No. 79-938
Argued: October 6, 1980Decided: January 13, 1981
Held:
The judgment is affirmed. Pp. 307-320; 322-331.
289 N. W. 2d 43, affirmed.
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- JUSTICE BRENNAN, joined by JUSTICE WHITE, JUSTICE MARSHALL, and JUSTICE BLACKMUN, concluded that Minnesota has a significant aggregation of contacts with the parties and the occurrence, creating state interests, such that application of its law is neither arbitrary nor fundamentally unfair, and, accordingly, the choice of law by the Minnesota Supreme Court does not violate the Due Process Clause of the Fourteenth Amendment or the Full Faith and Credit Clause. Pp. 307-320.
- (a) Respondent’s decedent was a member of Minnesota’s work force. The State of employment has police power responsibilities towards nonresident employees that are analogous to those it has towards residents, as such employees use state services and amenities and may call upon state facilities in appropriate circumstances. Also, the State’s interest in its commuting nonresident employees, such as respondent’s decedent, reflects a state concern for the safety and well-being of its work force and the concomitant effect on Minnesota employers. That the decedent was not killed while commuting to work or while in Minnesota does not dictate a different result, since vindication of the rights of the estate of a Minnesota employee is an important state concern. Nor does the decedent’s residence in Wisconsin constitutionally mandate application of Wisconsin law to the exclusion of forum law. Employment status is not a sufficiently less important status than residence, when combined with the decedent’s daily commute across state lines and the other Minnesota contacts present, to prohibit the choice-of-law result in this case on constitutional grounds. Pp. 313-317.
- (b) Petitioner was at all times present and doing business in Minnesota. By virtue of such presence, petitioner can hardly claim unfamiliarity with the laws of the host jurisdiction and surprise that the state courts might apply forum law to litigation in which the company is involved. Moreover, such presence gave Minnesota an interest in regulating the company’s insurance obligations insofar as they affected both a Minnesota resident and court-appointed representative (respondent) and a longstanding member of Minnesota’s work force (respondent’s decedent). Pp. 317-318.
- (c) Respondent became a Minnesota resident prior to institution of the instant litigation. Such residence and subsequent appointment in Minnesota as personal representative of her late husband’s estate constitute a Minnesota contact which gives Minnesota an interest in respondent’s recovery. Pp. 318-319.
- JUSTICE STEVENS concluded:
- 1. The Full Faith and Credit Clause did not require Minnesota, the forum State, to apply Wisconsin law to the contract-interpretation question presented. Although the Minnesota courts’ decision to apply Minnesota law was unsound as a matter of conflicts law, no threat to Wisconsin’s sovereignty ensued from allowing the substantive question as to the meaning of the insurance contract to be determined by the law of another State. Pp. 322-326.
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- 2. The Due Process Clause of the Fourteenth Amendment did not prevent Minnesota from applying its own law. Neither the “stacking” rule itself nor Minnesota’s application of it to these litigants raised any
- serious question of fairness. Nor did the Minnesota courts’ decision to apply this rule violate due process because that decision frustrated the contracting parties’ reasonable expectations. The decision was consistent with due process because it did not result in unfairness to either litigant, not because Minnesota had an interest in the plaintiff as resident or the decedent as employee. Pp. 326-331.
BRENNAN, J., announced the judgment of the Court and delivered an opinion, in which WHITE, MARSHALL, and BLACKMUN, JJ., joined. STEVENS, J., filed an opinion concurring in the judgment, post, p. 320. POWELL, J., filed a dissenting opinion, in which BURGER, C. J., and REHNQUIST, J., joined, post, p. 332. STEWART, J., took no part in the consideration or decision of the case.
Mark M. Nolan argued the cause and filed a brief for petitioner.
Andreas F. Lowenfeld argued the cause for respondent. With him on the brief were Samuel H. Hertogs and Bruce J. Douglas.
JUSTICE BRENNAN announced the judgment of the Court and delivered an opinion, in which JUSTICE WHITE, JUSTICE MARSHALL, and JUSTICE BLACKMUN joined.
