Conflicts of Law Outline
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Facts: Mass had a tort damage limitations, NY didn’t have cause of action or limitation Statute was not penal (not criminal/sentencing) and NY public policy doesn’t prohibit the Mass cause of action being heard in a NY court, and no reason to refuse a cause of action just because the legislature hasn’t acted on issue in NY yet Holding: Can hear the case in NY. Foreign based rights will be protected unless there is some profound public policy against it – the mere difference in laws is not enough Jurisdiction will be refused unless the statues are “substantially the same” (so need a comparable NY statute), and NY’s constitution ensures atonement for the wrongdoing of another, plus no NY policy forbidding hearing this kind of case Penalty assessment isn’t extravagant – has some limits to ensure justice Mertz v. Mertz: W sued H accident in CT (no immunity), dom in NY (spousal immunity) Forum’s public policy offered a reason to override the First RST choice of CT law State judges can only refuse to give reciprocity to another jurisdiction’s laws if their enforcement violates some in-state public policy – here, there is more than a “mere difference in law,” and the application of the foreign law offends NY sense of justice and is a menace to the public because it encourages spousal disharmony Notes: So Loucks set up the law, and Mertz applied it – needed some policy that was the exact opposite in the forum and foreign jurisdictions to refuse to apply foreign law (no reason not to re-characterize as family law) Holzer v. Deutsche Reisbahn: Germ. company fired Jewish/German employee, K claim Holding: There was no breach of contract because the German government required the defendants to discharge the plaintiff. Not against public policy to hold people to K’s they make in their country to be performed under that country’s law NY public policy of respecting other foreign sovereigns Every sovereign is required to respect the independence of every other sovereign state – the forum state cannot judge the acts done under a foreign jurisdiction’s laws (if it were 15 years later, Nuremberg trials would change result) Modern Approach: The Rule of Validation After the First Restatement, several additional approaches were developed in response to the critiques surrounding the rigidity of the Traditional Approaches. Some statutes were passed mandating specific approaches to conflicts of law questions. Statutory directives are normally more consistent and easier to apply, and they explicitly dictate what happens in multi-state disputes. Rule: Always look to see if there is a statute that addresses the choice of law issues Foreign Wills: Will validity is governed for moveable property by the law of the domicile at death and for immovable property under law of the situs (First RST §249, 306) No-Fault Insurance Provisions: States say that no negligence claims can be made But don’t always dictate what happens out of state, or to non-residents in state Borrowing Statutes: Detail when to dismiss and borrow the foreign SOL Encourage docket clearing, avoid forum shopping, encourage commerce and fulfilling the intent of the parties to a contract (but where did event “arise”?) Rule/History: The Rule of Validation is based on the presumption that when parties get to choose the law that governs their K, without any fraudulent intent, the parties are assumed to have wanted to choose a law that validated K they entered into. This approach moves away from strict territorialism and empowers parties to choose the law governing their contracts, mostly in regards to issues of interpretation. Yet, to permit parties to stipulate the law that should govern the validity of their agreement gives them an artificial device for avoiding the policies of the sate that would otherwise regulate their agreement, thus less deference is given to parties to choose law determining contract validity. Performance – law of place performed; Validity – law of place contract executed Prof Beale: Party autonomy permits parties to do a legislative act – frees from otherwise applicable law Parties may have more control over COL governing a K than the First RST would allow So might be attractive to contracting parties, but frowned upon by courts and legislatures Should vindicate state regulatory interests, but balance with maintaining party K freedom Good Practice: Keep some ties with the place whose law you choose (bank with escrow) First RST Approach to Rule of Validation: In the absence of fraud, assume parties to the contract would want to make contracts binding, so would implicitly choose the law that validates their agreement (Pritchard v. Norton) Pritchard v. Norton - STILL LOOK AT TERRITORY Facts: Appeal bond signed by Pritchard (LA) and Norton (NY) agreeing to indemnify Pritchard from loss. Under NY law, bond invalid because lacked consideration because appeal bond executed before promise for indemnity (but valid under LA law- no consideration needed) Holding: LA Law controls. Even though this is a validity issue (normally lex loci contractus), a K is governed by the law that the parties had in mind when the K was made, and the bond was made with a view that LA was the place of fulfillment– focus on place of performance Rule: When a person enters into a contract to be performed in a certain place, the parties voluntarily submitted themselves to that local law Second RST Approach to Party Autonomy: The Second RST transitions away from territorialist approach, instead requests that the court abide by the parties choice of law, unless there are extraordinary circumstances in play. What differentiates the legitimate exercises of party autonomy from the illegitimate ones? (1) Substantial Connections. Look at whether chosen law state has an interest in the K Siegelman v. Cunard: Party autonomy can be honored on a validity issue if: (1) the COL is in good faith/bona fide, and (2) the law chosen must be that of the jurisdiction having some relation to the agreement (either the place of making, or of performance) {implicit: (3) no evidence of an attempt to evade a certain jurisdiction’s policy, (4) existence of contrary statute, (5) whether chosen law is oppressive to one party} (2) Interpretation v. Validity. No clear difference, but for interpretation- (maximum party autonomy) and validity issues (minimum party autonomy) Parties have presumption control over transactions where planning and reliance is at a maximum. There is greater party autonomy for contracts (planned) than torts (accident). Choice of Law for Inter Vivos and Testamentary Trusts Hope v. Brewer: Place where trust agreement was executed controls Hutchinson v. Ross: Place of one’s domicile means less and