Conflicts of Law - Hoffheimer

8/10/2019 Conflicts of Law - Hoffheimer

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Conflicts of Law (Hoffheimer, Spring 2005)

The realm of the conflict of laws is a dismal swamp, filled with quaking quagmires, and inhabited by

learned but eccentric professors who theorize about mysterious matters in a strange and incomprehensible

jargon. The ordinary court, or lawyer, is quite lost when engulfed and entangled in it. - Prosser

I. Recognition of JudgmentsA. Introduction - RES JUDICATA

1. Res judicata (claim / defense preclusion)

a. Used to bar a claim (or merge in claim already decided)

b. ELEMENTS

1. Identity of the parties(or privity of parties)2. Same claim

3. CF. FOUR ELEMENTS in Mississippi

a. Identity of the subject matter of actionb. Identity of the cause of action

c. Identity of the parties (privity of the parties)

d. Identity of the quality or character against whom claim is made

1. EG: Suing Barbour, or suing governor

c. Claim preclusion applies to counter-claims too (if it was a compulsory counter-claimnot raised, then cant litigate in separate suit)

2. Collateral Estoppel (fact / issue preclusion)

a. Can be a small issue, or ultimate issue in caseb. ELEMENTS

1. Issue / fact actually litigated2. Must be necessary to the judgment

3. Party against whom offered has had day in court

a. Ins. Co. gets declaratory judgment it did not cover X at time of

accident with Y. Y sues and wins against X. Y now sues Ins. Co. Does

Ins. Co. have benefit of claim preclusion on the issue of coverage?:

1. Y never had day in court on issue

4. Use of estoppel must be fair (same incentives, same opportunity to litigate

issue)

a. If sued in justice court for $10, and then sued in circuit court for $10

million, probably not the same incentives5. OPTIONAL ELEMENT (recognized by some jurisdictions but not all)

a. Mutuality1. How this might make an impact:

a. If A is convicted of DUI, and B then wishes to sue

A, wanting to have the negligence found per se (due

to conviction); but B must walk through all the

elements (which are all OK, except MUTUALITY,

since B was not a party to the first action, then cant

use as claim preclusion)

2. Not required in MS or federal courts

3. GENERAL REQUIREMENTSa. Must be a VALID judgment (constitutional; personal jurisdiction)

b. FINAL judgment on the MERITS1. EG: If not on merits, court itself would not give affect2. IF something like statute of limitations, then maybe not

4. GENERAL PURPOSES of Res Judicata

a. Consistency

b. Dont want to waste resources (legal economy)


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c. Has to be some kind of finality (otherwise, always litigating)

1. Finality sometimes is more important than getting right result

a. WRONGNESS is NOT an exception

Enforcement of Foreign Judgments - International

B.Hilton v. Guyot(1895)1. An action in personam by a foreign citizen in a foreign country against a U.S. citizen

a. French citizen sued two New Yorkers in France and won judgment

1. Frenchman then sued in New York federal court seeking enforcement

b. NB contrast - If had been an action in rem, then would have been binding

2. Holding turns on RECIPROCITY (comity)

a. France wont recognize U.S. judgments, so U.S. wont recognize Frances1. This comity wrinkle added since the judgment was one of a citizen of France

vs. a non-citizen (See Richman, 355)

b. Encourages France to recognize U.S. judgments

1. DISSENT - Urges res judicata

a. Looks at doctrine of finality and wasting of court resources on analready litigated issue

c. PROBLEM:

1. Sticking finger in own eye by not recognizing foreign judgment (not likely

France will now recognize U.S. judgments)

2. Whose decision should this be - courts or lawmakers? (foreign policy

decisions)d. NB AfterErie,Hiltonmay not be good law anymore

1. Federal courts now may apply state law in same situation

2. Many states have rejected this tit-for-tat principle

3. RULES discussed HERE:

a. Old Rule

1. Foreign ruling is prima facie evidence in favor of party seeking enforcement2. Does NOT prevent relitigation (ie, could relitigate)

b. New Rule (Story / Kent)

1. Prevents relitigation

2. ELEMENTS (General Requirements)a. Have opportunity for full / fair trialbefore competent jurisdiction

b. Regular proceedingsc. Due citation or voluntary appearance of defendant

d. System secure likely impartial administration of justice

e. NON-RECOGNITION IF (DEFENSES):

1. Court had no jurisdiction

2. Obtained through fraud

3. Theres a clear mistake / irregularity4. If not valid in foreign country, then dont have to recognize

4. Note discussion on PUBLIC POLICY

a. Court explains even though France does not allow cross-examination, allows hearsay

and permits unsworn testimony, these are not repugnant to U.S. sense of justice

5. Tahan v. Hodgson(C.A.D.C. 1981)a. Court upholds enforcement of default judgment which plaintiff obtained against D in

Israel

1. Though Israeli procedures different (eg., service of process), not enough to be

repugnant to U.S. public policy

b. Does not require reciprocity (even though it is present here)

c. SUMMARY OF THREE ISSUES RAISED HERE:1. Was there due citation to D?

a. Yes (personal service of process here)

2. Is enforcement of the default judgment repugnant to public policy?


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a. No (though rule different from FRCP, not violative of policy)

3. Is there a requirement of reciprocity?

a. No

C. Uniform Foreign Country Money Judgment Recognition Act

1. Foreign money judgments are enforceable2. APPLIES only to money judgments (not injunctions, child custody, alimony, divorces, etc.)

3. Most states have NOT adopted

a. Essentially this is a blackletter treatment ofHilton

b. Look for other state statutes, case law (MS uses case law)4. ELEMENTS for judgment thats NOT CONCLUSIVE - (BASIC REQUIREMENTS TO

MEET)

a. If jurisdiction does not provide an impartial tribunal

b. Foreign court did not have personal jurisdiction

c. Foreign court did not have subject matter jurisdiction

d. NOTE:

1. Nothing in UFMJRA prevents collateral relitigation of these issues

5. ELEMENTS for judgment that NEED NOT be recognized:

a. D did not receive notices of proceedings in sufficient time

b. Judgment obtained by fraudc. Enforcement is repugnant to public policy

1.Matusevitch v. Telnikoff(D.D.C. 1995)

a. Court holds a foreign-country judgment pursuant to libel standards

that are contrary to the libel standards of the United States would be

repugnant to the public policies of Maryland and the United States, and

thus would not be recognized under the UFMJRA

1. In so deciding, court has walked through the UFMJRA list,

finding the problem here with public policy2. Policy differences

a. Burden of proof between English and U.S. law

(falsity must be proved in U.S.)

b. Actual malice required in U.S. for this type of

claim (higher free speech values in U.S.)b. Just because English law different is not enough - must also be

REPUGNANT

1. Look to core values here and contrast

d. Judgment conflicts with another final conclusive judgment

e. Proceeding in foreign court was contrary to an agreement between parties (arbitration

agreement)

f. Seriously inconvenient forumg. OPTIONAL ADD: Reciprocity (as in Texas)

1. Same problems as discussed inHilton(should courts make this kind of public

policy decision?)

State to State Recognition of Judgments

D.Durfee v. Duke(1963)1. Court holds where Nebraska court determined that it had jurisdiction of a suit to quiet title to

bottom land situated on Missouri river, then Missouri district court was not free to determine

whether the Nebraska court had jurisdiction over the subject matterProcedurally how this worked:

a. Accretion (slow, gradual change - goes to other state) and avulsion (rapid change -

stays with original jurisdiction) is at issue hereb. Nebraska court first found it has subject matter jurisdiction and the river moved due to

avulsion (so land was in Nebraska still)

1. Final judgment entered enforceable


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c. In second suit in Missouri, the Court of Appeals finds Nebraska had no subject matter

jurisdiction (so no res judicata to first case)

d. Supreme Court reversed Court of Appeals

1. Once subject matter fully litigated, then binding

2. Required by Full Faith and Credit Clause

a. NB Contrast of mandatory Full Faith/Credit Clause here as opposedto foreign judgments, where not binding

1. If had been a Saudi Arabia judgment, then state court free to

relitigate whether Saudi Arabia had jurisdiction

2. Since state-to-state, then NOT free to relitigate jurisdictiononce it has been found

E.Fall v. Eastin(1909)

1. Court holds that judgment in Washington for divorce that included a direct affect to title of land

in Nebraska need not be enforced

2. The Land Taboorule

a. An F-1 judgment that purports to affect directly title to land located in F-2 ned not be

respected by F-2

3. NB Distinctions fromDurfeea. Land at issue here is definitely in Nebraska (contrasted with uncertainty inDurfee)

b. Here it is an order to transfer land (not a quiet title action like Durfee)

c. Parties here are wife vs. new buyer of land (not husband, who lost in divorce)1. Not res judicata if different parties

F. Chicot County Drainage District v. Baxter State Bank(1940)

1. Court holds the opportunity to raise a jurisdictional issue is sufficient to foreclose it later, even

if the issue is not even raised

a. General Rule: OPPORTUNITY TO RAISE will prevent subsequent litigation

2. EXCEPTION to general rule

a.Kalb v. Feuerstein (1940)

