Charity Sportsman v. California Overland, Ltd. et al
Filing
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MEMORANDUM OPINION AND ORDER - Defendants' Motion to Apply Wisconsin Law (Doc. No. 18 ) is DENIED. Plaintiff's Motion for the Application of Minnesota Law on the Choice-of-Law Issue (Doc. No. 23 ) is GRANTED. The Court holds that Minnesota law governs this case. (Written Opinion) Signed by Judge Donovan W. Frank on 4/18/2018. (las)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Charity Sportsman,
as Trustee for the Heirs and
Next-of-Kin of Terry G. Sportsman, Jr.,
Plaintiff,
Civil No. 17-1064 (DWF/KMM)
MEMORANDUM
OPINION AND ORDER
v.
California Overland, Ltd., a Minnesota
corporation, and David V. Juneau,
Defendants.
Jessica K. Allen, Esq., and Steven J. Pfefferle, Esq., Pfefferle Kane LLP; Richard Francis
Burke, Jr., Esq., Clifford Law Offices, P.C., counsel for Plaintiff.
Christopher P. Malone, Esq., and Rachel B. Beauchamp, Esq., Cousineau, Van Bergen,
McNee & Malone, P.A., counsel for Defendants.
INTRODUCTION
This matter is before the Court on Defendants’ Motion to Apply Wisconsin Law,
(Doc. No. 18), and Plaintiff’s Motion for the Application of Minnesota Law on the
Choice-of-Law Issue, (Doc. No. 23). For the reasons set forth below, the Court
concludes that Minnesota law governs Plaintiff’s claims in this matter.
BACKGROUND
I.
General Background
On June 14, 2015, a vehicle hauling a fishing boat driven by decedent Terry G.
Sportsman, Jr. (“Decedent” or “Mr. Sportsman”) collided with a semi-tractor tanker truck
Defendant David V. Juneau (“Juneau”) was driving within the course of his employment
with Defendant California Overland, Ltd. (“California Overland”). (Doc. No. 20
(“Beauchamp Aff.”) ¶ 1, Ex. 1 (“Accident Report”); Doc. No. 26 (“Burke Aff.”) ¶ 3,
Ex. L at 4; Beauchamp Aff. ¶ 4, Ex. 4 (“Meyer Dep.”) at 25-27, 30, 32.) The collision
occurred on Interstate Highway 39 in the City of Janesville, Rock County, State of
Wisconsin. (See Accident Report.)
As Mr. Sportsman traveled south on Interstate Highway 39 towards his home in
Illinois, Juneau traveled north, hauling an empty tank trailer he had picked up in
Pennsylvania. (See id.; Meyer Dep. at 32-33.) At approximately 8:20 a.m., Juneau was
in the right lane of northbound I-39; he then crossed the median into the southbound
lanes of I-39, causing the accident. (Accident Report at 1, 5.) Mr. Sportsman died on the
scene. (Id. at 5.)
At the time of the accident, Juneau was a resident of South Dakota, and he worked
as a driver of semi-tractor trailer trucks for California Overland. (Meyer Dep. at 30-31.)
California Overland is a Minnesota corporation, incorporated under Minnesota law, with
its headquarters located in Wabasha, Minnesota. (Id. at 10, 16.) In 2015, California
Overland owned about 120 tractors and 240 trailers, all of which are licensed in
Minnesota. (Id. at 24-25.) Additionally, in 2015, 57 out of the 142 employed truck
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drivers resided in the State of Minnesota. (Id. at 37; Burke Aff. ¶ 3, Ex. C at 3.) In June
2015, California Overland had 486 regular customers, and out of those customers, 65
were located in Minnesota, and 43 were located in Wisconsin. (Meyer Dep. at 41; Burke
Aff. ¶ 3, Ex. C at 4.) In 2015, California Overland delivered 19,557 orders, including
5,788 to Minnesota, and 2,363 to Wisconsin. (Meyer Dep. at 59-60.)
