Jaurequi v. John Deere Co.

• Decision Date: 09 March 1993
• Docket Number: No. 91-3852,91-3852
• Citation: 986 F.2d 170
• Parties: Prod.Liab.Rep. (CCH) P 13,403 Juan JAUREQUI, Plaintiff-Appellant, v. JOHN DEERE COMPANY and Deere & Company, Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 170

986 F.2d 170

Prod.Liab.Rep. (CCH) P 13,403

Juan JAUREQUI, Plaintiff-Appellant, v. JOHN DEERE COMPANY and Deere & Company, Defendants-Appellees.

No. 91-3852.

United States Court of Appeals Seventh Circuit.

Argued Sept. 15, 1992.

Decided Feb. 8, 1993.

Rehearing and Rehearing En Banc Denied March 9, 1993.

William G. Stone, James R. Branit (argued), C. Lynn Lowder, Randall A. Carlisle, Bullaro, Carton & Stone, Chicago, IL, for plaintiff-appellant.

James V. McGlone, John M. Stuckey (argued), Stuart & Branigin, Lafayette, IN, for defendants-appellees.

Before CUMMINGS and MANION, Circuit Judges, and ZAGEL, District Judge. ¹

ZAGEL, District Judge.

Juan Jaurequi ("Jaurequi") was the victim of a tragic accident involving a John Deere 343 Quik-Thatch Corn Head ("Corn Head"). In August of 1987, Jaurequi, a citizen of Spain and botany student at the University of Seville, received an internship with Texas Triumph Seed Company ("Triumph"). Triumph is a Texas corporation located in Ralls, Texas, in the business of researching and developing hybrid crops. In September of 1987, Jaurequi and two other Triumph employees travelled from Lubbock, Texas to Missouri to perform grain research on one of Triumph's research test plots. On September 6, 1987, near Portageville, Missouri, Jaurequi began harvesting a test plot of sorghum, using a Massey combine and the Corn Head attachment as a stationary processing unit. That afternoon, while hand-harvesting the crop into the Corn Head for threshing, Jaurequi was pulled into the machine, traumatically amputating both of his legs.

Jaurequi filed suit in Texas state court against John Deere & Company, Deere & Company (collectively referred to as "Deere"), R.F. Fields Implement Company ("Fields"), and Carter Manufacturing Company, Inc. ("Carter"). Jaurequi sought damages under theories of product liability (both strict liability and negligence) and breach of warranty. Defendants jointly removed this diversity case from state court. Thereafter, Deere successfully moved to transfer venue from the Western District of Texas to the Northern District of Indiana. Prior to transfer, however, the Texas federal court dismissed defendant Fields for lack of personal jurisdiction.

After transfer, the Indiana district court ordered the remaining parties to brief the choice-of-law issues applicable to the case. Deere and Carter contended that Indiana law, specifically Indiana's statute of repose, applied to the case. Throughout the course of proceedings, however, Jaurequi maintained that Missouri law applied to both defendant Deere and Carter. Unlike Indiana, Missouri's legislature did not enact a statute of repose.

Deere won partial summary judgment by asserting that under the applicable choice of law, Indiana's statute of repose ² barred Jaurequi's products liability actions. ³ Jaurequi appeals the judgment in favor of Deere.

I.

We review de novo the district court's choice of law and grant of summary judgment, drawing all reasonable inferences in the light most favorable to the non-moving party. LAK, Inc. v. Deer Creek Enters., 976 F.2d 328, 330 (7th Cir.1992); Kincaid v. Vail, 969 F.2d 594, 600 (7th Cir.1992). Summary judgment is proper if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265 (1986). In this case, there is no genuine issue of material fact if Indiana's statute of repose operates to cut off Deere's liability for any design or manufacturing defect in the Corn Head.

II.

No one disputes that, if applicable, Indiana's statute of repose bars Jaurequi's products liability claims because the accident occurred more than 10 years after the Corn Head was delivered to its initial purchaser. Deere originally designed and manufactured this Corn Head in 1974, in Moline, Illinois. On October 28, 1975, Monticello Implement Company ("Monticello") sold the Corn Head to Robert Dahnke in Monticello, Indiana. Although the record does not reveal the manner by which Monticello acquired the Corn Head, it is undisputed that Deere cast the Corn Head into the stream of commerce in Indiana in 1975. In any event, Jaurequi's accident occurred in September 1989, almost 14 years after the original sale to Robert Dahnke.

III.