less when your property can be disposed of easily in other places Siegelman v. Cunard: P sued for injuries wife suffered on Queen Elizabeth (boat) Facts: Under ticket contract, 1 year SOL, but under forum court 2 year SOL Holding: Law of ticket contract binds its validity – action is barred by the SOL Even though minimum autonomy in deciding validity issues, wanted to reward good draftsmanship- K tries to make all claims uniform No attempt by parties to choose a random beneficial law or where their K is legal, and no statute contrary to England’s that prohibits party autonomy in these types of cases, no reason to think that English law is oppressive to passengers Dissent: Contract of adhesion – standardized with no real bargaining power No certainty and uniformity because laws governed by mechanized rules, without particularized justice Wyatt v. Fulrath: Duke and Duchess of Arion – Spanish law would leave half of property to wife, but NY law would let all husband’s property go to surviving spouse Holding: Apply NY Law. The intention of the parties to protect assets under laws where property sits should govern. Situs selected by the spouses for the safekeeping of their property governs the disposition of the property. Property requested to be governed by NY law should be governed under NY law even though foreign laws have a different method Dissent: Resolving the dispute by any other law than Spain is incompatible with historic principles – upsets uniform and established rules Rule of validation goes too far– ok when it saves party’s K from being invalid, but not where it nullifies important policies of parties’ residence If the parties chose a place, first look at whether it’s sufficient under Second RST §187: Is it a choice of law issue for which they could have resolved with an explicit provision? If so, then respect party autonomy and apply their chosen law (§187(1)) Paragraph 1 follows Pritchard and Siegelman- allows parties to choose applicable law Apply the law of the state the parties chose to apply unless: (§187(2)) (a) Law of the chosen state has no substantial relationship to parties or transaction Don’t want to give parties unrestricted freedom to select governing law Substantial Relationship: Doing business in a sketchy country, and want to have the US/European law govern the K, or if you have ties to that area (assets, company branches), or transactions for especially large sums or complexity can pick – shows they’re especially sophisticated (b) The law of the chosen states is contrary to fundamental policy of a state which has a greater material interest in the issue and would be the default law to apply Ex: Milliken v. Pratt: Mass law she can’t K, in Maine she can, but considering the case under 2d RST “material interest”/”rule of validation” Absence of a contrary indication of intent – refer to local law of state of chosen law Interest Analysis Approach Rule/History: The Interest Analysis approach is another modern alternative to the traditional territorialist approach. Critics of the First RST were unhappy with how fine gradations of fact created completely different results, and thus searched for a more fair and predictable alternative. Interest analysis looks critically at the interest of a state involved in the dispute in granting or denying recovery. Professor Currie advocates finding the purposes behind the law in conflict, and apply the laws that would advance those purposes, and ignore the laws whose purposes would not be advanced, even if the latter would be chosen by the traditional approach. This approach is used when either the parties didn’t choose which law would apply, or the legislature either intentionally or unintentionally didn’t address the conflict of law issue. Babcock v Jackson (NY): first case to reject the traditional approach and look at modern interest analysis Critiques: Creates a fractured system- not as predictable as it would be under traditional law Even COL statues are not always dispositive –aren’t exempt from escape devices either Statues can also be subject to the same re-characterization issues Statutes can still be subject to renvoi issues: Richards: US is liable in tort in accordance of law of place where act occurred- does “law of place” mean internal or whole law? How to Identify an “Interest” STEP 1: Figure out purpose which led to law’s adoption, (2) determine which contacts bring the case within that purpose. to what problem is this law a solution? what facts are implicated? Possible Results: Either (1) one state may be interested (false conflict), (2) both states may be interested (true conflict), or (3) neither state may be interested (unprovided for case) Look to what a legislator had in mind when developing some statute (leg history helpful) A court is not obliged to vindicate and enforce unconstitutional interests, thus if there is an example of an explicit attempt to discriminate against some class, nothing in interest analysis says you have to give deference to that policy. No guidance on determining when a state’s interest is determined. Differentiating between loss-allocating or conduct-regulating – still characterization Conduct-regulating: Outside of the courtroom before lawsuit (like speed limits) Place of the tort has a more important interest in regulating Law of the place of the tort usually applies unless displacing it will advance the relevant substantive law purposes without impairing the smooth working of the multi-state system or producing great uncertainty for litigants. Loss-allocation: After the event, while in a courtroom, regulates burden of injuries Parties’ common domicile has paramount interest in allocating losses These cases show that Choice of Law is a concern among states and within a single body of law, and can be resolved under the modern approach through legislative interpretation. Look to the chronology of the laws, the intent behind them, and try to give meaning to as much as possible. Chesny v. Marek: Civil rights statute v. FRCP for attorney fee recovery Holding: Legislation must be interpreted in light of its purposes (look at policy interests behind the statute to decide importance), intended to encourage bringing legitimate civil rights actions Public shouldn’t be deterred from bringing good faith actions to vindicate the fundamental rights involved by the prospects of having to pay their opponent’s counsel if they lose Marek v. Chesny: Same facts, but on appeal to SCOTUS Rule: Absent congressional expressions that state the opposite, the underlying statue defines costs to include attorneys fees, so such fees are to be included for purposes of Rule 68 Plain meaning of “costs” – only construction that gives meaning to each word in both Rules STEP 2: Figure out if it’s a TRUE or a FALSE