This Court granted certiorari to determine whether the Due Process Clause of the Fourteenth Amendment 1 or the Full Faith and Credit Clause of Art. IV, 1, 2 of the United States Constitution bars the Minnesota Supreme Court’s choice of substantive Minnesota law to govern the effect of a provision in an insurance policy issued to respondent’s decedent. 444 U.S. 1070 (1980). [449 U.S. 302, 305]
I
Respondent’s late husband, Ralph Hague, died of injuries suffered when a motorcycle on which he was a passenger was struck from behind by an automobile. The accident occurred in Pierce County, Wis., which is immediately across the Minnesota border from Red Wing, Minn. The operators of both vehicles were Wisconsin residents, as was the decedent, who, at the time of the accident, resided with respondent in Hager City, Wis., which is one and one-half miles from Red Wing. Mr. Hague had been employed in Red Wing for the 15 years immediately preceding his death and had commuted daily from Wisconsin to his place of employment.
Neither the operator of the motorcycle nor the operator of the automobile carried valid insurance. However, the decedent held a policy issued by petitioner Allstate Insurance Co. covering three automobiles owned by him and containing an uninsured motorist clause insuring him against loss incurred from accidents with uninsured motorists. The uninsured motorist coverage was limited to $15,000 for each automobile. 3
After the accident, but prior to the initiation of this lawsuit, respondent moved to Red Wing. Subsequently, she married a Minnesota resident and established residence with her new husband in Savage, Minn. At approximately the same time, a Minnesota Registrar of Probate appointed respondent personal representative of her deceased husband’s estate. Following her appointment, she brought this action in Minnesota District Court seeking a declaration under Minnesota law that the $15,000 uninsured motorist coverage on each of her late husband’s three automobiles could be “stacked” to provide total coverage of $45,000. Petitioner defended on the ground that whether the three uninsured motorist [449 U.S. 302, 306] coverages could be stacked should be determined by Wisconsin law, since the insurance policy was delivered in Wisconsin, the accident occurred in Wisconsin, and all persons involved were Wisconsin residents at the time of the accident.
The Minnesota District Court disagreed. Interpreting Wisconsin law to disallow stacking, the court concluded that Minnesota’s choice-of-law rules required the application of Minnesota law permitting stacking. The court refused to apply Wisconsin law as “inimical to the public policy of Minnesota” and granted summary judgment for respondent. 4
The Minnesota Supreme Court, sitting en banc, affirmed the District Court. 5 The court, also interpreting Wisconsin law to prohibit stacking, 6 applied Minnesota law after analyzing the relevant Minnesota contacts and interests within the analytical framework developed by Professor Leflar. 7 See Leflar, Choice-Influencing Considerations in Conflicts Law, 41 N. Y. U. L. Rev. 267 (1966). The state court, therefore, examined the conflict-of-laws issue in terms of (1) predictability of result, (2) maintenance of interstate order, (3) simplification of the judicial task, (4) advancement of the forum’s governmental interests, and (5) application of the better rule of law. Although stating that the Minnesota contacts might not be, “in themselves, sufficient to mandate application of [Minnesota] law,” 8 289 N. W. 2d 43, 49 [449 U.S. 302, 307] (1978), under the first four factors, the court concluded that the fifth factor – application of the better rule of law – favored selection of Minnesota law. The court emphasized that a majority of States allow stacking and that legal decisions allowing stacking “are fairly recent and well considered in light of current uses of automobiles.” Ibid. In addition, the court found the Minnesota rule superior to Wisconsin’s “because it requires the cost of accidents with uninsured motorists to be spread more broadly through insurance premiums than does the Wisconsin rule.” Ibid. Finally, after rehearing en banc, 9 the court buttressed its initial opinion by indicating “that contracts of insurance on motor vehicles are in a class by themselves” since an insurance company “knows the automobile is a movable item which will be driven from state to state.” 289 N. W. 2d, at 50 (1979). From this premise the court concluded that application of Minnesota law was “not so arbitrary and unreasonable as to violate due process.” Ibid.