1. Court finds policy behind the subject matter issue here (federal-state relations)is sufficient to relitigate issue that already had opportunity for full litigation

2. Congress wanted federal jurisdiction automatically in bankruptcy matters

a. State court erroneously decided it had subject matter jurisdiction

b. Need to protect integrity of the federal policy from a possibly hostile

state judiciary was considered strong enough to overcome the generalrule of issue preclusion

Substantive Interests of the Enforcing StateG.Fauntleroy v. Lum (1908) (most important rule out there)

1. Court holds Mississippi courts cant deny judgment from Missouri court concerning futures

even though it was considered gambling in Mississippi

2. NO public policy exception to full faith and credit clause

a. (T)he judgment of a state court should have the same credit, validity, and effect in

every other court in the United States, which it had in the State where it was pronounced,and that whatever pleas would be good to suit thereon in such State, and none others,

could be pleaded in any other court in the United States. - Chief Justice Marshall

3. State doesnt have to give greater effect, but only as much as would same effect rendering state

would give it4. CONTRAST

a. RESTATEMENT 103(which is contrary toFauntleroy)

1. Judgment rendered in one state need not be enforced in sister state if suchrecognition or enforcement is not required by the national policy of full faith and

credit because it would involve an improper interference with important interests

of the sister State.

5. State cant craft legislation to say without jurisdiction

a.Kenney v. Supreme Lodge of the World(1920)


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1. Court held phrasing a failure to enforce another states judgments in terms of

a lack of jurisdiction in the enforcing court is not an adequate explanation

6. EXCEPTIONS

a. Penal judgments

1. If intent of judgment is to punish a party, then can deny enforcement

2. PROBLEMa. Unclear what are penal judgments

1. They are NOT (so must be enforced):

a. Punitive damages

3. POLICYa. Is not enforcing penal judgments good policy, considering sister state

may most want this enforced

b. Workers Compensation

1. Thomas v. Washington Gas Light Co. (1980)

a. Court holds full faith and credit clause does not preclude successive

workmens compensation awards, since a state has no legitimate

interest within the context of the federal system in preventing another

state from granting a supplemental compensation award when thatsecond state would have had the power to apply its workmens

compensation law in the first instance

b. NOTE difference from precedent1.Magnolia Petroleum Co. v. Hunt(1943)

a. Court held once choose forum for workers

compensation, then precluded from pursuing

elsewhere (essentiallyFauntleroy)

b. DISSENT in Thomaswants to keep this approach

2.Industrial Commission of Wisconsin v. McCartin(1947)

a. Court substantially overrules Magnolia, finding a

worker can pursue a compensation claim in a secondforum unless the first forums legislature has enacted

some unmistakable language forbidding

supplemental compensation

b. CONCUR in Thomaswant to use this approach

1. Plurality permits plaintiff to obtainsubsequent judgment in second forum for

damages exceeding first forums liability

2. What if company appeals to court, as

authorized by statute?

c. Four justice plurality applies a balancing analysis

1. Virginias interest in finality of award and wants to limitliability to employer

a. Court explains full faith and credit clause does not

preclude second forum from finding supplemental

award2. Both states have interest in providing adequate

compensationa. This interest is not inconsistent with allowing

supplemental awards

3. Virginia has interest integrity of judgment

a. Factual determinations in first forum are subject to

full faith and credit1. First forum cant find injured for four

weeks and second forum find five weeks

(must be same)


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b. Supplemental awards not inconsistent with this

interest

c. Four justice plurality removesMcCartinsunmistakable language

exception

1. Since claim is before administrative agency, and

administrative agency is not looking to substantive law fromsister state (ie, could not determine (or have authority to

determine) rights under sister states law); so no need to apply

full faith and credit to preclude seeking supplemental award in

sister state2. Workers filing such claims are usually not informed fully,

and may later want to file a second, supplemental claim in

second state

2. University of Tennessee v. Elliot(1986)

a. Court finds full faith and credit clause is not applicable to

unreviewed state administrative fact finding

c. Injunctions

1. A problem area2. Five justices believe there should be an anti-suit injunction exception to full

faith and credit ( a minimal 103 exception)

d. Defense of Marriage Act (1996)1. Relives states of duty to enforce judgments related to same-sex marriage

a. Distinguish fromFauntleroy- if had been marriage prior to DOMA,

then would have to enforce, but now dont

2. Argue for DOMA

a. Congress can change under Effect thereof part of clause

3. Argue against DOMA

a. Effects clause (of Article IV) cannot be read to undermine or

abolish the full faith and credit obligation (pg 688 - text)1. The effects clause gives authority only to implement the

constitutional provision, not to amend it

2. Article IV, Section 1

a. Congress may by general Laws prescripe the

Manner in which such Acts, Records andProceedings shall be proved, and the Effect thereof.

4. See alsoMiss. Code Ann. 93-1-1(b)

a. Any marriage between persons of the same gender that is valid in

another jurisdiction does not constitute a legal or valid marriage in

Mississippi

Enforcing States Law of JudgmentsH. Statute of Limitations

1. States divided over whether applying statute of limitation is on the meritsa. In MS

1. Can apply longer statute of limitations even if first forum has shorter statute

of limitations (ie, not on the merits)

b.MElmoyle v. Cohen(1839)1. State does not have to apply another states statute of limitations

I. Union National Bank v. Lamb(1949)1. Court holds a 1945 Colorado judgment reviving 1927 Colorado judgment on personal service

on defendant in Missouri must be given full faith and credit in Missouri court in which suit was

brought on the revived judgment, notwithstanding Missouri statute providing that judgment cannot

be revived after 10 years from rendition of judgment.


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a. Once the sister state had jurisdiction over the parties and of the subject matter, its

judgment was valid and could not be impeached in the State of the forum, even though it

could not have been obtained there

b. HERE - Even though suit could not be revived in Missouri, since it could be revived in

Colorado and was valid, then Missouri had to enforce

2. COMPAREa. In Mississippi

1. 15-1-43 (Domestic)

a. Judgment within state must be brought for enforcement within 7

years2. 15-1-45 (Foreign)

a. Judgment rendered without state shall be brought within 7 years

b. If D a Mississippi resident, then shall be commenced within 3 years

3. No other MS statute seems to authorize revival

a. However, courts allow revive if can commence a judgment within 7

years

J. Watkins v. Conway(1966)

1. Court finds Georgia statute requiring all judgment obtained out of state be brought within 5years after such judgments does not deny full faith and credit (or violate equal protection) even

though domestic judgments are valid for seven years

a. Cf. If sister state revived judgment and its valid, then Georgia must enforce2. All P has to do is go to Florida to revive judgment and then come back to Georgia to enforce

K.Hart v. American Airlines(N.Y. Sup. Ct. 1969)

1. Airline loses lawsuit in Texas and is sued by another P in New York. Airline claims no

collateral estoppel on liability in second suit since Texas law requires mutuality (same parties).

Court permits collateral estoppel

a. Full faith and credit does not preclude state from giving MORE effect to judgment

b. CONTRAST - If NY plaintiff had sued in Texas, then could not rely on collateral

estoppel2. CONTRAST

a.Migra v. Warren City Sch. Dist. B. of Educ. (1984)

1. Federal courts may not give a judgment greater effect than would the state

where it was rendered

L. Treinies v. Sunshine Mining Co. (1939) (Last in time rule)1. Court adopts the last in time rule - the second (or last, if more than two) of two inconsistent

judgments must be given full faith and credit

2. Court upholds Idaho judgment where, (1) Washington state court first held stepfather owned

mining stock then (2) Idaho court found Washington court lacked jurisdiction and then entered

decree that daughter owned mining stock. Idaho judgment was last.

3. BENEFIT OF RULE

a. Simplifies judicial administration - if third court is asked to look at judgment, it needonly inquire whether the last-in-time court had a valid judgment (ie, jurisdiction); if so,

enforce that

4. PROBLEM

a. Creating incentive to not enforce initial judgmentb. What happens when F-1 is also F-3 (being asked to enforce F-2); states resist, though

Supreme Court has indicated should enforce F-25. State courts

a.Parsons Steel v. First Alabama Bank(1986)

1. Court holds last in time rule applies to state courts too

2. Challenges to the correctness of a state courts determination as to the

conclusive effect of a federal judgment must be pursued by way of appealthrough the state-court system and certiorari from this Court.

Domestic Relations: A Special Problem of JudgmentsDivorces


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M. The Williamscases

1. Williams v. North CarolinaI (1942)

a. Supreme Court reverses bigamy conviction since not established conclusively that the

parties were not domiciled in Nevada (instead of N.C.) to get ex parte divorces

1. Had either party been domiciled in Nevada, then other states had to give full

faith and credit to divorce2. RULE: States must give full faith and credit to divorce decress from another

state when one party is domiciled there but other states determination is not

binding on non-domiciled parties

a. Also valid divorce is place of marriageb. Marriage was historically conceptualized as a res; States could get in

rem jurisdiction over it and enter a decree.

