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Conflict of Law

I. INTRODUCTION -TRADITIONAL APPROACH


A. TRADITIONAL THEORY
1. Vested rights theory (Beale):
a. The 1st Restatement, which represents the traditional approach, adopted a territorially-focused
"vested rights" approach. This theory directs the forum in every case to apply the substantive
law of the state in which rights of the parties vest.
b. Methodology
(1) The forum ct. must first characterize the lawsuit (e.g., tort, contracts, property)
(2) Next, the forum ct. must localize the significant event or
thing in a particular jurisd. and apply the choice of law rule of that state
(3) Distinguish between substantive and procedural law (apply
substantive law (i.e., rule regarding liabilty), but not procedural (i.e., manner of proof
(4) Ascertain the consequences and decide whether
application a particular jurisd. laws would be violative of the public policy of th efourm.
Alternatively, the ct. may re-characterize the subject matter to arrive at different choice of law
rules.
(5) The ct. may also consider whether to follow the other jurisd.
conflict of law rules (renvoi) (rare, but may play role in policy oriented approaches.
c. Example
One would apply the law of the state where
the injury occurred in a tort case, or where a contract was made, or where the alleged
breach of contract occurred.

d. Criticism: The traditional approach has been criticized as mechanical, leading to hardship and
unjust results (see, e.g., Levy v. Daniel's U-Drive; Alabama Great Southern) and as ignoring
many important policy considerations. However, a significant number of states continue to
adhere to it.
e. Advantages: provides predictability and certainty, and thereby reduce forum shopping.

Alabama Great Southern RR v. Carrolll


facts: P (Carroll) was injured by RR. P was a citizen of Alabama; RR is corp. of Alabama. RR stretches across
several states. He was a brakeman on train running form AL to MS. K formed in AL, but injury caused by
link in two cars, suffered in MS. Evidence showed the link was defective when it left Birmingham. Shown
to be the duty of employees to check the link. Not clear where between Birmingham and MS link broke.
Duty of conductor to inspect and apparently there was a negligent omission to perform their duty.
- Under fellow servant doctrine: employer was not liable for negligence of
employee caused to another employee
- MS had fellow servant doctrine, but AL did not follow it.
- P had made prima facie case under AL employment law. The point when link
broke, if it broke in MS, would look to MS law under vested rights theory.
issue: What law should apply? Can there be recover in one state for injuries to the person sustained in another
state, unless the infliction of the injuries is actionable under the law of the state in which they were
received?
held:No. (p.6) The fact that created right to sue transpired in the state of MS. It was therefore in that state that the
C/A necessarily arose from that state. Negligence does not result in a C/A until there is an oinjury.
note: Transitory action v. local action - if a person is in CA and there is an accident there, and he goes back
to NY to have his doctor work on it. Wants to sue tortfeasor in CA. Suppose he finds that this person
who caused injury is in NY for vacation and tries serving him in NY. B/c it is a transitory action, you can
sue in any state where you can find D). But if it involved land, must go back to where land is (e.g.,
automobile crashes into house after losing control of car), thats a local action.
Suppose person had layover in airport, is that good service? Yes. Transient
jurisdiction(Burnham v. CA; Grace - served person while flying over a particular state)
Transitory right of action, maybe enforced in any other state or country where
comity admits of it. This P has no C/A and hence theres no rights that are enforceable.

Levy v. Daniels U-Drive


facts: Levy (P) a passenger in an car rented from a CT rental wa injured when the car was involved in an
accident in MA. He sued for damages in CT, where he sought to apply CT law. Under MA, P could not
maintain an aciton under the state's tort choice-of-law rule, the place of injury governs all issues.
Host statute - if giving person a ride. Driver cant be sued if there is a host
statute. Could a ct. be justified in saying that if a guest is non-resident, we wont given him any
right to recovery (apply host statute). But if hes one of our citizens, we wont apply our host statute.
With a borrowing statute, ct. could borrow statute of another state. Ct. could borrow statute of
another state to reach fair result.

issue: Does liablity arising out of a K depend upon the law of the place K, unless the K is to be performed or to
have its beneficial operation and effect elsewhere, or it is made with reference to the law of another
place?
held:Yes. A liablity arising out of a K depends on the law of the place of contracting, unless the K is to be
performed or to have its beneficial effect elsehwere. The purpose of the CT statute was to protect
highway users by urging renters to make their vehicles available only to cautious and able drivers.
Levy's being injured determined his identity as a beneficiary and his right of action. While Levy's
complaint alleges tortious operation of the car, his right to sue can be characterized to arise upon the
contract, wherein the choice of law rule is determined by place of contracting.

e. Note 2: one problem w/ allowing forum to always supply its own laws - the outcome can differ
where case brought (outcome determinative). Fairness demands that outcome should not
differ. Traditional choice of law thinking placed high value on:
1) uniformity of results
2) predictability, and
3) discouraging forum shopping.

these factors, suggest that same law should be applied


regardless of where case brought.
Does not answer, though, why MS law should be applied. The
place of wrong seems rather weak as basis of decision (for example, what if he lives in GA w/
family in GA, maybe should use GA law). We should take into consideration other factors.

f. Other important things to take into consideration:


reasonable expectation
deterrence on Ds bad conduct
- Suppose MS had abolished fellow servant rule and AL had
preserved it. In that case, P could recover under MS, but not under AL law. Wouldnt the
threat of liability change the RR conduct in AL? A factor that should enter into
consideration is will a decision in favor of the P in some way deter acts of the D (another
factor). If there is liability, and have choice of law on place of wrong, and a decision that
will deter D in some way from repeating actions that lead to harm.
g. note 5: why wouldnt it be appropriate for AL to award damages to AL
citizen who is negligently injured anywhere? AL has no jurisd. over the D.
h. note 6: it can be difficult to reconcile the principle of exclusive territorial sovereignty with the goal
of having courts in every state apply the same law in a particular case?

584 Determination of whether question is one of procedure: The ct. at the forum determines according to its own
conflict of law rules whether a given question is one of substance or procedure

585 What law governs proceducre: all matters of procedure are governed by the law of the forum

594 Mode of trial: the law of the forum determines whether the issue of fact shall be tried by the ct. or by a jury

B. SURVEY OF ESCAPE DEVICES


(ways to escape what may be unjust result normally reached by the traditional conflict of law theory)
1. Characterization
a. Process where factual situations are classified to fit an established legal category. Its significanvr
varies with the different choice of law rules applied.
b. B/c most choice law rules are judge made, they have great discretion in identifying
("characterizing") the subject matter of the case as being contract, tort, etc. Cts. often characterize
facts so as to ensure a just result.
Levy v. Daniels U-Drive
facts: Two CT rented cars in CT. They drove to MA, where they had an accident. Under vested theory, MA law
would apply, and rental car agency would have no C/A.
held:Ct characterized this as a K case, instead of a tort case, thereby enabling CT law to be applied.

Haumschild v. Continental Cas. Co.


facts: Huamschild (P) a WI resent sued her former husband (WI) (D) and his insurer for personal injuries
suffered in a CA auto accident though his negligence. Under CA law (situs of the accident), interspousal
suits were prohibited. P appeal on the grounds that WI law should apply.
issue: Should the law of the domicile be applied in determining any issue of incapacity to sue based upon
family relationship?
held:Yes. The immunity issue is not a question of tort law, but one of capacity to sue and be sued, which is thus
determined by the law of the family domicile. Rights, duties, disabilities and immunities conferred or
imposed by family relationships should not vacillate as families travel across state borders.

The new rule should not be applied on the basis of CA conflict of law principles (though CA law
embodies the new rule) in order to avoid the renvoi problem. In abolishing renvoi, where the substantive
law of another state (CA) is applied, that state's conflict of law principles must be excluded. Accordingly,
WI conflict of law should be applied.

2. Classification substance or procedure


a. Since the forum is required to apply on the substantive law fo the jurisd. choen, it is free to apply
its own procedural law. Thus, if the law otherwise applicable involves a SOL, SOF, burden of
proof, etc. the forum may choose to regard the issue as "procedural" to escape applying another
jurisdiction's law
substance: all issues that might materially affect the outcome of a case
procedure: house rules of litigation that
have little bearing on the outcome of the on case, and that for reasons of convenience and
practicality is governed by forum law.
b. The determination of what is substance/procedure is made by the forum according to its own
standards.
c. criticism: the discretion of cts. to characterize matters as substantive or procedural has too often
given a forum means to apply its own law and avoid the impact of a rigid choice of law rule,
which some judges feel compelled to give lip service to.
d. burden of proof: under Restatement 2d, burden of proof is generally procedural unless the ct.
finds that the primary purpose of the other state's rule is to affect the decision of an issue (e.g., a
statute has been enacted in a specific case to change the burden of proof).
e. Stat. of Fraud: the question of formalities is normally treated as substantive, particularly where
necessary to uphold a K. Cts. usually appy the statute in effect in the state that has the most
significant interest or relationship to the formalities issue.
Cts. will often refer to which law will uphold the K (Bernkrant v. Fowler)
UCC - formalities are governed by the SOF
in the state having "apprporiate relation to the transaction"
f. Stat. of limitations: traditionally treated as procedural even though it has a material effect on the
outcome of a case.
criticisim: encourages forum shopping
since it allows a P to take the case to antoher forum a sufficiently long SOL to bring suit,
and is unfair to the D when the forum from where the substantive law would be used
would cut off the asserted C/A
exceptions:
1) Special limitations
period: when action based on a foreign statute contains its own specific limitation
rule, the forum may treat that limitation is substantive.
2) borrowing statutes:
3) tolling statutes:
g. Measure of damages: traditionally the measure of damages and any conditions or limitations on
recoverability of damages will have an important effect on the outcome of the action. Thus,
ordinarily, it should be treated as "substantive"
Often, for public policy reasons though, a
ct. may refuse to apply another's more restrictive laws, and characterize the laws on the
measure of damages as procedural (Kilberg)
Modern trend is to refer to the state that
has the most significant interest or relationship to the question of damages

Kilberg v. Northeast Airlines (6, p. 54)


facts: Kilberg (P) brought suit for damages arising out of contract from purchasing a plane ticket when his
intestate, a passenger aboard a Northeast (D) plane crashed. Under MA law, a common carrier's liablity
for negligence was limited to no more than $15,000 whereas NY had no limitation. The trial ct. held the
P could sue in contract and thus the law of NY, place of contracting, would govern rather than MA, the
place of injury.
issue: In determining the choice of law, should the measure of damages be treated as a procedural question
controlled by the policies of the forum state?
held:Yes. NY has a strong public policy against limiting wrongful death damages. Wherre a plane fortuitously
crashes should not be limited simply b/c it crashes in one of 14 states which limits damages. In
determining choice of law, the measure of damages should be treated as procedural, and thus
controlled by the forum state. The forum need only enforce the substantive portion of the MA
determining whether a tort has occurred. (bifurcating analysis of damages from conduct giving rise the
C/A).

Grant v. McAuliffe
facts: Grant (P) and two others were injured in AZ in a car accident that was driven by Pullen, who died of his
injuries. P filed an action in CA against against McAuliffe, Pullen's administrator. D contended that AZ
law should apply (under AZ law, a tort action does not survive the tortfeasor). The trial ct. dismissed.
issue: Does the law of the ofrum govern whether an action against a tortfeasor survives his death?
held:Yes. The authority on the issue of whether the survival of an action against a tortfeasor is substantive or
procedural is mixed. This ct. believes that the law should be characterized as procedural because
survival is not an essential part of the C/A but relates to the procedure available for its enforcement.
Basically, the question is one of administration of decedents' estate.
dissent CA survival statute creates a right of recovery where one would otherwise not exist, so it should be
considered substantive.