conflict, or an un-provided for case Interest Analysis in TRUE Conflicts: A true conflict arises when applying one jurisdiction’s law undermines the policies behind the non-chosen jurisdiction. Several methods can be used to resolve such conflicts. Apply the Law of the Forum: One way to decide a true conflict is to simply apply the law of the forum, as proposed by Professor Currie, and as seen in Lillenthall. Where two states have an equal balance of interests in application of their own law to an interstate K dispute, the forum is privileged to apply its own law so as to advance its own public policy. Currie states that there are no objective standards for deciding what is the fundamental law forming the forum’s jurisprudence. Thus, courts should not engage in the political function of assessing values of competing legitimate interests of sovereign states. Instead, until a better option is presented, courts should be consistent and apply the law that they are most familiar with and competent in applying, which is the forum’s own law. This approach has been criticized for oversimplifying the problem, and for ignoring judicial competency to resolve complex issues. Further, it may promote forum shopping. Lilienthal v. Kaufman: D under spendthrift protection in Oregon, no power to enter into K’s Facts: D entered into K with P in CA (they didn’t know) (K allowed in CA, not in OR) Oregon Interest- Protect spendthrift/their family, they won’t become wards of state California Interest- Wants its citizen repaid, ensure K validity, avoid fraud Holding: OR spendthrift law applies and P can’t recover. There is a true conflict, and the forum law (OR) should therefore apply. Even though CA had more contacts with the transaction, the forum’s public policy is stronger so it should prevail (econ/social factors) Place of contracting, place of performance and the rule of validation all suggested that CA law should govern but court’s interest analysis found it was a true conflict Concurring: OR legislature didn’t intend to protect CA creditors more than OR citizens Notes: Legislature purposefully chose to protect spendthrifts over attracting business Better think just of the policies behind the law (protect spendthrifts’ families), not the state’s broader policy in general (attract business) Interest Analysis provided an alternative, albeit imperfect method to First RST. While states were adopting Currie’s Interest Analysis method, some states developed additional approaches to resolving true conflicts, including the Neumeier Rules in New York, and comparative impairment and moderate and restrained interpretation in other states. (Alternative 1): The Neumier Rules: Originally developed in NY to handle guest statute rules, courts officially expanded their use to all loss allocating cases. (but may not apply beyond loss-allocating guest-statute cases in NY) Cooney v. Osgood: Looked at Neumeier and found that the local law of each litigant’s domicile favors that party, have to look at interests involved Used to attempt to ensure predictability for litigants, prevent forum shopping. Only place where both litigants voluntarily subjected themselves to is place of accident First Rule: If P and D are both from the same state and that domicile’s law has a loss allocating rule, then apply the law of the common domicile Used for classic false conflicts. Law of place of injury is unlikely to have any of the purposes of it’s loss distribution rules advanced on these facts. Ex: Tooker v. Lopez or Shultz v. Boy Scouts – common domicile in NJ controlled the immunity for this case that occurred in NY. So long as you’re willing to buy that charity immunity is LOSS ALLOCATING type of rule. Second Rule: If P and D are from different states, look to law of the place of accident (a) D not liable if D conduct takes place in his state and that state says he’s not liable (b) D liable if conduct occurs in P’s state and state finds D liable (state protects P) Third Rule: Place of the injury should govern any remaining cases Look to law of place of accident, but NOT if another law will advance (1) relevant substantive purposes without (2) impairing the working of the multistate systems or creating great uncertainty (too many exceptions?) THEN: What to do in non-tort cases? Look at “center of gravity” in contract cases? Look at Second RST for five important contract “contacts” like place of execution, negotiation, performance, subject matter of contract, domicile of contracting parties (Alternative 2): Comparative Impairment: After deciding that there is a true conflict between the laws, the use of the comparative impairment analysis decides which state’s regulatory interest would be more impaired if its policy were subordinated to the policy of the other state. Comparative impairment analysis helps to make trade-offs to maximize the extent to which each state realizes its objectives in multi-state cases A court should apply law of the state with the stricter law as the other state wouldn’t be impaired by being more strict, but stricter law state would be impaired by being lax Don’t “weigh interests” to decide which is “better/worthier” but allocate domains of lawmaking power – don’t look at wisdom behind the policies Bernhard v. Harrah’s Club: Myers (dom in CA) drove to NV to go to a club (D’s dom) Facts: Served too much, then drove home, accident in CA with Bernhard (CA res) Nevada Interest: Protect tavern-keepers from liability which legislature doesn’t impose – every time a drink is poured have liability CA Interest: Want to protect public from injuries from intoxicated people Holding: California law applies. California can’t effectively effectuate its policy without extending its regulation to include out of state tavern keepers who sell to CA residents with reasonable certainty that they will drive back to CA drunk, and applying CA law doesn’t hurt Nevada, just creates greater liability exposure for them –foreseeable/coverable expense CA law imposes no new duty (already civil liability in NV) on Nevada residents, but application of Nevada law would greatly impair CA regulatory interests Notes: Impairs CA’s interest because this tavern is advertising in CA – so puts itself at the heart of California’s economy so puts more weight on CA regulatory interest Similar to “purposeful availment” like International Shoe - deliberately bringing people into CA, how do they avoid the costs? Who is the cheapest cost avoider? If you don’t advertise in California then you don’t reasonably expect CA visitors (Alternative 3): Moderate and Restrained Interpretation This approach tests whether the social objective underlying the law in question will be furthered by the application of the rule in cases like that presented. The answer determines