2. Williams v. North CarolinaII (1945)

a. Court upholds conviction since jury properly instructed that Nevada divorce judgment

could be found to be void only if the parties did not obtain bona fide domicile

b. CONTRAST

1. If North Carolina had determined Nevada had jurisdiction (ie., partiesdomiciled) then could not relitigate whether divorces valid

3. COMPARE

a. In Mississippi ( 93-5-5), must be a bona fide resident for 6 months prior tocommencing divorce (and not here just for purposes of getting divorce)

N. Ex Parte Divisible Divorce

1.Estin v. Estin(1948)

a. Court holds where wife obtained judgment in New York for separation and support,

and husband then obtained divorce in Nevada (without wife being served or present),

then Nevada had NO power to change New York award of support

1. Court makes divorce divisiblea. Gives effect to Nevada decree for divorce

b. Leaves in effect prior support award from New York (ie, Nevada is

ineffective on issue of alimony)

b. MODIFICATION TO WILLIAMS

1. Under Williams, give full faith and credit to divorce decree, but here: have tohave personal jurisdiction to change support order from prior court

a. To modify / eliminate without personal jurisdiction violates due

process

2.May v. Anderson(1953)

a. Ohio court was not required to give full faith and credit to Wisconsin divorce decree

awarding custody of minor children to their father where that decree was obtained by him

in ex parte divorce action in Wisconsin which had no personal jurisdiction over motherb. NOTE: how can get effective divorce, but theres property-like rights requiring due

process for the child custody matter

1. Also have to weigh in states interests in best interests of the child

2. We find it unnecessary to determine the childrens legal domicile because,even if it be with their father, that does not give Wisconsin, certainly as against

Ohio, the personal jurisdiction that it must have in order to deprive their motherof her personal right to their immediate possession.

O. Bilateral Divorce

1.Johnson v. Muelberger(1951)

a. Court explains where a decedent appeared in Florida court in divorce action by hissecond wife, and neither second wife nor decedent contested jurisdictional issues, then

decedents daughter would not be permitted by Florida law to attack the divorce decree as

beyond the jurisdiction of the rendering court so as to defeat third wifes widow rights to

decedents estate


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1. Second divorce valid since neither party contested jurisdiction

b. Non-party (daughter) is bound just as a party would be

P. Modifications: Child Custody and Support

1. Yarborough v. Yarborough(1933)

a. Consent decree in Georgia divorce proceedings fixing permanent alimony for minorchild held res judicata and entitled to full faith and credit

1. Daughter, in South Carolina, sought to have father pay more after divorce

decree entered; but prior non-modifiable award in Georgia

2. PROBLEMS:a. South Carolina also has interest in how much money daughter

receives

b. Daughter was not a participant in initial divorce proceedings which

set the permanent award

3. NB Not a big problem area today since most alimony awards are modifiable

a. Full faith and credit does not prevent modification of modifiable

award

4. Consider: 28 U.S.C. 1738A - FULL FAITH and CREDIT GIVEN TOCHILD CUSTODY DETERMINATIONS

a. Under federal law, states must enforce child custody and support

decrees from other states even when theyre modifiable.b. Courts may not modify a valid custody or support decree from

another state; they must enforce them according to their terms and not

modify a valid custody or support decree from another state, even when

its modifiable unless:

1. first state has lost jurisdiction

2. first state refuses to exercise jurisdiction to modify the

award.

3. second state has jurisdictionc. To get modifiable decree modified:

1. Go back to state issuing

2. Decree must be supported by jurisdiction and close

connection of child to home state as defined by statute

5. NB also: In MS, state uniform child custody act applies to foreign court order(Canada)

a. Foreign forum is res judicata (extendsDurfee reasoning to foreign

countries)

II. Choice of Law

TRADITIONAL APPROACHES AND FIRST RESTATEMENTTerritorial, vested rights, First Restatement

Approach still followed by some states and many foreign countries (though by 1970s, most states have

adopted something else)

I. General Policy of Traditional ApproachA. Fairness

1. May not be just to apply own law every time

2. Includes constitutional component (due process rights may require application of foreign law)B. Territorial

1. Since happened in another jurisdiction, should apply that jurisdictions law

C. Parties reliance / expectations

1. Parties rely on law of forum where occurred


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2. Something may be legal in one state but illegal in another; parties rely on that

D. Interests of state whose court is hearing the matter

1. Alabama court hearing a Mississippi matter may someday want the Mississippi court to apply

Alabama law (looking at states policy interests)

2. Other state interests

a. Interest of the state in which an action occurred in maintaining its sovereignty.b. Interest of the state in which an action is brought to bar parties from coming into the

courts of that state for the sole reason to take advantage of the law of that state. These

cases costs money and prevent other citizen from taking advantage of the court system.

II. TORTSA. Nonintentional Torts

1.Alabama Great Southern Railroad v. Carroll(1892) (LAST ACT NECESSARY rule)

a. Railroad employee, injured in Mississippi, could not sue in Alabama under Alabama

law where he had a contract, since the injury occurred in Mississippi and Mississippi

barred such a claim against employer

b. Case illustrates application of territorial approachc. NB Arguments

1. Tort argument

a. Apply MS law (where tort occurred)2. Employers Liability Act (Alabama statute)

a. Court holds statute applies only to injury within Alabama

b. Consider REST 398 - Compensation under Act of State of

Employment

1. Seems to envisage recovery, but language in restatementallows for court to interpret no recovery out-of-state (unless

the Act provides in specific words or is so interpreted as to

apply only to bodily harm occurring within the state 2. Court does NOT want inconsistent outcomes - permit

recovery in one state but not another (here, this is an

underlying concern)

a. MS would not apply ALA statute, so ALA cant

apply even in ALA court3. Alabama statute has been incorporated in contract in Alabama

a. Court explains since non-liability was never incorporated into

contract prior to the adoption of the Act, then cant presume withpassage of the Act it now is incorporated

2. SUMMARY OF BLACKLETTER RULES

a. REST 3771. Place of the wrong is in the state where the last event necessaryto make an

actor liable for an alleged tort took place (usually where the damage occurs)

Plaint.

Def.Contract

INJURY


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2. EXCEPTIONS

a. Poison

1. Place where harmful effect takes place

b. Deleterious substance

1. Place where substance takes effect

c. To land or chattels1. Place where force takes effect on land / chattel

d. Loss by fraud

1. Place where loss is sustained (not where fraudulent

representations made)e. Defamation (reputation)

1. Place where defamatory statement communicated

2. Still have uncertainty

a. Some jurisdictions require proof of damages,

others dont, so where apply?

B. Intentional Torts1. Same rules from non-intentional torts apply

2.Marra v. Bushee(D. Vt. 1970)

a. Court finds Vermont law applies, rather than New York where wife lived, in alienationof affection suit where plaintiffs husband lived and met mistress

b. Consider the interest:

1. VERMONTS: D (husbands mistress) lives here (permits cause of action)

2. NEW YORK: P (wife) lives here (no cause of action)

c. Test to apply

1. Lex loci delecti (place of the wrong)

a. Last event necessary for alienation of affection took place in

Vermont2. Court uses tentative draft of 406 (never included in final restatement first)

a. Rights incidental to relative status are determined by the law of that

state where the person in whom the right is asserted is at the time when

the right is alleged to have been violated.

d. Aside1. Case reversed on ground that place of wrong was factual question and should

be resolved by jury

III. CONTRACTSA. General issues

1. Concern of forum shopping

a. Unlike tort where P has little weasel room, in contract matters plaintiff may be able

to manipulate in which forum to have contract

2. Fairnessa. Dont want D to be able to breach in a friendly forum, leaving P without remedy

3. Whole idea of contracts is to create a private law to bind the parties ahead of time

B. Understanding basics

1. PLACE OF CONTRACTINGa. Governs almost everything about a contract (dominant rule)

b. When dispute about where, then factual determination for jury (see notes below for 1st

Restatement rule)c. NO CHOICE OF LAW exception under the Restatement First

2. PLACE OF PERFORMANCE

a. Governs how performance occurs

1. Manner of performance

2. Time and locality of performance3. Person or persons by whom or to whom performance shall be made/rendered


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4. Sufficiency of performance

5. Excuse for non-performance

C. Selected 1stRestatement Rules

1. GENERAL THEME IN FIRST RESTATEMENT

a. Last event necessary to make contract binding is place of law applied

2. Mail - contract completed by delivery ( 314)a. Place of contracting is where the document is posted or is received by the carrier

3. By Agent (delivered K by agent)

a. Place where agent delivered it

D.Poole v. Perkins(1919)

1. Court holds where married woman, incapable of contracting in the state of her domicile (TN),

executed and delivered contract in another state (VA), where she had a right to contract, then the

contract was governed by the latter state (and she could be sued)

a. Important facts:1. Note was signed and delivered in TN (where she had no capacity)

2. Note was payable in VA (where she had capacity and can be sued)

2. Court looks to INTENT of partiesa. (T)he law of the place with reference to which the contract is made, which is usually

the place where it is made, unless it is to be performed in another place or country, and

then the law of that country. - Prof. Minor

b. NOTE how prior rule applied here is not exactly the same as articulated in 1st

Restatement

c. Concern with intent

1. If were looking at intent, we should be trying to effectuate the intent of the

parties, not what law applies. Its awkward; that might be why its not includedin the First Restatement.