Bournias v. Atlantic Maritime Co.


facts: Bournias (P) brought suit in US fed. ct. against Atlantic Maritime (D) for unpaid wage benefits he
claimed was owed to him under Panamanium labor code. The suit was brought beyond the SOL of the
Panamanium code. Atlatnic moved to dismiss as being barred by the SOL.
issue: Can a foreign SOL be enforceable as substantive law in the forum if it extinguishes the right sued upon
rather than merely barring remedy?
held:Yes. Generally, SOL is treated as procedural. An exception to this rule exists, however, when the right sued
upon is so interconnected with the right that the limitation is thought to extinguish the right rather than
merely bar the remedy. Rather than see if the foreign state views its SOL as substantive or procedural,
the better apporach would be to examine if there is specific SOL engrafted onto the specific right sued
upon. Here, the specific right sued upon is covered only by a general SOL for the entire labor code,
with certain specific rights within the code exempt from the general limitation. Thus, the ct. finds that the
limitaiton is procedural, and the suit is still maintainable under th forum SOL.

3. Renvoi: where renvoi might lead the forum to apply its own internal law, it could be used as a
means of avoiding the application of foreign law. Renvoi may arise when the choice of law rules of the
forum refer a matter to a foreign law, and the forum decides to apply the whole law (including its choice-
of-law rules), the choice of law rules of the latter forum may refer the courts to the original forum's law
(creating ping-pong action or renvoi)
a. Definitions:
whole law: all the laws of a forum, including its conflict of law rules
internal law: all the laws of a forum except the choice of law rules
remission: the other state's choice of law rules refer the forum back to its own laws
transmission: the choice of law rules in the other state refer the froum to a third state
b. Majority view: reject the renvoi and look only to the internal law of the second state.
Restatement 1st: authorizes reference to a
jurisd. whole law only in cases dealing w/ title to land or w/ divorce
criticism: test is unacceptable b/c it meant always
and never - no guarantee when renvoi would be applied (p. 69)
c. Partial renvoi: forum accepts the renvoi or reference back from the foreign conflict of laws rule,
but only to local interna law.
Example: State A's forum looks to state B's
whole law. Pursuant to B's laws, which would decide the problem by reference to State A's
laws or (or laws of a 3rd state), State A will hold that B's reference to A's laws is only to to
A's internal laws rather than to its choice of law rules which would bounce the issue back
to B.
d. Whole renvoi: if the forum conflict of law rule dictates that the foreign whole law be looked to, the
forum ct. looks to the choice of law problem as the foreign ct. would. If the foreign ct. would refer
back to the forum's law, including its choice of law rules (which would then bounce the case
back to the foreign forum), the forum should accept this last bounce only to the extent of using
the foreign state's internal laws. (In re Annesley)
The local ct. usually ends up applying the
foreign jurisd. internal law (the same result as if it had rejected the renvoi)
Occasionally, if the foreign forum refers
only the local forum's internal laws, then the ct. may end up applying its own local law. (In
re Schneider)
whole renvoi offers the advantage of
encouraging unformity of decision by forcing a local ct. to decide the matter as the foreign
ct. would. For this very reason, the Restatement 2d, which generally rejects renvoi,
accepts the whole renovi approach as to issues involving title to land or testate and
intestate succession to movables ( 223, 260, 263) Renvoi will be applied whenever the
objective of the particular choice of law rule is that the forum reach the same result on the
facts involved as the foreign forum

In re Schneider Estate
facts: P was a naturalized American citizen, domiciled in NY county when he died. Under regular conflicts law
of NY, apply NY county law to govern will or estate if there were no will. The leading estate was real
property in Switzerland. He wanted to dispose in manner contrary to Swiss internal law. The right to
land could not be disinherited from his heirs. Under law of situs, must look to place where land is
situated to determine what the law is.
issue: Where the disposition of real property is to be determined by a ct. foreign to the situs of the property
upon the death of the owner, must the forum ct. be bound by the local law of the situs w/o regard to the
conflict of law rule of the situs?
held:No. Testamentary plan was valid even if its application to Swiss law would hold it invalid. Swiss ct. would
refer to NY internal law to stop renvoi. He could do whatever he wanted, unencumbered by Swiss law.
notes: (Griswold) If another ct. in this case our own, is thrust into a position where it is obliged to adjudicate the
same quesiton concerning title to land, it should be guided by the method which would be employed in
the country of situs. The fortuitous transfer of the problem to cts. of another state by virtue of a post-
mortuary converiosn of land ought not to alter the character of the legal relations which existed wrt to
the land at the date of death.

In a case like this, to determine the answer to the problem, look to see if there is treaty w/
Switzerland. Treaties Now Enforced - published by govt. There was a enforceable treaty.
Nonetheless, the court seemed to have overlooked the easy solution to the problem.

e. Renvoi has not found widespread use in US. Nevertheless, it remains active. Under the the
FTCA, the govt's liability shall be determined by "the law of the place where the act or omission
occurred." This provision has been held to require reference to the whole law of the place or
omission. Thus, when a case comes under FTCA, always keep in mind that renvoi may very
well result in rule of decision in that particular case.

wouldnt it make more sense to enter into treaty w/


various foreign countries so that whenever this problem comes up, it should be decided
according to treaty to set forth what parties think is just. (better solution). If applicable law
would offend morality of forum, then it should be something that it would not accept.

Aside: liquidated damage clause - damage given by K in event of breach.


- if a K is breached, is the other party discharged from performance? Yes. P wanted more than liquidated
damages. In a K, there are two rights. Primary and secondary rights. The primary rights would be that the K be
peformed. The secondary right is in the event of breach, then damage or specific performance is entitled to P.
Once P is discharged by breach, then every bit of K falls to wayside, but liquidated damage falls w/ rest of K,
therefore they should be able to gain as much as the damage regardless of K provisions. Cts. agreed.

two exceptions to 1934 Restatement - see notes


In re Annesley (p. 68)
facts: Britiish subject domiciled in France. In England, refer to decdents domicile at death. France however,
followed nationality principle. Thus, the place the where litigants was national would control. French
court couldbreak circle by accepting reference and applying French law.
Partial renvoi- apply english law, depen on where case brought
held: Complete renvoi - ct. used this

4. Public policy
a. Traditional rule: the 1st Restatement provided that a forum state was not required to entertain
foreign causes of action that were contrary to its strong public poilicy. Since the general
Restatement theory rested on the theory that cts. would enforce rights that had "vested", the
public policy exception was limited to situations that would violate some "fundamental principle
of justice, good morals, or deep rooted tradition of the local jurisdiction." (Loucks)
Thus forum cts. generally allowed recovery
on debts arising from gambling done in another forum where legal, even though gambling
was illegal in the forum of the ct. (Intercontinental Hotel)
Nonetheless, cts. have refused to enforce
rights arising under a foreign forum on the grounds that they violate public policy (Mertz v.
Mertz)
Mere lack of any similar c/a in the forum
alone does not justify its refusal to enforce a foreign right. If the forum's choice-of-law
refers to a foreign law, the fact that the foreign law creates rights different from or
dissimilar to those recognized in the forum is immaterial.
the overwhelming number of cases which
have rejected foreign law on public policy grounds are cases with which the forum had
some important connection.. (n. 7, p. 78)

Loucks v. Standard Oil


facts: intestate (NY) traveling in MA was run down and killed b/c of negligence of defendants servants.
Decedent left behind wife and children in NY. There was cap of $10K that could be levied on D and a
short SOL in MA. Wrongful death suit was brought in NY based on MA wrongful death statute. D
moved to dismiss copmalint on the grounds that the MA statute was penal in anture and therefore
unenforceable in NY.
issue: When will we not enforce the law of another state (excluding penal law)? May a right created in one
state by statute be enforced in antoher state if the enforcement would not violate the public policy fo the
forum and underlying statute is not penal in nature?
held:Yes. (p. 70)
1) Ct. While this statute is penal in the sense that damages are awarded on the
basis of the D's conduct rather than the P's measure of damages, the right is private and therefore
the statute is not penal in the international sense.
2) Enforcement of the right would not violate the public policy of NY b/c this state
recognizes the right of survivors to recovery for wrongful death. The fact that our statute differs in
the mode of recovery does not madke the MA sattute wrong. There is no express strong public
policy against enforcing MA law, and it is not penal in the international sense.
Note: A state will not enforce penal law of another state (could be a fine, murder charge). What is penal law,
however, can differ from state to state. Whether a statute is penal depends on the type of liablity it
creates. Where the penalty is award to the state or amember of the public is suing in the interest of the
whole community to redress a public wrong, the statute and/or recovery is penal.

What is public policy? Cardozos formulation in Loucks is the classic defintion of public policy.
It is likely the law today.

Mertz v. Mertz
facts: Wife (P) trying to recovery in NY for damages from hubbys negl. operation of a vehicle while in CT. NY
had a statute which prohibited a suit by one spouse against the other to recover damages for personal
injury. CT had no such statute.
issue: May "public policy" be used as a basis for denying enforcement of a sister state's statute, where such
public polic is not enunciated in the forum's constitution, statutes, or judicial record.
held: No. While the term "public policy" is ill defined, it properly must be represented by the forum's
constititon, statutes, or judicial records. It cannot mean merely the forum cts own notion of expediency
or justice. NY's public policy is to incapacitate one spouse from suiting the other without regard to the
underlying merit of the case. CT annot impose its own policy to the contrary on NY.

Holzer v. Deutsche Reichsbahn-Gesellschaft


fact: A K was made by P w/ German corp for employment. Germany adopted a law prohibiting employment of
Jews. D release P, and he sued for a sum upwards of $50K on the ground that he was wrongfuly
discharged. In addition, he sued German govt for incarceration in concentration camp.
issue: Should company be liable b/c of edict of German ct.? No, despite repugance to our sense of public
policy. In an action based on the breach of an employment K, may it be raised as a defense by the
employer that such breach was mandated by law?
held:Yes. The law of the country where a K was made must be respected by the courts of a forum state. Here,
the country of Germany not only permitted breach, but mandated it. Therefore, as a matter of law, the K
could have been breached.
note: Can Mertz and Holzer be reconciled? Perhaps dsitinguishing one as the law of a sister state while the
other was the law of another nation

Intercontinental Hotels Corp. v. Golden


facts: Someone went to gamble in Peurto Rico, and he ran up a bill. He ran to the U.S. Casino is suing in NY,
which has a law against public gambling.
issue: Can the P recover? p. 78
held:Yes. Action is permitted. How do you reconcile this policy against gambling, yet enforcing recovery of the
debt incurred by gambling in place where it was valid?

b. "Most significant relationship" approach: the 2d Restatement continues to flatly prohibit against
enforcement of foreign law contrary to the forum's strong public policy with the same narrow
scope of application.
c. Policy oriented approach: does not use public policy as a "defense" against enforcement of
foreign law, rather public policy is used affirmatively to determine whether forum law should be
applied in the first place.