At the time of the accident, Decedent, his wife, Charity Sportsman
(“Mrs. Sportsman”), and their two minor children were residents of Illinois. (See
Accident Report; Burke Aff. ¶ 3, Ex. E.) Mr. Sportsman’s parents owned a cabin in
Wisconsin which was purchased from Decedent’s grandfather. (Burke Aff. ¶ 3, Ex. L at
3.) Neither Mr. Sportsman nor Mrs. Sportsman ever owned this cabin or any property in
Wisconsin or Minnesota since 2007. (See id. at 2-3.) Decedent occasionally fished in
Wisconsin; on three different occasions, Mr. Sportsman won fishing tournaments in
Wisconsin, earning approximately $1,000 total. He also fished in Minnesota. (See id. at
4, 7-9.) From 2007 until the time of his death, Mr. Sportsman obtained fishing and
hunting licenses annually in Wisconsin, and he obtained a fishing license in Minnesota on
approximately three occasions. (See id. at 4.) Both Mr. and Mrs. Sportsman had driver’s
licenses issued by the State of Illinois. (Id.)
II.
Procedural Background
On August 5, 2016, Defendants filed a declaratory judgment action in Wisconsin
state court, seeking a determination that Wisconsin law applied to any wrongful death
claims arising out of Mr. Sportsman’s death. (Burke Aff. ¶ 3, Ex. E.) On April 20, 2017,
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the Wisconsin court dismissed Defendants’ complaint on the basis that it lacked personal
jurisdiction over the Sportsmans. (See Burke Aff. ¶ 3, Exs. F-G.)
On September 16, 2016, Decedent’s surviving spouse Charity Sportsman, filed a
wrongful death suit on behalf of herself and their two minor children in their home state
in the United States District Court - Northern District of Illinois. (Burke Aff. ¶ 3, Ex. H.)
On March 23, 2017, the Illinois federal district court dismissed the case, concluding that
it lacked personal jurisdiction over Defendants. (Burke Aff. ¶ 3, Ex. J.)
On April 5, 2017, Mrs. Sportsman then filed a complaint in this court, alleging
claims under Illinois law for her husband’s wrongful death. (Doc. No. 1.) Defendants
answered and asserted a counterclaim seeking a declaratory judgment that Wisconsin law
should apply to Plaintiff’s claims. (See Doc. No. 5.) After the parties entered into a
stipulation precluding Mrs. Sportsman from alleging claims under Illinois law,
Mrs. Sportsman served and filed an amended complaint as Trustee for the Next-of-Kin
of Mr. Sportsman, alleging claims for wrongful death under Minnesota law. (Doc. Nos.
13, 16.) The parties disagree as to which State’s law should govern in this case,
particularly with respect to available damages; Plaintiff and Defendants have separately
moved the Court to determine which state’s law applies. (Doc. Nos. 18, 23.)
DISCUSSION
I.
Legal Standard
In cases where jurisdiction is based on diversity, federal courts apply the forum
state’s choice of law rules. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496
(1941); Highwoods Props., Inc. v. Executive Risk Indem., Inc., 407 F.3d 917, 920 (8th
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Cir. 2005). As this is a diversity case, the Court applies Minnesota’s choice-of-law
principles. However, before conducting a choice-of-law analysis, the court must
determine if the relevant laws conflict. Prudential Ins. Co. of Am. v. Kamrath, 475 F.3d
920, 924 (8th Cir. 2007). “A conflict exists if the rule of one state or the other is outcome
determinative.” Glover v. Merck & Co., Inc., 345 F. Supp. 2d 994, 997 (D. Minn. 2004).
Under Minnesota law, the court must also determine whether it would be constitutional to
apply each state’s law. Id. at 997. In order to constitutionally apply a state’s law, the
state in question “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.” Nodak Mut. Ins. Co. v. Am. Family Mut. Ins. Co., 590 N.W.2d 670, 672 (Minn.
