Conflicts of Law – Spring 2007 – Prof. Isenbergh
Rules outline
Rules/Schemes of Choice of Law:
I. Restatement (First) of Conflicts
a. Info: jurisd’n-selecting rules; content of rules irrelevant. System of rules, not a method of analysis.
b. Policy: concern w/uniformity of result, predictability, allowing parties to mold conduct to law (serving parties’ expectations)
c. Rules:
i. Torts: law of the place of the harm governs. Carroll, p. 1
ii. Contracts: law of the place where the K was made governs. Milliken, p. 2
iii. Property (movable and immovable): law of the situs governs. Barrie, Cammell, p. 2
iv. Murder: law of place where act was committed governs
v. Criminal acts: law of the place where the result was manifested governs (incl. poison); if the Ct has jurisd’n, it applies its own law.
vi. Marriage valid everywhere if legal where performed
d. Concerns:
i. Domicile v. residence (only one domicile, can be destroyed only by establishing domicile elsewhere, White v. Tennant, p. 3)
ii. Escape devices to get around harsh results in this approach:
1. Characterization: i.e. calling a tort case a K case in Levy, p. 4, calling a tort case an immunity/family law case in Haumschild, p. 4, calling a vicarious liability case a tort question in Venuto, p. 4, etc.
2. Characterizing rule as procedural to take advantage of forum law
a. Rule re: survival of COA beyond tortfeasor’s death is procedural in Grant, p. 5
b. Statutes of limitations can be procedural (when they affect remedy, not right, in Bournias, p. 5) or substantive (when the same statutes creates the right and the remedy in The Harrisburg , p. 6)
iii. Public policy: can only rarely be sufficient to set aside COL in Loucks, p. 7, it’s possible to use characterization to achieve a policy interest, Mertz, p. 7. Can paint “policy” w/a broad brush to avoid getting to substance of law at issue Holzer, p. 7.
iv. Renvoi:
1. Apply whole law (incl COL provisions) in land (law of situs, Schneider, p. 6) and of domicile, otherwise apply only substantive law, not COL.
v. Foreign law: must be pled by P, otherwise complaint will be dismissed, Walton, p. 7
vi. COL in domestic setting: overrule decisions to achieve preferred allocative effect, MacPherson, p. 8.
II. Statutory solutions to COL
a. Isenbergh’s model:
i. Policy: uniformity of result, fair allocative effect over time.
ii. Rules: uniform statute that all states adopt; resolve false conflicts (so state w/greater interest has its law apply) and in true conflicts, ct should adopt the law of the other state. If both states would do this (renvoi?) ct should flip a coin.
b. UCC COL provisions (often litigated)
III. Choice of the Parties
a. Policy: giving effect to parties’ expectations, predictability
b. Rule of validation: apply the law that would make a K valid in the face of a contrary rule, Pritchard, p. 8.
c. Party COL applies even if K is an adhesion K; this applies to COL in Siegelman, p. 9 and choice of forum in Carnival Cruise, p. 9.
d. Testamentary distribution: parties COL controls, Wyatt, p. 9.
e. Inter vivos trusts: ct protects parties’ intent when the trust was created, Hutchinson , Shannon p. 10
IV. Restatement (Second) of Conflicts
a. Info: Lots of discretion to courts, who rarely apply it mechanically (Phillips, p. 11); method of analysis, not rules
i. Closely related to the center of gravity rule, Auten, p. 11
b. Policy: effectuating policy concerns
c. Rules:
i. Three part analysis:
1. (1) Choose presumptively applicable law under appropriate jurisd’n selecting rule: in tort, it’s the place of injury, in K it’s the COL of the parties.
2. (2) Look at contacts (can get different weight)
a. Torts:
i. (a) Place where injury occurred
ii. (b) Place where conduct causing injury occurred
iii. (c) Domicile/residence/nationality of parties
iv. (d) Place where the relationship (if any) btwn the parties is centered.
b. Contracts:
i. (a) Place of K’ing
ii. (b) Place K was negotiated
iii. (c) Place of performance
iv. (d) Location of subject matter of the K
v. (e) Domicile/residence/nationality of parties, place of incorporation and PPB of corp’ns.
3. (3) Consider factors relevant to COL (can get different weight)
a. (a) Needs of interstate/int’l system
b. (b) Relevant policies of forum
c. (c) Relevant policies of other interested states
d. (d) Protection of justified expectations
e. (e) Basic policies in the field of law
f. (f) Certainty/predictability/uniformity of results
g. (g) Ease in determining applicable law to apply
d. Concerns:
i. Renvoi: adopt whole law when the objective of the COL rule is to have the forum reach the same result on these facts as would the courts of another state, p. 6.
ii. Limits on party discretion: requires that state whose law is chosen hhas subst’l relationship to the parties or that there’s another reasonable basis for the choice; prohibits COL that’s contrary to a fund’l policy of the state whose law would otherwise apply.
