This is likely to impose a serious burden on interstate travel and commerce. It is also reasonably certain that the adoption of this procedure will work a substantial increase in the cost of insurance, which is not in the public interest.
It is my opinion that the Seider procedure violates due process and is, therefore, unconstitutional.

. Siegel, Supplementary Practice Commentary to N.Y.C.P.L.R., § 5201, McKinney’s Const.Laws of N.Y., Book 7B at 41-42 (1968 Cum.Supp.).

. 348 U.S. at 72-73, 75 S.Ct. at 170.

. Cf. Schmidt v. Driscoll Hotel, 249 Minn. 376, 82 N.W.2d 365, 368 (1957): “The result [of refusing to allow suit in Minnesota] would be that here both the interest of Wisconsin in affording whatever remedies it deems proper for those injured there as the result of foreign violations of liquor laws, Watson v. Employers Liability Assur. Corp., 348 U.S. 66, 75 S.Ct. 166, 99 L.Ed. 74, and the interest of Minnesota in admonishing a liquor dealer whose violation of its statutes was the cause of such injuries; and in providing for the injured party a remedy thex’efor under the civil damage act would become ineffective.”
In Watson, the interests which were identified as significant in the Driscoll Hotel case (the interest of the accident state in affording a remedy to those injured and the interest of the state where the tortious conduct occux'red in deterring such conduct) coincided in Louisiana.
Although Drisooll Hotel involved a choice of law determination rather than the exercise of legislative power over the limits of judicial in-personam jurisdiction, its ‘interest’ analysis is relevant to both issues because of their focus on ‘contacts’, which is to say, the relation of the controversy to the community. See von Mehren and Trautman, Jurisdiction to Adjudicate: A Suggested Analysis, 79 Harv.L.Rev. 1121, 1166-1167 (1966). The degree of interest necessary to validate a legislative determination of judicial in-personam jurisdiction is greater, however, than the degree of interest required to support a decision concerning choice of law.
Compare, Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1239, 2 L.Ed.2d 1283 (1958) :
“For the purpose of applying its rule that the validity of a trust is determined by the law of the State of its creation, Florida ruled that the appointment amounted to a ‘republication’ of the original trust instrument in Florida. For choice of law purposes such a ruling may be justified, but we think it is an insubstantial connection with the trust agreement for purposes of determining the question of personal jurisdiction over a nonresident defendant. The unilateral activity of those who claim some relationship with a nonresident defendant cannot satisfy the requirement of contact with the forum State.”

. See especially the excellent Comment, Garnishment of Intangibles, 67 Colum.L. *115Rev. 550, 559: “It is evident that the Court attached great importance to the occurrence of the accident within the forum state. These same factors — trial convenience and the forum’s interest in protecting parties injured within its bounds —have been reiterated in more recent decisions concerning direct action statutes.” [Footnote omitted.] See also Note, 74 Harv.L.Rev. 357, 389 (1960): “The occurrence of the accident in Louisiana was stressed by the Court in the Watson case.”

. It should be noted that the Seider result could not have been reached under either of the legislatively-created direct action statutes, which permit a direct action only if the accident occurs within the state. Wis.Stat.Ann. § 260.11 (Supp. 1966); La.Rev.Stat.Ann. § 22.655 (Supp. 1965); Koss v. Hartford Acc. & Indem. Co., 341 F.2d 472 (7 Cir. 1965) (Wisconsin statute); Guess v. Read, 290 F.2d 622 (5 Cir. 1961), cert. denied, 368 U.S. 957, 82 S.Ct. 394, 7 L.Ed.2d 388 (1962) (Louisiana statute); Honeycutt v. Indiana Lumbermans Mut. Ins. Co., 130 So. 2d 770 (La.Ct.App.1961) (Louisiana statute).

. See von Mehren and Trautman, op. cit. supra, note 3 at 1166-67:
“We believe that the approach in terms of reason and fairness brought to bear on jurisdiction over corporations and other legal persons by the International Shoe case, whose implications already have begun to be felt in the area of specific jurisdiction over nonresident individuals, will continue to be extended and refined.
“What policies should inform these developments and give content to ‘reason’ and ‘fairness’? We submit that specific jurisdiction — with its characteristic feature of permitting the plaintiff to require the defendant to come, as it were, to him — is appropriate in two distinct classes of cases: (1) when the traditional jurisdictional bias in favor of the defendant is not justified; (2) when very strong considerations of convenience, relating not only to the plaintiff but also to the taking of evidence and other litigational considerations, point to a particular community.”

. Thus, in Pugh v. Oklahoma Farm Bureau Mutual Insurance Co., 159 F.Supp. 155, 159 (E.D.La.1958), Judge Wright, in holding that the Louisiana statute permitting suit against a non-resident insurer by service of process upon the Secretary of State did not deny due process, stated:
“The interest of the state in the safety of her highways, the care and hospitalization of persons injured thereon, the availability within the state of witnesses to the accident, the fact that Louisiana law will determine the liability for damages arising from the accident, * * * all combine to make certain that the maintenance of the suit within the state does not offend ‘traditional notions of fair play and substantial justice.’ Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 343, 85 L.Ed. 278.”