3. Summary of Rules possible to apply to determine CAPACITY:

a. Domicile of parties

b. Law of place with reference to which K is made

1. Court here adopts this rule2. Effectuates the intent of the parties (not what 1stRestatement does)

c. Law of place of contracting

E.Linn v. Employers Reinsurance Corp. (1958)

1. Court, applying 1stRestatement, finds law of the place of contracting is the place where the

contract is made (here, where it is accepted; ie, where the acceptance is spoken)

a. Jury determination of where acceptance is spoken2. The conflict is a Statute of Frauds issue

a. Under NY law, the contract would have had to have been to be performed within one

year of the execution.

1. From 1926-1953, the partiesperformed the contract; performance can take anoral contract out of the statute of frauds.

2. PA law would have taken it out of the statute of frauds b/c of performance;NY law would not have taken it out of the statute of frauds

3. NOTE CONTRAST

a. In the Restatement of Conflicts rule for telephones, the place of contracting is where

the speaking occurs, not where its heard

b. In Restatement of Contracts, contracts are made where the speech is heard.

IV. DOMICILEA. 1stRestatement Rules for Domicile


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1. Domicil is the place with which a person has a settled connection for certain legal purposes,

either because his home is there, or because that place is assigned to him by the law ( 9)

a. Domicil determined by the law of the forum

b. Everyone has a domicile

B. Determining

1. Today, just have to move with an intent to indefinitely stay to establish new domicilea. CONTRAST - Before had to move with intent to permanently stay

2. Childs domicile

a. Legitimate - then place of parents

b. Illegitimate - Place of mother at time of birth ( 14)3. Problem areas

a. Students, prisoners, armed forces

C. Elements of domicile

1. Physical presence

2. Intent to make it home

D. Hypothetical

1. If X is domiciled in Pennsylvania, then moves to West Virginia before moving back to

Pennsylvania and dying, then where is domicile?a. Likely still Pennsylvania (never had intent to make West Virginia indefinite home

b. Could go other way too

V. MARRIAGEA. General rule - If marriage is valid in forum, then it is valid everywhere

1. Flip: If not valid in forum, then not valid anywhere

2. EXCEPTIONS to general rule ( 132)- if marriage valid in forum, still invalid elsewhere if

marriage is INVALID in one partys domicile AND:

a. Polygamous marriage1. Natural law prohibition? Old Testament spoke of

b. Incestuous marriage

1. Natural law prohibition

c. Marriage between different races (overruled by U.S. Supreme Court inLoving)

d. Statutory prohibition (positive law)1. Marriage of a domiciliary which a statute at the domicil makes void even

though celebrated in another stateE. PUBLIC POLICY

1. A more frontal assault on marriage (not walking through 132 exceptions but

directly prohibiting

2. Note interest against public policy invalidation (to pause before doing so):a. If there are three wives and marriage invalidated, state may have to

support those three

B.In re Mays Estate (N.Y. 1953)

1. Court holds a marriage between an uncle and niece, valid in Rhode Island, is also valid in New

York2. Analysis

a. Court first looks to general rule: Marriage is valid in Rhode Island

b. Next, turn to exceptions

1. Natural law exception?a. Court finds this marriage is not repugnant to public policy

b. Marriage in accord with Jewish faith

2. Positive law exception?a. No extra-territorial statute in N.Y. prohibiting such a marriage

b. NB DISSENT - Argues only way to give N.Y. prohibition any teeth

is to apply it extra-territorially

c. NB: Miss. Code Ann. 93-1-1 doesnt leave any question that an

uncle/niece marriage is prohibited. What about the half-blood factor?The MS statute doesnt specifically mention half-bloods.


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C.Lanham v. Lanham(Wis. 1908)

1. Wisconsin woman, who divorced husband, went to Michigan to remarry older man in order to

skirt Wisconsin prohibition on remarrying within 1 year; court invalidates second marriage

2. Court gives extra-territorial effect to positive law prohibition on one-year restrictiona. (P)ersons domiciled in this state, and who are subject to the provisions of the law,

leave the state for the purpose of evading those provisions, and go through the ceremony

of marriage in another state, and return to their domicile, such pretended marriage is

within the provisions of the law, and will not be recognized by the courts of this state.

D. Same-sex marriages

1. States have passed positive law prohibitions

a. Congress, through DOMA, also sought limit states recognition of same-sex marriage

1. Question of DOMAs effectiveness not yet fully litigated

b. MS - 93-1-1 (restricts same-sex marriage)

2. Under the First Restatement approach, states w/o non-recognition statutes probably wont be

required to recognize same-sex marriages because of a strong Natural Law argument.

VI. REAL PROPERTYA. Generally

1. All substantive questions are governed by the law of the place where the land is

2. Exceptions

a. Interpretation( 214, 251) (only time deviate from everything rule of property)

1. If have pure question of intent, and law of state where land is does

not give operative effect either (incl. under doctrine of worthier title),

then look to:a. 214 looks at law of domicile of conveyor at time of

conveyance

b. 251 looks at law of domicile of testator at time when will was

made

c. POLICY1. Better place to look to understand what person meant is

domicile

B.Burr v. Beckler(1914)

1. Court holds note executed and delivered by married woman in state where she cant do that

cannot be enforced on theory that it would be enforced in her domicilea. Put another way: Woman is able to sign note in place where land is. She executes note

in place where she cant execute notes. Court explains note invalid.

b. Court is looking to law of Florida to determine validity of transfer of land in Illinois

C. Thomson v. Kyle(1897)

1. Court, consistent with Rest. 1, holds:a. Woman who has no capacity in her domicile to execute land transfer, but

b. Executes transfer for land in another state where she would have capacity, then

c. Transfer is valid because look to the law where the land is

VII. CORPORATIONSA. General rule

1. Apply the law of the place of incorporation

2. Internal Affairs Doctrine - requires that law of the state of incorporation should determine

issues relating to internal corporate affairs

B.McDermott Inc. v. Lewis(Del. 1987)


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1. Court applies internal affairs doctrine (law of place of incorporation in Panama) to allow

subsidiary to vote shares it held in parent company (even though such a vote would be invalid

under Delaware law)

C. Direct liability

1. For agents and directors ( 188) (piercing the corporate veil)a. State can impose liability on directors or agents of a foreign corporation doing business

in the statefor acts donewithin the state

1. EG: Della hypo - she makes muffins and sells them in foreign state, where

theres a poisoning - then D can be liable2. For shareholders ( 191) (piercing the corporate veil)

a. Liability for a shareholder for an act caused by a foreign corporation can be imposed

by law of state where act is done only:

1. If shareholder is domiciled in state

2. Shareholder has taken part in doing the act or causing it to be done

3. Shareholder has notice that corporation was formed to do business there.

a Ambiguous here - may only apply for notice at time of incorporation,

not for subsequent business

VIII. PERSONAL PROPERTY AND TRUSTSA. Inter vivos transactions

1. General rule - Apply law of place where chattel is at time of transaction

a. Parties can be domiciled elsewhere (does not matter)

B. Succession at death

1. General rule - apply land where decedent is domiciled (validity of will - 295) (or intestate

succession)

a. NOTE MS distinction - apply MS law on matters of intestate succession2. Interpretation of wills - absent controlling authority otherwise, look to law of decedents

domicile

C. Morson v. Second Natl Bank of Boston(1940)

1. Court holds inter vivos transfer, made in Italy for stock in Massachusetts, is valid transfer

(applying Massachusetts law) even though it would have been invalid in Italya. NB Shares of stock here not ordinary tangible chattels, according to court, so not

apply where paper is (Italy) but where stock interest is for corporation (Massachusetts)b. LEGAL INTEREST HERE

c. CONTRAST

1. EQUITABLE INTEREST

a. TRUSTS - Look to where chattel (trust property) is at time trustcreated

1. BUT NOTE: Questions of administration governed by law

of state where trust locates the administration

b. TESTEMENTARY - general law of testators domicile at time of

death2. Interpretation

a. Look to domicile of settler of trust at time of

execution of instrument that created it (usage at time

drafted)2. NOTE

a. Legal / equitable interest and chattels ( or not chattels) creates are for

manipulationb. EXAMPLE - Stock

1. Is that a legal interest or an equitable interest

D. Wills

1. No separate restatement for wills


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2. Generally - governed by what property interest is in will (governed by Restatement sections

dealing with that type of property at issue)

a. Real property - where the land is

b. Personal property - where decedent domiciled

c. Equitable interest - where testators domicile at death

3. Will-borrowing statutesa. Supplement validation of will (if will complies with law where testator domiciled, then

valid here)

b. MS has no will-borrowing statute

E.Hutchison v. Ross (N.Y. 1933)

1. In New York, court applies law of where the trustee is to validate a second trust created by

husband (which creditors sought to invalidate) and not invalidating a first trust (in Canada, which

under Canadian law can not be modified)

F. Wilmington Trust Co. v. Wilmington Trust Co. (Del. 1942)

1. Court, inconsistent with First Restatement, says Delaware law should apply when original New

York trustee (where trust created) moves to Delawarea. Contradicts First Restatement since should apply law where trust created (here, N.Y.)