II
It is not for this Court to say whether the choice-of-law analysis suggested by Professor Leflar is to be preferred or whether we would make the same choice-of-law decision if sitting as the Minnesota Supreme Court. Our sole function is to determine whether the Minnesota Supreme Court’s choice of its own substantive law in this case exceeded federal constitutional limitations. Implicit in this inquiry is the recognition, long accepted by this Court, that a set of facts giving rise to a lawsuit, or a particular issue within a lawsuit, may justify, in constitutional terms, application of the law of more than one jurisdiction. See, e. g., Watson v. Employers Liability Assurance Corp., 348 U.S. 66, 72 -73 (1954); n. 11, infra. See generally Clay v. Sun Insurance Office, Ltd., 377 U.S. 179 , [449 U.S. 302, 308] 181-182 (1964) (hereinafter cited as Clay II). As a result, the forum State may have to select one law from among the laws of several jurisdictions having some contact with the controversy.
In deciding constitutional choice-of-law questions, whether under the Due Process Clause or the Full Faith and Credit Clause, 10 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. See Clay II, supra, at 183. In order to ensure that the choice of law is neither arbitrary nor fundamentally unfair, see Alaska Packers Assn. v. Industrial Accident Comm’n, 294 U.S. 532, 542 (1935), the Court has invalidated the choice of law of a State which has had no significant contact or significant aggregation of contacts, creating state interests, with the parties and the occurrence or transaction. 11 [449 U.S. 302, 309]
Two instructive examples of such invalidation are Home Ins. Co. v. Dick, 281 U.S. 397 (1930), and John Hancock Mutual Life Ins. Co. v. Yates, 299 U.S. 178 (1936). In both cases, the selection of forum law rested exclusively on the presence of one nonsignificant forum contact.
Home Ins. Co. v. Dick involved interpretation of an insurance policy which had been issued in Mexico, by a Mexican insurer, to a Mexican citizen, covering a Mexican risk. The policy was subsequently assigned to Mr. Dick, who was domiciled in Mexico and “physically present and acting in Mexico,” 281 U.S., at 408 , although he remained a nominal, permanent resident of Texas. The policy restricted coverage to losses occurring in certain Mexican waters and, indeed, the loss occurred in those waters. Dick brought suit [449 U.S. 302, 310] in Texas against a New York reinsurer. Neither the Mexican insurer nor the New York reinsurer had any connection to Texas. 12 The Court held that application of Texas law to void the insurance contract’s limitation-of-actions clause violated due process. 13
The relationship of the forum State to the parties and the transaction was similarly attenuated in John Hancock Mutual Life Ins. Co. v. Yates. There, the insurer, a Massachusetts corporation, issued a contract of insurance on the life of a New York resident. The contract was applied for, issued, and delivered in New York where the insured and his spouse resided. After the insured died in New York, his spouse moved to Georgia and brought suit on the policy in Georgia. Under Georgia law, the jury was permitted to take into account oral modifications when deciding whether an insurance policy application contained material misrepresentations. Under New York law, however, such misrepresentations were to be evaluated solely on the basis of the written application. The Georgia court applied Georgia law. This Court reversed, finding application of Georgia law to be unconstitutional.
Dick and Yates stand for the proposition that if a State has only an insignificant contact with the parties and the [449 U.S. 302, 311] occurrence or transaction, application of its law is unconstitutional. 14 Dick concluded that nominal residence – standing alone – was inadequate; Yates held that a postoccurrence change of residence to the forum State – standing alone – was insufficient to justify application of forum law. Although instructive as extreme examples of selection of forum law, neither Dick nor Yates governs this case. For in contrast to those decisions, here the Minnesota contacts with the parties and the occurrence are obviously significant. Thus, this case is like Alaska Packers, Cardillo v. Liberty Mutual Ins. Co., 330 U.S. 469 (1947), and Clay II – cases where this Court sustained choice-of-law decisions based on the contacts of the State, whose law was applied, with the parties and occurrence.