5. Penal Laws
a. Traditional approach: historically, a forum has refused to enforce claims "characterized" as
arising under the penal laws of another state. A penal law in the conflicts sense, awards a
penalty to state or to a public office in its behalf or to a member of the public suing in the interest
of the whole community to redress a public wrong. Huntington v. Attrill p. 79. The ct. dismisses,
leaving litigant to sue elsewhere.
thus, very few non-criminal claims can be
refused to be enforced on the ground that they are penal
whether the foreign statute is penal is
determined by the forum (not bound by the characterization of the enacting state.
1st restatement - provides that no foreign
penal action can be maintained to recover a penalty
what about antitrust law for treble damages? Private remedy is not penal.
- civil rights of one state enforceable in another state? E.g. harassment
b. "most significant relationship" approach: 2d restatement similar states that no action will be
entertained on a foreign penal cause of action
c. Why shouldnt state assist another state in the enforcement of a penal law designed to further
govtal interest?
according to Hand (p. 81), to pass upon the
provisions for the public order of another state, should be beyond the powers of a court. It
involves the relations between states which cts. are incompetent to dea, and which are
intrusted to other authorities.

6. Tax laws: traditionally laws characterized as foreign revenue laws were treated the same as
"penal laws" (e.g., not enforceable in the forum state)
a. While the S.Ct. held that FFC had to be given to a foreign judgment for taxes due, it left open
the question whether a tax claim arising under a foreign law could be rejected in another state.
(Milawaukee County v. M.E. White)
b. Many state cts. now entertain actions brought by another state to collect taxes, based on the
need for reciprocal relations among states. Unlike an attempt to enforce a penal law, a tax claim
does interfere w/ the prerogatives of the foreign state b/c the foreign state is the one that wants
to sue. In addition, concerns re: retribution are irrelevant b/c the tax laws are not passed to
punish people, and factors of trial inconvenience and cost are no more than any other transitory
action. Moreover, a rule against enforcing foreign revenue laws encourages willful dishonest tax
evasions.
c. Some states though, will not enforce the revenue laws of another state justificiation b/c they
purportedly affect a state in matters as vital to its existence as criminal laws. (n 2, p. 82)

7. Depecage: under the modern approaches to conflicts of law, rather than employing the broad
characterization process of the traditional approach, modern cts. tend to focus on particular issues
involved. The laws of different state may govern the resolution of the different issues presented in the
case creating the situation known as depecage
a. Example: the forum ct. might apply the law of the state of injury to determine whether the D's
conduct was negligent and the law of the forum to determine the degree of the D's liabilty.
b. Depecage offers the advantage that where a D would not be liable under the whole law of either
state, could be held liable where the laws of both states are applied on different issues.

C. PLEADING AND PROVING FOREIGN LAW


1. Traditionally, the content of foreign law, even that of a sister state, was considered a question
of fact. If a party asserted a claim or defense under foreign law, he was required to plead and prove that
law as if it were a fact (e.g. by bringing an expert witness to testify).
2. Modern practice: American cts are empowered to take judicial notice of the law of sister states
under the Uniform Interstate and Internation Procedure Act (UIIPA)
a. When considering the laws of a foreign nation, some states still require pleading and proof the
foreign law as it were a factual issue. Other states have adopted the Interstate and International
Procedure Act, which permits cts. to determine the foreign law as a matter of law.
b. Possible consequences of failing to prove foreign law:
1) Dismiss the suit b/c the P has not made
out an essential element of the case the law of the place of the wrong (Walton v. Arabian
American Oil Co.)
2) Apply presumptions: rather than dismiss,
presume that the law of the other state is similar to its own and apply its own law.
3) Apply the law of the forum: a few cts. and
commentators advocate applying the forum's own law on the theory that the parties either
acquiesced in that law or waived the right to rely on the foreign law by failing to prove it.

Art. IV of the UIIPA:


4.01 [notice] A party who intends to rais an issue concerning the law of any jurisd. outside this state shall give notice
in his pleadings or other reasonable notice.

4.02 [materials to be considered]: the ct. may consider any relevant material or source, including testimony whether
or not submitted by a party or admissible under the rules of evidence.

4.03 [ct. decision and review]: the ct. not jury, shall determint eh law of any govt. outside this state and shall be
subject to review on appeal.
FRCP 441 - adopts substantial identical provisions in UIIPA

Walton v. Arabian American Oil Co.


facts: In fed. ct. based on divesity. Trial ct. looked to NY rules on conflict of laws. P, an American, was
injured when he was by car owned by D and driven by one of Ds employees. D is a corp. incorporated
in DE w/ extensive business activity in Saudi Arabia. Under NY law, P has burden of showing what
foreign law is all about.
issue: Must judge take judicial notice of foreign law?
held:In Siegelman - ct. had decided it could take judicial notice of foreign law which had been neither pleaded
nor proven. Justified b/c it involved english law, which could be easily comprehended. Not true here.
note: Sometimes, cts. will assume, where foreign law has not been proven, it will assume that local law is
the same as foreign law.

(Currie) p. 89 - if foreign law is not established, then the natural and moral thing a ct to do is to
apply its own law b/c no one has shown why it should be displaced. Nevertheless, if the P does not
convince the ct. that a foreign law gives him a right to relief, then really he has failed to state a claim
upon which relief can be granted.
II. MODERN APPROACHES TO CHOICE OF LAW
A. STATUTORY APPROACH
1. Although choice of law rules are for the most part contained in CL, if the forum has a statutory
rule, it must follow the directive assuming it is constitutional
2. Is it better that statutes set standard or let CL fumble upon solution?
a. Advantages: gives certainty and predictability
See, e.g., UCC 1-105 (1) (p. 91) - When a transaction
bears reasonable relationship to this state or to another state, the parties may agree which law
should apply. Failing to make such agreement, the act applies to transactions bearing an
appropriate relation to this state.
b. Disadvantage - Not always useful tool always b/c court must still characterize issues to select
appropriate choice of law provision
3. Examples:
a. Federal Tort Claims Act (FTCA): subjects the US to liablity where the "US, as a private person,
would be liable to the claimant in accordance with the law of the place where the act or omission
occurred." The Act has been interpreted to require application of the whole law of the place
where the D's acts or omissions occurred.
thus, fed. cts. hearing claims under the act
must look to the choice of law theory adopted where the tortious event occurred (achieves
a result similar to that in Klaxon, which directed fed. cts. hearing diversity cases to apply
the conflict of law rules of the state in which the fed. ct. sits.
b. Borrowing statutes: many state have enacted special SOL that "borrow" the limitations period of
the place where the C/A arose or where the D resided, to prevent forum shopping. Otherwise,
adherence to the general rule that the forum should apply its own SOL would encourage P's to
seek out the forum w/ the most liberal SOL period.
Essentially, it recharacterizes the limitation question as substantive
Borrowing statutes also facilitate docket clearing.
Sometimes, states will borrow a more
liberal statute if it involves a domicilary of the forum state (under the premise that the
substantive law of the state should govern the merits of the case, the limitations law of that
state should also apply)
- under 142 of the 2d
Restatement, the forum should apply its own SOL barring a claim "unless
exceptional circumstances of the case make such a result unreasonable." Most
authorities supports the view that the SOL of the forum provides an ultimate outer
limit upon the period within which suit may be brought in its ct. (such as where
through no fault of the P, no alternative forum is available). This has been
criticized by Leflar b/c such statutory rule fails to take into account concerns of
justice (p. 95)
c. Tolling statutes: suspend the running of a SOL against out-of-state defendants.
enacted to ensure that the P is not deprived
of a reasonable opportunity to sue b/c a time ran while the D was beyond the reach of
service
usual view is that reference to the limitation
period of a particular forum includes references to any tolling provisions of that forum.
It can lead to a situation where a P can
bring an action well after an "action has arisen". Arguably, it seems that long arm statutes
subjecting D's to personal jurisd. could eliminate this problem that is meant to be
addressed by the tolling statutes.
d. UCC: 1-105 permits parties to agree contractually that the law of a particular state will govern
their rights and duties. The agreement will be recognized as long as the transaction bears some
"reasonable relation" to the state or nation selected. Failing such agreement, the Act applies to
transactions bearing an appropriate relations to this state.
incorporates two modern choice of law tests:
1) most significant relations test
2) governmental interest analysis
the problems remains that the court must
still characterize issues to select the approprirate choice of law provision.
Effect of a borrowing statute on a K
governed by 1-10591) of the UCC (some cts .have ignored the K'ual choice of law on
the ground thatt he forum borrowing statute required the ct. to apply the shortest SOL).
Skinner v. Tober
facts: Skinner (P) a CT resident bought an airplane from Tober (D), a MA corp. Negotiations and all instrument
sin connection with the purchase occurred or were exectued in MA. P was to pay $200/mo on the K. B/c
the plane developed significant engine problems that Skinner could not afford to pay to fix, he sought to
return the plane and cancel the deal. Tober orally agreed to reduce the payments to $100/mo.
However, by the end of the year, Tober demanded that Skinner increase the payment back to $200.
After Skinner continued paying only $100, Tober repossessed the plane and sold it to a 3rd party.
Skinner brought suit for damages in MA, which Tober appeals, contending that CT, not MA law should
apply.
issue: When a transaction bears a reasonable relation to the forum state and also to another state, and the
parties have not agreed as to which law should govern their rights and duties, should the law of the
forum state be applied to transactions?
held:Yes. MA law applies. The parties did not agree that CT should apply and the transactions bore appropriate
relations to MA. Tober's argument that the law of the debtor's place of business should apply as to
questions of validity and the perfection of a security interest is w/o merit b/c a security interest is not
involved here. In the absence of a showing that the oral modification occurred outside of MA, MA law
should apply, which conforms to the UCC. Under UCC 2-209(1), consideration is not needed to make
oral modification of the contract valid. As the modification a valid, Tober had no right to repossess.

United Counties Trust Co. v. Mac Lum, Inc. (deciding whether a transaction bears an "appropriate relation" under
1-105)
facts: A KY corp. sold and then leased back restaurant equp located in one of its GA restaurants. The
buyer/lessor was a NJ corp. and the agreement was negotiated and executed at the home offices of the
two companies.
held:Noting that the only nexus w/ GA is the location of the equipment, the ct. held that the transaction bore an
appropriate relation to KY or NJ but not GA.
note: Comment 1-105 (p.92) states that "the mere fact that suit is brought in a state does not make it
appropriate to apply the substantive law of that state. The provision has been read to incorporate botht
the 2d Restatement most signficant relationshipo test and interest analysis approach.

