February 2001 

Classifieds
Letters
Display Ads
Archives
Article Index
Feb '01 Issue
Latest Issue
MSBA Home Page

The cause is unclear. It may be the chills that run up and down most attorneys' spines at the mere mention of the Erie doctrine.1 It may be attorneys' understandable reluctance to challenge a substantial body of seemingly settled case law. It may be caused by a fear of Rule 11. Or the explanation may lie elsewhere.

But for one or more reasons, more than a decade appears to have passed since any litigant has questioned the series of decisions from the United States District Court for the District of Minnesota holding that Minn. Stat. ¤549.191 -- the statute that prohibits plaintiffs from seeking punitive damages in their complaints and requires trial judges to act as gatekeepers when plaintiffs seek to amend their pleadings to include a claim for punitive damages -- applies to claims asserted under Minnesota law but brought in the District.

So why is this a problem? It is quite simple. Despite their unanimity, the judges in the District of Minnesota may be wrong.

A quick Westlaw search makes clear how settled the law is in the District of Minnesota. Over the years, District Judges Devitt, Doty, Kyle, MacLaughlin, (now Circuit Judge) Murphy, Renner, and Magistrate Judges Erickson and Lebedoff have all found that the procedural requirements of Minn. Stat. ¤549.191 apply with equal force to the pleading of punitive damages on state law claims in the federal courts.2

The most detailed explanation of why Minn. Stat. ¤549.191 should be applied to state law claims brought in the federal courts was offered by Judge Devitt. In Judge Devitt's view, Minn. Stat. ¤549.191 does not conflict with any of the Federal Rules of Civil Procedure, meaning that it passes muster under Hanna v. Plumer,3 and must in turn be analyzed under Erie.4 Judge Devitt's Erie analysis concluded that the failure to apply ¤549.191 in the federal courts would lead to forum shopping by plaintiffs.5 In another decision, Judge Devitt also focused on the "tactical advantage" any plaintiff has when allowed to seek punitive damages without leave of court.6

It appears that the only District of Minnesota judge ever to hold otherwise is Judge Alsop. After first holding that Minn. Stat. ¤549.191 was a "procedural" rule which did not apply in the federal courts,7 Judge Alsop subsequently reversed his field "in the interest of consistency within the district," claiming that he was "persuaded by the reasoning" of his colleagues.8

In recent years, the judges and magistrate judges have not had occasion to question the validity of this rule, or if they have done so, they have chosen not to publish those opinions. In fact, Magistrate Judge Erickson considers the rule to be "well settled,"9 and Judge Doty has noted that the court has applied the rule "consistently."10

The 8th Circuit has not yet confronted the Hanna and Erie questions that arise from the application of Minn. Stat. ¤549.191 to state law claims in the federal courts. Only three 8th Circuit decisions even mention Minn. Stat. ¤549.191,11 and in each of these cases, the 8th Circuit appears to have assumed that Minn. Stat. ¤549.191 applied to state law claims in the federal courts, presumably because none of the litigants argued otherwise.

So what is the problem with all of this unanimity in the District of Minnesota and the apparent acquiescence of the 8th Circuit? The problem is that both of these courts may have reached the wrong result.

Josh Jacobson is a commercial litigator and the principal in his own Minneapolis firm, where he also practices in the areas of civil rights and employment litigation. He is a regular contributor to the "Notes & Trends" column in Bench & Bar.

"So why is this a problem? It is quite simple. Despite their unanimity, the judges in the District of Minnesota may be wrong."

The District of Minnesota is in the minority in its belief that state statutes which govern the pleading of punitive damages should be applied to state law claims in the federal courts.

A handful of other states have statutes that operate very much like Minn. Stat. ¤549.191.12 In these states, an overwhelming majority of published decisions have rejected defendants' attempts to have these pleading statutes applied to plaintiffs' punitive damages claims in the federal courts.

Some of these courts have labeled the punitive damages pleading statutes as "procedural" rather than "substantive."13 Other courts have found that these state punitive damages pleading statutes conflict with Fed. R. Civ. P. 8(a)(2), in that they require more than a "short and plain statement" of a plaintiff's claim, that they conflict with Fed. R. Civ. P. 8(a)(3), because they prohibit a plaintiff from specifying all of the "relief the pleader seeks," or that they conflict with Fed. R. Civ. P. 9(g), which requires a plaintiff to "specifically" plead any claims for "special" damages.14

In contrast, the federal courts in Idaho and North Dakota have found these statutes do not conflict with the Federal Rules of Civil Procedure, and should be viewed as "substantive" under Erie.15

In the years between 1989 and 1999, Florida's federal courts issued several dozen published opinions construing the Florida punitive damages statute. Those opinions revealed a wide split among the members of Florida's federal bench. However, that split was put to rest by the 11th Circuit in Cohen v. Office Depot, Inc.,16 which, to date, is the only federal appellate decision to squarely confront the interplay of the Federal Rules of Civil Procedure, Hanna, Erie, and these punitive damages pleading statutes.

