Nesladek v. Ford Motor Co.

• Decision Date: 26 January 1995
• Docket Number: No. 94-1885,94-1885
• Citation: 46 F.3d 734
• Parties: Jill NESLADEK, as Trustee for Heirs and Next of Kin of Jeremy J. Nesladek, Decedent, Appellant, v. FORD MOTOR COMPANY, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 734

46 F.3d 734

Jill NESLADEK, as Trustee for Heirs and Next of Kin of Jeremy J. Nesladek, Decedent, Appellant, v. FORD MOTOR COMPANY, Appellee.

No. 94-1885.

United States Court of Appeals Eighth Circuit.

Submitted Oct. 12, 1994.

Decided Jan. 26, 1995.

David F. Herr, Minneapolis, MN, argued (William H. McDonald, Springfield, MO and Eric W. Kruger, Omaha, NE, on brief) for appellant.

Hildy Bowbeer, Minneapolis, MN, argued (Douglas S. Laird, Kansas City, MO and Michael J. O'Reilly, Dearborn, MI, on brief), for appellee.

Before BOWMAN, Circuit Judge, LAY, Senior Circuit Judge, and MORRIS SHEPPARD ARNOLD, Circuit Judge.

BOWMAN, Circuit Judge.

Jill Nesladek, as trustee for the heirs and next of kin of her son Jeremy, appeals the decision of the District Court ¹ granting Ford Motor Company's motion for summary judgment and dismissing her complaint with prejudice. We affirm.

I.

On April 18, 1990, near West Point, Nebraska, Jeremy's father Ken Nesladek started the family's Ford pickup truck, preparing to take three-year-old Jeremy and Jeremy's younger brother Dustin to day care. With Dustin in the truck, Ken Nesladek realized Jeremy and his toy wagon were behind the truck and left the vehicle to move the wagon and retrieve his son. As he proceeded to do so, the truck moved backward and rolled over Jeremy, severely injuring him. Jeremy died from his injuries about two years later on February 20, 1992, at the family farm in Nebraska.

After Jeremy's death, the Nesladeks moved to Minnesota. Jill Nesladek brought this wrongful death suit in Minnesota state court. Ford removed the case to federal court and moved for summary judgment, arguing that Nesladek's claim was barred by Nebraska's ten-year statute of repose applicable to products liability actions. The District Court granted Ford's motion and Nesladek appeals, 876 F.Supp. 1061. We review de novo the decision to enter summary judgment.

II.

All agree that this is a conflict of laws case. Under Nebraska law, which the District Court applied in dismissing the claim, "any product liability action," with some exceptions not relevant here, "shall be commenced within ten years after the date when the product which allegedly caused the personal injury, death, or damage was first sold or leased for use or consumption." Neb.Rev.Stat. Sec. 25-224(2) (1989). The truck at issue was a composite of two vehicles, combined in 1989 by Ken Nesladek and Harvey Kreikemeirer: a 1976 Ford model F-250 cab on a 1973 Ford model F-350 chassis. Thus, under Nebraska law, Nesladek cannot maintain this action, as it was precluded by the statute of repose in 1986 (ten years after the 1976 model was first sold) at the latest. Because ten years elapsed before the accident occurred, a cause of action never accrued.

Minnesota's approach to the issue of liability for injury, death, or damage allegedly caused by aged products is its "useful life" statute. Under that statute, "it is a defense to a [products liability] claim against a designer, manufacturer, distributor or seller of the product or a part thereof, that the injury was sustained following the expiration of the ordinary useful life of the product." Minn.Stat. Sec. 604.03 subd. 1 (1992). "The useful life of a product ... is the period during which with reasonable safety the product should be useful to the user." Id. Sec. 604.03 subd. 2. The fact-finder considers, inter alia, wear and tear, subsequent industry developments, conditions of use, the manufacturer's stated useful life, and user modification of the product. Id. Minnesota's useful life statute would not necessarily be dispositive of Nesladek's claim; rather, it would be for the jury to decide whether the truck's useful life had expired before the accident in question occurred. See Hodder v. Goodyear Tire & Rubber Co., 426 N.W.2d 826, 832 (Minn.1988) (en banc), cert. denied, 492 U.S. 926, 109 S.Ct. 3265, 106 L.Ed.2d 610 (1989).

There being no question that this case presents a true conflict of laws, see Lommen v. City of East Grand Forks, 522 N.W.2d 148, 149 (Minn.Ct.App.1994), we proceed to the next step of our analysis.

III.

Federal courts sitting in diversity apply the forum state's conflict of laws rules. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 1021-22, 85 L.Ed. 1477 (1941). Under Minnesota law, the first issue that must be resolved before we may choose between Nebraska and Minnesota law is whether the law at issue is substantive or procedural. If the law is procedural, then we apply the law of the forum state. If, on the other hand, it is substantive, the choice of law analysis continues to the next step. Gate City Fed. Sav. & Loan Ass'n v. O'Connor, 410 N.W.2d 448, 450 (Minn.Ct.App.1987). Minnesota law controls the substantive/procedural determination. Id.