B. MOST SIGNIFICANT RELATIONSHIP APPROACH (2D RESTATEMENT)


1. Overview:
a. The Restatement 2d rejects, on the one hand, the rigidity of the territorial focused approach of
the 1st Restatement. On the other hand, it does not engage in open-ended interest analysis or
share in the forum-bias of that approach. Its goals, like the traditional approach, are
predictability, uniformity of result, and prevention of forum shopping.
b. While accepting some of the traditional rules in some areaa of law, it primarily provides criteria
and approach designed to lead to the formulation of narrow, issue-oriented rules. In the areas
that call for abandoning the traditional rules, the Restatement 2d calls for identifying the "place
of the most significant relationship."
2. Choice of law factors: (Rest. 2d 6)
a. Need of interstate and international systems: consider desire to harmonize relations and
commercial intercourse between states and nations.
b. Relevant policies of forum: identify the purpose of the forum's law to see whether that purpose
would be furthered by applying that law in the instant case.
c. Policies of other states involved and respective interests in having their policies applied: analyze
the purposes behind the laws of other interested states to ascertain whether those purposes
would be furthered by application of their laws.
d. Protection of justified expectations: in K (only), examine the parties expecttations as to what law
would govern their affairs.
e. Basic policies underlying the particular field of law: the choice of law decision should reflect the
basic policies underlying the particular field of law involved. (e.g. validating K when possible is a
basic policy of K law)
f. Certainty, predictability, and uniformity of result: preferred over negative factors such as forum
shopping
g. Ease in determination and application of law to be applied: matter of convenience, and should
not outweigh the goal of attaining a desirable result. May discourage application of esoteric law,
especially that of a foreign state.
3. Specific contacts for each kind of problem: the most significant contacts will depend on
the specific problem being addressed. For example, deciding whether a D's conduct is negligent finds
the most significant contact probably rests with the forum where the D acted, but wrt damages, the most
significant relationship may be at the palce where the injured party was domiciled.
Many of former rules recommended by the 1st Restatement bceame reduced to
presumptions that identify the state most likely to have the most significant relationship in a given
situation
4. General analytical approach:
1) choose a presumptively applicable law under the appropriate jurisdiction selecting rule
2) test this choice against the principles of 6 in light of relevant contacts
identified by the general provision like 145 (torts and 188 (contracts).

In practice, cts generally identify the state w/ the most


significant relationship not in terms of specific contacts, but w/ reference to governmental
interest apprroach (see below)

5. Criticism: the analysis based on the relative "significance" of contacts is relatively unhelpful
since the ct. will generally look the choice of rules determine the significance of the contact. Moreover,
different cts. may conclude differently as to what is "significant."
Judge Fuld advocated the center of gravity theory (states w/ the most
contacts) (p. 117) Another way of saying as looking upon conclusive the partys intention or place
of king, but instead on the place which has the most signicant contact in the matter of the dispute.
On the one hand, the 2d Restatement reduced certitude and left the answer to very
specific problems very much at large. On the other, the approach accords greater sensitivity in
judgement to important values that were formerly ignored.

Consider Alabama v. Carroll - between AL and MS, coupling broke. Deciding


which state has the most significant contact? RR made many stops. Should hold AL as relevant
law b/c this man should be compensated (this seems to be an important factor to consider
according to JL). (not clear where negligence occured). A more significant contact than simply
where injury occurred should be examined.

Compare better rule approach for K: choose state which would have upheld
contract. Why should we uphold a will? If a choice of a forum in a trust has been made, what is
basis for upholding that choice? Look to see if state has substantial relations to the trust. See
Shannon

6. Pervasive problems
a. Subject matter characterization: continues to part of the Restatement approach
b. Substance/procedure dichotomy problem remains
the question of SOF is governed ( 141) by the law selected
by the applicaiton of 187-88 (choice of law rules for K, either the law chosen by teh parties, or
absent a choice, the law of most significant relationship)
For SOL, 142 was revised to select the law applicable to
the limitation issue (i.e., depecage) in accordance w/ the general principles of 6. In general, in
the absence of special circumstances, forum law should govern.
c. Renvoi: Restatement 2d advocates the limited use of another state's conflict laws ( 8), when:
i) the objective is to reach the same result as
another state, apply that state's conflict rules
ii) the forum has no or little connection with
the parties or case, and other interested states would select a particular state's law, do as
they would do (describes in essence a "false conflict" situation)
d. Public policy of the forum: while not expressly mentioned as a reason for not applying an
otherwise applicable law, the relevant policies of the forum and other interested states will be
considered as part of the initial choice of law

C. GOVERNMENTAL INTEREST ANALYSIS


1. Overview: seeks to find a solution to the particular case, even issue-by-issue by looking at
the potential applicable lawas and asking what purpose(s) ("policies") they seek to further, and then
determine how these policies would be advanced by the application of one state's law over another.
a. Developed largely as a reaction against the traditional approach, which required a forum to
apply a particular state's law w/o regard to whether its underlying policy would be furthered.
Thus, a forum, under the traditional approach, could be placed in the irrational position of
denyings its own legitimate governmental interests in applying its local laws w/o advancing the
govt'al interests o the state whose laws were applied.
b. Currie suggested that the forum ct., as an instrument of state policy, should apply its own law
wherever it has a legit. interest in doing so.
c. What does policy mean? It is the interest of a state. Its not like public policy, policy as used
here is more particular. Seeking what will effectuate foreign state goals?

Chesny v. Marek (Posner - applies economic analysis of law and applying yardstick of cost effectiveness to any
decision).
facts: Chesny (P) brought a fed. civil rights action against various D for excessive use of force. At one point
near trial, an FRCP 68 offer of $100K was made, which Chesny rejected. The jury awarded only $60K.
The ct. pursuant to 1988 awarded Chesny atty fees, but for the time after the Rule 68 offers was
rejected, rling that Chesny's lesser verdict precluded such an award.
issue: May a FRCP 68 offer preclude awarding atty fees under 42 USC 1988?
held:No. Section 1988 was intended to encourage bringing meritorious civil rights actions. The effectiveness of
this section would be reduced if a rejection of a Rule 68 offer turned out to be more favorable thant he
jdugement teh P eventually received. Placin ghte civil rights P in such a predicament cuts against the
grain of 1988. REA provides that the FRCP should not be construed to abridge substantive rights.
1988 seeks a substantive objective -- compliance w/ civil rights laws. Thus, to the REA prevents usfrom
reading "costs" in Rule 68 to include atty. fees.
note: Human elements is not of highest importance. Posner focuses on the process.

Marek v. Chesny
held:Yes, FRCP 68 may preclude the awarding of atty fees under 42 USC 1988. Section 1988 only provides for
awarding "reasonable" atty fees. If a reasonable offer is rejected, it stands to reason that fees incurred
thereafter are not resonable. In essence 1988 exists to encourage meritorious suits, and Rule 68
exists to encourage settlement. These sections do not conflict with each other.

2. Method of analysis:
a. The forum examines the substance of its own relevant laws and those of the other states
involved, and look for the purpose(s) that lead to adoption of the law
b. Next, determine which state has an interest in having its law applied to the specific issue (e.g.,
Determine which contacts within the case are within each identified purpose) (note: the law of
the forum will not be displaced by that of another state if the ct. determines that the forum's
interests would be advanced by applying its own law)
other factors besides purpose of statute
that should be considered: fairness; not to overburden court system (forum non
conveniens)

Milliken v. Pratt
facts: P did business in Portland, ME. D always resided in MA and applied for credit in ME. Creditor required
a guaranty from the defendant for the amount of $500. Wife provided the guaranty. In the K, she
guaranteed payment by his husband, up to the amount of $500, for consideration of $1. She executed a
note in MA, though the instrument was titled in Portland, ME. P sold and delivered goods from time to
time relying upon the guaranty. The $1 mentioned in guaranty was never paid and the only
consideration moving to D was a giving of credit by P to Mrs. Pratts husband. Upon default of her
husband, Milliken (P) demanded payment. P sued her in MA. She argued that she lacked the
competency of entering into such agreement, and theres no C/A.
issue: May a K validly made in one state be enforceable against the citizens of another state in the cts. of the
second state where such K's are statutorily invalid?
held:Yes. The validity of a K is to be determined by the law of the state where it was made. Acceptance of this K
occurred in ME where Milliken acted on the guaranty. If it is valid there, then it is valid and enforceable
everywhere. Even if K is prohibited by one state, if not immoral, should not be deemed to be invalid.
Should we look at when time K is made or at time K is performed? The tendency of modern legislation is
to enlarge the capacity of women to make K. In fact, MA has subsequently allowed married women to
enter into such K's. There is no reason of public policy that should prevent the maintenance of this
action.
note: Under 1st Restatement, the law of the place of contracting determines the validity and effect of a promise
with respect to:
a) capacity to make the K
b) the necessary form, if any
c) the mutual assent or consideration, if any required,
g) the time when and the place where promise is by its terms to be performed.
Compare rule of Beale, which would look to where K was to be performed. In K cases, more
than one states law may need to be used. The question whether K is valid must be determined at
place of contracting, P is vested with the right then.

hypo: A makes offer through mail. Offeree signs K and mails it back from another state. When does K take
effect? When he mails it (not necessarily where he signed it).

3. Currie methodology: false v. true conflicts.


a. The distinction between "false" and "true" conflicts is not a part all approahces to choice of law
except traditional vested rights theory.
b. False conflicts: exists where the forum finds that the potentially applicable laws do not differ, or
when only one of two or more states with ostensibly conflicting laws has a legitimate interest in
the application of its laws, the forum wil lapply the law of the interested state.

Alabams Great Souther RR Co. v .Carroll


Illustrates a false conflict. The policies of the law of X would be furthered by its application (upholding respondeat
superior) while non applicaiton of the law of Y would not detract from Y's policy (immunity of employers) b/c neither
the employer nor the employee is a Y resident and since Y's immunity rule does not regulate conduct in the way a
liability rule does.

Babcock v. Jackson (first case to explicitly reject traditional approach and embrace modern trend for torts)
facts: Babcock (P) and Jackson (D), both residents of NY, left together on a trip to Ontario. An accident
occurred in Ontario and Babcock was injured. He brought suit in NY and Jackson sought to bar the
action by relying on Ontario statute which has a host-guest statute that prohibits any imposition of liablity
on a driver for injuries sustained by a passenger. NY would permit reocvery based on ordinary
negligence.
issue: Does the law of the place where the injury occurred invariably govern the availability of relief for the tort?
held:No. NY has a much greater interest in this action than Ontario, since all the parties are from NY, the vehicle
was probably insured in NY, and trip started and ended in NY. Ontario's relationship to the accident is
merely adventitious. Ontario's desire to prevent fraudulent assertions by passengers in collusion w/
drivers is hardly a legislative concern where the parties and insurers are in nY. The Ontario statute does
not bar the action.
note: Seen as application of interests analysis to a false conflict. Are the various theories seen as
interchangeable. How does interest analysis differ from most siginficant relationship test?
- if the case had been brought in state X, it too should follow the same analysis to
reach the same result: application of the law of the common domicile.

Tooker v. Lopez
facts: Tooker and Lopez were both students at MI state, but both were domiciled in NY. Lopez was driving a
car belonging to her father which had been registered in NY. Both were killed when Lopez was driving a
car. Tooker sued Lopez and D defended on grounds that MI required a showing of willful misconduct or
gross negligence. P moved to dismiss b/c NY law should apply. Lower court in Dym applied Michigan
guest statute.
issue:
held:Reversed.
dissent: It was adventitious (by chance) that the car was insured in NY. She went to MI state, and decided to go
to Detroit by a car registered in NY. The major concern to NY seems to be someone may be suffering
and which NY must support as ward of state. Hard to accept the consequence that a MI resident, if
killed in that accident, shoul not be able to recover, but a recovery can be had for her deceased fellow
passenger.
note: If representing D, should be the place of the accident that controls the choice of law. See also Dym
which applied the MI guest statute.