In Alaska Packers, the Court upheld California’s application of its Workmen’s Compensation Act, where the most significant contact of the worker with California was his execution of an employment contract in California. The worker, a nonresident alien from Mexico, was hired in California for seasonal work in a salmon canning factory in Alaska. As part of the employment contract, the employer, who was doing business in California, agreed to transport the worker to Alaska and to return him to California when the work was completed. Even though the employee contracted to be bound by the Alaska Workmen’s Compensation Law and was injured in Alaska, he sought an award under the California Workmen’s Compensation Act. The Court held that the choice of California law was not “so arbitrary or unreasonable as to amount to a denial of due process,” 294 U.S., at 542 , because “[w]ithout a remedy in California, [he] would be remediless,” ibid., and because of California’s interest that the worker not become a public charge, ibid. 15 [449 U.S. 302, 312]
In Cardillo v. Liberty Mutual Ins. Co., supra, a District of Columbia resident, employed by a District of Columbia employer and assigned by the employer for the three years prior to his death to work in Virginia, was killed in an automobile crash in Virginia in the course of his daily commute home from work. The Court found the District’s contacts with the parties and the occurrence sufficient to satisfy constitutional requirements, based on the employee’s residence in the District, his commute between home and the Virginia workplace, and his status as an employee of a company “engaged in electrical construction work in the District of Columbia and surrounding areas.” Id., at 471. 16
Similarly, Clay II upheld the constitutionality of the application of forum law. There, a policy of insurance had issued in Illinois to an Illinois resident. Subsequently the insured moved to Florida and suffered a property loss in Florida. Relying explicitly on the nationwide coverage of the policy and the presence of the insurance company in Florida and implicitly on the plaintiff’s Florida residence and the occurrence of the property loss in Florida, the Court sustained the Florida court’s choice of Florida law.
The lesson from Dick and Yates, which found insufficient forum contacts to apply forum law, and from Alaska Packers, Cardillo, and Clay II, which found adequate contacts to sustain the choice of forum law, 17 is that for a State’s substantive [449 U.S. 302, 313] 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. Application of this principle to the facts of this case persuades us that the Minnesota Supreme Court’s choice of its own law did not offend the Federal Constitution.
III
Minnesota has three contacts with the parties and the occurrence giving rise to the litigation. In the aggregate, these contacts permit selection by the Minnesota Supreme Court of Minnesota law allowing the stacking of Mr. Hague’s uninsured motorist coverages.
First, and for our purposes a very important contact, Mr. Hague was a member of Minnesota’s work force, having been employed by a Red Wing, Minn., enterprise for the 15 [449 U.S. 302, 314] years preceding his death. While employment status may implicate a state interest less substantial than does resident status, that interest is nevertheless important. The State of employment has police power responsibilities towards the nonresident employee that are analogous, if somewhat less profound, than towards residents. Thus, such employees use state services and amenities and may call upon state facilities in appropriate circumstances.
In addition, Mr. Hague commuted to work in Minnesota, a contact which was important in Cardillo v. Liberty Mutual Ins. Co., 330 U.S., at 475 -476 (daily commute between residence in District of Columbia and workplace in Virginia), and was presumably covered by his uninsured motorist coverage during the commute. 18 The State’s interest in its commuting nonresident employees reflects a state concern for the safety and well-being of its work force and the concomitant effect on Minnesota employers.
That Mr. Hague was not killed while commuting to work or while in Minnesota does not dictate a different result. To hold that the Minnesota Supreme Court’s choice of Minnesota law violated the Constitution for that reason would require too narrow a view of Minnesota’s relationship with the parties and the occurrence giving rise to the litigation. An automobile accident need not occur within a particular jurisdiction for that jurisdiction to be connected to the occurrence. 19 [449 U.S. 302, 315] Similarly, the occurrence of a crash fatal to a Minnesota employee in another State is a Minnesota contact. 20 If Mr. Hague had only been injured and missed work for a few weeks, the effect on the Minnesota employer would have been palpable and Minnesota’s interest in having its employee made whole would be evident. Mr. Hague’s death affects Minnesota’s interest still more acutely, even though Mr. Hague will not return to the Minnesota work force. Minnesota’s work force is surely affected by the level of protection the State extends to it, either directly or indirectly. Vindication of the rights of the estate of a Minnesota employee, therefore, is an important state concern.
