                    United States Court of Appeals
                          FOR THE EIGHTH CIRCUIT
                                     ___________

                                     No. 00-3249
                                     ___________

Patricia L. Larsen; Donald Larsen,        *
                                          *
                   Appellants,            * Appeal from the United States
                                          * District Court for the District
      v.                                  * of Minnesota.
                                          *
Mayo Foundation,                          *     [UNPUBLISHED]
                                          *
                   Appellee.              *
                                     ___________

                            Submitted: October 19, 2001

                                 Filed: October 24, 2001
                                  ___________

Before BYE, FAGG, and RILEY, Circuit Judges.
                             ___________

PER CURIAM.

      Patricia L. Larsen received medical treatment from Mayo Clinic, a subsidiary
of Mayo Foundation, in 1996. More than two years later, in 1998, Larsen and her
spouse filed a diversity action in Minnesota against Mayo Foundation, alleging the
1996 treatment was negligent and caused Larsen further health problems. Because
Minnesota’s two-year statute of limitations had expired before the Larsens’ lawsuit
was properly filed, the district court granted Mayo Foundation’s motion for summary
judgment and we affirmed. Larsen v. Mayo Med. Ctr., 218 F.3d 863, 865 (8th Cir.
2000), cert. denied, 531 U.S. 1036 (2000). Effective August 1, 1999, the Minnesota
legislature amended the medical malpractice statute of limitations, extending it from
two years to four for “actions commenced on or after that date.” Act of Mar. 23,
1999, ch. 23, sec. 3, 1999 Minn. Laws 128, 130 (application of sec. 2 of the Act) (sec.
2 codified at Minn. Stat. § 541.076 (2000)). The Larsens then refiled their lawsuit in
November 1999, contending the amended statute of limitations should be applied
retroactively and allow their lawsuit to proceed. The district court* again granted
summary judgment for Mayo Foundation, holding the principle of res judicata
precluded the Larsens from litigating the statute of limitations issue. The Larsens
appeal, and we affirm.

       We review the grant of summary judgment de novo. Larsen, 218 F.3d at 866.
Additionally, we apply Minnesota law on the substantive questions of res judicata and
the statute of limitations because these issues are controlled by state law in diversity
actions. See Hillary v. Trans World Airlines, Inc., 123 F.3d 1041, 1043 (8th Cir.
1997).

       Res judicata precludes a later lawsuit when the same issue has already been
adjudicated to a final judgment on the merits in a case involving the same parties.
Wilson v. Comm’r of Revenue, 619 N.W.2d 194, 198 (Minn. 2000) (elements of res
judicata). The Larsens contend res judicata does not bar their second lawsuit because
the dismissal of the first case was not a judgment on the merits. Minnesota law
clearly states that dismissing a case because the statute of limitations has run is a
judgment on the merits and bars a later lawsuit about a substantially similar claim,
even if brought under a different statute of limitations. Nitz v. Nitz, 456 N.W.2d 450,
452-53 (Minn. Ct. App. 1990); Sautter v. Interstate Power Co., 567 N.W.2d 755, 759
(Minn. Ct. App. 1997). The district court correctly applied this rule.



      *
      The Honorable John R. Tunheim, United States District Judge for the District
of Minnesota.

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       The Larsens also contend their case should be allowed under an “exceptional
circumstance” exception to res judicata. The district court noted the Minnesota
Supreme Court has held “res judicata is a ‘flexible doctrine’ that need not always be
applied if it would be contrary to the interests of justice.” Larsen v. Mayo Found., No.
99-1726, slip op. at 6 (D. Minn. Aug. 23, 2000) (citing R.W. v. T.F., 528 N.W.2d
869, 872 n.3 (Minn. 1995); Johnson v. Consol. Freightways, Inc., 420 N.W.2d 608,
613-14 (Minn. 1988); AFSCME Council 96 v. Arrowhead Reg’l Corr. Bd., 356
N.W.2d 295, 299 (Minn. 1984)); see also Minn. R. Civ. P. 60.02(e) (authorizing relief
from judgments and orders no longer equitable). The district court then analyzed
Minnesota law and concluded that contrary to the unusual factual and legal
circumstances of the Minnesota cases applying the exception, the Larsens’ “case
involves a simple and straightforward failure to bring the first action within the
applicable statute of limitations. . . . [A] change in the applicable statute of limitations
is a common, not an extraordinary, circumstance.” Larsen, No. 99-1726, slip op. at
7 (citing Simington v. Minnesota Veterans Home, 464 N.W.2d 529, 531 (Minn. Ct.
App. 1990)).

       We conclude the interests of justice do not require the Larsens’ second lawsuit
to proceed, even in light of the amended statute of limitations. In Minnesota, the
statute of limitations in place at the time of injury governs the lawsuit, with two
primary exceptions. First, if the legislature clearly intends for the revised statute of
limitations to be retroactive, a plaintiff may file her otherwise time-barred claim
under the new statute of limitations. Sarafolean v. Kauffman, 547 N.W.2d 417, 419-
20 (Minn. Ct. App. 1996) (“window provision” signals clear intent). The Minnesota
Court of Appeals has held the Minnesota legislature did not clearly intend to make
the new statute retroactive, and the Minnesota Supreme Court has granted review to
consider this issue in Morton v. Dyste, 627 N.W.2d 734, 737 (Minn. Ct. App. 2001),
pet. for rev. granted, (Aug. 15, 2001) (No. C4-00-002046) and Gomon v. Northland
Family Physicians, Ltd., 625 N.W.2d 496, 502 (Minn. Ct. App. 2001), pet. for rev.
granted, (July 24, 2001) (No. C8-00-001465). In Morton and Gomon, however, the

                                            -3-
plaintiffs filed their lawsuits for the first time under the amended statute of
limitations. The Larsens’ question of whether a plaintiff whose case was previously
filed and dismissed as untimely can refile is not before the Minnesota Supreme Court
and we have found no Minnesota cases authorizing a lawsuit to proceed under these
circumstances. As for the second exception, if the statute of limitations is extended
while a plaintiff’s original claim is still timely, the revised statute of limitations
governs the claim, in effect “grandfathering in” the plaintiff’s claim under the new
statute of limitations. Donovan v. Duluth St. Ry. Co., 185 N.W. 388, 388-9 (Minn.
1921); Klimmek v. Indep. Sch. Dist. No. 487, 299 N.W.2d 501, 502 (Minn. 1980).
The Minnesota legislature amended the statute of limitations effective August 1,
1999–more than one full year after the statute of limitations governing the Larsens’
claim expired–and so the amendment does not extend the original statute of
limitations for the Larsens.

       The Larsens’ lawsuit presents for a second time the same claim between the
same parties, which has already been adjudicated to a final judgment on the merits.
Res judicata bars the lawsuit absent an exceptional circumstance, and there is no
exceptional circumstance in this case. We thus affirm the judgment of the district
court.



      A true copy.

             Attest:

                     CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.




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