the measure of the rule’s importance, and the state’s interest in the conflict at hand. Use as a second step in determining some other, greater interest that cuts against preliminary interest analysis. Like in Bernkrant in contract cases, consider parties’ justifiable expectations, where a statute can be interpreted broadly or narrowly – choose narrow interpretation When the governmental interest approach reveals an apparent conflict, reexamine policies to determine if a more restrained interpretation is more appropriate. Look at a state’s real interests, not their hypothetical interests. (Bernhard v. Harrah’s Club) Cavers: The M&R Approach is virtually the same as balancing state interests Baxter: Look at what legislatures likely would have wanted had they discussed application of their inconsistent rules in inter-state disputes Kramer: Should adopt policy-selecting rules to direct courts to apply the law that reflects a generally shared policy or preference – forum sacrifices procedural policies in favor of another state’s substantive policies but gains by having its policies favored when they conflict with a foreign state’s procedural rules in cases outside the forum Bernkrant v. Fowler: House sale, decedent orally promised to forgive debt, buyers sued estate California Interest: Wanted to protect estates from false claims on alleged oral contracts, Nevada Interest: All contacts in NV – want to protect residents rights who are parties to the contract, policy that contracts be valid and enforceable Holding: Apply Nevada law. At first looks like a true conflict because contract is invalid under CA (forum/dom), but valid under Nevada (where K made). BUT, the court applies a “moderate and restrained interpretation” of the policies behind the laws in conflict and finds that both laws are trying to protect the reasonable expectation of the parties when they entered into the contract. Policy of enforcing contracts valid under the only law applicable when the K was made, and since the K was entered into in Nevada, apply that law. No reason for the parties to expect that the decedent would later move to CA and there would be a writing requirement Interests Analysis in FALSE Conflicts: False conflicts arise when either the policies behind the rules in conflict connect with the factual circumstances, or, no matter which law is chosen to be applied, the results are the same When P and D are both domiciled in same state, usually but not always a false conflict Usually apply the law of the common domicile (Tooker v. Lopez) People with different domiciles aren’t legally “similarly situated” so it makes sense to treat people of different domiciles differently Easier to defend law of common domicile – reduces forum shopping, and the presumption that forum is always biased in favor of the forum law, easy to apply Plus, those parties can vote and change legislation in the forum (forum benefits) False conflicts are really rare because you can usually find several purposes behind most laws. So false conflicts only where judges assume away inconvenient argument (Prof. Singer) Incentive to find a false conflict oversimplifies interest at stake in a choice of law case Tooker v. Lopez: Tooker (passenger) killed when Lopez (driver) lost control of the car. NY allows wrongful death recovery for passenger, but MI guest statute bars recovery Facts: Both residents of NY, car registered/insured in NY, forum in NY, MI accident NY Interest: Make sure that passengers injured in accidents are compensated Michigan Interest: Don’t allow passengers and drivers to collude against insurance companies, encourage people to give guests a ride Holding: NY has the only real interest in whether recovery should be granted, and applying Michigan law would defeat a legitimate interest of the forum state without serving a legitimate interest of any other state (can’t collude against Michigan insurance when insured in NY) Jurisdiction enacting a law for the protection of guests has no interest in the application of the law if the guests do not reside and are not suing there. Notes: Maybe NY got this wrong, the domiciliary is kind of Michigan because they were going to school there and intended to stay “for a time at least” so maybe not NY domiciliary Schlutz v. Boy Scouts: P sued Boy Scouts for injuries from molestation by teacher/scoutmaster Facts: How to determine the right of recovery in an action by a foreign domiciliary for torts that are wrong under both jurisdictions’ laws Interests: Defendant Boy Scouts HQ’d in NJ/TX (no charity immunity), D school HQ’d in Ohio (qualified charitable immunity), NY forum, P’s domiciled in NJ NY Policies: Compensate people injured within their borders, deter people from injuring others within NY state borders NJ Policies: Don’t punish charities – have a good purpose, protect medical creditors, prevent injured tort victims from being public wards in locus state Holding: NJ law applies. NY has no significant interest in applying its own law to the dispute, as it can’t deter people who don’t live there – applying NJ law reduces forum shopping, provides certainty for litigants about how to act where they are domiciled This is likely a loss-allocating case, so look more at parties domicile than tort location Favors jurisdiction of common domicile because want parties to accept benefits and burdens of living in that jurisdiction and submitting to its authority Reasoning: If a tort, look at rules involving appropriate standards of conduct, so place of accident usually have higher interest in protecting expectations of parties BUT when case is about allocating losses, state cautionary interest and party reliance are less important Interest Analysis in the Unprovided-For Case An unprovided for case arises when neither state has a vital interest in applying their law to the case According to Prof. Kramer, there is no such thing as an unprovided-for case, but instead it is a product of a misanalysis of state interests. Prof. Weintraub advocates that courts must re-examine state interests to find another policy that would be advanced by applying the law of one of the states Options in the Unprovided-For Case: (1) Apply laws that appears to be “more enlightened and humane” (2) Selfishly apply the law that aids the litigant who is a local resident (3) Treat foreign claimants as they would be treated in their home states (4) Apply the law of the forum (most chose this one – rational and convenient) Erwin v. Thomas: Erwin (from Washington) was injured by Thomas (from Oregon) in an accident in Washington – Erwin’s wife sued Thomas for loss of consortium in Oregon Washington interest- Believes that wife’s rights to relationship aren’t strong enough to make negligent defendant pay wife (protects D’s) Oregon