How to reconcile Babcock w/ Tooker? Ontario law as intended to prevent the fraudulent
assertion of a claim from insurance carriers. If we uphold the legislation in Ontario we do good for
Ontario, but do we hurt Ontario insurance carriers by not using Ontario law? No. Ct. found NY had the
lony interested in requiring a tort festor to compensate his guest for injured caused by his negligence. In
Tooker, the sports car was registered and insured in NY.

Why is it in the interest of NY to apply NY law? Matter of grave concern that motorists shall be
financially able to respond I dmages for their negligenc acts so that innocent victims may be recompensed.
In contrast, MI has no interest in whether NY P is denied recovery against a NY D where the car is insured in
Ny

JL disagrees w/ dissent. Agrees w/ majority decision.

Schultz v. Boy Scouts of America


facts: Sexual molestation by a Franciscan brother, also scout master, of two boys. Molestation started in NY.
After return to NJ, one of the boys committed suicide. NJ gives charitable immunity to charities. In NY,
however, can recover. Boy Scouts, after suit, moved to TX.
issue: Where do you look to law of liability of Boy Scouts? Does it matter the BS were domiciled in NJ at time
suit filed, but later moved to TX. Brothers were incorporated in OH which recognized charitable
immunity unless they were negligent in hiring and supervising employees. Obviously the preffered law
was between NY and NJ.
note: Does NY have any interest in this case? Yes, which can have a strong nationwide deterrent effect.
Reason for applying no liablity for company?
held:Affirms using NJ law.
dissent: Majority overstates ths significance of NJs interests. The importance of deterrent factor in a case is
understated. Majoiritys opinion seesm silly. Perhaps reflects power of archdiocese in NJ.

b. True conflict: exists where more than one state has a legit. interest in having its law applied, and
the laws of the interested states conflict.

Preference for law of forum: In such case, Currie suggests


that the ct. should recognize the interest of the forum by applying its own law, even though it
would defeat the interests of the other states involved.
- b/c of the possibility of different results,
Currie advises that the forum reconsider its interests and the interests of the other states.
It may be that a more "restrained and moderate" interpretation of the conflicting interests
will allow a forum to avoid a conflict by applying a common policy of both states. If the
forum still finds the conflict unavoidable, then it should apply its own law.

Lilienthal v. Kaufman
facts: Action to recover on two promissory notes. D had previously been declared a spendthrift by ct. and
under guardianship. OR ct. has declared K made by a spendtrhift, such as the one at issue, void. Suit
brought in OR. P asserts that the note was executed and delivered in CA, which does not recognize the
disability of spendthrifts. P argues that the place of K should control. Ct. held that OR law applies.
issue: May the forum apply its own law to advance its own public policy where ther is an equal balance of
conflicting interest in the choice of law in an interstate contract dispute?
held:Yes. On the one hand, there is the traditional rule that the law of the place where the K is made should
govern its validity. In addition, there is CL authority for the assertion that choice of law should be made
to uphold, not void a K. The ct. rejected the CL public policy doctrine b/c the lack of any remotely
objective std for deciding what is the fundamental law forming a a cornerstone of the forums
jurisprudence (p. 177). Furthermore, OR has an interest in seeing that K's made by OR citizens are
honored in OR cts. On the other hand., there is a valid public poilicy, expressed by legislation of
preventing a spendthrift from making himself and his family public charges by his wastrel. It must be
presumed that the legislature weighed the adverse consequence of disabling interstate commerce by
voiding a spendthrift's K's. When faced with an equal balance of interests, the cts. of this state are
obligted to give force to the expressed public policy. Ct. felt, since it was a mere instrument of the
state, it has no choice but to enforce this statute in view of legislative decision, despite contravailing
policies of CA, to hold interests of spendthrift more important.
dissent: The overriding policy of both OR and CA to uphold the sanctity of K's has been lost in the decision to
keep the rare spendthrift off the welfare rolls in OR. It is a step backwards towards balkanization of the
law of K to send an out-of-state creditor toward insolvency to uphold a dubious policy of OR.
note: The case represents an example where the Currie's approach to choice of law emphasizes the
importance of forum law. The OR ct. was quick to find a balance of conflicting interests, and that the
forum should prevail.
Would CA be obliged to recognize interests of OR in acknowledging disabiilty of
spendthrift? Unlikely, they have interest in protecting their domiciliary.
Under 1st Restatement, would have applied CA law (place of execution and of
performance of the K). Under 2d Restatement, the most significant contact appears to be CA.
Under most significant relationship analysis, the CA interest is to have K carried out, whereas OR
has interest in protecting spendtrhift. Result depends on which court is hearing the case!
If spendthrift domiciled in CA, but adjudged in spendthrift in OR. Is CA
obligated to recognize the spendthrift law of OR.

hypo: Assume Carroll had sued Alabama RR in state Y. Although Y is the forum state , state Y really has not
greater interest than in the false conflict situation described above. Although its policy is to shield
employers, that policy arguably does not extend to out-of-state employers who are not so immunized
their home state. This "restrained" view of Y law shows that no real conflict exists, and X law should
apply.
Bernkrant v. Fowler (important)
facts: Bernkrants (NV) owed Granrud money for the balance on a NV apartment. In 1954, Granrud orally stated in
NV that he would forgive in his will any debt that remained at time of his death in exchange of partial
payment and refinancing of debt from Bernkrant. Granrud died later but will did not forgive debt. Suit
brought in CA to compel cancellation of debt and reconveyance of property that had been mortgaged. Trial
ct. held that the action was barred by the SOF by both CA and NV laws. 6 of CA civil code provided that
K would be invalid. P contends that NV has no counterpart to 6 of CA civil code and NV SOF is
applicable. This was K involving real property

CA interests: protects its domiciliaries, and prevent false claims based on alleged oral contracts in wills.

issue: May the forum state apply its own SOF to invalidate an oral agreement where the contracting parties
expeted at the time the agreement was made, that another state's law would apply?
held: No. The Bernkrants were residents of NV, the K was made in NV, and they performed the K in NV.
Assuming Granrud was a resident of NV at the time, his moving to CA should make no difference b/c both
parties expected the agreement to be valid, in reliance on NV law. Parties cannot be expected to anticipate
a change in the SOF merely b/c one of the parties move. If Grandrud was domiciled in CA at the time of
agreement, then Bernkrants perhaps would have been alerted to the fact that CA law was to be applied,
however, there was no showing of this.
Although CA has a policy to enforce lawful contracts, it is subordinated in any case which does
not meet the applicable SOF. In determining whether the K is subject to the CA SOF, we must consider
both the policy to protect reasonable expectations and the policy of the SOF. Since CA would have no
interest in applying its own SOF unless Granrud remained there until his death, P were not bound to
know that CA statute might ultimately be invoked against them.
Parties to a local transaction cannot be expected to take cognizance of the law of other
jurisdictions they cannot be expected to anticipate. Protection of rights growing out of valid contracts
precludes interpreting the SOF to destroy such rights arising merely from the movement of parties
across state lines.
While undoubtedly CA has an interest in protecting estates probated there from false claims
based on alleged oral contracts is constitutionally valid, the legislature enacting the statute is ordinarily
concerned with laws go vern purely local transactions. This transaction was not local, but happened in
NV, where both parties to the K had a reasonable expectation that an agreement had been made.
Thus, there isn o conflict between the law of CA and NV, and we can give effect tot eh common policy of
both states to enforce lawful contracts and sustain NV interest in protecting its residents their
reasonable expections growing out of a transaction substanitally related to that state.

note: If held otherwise, a person could move to a new more favorable jurisd. after making a generous K.
Under interp. of Traynor, this is a false conflict. B/c of party expectation, we constrain the
scope of CA law. The mere fact that someone moved away does not change result. Both CA and NV
has a common policy to enforce a K.
Interestingly, the ct. ignored the fact that NV had a deadman statute, which would have resulted in
blocking the oral K if the action had been brought.
Narrowly interpreting a state s laws is another way to avoid an unfair decision.

4. Comparative impairment approach: (Baxter) forum should apply the law of the state whose
underlying policies would be most impaired if its laws were not applied. Baxter assumed that states
could agree upon which policy would be least impaired, and so the result advocated by Currie (i.e.,
having a state apply its own laws by default) could be avoided. (used only in CA)

Bernhard v. Harrahs
facts: In response to Ds advertisements, driver drove form CA residence to NV, where they were served
alcohol until they were unable to safely drive a car. They collided in CA with P, a resident of CA. NV
denies recovery against a tavern keeper by a 3rd person injured by the former selling the intoxicated
person alcohol who inflicted the injury to a 3rd person.
issue: In the case of a true conflict, should the ct. apply the law of the state whose interest would be least
impaired?
held:Yes. Ct. applied doctrine of comparative impairment (e.g., analyzing by not applying certain law, to what
extent it would impair the jurisprudence of a particular state.) If they had not applied the law of CA, and
instead applied NV law, which does not even provide civil liability, interests of CA would be seriously
impaired. CA interest in discouraging tavern keepers from selling liquor to obviously intoxicated patrons
would be seriously undermined if out-of-state tavernkeepers could avoid liability, whereas NV interest in
protecting resident tavernkeepers should not protect those, who like D, regularly sell to and solicit CA
patrons. If we said there is no liabilty, would it enhance the law of NV? By its very nature, the law of NV
is very lax. If we were to uphold the law of NV, it would not elevate NV, but would impair the law of CA.

note: Escape: NV had a criminal statute suggesting a NV governmental interest to protect people from tavern
keepers. If apply CA law, there would be less impairment b/c there already is a NV statute punishing
tavern keepers.

Offshore Rental Co. v. Continental Oil (p. 198)


facts: Co. (CA) sent VP to facilities in LA where he was injured due to negligence of Ds (DE corp. doing
business in CA and LA) employees. P brought an action in CA, caused by loss of service from loss of
VP. CA civil code provides liability for such situation, however LA does not give C/A. The CA ct. held
that LA applied.
issue: To resolve a true conflict of laws, should the ct. apply the law of the state whose interest would be more
impaired if its laws were not applied?
held:Yes. First the ct. a true conflict arising from CA interest in protecting its corp. from economic harm and LA's
conflicting interest in shielding its corp. tortfeasors from undue financial burdens. Among the factors to
consider is:
whether the policy underlying a state's law has become attenuated and anachronistic;
whether the original object of the statute has ceased to be of pressing importance; and
whether that object can be easily satisfied by some means other than
enforcement of the statute.
CA statute was found of minimal importance in the fabric of CA law. LA has stronger, more
current interest in having its law applied, and thus, its interest would be most impaired if its law were not
applied.
note: Opinion has been criticized b/c:
i) The CA ct. failed to examine the domestic policy of its own statute before
deciding the choice of law question. Had it done so, it might have found that the CA statute did not
create a C/A for "key employee" suits, and thus there was no conflict w/ LA law.
ii) The ct. imported factors into the comparative impairment analysis such as the
relative value of the conflicting laws, that are not a part of Baxter's conception of the rule

5. Disinterested forum: where the forum has not interest in applying it own law ("disinterested
third state")
a. False conflicts in disinterested forum: If the ostensible conflict between the other two states is
"false", then the forum should simply apply the law of the only interested state.

