Beard v. J.I. Case Co.

• Decision Date: 05 August 1987
• Docket Number: No. 86-1484,86-1484
• Parties: Prod.Liab.Rep.(CCH)P 11,472 Frank A. BEARD and Edith F. Beard, Plaintiffs-Appellants, v. J.I. CASE COMPANY, a Delaware Corporation, and Tenneco, Inc., a Delaware Corporation, Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1095

823 F.2d 1095

Prod.Liab.Rep.(CCH)P 11,472

Frank A. BEARD and Edith F. Beard, Plaintiffs-Appellants, v. J.I. CASE COMPANY, a Delaware Corporation, and Tenneco Inc., a Delaware Corporation, Defendants-Appellees.

No. 86-1484.

United States Court of Appeals Seventh Circuit.

Argued Sept. 22, 1986.

Decided July 6, 1987.

Rehearing and Rehearing En Banc Denied Aug. 5, 1987.

James J. Kriva, Kasdorf, Lewis & Swietlik, S.C., Milwaukee, Wis., for plaintiffs-appellants.

Frank A. Scherkenbach, Borgelt, Powell, Peterson & Frauen, Milwaukee, Wis., for defendants-appellees.

Before FLAUM and EASTERBROOK, Circuit Judges, and SWYGERT, Senior Circuit Judge.

FLAUM, Circuit Judge.

Frank Beard, a Tennessee farmer, was seriously injured when he became entangled in the rollers of a cornpicker manufactured by the defendant. Six months after the accident, Beard and his wife filed this products liability action in federal district court in Wisconsin. The court held that a Wisconsin court would apply the Tennessee Products Liability Act--including its period of repose, which bars any action for a personal injury caused by a product that was sold by the manufacturer more than ten years before the filing of the action. Applying Tennessee law, the court concluded that the action was time-barred, and therefore entered judgment for the defendants.

We conclude that the judgment of the district court must be reversed. The timeliness of the Beards' action is governed by the Wisconsin borrowing statute. We believe that in order to avoid a potential conflict with the Remedy for Wrongs provision of the Wisconsin Constitution, the Wisconsin Supreme Court would construe the borrowing statute to require use of Tennessee's period of limitations, but not its period of repose.

I.

While working on his farm in Tennessee, Frank Beard was seriously injured when both of his arms and one of his legs became caught between the rollers of a cornpicker. All three of Beard's injured limbs were later amputated. The accident occurred on November 9, 1981. Six months later, Beard and his wife filed this diversity action against the manufacturer of the cornpicker, the J.I. Case Company, and its parent corporation, Tenneco Inc., in the United States District Court for the Eastern District of Wisconsin. The Beards alleged that the defendants had been negligent and were strictly liable for defectively designing the cornpicker and the rollers. They further alleged that the defective design work had occurred in Wisconsin and that the action was, therefore, governed by Wisconsin law.

The defendants subsequently moved for summary judgment on the ground that the Wisconsin borrowing statute, Wis.Stat.Ann. Sec. 893.07 (West 1983), barred the action. The statute provides that no action may be maintained in a Wisconsin court on a "foreign cause of action" if the "foreign period of limitations which applies has expired." Id. The defendants argued that the borrowing statute required the use of the period of limitation and the period of repose ¹ contained in the Tennessee Products Liability Act, Tenn.Stat. Sec. 29-28-103(a) (1980 & Supp.1983). The Tennessee statute bars any products liability action not brought within six years of the injury (the period of limitation) and within ten years "from the date on which the product was first purchased for use or consumption" (the period of repose). Id. Because the cornpicker was first purchased in 1950, the defendants argued that the Tennessee period of repose barred the action.

The plaintiffs opposed the defendants' motion for summary judgment, arguing that the Wisconsin borrowing statute mandated the use of foreign periods of limitation, but not foreign periods of repose.

The district court granted partial summary judgment for the defendants. The court declined to resolve the question of whether the Wisconsin borrowing statute required the use of the Tennessee period of repose. Rather, the court stated that Tennessee law governed liability, and that "[u]nder general choice of law principles," the Tennessee period of repose applied "because Tennessee regards its statute of repose as substantive law." Beard v. J.I. Case Co., No. 82 C 0531, slip op. at 5 (E.D.Wis. Feb. 21, 1985) (decision and order). The court concluded that the Tennessee period of repose barred the plaintiffs' claims that the cornpicker was defective. Id. at 8. ²

II.