interest- Protects rights of married women – but not concerned of rights of non-resident married women injured outside of Oregon (FORUM) Holding: Neither state has a vital interest, so forum law should apply (Oregon) WA doesn’t care if others require non-WA residents to respond to claims The Second Restatement Rule/History: The Second Restatement arose out of a desire for a return to a unified method of addressing conflicts after the fragmentation resulting from interest analysis, and from the criticism of the First RST. The Second Restatement developed its “Most Significant Relationship” test (MSR) to determine choice of law issues, and to avoid the confrontation of a true conflict. Unlike the First Restatement, the Second Restatement looks at rebuttable presumptions that identify what most likely has the most significant contacts (Casey Case), evaluated according to their relative importance to the particular issue thus creating more judicial flexibility. This approach gives judges more discretion than First RST, but more clearly articulated guidelines than under interest analysis. Elements used to consider “contacts” aren’t listed in order of importance, and non-existence of any one contact is not dispositive. The MSR test is fact-dependent, and also has characterization issues. Application: In applying the MSR test, a court has to decide whether the purposes sought to be achieved should be furthered at the expense of the other choice of law factors (Step 1) Characterize the case to find relevant provisions of 2d Rst that apply Based on this characterization, there is a presumptively applicable law under the appropriate jurisdiction-selecting rule Tort: Presumption under §146 that law of place of injury controls Contract: Presumption under §188(3) if place of negotiating and performance are same, that state’s law will usually be applied SOL: Without exceptional circumstances, forum applies its own SOL barring or allowing claim unless SOL of state whose substantive law applies bars the claim Land: Presumption under §214 that because land is within exclusive control of the state in which they’re situated, local officials are the only ones who can lawfully deal with them, so their law should apply (plus certainty/convenience) (Step 2) Use the factual contacts to ID Other Maybe relevant jurisdictions What other jurisdictions might have a relationship with the parties or the events? Analysis under §145 or §188 helps set the bounds for which jurisdictions might be “in play” in determining the analysis under §6 Categorization still is a problem –§7 says “characterization is determined in accordance with the law of the forum” – but is that really helpful? TORT: Second RST §145: Important contacts include: (1) Place where injury occurred (all First RST cared about), (2) place where conduct causing the injury occurred, (3) domicile, residence, nationality, PPB, place of incorporation of the parties, (4) and place where relationship is centered CONTRACT: Second RST §186: Issues are determined by the law chosen by parties under §187 (allowing party autonomy), or otherwise by principles of §188 2d RST §188: Without an effective party choice of law, important contacts are: Place of contracting, place of negotiation of the contract, place of performance, location of subject matter of the contract, domicile, residence, nationality, place of incorporation or PPB of the parties Test- Locate a state which is the center of gravity for each issue and apply the law of that state to that issue (Step 3) Assess each of these jurisdictions’ relationship to the present event and the parties using §6, including, but not limited to, states’ policy interests Test the presumptive choice against the principles of §6 based on the facts of that case and based on what kind of case it is (tort, contract, etc.) Assess the actual relationship each state has to the case under §6 Second RST §6: Choice of Law Provisions: A court should follow the statutory directive of its own state’s choice of law, BUT if there is none, relevant factors include: Needs of interstate/international systems (no comity discussed in First RST) Want to promote harmony and facilitate commercial intercourse between states (as articulated in Philips v. GM) Relevant policies of the forum Relevant policies and interests of other interested states (like interest analysis) Have to consider whether applying the law of a state with a relevant contact would further the purpose that law was designed to achieve – so under the “relevant policy” test compare with facts under §145(a-d) Protection of justified expectations Policies underlying particular field of law Torts (include compensation and deterrence), contracts (enforceability) Certainty, predictability and uniformity of result Predictability is really only relevant in K/transactional work, not torts Ease in determination and application of the law to be applied (Step 4) Decide if relationship is significant enough to override a presumption Here, presumption under §146 that law of place of injury controls – but get to make the arguments about strength of opposing interests Phillips v. General Motors: Car bought in NC with NC address, then moved to MT Facts: Driving from MT to NC, but got in an accident in Kansas Deceased were MT residents, Phillips was legal guardian of surviving son Guardian lived in NC – probate filed in MT (this case’s forum) Holding: Purposes of MT and NC product liability law are furthered (based on where bought and domicile), but because NC wouldn’t apply its own law, choose Montana law Purpose of state’s liability law is to regulate purchases made within its borders and to protect and compensate its residents – points to MT law Displaces presumption that law of accident applies. No public policy exception Recognized that application of Beale’s vested rights theory resulted in escape devices to avoid the arbitrary or unfair results – diminishes traditional rule’s supposed advantages The Better Law (Prof. Leflar’s Choice Influencing Considerations) Rule/History: During the Modern Era of conflict of laws, another method developed, with broader application than just for true conflicts. This “Better Law” rule was in response to the rule-bound Second RST, and attempted to dispose of its characterization issues. Professor Leflar attempted to reduce the choice-influencing considerations to a manageable size, and encourage courts to “administer justice” by applying the better rule in cases where there was no firm forum interest. The “Choice Influencing Considerations” are similar to the Second RST §6 MSR tests, however it adds the consideration of what is the “better rule of law.” As seen in Milkovich v. Sarri, this approach supports the premise that those who seek out a forum for their case