V. Interest Analysis
a. Info: not an off’l doctrine, but it has been folded into R.2d analysis. Basic idea is that the exercise of COL is to determine which among possible suppliers of law has a govn’tal interest in the application of its own law.
b. Policy: less concern for uniformity; inherent forum shopping possibility w/true conflicts result; conflicts can be categorized by allocative effect.
c. Rules:
i. Ascertain purposes behind each law at issue:
ii. Determine the nature of the conflict and apply solution:
1. True conflict (both states have interest in application of own law): apply the law of the forum Lilienthal, p. 17.
a. California Approach: Comparative impairment, p. 17: eliminate true conflicts by recalibrating interests (Bernkrant, p. 17), then apply the law of the state whose law would be impaired more by application of the law of the other state. Benhard, p. 17.
2. False conflict (one state has predominant interest in application of own law): law of state with interest applies, Tooker, p. 14.
a. NY Approach: Neumeier rules p. 14: (note: doesn’t just cover torts, but usually applies only to loss-allocating (not conduct-regulating) rules).
i. (1) Apply law of state of common domicile, if any
1. Shultz, p. 15.
ii. (2)-(3) Place of injury rule: Cooney, p. 15
1. (2) If accident in D’s state and the law protects Ds (guest statute), that law should apply
2. (3) If accident is in P’s state and that law protects Ps (no guest statute), that law should apply
iii. (4) In all other cases, the law of the place of the accident usually applies unless displacing that rule will advance substantive law purposes w/o impairing working of multistate system or producing uncertainty for litigants.
3. Unprovided-for case (neither state has interest): many approaches, predominant is to apply forum law, Erwin, p. 16.
iii. Concerns:
1. Renvoi: foreign COL rules aren’t mandatory in interest analysis b/c these rules don’t speak to states’ substantive interests in having their law apply, Pfau, p. 20.
VI. The Better Law
a. Info: Not adopted by majority; methodology, not rule
b. Policy:
i. Better law in purely internal adjudication and false conflicts: the law w/ net favorable effect on social cost
ii. Better law in true conflicts: the one that upholds reasonable expectations of parties
c. Rule: five choice-influencing considerations:
i. (1) Predictability of results
ii. (2) Maintenance of interstate/int’l order
iii. (3) Simplification of the jud’l task;
iv. (4) Advancement of the forum’s govn’tal interests
v. (5) Application of the better rule of law; this can be determined on a facial view of the law, e.g. Milkovich, p. 19 or a specific view of the law in the instant case, e.g. Jepson, p. 19.
VII. Choosing btwn State and Fed’l Law in Diversity Cases
a. Federal courts sitting in diversity apply state substantive law, Erie , p. 21
i. Giving content to “substantive” – if a rule is outcome determinative (will lead to a substantially more beneficial outcome) it’s substantive and the state rule must apply. Guaranty Trust, p. 21.
ii. Fed’l cts sitting in diversity must follow COL rules of the state where they sit, Klaxon, p. 23.
iii. Law that applies doesn’t change b/c of transfer, Van Dusen, Ferens, p. 23-24.
b. If the state rule would alter an essential characteristic of the fed’l jud’l system (e.g. right to a jury trial), the fed’l rule applies. Byrd, p. 22.
c. FRCP: if the FRCP is on point and const’l under the REA, it applies over a conflicting state rule, Hanna, p. 22
i. The FRCP must be at least as broad as the state rule to apply, Walker , p. 22
1. The scope of the FRCP must be sufficiently broad to cause a direct collision w/the state law or implicitly control the issue, Burlington Northern, p. 23.
ii. This applies to fed’l statutes, too Stewart, p. 23.
iii. If a fed’l rule and state rule appear to conflict, but effect can be given to both w/o detriment to the other, that’s what the Ct should do, Gasperini, p. 23.
d. Dismissal on SOL grounds in diversity has same preclusive effect as it would have had in the State ct, Semtek, p. 23.
e. Fed’l CL:
i. Still exists; limited to matters w/in the exclusive province of the fed’l govn’t (comm’l paper is, Clearfield Trust, p. 24, but securities are not b/c jurisd’n is concurrent w/states, Parnell, p. 24)
ii. Act of state doctrine: countries don’t examine the validity of off’l acts of another country as long as legal where they occurred and jurisd’n/authority existed to take the acts, Banco Nacional, p. 24.
iii. Torts affecting the govn’t: all over the map, p. 24-25.
