1. Introduction
  2. Conflict of law – principles courts apply to decide what body of law to apply to a particular case
  3. Many cases are international or interstate
  4. Case has factual ties to two or more jurisdictions
  5. Case involves laws from two sources within the same jurisdiction
  6. Federal and state
  7. Historically, common law rules
  8. Mostly still true; all but two states
  9. Reasons to have choice of law instead of applying the law of the forum
  10. Would encourage forum shopping
  11. Could have courts applying their own law to cases with no connection to forum
  12. Parties have expectations about how/which law governs
  13. Dépeçage – different issues in the same case can be governed by different sets of laws
  14. Limited by the U.S. constitution for interstate approaches
  15. Due process clause
  16. Full faith and credit clause
  17. First Restatement –traditional “vested rights” approach; Prof. Beale – vindicate the substantive rights of the parties
  18. Background
  19. Attempts to be predictable, simple even if resulting in ridiculous results
  20. The right of recover exists once a particular event occurs, the law of the place where that event occurred controls
  21. The vested right, once created, is recognized everywhere
  22. Cause of action is “transitory”
  23. Can be brought wherever there is personal jurisdiction
  24. Jurisdiction selecting versus law selecting
  25. Select the state without regard to what the content of the law
  26. After selecting the state’s law, then examine and apply substance
  27. Torts cases – the right to sue sprang into being in one place; use that place’s substantive law
  28. Lex loci delicti – site of the injury (Alabama Great Southern RR Co. v. Carroll (Ala. 1893))
  29. RR injury in MS, but parties domiciled in AL; employment contract in AL
  30. In MS, couldn’t sue fellow employee; in AL, could – use MS rule
  31. Right to sue arose in MS, site of the injury; place of last event allowing cause of action
  32. Injury completes the tort; no amount of negligence in AL could give rise to a cause of action without the injury
  33. Contracts cases
  34. Rationale: parties’ wishes as to the law governing the contract should be, to the extent possible, respected
  35. It is reasonable to expect parties to learn/know law of place of contract
  36. Lex loci contracti – where the contract was made (Milliken v. Pratt (Mass. 1878))
  37. MA wife executed contract in ME to supply collateral for husband
  38. MA did not allow wives to contract; ME did
  39. Contract made in ME; ME law applies
  40. Providing goods to husband completed the contract
  41. NOTE: SJC may be picking based on substantive law = unfaithful to 1st restatement
  42. Contract validity/formation issue – law of the place where the contact had been made applies
  43. Contract performance issue – law of the place of performance should apply
  44. Restatement § 358 – law governing performance: the duty for the performance of which a party to a contract is bound will be discharged by compliance with the law of the place of performance of the promise with respect to:
  45. The manner of performance
  46. The time and locality of performance
  47. The person or persons by whom or to whom performance shall be made or rendered
  48. The sufficiency of performance
  49. Excuse for non-performance
  50. Property cases
  51. Lex loci rei sitae – law of the place where the real property is situated (In Re Barrie’s Estate (Iowa 1949))
  52. Deceased resided in Illinois; real property in Iowa designated by will to church
  53. Illinois probate court decided will was invalid because revoked
  54. Method of revocation not recognized in Iowa
  55. Illinois judgment valid for Illinois property but not Iowa property
  56. Dissent argues Iowa statute applies for both wills executed and revoked outside of the state
  57. Escape devices in administering the vested rights approach – ways to avoid 1st restatement application; one of the major criticisms of the 1st restatement
  58. Characterization – the way you frame the issue may result in a different choice of law
  59. Levy v. Daniels’ U-Drive (Conn. 1928): Connecticut statute imposed liability on car rental companies for their drivers’ negligence
  60. Driver rented from CT Co. with CT passenger and crashed in MA
  61. CT law applied because statute imposes a condition on the making of the contract and the condition became a part of the contract, enforceable against any action in any jurisdiction
  62. Purpose of the statute to provide safe highways; if not applicable to accidents that happen elsewhere with CT rental cars, then statute is useless
  63. Haumschild v. Continental Casualty Co. (Wis. 1959): husband and wife domiciled in WI, car accident in CA; wife sued husband
  64. CA recognized spousal immunity; would characterize as “legal capacity” governed by spousal domicile and apply WI law
  65. WI did not have spousal immunity (would have allowed the suit); would characterize as torts issue and apply CA law
