Brief Fact Summary
Allstate (Defendant) argued that the Minnesota state courts should have applied Wisconsin laws at a personal injury trial.
Synopsis of Rule of Law
If a state has only insignificant contact with the parties and the occurrence or transaction, application of its law is unconstitutional.
Hague’s (Plaintiff) late husband, Ralph Hague, died of injuries suffered when a motorcycle he was riding on as a passenger was hit from behind by an automobile in Pierce County, Wisconsin.Â The drivers of both vehicles, and Hague, were Wisconsin residents.Â Hague worked in Red Wing, Minnesota, and commuted to work from Wisconsin.Â Following the accident, Mrs. Hague (Plaintiff) moved to Red Wing and established residence in Minnesota.Â She then filed suit in Minnesota District Court against Allstate (Defendant), which had issued an automobile insurance for Mr. Hague, asking that Minnesota law be applied so that she could â€œstackâ€ the uninsured motorist coverage on each of her deceased husband’s three automobiles, to provide for a larger recovery.Â The Minnesota Supreme Court affirmed a summary judgment for Hague (Plaintiff), which held that Minnesota’s choice of law rules required the application of Minnesota law permitting stacking.Â Allstate (Defendant) appealed.
If a state has only insignificant contact with the parties and the occurrence or transaction, is the application of its law unconstitutional?
(Brennan, J.)Â Yes.Â If a state has only insignificant contact with the parties and the occurrence or transaction, application of its law is unconstitutional.Â For a state’s substantive law to be selected in a constitutionally permissible manner, the state must have a significant contact or significant aggregation of contacts, creating state interests, so that choice of its law is neither arbitrary nor fundamentally unfair.Â In the present case, Mr. Hague was a member of Minnesota’s work force, he commuted to work in Minnesota; and Allstate’s (Defendant) presence in Minnesota gave Minnesota an interest in regulating the company’s insurance obligations in that they affected both a Minnesota resident and court-appointed representative, Mrs. Hague (Plaintiff), and a long-standing member of Minnesota’s work force, Mr. Hague.Â Affirmed.
(Powell, J.)Â The contacts between Minnesota and this litigation are either trivial or irrelevant to the furthering of any public policy in Minnesota.
(Stevens, J.)Â Allstate (Defendant) has failed to establish that Minnesota’s refusal to apply Wisconsin law poses any direct or indirect threat to the sovereignty of Wisconsin.Â The decision of the Minnesota courts does not frustrate the reasonable expectations of the contracting parties.
In a lower court decision commenting on this case, the court stated that the significant contacts analysis here â€œaddresses the traditional concerns of due process, i.e., preventing unfairness to the parties and promoting interstate relations.â€Â See McCluney v. Jos. Schlitz Brewing Co., 649 F.2d 578 (8th Cir. 1981).