Ct. App.1999), aff’d, 604 N.W.2d 91 (Minn. 2000) (quoting Allstate Ins. Co. v. Hague,
449 U.S. 302, 312-13 (1981)).
If the court determines that a conflict exists and that either state’s law may be
constitutionally applied, the court must determine whether the law in question is
substantive or procedural. See Glover, 345 F. Supp. 2d at 998. If the conflicting laws are
substantive, the court conducts “a multi-step choice-of law analysis, which includes
application of five choice-influencing considerations, to determine which state’s law
applies.” Id. (quotation marks and citation omitted); see also Jepson v. Gen. Cas. Co. of
Wis., 513 N.W.2d 467, 470 (Minn.1994). The five factors are: “(1) predictability of
result; (2) maintenance of interstate and international order; (3) simplification of the
judicial task; (4) advancement of the forum’s governmental interest; and (5) application
of the better rule of law.” Jepson, 513 N.W.2d at 470. In considering these factors,
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courts must evaluate each case on its own particular facts. See id. (“These factors were
not intended to spawn the evolution of set mechanical rules but instead to prompt courts
to carefully and critically consider each new fact situation and explain in a
straight-forward manner their choice of law.”).
A.
Conflict Between Minnesota and Wisconsin Law
The parties agree that there is a conflict between the relevant Minnesota and
Wisconsin laws. Specifically, Plaintiff emphasizes that Wisconsin caps damages for loss
of society and companionship in wrongful death claims. Defendants similarly argue that
the wrongful death statutes of the two states substantively conflict with respect to
potential claimants, available claims, and measure of damages.
Minnesota’s wrongful death statute, Minn. Stat. § 573.02, provides for recovery in
the form of “the amount the jury deems fair and just in reference to the pecuniary loss
resulting from the death, [which] shall be for the exclusive benefit of the surviving
spouse and next of kin, proportionate to the pecuniary loss severally suffered by the
death.” Minn. Stat. § 573.02, subd. 1. Thus, potential claimants include the decedent’s
spouse and next of kin, and the “pecuniary loss” available to such claimants is
determined according to what the jury determines is fair. See id.
In contrast, Wisconsin’s wrongful death statute, Wis. Stat. §§ 895.03, 895.04,
provides a cause of action for a surviving “spouse or domestic partner . . . and minor
children under 18 years of age” followed by the decedent’s lineal heirs if no such spouse
or children survives. Wis. Stat. § 895.04(2). The statute lists several classes of potential
wrongful death beneficiaries and establishes a hierarchy to determine who may bring a
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claim. See id. Such beneficiaries may obtain “damages for pecuniary injury,” and
“[a]dditional damages” of up to $350,000 for a deceased adult “for loss of society and
companionship.” Wis. Stat. § 895.04(4). If a jury awards damages exceeding the
$350,000 cap, Wisconsin law directs the court to reduce such excess damages. See Wis.
Stat. § 895.04(7).
The Court concludes that a conflict exists between the wrongful death statutes of
Minnesota and Wisconsin. As outlined above, the statutes provide for different potential
claimants, and only Wisconsin imposes a limit on companionship damages. These
differences would be outcome-determinative in this action, providing for materially
different relief. The Court must next ensure that each state has significant contacts so
that its law can be constitutionally applied.
B.
Constitutional Limits
“[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.” Nodak, 590 N.W.2d at 672 (citation omitted). Relevant contacts under this
inquiry include, for example, the parties’ places of residence, registration of vehicles, and
the parties’ historical presence in the respective forums. See Jepson, 513 N.W.2d at 470.
Defendants argue that the cause of action must have a connection to the forum that
is “not . . . too slight and casual” in order to constitutionally apply the forum’s laws.
(Doc. No. 21 at 17 (quoting Hime v. State Farm Fire & Cas. Co., 284 N.W.2d 829, 832
(Minn. 1979)).) According to Defendants, Minnesota’s only relevant connection is that it
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is California Overland’s home state. Defendants contend that “the relationship of this
cause of action with the State of Minnesota cannot be described as anything other than
slight and casual.” (Id.) In contrast, Plaintiff argues that “[a]pplying Minnesota law to
this case is neither unfair nor unexpected.” (Doc. No. 25 at 19.)
The Court concludes that both states have significant contacts, making application
of either state’s law constitutional. In particular, the Court rejects Defendants’ argument
regarding the unconstitutionality of applying Minnesota law and agrees with Plaintiff that
Mr. Sportsman’s heirs should be permitted to seek damages against Defendants under the
laws of California Overland’s place of incorporation. There is nothing arbitrary or unfair
about this result. See Mooney v. Allianz Life Ins. Co. of N. Am., 244 F.R.D. 531, 535 (D.