  66. Court overturned precedent and held issue properly characterized as family law, and law of domicile should apply
  67. Substance vs. procedure – apply the procedural rules of the forum
  68. Grant v. McAuliffe (Cal. 1953): CA domiciliaries in car accident in AZ with another CA driver
  69. CA had survival of actions; AZ did not
  70. Court characterized survival of action as procedural
  71. Characterization as substantive or procedural according to the nature of the problem for which a characterization must be me; different settings could equal different outcomes
  72. Likely, Judge Traynor failed to see the purpose of applying AZ law to a dispute among Californians but wanted to maintain the First Restatement approach
  73. Public policy – the forum will not apply foreign law that outrages the public policy of the forum
  74. Loucks v. Standard Oil Co. of NY (NY 1918): “not so provincial as to say that every solution of a problem is wrong because we deal with it otherwise at home”
  75. NY resident killed in MA; MA capped wrongful death at $10,000 and NY had no cap
  76. Applied MA cap because must enforce “foreign right” unless doing so would “violate some fundamental principle of justice, some prevalent conception of good morals, some deep-rooted tradition of the common weal”
  77. Renvoi –whether to apply the foreign state’s “whole” (including choice-of-law rules) law or “internal” (substantive) law
  78. Generally rejected in the US except for questions of title to land; questions concerning the validity of a decree of divorce; and settlement of estates
  79. Property completely and exclusively within the sovereign of the state in which it is situated
  80. Estates can involve property in foreign countries
  81. Marital status be treated uniformly throughout the country
  82. In re Shcneider’s Estate (NY 1950): in NY, can leave property to whomever; property situated in Switzerland, can’t ignore heirs
  83. Apply Swiss “whole” law; Swiss would choose NY law; therefore, apply NY substantive law
  84. Creates uniform results if case brought in Switzerland or NY
  85. Rights spring into existence in Switzerland so should use Swiss choice-of-law rules
  86. Interest Analysis
  87. Currie – jurisdiction should fundamentally follow its own law through a series of steps
  88. First, courts should look to policies expressed by the legislature in both jurisdictions
  89. Where laws conflict:
  90. False conflict – only one state’s policy furthered through application; only one state with a cognizable interest
  91. Forum should determine if applying law would further its policy
  92. If not, apply the other jurisdiction’s policy if apply the law would further that policy
  93. True conflict – if both states have policies that would be furthered through application of their own law
  94. Apply forum’s law
  95. Decision of which law is better should be left to the legislature
  96. Unprovided for case – neither state has an interest; dismiss or apply forum law
  97. Criticisms
  98. Very difficult to define policy; courts can define foreign policy in a way that allows them to reach the desired results
  99. For example, NY could no agree in three cases on proper characterization of the interest underlying the relevant guest statutes
  100. Allows for forum shopping because forum law is default
  101. False conflicts – NY cases
  102. Babcock v. Johnson (NY 1963): NY residents with NY insured car crash in Ontario; Ont. had a guest statute barring passengers from suing drivers, NY did not
  103. Look to the scope of the law to determine interests involved
  104. Conduct regulating – place of injury has an interest in enforcing law; e.g. if accident happened within NY’s borders
  105. Loss allocation – place of injury may not have an interest; who pays after the accident; goal of Ont. law
  106. Ont. Statute concerned with preventing collusion not applicable here because NY insurer
  107. “wholly adventitious” that accident happened in Ont., therefore application of Ont. law would be arbitrary and pointless
  108. NY concerned with compensating NY injured parties and establishing standards of care for NY drivers
  109. False conflict – apply NY law because NY has only cognizable interest
  110. Tooker v. Lopez (NY 1969): passenger and driver both NY domiciliaries; accident in MI; MI had guest statute, NY did not
  111. NY law should apply because NY car/insurer and false conflict
  112. Concurring – lists different outcomes based on domicile and site of accident
  113. Dissent – common domicile should be more important in some situations (like Babcock) over others (like this one)
  114. Girls chose to be in MI for an extended period of time
  115. Shultz v. Boy Scouts of America, Inc. (NY 1985): NJ residents sued NJ and OH charities after sexual abuse on trip in NY; NJ has charitable immunity, NY does not
  116. NY has no interest because not NY citizens or defendants
