Bishop et al v. The Goodyear Tire and Rubber Company et al
ORDER denying 74 Defendants' Motion seeking to apply Wisconsin's substantive law to the case. Signed by US Magistrate Judge Daneta Wollmann on 4/6/16. (YB)
UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH DAKOTA
OTTO BISHOP, STATE FARM
MUTUAL AUTOMOBILE INSURANCE
THE GOODYEAR TIRE AND RUBBER
COMPANY, GOODYEAR DUNLOP
TIRES NORTH AMERICA, LTD,
Otto Bishop and his wife were driving on their motorcycle from their
home in Wisconsin through South Dakota. On their way through South
Dakota, the tire became disabled and Mr. and Mrs. Bishop were injured. State
Farm Mutual Automobile Insurance Company (hereinafter “State Farm”) paid
the property damage on the motorcycle and seeks repayment from Goodyear
Tire and Rubber Company and Goodyear Dunlop Tires North America, LTD
(hereinafter “Defendants”). Plaintiffs filed suit alleging product liability, failure
to warn, and negligence.1 The Defendants allege, amongst other things, that
Mr. Bishop failed to properly maintain the tire and misused and abused the
tire by failing to maintain proper air pressure and repeatedly operating the
The lawsuit was originally filed in circuit court in Jackson County, South Dakota, but was
removed to federal court on diversity grounds.
motorcycle in excess of the maximum load for the motorcycle and the tire.
(Doc. 74 at p. 3).
The defendants filed this motion to determine the applicable substantive
law. Defendants believe that Wisconsin law should apply to substantive
questions in this case. The plaintiffs disagree. For the following reasons, the
court finds the applicable substantive law is South Dakota law.
Whether the Motion is Untimely
First, plaintiffs assert that the motion to determine substantive law
should be denied as untimely because it should have been filed and served on
or before January 12, 2015. (Doc. 75 at p. 1). In support of this argument,
plaintiffs cite to the District Court’s scheduling order that states “[a]ll motions,
other than motions in limine, together with supporting briefs, shall be filed and
served on or before January 12, 2015.” (Doc. 38) (order extending previously
set deadlines). Defendants respond that their motion is timely because it was
filed more than three months before trial and choice of law had not been
presented by either party. (Doc. 80 at p. 1). Defendants argue that it is
beneficial for all parties to know which substantive law governs in order to
prepare jury instructions. Moreover, Defendants argue motions to determine
applicable substantive law of the case may be brought at any time before or
during trial as long as the opposing party does not suffer prejudice. In support
of this, Defendants cite to a case from the Court of Appeals for the First Circuit,
Levin v. Dalva Brothers, Inc, 459 F.3d 68 (1st Cir. 2006).
The court will not dismiss the motion on this ground. The plaintiff
submitted no evidence to show that it was somehow prejudiced by this motion.
Defendants filed this motion before trial and, while it could have been filed
earlier, Plaintiff did not contend that Defendants intentionally waited to raise
this issue to gain some sort of unfair advantage. The Plaintiff has not suffered
any prejudice. Furthermore, such a motion would eventually arise during the
course of trial and the court believes it an efficient use of time to resolve the
issue at this juncture.
Whether the Defendants Waived Statutory Defenses
Plaintiffs argue the Defendants waived the ability to raise statutory
defenses because Federal Rule of Civil Procedure 8(c) required Defendants to
raise such defenses in their answers. (Doc. 75 at p. 7). Defendants argue they
did not waive the right to a choice of law determination because their answers
sufficiently identified all affirmative defenses they now seek to assert. (Doc. 80
at p. 3-4).
Federal Rule of Civil Procedure 8(b)(1)(A) requires a “short and plain”
statement of the party’s “defenses to each claim asserted against it.” Federal
Rule of Civil Procedure 8(c) requires that a party affirmatively state any
affirmative defense. Both Defendants stated in their respective answers that
they were asserting all available defenses pursuant to any statute governing
plaintiff’s claims. (Doc. 33 at p. 6; Doc. 34 at p. 6). Thus, Defendants have not
waived statutory defenses.
The Defendants Have Shown a Meaningful Conflict of Law
Plaintiffs argue the defendants failed to show a conflict in the laws that is
meaningful and would change the outcome of the case. (Doc. 75 at p. 2).
Defendant argues that it has shown a conflict of law exists, but it does not
argue such a difference in the law would change the outcome of the case at
bar. (Doc. 80 at p. 2-3).
“A district court sitting in diversity applies the law including the choiceof-law rules, of the state in which it sits.” Prudential Ins. Co. of America v.
Kamrath, 475 F.3d 920, 924 (8th Cir. 2007) (citing Klaxon Co. v. Stentor Elec.
Mfg. Co., 313 U.S. 487, 496 (1941)). “Before applying the forum state’s choiceof-law rules, however, a trial court must first determine whether a conflict
exists. Kamrath, 475 F.3d at 924 (other citations omitted).