Minn. 2007) (“As a Minnesota corporation, Allianz can not [sic] claim surprise by the
application of Minnesota law to conduct emanating from Minnesota.”)
C.
Choice of Law
Turning to the choice-of-law analysis, the Court concludes as a preliminary matter
that the conflicting laws at issue are substantive, and not procedural, in nature. 1
Considering the relevant factors, the Court concludes that the maintenance of interstate
order, simplification of the judicial task, and advancement of the forum’s governmental
interest warrant the application of Minnesota law. 2
1
The parties do not dispute that the conflict is on a substantive issue of law.
2
Because the first four factors weigh in favor of applying Minnesota law, the Court
need not make a determination as to which of the states has the better rule of law. See
Medtronic, Inc. v. Advanced Bionics Corp., 630 N.W.2d 438, 455 (Minn. Ct. App. 2001)
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1.
Predictability of Result
The first consideration, predictability of result, “represents the ideal that litigation
on the same facts, regardless of where the litigation occurs, should be decided the same to
avoid forum shopping.” Nodak Mut. Ins. Co. v. Am. Family Mut. Ins. Co., 604 N.W.2d
91, 94 (Minn. 2000). Where a court is considering a tort claim arising out of a motor
vehicle collision, “[p]redictability of result . . . is not of great importance . . . because of
the unplanned nature of automobile accidents.” See Jepson, 513 N.W.2d at 470; cf.
Nodak, 604 N.W.2d at 95 (“[A]utomobile accidents are not consensual transactions, nor
is this a contract case, and therefore predictability favors neither forum.”). Simply put,
“[p]arties do not commit torts in one state rather than another because of that state’s tort
laws.” Kenna v. So-Fro Fabrics, Inc., 18 F.3d 623, 626 (8th Cir. 1994). The Court
concludes that this factor carries little weight in this case.
2.
Maintenance of Interstate Order
Next, the maintenance-of-interstate-order factor, is “primarily concerned with
whether the application of Minnesota law would manifest disrespect for [another state’s]
sovereignty or impede the interstate movement of people and goods.” See Jepson, 513
N.W.2d at 471. This factor aims “to maintain a coherent legal system in which the courts
of different states strive to sustain, rather than subvert, each other’s interests in areas
where their own interests are less strong.” Id. Through this factor, courts can ensure that
“the opportunities for forum shopping [are] kept within reasonable bounds.” Id. Courts
(“[T]he fifth factor . . . should be applied only when the choice-of-law question remains
unresolved after the other factors are considered.”).
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should defer to another state’s law “when that sister state has a substantial concern with
the problem, even when the forum state also has an identifiable interest.” Nodak, 590
N.W.2d at 673.
To evaluate this factor, the court must carefully consider the relevant contacts
between each state and the transaction at issue. Id. at 674. “[M]aintenance of interstate
order [in tort cases] is generally satisfied as long as the state whose laws are purportedly
in conflict has sufficient contacts with and interest in the facts and issues being litigated.”
Nesladek v. Ford Motor Co., 46 F.3d 734, 739 (8th Cir. 1995) (citation omitted). Where
the state’s only relevant “contact” with the litigation is the location of a corporate
defendant’s principal place of business, this fact alone should not carry significant
weight. See Hughes v. Wal-Mart Stores, Inc., 250 F.3d 618, 621 (8th Cir. 2001). In
addition, states carry a “‘singular concern’ . . . for motor vehicle accidents occurring
within [their] borders.” Nodak, 590 N.W.2d at 674 (citation omitted). However, the
mere fortuity of an accident’s location is not necessarily dispositive in a choice-of-law
inquiry. Cf. Kenna, 18 F.3d at 627-28.
Defendant argues that the maintenance of interstate order strongly favors
Wisconsin based on “the most significant grouping of contacts” in that state. (Doc.