Choice of Law Concerns:
I. Constitutional Limits on COL
a. Due process: state must have sufficient connection w/parties/transaction to apply its law, lest it violate due process, Dick, p. 25.
b. FFC: as long as a state has a sufficient interest, it may apply its own law
i. Balancing approach btwn state interests: Alaska Packers, p. 25.
ii. Any interested state can apply its law, notwithstanding the interest of the other state: Pacific Employers, p. 26.
c. Convergence of DP and FFC:
i. State must have minimally sufficient contacts w/the accident/occurrence to apply own law; low threshold, Allstate v. Hague, p. 26. State must not be arbitrary/unfair in selecting applicable law.
ii. In class action, state must have sufficient contacts/aggregation of contacts w/each member of the class to apply its law to the entire class, Phillips Petroleum, p. 26.
iii. FFC includes obligation to provide a forum; can trump state policy when state statute would deny P a forum, Hughes, p. 27.
d. Equal Protection:
i. No unconst’l discrimination in COL; Piper, p. 27.
1. Privileges/immunities clause allows discrimination against nonresidents when (a) there’s a subst’l reason for the differential treatment; and (b) the disc’n bears a subst’l relationship to the state’s objective.
ii. No discr’n against “foreigners,” forbids unreasonable distinctions btwn citizens of the state whose law is at issue.
II. Recognition of Judgments
a. Res judicata/finality concerns
i. Claim preclusion vs. issue preclusion, p. 28.
b. FFC to judgments:
i. Judgments must get the same weight as they would where rendered; not more or less.
ii. A party may not attack a judgment that was fully and fairly litigated if it has become final where litigated, even if the Ct that decided the issue made a mistake. Fauntleroy, p. 28.
1. This applies w/equal weight to jurisd’l facts/issues, Durfee, p. 30.
a. Party can always collaterally attack lack of PJ if he never appeared.
b. SMJ can’t be waived, though R.2d would allow it in some situations, p. 30.
iii. Equitable decrees get the same preclusive effect as judgments at law, Yarborough, p. 28.
iv. Limitations on application of FFC to judgments, p. 29.
1. Penal judgments not entitled to FFC, p. 29.
2. State has no interest in preventing another state from granting a supplemental compensation award (when second state had power in the first place), Thomas, p. 30.
3. Judgment re: disposition of land doesn’t get FFC if given by any Ct other than one located in the situs, Clarke, p. 31.
a. Equity exception: a ct of equity w/PJ over the parties can indirectly act upon real estate in another state through authority over the person, Fall, p. 31.
v. Fraud/duress/coercion to attack sister-state judgment only if fraud is extrinsic (e.g. to the opp’ty to appear/defend) but not if it’s intrinsic.
vi. Non-final decrees: modifiable decree for spousal support can be modified/enforced in another state, Worthley, p. 31.
c. Int’l/Foreign judgments
i. Int’l comity requires reciprocity (old approach); Hilton, p. 32.
1. R.2d takes compromise (broader) approach, w/policy in favor of recognition in limited circumstances, p. 32.
ii. Defenses against recognition of foreign judgments: (1) nation lacked jurisd’n, Schibsby, p. 32; (2) fraud/violation of public policy.
iii. Money judgments entitled to comity regardless of reciprocity.
III. Extraterritorial Reach of Statutes (Int’l Question)
a. Criminal:
i. Five trad’l bases of jurisd’n over extraterritorial crimes
1. (1) Territorial (based on place where offense is committed)
2. (2) Nat’l (based on nat’ality of offender)
3. (3) Protective (based on whether nat’l interest is injured)
4. (4) Universal (based on physical custody of perpetrator of offenses considered particularly heinous and harmful to humanity, incl. piracy, torture, genocide, war crimes), Yunis, p. 33.
5. (5) Passive personal (based on nat’ality of victim – highly controversial), Yunis, p. 33.
b. Civil, etc.
i. Effects doctrine: extraterritorial reach when effects felt in country seeking to apply law; SS Lotus, p. 33.
ii. Presumption against extraterritoriality in US law; American Banana, p. 34.
1. Has been modified: deference to foreign law may be appropriate despite effects in the US when conflicts could cause int’l tension, Timberlane, p. 34.
2. Antitrust: consider other nations’ interest, but can apply US law, Harford Fire, p. 34.
IV. Extraterritorial Reach of the Const’n
a. 4th A (search/seizure) doesn’t apply to nonresident aliens outside the US, Verdugo-Urquidez, p. 35.
b. Due process extended to everyone
V. European Perspective: more rules; statutes get more weight
VI. Acts of State:
a. Courts of one country won’t question off’l acts of another country if legal where committed and that country had jurisd’n over the act when done. Banco Nacional, p. 35.
b. Unofficial acts of a foreign country don’t count, Kirkpatrick, p. 35.
Conflicts of Law – Spring 2007 – Isenbergh
Full Outline
Choice of Law: The Basic Model
I. The Traditional Approach to Choice of Law (2-90 + McPherson v. Buick)
a. Introduction: these rules were largely mechanical, known as the “mechanical rules” or the “mere mechanical rules”; they follow mechanical, objective tests
i. The system collapsed in less than a generation.
ii. Note: these are jurisdiction-selecting rules b/c the content of the rules/laws is irrelevant.