Example: Car collision happens in state X in which D, a state Y


resident is responsible for the death of P's husband, a resident of state Z. P filed a wrongful
death action against D in state Y. The laws of both Y and Z allow unlimited liability for wrongful
death statute. However, X limits liability for wrongful death to $25K in order to protect
defendants against excessive liablity.
State X has no interest in applying it law to protect D, a resident of Y.
State Y, which permits unlimited liability,
has no interest in giving the D a windfall by applying X's law on its behalf. In addition, Y
has no interest in applying it own law b/c P does not reside there.
State Z, where P lives, though, is interested in providing full recovery to its residents.
Y is thus, a disinterested 3rd state, and it should apply the law
of Z, being the only interest state. (Reich v. Purcell)

b. True conflicts in disinterested forum: if the forum finds that other states involved have a legit.
interest in applying their competing laws arising out of competing policies, a true conflict exists.
Since the ct. should not weigh the relative policiies of other interested states, Currie has
suggested that:
Such a case should be dismissed on forum non conveniens grounds.
If that cannot be done (e.g., b/c the SOL
has run in the other state(s)), then the forum must apply the law of one of the interested
states. The forum may either (i) choose which law it thinks is better or sounder, or (ii)
apply the law which most resembles its own (on the theory that the forum legislature has
already determined that law to be better)

Example: If D in Reich were a resident of state X, and P moved


to state Y after decedent's death, forum non conveniens would not be available. Assuming a
conflict could not be avoided by a restrained interp., the forum might apply the law of that state
more similar to its own (e.g. the unlimited liablity law of state X).

ASIDE: Review of forum non conveniens


A ct. in its discretion may refuse to exercise its jurisd. if it determines taht the forum is an unfair or seriously
inconvenient place for trial as to any party and that a more convenient place is available.
- If the ct. find the local forum seriously inconvenient, the ct. may either stay the action or dismiss the
action.

Factors to weigh:
Plaintiffs preference as to forum: a P's choice of forum will be respected unless the balance of
convenience is strongly in favor of some other forum.
- note: when the P represents foreign parties litigating a foreign C/A, and the suit is filed in the
US rather than the foreign country where the injured occurred, the P may not defend against a motion to
dismiss based on forum non conveniens simply b/c the law applicable in the foreign forum is less
favorable (Piper Aircraft Co. v. Reyno)
Residence of the parties: action is rarely dismissed where the P is a bonafide resident of the forum state
- some cts. apply the same rule if the P chooses to file suit at the D's residence so that the
doctrine can be invoke only when all the parties are non-residents.
Residence of witnesses and availability of process for compelling their attendance
Ease of access to sources of proof
P's motives for bringing suit in the local forum (e.g. is he forum shopping, harrassing the D?)
Availability of an alternative forum: if the SOL has run in the other forum where suit could have been
brought or the D is subject to jurisd. there.
Interests of forum state
Likelihood of forum's judgment being enforceable

A ct. may not decline jurisd. (under the guise of forum non conveniens) solely b/c C/A sued upon arises under the
laws of another state. That would violate the FFCC.

c. "Unprovided for case": arises where neither the forum nor the other states involved have an
interest in the application of their respective laws.

Example: P, a resident of state X, is injured while riding in a car


that is garaged in state Y, but driven in state X by D, a resident of Y. State X has a guest statute
which would prevent liability, while state Y has no guest statute.
State X has no interest in applying its statute to protect state Y defendants.
State Y has no interest in giving compensation for a state X resident injured in state X.

Currie suggested four possible solutions:


1) Apply the law of that state that provides a
"better solution" to the underlying social and economic problem.
2) Selfishly protect the local D against the claims of foreign plaintiffs
3) Reach the same result as 2) by applying a
more sophisticated rule that would treat the foreign P as they would be treated in their
home states; or
4) Apply the law of the forum, since application of another state's law is not justified.
Currie preferred the fourth altenerative, finding that the 1st
approach gave cts. greater discretion in conflicts cases than in domestic cases, and rejecting
the 2d and 3rd options as presenting constitutional difficulties.

Erwin v. Thomas (unprovided for case)


facts: Erwin (WA resident) was injured by Thomas (OR resident) in WA. Suit brought in OR. Erwins wife
sued for loss of consortium.
WA follow CL rule that wife cannot sue for loss of consortium.
In OR both spouses can sue.
D moved to dismiss on ground that WA law should apply.
issue: When no state has a legit. interest in the application of its law in the trial of an action, should law of the
forum state be applied?
held:Yes. WA does not believe the rights of a married woman sufficiently important to provide a remedy. WA's
policy cannot be offended if another state's court gives rights to a WA resident which WA does not so
long as no WA defendant is involved. Thus, WA appears to have no urgent interest that would be
offended if OR law were applied. OR, on the other hand, has an interest in protecting married women. It
does not seem, however, that it has an interest in protecting all married women outside OR. Thus, no
legit. interest is held by either state. Where there appears no true conflict, it is unnecessary to use the
"most significant relationship" test.
dissent: OR statutory rights should not be given to non-residents who simply walk across the border. The
policies of WA and OR obviously conflict if the form will not provide a remedy while the latter will.
note: Professor Sedler suggests that some common policy can be discerned between the forums which would
indicate the law to be applied.

Neumeier v. Kuehner
facts: Kuehner's (D) decedent (NY) drove into Canada to pickup Neumeier's (P) decedent (ON resident) for an
Ontario car trip before Kuehner's decedent was to return home. During the drive, the car was struck by
a train operated by Canadian National Railway (D). P brough suit in NY against Keuhner and the
railway. Both D's pleaded the ON guest statute as a defense.
issue: For the forum state to apply its own law, rather than that of the place of injury, must the P show that the
forum state's connection w/ the action is sufficient to justify displacing the law of the place of injury?
held:Yes. It appears that the only purpose of the ON guest statute was to protect car owners and drivers against
ungrateful guests. NY has a strong interest in protecting its residents injured in a foreign state against
unfair statutes. However, it has no legit interest in ignoring that state's public policy and in protecting the
P-guest (ON resident) domiciled and injured in ON from legislation directed to him. Although applying
the ON guest statute would lead the NY ct. to extending a "less generous right" to a NY insured
resident, that is not invidious discrimination. Rather it is the result of different rules held by different
jurisdictions. The general principle can be stated as follows: when the passenger and driver are
domiciled in different states, the applicable rule of decision will be that of the state of the accident unless
it can be shown that displacing the nomrally applicable rule will advance the relevant substatnive law
purposes w/o impairing the smooth working of the multi-state system or producing great uncertainty for
litigants.
Thus, ON law should apply unless application of NY law would advance
substantive law purposes. It does not here b/c it would expose NY residents to greater liablity.
Furthermore, it would lead to uncertainty by encouraing forum shopping.
dissent: There is no defensible ground to say in a ct. that the rights of one man whose suits is accepted shall be
adjudge differently on the merits ont he basis of where he happens to live.
critic: Twerski (p. 173) In unprovided case like Neumier, we face a situation where there are no domiciliary
interest to protect on the part of the contact states. NY has no domiciliary interst to protect by pro-
compensation rule since the plaintiff is not a NY resident, and Ontario has no domiciliary interests to
protect. This domiciliary interest oriented interest analysis is unresolvable.
Kramer concludes (p. 175) that the whole debate rests on a fallacy b/c there is no such thing
as unprovided for case. The mistake is to think about a states interest by reference to how the state
should decide a wholly domestic case, rather than by reference to the particular multistate case.
-In Neumeier, Kramer argues that the P can assert a right to recover under
Ontario law. Kramer agrees that an ON P injured in Ontario cannot recover under NY b/c NY
confers a right to recover only on P from NY (pursuant to a compensatory interest) or on P injured
in NY (pursuant to a deterrence interest). Kramer notes that the P can assert a right to recover
under ON law b/c ON presumably allows tort damages to further the same interests as discussed
for NY. Presumably, ON enacted its guest statute to protect ON insurance rates, but since this D is
from NY, there is a false conflict, so while ON guest statute does not apply, the P should recover
under ON tort law.

6. Pervasive problems w/ governmental interest analysis


a. Subject matter characterization: favors the "interested state". Usually the forum in true conflicts,
and many or most false conflicts cases.
b. Procedural characterization of the traditional kind become unimportant if the forum law is the
starting point for most cases.
c. Renvoi is not an issue if the forum law is selected for application. But note: the other state's
conflict rules may something about its "interest", especially if it away from it, perhaps even to the
forum. The other state's conflicts rules may reveal a false conflict.
d. Public policy: will rarely be an issue b/c it will have been part of the determination of the
"governmental interest" of the forum in the initial choice of law.

7. Criticisms of governmental interest analysis


a. Difficulty in identifying underlying policies behind the various laws. Often policy considerations
are unarticulated and most laws develop w/o reference to multistate events. Thus, any
identifiable underlying policies may not necessarily reflect an interest wrt to interstate case
b. Unpredictability of approach: the weighing of conflicting policies that must occur serves to
negate uniformity of result. Thus, parties never know in advance, which state's interests will be
deemed paramount.

How does most significant relationship test differ from interest analysis? Would result be any different?
- Interest analysis examines purpose of the legislation, whereas, most significant relationship test relies
more on judgement of the judge to decide what is significant.

D. THE BETTER LAW


1. principle: whether one applies rules or policies, the decisions made reflect "choice-
influencing" considerations. Leflar reduces these considerations to five factors. The forum is directed to
select whichever law would best effectuate justice in light of particular problem presented using the
choice-influcencing considerations as an aid.
2. Five considerations to support better law theory
1) Predicabability: to discourage forum shopping, protect the justified
expectations of the parties, and further goal of uniform results.
2) Maintenance of international and national order: further the free flow of
persons and goods from one jurisd. to another, thereby encourage interstate and international
intercourse.
3) Simplification of judicial task (that still will yield justice): to permit the forum to
apply its own procedural law for judicial conveniennce while recognizing outcome determinative
procedural law of another state should be applied (SOF, measure of damages, surival of tort claim)
4) Advance forums governmental interest (see Curries theory): to permit the
forum to effectuate its own legit. interest in applying a given rule
5) Application of the better rule of law : to recognize that choice of law should be
between particular laws, not between the states whose laws is to be applied.
If it were a purely jurisidctional selection process, that would
be rather easy. However, that is not what courts do or should do. States govtal interests can
only be analayzed by the content of the law.
3. Criticism:
a. Too Indefinite and uncertain b/c different cts. will evaluate the considerations differently
b. Cts. may tend to b bias towards their own forum's law.

Milkovich v. Saari
facts: Milkovich (P), an ON resident, was injured as a passenger in a car driven by Saari (D) (ON resident). P
was injured when D crashed the car in MN, which does not have a guest statute. P was hospitalized in
Duluth for 6 weeks and brought suit in MN (ON guest statute required a showing of gross negligence).
The car was regiestered, insured, and stored in ON.
held:A rule which looks to reason and justice should be adopted. Here:
1) predictability of results is irrelevant in an accident (more applicable to K cases)
2) As for interstate/international relations, the forum state has a substantial
connection w/the facts and issue by being the place of injury and recovery.
3) Simplification of judiicial task not important since either law can be applied easily
4) (forum's gov'tal interest) There may be more deterrent effect in our common-
law rule of liablity as opposed to the guest-statute reqmt.
5) In conformity w/ our notions of fairness and equity, MN's lack of a guest statute
is the better approach. Guest statutes have lost favor as collusive suits which they designed to
prevent can be easily uncovered.