  117. Dissent – NY has an interest of preventing abuse within its borders (conduct regulating)
  118. NJ has significant interest because protecting charities in NJ; NJ residence must accept burdens with the benefits (loss allocation)
  119. False conflict – apply NJ law because NJ has only cognizable interest
  120. True conflicts
  121. Lilienthal v. Kaufman (Ore. 1964): OR spendthrift signed promissory note in CA; OR makes contracts with spendthrift void, CA does not
  122. OR has interest in protecting spendthrift’s family
  123. CA has interest in freedom/security of contract
  124. True conflict – apply forum law
  125. Should apply the choice-of-law rule which will “advance the policies or interests” of OR
  126. Courts are instruments of state policy; appropriate instrument to enforce this policy
  127. Concurring – OR legislature did not intend to protect CA creditors to a greater extent than OR creditors
  128. Dissent – CA contract, parties would expect CA law to apply; don’t drag unsuspecting creditor into spend thrift’s mess
  129. Bernkrant v. Fowler (CA 1961): NV residents contracted orally with decedent who died in CA
  130. CA had statute of frauds – interest in avoiding false claims in probate
  131. CA does not really have an interest in preventing fraud in foreign contracts so enforcing its SOF would not serve policy
  132. NV no statute of frauds – protect rights of contracting parties
  133. Contract made and performed in NV
  134. NV parties unaware of deceased’s domicile
  135. Apply NV law
  136. Otherwise, NV parties would need to be concerned every time creditor moved somewhere
  137. Unprovided-for case
  138. Erwin v. Thomas (Ore. 1973): OR employee/employer negligently injured WA husband, wife sues for loss of consortium
  139. OR allows suit for loss of consortium, but no interest in application to foreign plaintiffs
  140. WS does not allow suit for loss of consortium, favors defendants but not foreign defendants
  141. Apply OR law because no material or urgent policy or interest which would be offended by applying OR law
  142. Neumeier rules – first discussed in Judge Fuld’s concurring opinion in Tooker
  143. Three rules:
  144. Passenger and driver domiciled in same state, and car registered there – apply law of that state
  145. Parties’ domiciled in different states and the local law favors the respective domiciliary – true conflict
  146. Driver’s conduct occurred in state of domicile, no liability, then not responsible; passenger injured in state of own domicile, driver will not be able to impose own law; guest’s law will apply
  147. If driver and passenger from different states, apply lex loci delicti unless displacing that rule will advance the relevant substantive law without impairing the smooth working of the multi-state system
  148. Site of injury is appropriate because that is the only place the parties have purposely associated with
  149. Cooney v. Osgood Machinery, Inc. (NY 1993): Osgood installed machinery in NY then machine ended up in Missouri at Mueller; Cooney, MO resident injured and recovered workers’ compensation, releasing Mueller from liability under MO law
  150. Osgood impleaded Mueller, not allowed under MO law but allowed under NY
  151. Contribution rules are loss allocating, not conduct regulating
  152. Local law of each litigant’s domicile favors that party – true conflict
  153. Apply law of place of injury
  154. Comparative impairment – more flexible approach to treatment of state interests; in true conflicts, the law of the state whose cognizable interest would be more impaired by non-application of its law should be applied; imagine interstate negotiations; adopted in CA
  155. Bernhard v. Harrah’s Club (Cal. 1976): CA residents drove into NV, drunkenly drove back into CA and injured CA resident
  156. CA imposed liability on tavern owners for injuries caused to third parties
  157. CA interest in protecting the safety of residents
  158. NV had no liability
  159. NV immunizing casinos from dram shop liability to provide economic protection for a vital part of economy
  160. Apply CA law because interest would be significantly impaired otherwise
  161. NV also imposes criminal liability for over serving, so not imposing a new duty
  162. Harrah’s actively solicited in CA, so not all taverns would be implicated by application of CA law in this case
  163. Second restatement – the “most significant relationship”
  164. Two step process
  165. Start with applicable presumptive rule
  166. Use § 145 with § 6 to determine which state has the most significant relationship
  167. § 6 provides judges with list of relevant factors; not exclusive list
  168. the needs of the interstate and international systems
  169. the relevant policies of the forum
  170. the relevant policies of other interested states and the relative interests of those states in the determination of the particular issue
  171. the protection of justified expectations
  172. the basic policies underlying the particular field of law