IX. WRINKLES IN THE THEORYA. Lack of uniformity

1. Rules themselves are not universally applied

B. Rules themselves are different in application

C. Characterization

1. Renvoia. Occurs when have a conflicts case and apply whole law of foreign state

1. Also means to send to a third state

2. First Restatement general rule for renvoi:

a. Apply local substantive law (and notconflicts law) of other Statesexceptin cases involving

1. Validity of divorce decrees

2. Title to land.b. In re Estate of Damato(1965)

1. New Jersey court applies only Floridas local law (and not whole law) to

determine disposition of balance of a decedents bank account, awarding it to

sona. NB If had applied Floridas whole law, then it would have kicked the

law back to New Jersey (and would not pass balance to son) (NJ had a

traditional approach - look to law of place of trustee, who was in NJ)

b. But Florida had Trotten trust theory

1. Explains presumption of absolute trust at death2. Had to apply Florida law, or would be frustrating

decedents intent

c. University of Chicago v. Dater(1936)

1. Illustrates use of renvoi in contracts case2. Michigan court looks to whole law of Illinois (in contract case where D was a

Mich. woman and note was executed in Illinois)

a. Illinois, would in turn, look to domicile of woman for capacityb. Thus, Michigan wound up applying its own law to allow a coverture

defense to the woman under Michigan law that would have been

invalid under Illinois law

2. Substance / procedure

a. Forum applies procedure laws: 5851. Examples of procedure:


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a. Capacity of parties

b. Evidence rules

c. Burdens of proof

d. Joinder, counterclaim

e. Survival / revival

f. Equitable reliefb. Sampson v. Channell(1stCir. 1940)

1. Massachusetts federal court should apply Massachusetts burden for

contributory negligence instead of law of Maine, where tort occurred in Maine

but Massachusetts characterizes burden as procedurala. Note unusualness here: Since in diversity in federal court, federal

court must consider burden to be substantive (outcome determinative)

so it has to look to state law, which in turn considers it procedural

c. OLeary v. Illinois Terminal Railroad(Mo. 1957)

1. Court considers burden to prove P acted with ordinary care to be substantive,

thus governed by foreign law

2. Note inconsistency with Sampson (only reason: have two different courts

applying law)d. Grant v. McAuliffe(Cal. 1953)

1. Court applies California law for survival actions, analogizing it to statutes of

limitations, which are procedural and subject to forum lawa. CONTRAST - Under First Restatement, seems survival actions

should be governed by the place of the wrong, not the forum

e. STATUTES OF LIMITATIONS

1. Under First Restatement, treated as procedural, so forum law applies

a. EXCEPTIONS (substantive statutes of limitations)

1. When substantive effect of the statute of limitations is to

cut-off rightand not just time-bar (eg., adverse possession)

2. When time period for litigating a claim is made substantivecondition of the rightby law or statute (i.e.., a condition of

right)

a. Is it textually embedded in the statute

b. Not common

3. Statutes of reposea. Cut off remedy along with rights

2. Mississippi borrowing statute ( 15-1-65)

a. If foreign statute of limitations is longer than MS statute of

limitations, then apply forum law (MS borrowing statute only applies

SHORTER statutes of limitations)

1. NB exception for MS residents:

a. If cause of action accrues in their favor outside ofMS and is barred by foreign law but not MS, then

apply MS statute of limitations

b. Could be equal protection and privileges and

immunities issues here; as well as when is one aresident

b. If MS plaintiff1. Then always use the longer MS stat. of limitation, even if

time-barred in foreign jurisdiction

c. NB No will-borrowing statute in MS

3. Public policy exception

a. Defined1. (States) do not close their doors unless help (to the other state) would violate

some fundamental principle of justice, some prevalent conception of good

morals, some deep-rooted tradition of the common weal. (Cardozo) (pg 163)

b.Marchlik v. Coronet Insurance Co. (1968)


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1. Illinois court, finding direct-action statute of Wisconsin is substantive for

Wisconsin wreck, refuses to apply as repugnant to public policy

a. At time, only three states had direct action statutes

c.Holzer v. Deutsche Reichsbahn-Gesellschaft(1938)

1. New York court allows defense of Nazi under German law

2. Traditionally, public policy exception applies only to:a. Claims (not defenses)

1. Defenses dont have same public policy implications as

claims (immoral prosecution of claims)

2. Note if didnt allow defenses, then leaving without remedy,whereas on claims, if is against public policy, can always go

back to where happened and sue there

4. Penal law exception

a. Defined

1. (T)o be, in its essential character and effect, a punishment of an offense

against the public. (pg 171)

b. Cant enforce penal laws of one state in another ( 611)

c.Paper Products Co. v. Doggrell(1953)1. Court finds Arkansas law, which provided that a group which failed to

incorporate so under Arkansas law would be subject to joint-and-several

liability, is a penal law and not be enforced5. EXAMPLE

a.Haumschild v. Continental Cas. Co . (Wis. 1959)

1. Court holds that capacity for wife to sue husband is determined by domicile

of couple, not by location of tort

2. Note - trial court characterized as a tort case and applied law where tort

happened; appellate court reversed, characterizing issue as one for family law,

thus law of domicile

a. POLICY - Husband and wife probably expect domicile law to applyb. NB - Restatement would characterize as a tort

c. Additionally on renvoi

1. If had applied law of tort (Calif.), then Calif. would have in

turn looked to law of domicile to determine capacity to sue

hereD. Proof of foreign law

1. Old approach

a. Presumption that law is identical to forum law unless adequate proper proof

b. Proof of foreign law was a matter of FACT

2. Modern approach

a. Proof of foreign law is a question of law

1. No different than proving own states law (Miss. Code Ann. 13-1-149)a. Have briefs, arguments, citations to case law, etc.

b. FRCP 44.1

1. If raising foreign law, must

a. Give notice by pleadings (or other reasonable written way)b. Court may consider any relevant material or source

c. Treat as a question of law3. Tidewater Oil Co. v. Waller(10thCir. 1962)

a. Case illustrates what happens when no proof of foreign law, though trying to assert

foreign law (here, law of Turkey being used in Oklahoma court)

b. When NO PROOF, court has three options

1. Dismiss claim (P had the burden to prove law and didnt)2. Assume law of foreign country identical to forum

3. Indulge in some similarities (presumption of similarity, though not identical)

a. Tidewatercourt uses this approach


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c. If P is in home state, and D from foreign state, and wreck happens in Ps home state,

apply Ps state

1.Neumeier-like

d. In other situations when P and D are from different states, normally apply where wreck

happened unless there are relevant substantive law purposes to apply something else

without impairing smooth working of the multi-state system or produce great uncertaintyfor litigants

1. Generally like First Restatement approach (lex loci delicti)

3. Here, N.Y. has no interest (only D from there)

4. Possible, Canada has no interest either (so this could be an unprovided for case?)

E. Schulz v. Boy Scouts of America, Inc. (1985)

1. New York court, finding parties are co-domiciliaries of New Jersey but tort committed in New

York, should apply New Jerseys charitable immunity statute

a. Courts holding consistent withNeumeier

1. Those black letter rules formulated for guest statutes are generally applicable

2. Using a greater interest analysis

3. NB Since not enough contact between New York and the claim, then no needto look at whether the charitable immunity in N.J. is against New Yorks

fundamental public policy

b. New York has no significant interest in applying its law (permitting suit against thecharity for the sex-abuse) but New Jersey, which is a common domicile that has set up its

own loss-shifting rules for torts, has a significant interest1. NB Had New Yorks regulation permitting suit against charities been

conduct-regulating, the New Yorks interest would have been greater

a. But, rule considered merely loss-shifting here

1. Debate on whether to call something loss-shifting or

conduct-regulating (e.g., guest statutes are generally going to

be loss-shifting, but here the charitable immunity provision

may be conduct-regulating as well as loss-shifting)

apply NY apply Canada

apply Canada apply Canada

New York D Canada D

New York P

Canada P

New York P

Canada P

IN CANADA

IN NEW

apply NY apply NY

apply NY apply Canada (unclear)


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2. NB Uncomfortable rule here: Had the little boy been from New York, then all

of the sudden New York has a greater interest to protect; but not the same for a

New Jersey boy

c. Three reasons offered to sometimes apply forum law in cases like this (ultimately

rejected):

1. Protect local medical creditors2. Prevent injured parties from becoming public wards of the state

3. Deterrence

4. ANALYSIS

a. Court rejects first two because they are pro-plaintiffb. Also rejects deterrence, though seems strange (why is deterrence of

bad conduct less for non-residents)

2. Complication

a. The charity moved from New Jersey to Texas post-transaction. Now, the D is in

Texas, which has the same law as New York, and the parties do not share a common

domicile. Should the New York court, then, have applied New York law (the lex loci)

instead of New Jersey?

