Supreme Court of the United States · 1981 · Civil Procedure
Civil ProcedureChoice of LawDue ProcessFull Faith and Creditchoice of lawdue processfull faith and creditsignificant contacts
Facts
Ralph Hague, a Wisconsin resident, died in a motorcycle accident in Wisconsin involving uninsured motorists. He held an Allstate policy issued in Wisconsin covering three automobiles, each with $15,000 uninsured motorist coverage, and respondent sought in Minnesota to stack those coverages for a total of $45,000. Before suit, respondent moved to Minnesota, later remarried a Minnesota resident, and was appointed in Minnesota as personal representative of Hague's estate. Hague had worked in Red Wing, Minnesota, for 15 years and commuted there daily from Wisconsin, and Allstate was at all times present and doing business in Minnesota.
Issue
Does the Due Process Clause or the Full Faith and Credit Clause bar Minnesota from applying its own substantive law to allow stacking of uninsured motorist coverages when the policy was issued in Wisconsin and the accident occurred in Wisconsin, but Minnesota had multiple contacts with the parties and the occurrence?
Rule
For a State's substantive law to be selected in a constitutionally permissible manner, that State must have a significant contact or significant aggregation of contacts, creating state interests, such that choice of its law is neither arbitrary nor fundamentally unfair. Under both the Due Process Clause and the Full Faith and Credit Clause, the Court examines the forum State's contacts with the parties and the occurrence or transaction giving rise to the litigation.
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Derek Nolan lived in Idaho and bought an auto policy there from Pine Summit Casualty, which also maintained offices and sold policies in Oregon. For 12 years, Derek commuted daily to his job in Portland, Oregon. After Derek was killed in a Nevada crash involving an uninsured driver, his widow, Lena, moved in good faith to Oregon, was appointed personal representative there, and filed suit in Oregon seeking the benefit of an Oregon insurance rule more favorable than Idaho's.
May Oregon constitutionally apply its own substantive insurance law?
Explanation. The governing constitutional rule is that a forum may apply its own substantive law if it has a significant contact or significant aggregation of contacts with the parties and the occurrence or transaction, creating state interests, such that application of forum law is neither arbitrary nor fundamentally unfair. Here, Oregon has multiple contacts: Derek's long-term employment and daily commute there, the insurer's business presence there, and Lena's bona fide Oregon residence and appointment there before suit. The Constitution does not require Oregon's contacts to be exclusive, and no balancing against Idaho is required.