Factors 4 & 5 are the most compelling.


dissent: The Canadians have opined their law is the better law, not the American law. The majority's conclusion
is little more than a mechanical application of hte law of hte forum.
note: The case seems to cast aside a ON's strong interests in the action. The car trip began and was to end in
ON, the parties were residents of ON, it appeared P was forum shopping since she first filed her suit in
ON. Also the expectations of Saari's insurerr were based on ON law.

Suppose we used Leflars better law concept. Would better law be shouldnt let spendthrift to
get away with fraudulent behavior. If several other states followed suit, the law of contracts could
crumble.

F. REVISITING OLD AND NEW PROBLEMS W/ MODERN APPROACHES


1. Depecage (p. 221) When a case that presents more than one issue, the law of one state may
govern one issue, and a second states law may govern second issue.

Maryland v. Jacek (What limits should there be on depecage?)


facts: Suit by a MD insurer for DJ determining its liablity under a car insurance polyc issued in NJ to D. Jaced
had driven the car w/ his wife into NY where she was injured. Under NJ, where Jacek was domiciled,
spousal immunity was recognized, but in NY the immunity was abolished. However, NY required that an
express provision covereing injury to the spouse be included in the policy to enable the spouse to be
covered. Under NJ law, the insurer was liable for any sums the insured might become legally obligated
to pay. Thus, under either state alone, the P insurer should win a DJ for nonliability.
held:The ct. aplied the law of NJ to the K (the place of making), and the law of NY, the place of the wrong, to the
tort, thus permitting the insurer to be held liable even though it would not have been so held in a purely
domestic case in either state.
critic.: Both NJ and NY rules are concerned w/ danger of collussion when spouses are allowed to sue each
other. NJ avoided this by proscribing suits altogether. NY minimizes the danger by interpreting insurance
policies strictly. The Jaceck ct. ingored the protective measures of each state by treating the immunity
issue separately from the insuranc eissue.
Pro.: A contrary result would have disappointed the legit. expectations of the husband. The policy by its terms
protected him w/o qualification against liablity. It is by no means clear that the NY statute was intended
to cover non-NY'ers outside NY, but rather was directed to in-state insurers to protect against collusion.
note: Depecage may be considered inappropriate when rule, which are related in purpose, are separated and
combined w/ rules of other states.

2. Renvori and interest analysis (p. 225)


a. Foreign law should be applied only when the ct. has determined that the foreign state has a
legit. interesti nthe application of its law and policy to the case at bar and that the forum has
none.
b. Most commentators have concluded that while foreign choice of law rules can be informative,
they are not binding and need not be considered unless the forum this useful in resovling a
difficult case. For example, a true conflict is found, but one of the interested states follow the 1st
Restatement and would not apply its own law, then most analyssts would invoke the foreign
choice of law rule.
c. The key thing to note is that the use of renvoi are purely tactical and foreign choice of law rules
have no mandatory role under interest analysis. Moreover, it is preferable to ingore the foreign
choice of law rules especially if they are of hte jurisidcition selecting variety.

Pfau v. Trent Aluminum Co.


facts: While driving a car belonging to his father's company, Trent (D) got into a car accident in IA with Pfau as
a passenger. Trent was a NJ citizen, and Pfau (P) was a CT citizen. Both were going to college in IA. D
contended the IA's guest statute applied. The trial ct. ruled that CT, which contained no guest statute
was applicable. D argues that if it applies CT substantive law, then it should apply its whole law, which
relies on the lex loci delecti rule.
issue: May a state's substantive law be applied w/o its choice of law being applied also?
held:Yes. IA's purpose for its guest statute appears to be to cut down litigation arising from the unselfish practice
of sharing a ride, to prevent suits by hitchikers, and to prevent collusion suits by friends which woudl
result in escalating insurance rates. The ct. dismissed these concerns as not relevant to a CT P and a
NJ D in a NJ car. CT's substantive law allowing recovery for a host's negligence gives it substnatial
interest in having its law applied to one of its citizens. The forum's choice of law analyis is based on
govt'al interests. It is clear that when CT adheres to the lex loci rule, which has nothing to do w/ govt'al
interests, using CT's choice of law rule would not promote any of its govt'al interests in this litigaiton and
should not be applied.
3. Rules v. standards

Paul v. National Life p. 230


facts: Two WV residents took a trip to IN and were killed in an accident there. A wrongful death action was
brought against other driver and insruance co. in WV. D contends that IN has guest statute immunizes
D (host) from suit unless there is willful or wanton conduct. Trial ct. held that IN law applies and found
no evidence of willful or wanton conduct.
held:The lex loci delicti choice of law should be applied unless it would violate state public policy. In the last 30
years, this rule has been replaced by anaalysis of competing state interests. A cloase reading of those
cases that discarded the lex loci rule was to avoid unjust results in a particular case. The better
approach is to retain the lex loci unless it would violate state public policy in a particular case. The lex
loci rule has the advantage of predictability which helps to expedite cases.

key question: can a subject such as conflict of law be reduced to rules b/c there are so many variable involved in
these cases.

4. Complex litigation (How should we decide a case where Ps are from all over the country?)

In re Agent Orange Product Liability Litigation


facts: Numerous veterans filed product liability actions against manuf. of agent orange. In ruling on the choice
of law, the dist. ct. held that fed. CL should apply, ruling that the cases be based on fed. Q. The 2d Cir.
reversed, finding jurisd. was based on diversity and remanded to determine the issue of choice of law.
issue: Will a national/federal law be applied when P come from many states, the tort occurred on foreign soil
and no one state has an overriding interest in having its law applied?
held:Yes. Under the lex loci appraoch, the law of the place of injury, Cambodia would be applied. The law of
these jurisdictions are inappropriate for this litigation. The ct. believes, absent a controlling place of
injury law, that the transfer states would apply nationa/federal law. It is impossible to apply 2d
restatement doctrine (e.g., state w/ most significant relation.) Under "governmental interest" apporach, it
is unclear as to whether any one state has a majore interest in the outcome of the case. In contrast to
the nebulous interests of each state, the nationa/fed. interest is clear and articulable. The fed. govt. has
in interest in compensating its veterans that easily outweighs any state interest.
note: The legal validity of the approach taken has been questioned. The issue was never resolved at the
appellate level.

DES
P could not put their finger on particular manuf. that caused partciular injury. Even though one company in CA, by
its record, made no sales outside of CA, were put into mix, and had to pay damages by P injured by benedictin even
though they probably did not in any way contribute to the injury suffered. It would have cut out a large number of
manuf. Nevertheless, the Ct. upheld decisions on forum choice.
- while the S.Ct. juris. cases required the existence of a territorial nexus as well as a state interest,
Judge Weinstein observed that none of these cases involved mass tort. He argued that the territorial nexus
doctrine is an inadequate mechanism for protecting mass producers from undue litigations burdens. The
aggregation fo D's in a mass tort creates economies of scale that reduces cost and inconvenience. In view
of the development of transportation and communications technology, there is often no indication of
inconvenience or unfair surprise. The ct. therefore elminated the territorial nexus reqmt. in mass tort cases
and held that a prima facie case of jurisd. exists if the forum state has an appreaciable interest in the
litigation in the sense that its resolution would affect policies expressed in the substantive, remedial or
procedural laws of of the state.

n. 2 - time has come for a fed. law b/c the law of one or two states can solve this. A problem not yet thoroughly
solved.

Van Dusen
facts:
issue:
held:
P from several states, were brought under laws of one state.

mass tort rule on p. 252- too complicated, does not seem to be the answer either.

n.6 p. 254 - dispersed torts like Agent Orange - not clear if it should be treated differently from a single-event tort,
but involving victims from many states.
Why not create a federal substantive law? Have a single SOL.
III. APPLICATION OF CONFLICT OF LAW RULES TO SPECIFIC PROBLEMS
A. TORTS
1. Traditional approach: place of wrong rule: existence and extent of tort liabilty was to be
determined according to place of wrong.
a. rationale: a right to a C/A did not accrue to someone until an injury was sustained. The jurisd. in
which the injury was sustained (e.g., when the right was vested) is the relevant jurisd. to refer to.
b. Place of injury as place of wrong: 1st Restatement defined the place of "wrong" as "where the
last event necessary to make the actor liable took place." Generally, it has been constured to be
where the P's injuries were sustained.
c. Criticisms:
fortuitous result: focusing only upon the place of injury lead to
fortuitous applicaiton of law that did not necessarily lead to a just result to the injured party
defeating policies of other states: often the rule defeated the
policies of other state having far more significant contacts w/ the parties and their injures (e.g.,
where P is domiciled in another state and receives state aid)
d. Escape devices:
characterizing an aspect of the tort problem as "procedural" (see Kilberg)
characertizing as a non-tort problem (see Levy v. Daniels' U-
Drive (characterizing the D's negligent breach of duty of care as arsing from a contractual
relationship; Haumschild v. Continental (characterizing the question of interspousal immunity as
"family law" rather than tort to justify reference to the spouse's domicile rather than place of
injury)
holding the "wrong" to be the conduct rather than injury: in
particularly morally blameworthy cases, cts have designated the conduct rather than the injury
as the wrong in order to apply the law of hte place where the conduct took place.
public policy defense: last ditch defense to application of the
place of wrong (see Mertz v. Mertz) Criticized b/c it undermines any attempt at uniformity of
results.
2. Most significant relationship approach: a forum is to consider the "contacts" and interests
of each state involved and to apply the law of the state having the most significant relationship w/ the
particular issue before the ct. (see Babcock v. Jackson (finding that since all the parties were NY
residents, the car was from NY, and guest-driver relationship arose in NY, the most significant consts
were in NY and its laws should apply))
a. Rest. 2d 145(2) significant contacts: (evaluated according to their relative importance to a
particular issue)
1) place of injury
2) place of conduct
3) place of each party's residence and/or business
4) place where the relationship (if any) between the parties is centered
retains the basic preference for the law of the place of injury
unless other factors establish a more signficant relationship (Rest. 2d 146, 147).
b. Critcisms: inconsistency in judgements b/c cts. may weigh the contacts differently
For example, the same ct. that decided Babcock reached the
precise opposite conclusion in Dym v. Gordon (the only factual difference being that the guest
and driver, although domiciled in NY, were attending school in CO, and based on that concluded
that the guest-driver relationship arose in CO to justify applying its guest-statute.)
Compare Tooker v. Lopez, where the ct. later began to place
more emphasis on the purposes of the respective laws in question. Thus, in Tooker, the ct.
observed while that MI law was to prevent fraudulent claims against local insurers, both parties
were residents of another state and only NY had any real interest in whether recovery should be
granted. (essentially a governmental interest approach)
- but see Neumeier v. Kuehner, where the
NY ct. restricted Tooker to cases where the host and guest were both forum residents. The
held that where the passenger and driver are domiciled in different states, the law of the
place where the accident happened should be applied.
3. Governmental interests approach: forum applies it own law if it has an interest in doing so
(Reich v. Purcell)
a. Effect of post-accident changes: the change of domicile by a P is irrelevant. Otherwise, to apply
a different rule b/c a party moves would encourage forum shopping subject D to liability that
could have been foreseen when he acted.
4. Specific tort problems:
a. Wrongful death cases:
traditional rule: the law of the place where the fatal injury was
sustained is applied even though the decedent died elsewhere (but note possible bifurcation of
issues as in Kilberg)
contacts approach: apply the law of the place of injury unless
another state has a more signficant relationship (Rest. 2d 175) (such as when the injury
fortuitously occurred in a state while passing through)
interests approach: 3 potential interests served by the wrongful death statute (see Reich)
1) compensation for the survivors
2) deterrence of conduct
3) limitation (lack thereof) on the amt of damages recoverable