Mr. Hague’s residence in Wisconsin does not – as Allstate seems to argue – constitutionally mandate application of Wisconsin law to the exclusion of forum law. 21 If, in the instant [449 U.S. 302, 316] case, the accident had occurred in Minnesota between Mr. Hague and an uninsured Minnesota motorist, if the insurance contract had been executed in Minnesota covering a Minnesota registered company automobile which Mr. Hague was permitted to drive, and if a Wisconsin court sought to apply Wisconsin law, certainly Mr. Hague’s residence in Wisconsin, his commute between Wisconsin and Minnesota, and the insurer’s presence in Wisconsin should be adequate to apply Wisconsin’s law. 22 See generally Cardillo v. Liberty [449 U.S. 302, 317] Mutual Ins. Co., supra; Alaska Packers Assn. v. Industrial Accident Comm’n, 294 U.S. 532 (1935); Home Ins. Co. v. Dick, 281 U.S., at 408 , n. 5. Employment status is not a sufficiently less important status than residence, see generally Carroll v. Lanza, 349 U.S. 408 (1955); Alaska Packers Assn. v. Industrial Accident Comm’n, supra, when combined with Mr. Hague’s daily commute across state lines and the other Minnesota contacts present, to prohibit the choice-of-law result in this case on constitutional grounds.
Second, Allstate was at all times present and doing business in Minnesota. 23 By virtue of its presence, Allstate can hardly claim unfamiliarity with the laws of the host jurisdiction and surprise that the state courts might apply forum law to litigation [449 U.S. 302, 318] in which the company is involved. “Particularly since the company was licensed to do business in [the forum], it must have known it might be sued there, and that [the forum] courts would feel bound by [forum] law.” 24 Clay v. Sun Insurance Office Ltd., 363 U.S. 207, 221 (1960) (Black, J., dissenting). 25 Moreover, Allstate’s presence in Minnesota gave Minnesota an interest in regulating the company’s insurance obligations insofar as they affected both a Minnesota resident and court-appointed representative – respondent – and a longstanding member of Minnesota’s work force – Mr. Hague. See Hoopeston Canning Co. v. Cullen, 318 U.S. 313, 316 (1943).
Third, respondent became a Minnesota resident prior to institution of this litigation. The stipulated facts reveal that she first settled in Red Wing, Minn., the town in which [449 U.S. 302, 319] her late husband had worked. 26 She subsequently moved to Savage, Minn., after marrying a Minnesota resident who operated an automobile service station in Bloomington, Minn. Her move to Savage occurred “almost concurrently,” 289 N. W. 2d, at 45, with the initiation of the instant case. 27 There is no suggestion that Mrs. Hague moved to Minnesota in anticipation of this litigation or for the purpose of finding a legal climate especially hospitable to her claim. 28 The stipulated facts, sparse as they are, negate any such inference.
While John Hancock Mutual Life Ins. Co. v. Yates, 299 U.S. 178 (1936), held that a postoccurrence change of residence to the forum State was insufficient in and of itself to confer power on the forum State to choose its law, that case did not hold that such a change of residence was irrelevant. Here, of course, respondent’s bona fide residence in Minnesota was not the sole contact Minnesota had with this litigation. And in connection with her residence in Minnesota, respondent was appointed personal representative of Mr. Hague’s estate by the Registrar of Probate for the County of Goodhue, Minn. Respondent’s residence and subsequent appointment in Minnesota as personal representative of her late husband’s estate constitute a Minnesota contact which gives Minnesota an interest in respondent’s recovery, an interest which the court below identified as full compensation for “resident accident victims” to keep them “off welfare rolls” and able “to meet financial obligations.” 289 N. W. 2d, at 49. [449 U.S. 302, 320]
In sum, Minnesota had a significant aggregation 29 of contacts with the parties and the occurrence, creating state interests, such that application of its law was neither arbitrary nor fundamentally unfair. Accordingly, the choice of Minnesota law by the Minnesota Supreme Court did not violate the Due Process Clause or the Full Faith and Credit Clause.