should be prepared to have the case determined in accordance with the forum’s rules and sense of justice. Yet this approach is criticized for unfairly favoring the law of the forum, as it will nearly always consider its law “better” than the legislative choices of a sister state whose law may be just as legitimate Application: Prof. Leflar’s “Choice Influencing Considerations:” (1) Predictability of Results: Plan certain law into your transactions to give results desired Certain industries built around predicting accidents (insurance), for torts or contracts (2) Maintenance of Interstate/International Order: Free social/economic commerce is good for world People who seek advantages offered by another state shouldn’t be allowed to avoid the burdens associated with their choice (Jepson) Assume a state will reciprocate and apply your law in next case where your interests are greater (3) Simplification of the Judicial Task: Courts want to use their procedural rules – some outcome determinative rules, but besides that, look at characterization between rules of procedure & substance (4) Advancement of the Forum’s Governmental Interests: Reasonable for a court to act in accordance with some concern when it involves that state’s important social/legal policy (5) Application of the “Better Rule of Law:” A state’s “interest” in a set of facts can only be analyzed by reference to the content of the competing rules – choice between jurisdictions and what is “right” This is just one way to determine the “best” result, don’t want judges to avoid equity/justice, so maybe best to allow them to do justice by picking “better rule” Milkovich v. Sarri: Group domiciled in Ontario came into the US – car insured and registered in Ontario, got into an accident, guest injured, hospitalized in Minnesota (forum) Facts: Ontario has a guest statute (need proof of gross negligence to recover), Minnesota doesn’t Holding: Minnesota should use its better law – no foreign guest statute allowed. (1) Predictability of Result – no place in a tort case because not planned (2) Maintenance of Interstate Order – Court identifies it as a true conflict True conflict – (even though common domicile) because no recovery allowed under Ontario law, recovery under Minnesota law Stop forum shopping – if they game the system, greater chance for interstate chaos (3) Simplification of Judicial Task – Not a factor- easy to apply a negligence standard (4) Advancement of Forum’s Governmental Interest – All states want to “administer justice,” but the judges don’t want to do things inconsistent with Minnesota’s conception of fairness and equity (guest statutes go against the spirit of the times) (5) Better Law – Isn’t “better law” just always going to be forum’s law? Jepson v. General Casualty: P (Min.) injured in AZ (where he later moved), insurance, work in ND Facts: Stacking policies (combining insurance policies) allowed under MI but not ND law Holding: ND law applies. Neither ND nor the old or the new Minnesota law is ‘better’ (1) Predictability/Uniformity of Result – Predictability isn’t a factor for torts, but it’s important for K – reasonably expected state where insurance K issued to govern, so cuts in favor of ND law – but this case involves both contract and tort (2) Maintenance of Interstate Order- Need to reciprocate between states – don’t apply your law if another forum’s interests are greater (punishes P here) (3) Simplification of Judicial Task – not too much of an issue (4) Advancement of Forum’s Governmental Interest – MI doesn’t have much interests in facts, the move to Arizona is irrelevant – look more at policy of getting benefit of the K (5) Objective “Better Rule of Law” – MI has since changed to prohibit stacking, so that can’t be the better law – but is current one improved? Can’t tell so don’t focus on this Principles of Preference (Prof. Cavers) Prof. Cavers: Developed principles to guide judges in deciding between conflicting laws Focused on the purposes of conflicting laws, which leads naturally to emphasize the people on whom the laws impact. However, this analysis similarly looks at the interests of the parties to the relationship at stake so easy to just assign interests to the state where the parties are located – may give too much judicial discretion to identify “interests.” Torts: (1) Law of state of injury should apply if it’s more protective of plaintiff’s than law of defendant’s domiciliary state (2) Law of the state where a defendant acted and caused injury should apply if it’s less protective than the law of the plaintiff’s home state Visitor exposed himself to risks of territory that he voluntarily entered so shouldn’t expect people living there to a financial hazard that their law didn’t create Contracts: Apply the law of a certain state if the party protected was from that state and the transaction was centered there Problems in Modern Choice of Law While utilizing any of the above listed “modern” choice of law approaches, certain problems repeatedly arise, for which several remedies have been developed. Depecage: In trying to decide between a conflict of law, the use of depecage, or the application of different jurisdictions’ laws to different issues in a case, can be used to compartmentalize choice of law problems. Depecage is a characteristic of cases even today and will be an issue regardless of the technique for resolving choice of law questions. However, this method is critiqued for resting on hyper-technical distinctions between categorization of an issue, and resulting in inconsistent application of the choice of law principles. Further, under this method, one can have a case resolve in a way that is not allowed under either of the state’s laws chosen to apply to individual issues (Marie v. Garrison). Maryland Cas. v. Jacek: Drives car from NJ to NY (where insured), wife injured, spousal immunity in NJ, but not in NY, but no coverage under insurance in NJ But the Court applied NJ law to the insurance contract, and law of NY (place of accident) to the tort (spousal immunity) – insurer found liable even though it couldn’t have been found liable either in NJ or NY Renvoi: Renvoi is the use of a foreign jurisdiction’s whole law, or both the substantive and choice of law rules, to decide between a conflict of law. Normally, foreign law would only be applied when the court has determined that the foreign state has a legitimate interest in the application of its law and policy to the case at bar, and that the forum has none, for example in land cases. In other cases, renvoi is discouraged. If the forum state refuses to consider the choice of law rules of a state to which it refers, it “rejects” renvoi, but if it follows the foreign choice of law rules, it “accepts” the renvoi Remission- when state