No. 21 at 20.) Defendant also argues that states have a legitimate concern for motorvehicle accidents within their borders and have only a minimal interest in protecting
non-residents from torts committed by residents. Defendants emphasize that the accident
took place in Wisconsin, Wisconsin first-responders attended to the scene, and neither
driver was a Minnesota resident. Further, Defendant urges that the decedent and the
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next-of-kin claimants have significant relationships to Wisconsin, such as Sportsman’s
fishing tournament income, family cabin, recreational vehicles, and hunting and fishing
licenses. In Defendant’s view, “Sportsman, Jr. and his entire family have significant and
ongoing contacts with Wisconsin.” (Id. at 23.) Defendants also note that Juneau spent
the night before the accident in Wisconsin, and he is a South Dakota resident. Although
California Overland is a Minnesota business, Defendants suggest, it “has and had a
significant, ongoing, and continuous presence in Wisconsin.” (Id. at 24.)
Plaintiff argues that this factor favors Minnesota law. Plaintiff points out that the
Minnesota Supreme Court has noted that “[p]eople who purposefully seek advantages
offered by another state ought not to be allowed to avoid the burdens associated with
their choice.” (Doc. No. 25 at 21 (quoting Jepson, 513 N.W.2d at 471).) In this regard,
Plaintiff contends that California Overland enjoys the benefits of operating in Minnesota,
and Juneau has enjoyed the benefits of being employed by a Minnesota company.
Further, Plaintiff suggests that California Overland did not direct any specific business to
Wisconsin in connection with the accident. Finally, Plaintiffs argue that Defendants are
forum shopping by attempting to impose Wisconsin’s damages cap.
The Court agrees with Plaintiff that this factor favors the application of Minnesota
law. Specifically, the Court concludes that California Overland’s substantial business
operations in Minnesota are the more relevant contacts under this factor. Importantly, the
Court does not reach this conclusion based simply on the location of California
Overland’s corporate domicile. Rather, the Court determines that relevant conduct by
California Overland that most likely occurred within this state is central to Plaintiff’s
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case. Defendant Juneau, an employee of California Overland, regularly drove on
Minnesota roads in a vehicle licensed and inspected in Minnesota. Along with a
negligence claim against Juneau premised on the accident itself, Plaintiff also asserts
claims directed at California’s Overland corporate conduct, including negligence in
connection with its training, instruction, monitoring, and supervision of Juneau; negligent
hiring; negligent retention; and negligent supervision. A Minnesota company authorized
to do business in this state whose employee was involved in a serious accident should not
be surprised by the application of Minnesota law to such claims.
In contrast, Wisconsin has no relevant contacts in this action by an Illinois resident
aside from the location where the accident took place. To be sure, the accident’s location
is not irrelevant to the Court’s analysis. Wisconsin has a valid interest in accidents that
occur on its highways, and Wisconsin’s wrongful death statute specifically governs
“death[s] caused in [the] state.” See Wis. Stat. § 895.03. The Court concludes, however,
that these state interests arising from the happenstance of the accident’s location do not
override Minnesota’s relevant contacts with the parties’ dispute.
In addition, although both parties could reasonably be accused of some degree of
forum-shopping in this matter, Plaintiff’s choice to originally litigate this action in her
own home state and thereafter in California Overland’s place of incorporation does not
reflect significant forum shopping. In contrast, the procedural history of this case and the
parties’ other litigation in Wisconsin and Illinois illustrate Defendants’ vigorous efforts to
impose Wisconsin law in this case. In sum, the Court concludes that this factor weighs in
favor of applying Minnesota law.
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3.
Simplification of the Judicial Task
The third factor is not particularly relevant where the competing laws are
straightforward. See Nodak, 604 N.W.2d at 95. This court is capable of applying either
Minnesota or Wisconsin law without difficulty. Even so, “the judicial task is obviously
simplified when a Minnesota court applies Minnesota law.” Jacobson v. Universal
Underwriters Ins. Grp., 645 N.W.2d 741, 746 (Minn. Ct. App. 2002) (citation omitted).
This factor therefore weighs slightly in favor of applying Minnesota law.
4.
Advancement of the Forum’s Governmental Interest
The fourth factor addresses “which choice of law most advances a significant
interest of the forum.” See id. (citation omitted). “A governmental interest is discerned
by comparing the reasons supporting the legal rules of the forum and the other state and
the factual contacts with the case, or the issue in a case.” Nodak, 590 N.W.2d at 674.