In Cohen, the plaintiff filed a diversity action in the Southern District of Florida, asserting claims under Florida law. All parties agreed that the plaintiff could not satisfy the amount in controversy requirement if she could not assert a claim for punitive damages in her complaint. After the district court, relying on the Florida punitive damages pleading statute, struck Cohen's demand for punitive damages, Cohen appealed.

Before the 11th Circuit, Cohen argued that the Florida statute was in direct conflict with both Fed. R. Civ. P. 8(a)(2) and 8(a)(3). Finding that Rule 8(a)(2) applies only to "claims," and that a request for punitive damages is not a "claim" for purposes of that rule, the 11th Circuit found no conflict between Fed. R. Civ. P. 8(a)(2) and the Florida statute.17
However, the Court of Appeals did find a direct conflict between the Florida statute and Fed. R. Civ. P. 8(a)(3), because the Florida statute barred plaintiffs from identifying the precise remedy they seek.18 Already having found a direct conflict between the Florida statute and Fed. R. Civ. P. 8(a)(3), the 11th Circuit saw no need to weigh the substantive versus procedural aspects of the Florida statute under Erie.

To summarize, the 11th Circuit has held that Florida's punitive damages pleading statute conflicts with the Federal Rules of Civil Procedure, and the federal district courts in Kansas, Illinois, Oregon, and California have uniformly declined to apply the punitive damages pleading statutes from those states as well. In contrast, a Westlaw search reveals only three opinions from North Dakota and Idaho that follow the rule first established in the District of Minnesota.19 Westlaw has no opinions addressing the applicability of Colorado's punitive damages pleading statute in the federal courts.

So which of these courts are right? And what does this split of authority mean for future litigants in the District of Minnesota?

Though it is an extremely close call, I believe that the 11th Circuit reached the correct result in Cohen, inasmuch as there does appear to be a conflict between the punitive damages pleading statutes and Fed. R. Civ. P. 8(a)(3). Beyond Fed. R. Civ. P. 8(a)(3), there are legitimate arguments that the punitive damages pleading statutes conflict with Fed. R. Civ. P. 8(a)(2) and 9(g) as well, and that even absent any conflict between these statutes and the federal rules, the statutes should be treated as procedural rules when analyzed under Erie. It is worth noting that a plaintiff need prevail on only one of these alternative theories in order to be able to seek punitive damages without leave of court.

So what does all of this mean for future litigants? Well for starters, litigants who intend to challenge the prevailing rule in the District of Minnesota can direct the court's attention to a substantial body of federal case law that rejects the current rule in the District.

Second, so long as litigants acknowledge the prevailing rule in the District but argue that the law should be changed, those litigants should be able to proceed without the fear of Rule 11 sanctions. Fed. R. Civ. P. 11(b)(2) specifically permits litigants to present "nonfrivolous argument for the extension, modification or reversal of existing law." Moreover, as the 11th Circuit, sitting en banc noted a decade ago:

We are aware of no case in this circuit or anywhere in the nation in which a court imposed sanctions on a party who had acknowledged adverse precedent, but argued that the precedent should be reversed.20

Much has changed in the 13 years since Judge Alsop's initial opinion discussing the interplay between Minn. Stat. ¤549.191 and Erie. And while the law has been settled in the District of Minnesota for more than a decade, that law remains the minority view nationwide. Accordingly, litigants should not hesitate to argue for a change of the law in the District of Minnesota. And, given that it is in the minority, one would hope that the court would be receptive to a well-argued challenge to its prior decisions.

