West American Ins. Co. v. Westin, Inc.

• Court: Minnesota Supreme Court
• Writing for the Court: I join the dissent of Scott
• Citation: West American Ins. Co. v. Westin, Inc., 337 N.W.2d 676 (Minn. 1983)
• Decision Date: 26 August 1983
• Docket Number: No. C6-82-69.,C6-82-69.
• Parties: WEST AMERICAN INSURANCE COMPANY, Appellant, v. WESTIN, INC., etc., Respondent.

337 N.W.2d 676 (1983)

WEST AMERICAN INSURANCE COMPANY, Appellant, v. WESTIN, INC., etc., Respondent.

No. C6-82-69.

Supreme Court of Minnesota.

August 26, 1983.

Jardine, Logan & O'Brien, Carol A. Hooten and George W. Kuehner, St. Paul, for appellant.

Doar, Drill & Skow, Thomas D. Bell, New Richmond, Wis., for respondent.

Heard, considered, and decided by the court en banc.

PETERSON, Justice.

Plaintiff, West American Insurance Company (West), the insurer of a vehicle operated by Diane Butina, a Minnesota resident, settled personal injury claims that had been made against Butina as a result of an automobile accident. The accident occurred in Minnesota while Butina was returning to Minnesota after consuming alcoholic beverages in Hudson, Wisconsin. West then commenced this action seeking contribution or indemnity against defendant, Westin, Inc. (Westin), the operator of an establishment known as Dibbo's Tavern in Hudson, Wisconsin, which had sold the alcoholic beverages to Butina. Defendant's motion for dismissal of the action for lack of personal jurisdiction was granted by the Ramsey County District Court. West appeals from the order of dismissal. We affirm.

On November 16, 1978, Diane Butina and her friend Joan Koshenia, both 18 years of age and both residents of Minnesota, drove to Hudson, Wisconsin, where they consumed alcoholic beverages at Dibbo's Tavern. Hudson is located on the Minnesota-Wisconsin border, approximately 15 miles from the Twin Cities. Dibbo's Tavern is on the main street of Hudson, a short distance from Interstate Highway No. 94, which connects the metropolitan area of Saint Paul-Minneapolis with Hudson, Wisconsin. At the time of the incident, Wisconsin law permitted the sale of beer or malt liquor to persons 18 years of age or older, while Minnesota did not.¹ At approximately 3 a.m., on November 17, 1978, Butina and Koshenia were returning to Minnesota. Butina was driving. On the Minnesota side of the Hudson bridge, the Butina vehicle collided head on with an eastbound automobile operated by Edward James, a Saint Paul, Minnesota, resident. Both Koshenia and James sustained personal injuries and property damage.

West settled the claims on behalf of Butina, after which it commenced this action in Minnesota for contribution or indemnity, alleging common law negligence in the making of an illegal sale. Dibbo's Tavern moved to dismiss for lack of personal jurisdiction and for failure to state a claim upon which relief can be granted. The sole contact between Dibbo's Tavern and Minnesota alleged by plaintiff was a hearsay allegation that Minnesota Highway Patrol officers, if called as witnesses, would testify that of the young people who drink and have traffic problems in the vicinity of the accident in this case, 75% have been drinking at Dibbo's Tavern. The trial judge granted the motion on the ground the "minimum contacts" essential to the exercise of personal jurisdiction over defendant by Minnesota were lacking. The trial court was of the opinion that Rush v. Savchuk, 444 U.S. 320, 100 S.Ct. 571, 62 L.Ed.2d 516 (1980),² "significantly modified" our earlier decisions in Anderson v. Luitjens, 311 Minn. 203, 247 N.W.2d 913 (1976), Blamey v. Brown, 270 N.W.2d 884 (Minn.1978), cert. denied, 444 U.S. 1070, 100 S.Ct. 1013, 62 L.Ed.2d 751 (1980), and Wendt v. County of Osceola, Iowa, 289 N.W.2d 67 (Minn.1979).

In World-Wide Volkswagon Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980), the United States Supreme Court issued the following admonition to state courts that attempt to assert in personam jurisdiction over foreign defendants:

Even if the defendant would suffer minimal or no inconvenience from being forced to litigate before the tribunals of another State; even if the forum State has a strong interest in applying its law to the controversy; even if the forum State is the most convenient location for litigation, the Due Process Clause, acting as an instrument of interstate federalism, may sometimes act to divest the State of its power to render a valid judgment.