accepts renvoi, and that law returns the case back to forum Transmission- when state accepts renvoi, and that law sends case to third state Partial- Foreign choice of law rules is found to refer to the internal law of a state Total- If the foreign reference is to the whole law of that jurisdiction Option 1: Any references to foreign law means internal law only – not their COL First RST §7: Directed courts to ignore foreign choice of law rules EXCEPTIONS: Except for title of land and validity of divorce decree rules which are controlled by situs of land and domicile of parties, respectively BUT a badly organized system yields disorganized exceptions Under Currie’s interest analysis method, don’t use the whole law to determine a state’s interest COL rules intended to limit scope and meaning of substantive law – so reflect a state’s decision about how to extend local law (ignoring may betray purpose of interest analysis) Maybe the conflict of law is an extension of substantive law – so should treat the foreign state’s decision of its territorial scope with the same deference given its substantive laws Option 2: Replace rules with “rebuttable presumptions” against applying whole law of foreign state Reference to the law of the situs necessarily entails a reference to the whole law of that country, including the conflict of law rules (Schneiders Estate – esp if land in foreign jurisdiction) RST 2d §8(2): Recognizes renvoi whenever the forum’s goal is reach the same result on the very facts involved as would the courts of the foreign state Option 3: Accept renvoi back to forum, but prevent door from going on forever Use whole law of foreign jurisdiction as a justification for applying law of forum – just as logical to stop at second as third revolution (Griswold) Renvoi should end because court made decision not to agree with that other court’s law – allowing another state to dictate the applicable law is “nothing less than an abdication of sovereignty” (Lorenzen) Renvoi methods may encourage reciprocity, and discourage forum shopping. Foreign COL rules are informative, but aren’t binding and don’t need to be considered unless the forum finds it useful to resolve a case In Re Schneiders Estate: US citizen from Switz, domiciled in NY left property in Switz Swiss law (property of a foreign national is split among heirs), NY law (will decides). Swiss conflict law said foreign national issues are decided by domiciliary internal law Holding: NY Law Applies. Actions concerning real property are properly decided only before the courts of the situs BUT under NY law the forum has to look to the whole law of Switzerland. Under Swiss law, court looks to NY law (domicile), NY law says it’s valid, so the transactions surrounding the Swiss property under the will are valid. Following the whole Swiss law ensures uniformity of result, and still gives them the sovereign rights to decide how land in their jurisdiction is disposed Pfau v. Trent Aluminum: Plaintiff (CT domicile) injured while a passenger in a car in Iowa Facts: Car driven by a NJ resident, owned by a NJ corporation, insured in NJ Iowa has a guest statute (driver not liable), CT and NJ would allows guest recovery Iowa Interest: Discourage litigation, prevent collusion, encourage sharing rides CT Interest: Want to allow guests to recover (implicated here because P is a domiciliary) Holding: No. Applies Connecticut law – and only the local law, not the whole law CT law looks to the place of the injury – which is Iowa (whose policies don’t matter) Because Iowa has no interest in the litigation and the substantive laws of CT and NJ are the same, it’s a false conflict, so CT plaintiff should be able to show negligence Rules v. Standards: The First and Second RST and Interest Analysis approaches are criticized as being either overly rigid or overly flexible. However, this distinction between rigid rules and flexible standards appears to be really a false conflict because whatever method people actually adopt is going to combine elements of both. Rules create characterization problems because they have gaps and ambiguities, but standards will create rule-like patterns of decisions. Rules: It is cheaper and easier to have rules – fixed principles announced beforehand limit arbitrariness of decisions, improve predictability, let people plan ahead Rules create arbitrary results – need some subjective case-by-case analysis to be fair Standards: RST’s are intended to restate patterns of decisions into something more rule-like Paul v. National Life: WVa (forum) residents injured in Indiana (has guest statute gives immunity) Holding: WVa law applies. Indiana law applies because it was the place of the tort, but the guest statute there goes against WV public policy – so decides not to use it Court looked at all conflict of law methodologies, eventually decided to use the traditional approach, coupled with their public policy exception to change the law applied when the foreign guest statute law is against the public policy of West VA What Kind Of Case Does Each Plaintiff Want To Bring?’ Multi-Jurisdictional/Mass Class Action Litigants want to bring class-actions in a place that assures that the class will be certified, as a court is likely to deny class certification when a COL inquiry points to multiple states with conflicting laws. Yet courts seem to go to great lengths to bend COL rules so that only one law is selected to govern all claims. Good Practice: For difficult class certifications, could create sub-classes and resolve the class that way – different COL for each sub-group (semi-depecage for class actions) ALI §6.01: Transferee court shall choose the law governing rights, defenses of parties with the objective, if feasible, of applying a single state’s law to all similar tort claims assessed against a D Certify classes to be efficient, but efficiency goes away with too many COL rules to apply (1) In multi-state class actions, COL inquiry can be dispositive, courts can’t certify an unmanageable class Ex: Product liability action against Bridgestone and Ford – PREVENTED IT Indiana was a lex loci jurisdiction, so since financial losses occurred in all 50 states and not in D’s headquarters, so the class is unmanageable and un-certifiable Ex: Product liability action against tobacco manufacturers – ENABLED IT P’s from all states, claim alleged conspiracy to conceal data, punitive damages for conspiracy in NY where D’s HQ’d (certified – doesn’t want NY to be a haven for corrupt corporations) (2) Some black-letter doctrine exists regarding choice of law in multi-state litigation Not black letter, but courts have an institutional preference to find a single state’s law that applies in complex litigation – Air Crash (applying IL law for punitive damages) Klaxon: Erie: A federal district court in diversity has to apply the COL rules of state where it sits Van Dusen: When a case is transferred between federal district courts, the court where it’s transferred to applies the law of the sate where it was transferred from In Re Air Crash Disaster Near Chicago: Residents from numerous states (118 wrongful death actions) Facts: Place of crash and the Forum (7th Cir- Klaxon): Illinois Difference in Law: No punitive: Illinois, CA, NY, Punitive: Missouri, TX, OK Holding: Illinois applies. Can’t arrive at a “moderate and restrained” interpretation to avoid a true conflict, and no rebuttal of the presumption to apply IL, so no punitive damages. Step 1: Is there a true conflict? YES- Look at COL rules of states where the actions were filed – some allow punitive damages, some don’t, so true conflict which can’t be reconciled Step 2: So, apply the conflict-of-law theories of the forum states MO has an interest in preventing wrongful design and manufacture – to not include their interest would be to encourage companies to locate in numerous states CA has an interest- want to encourage people to do business in the state (protect companies from punitive damages) So looks at forum/injury: IL has an interest in promoting airline safety but also of encouraging airlines to do business in that state Step 3: Is Second RST presumption overcome? NO- IL COL says place of injury has the MSR under §175, and CA or Missouri don’t have a MSR than Illinois- plus they conflict) In Re Agent Orange Product Liability: Vietnam war veterans and families sued Facts: Court had to apply COL rules of original transferor courts (under Klaxon and Van Dusen) Holding: Apply a “national consensus law” - J. Weinstein: Sensible to treat all veterans the same for injuries fought in a foreign war, and under Prof. Lefler’s, Second RST and Interest Analysis, and traditional rules, and lex fori approach – probably all same result – national consensus law Likely each state would look to a federal law for manufacturer’s liability, punitive damage Too many states with relevant contacts under Second RST §145 and §6 plus three countries Couldn’t identify the interest of any one state as being sufficiently greater than any other to justify application of that state’s law Notes: Court basically yelled at congress for not addressing the agent orange issue Wanted to create sub-classes on common issues of fact, didn’t articulate standard because he was encouraging them to settle (admonished by 2nd Circuit Court of Appeals later on) Would be easier to overrule Klaxon and Van Dusen to enable federal courts to develop a federal common law choice of law – help solve the complex litigation issues and reduce federal uncertainty in decisions because of applying uncertain state rules G. W. Bush’s Congress passed “Class Action Fairness Act” Class action can be removed to a district court without regard to whether any D is a citizen of state where the action brought, except such action may be removed by any D without consent of all D’s So now: “Fine to kill the class on the ground that more than one state’s law will apply” So really like the “Anti-Depecage Act” because federal judges won’t want to break things up and apply different laws to sub-classes What Substantive Limitations Does Each State Have? What Are Differences in Law? Are there Sol or statutory limitations on the right to hear the case? Bournias – argument, SOL is not general but specific to this cause of action Sometimes the SOL can be so limiting that it is a de facto denial of a forum Any state - federal court interaction? Klaxon: Erie: A federal district court in diversity has to apply the COL rules of state where it sits (Van Dusen: Court where transferred to applies state law where transferred from) Constitutional Limitations on Choice of Law: Can the Forum Constitutionally Apply Its Own Law? The constitution protects individual parties by avoiding unfair surprise, and encouraging inter-state harmony by requiring full faith and credit (FF&C) to be given to sister state judgments. Although there are no explicit restrictions in the constitution limiting which choice of law method to apply, the constitution does impose restrictions on the result that can be reached under those methods. (1) Fairness: If it’s constitutionally unfair to hold one party to a certain law, then the application of that law to the parties is unconstitutional (Home Insurance) The state must have significant contacts or aggregation of contacts to the parties or the transaction creating state interests such that the application of a state’s law is neither arbitrary and fundamentally unfair (Allstate Insurance) The parties getting benefits of one state’s law might also have to subject to its burdens (take bitter with the sweet) (but Bradford shows that having any contact is not enough) (2) State Interest: Find sufficient forum contacts to justify finding a state interest in application of forum law (AK Packers, Pacific Employers, Bradford) There must be at least some minimal contact between a state and the regulated subject matter or transaction before the state can, consistent with the requirements of Due Process, exercise legislative jurisdiction (Gerling Global) State Interest: Has to be: (1) Legitimate/constitutionally valid (no valid state interest in discriminating), AND (2) engaged in these case’s specific facts (not just interests behind law, but the interests are connected –his lines if policy is connected to facts) Sufficient Contacts: The exercise of jurisdiction does not offend DP if the pertinent party has certain minimum contacts with the jurisdiction such that the maintenance of the action does not offend traditional notions of fair play and substantial justice. Can have PJ contacts without sufficient COL contacts (Gerling – was within the PJ of the FL courts, but FL couldn’t apply FL law to company) Schutts: Courts had PJ in Kansas, but Kansas law couldn’t apply PJ: Look at contacts between the regulated Directory: outlines -> Conflicts%20of%20Laws outlines -> Adil Khan Contracts Midterm outline- waldron outlines -> Remedies for breach of promise (1) The Interests Protected outlines -> Basic Process for Assessing Damages: 97 Select interest that deserves vindication 97 a. Restitution 97 outlines -> Chapter Five: Written Documents 1 Unsigned Documents 1 outlines -> Cases and Materials on Contracts outlines -> College of Science and Health outlines -> Evidence outline outlines -> 2. Act, Omission, Status or Circumstances 4 Consequences and Causation 8 Introduction to Mens Rea and Intent 10 Levels of Fault 11 Conflicts%20of%20Laws -> Choice of law: the basic model Download 381.41 Kb. Share with your friends:
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