Critically, courts in Minnesota should not be obligated “to apply rules of law inconsistent
with Minnesota’s concept of fairness and equity.” See Jacobson, 645 N.W.2d at 746
(citation omitted). “In considering which law will advance the governmental interest of
Minnesota, [the court should consider] the public policy of both forums.” See
Schumacher v. Schumacher, 676 N.W.2d 685, 691 (Minn. Ct. App. 2004). In general,
however, “Minnesota’s governmental interests will most clearly be advanced by
application of Minnesota law.” See Medtronic, Inc. v. Advanced Bionics Corp., 630
N.W.2d 438, 455 (Minn. Ct. App. 2001) (citation omitted).
As noted by the Minnesota Court of Appeals in an insurance dispute following a
wrongful death settlement arising out of an automobile accident, “Minnesota courts have
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a recognized interest in seeing that all tort victims are fully compensated,” and “[t]his
interest is not limited to residents.” Jacobson, 645 N.W.2d at 743, 745-46 (declining to
apply Iowa’s wrongful death law which did not provide for pecuniary loss damages); see
also Boatwright v. Budak, 625 N.W.2d 483, 489 (Minn. Ct. App. 2001) (“Minnesota
places great value in compensating tort victims.” (quoting Jepson, 513 N.W.2d at 472)).
However, “Minnesota’s interest in compensating tort victims is lessened where the injury
occurred in another state, the injured party is not a Minnesota resident and did not receive
medical care here.” Schmelzle v. ALZA Corp., 561 F. Supp. 2d 1046, 1050 (D. Minn.
2008). Similar to Minnesota, “Wisconsin has an interest in compensating those injured
by negligent conduct within its borders, whether the tort victims are residents or
nonresidents.” Brooks v. Gen. Cas. Co. of Wis., Civ. No. 06-C-0996, 2007 WL 4305577,
at *5 (E.D. Wis. Dec. 7, 2007). As its wrongful death statute demonstrates, however,
Wisconsin also has an interest in “protect[ing] . . . those doing business in the state from
the risk of large awards for certain nonpecuniary losses in death cases.” See id. In a
wrongful death action, the home state of the decedent and beneficiaries “has the
predominate governmental interest in distribution of the recovery.” See Montpetit v.
Allina Health Sys., Inc., Civ. No. C2-00-571, 2000 WL 1486581, at *3-4 (Minn. Ct. App.
Oct. 10, 2000).
The Court concludes that applying Wisconsin law would unfairly prevent
Sportsman’s family and next-of-kin from being fully compensated consistent with the
laws of California Overland’s home state. Because neither the decedent nor his heirs are
domiciled in Minnesota or Wisconsin, the governmental interest in the distribution of a
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wrongful death recovery favors neither state. However, Minnesota’s interest in fully
compensating tort victims would be undermined by the application of Wisconsin law.
Specifically, Wisconsin law would impose limits on which of the decedent’s family
members may recover as well as the ultimate amount of any possible recovery. The
location of the accident is not particularly relevant here, and no parties have meaningful
Wisconsin contacts. 3 Notably, a Wisconsin court has already determined that Wisconsin
lacked sufficient contact with the Sportsmans to exercise personal jurisdiction in
Defendants’ prior declaratory judgment action. Notwithstanding Wisconsin’s apparent
interest in protecting corporations from large damages in wrongful death cases,
Minnesota’s strong governmental interest in fully compensating tort victims weighs in
favor of applying Minnesota law.
In conclusion, Court determines that the state of Minnesota has enough contacts
with the cause of action to constitutionally apply Minnesota law, and the five-factor test
favors the application of Minnesota law.
ORDER
Based on the files, record, and proceedings herein, IT IS HEREBY ORDERED
that:
1.
Defendants’ Motion to Apply Wisconsin Law (Doc. No. [18]) is DENIED.
2.
Plaintiff’s Motion for the Application of Minnesota Law on the
Choice-of-Law Issue (Doc. No. [23]) is GRANTED.
3
Although Defendants place much emphasis on Mr. Sportsman and his family’s
recreational contacts with the state of Wisconsin, the Court declines to place much weight
on these contacts or Mr. Sportsman’s earnings from fishing tournaments in Wisconsin.
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3.
The Court holds that Minnesota law governs this case.
Dated: April 18, 2018
s/Donovan W. Frank
DONOVAN W. FRANK
United States District Judge
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