“In determining whether a conflict exists, the court must ascertain which
state’s law may apply.” General Cas. Co. of Wisconsin v. Nelson Engineering
Consulting, LLC, 91 F.Supp.3d 1168 (D.S.D. 2015) (determined the states in
which the parties were located in and acts took place). If the outcome would be
the same regardless of the law applied, then the court should use the law of the
state in which it sits. See Id. at 1172-73 (none of the potential state laws
would change the outcome of the case, thus the court applied South Dakota
law); Kamrath, 475 F.3d at 924 (need not decide whether Missouri law or New
York law applies because the outcome would be the same under either).
Though the parties only address South Dakota and Wisconsin law, it is up
to the court to consider all states that may apply. See General Cas. Co. of
Wisconsin, 91 F.Supp.3d. at 1172 (where the court considered the applicability
of Iowa law to contract claim where the parties only considered South Dakota
and Wisconsin, but the contract was prepared in Iowa). The states at issue are
Ohio, New York, South Dakota and Wisconsin.
At minimum, the court finds the defendants have shown a meaningful
choice of law exists between South Dakota and Wisconsin. Defendants
presented a difference in Wisconsin’s and South Dakota’s comparative
negligence laws (compare Wis Stat § 895.045(3) and SDCL § 20-9-2) and a
Wisconsin presumption that a product is not defective if the party
demonstrates compliance with government standards (compare Wis. Stat. §
895.047(3) and SDCL §§ 20-9-9, 20-9-10, and 20-9-10.1). This is a
presumption that South Dakota does not have. Though the Plaintiffs dispute
how meaningful these differences are, they concede the differences exist. The
court finds these differences are meaningful in that they go to Defendants’
defenses and have the potential to change the outcome of the case. Thus, a
choice of law analysis is necessary.
South Dakota’s Law Applies Because South Dakota has the
Most Significant Contacts
“In a choice-of-law analysis for a diversity action brought in federal
district court, the choice-of-law rules are substantive for Erie purposes, and
the choice-of-law rules of the forum state are applied to determine the litigating
parties’ rights.” Delaney v. Rapid Response, Inc., 81 F.Supp.3d 769, 773
(D.S.D. 2015) (internal quotations omitted) (citing Allianz Ins. Co. v. Sanftleben,
454 F.3d 853, 855 (8th Cir. 2006)). Therefore, the court will apply South
Dakota’s choice-of-law rules.
Since Chambers v. Dakotah Charter, Inc., 488 N.W.2d 63, 67 (S.D.
1992), South Dakota has used the “most significant relationship approach to
govern multi-state tort conflicts.” Delaney, 81 F.Supp.3d at 773. The most
significant relationship approach as defined by the Restatement (Second) of
Conflicts of Laws provides as follows:
(1) [t]he rights and liabilities of the parties with respect to an issue in tort
are determined by the local law of the state which, with respect to that
issue, has the most significant relationship to the occurrence and the
parties under the principles stated in § 6
(2) The contacts to take into account in applying the [principles of § 6 of
the Restatement] include:
(a) the place where the injury occurred,
(b) the place where the conduct causing the injury occurred,
(c) the domicile, residence, nationality, place of incorporation and
place of business of the parties, and
(d) the place where the relationship, if any, between the parties is
Chambers, 488 N.W.2d at 68 (citing Restatement (Second) of Conflict of
Laws § 145 (1971)). Section 6 of the Restatement (Second) Conflict of Laws
provides choice-of-law principles to be considered in the choice of law analysis:
(1) A court, subject to constitutional restrictions, will follow a statutory
directive of its own state on choice of law.
(2) When there is no such directive, the factors relevant to the choice of
the applicable rule of law include the needs of the interstate and
the relevant policies of the forum,
the relevant policies of other interested states and the relative
interests of those states in the determination of the particular
the protection of justified expectations,
the basic policies underlying the particular field of law,
certainty, predictability and uniformity of result, and
ease in the determination and application of the law to be applied.
Chambers, 488 N.W.2d at 68 (citing Restatement (Second) of Conflict of Laws §
Most significant relationship factors
The place where the injury occurred.
The accident occurred on Interstate 90 in Jackson County, South
Dakota. The purpose of Mr. Bishop’s travel into South Dakota was a week long
motorcycle trip. Mr. Bishop had planned a trip through South Dakota to
experience the Sturgis Motorcycle Rally on his way to Wyoming. On the day of
the accident, Mr. Bishop had three stops in South Dakota, including an
unexpected stop, when the digital speedometer on his motorcycle lost power
and went black. After a 30 minute wait, Mr. Bishop continued down the
interstate and, thereafter, the motorcycle went out of control resulting in an
injury producing crash. Mr. Bishop was transported to Rapid City Regional
The Restatement commentary cautions that if the place of the injury is
merely fortuitous, in that it bears little relation to the occurrence and the
parties, then the court should discount the place where the injury occurred.