F.Padula v. Lilarn Properties Corp. (N.Y. Ct. App. 1994)1. New York court, finding rules regarding protective devices during construction were conduct-

regulating, applies Massachusetts law where injury occurred in Massachusetts but both P and D

are New York domiciliaries.a. Since conduct-regulating rules, then look to the law of the place of injury

2. Court explains its two-step analysis:

a. First, look at the interest of each forum by examining contacts

b. Second, look to see whether the purpose of law is conduct-regulating or loss-shifting

1. If conduct-regulating - apply lex loci

2. If loss-shifting - apply lex loci unless there is a common domicile between the

parties

II. INTEREST ANALYSIS

-Approach created by Professor Brainerd Currie

-Law is purposive in nature - those who made the law sought to serve various social goals

-Applying the law would achieve a policy goal sought by the sovereign which promulgated the law

A. Generally applying forum law (default rule)

B. Analysis

1. What are the interests of the different jurisdictions

2. If forum interest, apply forum law (even if there is a foreign interest too)

3. If NO forum interest

a. If there is a foreign interest, apply foreign lawb. If NO foreign interest, apply forum

c. If TWO foreign interests, then apply forum law

d. UNPROVIDED FOR - If NO interest by any state, apply forum law

C. Understanding terminology1. True conflict

a. Both forum and foreign state have interestb.Lilienthal v. Kaufman(Or. 1964)

1. Oregon court, finding D was an Oregon spendthrift who entered into a K with

a California P in California, applied Oregon law (preventing Ps recovery

against D b/c K was voidable under Oregon spendthrift law)

2. Conflict - California permitted K and Oregon didnta. So Oregon determines its policy precluding spendthrifts from

entering into contracts was more of an interest than Californias, so

apply Oregon law


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b. CONTRAST with First Restatement - would have applied law of

place of contracting (here, California, not Oregon)

2. False conflict

a. Only one jurisdiction actually has interest

3. Apparent conflicts

a. Unclear whether conflict or notb.Bernkrant v. Fowler (Cal. 1961)

1. California court applies Nevada law regarding oral K made in Nevada, where

P lived, and where the land was, although D died in California before fulfilling

promise of K and Californias statute of frauds would have invalidated the oralK

2. Judge Traynor determined Californias interest was to protect party

expectations in contract cases (here, the K was made in another state and parties

could not know the promisor might die in California)

a. Turns case into a false conflict

3. Case further illustrates how characterizing interest (here, partys expectations

rather than finding Californias interest was to prevent fraud by oral Ks, giving it

greater weight)a. California could also have determined statute of frauds was

procedural (so apply forum) instead of substantive, which allowed it to go to

Nevada4. NB - Under First Restatement, would apply law of place of contracting, which

would have been Nevada (so here it is consistent, just get there a different way)

4. Unprovided for cases

a. Apply forum

b.Hurtado v. Superior Court(Calif. 1974)

1. Court, in deciding which law to apply regarding limitation of recovery where

neither California or Mexico has interest, finds the forum law (California)

should apply2. Break-down of analysis:

a. Mexican residents sue in California against a California resident for

accident in California

b. Mexico imposes limit on recovery, but no interest here in limiting

recovery1. Note - Mexico could characterize its interest in limiting

recovery is aimed at ungrateful passenger (conduct-regulating)

and so becomes an interest for Mexican law to apply

c. Californias does not limit recovery, but this is a loss-shifting rule, so

no real interest in applying its law

1. Note: Could characterize as a conduct-regulating rule to

encourage safe driving and does create interestd. Court applies forum law (California)

D. Examining problems with Interest Analysis

1. Favors forum law

a. Promotes forum-shopping and makes hard to know as a potential D what law will beapplied

2. Unclear characterizing between conduct-regulating and loss-shiftinga. How define will often determine which law applies

3. Lack of uniformity

4. Lack of predictability

5. Unsatisfactory solutions in true conflicts cases (easy answer (forum), but not always clear

forum has most interest)6. Use of domicile

a. Is this fair? Not always clear where domicile is.


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III. COMPARATIVE IMPAIRMENT

-Promulgated by Professor William Baxter

-Variation on interest analysis

-Based on external objectives for each states policies to be recognized elsewhere

-Applying the law whose state policy would be most impaired if not applied

-SAME application of basic interest analysis EXCEPT for true conflicts

A.Bernhard v. Harrahs Club(Cal. 1976)

1. California court, finding Nevada tavern owner (D) served drinks to California P who was in

wreck in California, applies California law allowing recovery even though Nevada law wouldhave prohibited recovery

2. Analysis

a. There is a true conflict

1. So, turn to state law most impaired by non-application

a. Nevadas interest here is purely loss-shifting

b. Californias interest is both conduct-regulating (protect highways)

and loss-shifting (provide full compensation to P)

3. NB Under First Restatement, and regular interest analysis, California law would also apply4. CONTRAST

a. What if accident happened in Nevada and Nevada didnt advertise in California for

business?1. Harder to find Californias interest is more impaired than Nevadas in this

situation

B. Problems with approach

1. Comparative impairment only works when multiple jurisdictions adopt, not just one

a. E.G., If California adopts approach, but Oregon doesnt, then Oregon is in win-win but

California isnt (it cant control what Oregon will do or rely on Oregon to apply

Californias law when it would be most impaired)

2. Larger states have to adopt for the approach to matter much

IV. THE BETTER RULE

-Promulgated by Professor Robert Leflar

-Only a few jurisdictions have adopted this approach

A. Five choice-influencing considerations

1. Predictability of Results

2. Maintenance of Interstate and International Order

3. Simplification of Judicial Task

4. Advancement of Forums governmental interest

5. Application of the better rule of law

B.Milkovich v. Saari(Minn. 1973)

1. Minnesota court, finding both P and D are from Ontario and car registered in Ontario, applied

Minnesota law when accident happened in Minnesota and Minnesota had the better rule (noguest statute, opposed to Ontario which precluded recovery)

2. Analysisa. Walk through the five choice-influencing considerations

1. Predictability

a. Irrelevant in this nonconsensual transaction

2. Interstate system order

a. Satisfied as long as law of state with substantial connection wasselected

1. In looking at its connection, Minnesota finds in protecting

local creditors (if someone hurt in state, then will have to pay)


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(nb how this rationale turns every case into one where forum

has interest)

3. Simplification of judicial administration

a. Not problem here (either rule easy to apply)

4. Forums interesta. Here, Minnesota has interest (status as a justice-administering state)

5. Better rule

a. Minnesota finds its lack of a guest statute is a better rule

C. Problems1. Unclear what better rule is

a. If clearly a better rule, shouldnt all jurisdictions adopt

2. Should a forum apply a foreign law on basis foreign law is better rule

a. Shouldnt changing law be province for lawmakers if there is a better rule

V. RESTATEMENT SECOND - Most significant relationship test

-Completed in 1971

-Dont apply renvoi (look to local law)

A. Choice-of-law principles ( 6) (POLICIES)1. Follow statutory directives of state, subject to constitutional limitations

a. Adds very little

2. Needs of interstate and international systems

3. Relevant policies of forum

4. Relevant policies of other interested states and relative interests of those states

5. Protection of justified expectations

6. Basic policies underlying particular field of law

7. Certainty, predictability and uniformity of result8. Ease in determination and application of law

B. TORTS - Choice-of-law principles ( 145) (CONTACTS)

1. Presumptively apply law of place of injury, unless displaced by more significant relationship (146)

2. Apply local law of state with respect to each issue with most significant relationship to

occurrence and parties

3. FOUR FACTORS to consider from 145:

a. Place of injury

b. Place where conduct causing injury occurred

c. Domicile, residence, nationality, place of incorporation and place of business of partiesd. Place where relationship, if any, between parties is centered

4. For each one of the 6 factors, look at the contacts in 145

5.Phillips v. General Motors Corp. (Mont. 2000)

a. In answering certified questions, Montana court explains it has adopted theRestatement Second approach, and Montana law should apply to a suit involving injury

in Kansas1. P was a Montana resident, and Montana has interest in preventing defective

products from causing injury to its residents

b. Montana court emphasized the 6 policy factors to reach its conclusion

1. No need to do a public policy exception analysis under Restatement Second

(it would be redundant to most significant relationship test)6.McDaniel v. Ritter(Miss. 1989)

a. Mississippi court, finding Tennessee law should apply to almost all aspects of suit

involving TN plane, TN pilot, Miss. P, and crash in Missouri, holds that Mississippi law


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should apply regarding comparative negligence, rejecting Tennessees contributory

negligence (assumption of risk) standard.