444 U.S. at 294, 100 S.Ct. at 565.

It is manifestly clear that "the defendant's contacts with the forum state must be such that maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'" World-Wide, 444 U.S. at 292, 100 S.Ct. at 564 (quoting International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945), and Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 342, 85 L.Ed. 278 (1940)) (emphasis added). It is equally apparent that due process limitations on state court jurisdiction are grounded on two separate (though related) concerns. The first consideration, stemming from the seminal case of Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565 (1878), is for the integrity of state sovereignty and a respect for territoriality. A second, more modern, concern is a recognition of the importance of fairness toward the foreign defendant. Accommodation of these two goals is accomplished via the "minimum contacts" requirement. The United States Supreme Court in World-Wide states:

The concept of minimum contacts, in turn, can be seen to perform two related, but distinguishable, functions. It protects the defendant against the burdens of litigating in a distant or inconvenient forum. And it acts to ensure that the States, through their courts, do not reach out beyond the limits imposed on them by their status as coequal sovereigns in a federal system.

444 U.S. at 291-92, 100 S.Ct. at 564.

In World-Wide and Rush, the United States Supreme Court attempted to slow the inexorable expansion of jurisdiction in state courts by underlining the significance of territoriality and de-emphasizing the relative importance of "fairness" to the defendant. See generally, Jay, "Minimum Contacts" as a Unified Theory of Personal Jurisdiction: A Reappraisal, 59 N.C.L. Rev. 429, 450 (1981); Note, World-Wide Volkswagen Corp. v. Woodson: A Limit to the Expansion of Long-Arm Jurisdiction, 69 Calif.L.Rev. 611, 615-16 (1981). These cases evidence a dramatic shift in the constitutional theoretical underpinnings of personal jurisdiction. After World-Wide and Rush, the critical focus in any jurisdictional analysis must be on "the relationship among the defendant, the forum and the litigation." Rush, 444 U.S. at 327, 100 S.Ct. at 576 (quoting Shaffer v. Heitner, 433 U.S. 186, 204, 97 S.Ct. 2569, 2579, 53 L.Ed.2d 683 (1977)). This tripartite relationship is defined by the defendant's contacts with the forum state, not by the defendant's contacts with residents of the forum. See, e.g., Hanson v. Denckla, 357 U.S. 235, 250-55, 78 S.Ct. 1228, 1237-40, 2 L.Ed.2d 1283 (1958); Aaron Ferer & Sons Co. v. Atlas Scrap Iron, 558 F.2d 450, 455 n. 6 (8th Cir.1977).

We addressed the issue of personal jurisdiction over border state liquor vendors in Blamey v. Brown, 270 N.W.2d 884 (Minn. 1978), cert. denied, 444 U.S. 1070, 100 S.Ct. 1013, 62 L.Ed.2d 751 (1980), and Anderson v. Luitjens, 311 Minn. 203, 247 N.W.2d 913 (1976).³ In Anderson, we held that Minnesota courts could exercise in personam jurisdiction over the operator of an Iowa tavern located 3 miles south of the Minnesota-Iowa border when alcoholic beverages had been illegally sold by the tavern to Minnesota residents who subsequently became involved in a Minnesota automobile accident. The Iowa tavern made 8% of its sales to Minnesota residents. We noted that this fact made it "reasonable for the defendant to foresee that making illegal sales * * * might lead to consequences such as those which resulted here and that those consequences might occur in Minnesota." 311 Minn. at 209, 247 N.W.2d at 916 (emphasis added).

In Blamey, a case factually very similar to the present matter, we upheld jurisdiction over a Hudson, Wisconsin, bar owner. The bar owner there sold alcoholic beverages "off sale" to a Minnesota minor who had driven to Hudson to take advantage of Wisconsin's more liberal liquor laws.

In both cases, we upheld personal jurisdiction over border state liquor vendors for essentially three reasons: (1) the consequence of the sale of liquor, i.e., an accident in Minnesota, was foreseeable by the defendant; (2) Minnesota had a "strong interest" in providing a forum for injured Minnesota plaintiffs; and (3) the short distances involved vitiated any inconvenience to the defendants. While this rationale was perfectly valid at the time these decisions were rendered, we are compelled to conclude that subsequent developments in this case law have vitiated the vitality of Blamey and Anderson.

In World-Wide, the United States Supreme Court expressly rejected as a basis for jurisdiction the type of "foreseeability" considerations that are central to the Blamey and Anderson rationale. Justice White wrote for the United States Supreme Court:

The foreseeability that is critical to due process analysis is not the mere likelihood that a product will find its way into the forum State. Rather, it is that the defendant\'s conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there.

444 U.S. at 297, 100 S.Ct. at 567. We recently stressed this point in Dent-Air, Inc. v. Beech Mountain Air Services, Inc., 332 N.W.2d 904, 907 (Minn.1983).

The second part of the Blamey-Anderson jurisdictional paradigm fares no better. Minnesota's interest in providing a forum, standing alone, does not support the attempted exercise of personal jurisdiction over a foreign defendant. In essence, this consideration is the precise opposite of the correct form of analysis. That is, it mistakenly focuses on the plaintiff's interest in having a case decided in a particular forum when World-Wide and Rush unequivocally establish that the primary focus must be on the defendant's interests and the defendant's contacts with the forum state. As we ourselves so recently stated in Dent-Air, Minnesota's interest in...