For example, if a plaintiff is injured while passing over a state while onboard an
airplane, or while on an interstate journey on a bus passing through, it would
constitute a fortuitous location. This is distinguishable from the facts here.
Mr. Bishop planned to spend a night or two at a hotel between Rapid City and
Sturgis and planned to take in the Sturgis Motorcycle Rally. Additionally, the
accident’s location was not fortuitous because Mr. Bishop’s treatment of the
tire during his trip and leading up to the accident is significant. The
Defendants have alleged contributory negligence including Mr. Bishop’s failure
“to observe safety standards or applicable law, including speed control laws.”
(Doc. 34 at p. 5). Presumably, the speed control laws relied upon by the
defendants are South Dakota’s codified laws. Mr. Bishop’s conduct and the
performance of the tire in the hours leading up to the accident occurred in
Additionally, the witnesses, medical personnel, investigators and others
who saw, responded to, or who otherwise attended to the accident and the
aftermath are located in South Dakota. Despite Defendants’ claim that the loss
occurred in Wisconsin, the court finds the loss occurred in South Dakota when
the accident took place. Moreover, South Dakota has an interest in applying
its comparative negligence law to people who drive through the state. These
factors all weigh heavily in favor of applying South Dakota law.
The place where the conduct causing the injury occurred
Plaintiffs claim the conduct causing the injury that occurred is “the
result of manufacturing issues that did not happen in either South Dakota or
Wisconsin.” (Doc. 75 at p. 9). According to Plaintiffs, the tires were
manufactured in New York. (Doc. 75 at p. 5). Quality control and inspections
on the tire were conducted in New York. The sale of the tire to a distributor
took place in New York. Thus, the conduct causing the injury, if that injury is
the result of manufacturing issues, would have been in New York. Defendants
argue the place where the conduct causing the injury is Wisconsin. The tire
was purchased, installed, stored, maintained, and allegedly misused in
Wisconsin. (Doc. 80 at p. 5). Either the tire was defective when it left New
York, or the tire was misused in Wisconsin and in South Dakota. Thus, the
states have equal ties to the accident, and this factor does not favor any state.
The domicle, residence, nationality, place of
incorporation and place of business of the parties.
As to the residence, place of incorporation and place of business of the
parties, the court finds this factor is not in favor of any party. Otto Bishop and
his wife, at all relevant times, were residents of Wisconsin. Goodyear Dunlop
Tires North America, Ltd. was formed under the laws of Ohio, its principal
place of business is Ohio, and it conducts business in South Dakota,
Wisconsin, and New York. The same is true for The Goodyear Tire and Rubber
Company. State Farm is an insurance company that does business in all fifty
states. Otto Bishop purchased the tire in question at Appleton Harley
Davidson, in Appleton Wisconsin. However, Appleton Harley Davidson is not a
defendant in this lawsuit. Therefore, the court finds that the domicile or place
of business of the parties does not favor any state over another.
The place where the relationship, if any, between the
parties is centered.
The place where the relationship is centered is also inconclusive. The
parties would not have a relationship except for the accident, which occurred
in South Dakota. The relationship between the parties arises from the use and
failure of the tire. The tire was used in both Wisconsin and South Dakota. The
Defendants argue the Plaintiff’s most prolonged misuse of the tire occurred in
Wisconsin. The alleged tire failure occurred in South Dakota. The relationship
between Appleton Harley Davidson and Bishop is irrelevant, because Appleton
Harley Davidson has not been named a party to the action. Therefore, this
factor does not weigh in favor any particular state.
In applying the most significant relationship approach, the court
concludes the Plaintiff’s product liability and negligence case against the
Defendant has the most significant relationship with South Dakota, given that
the immediate conduct leading up to the accident, as well as the accident,
occurred in South Dakota. The other contacts to be considered under § 145 of
the Restatement do not heavily favor Wisconsin, New York or Ohio over South
Dakota. When evaluating all four factors of § 145 and the policy
considerations of § 6, the relative importance with respect to the product
liability and negligence issues to be resolved in this case weighs heavily in favor
of applying South Dakota law. Therefore, the court concludes that South
Dakota law should govern the substantive claims and defenses in this case.
NOTICE TO PARTIES
Pursuant to 28 U.S.C. § 636(b)(1)(A), any party may seek reconsideration
of this order before the district court upon a showing that the order is clearly
erroneous or contrary to law. The parties have fourteen (14) days after service
of this order to file written objections pursuant to 28 U.S.C. § 636(b)(1)(A),
unless an extension of time for good cause is obtained. See FED. R. CRIM. P.
58(g)(2); 59(a). Failure to file timely objections will result in the waiver of the
right to appeal questions of fact. FED. R. CRIM. P. 59(a). Objections must be
timely and specific in order to require review by the district court.
DATED this 6th day of April, 2016.
BY THE COURT:
United States Magistrate Judge
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