1. In short, its a public policy exception b/c Tenn. has most significant

relationship to crash, but Miss. cant enforce Tenn.s law regarding assumption

of risk

C. CONTRACTS - Choice-of-law principles ( 186, 187, 188)1. FIRST QUESTION

a. Is this a K governed by the UCC?

1. If yes, then see flow chart:

2. If NOT a UCC contract, then APPLY forums general choice-of-law (e.g.,

Restatement Second)

b. Under UCC 1-301(c):

1. (T)he rights and obligations of the parties are determined by the law that

would be selected by application of this States conflict of laws principles.

2. Provision replaces UCC 1-105, which provided law of forum applies iftransaction bears appropriate relationship

c. If NO choice of law in K and under general choice-of-law under Restatement Second,

then:

UCC Contract

There is a CHOICE OF LAW in the contract NO CHOICE OF LAW in the contract

Is there a reasonable relationship between the choice of

law and matter?

Then apply FORUMs UCC (see UCC 1-301

below) (see also old 1-105 - appropriaterelationshi , then forum

Yes

No

Choice of Law is Valid

Not valid choice of law, so go to NO CHOICEOF LAW


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1. Restatement Second 188(2) CONTACTSa. Place of contracting

b. Place of negotiation

c. Place of performance

d. Location of the subject matter of the contracte. Domicile, residence, nationality, place of incorporation and place of

business for parties

2. NB Unclear 188(3)

a. If place of negotiation and performance SAME, then that local law

USUALLY will be applied

1. Is this a presumption? And if so, what kind?

2.Nedlloyd Lines B.V. v. Superior Court(Cal. 1992)

a. California court finds contract, specifying choice of Hong Kong law to govern andthere are significant Hong Kong contacts, should be governed by Hong Kong law (which

does not recognize breach of fiduciary duty or breach of implied covenant of good faith,

unlike California law)1. In the scheme of analysis, this follows:

a. Under Restatement Second (Non-UCC contract)

b. Could not have had this choice under California law (cant choose no

breach of fiduciary duty, etc.)

1. Still Valid unless:

a. No substantial relationship (there is in Hong Kong)

b. Contrary to fundamental public policy (Not a

fundamental policy for California)

Restatement Second

(NON-UCC Contracts)

Can you have a choice

of law in this contract? No choice of lawfor this contract

Yes No

Then validchoice-of-law

Still valid choiceof law, unless:

No substantial relationship

to transaction and noreasonable basis forchoice

Contrary to fundamental

public policy of state with

materially greaterinterest

Look to most significantrelationship (188(2)

contacts


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c. So, Hong Kong law validly chosen and applied

3. When chosen choice-of-law in contract CONTRADICTS contract

a.Kipin Industries, Inc. v. Van Deilen Intern, Inc. (6thCir. 1999)

1. Court, finding parties chose to have no liens which directly contradicted

chosen Illinois law, assumes there is NO choice of law for that provision and

goes under Restatement Second (most significant relationship test)a. In scheme of analysis:

1. When contract contradicts choice of law, assume NO

CHOICE, then apply Restatement Second

a. Dont invalidate, simply assume no choiceD. WRINKLES

1. Forum-Selection Clauses

a. Permissive forum-selection clause

1. Basically creating jurisdiction for a dispute

a. Courts honor

2. Does not preclude jurisdiction elsewhere

b. Mandatory forum-selection clause

1. Restrictive clause requiring disputes to be in certain jurisdiction2. Trend to enforce today as long as reasonable

a. Historically, disfavored

2. DomicileImportant factor in Restatement Second

1. After-acquired domicile

a.Reich v. Purcell(1967)

1. California court, finding Ds were domiciled in Ohio at time of Missouri

accident before moving to California, are subject to Ohio law; in short, court

wont consider after-acquired domicile to determine what law applies

a. Both parties were in Ohio at time of accident

b. Although Ds moved after the fact, Ohio had strongest interest(California applying an interest analysis for this choice of law)

c. NB Accident was in Missouri, but under this interest analysis, dont

always apply law of place of wrong (here, the rule in play was a loss-

shifting limit on amount of damages, so Missouri had little interest)

b. Jurisdictions split on whether to consider after-acquired domicile1.Miller v. Miller(N.Y. 1968)

a. New York court, finding D moved to N.Y. after an accident resulting

in death, chose to apply New Yorks wrongful death (with no limit on

damages) instead of Maines (limited damages), finding no evidence D

moved there for a more favorable legal climate and Maine had no

interest in nature of recovery awarded

c. Concern with after-acquired domicile1. Forum-shopping

a. But consider: How would a court know intent of move (engaging

in a kind of psycho-analysis)3. Renvoi1.Pfau v. Trent Aluminum Co. (N.J. 1970)

a. Court, finding P is a domiciliary of Connecticut and has interest in applying itspassenger-can-sue statute, applies Connecticut local law instead of its choice of law

(which would have picked Iowas law, where the tort occurred)

b. BREAKDOWN of analysis

1. Suit brought in New Jersey (domicile of D)

a. P wants Connecticut law to applyb. D wants Iowa law to apply b/c it has guest statute

1. Tort occurred in Iowa

2. Connecticut has interest in seeing its P compensated for injury

a. So, court decides Connecticut has strongest interest


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3. D argues should apply Connecticuts WHOLE LAW (which would include its

choice of law, which would pick the lex loci as law to apply (here Iowa))

4. Court rejects D, applying only the local substantive law of Connecticut

a. New Jersey has no interest either in applying or not applying guest

statute

b. NB Irony - if suit had actually been brought in Connecticut, then thechoice of law would have been Iowa and P would have lost; (same if

suit brought in Iowa)

5. Case is consistent with RESTATEMENT SECOND

2. Scholarly considerationa. Argument out there that court should consider states whole law when determining

interest

1. EG: If look to state to see interest, and state itself would apply another states

law, then that should weigh to diminish the interest

b. Many courts, unlikePfau, do look to the whole law for interest

4. Statutes of Limitations

1.Ledesma v. Jack Stewart Produce, Inc. (9thCir. 1987)a. California court, finding tort occurred in Arizona, D was in Arkansas, and California

had little interest in applying its own one-year statute of limitations, applied two-year

statute of limitations of Arizona1. Arizona has greater interest in its law applying

a. Regulating conduct of roads

1. But this statute of limitations could be characterized as a

loss-shifting rule, and diminishing Arizona interest (versus an

arguably stronger California interest in finality and access to

courts in its one-year statute of limitations)

b. NB Court here is not starting off with whether this is procedural or substantive, but

instead engaging in a comparative impairment analysis right from the beginning (Nosubstance or procedure characterization)

1. CONTRAST - In Mississippi, would first characterize as substance or

procedure and apply accordingly (here, stat. of limit is procedural, so apply

Miss. law)

2. Mississippi only gets to Second Restatement when substantive (whenprocedural, apply Miss. law)

a. NB The Miss. borrowing statute would NOT apply in this type of

procedural situation (only substantively)

3. Mississippi borrowing statute

a. Adopt foreign statute of limitations when:

1. Cause accrues outside of state

2. And is time-barred by that jurisdiction3. And is NOT a MS plaintiff (who gets benefit of longer MS

statute of limitations)

2. 142 STATUTE OF LIMITATIONS (presumption for forum in conflict)

a. Unless exceptional circumstances for claim against defense of statute of limitations,court will apply:

1. Its own statute of limitations barring claim2. Its own statute of limitations permitting claim UNLESS:

a. Wont serve any substantial interest of the forum

b. Claim would be barred under the statute of limitations of state having

more significant relationship to parties and occurrence

5. Substance / Procedure

1. (T)he traditional rule that the procedural law of the forum should apply seems quite consistent

with interest analysis and its cousins.

2. Issue: Whats procedural and whats substantive

a. PROCEDURAL


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1. Rules having to do with how the forums courts handle cases are procedural

b. SUBSTANTIVE

2. Rules having to do with how cases come out

6. Public Policy

1. Jurisdictions split on whether this analysis would be redundant with interest analysis

SUMMARY OF BASIC CHOICE-OF-LAW INQUIRY

1. What choice-of-law does jurisdiction apply?

a. First Restatement

b. New York approach

c. Interest analysis

d. Comparative impairment

e. Better Rule

f. Restatement Second most significant relationship test

2. What states law should apply?

3. Is that law constitutional?

III. Erie, Federal Torts Claims Act, and Federal Choice of Law

A. Federal Torts Claims Act

1.Richards v. United States(1962)

a. Court explains under Federal Torts Claims Act the law of place of act/omission

means apply the WHOLE LAW (which includes choice-of-law)

b. Court applies whole law of Oklahoma where negligence occurred in Oklahoma but

plane crashed in Missouric. Statutory language of FTCA unclear, so court just picked whole law (ie., court finds

Congress wanted a flexible rule to apply as it would if it were two individuals involved)

B.Erie Railroad v. Tompkins (1938)

1. Federal courts must follow the rules of the states in substantive matters

a. As a matter of forum-shopping:

1. Applying state substantive law still leaves open forum-shopping from state-

to-state

2. BUT it takes away forum-shopping between state court and federal court in

same state

2.Hanna v. Plumer(1965)a. If federal rule is procedural, then apply federal rule

3.Klaxon Co. v. Stentor Electric Mfg. Co. (1941)

a. Court holds federal court must apply states choice-of-law, not follow its ownconception of the better view

b. Here, lower court should have applied conflict-of-law of Delaware (and only go to

New York law if the Delaware conflicts stated to) in a breach of contract action broughtin Delaware

c. EXCEPTION TOKLAXON

1.Ferens v. John Deere Co. (U.S. 1990)

a. Court holds transferee forum (from a 1404 transfer) must apply law

of transferor court regardless of which party initiates transfer (here, P)

1. Can create problem of forum-shopping2. BUT


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a. If dont allow, Ps will still go to distant forums to

litigate

b. Would lead to other complications (what happens

if court transfers on its own, or both parties move to

transfer)

3. Van Dusen v. Barrack(1964)a. Already had held if D transfers, still apply

transferring courts law

2. NB If transfer for any other reason than 1404, then NOT within exception

Constitutional LimitationsC. A look at the various clauses in play:

Due Process

Clause (in 14th

Amendment, 1)

Prohibits States from

depriving

Persons Life, liberty,

property

Equal Protection

Clause (in 14th

Amendment, 1)

Prohibits States from

depriving

Persons Equal protection of

the laws

Full Faith andCredit Clause (in

Art. IV, 1)

Mandatory States give FullFaith and Credit

To Public Acts,Records, Judicial

Proceedings

Privileges and

Immunities

Clause (in Art.

IV. 2)

Mandatory States entitle Citizens of States

(means natural

persons, not

corporations)

To Privileges and

Immunities in the

several states

Commerce

Clause (in Art. I,

8)

Mandatory Congress shall

regulate

Commerce with

foreign nations and

among several

States

Due Process issue

D.Home Insurance Co. v. Dick(1930)1. Court finds Texas statute void in its application to a Mexican contract (made and performed in

Mexico)

a. Texas would strike down contract provision limiting suits to be brought within one

year (must have at least two years under Texas law)

b. Contract specified only one year1. Court voided Texas law, in part, because it would have expanded obligations

under the contract

2. Understanding the constitutional issue: its a due process violation to apply Texas law

a. If Texas statute applied, then there would have been breach and a taking of property

from Mexican D once reduced to judgment, thus resulting in a due process violation3. Result from this case is still looked upon favorably (though no clear-cut rule here)

Full faith and credit issue

E.Pacific Employers Ins. Co. v. Industrial Accident Commission (1939)

1. Court finds California can apply California law where worker injured in California, even though

worker was from Massachusetts, had a K with employer in Massachusetts, and Masschusetts lawsaid it was the exclusive remedy for such workers comp claims

2. Court explained once it found California had some substantial interest (here, worker hurt there),

then it could apply its own law (in fact, either state in this situation could have applied its own law

and not been in violation of the full faith and credit clause)


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3. Full faith and credit does not here enable one state to legislate for the other or to project its

laws across state lines so as to preclude the other from prescribing for itself the legal consequences

of acts within it. - from opinion

Due process and full faith and credit issues

F. Watson v. Employers Liability Assurance Corp. (1954)1. Louisiana court can apply direct-action statute against Massachusetts insurer (where contract

with insured made) since state had significant interest in tort that occurred within Louisiana and P

is domiciled in Louisiana

2. As long as state interest, within full faith and credit and due process restrictions


G. Clay v. Sun Ins. Office, Ltd. (1964)

1. Court holds Florida law can apply in action involving a Florida P and loss of boat in Florida,

although K with insurance company was made in Illinois and P lived in Illinois at time K signed

a. Reasoning:

1. Insurance company knew P had moved to Florida with boat

2. P is a citizen of Florida3. Insurance company licensed to do business in Florida

4. Loss in Florida

2. Court focuses on state interests herea. If state interests are too slight, then due process kicks in

1. Here, though, state interests are significant

3. Conflict in law here:

a. Under Illinois law, suit had to be brought in 12-months under the K

b. Under Florida law, any restriction on suits less than five years was null and void

1. Contrast withDick

a. No contacts analysis in that earlier case, but upon reflection, Texas

had no contacts with the parties


NOTE: Due Process and Full Faith and Credit are tested by single, same test

H.Allstate Insurance Co. v. Hague(1981)

1. Court holds Minnesota court, in considering wreck claim from Minnesota accident, couldstack three insurance policies issued in Wisconsin for Wisconsin domiciled resident and despite

fact Wisconsin forbids stacking.

a. NB Minimum contacts for personal jurisdiction are NOT same as significant contacts

or significant aggregation of contacts for conflicts analysis

2. No due process or full faith and credit clause violations

a. Court identifies THREE contacts with Minnesota to establish significant contact or

significant aggregation of contacts creating state interest that was neither arbitrary norfundamentally unfair. (thus, it was constitutionally permissible)

1. Hague commuted to work in Minnesota

2. Allstate did business in Minnesota

3. P, Hagues wife, became a resident of Minnesota before filing suita. No indication she moved there just to sue

3. Minnesota is using the better rule approach herea. NB Had Minnesota been under either First Restatement, Second Restatement then

claim would have been brought in Wisconsin

b. Even if Minnesota has a poor choice of law, that does not render it unconstitutional

4. Implied sub-rules forAllstate(if it expands a contract, then no)

a.Home Ins. Co. v. Dick(1930)1. Single contact with Texas (domicile of P) was purely formal contact and not

enough to establish significant contact

b.John Hancock Mutual Life Ins. Co. v. Yates(1936)


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1. After-acquired domicile in Georgia was not enough contact to apply Georgia

law to New York contract

a. Could there be some different result for a tort?

I.Phillips Petroleum Co. v. Shutts(1985)

1. Court finds application of Kansas law to investors claims, when 97 percent of investors had no

connection to Kansas, violated due process and full faith and credit clausesa. Court notes OK for Kansas to exercise jurisdiction for this class-action

b. But Kansas cant apply its law to all of the claims

1. EG Texas, with Ps there, may apply different rate of interest on claims than

Kansas would2. Given Kansas lack of interest in claims unrelated to that State, and the

substantive conflict with jurisdictions such as Texas, we conclude that

application of Kansas law to every claim in this case is sufficiently arbitrary and

unfair as to exceed constitutional limits. - opinion Judge Rehnquist

J. Sun Oil Co. v. Wortman(1988)

1. In same fact situation asPhillips Petroleum, lower court deftly concluded that all other states

with interest in the royalty litigation would apply the same liability rules as Kansas, so it waspermissible to apply Kansas law - UPHELD by U.S. Supreme Court

a. By finding as it did, lower Kansas court crafted a false conflict with other states, so

avoiding constitutional issuesb. U.S. Supreme Court only reviews misconstructionof other states laws to see if it

contradicts clearly established law

2. Statute of Limitations

a. Lower court also applied its own statute of limitations (5 years) to all of the claims,

even though many of the claims would have been time-barred in other states - UPHELD

by U.S. Supreme Court

b. Statute of limitations reasoned to be procedural issue, governed by forum law

c. NB how majority opinion distinguishes Substantive versus Procedural forconstitutional issues

1. CONCUR (Brennan) - Applying Allstate, determines contact state has with

claim simply being there creates sufficient procedural interest to apply its own

limitations period (a functional approach)

Obligation and the Right to Provide a ForumK. Door-closing problem

1.Hughes v. Fetter(1951)

a. Court holds Wisconsin could not refuse to enforce Illinois wrongful death claim based

on Wisconsin statute that recognized only Wisconsin deaths under the statute (which the

lower court incorrectly reasoned created a public policy for recognizing wrongful deaths

elsewhere)

1. Refusing to enforce Illinois statute violated full faith and credit clausea. Full faith and credit bars door-closing when its just because cause of

action is from another state

b. NB distinction if had been Canada

L. Reverse door-closing problem1. Tennessee Coal, Iron & Railroad Co. v. George(1914)

a. Court holds P can sue in Georgia court under an Alabama statute that stated use of the

statute must be brought in a court within Alabama (ie., cant stop other states from

enforcing same liability elsewhere)

1. In short, Alabama cant force Georgia NOT to take the cause of action

M. Sovereign Immunity

1.Nevada v. Hall(1979)


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a. Court holds doctrine that no state may be sued in its own courts without its consent

affords NO support for a claim of immunity in another sovereigns courts

b. Analysis

1. Nevada employee (from university) goes to California and has wreck

a. Being there enough to establish in personam jurisdiction in

California2. California court applies California law in action

a. Nevada argues its own sovereign immunity limit for damages should

be applied under the full faith and credit clause and argues under the

11thAmendment1. Court holds nothing in 11thAmendment prevents state-to-

state suits in state court

2. Court holds full faith and credit does not require application

of Nevada law

3. Essentially, NO SOVEREIGN IMMUNITY must be

recognized in sister

Conflicts of Law - Hoffheimer

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