At the outset, we must determine our standard of review. Conflict of laws cases present both questions of law, and mixed questions of law and fact. As a general rule, "such determinations are independently reviewable by an appellate court." Schuneman v. United States, 783 F.2d 694, 699 (7th Cir.1986) (citation omitted). However, we have recognized that district court decisions construing the law of the state in which it sits are entitled to some deference. See, e.g., Moore v. Tandy Corp., 819 F.2d 820, 823 (7th Cir.1987). But see Fassett v. Delta Kappa Epsilon (New York), 807 F.2d 1150, 1157 (3d Cir.1986) (circuit court has plenary review over district court's interpretation of the law of the state in which it sits); In re McLinn, 739 F.2d 1395 (9th Cir.1984) (en banc ) (rejecting deference in favor of plenary review of questions of state law). We give weight to these decisions because we presume that a district judge is likely to have a special familiarity with the law of the state in which he or she sits. ³

We have never considered whether the deference generally due to district court decisions construing the law of the state in which it sits applies to decisions involving state choice of law questions. In resolving this issue, we note that choice of law cases typically involve a two-step process. First, the district court must determine which law a state court in the state in which the district court sits would apply. Second, the district court must resolve the case before it using the applicable law.

We conclude that district court decisions as to which law the courts of the state in which it sits would apply are due the same deference as other district court decisions interpreting that state's law. A state's conflicts law is a part of its total body of law. There is no reason to presume that the district court is any less familiar with its home state's conflicts law than with other parts of the law of that state.

The presumption of district court expertise does not always continue, however, once the court has determined which law to apply. If the court selects the law of the state in which it sits, its subsequent construction of that law is entitled to the usual deference. However, if the district court applies the law of a jurisdiction other than the state in which it sits, we do not show deference to its subsequent interpretation of that law because the district court is not likely to have any special familiarity with it. See Kalmich v. Bruno, 553 F.2d 549, 553 (7th Cir.), cert. denied, 434 U.S. 940, 98 S.Ct. 432, 54 L.Ed.2d 300 (1977) (declining to give deference to district court's interpretation of foreign law).

III.

The Beards have appealed the district court's decision to grant partial summary judgment against them on their claims that the entire cornpicker was defective. We believe that the district court correctly applied Wisconsin conflict of laws principles in order to determine that Tennessee law governed the merits of the plaintiffs' claims. However, we conclude that the district court erred in looking to general conflicts principles, rather than to the Wisconsin borrowing statute, to determine what law governed the question of whether the action was time-barred. Applying Wisconsin law, we conclude that the borrowing statute requires the use of the Tennessee period of limitation, but not the Tennessee period of repose. Finally, we conclude that the Beards' action is not time-barred by the Tennessee period of limitations.

A.

The district court held that, under Wisconsin conflicts principles, Tennessee law governed the issue of liability. Because the district court based this decision on Wisconsin conflicts law, we review this conclusion with deference.

The district court correctly observed that Tennessee had significant contacts with this litigation. The plaintiffs reside in Tennessee, the cornpicker and rollers were purchased in that state, and the accident occurred there. At the same time, the court also noted that the only undisputed contact that Wisconsin had with the litigation was the fact that the defendant J.I. Case Company maintains its corporate headquarters in that state. Although the parties disagreed as to whether the cornpicker was designed and manufactured in Wisconsin, the district court assumed it had been designed and manufactured outside the state. Based on these facts, the district court, applying Wisconsin's "center of gravity" approach, see Heath v. Zellmer, 35 Wis.2d 578, 596, 151 N.W.2d 664, 672 (1967), concluded that Tennessee law should apply.

The district court should have tried to resolve the disputed issue of whether the cornpicker had been designed and manufactured in Wisconsin before it entered partial summary judgment. This is a significant contact that might have affected the court's decision. Nonetheless, even if the cornpicker was designed and manufactured in Wisconsin, we would still uphold the district court's decision, under Wisconsin conflicts principles, to apply Tennessee law to determine liability. See Air Products & Chemicals v. Fairbanks Morse, Inc., 58 Wis.2d 193, 206 N.W.2d 414 (1973) (Pennsylvania law applied in case in which Pennsylvania plaintiff sued, alleging that the defendant had defectively designed a product at its Wisconsin factory).

B.

After concluding that Tennessee law applied, the district court went on to state that the applicable Tennessee law included the Tennessee period of repose because this period was "substantive." The district court based this decision on general conflicts principles,...