The issue simply is whether Indiana's statute of repose applies here. The district court, as a transferee court sitting in diversity, is obligated to apply the choice-of-law rules followed by the transferor court--in this case, the Texas district court. Van Dusen v. Barrack, 376 U.S. 612, 84 S.Ct. 805, 11 L.Ed.2d 945 (1964). Furthermore, the Erie doctrine requires a Texas district court, sitting in diversity, to apply the substantive law of the forum state, including its choice-of-law principles. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941); Tennimon v. Bell Helicopter Textron, Inc., 823 F.2d 68, 70 (5th Cir.1987); Goad v. Celotex Corp., 831 F.2d 508, 510 (4th Cir.1987) (after § 1404(a) transfer, district court in Virginia was required to apply same choice of law as Texas state court).

In 1979, the Texas Supreme Court abandoned the mechanical lex loci delecti rule and adopted the "Most Significant Relationship" approach, from the Restatement (Second) of Conflict of Laws §§ 145, 146, and 6 ("Second Restatement"). Gutierrez v. Collins, 583 S.W.2d 312 (Tex.1979). The "Most Significant Relationship" rule was intended to prevent the "harsh and inequitable" results produced by the talismanic application of the law of the state in which the injury occurred. ⁴ Gutierrez, 583 S.W.2d at 317. Texas courts subscribe to this new rule because it results in an equitable and reasoned choice-of-law decision that meets the demands of our highly mobile modern society. Id. at 317; Duncan v. Cessna Aircraft Co., 665 S.W.2d 414, 420-21 (Tex.1984).

Under this approach, a court must apply the law of the state with the most significant relationship to the particular substantive issue. ⁵ The Second Restatement rule specifically dictates that "in an action for a personal injury, the local law of the state where the injury occurred determines the rights and liabilities of the parties, unless, with respect to the particular issue, some other state has a more significant relationship ... in which event the local law of the other state will be applied." RESTATEMENT (SECOND) OF CONFLICT OF LAWS § 146 (1979).

Each substantive issue in the case mandates an independent, quantitative and qualitative evaluation and decision. A court first must isolate the pertinent issue, examine each state's connection to the occurrence, identify the governmental policies espoused by each state relevant to the issue, and proclaim applicable the law of the state with the superior interest. Allison v. ITE Imperial Corp., 928 F.2d 137, 141 (5th Cir.1991); Duncan, 665 S.W.2d at 421.

IV.

At the core of the dispute between the parties is the role, if any, that Carter plays in the choice-of-law analysis. Jaurequi suggests that each defendant is entitled to a separate conflicts analysis because different state laws may be applied to Deere and then named defendant Carter. Jaurequi's argument embraces the conflicts analysis that this Court espoused in In re Air Crash Disaster Near Chicago, 644 F.2d 594 (7th Cir.1981).

In response, Deere argues that Carter's contacts with Indiana must be factored into the choice-of-law analysis because Carter was a defendant at the time the district court granted summary judgment. Deere portrays Jaurequi's individualized conflicts approach as an "attempted 'end run' around the district court's ruling" and cautions this Court not to fall for Jaurequi's play and erroneously consider on appeal factual developments (Carter's settlement and dismissal) that occurred after summary judgment. Finally, Deere raises a waiver argument. Deere argues that Jaurequi waived any error assignable to the district court's analysis by not having urged that court to conduct an independent choice-of-law analysis for each defendant.

Deere's arguments do not work. First, Jaurequi's failure to caution the district court of its need to conduct a separate analysis for each defendant is neither fatal nor erroneous. To preserve a choice-of-law issue for appeal, Jaurequi need only notify the court in a timely manner of the applicability of another state's law. Kucel v. Walter E. Heller & Co., 813 F.2d 67, 74 (5th Cir.1987) (federal courts must "take judicial notice of the content of the laws of every state in the Union"). Jaurequi's position throughout the entire proceedings was that Missouri law applied to both Deere and Carter. There was no reason for him to ask for a separate analysis for each defendant. He reasonably could assume that the district court would follow the established Texas law. We, therefore, find that Jaurequi did not waive the issue regarding independent choice-of-law analysis.

We are not persuaded, however, that Texas state courts adhere to the principle of conducting separate conflicts analysis for each defendant. Nevertheless, we are persuaded that Texas choice-of-law rules mandate a separate conflicts analysis for each substantive issue, which in this case translates into a separate conflicts analysis for each defendant's conduct. The district court was presented essentially with two issues for purposes of choice-of-law analysis: 1) whether Indiana's statute of repose barred the products liability claim based on negligent manufacturing and design (claim against Deere); and 2) whether Indiana's statute of repose barred the products liability claim based on negligent modification (claim against Carter). ⁶ The district court, however, did not isolate...