1 Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S. Ct. 817 (1938).
2 See Fournier v. Marigold Foods, Inc., 678 F. Supp. 1420, 1422 (D. Minn. 1988) (Devitt, J.); Engele v. Indep. School Dist. No. 91, 846 F. Supp. 760, 768 (D. Minn. 1990) (Doty, J.); Minnesota Pet-Breeders, Inc. v. Schell & Kampeter, Inc., 843 F. Supp. 506, 519 (D. Minn.), aff'd., 41 F.3d 1242 (8th Cir. 1994) (Kyle, J.); Zeelan Indus., Inc. v. De Zeeuw, 706 F. Supp. 702, 705 (D. Minn. 1989) (MacLaughlin, J.); Northwest Airlines, Inc. v. American Airlines, Inc., 870 F. Supp. 1499, 1502 (D. Minn. 1994) (Murphy, J.); Daines v. City of Mankato, 754 F. Supp. 681, 704 n.9 (D. Minn. 1990) (Renner, J.); Olson v. Snap Products, Inc., 29 F. Supp. 2d 1027, 1034 (D. Minn. 1998) (Erickson, J.); and Laffey v. Indep. School Dist. # 625, 806 F. Supp. 1390, 1406 (D. Minn. 1992), aff'd., 994 F.2d 843 (8th Cir. 1993), cert. denied, 510 U.S. 1054, 114 S. Ct. 715 (1994) (Lebedoff, J.).
3 380 U.S. 460, 85 S. Ct. 1136 (1965).
4 Kuehn v. Shelcore, Inc., 686 F. Supp. 233, 234 (D. Minn. 1988).
5 Id. at 235.
6 Fournier v. Marigold Foods, Inc., 678 F. Supp. 1420, 1422 (D. Minn. 1988).
7 Jacobs v. Pickands Mater & Co., 1987 WL 47387 (D. Minn. Aug. 24, 1987).
8 Security Savings Bank v. Green Tree Acceptance, Inc., 739 F. Supp. 1342, 1352-53 (D. Minn. 1990).
9 Backlund v. City of Duluth, 176 F.R.D. 316, 320 n.3 (D. Minn. 1997).
10 Engele v. Indep. School Dist. No. 91, 846 F. Supp. 760, 768 (D. Minn. 1994).
11 Pourous Media Corp. v. Pall Corp., 173 F.3d 1109 (8th Cir. 1999); Bunker v. Meshbesher, 147 F.3d 691 (8th Cir. 1998); Gamma-10 Plastics, Inc. v. American President Lines, Ltd., 32 F.3d 1244 (8th Cir. 1994), cert. denied, 513 U.S. 1198, 115 S. Ct. 1270 (1995).
12 See Cal. Civ. Pro. Code ¤425.13 (prohibiting pleading of claims for punitive damages in negligence actions brought against health care providers); Colo. Stat. ¤13-64-302.5 subd. 3 (prohibiting demand for exemplary damages in initial claim for relief against health care professional); Fla. Stat. ¤768.72 (plaintiff may not seek punitive damages in initial pleading); Idaho Code ¤6-1604 (no claim for damages shall be filed containing a prayer for relief seeking punitive damages); Ill. Comp. Stat. 5/2-604.1 (complaint in negligence and product liability actions may not include prayer for relief seeking punitive damages); Kan. Stat. ¤60-3703 (no reference to punitive damages shall be included in a petition or other pleading); N.D. Cent. Code ¤32-03.2-11 subd. 1 (initial complaint may not seek punitive damages); Or. Rev. Stat. ¤18.535 (initial pleading may not contain request for an award of punitive damages).
13 See Jackson v. East Bay Hospital, 980 F. Supp. 1341, 1353 (N.D. Cal. 1997); Wortheim v. Gillette Co., 774 F. Supp. 514, 516-17 (N.D. Ill. 1991).
14 See Schnuelle v. C & C Auto Sales, Inc., 99 F. Supp. 2d 1294, 1299 (D. Kan. 2000); Pruett v. Erickson Air-Crane Co., 183 F.R.D. 248, 250-52 (D. Or. 1998).
15 Nereson v. Zurich Ins. Co., 1992 WL 212233 at *2 (D.N.D. Aug. 20, 1992); Windsor v. Guarantee Trust Life Ins. Co., 684 F. Supp. 630, 633 (D. Idaho 1988).
16 184 F.3d 1292 (11th Cir. 1999), vacated on other grounds on rehearing, 204 F.3d 1069 (11th Cir.), cert. denied, ___ U.S. ___, 121 S. Ct. 381 (2000).
17 Id. at 1297.
18 Id. at 1298.
19 In addition, an unpublished 9th Circuit opinion, Native Am. Services, Inc. v. Givens, 2000 WL 328137 (9th Cir. Mar. 23, 2000), affirmed the dismissal of a punitive damages claim for failure to comply with the Idaho statute, but offered no analysis of the Hanna or Erie issues.
20 McGinnis v. Ingram Equipment Co., 918 F.2d 1491, 1496 (11th Cir. 1990).

"Accordingly, litigants should not hesitate to argue for a change of the law in the District of Minnesota."