In Minnesota " '[i]t has long been recognized that substantive law is that part of law which creates, defines, and regulates rights, as opposed to "adjective or remedial" law, which prescribes method [sic] of enforcing the rights or obtaining redress for their invasion.' " Zaretsky v. Molecular Biosystems, Inc., 464 N.W.2d 546, 548 (Minn.Ct.App.1990) (quoting Meagher v. Kavli, 251 Minn. 477, 88 N.W.2d 871, 879-80 (1958)). Nebraska's statute of repose, at least as it applies to cases like this one in which the injury-causing accident does not occur until after the ten-year repose period has expired, and Minnesota's useful life statute are relatively easy to classify under this test, and we hold that they are substantive law. ²

Under Minnesota law, "statutes of limitations relate to remedy" and therefore are procedural, so that the period of time after accrual within which a party may bring an action is controlled by Minnesota law if the forum is in Minnesota. United States Leasing Corp. v. Biba Info. Processing Servs., Inc., 436 N.W.2d 823, 826 (Minn.Ct.App.1989). A statute of repose, on the other hand, directly impacts on the accrual of a cause of action in the first instance. ³ It operates as a statutory bar independent of the actions (or inaction) of the litigants--often before those litigants can even be identified. See Zaretsky, 464 N.W.2d at 550 (finding prejudgment interest statute procedural because, inter alia, it "applies to the relationship of the parties as litigants"). Although the Nebraska statute of repose does not create rights, it is no less substantive because it imposes a disability upon potential claimants. Or, viewed another way, it creates in the potential products-liability defendant a right to immunity from suit under the circumstances set out in the statute. See Norwest Bank Neb., N.A. v. W.R. Grace & Co.--Conn., 960 F.2d 754, 759 (8th Cir.1992) (interpreting Nebraska law). The statute of repose "regulates rights," not remedies. It does not dictate a "method of enforcing the rights or obtaining redress for their invasion." Zaretsky, 464 N.W.2d at 548 (quoting Meagher, 88 N.W.2d at 880). Rather, its effect is that ten years after a product first is sold there can be no rights to enforce, regardless of any subsequent injury related to the product's use. Cf. Stern v. Dill, 442 N.W.2d 322, 324 (Minn.1989) (finding a Minnesota statute to be procedural for purposes of extending filing deadlines because "it does not change [plaintiff's] basic right to sue for negligence"). By the same token, Minnesota's useful life statute regulates the rights of a defendant in a products liability suit, that is, it creates the right to present a substantive defense--the useful life defense--to such a suit. "Expiration of useful life is a defense" and "a factor to be weighed by the jury in determining the fault of the manufacturer and the fault of the user." Hodder, 426 N.W.2d at 832. It is no more a procedural bar--a statute of limitations type of defense--than is the Nebraska statute of repose. ⁴

Nebraska's characterization of its own statute, while not dispositive because we are applying Minnesota law, is to be considered under the choice-of-law analysis used by the Minnesota courts. See Myers v. Government Employees Ins. Co., 225 N.W.2d 238, 241 (Minn.1974) (considering decisions from Louisiana state courts when deciding whether a Louisiana law was substantive or procedural); see also Mason v. Spiegel, Inc., 610 F.Supp. 401, 404 n. 2 (D.Minn.1985) (noting that in a conflict of laws case Minnesota "will be guided, at least partially," by a state's characterization of its own law as substantive or procedural). Nebraska state courts have yet to squarely hold in a conflicts case that Neb.Rev.Stat. Sec. 25-224(2) is substantive rather than procedural law. Nevertheless, the comments that courts have made as regards the statute leave little doubt about how they would rule if faced with the question. For example, the Nebraska Supreme Court has described the "immunity afforded by a statute of repose" as "a right which is as valuable to a defendant as the right to recover on a judgment is to a plaintiff." Givens v. Anchor Packing, Inc., 237 Neb. 565, 466 N.W.2d 771, 774 (1991). "These are substantive rights recognized by Nebraska law and protected by its Constitution." Id. (emphasis added); see also Norwest Bank, 960 F.2d at 759. We think it clear that Nebraska state courts see the Nebraska statute of repose as substantive law.

Finally, we note that the Minnesota Court of Appeals on at least one occasion has noted its disinclination "to classify anything as procedural because of the potential that doing so will encourage forum shopping." Zaretsky, 464 N.W.2d at 550 n. 2. Both Nesladek and her husband admitted that they moved to Minnesota in part because they had consulted an attorney and were aware that under Nebraska law their case was a non-starter, whereas Minnesota's law was more favorable to a suit against Ford. ⁵ Thus forum shopping clearly is a factor in this case, which further reduces any possibility that a Minnesota court would classify either of the statutes at...