Schreiber v. Allis-Chalmers Corp.

• Decision Date: 21 January 1980
• Docket Number: ALLIS-CHALMERS,No. 78-1357,78-1357
• Parties: Lawrence SCHREIBER, Plaintiff-Appellant, v.CORPORATION, Defendant-Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 790

611 F.2d 790

Lawrence SCHREIBER, Plaintiff-Appellant, v. ALLIS-CHALMERS CORPORATION, Defendant-Appellee.

No. 78-1357.

United States Court of Appeals,

Tenth Circuit.

Argued May 17, 1979.

Decided Nov. 27, 1979.

Rehearing Denied Jan. 21, 1980.

Larry Latham, Jackson, Miss. (R. Daniel Lykins of Jones, Schroer, Rice & Bryan, Topeka, Kan., on brief), for plaintiff-appellant.

Barry E. Warren, Overland Park, Kan. (Frank Saunders, Jr., of Wallace, Saunders, Austin, Brown & Enochs, Overland Park, Kan., on brief), for defendant-appellee.

Before McWILLIAMS, BARRETT and DOYLE, Circuit Judges.

McWILLIAMS, Circuit Judge.

Lawrence Schreiber, plaintiff-appellant, appeals the summary judgment entered in favor of Allis-Chalmers, the defendant-appellee. The Memorandum and Order of the trial court now appears as Schreiber v. Allis-Chalmers Corp., 448 F.Supp. 1079 (D.Kan.1978).

Schreiber filed the instant action in the United States District Court for the Southern District of Mississippi, Jackson Division, on June 16, 1977. Allis-Chalmers, the defendant, is incorporated in Delaware, and has its headquarters in Milwaukee, Wisconsin. Since 1932 Allis-Chalmers has been duly licensed, qualified and authorized to do business in the State of Mississippi. Service of process was made by serving Allis-Chalmers' statutory agent for service of process. Additionally, the general manager of Allis-Chalmers' manufacturing facility, located just south of Jackson, Mississippi, was personally served with process.

In the complaint Schreiber alleged that he is a resident and citizen of Kansas and federal jurisdiction is thus based on diversity of citizenship. Schreiber further alleged that on June 22, 1971, he was severely injured near Soldier, Kansas when working on an Allis-Chalmers Roto Baler, causing amputation of his arms. It was alleged that Allis-Chalmers had defectively designed and manufactured the Roto Baler in question and Schreiber's cause of action was grounded on ordinary and gross negligence, breach of implied warranty and strict liability. Damages were sought in the amount of $5,000,000.

Allis-Chalmers filed an answer and a motion for change of venue pursuant to 28 U.S.C. § 1404(a). The motion was based on a belief that since the accident complained of occurred in Kansas, the case should be transferred to the United States District Court for the District of Kansas. A federal district judge in Mississippi denied the defendant's motion for change of venue.

In an original proceeding brought in the United States Court of Appeals for the Fifth Circuit that Court, by minute order, ordered the federal district court in Mississippi to transfer the case to the United States District Court for the District of Kansas. In due time the case was thus transferred.

In the Kansas federal court Allis-Chalmers filed a motion for summary judgment, and also sought, and obtained, an order staying discovery until a ruling on the summary judgment motion. The motion was predicated on two propositions: (1) the Mississippi federal court was without jurisdiction to adjudicate Schreiber's cause of action; and (2) assuming jurisdiction, the cause of action was barred by the 2-year Kansas statute of limitations. ¹ After oral argument, the trial court granted Allis-Chalmers' motion for summary judgment, holding that the Mississippi federal court did not have jurisdiction to hear the case, and, alternatively, that if the Mississippi federal court did have jurisdiction, it would have applied the Kansas 2-year statute of limitations, which would bar the action. Schreiber now appeals the summary judgment entered for Allis-Chalmers.

The trial court in a detailed Memorandum and Order, consisting of some 20 printed pages, made no findings of fact, of course, since the case was disposed of by way of summary judgment. The critical portions in the Memorandum constitute conclusions of law, with a comprehensive review of the many legal authorities which have bearing thereon. We would parenthetically note that authorities dealing with the troublesome questions of federal jurisdiction and conflict of laws here involved are not only numerous but often contradictory.

We summarize the trial court's Memorandum and Order as follows: (1) The transferee court, the Kansas federal court, must decide this case as would the transferor court, the Mississippi federal court, and the Mississippi federal court in turn must apply Mississippi state law. We agree. (2) The Mississippi federal court would hold that a Mississippi state court under Mississippi statutory and case law could assume jurisdiction of this case. We agree. (3) The attempted assumption of jurisdiction by the Mississippi state court, however, must fail because such would violate federal due process. Therefore, the hypothetical Mississippi state court has no jurisdiction of the case. With this we disagree. (4) However, assuming jurisdiction on the part of the Mississippi state court, which in turn would give the federal district court in Mississippi jurisdiction to hear the case, under present Mississippi law the Mississippi state court would normally hold that the statute of limitations of the forum state, i. e., the 6-year statute of Mississippi controls. With this we agree. (5) However, if this particular case were presented to a Mississippi state court at this point in time, the Mississippi state court would, for the first time, abandon the Lex fori rule and would apply the 2-year statute of limitations of the State of Kansas. With this we disagree.

As indicated, then, we agree with the trial court that it must sit as though it were a federal district court sitting in the Southern District of Mississippi. Although Allis-Chalmers apparently argued to the contrary in the trial court, on appeal it does not press the matter. The trial court's determination in this regard finds support in Van Dusen v. Barrack, 376 U.S. 612, 639, 84 S.Ct. 805, 11 L.Ed.2d 945 (1964), where the Supreme Court held that the transferee federal district court is obligated to apply the state law that would have been applied if there had been no change of venue. A corollary of the foregoing is that in the instant case the Mississippi federal court in this diversity proceeding must apply Mississippi's state law, and the same rule extends to the field of conflict of laws. Klaxon Company v. Stentor Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941) and Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938).

As indicated, we also agree with the trial court in the instant case that a Mississippi state court, and therefore the Mississippi federal court, would hold that under Mississippi statutory and case law a Mississippi state court could assume jurisdiction of this case. In just so many words, a Mississippi statute provides that a foreign corporation doing business in Mississippi is subject to suit in Mississippi to the same extent that corporations of Mississippi are, "whether the cause of action accrued in this state or not." Section 79-1-27, Miss. Code 1972. In support of the trial court's interpretation of that statute, see S. & W. Constr. Co. v. Douglas, 244 Miss. 498, 142 So.2d 33 (1962) and the cases cited therein. In Douglas the Mississippi Supreme Court held that under Mississippi law a Mississippi state court had jurisdiction to hear a case wherein the plaintiff, a resident of Tennessee, was injured in an accident occurring in Tennessee and the defendant was a Tennessee corporation, which, however, had qualified to do business in Mississippi and had appointed a resident agent for service of process upon whom service had been effected.

As indicated, we do not agree that the assumption of jurisdiction by the Mississippi state court would offend federal...