  173. certainty, predictability and uniformity of result
  174. ease in the determination and application of the law to be applied
  175. § 145 highlights some contacts that matter
  176. the place where the injury occurred
  177. the place where the conduct causing the injury occurred
  178. the domicile, residence, nationality, place of incorporation and place of business of the parties
  179. the place where the relationship, in any, between the parties is centered
  180. Phillips v. General Motors Corp. (Mont. 2000): Byrds fatally injured in KS, domiciled in MT, car bought in NC, GM domiciled in MI; KS limited recovery, MT did not
  181. Court weighed factors in favor of MT
  182. Cited but ignored presumptive rule; seriatim discussion of §6 factors using §145
  183. Defined the purpose of product liability laws to protect and provide compensation to residents and regulate the sale of products within its borders
  184. KS law not implicated
  185. MT law implicated because allowed punitive damages which serve to punish and deter placing defective products into the stream of commerce
  186. Wood Bros. Homes, Inc. v. Walker (Colo. 1979): CA contractor signed contract in CO to do work in NM; NM does not allow non-licensed contractors, CO does
  187. Start with presumption under § 196 pointing to NM law unless some other state has a more significant relationship
  188. NM law designed to protect NM citizens against substandard work
  189. CO interest in protecting parties’ expectations and validation of agreements
  190. NM has more significant relationship to particular issue; presumption not rebutted
  191. Martineau v. Guertin (VT 2000): Canadian domiciliary killed in VT crash; Canadian system would only allow recovery through no-fault system – loss allocation
  192. Start with presumption in wrongful death, law of the state where the injury occurred unless another state has a more significant relationship
  193. Place of common domicile important when dealing with loss allocation – Canada
  194. Relationship centered in CT because both worked there
  195. Contacts involving tort are located in two or more states with the same law governing issue – group together
  196. Allowing recovery in VT will not undermine Canada’s system
  197. Canada’s interest diminish with accident outside their province
  198. Expectations of the parties – CT car insured in CT, driving in US to CT
  199. Would think CT law or at least US law
  200. Leflar’s “better law” approach – choice-influencing considerations based on study of conflict of law decisions
  201. Courts should consider five principles that out to inform the forum’s ultimate decision
  202. Predictability of results
  203. Respect what parties intended; helpful in contracts cases
  204. Maintenance of interstate and international order
  205. Forum should not “ruffle feather” by being too unseemly in the disregard of foreign law
  206. Make a reasonable choice
  207. Simplification of the judicial task
  208. Almost always results in a conclusion that the forum can apply forum or foreign law with about equal ease
  209. At least in domestic cases; foreign country law might be harder
  210. Advancement of the forum’s governmental interests
  211. Only forum’s interests; Leflar’s considerations are rooted in what courts have done and what courts can be expected to do
  212. Application of the better rule of law
  213. Must mean something more than different
  214. Overzealous preference for forum law might conflict with (2)
  215. Party Autonomy to choose the applicable law
  216. Choice of law clauses - § 187 of 2nd restatement; struggles to reconcile the principle of party autonomy with the prerogative of the state to regulate contracts
  217. § 187(2) dealing with issues parties could not have resolved by an explicit provision in their agreement; usually issues of contract validity (e.g. illegality, acceleration provisions, unconscionable or unenforceable based on forum law)
  218. Limits on party autonomy – choice of law provisions are enforceable unless:
  219. State chosen must have a substantial relationship to the parties or the transaction; or
  220. There needs to be some other reasonable basis for the selection of that state
  221. The fact that the choice of law would validate the contract is not enough of a reason
  222. Further limits when choice-of-law provision is too “unreasonable”
  223. Forum must have been the ordinary choice under § 188
  224. Contacts to be taken into account (equivalent of § 145)
  225. Place of contracting
  226. Place of negotiation of the contract
  227. Place of performance
  228. Location of the subject matter of the contract
  229. Domicile, residence, nationality, place of incorporation, and place of business of the parties
  230. Must concern fundamental policy which the contractual choice of another state’s law subverts
  231. Must have a materially greater interest in the matter than the state whose law the parties have chosen
  232. DeSantis v.