Out-of-staters tossed from North Dakota courts

John O'Brien Feb. 23, 2011, 7:00am


BISMARCK, N.D. (Legal Newsline) - Thirteen out-of-state plaintiffs should not be filing their lawsuits in North Dakota, the state Supreme Court has ruled.

The statute of limitations on the plaintiffs' claims had expired in all other states, so they brought suit in North Dakota because it has a six-year statute of limitations. They argued that because there was no alternative forum to bring their claims, North Dakota was obligated to hear them.

North Dakota adopted the Uniform Law, which gives courts discretion to avoid harsh results where a plaintiff does not have a fair opportunity to litigate a claim. It has been adopted in seven states.

"The drafters of the Uniform Act, although noting that this provision created an 'escape clause' allowing courts to 'avoid injustice in particular cases,' expressly cautioned that it 'should rarely be employed,' and only in 'extreme cases' to avoid 'harsh results,'" Chief Justice Gerald VandeWalle wrote in the opinion, released Friday.

VandeWalle noted that the parties in the case - titled Vicknair v. Phelps Dodge - argued over which side had the burden to prove that the escape clause did or did not apply to the case.

"In two cases, however, courts interpreting the Act have indicated that it is the party urging application of the escape clause who should have the burden of proof and be required to present evidence that the limitations period of the other state law has not afforded a fair opportunity to sue upon the claim," he wrote.

Those decisions came from courts in Arkansas and Washington. VandeWalle said the North Dakota case provided an example as to why the burden is on the plaintiffs.

"The plaintiffs assert that the determination whether they were afforded a fair opportunity to litigate their claims was case-specific and fact-specific, but all of the relevant facts concerning the plaintiffs' ability to fairly litigate their claims under the other states' limitation periods are uniquely within the plaintiffs' own knowledge," the opinion says.

"The defendants would have to speculate about the plaintiffs' possible legal theories, or provide more generalities, if required to provide evidentiary support establishing that these plaintiffs were afforded a fair opportunity to sue upon their specific, individual claims.

"It is far more logical, and fair, to require the plaintiffs to identify and articulate the exceptional, rare and harsh circumstances which would warrant application of the escape clause and to require that they provide evidence demonstrating they have been denied a fair opportunity to sue upon their claims."

The case was watched closely by the business community, which filed an amicus brief. Among those that signed the brief were the American Tort Reform Association, the North Dakota Chamber of Commerce, the National Association of Manufacturers, the American Insurance Association and the U.S. Chamber of Commerce. Legal Newsline is owned by the Institute for Legal Reform, an affiliate of the U.S. Chamber of Commerce.

The brief suggests the court should avoid a ruling that would augment asbestos or other tort filings in the state, particularly those where the plaintiffs have no connection to the state.

"It may seem far-fetched that residents of other states would come en masse to file claims in North Dakota, but the specter of many new claims becomes clearer when, as here, the choice is between no claim and a potentially large award," it said.

A decision to apply the state's six-year general tort statute of limitations would "essentially make the state a place where otherwise time-barred personal injury lawsuits from all over the country can spring back to life" and would have "far-reaching and negative effects," it added.

The groups also argue it would place an unfair burden on the state's courts, including its judges, litigants and jurors, as well as its taxpayers.

"Businesses price their goods and services based on what they reasonably expect to be the costs of doing business, including their tort liability," the groups wrote.

"If liability can be imposed after the statute of limitations that they reasonably expect to apply to their claims has expired, then businesses may be unjustly harmed."

From Legal Newsline: Reach John O'Brien by e-mail at jobrienwv@gmail.com.

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