Reich v. Purcell
issue: Should a forum (CA) recognize a limit of damages in the law of the place of death (MO)
held:No. The limitation was designed to protect resident-D from excessive financial burdens. Since the D is not a
resident of MO, that state has no interest in having its limitation applied to protect him. Instead the
forum should apply the law of the decdent's domicile which imposed no such limitation.

b. Survival C/A
traditional rule: whether a tort c/a survives the death of the
tortfeasor or victim is traditionally decided according to the place of injury.
- this rigid rule can be avoid by
characterizing the survivability issues as an issue in the administration of the decedent's
estate, and hence should be governed by the law of the place where decedent's estate is
being administered.
modern approach: cts. now weight the interests and policies
underlying the particular issue before the ct. This usually result in application of the survival
statute in the decedent's domicile.

c. Multistate injuries
no clear rule has been adopted
some states look to the place of injury (in some cases
requiring the ct. to consider the law of each state in which injury is alleged.
- A growing number of states have adopted
the Unifrom Single Publication Act, which provides that a defamatory publication creates
only a single action, no matter where the damages took place (does not restrict the P's
forum, the suit can be maintained anywhere there are minimum contacts w/ the D even
though the P may lack any personal contacts with the forum) (Keeton v. Hustler
Magazine).
Other courts emphasize the policy of punishing a D for his
conduct (usually the law of the place of the D's act (e.g., place of broadcast, publication, etc.)
Some cts. have applied the law of the P's domicile or
principal place of business as the place of principle injury.
Lastly, some suggest applying forum law so long it has any legitimate contact w/ the matter

1934 Restatement - rule 377 - Where harm is done to reputation of person, the place of wrong is where harmful
statement is communicated. Must sue in every state severally. All damages from the multistate libel must be brought
in a single action under the single publication rule. If one law is to govern the entire proceeding, the court should
apply the law of the Ps home state where the greatest harm of reputation will occur.

d. Vicarious liablility:
traditional approach: traditionally the law of the place of injury,
or the place where the D acted to put into motion the forces that ultimate resulted in injury
- criticized on the ground thatt he D should
be liabile only under the law whose application was reasonable foreseeable and against
which she would insured herself against
modern approach: Applying the most significant relationship
test or governmental interest approach, the D should be subject to liablity only under the law of
any state whose application is reasonably foreseeable (and against which he might have
insured himself)
- see Bernhard v. Harrah's finding CA law
should apply b/c its interest would be more impaired if its laws were not applied.

e. Products liability
traditional approach: the nature and extent of liablity is determined by the "place of wrong"
- place of wrong has been construed by
some cts. to be the place where the product was manufactured, sold, or repaired rather
than the place of injury.
modern approach: cts. tend to look to the injured party's
domicile as the state w/ the most significant contact (at least where this faciliates recovery) in
order to protect its consumers from products in the stream of commerce in the future.
- cts. tend to apply whichever law is most
favorable to the P in order to enable compensation

f. Guest statutes
traditional approach: look the forum where the place of injury occurred.
modern approach: reference should be to the law of the
domicile forum, where the host-guest relationship arose, and where the car originated from (
Babcock v. Jackson) (host & guest domiciled in same forum)
- if the host and guest are from the same
state and car is maintained there, the law of that state should determine the issues
(Babcock)
- if the host and guest are from different states (split domicile)
1) if guest statute exists at
the place of injury and the D (host) is domiciled there, then recovery will probably
be denied b/c even where the domicile of the injured guest would allow recovery,
a D should be able to rely on the protection of the law of the state in which he
resides and act.
2) Some cts. have applied
the guest statute at the place of injury if the guest resides there, even though no
guest statute exists where the D-host was domiciled. (criticized as a retreat to
simply the lex loci delicti (place of injury) rule (Neumeier v. Kuehner)

- a ct may still refuse to apply a guest statute in effect


at the place of injury if both the host and guest, are from different state
which do not have guest-host statutes

B. CONTRACTS
1. Generally: ct have usually tried to develop principles that give effect to the expectations of
the contracting parties unless these are clearly outweighed by the interest or policies of a state having a
direct and immediate relationship w/ the transaction.
2. Effect of express designation of applicable law:
a. Traditional view: under the vested rights approach, parties were precluded from designating any
different law. If a K was made in one state, it should do the parties any good to wish they were
in another (lex loci contractus = the place of contracting)
b. Modern view: so long as it is not against public policy, parties may expressly incorp. some
foreign law into their K.
some cts. have allowed parties to
designate a state even though there was no contact w/ that state
Rest. 2d 187(2): party choice will only be
upheld if there is substantial relationship w/ the law chosen or some other reasonable
basis for selecting that law.
note: party choice cannot be used to evade
a fundamental interest or policy of the forum state. For example if state A is the domicile of
a minor and merchant, it prohibits the minor from selling property w/o his parents consent,
the parties canot make a K valid to sell property by inserting a provision in that another's
state's laws would apply.
exception - adhesion K: the rule
recognizing the K'ing party's rights to designate a law will not apply if the party's do not
have equal bargaining power in choosing such law. Thus, where the designation is in very
fine print of an adhesion K, cts. may be reluctant to uphold the designation particularly
where to do so would evade the forum's protection of the weaker party.
3. General approach in absence of express designation
a. Traditional vested rights approach:
validiity problems: determined by reference to the law of the
place where K was made (Milliken v. Pratt) (Rest. 1st 332)
- validity concerns involve formalities of the
K, sufficiency of consideration, capacity, fraud, illegaility, or other defenses making the K
voidable

Aside: Determination of place of contracting

Unilateral K
as soon as action is undertaken in conformance w/ offer, you lose right to revoke offer. The place of King is where
the place of action makes the K binding.

Informal bilateral
place of contracting wherre second promise is made in consideration of first promise

Examples:
Phone: the place of making is where the accepting party spoke
Mail: where acceptance was mailed, since such posing was the last event necessary to create a binding K.
Suppose Pratt calls, and Milliken offers $10/bag, and Pratt says sold. K formed in MA.
Suppose want to order book from Amazon and you order it to be sent. Is K made? When is K made? When you tell
them to send it. Not addressed in even 2d Restatement.

Performance problems: governed by the law of the place at


which performance is called for in the K. (Rest. 1st 358) The place where the K was to be
performed creates the rights and duties flowing thereform.
- performance concerns would include:
sufficiency of performance, manner of performance, existence and materiality of breach,
questions relating to damages, and right to rescind, where based on performance.

criticisim: characterizing whether it is a validity or


performance issue is difficult; there's no reason to assume that k'ing parties intended different
states' laws to apply to the two problems; often the law applied was fortuitous and arbitrary.

b. Modern approaches:
Center of gravity: group the various contacts in the case and
apply the law of the resulting center of gravity (Auten v. Auten)
- criticized b/c it is too mechanical. There
mere fact that more contacts occur in one state, alone, should not suffice as a reason to
apply the former state's law. This approach also breaks down where ther eis no
preponderance of of contacts in one state.

Auten v. Auten
facts: Husband and wife were both British citizens. He left her and went to NY and eventually got a Mexican
divorce. Ex- wife came to NY, and the hubby executed agreement in NY to provide child suppport to her.
Included in the K was a provision providing that neither party could sue the other in any action relation to
the separation. After the hubby made only sporadic payments, she brought an action in England and got
a judgement to pay. She then took the judgment and brought an action in NY to enforce separation
agreement.
- The D argued that earlier suit operated to repudiate the K. This would be valid
defense under NY law but not under English law. The ct. sustained the hubby's position.
held:The new approach of considering which jurisd. has the most significant contacts provides the jurisd. w/ the
greatest interest in the case the right to apply its own law. The ct. can consider the interests of other
jurisd. as well as the validity of the more traiditional rules. The only contact that NY had w/ the
agreement was that it was where the agreement was made and where the money was to be paid to the
trustee. On the other hand, these were British subjects, married in England, w/ children living in
England; where ex-wife lived and educated the children, and to refrain from suit bringing suit -- all in
England. The place of making was fortuitous. Thus, England remains the jurisd. that has the greatest
concern in regulating the rights and duties under the separation agreement.
- The same result would be reached by applying the more traditional apporach to
law governing breach of K (law of the place of performance)
- The result might be different if the the hubby's performance was at issue, since
payments were to be made in NY, but it is the wife's breach which is to be considered.

note: Contact in NY was where K was executed. NY, it seems to be the center of gravity. It seems he should
be under obligatoin and should not be able to escape by technicality even though it was brought on by
wifes negligence in failing to follow through. Moral factor seems to play the most important factor. Not
waste of judicial resources.

Most signficant relationship: in addtion to factors generally


listed for MSR approach, other important factors that are applicable include:
1) place of contracting
2) place of negotiation
3) place of performance
4) location of subject matter of the K; and
5) domicile, residence, nationality, place of
incorp. and place of business of each party to the contract

Wood Bros. Homes (p. 120)


facts: Pursuant to negotiations in CA, CO ad NM, Wood Bros. (D) contracted Gagnon, a CA resident do
carpentry work in NM. The K was signed in CO. Wood Bros., a DE corp., had it principal place of
business in CO. Gagnon was not licensed there in NM. D canceled the K and refuse to pay Gagnon.
As Gagnon's assignee, Walker (P) brought suit in CO. The trial ct. held NM law applies, which barred
the action b/c Gagnon was not license.
held:Law of NM applies, thus action is barred. Under state law, there is a rebuttable presumption that the state
where performance is to be rendered is the state w/ the most MSR. This presumption has not been
overcome.
note: - Looking to policy of NM (e.g., why do they require a license for construction. To protect from amateur
construction builders and to protect consumers (presumably)).
- why should this law be enforced when there is no such requirement in CO? Seems like CO
has stronger interest.
- If case were tried in NM, is there any reason why NM should not permit recovery? E.g., if CO
does not care about protecting against inferior workmanship, why should we care about imposing our
higher standard? Seems like NM law should apply so no recovery allowed.
- P can be estopped from enforcing an illegal K in view of Ps non-conformance with the
licensing requirement of the NM statute.

Bryant v. Silverman
facts: Airplane crashed and several people died. Flying from NM to CO (case in AZ). Airline was an AZ corp.
and each person died was domiciled in different states in SW. All the 3 decedents were on their way to
CO for skiiing. Bryant filed wrongful death action against airline in AZ. Similar action filed in AZ by other
suriviing relatives. CO prohibits punitive damages in wrongful death actions and compensatory
damages limited to net pecuniary loss suffered by surviving relative. All P prefer AZ law be applied
where there is no cap on damages for wrongful or punitive damages. What interests are involved to
determine what jurisd. law is applicable? (Law chosen was AZ b/c it had the most interest in this case).
Why?
issue: Which states law do we apply
held:If party is a non-resident P, we do not have a strong interest in compensation. Really, it is the states
domicile that has a stronger interest. Thus, CO has no strong interest in compensation. Thus, place of
injury carries little weight. Contacts in AZ weighed more than in CO. In addition to the compensation
factor of its domiciliary, AZ has important deterrence factor to consider. The state which had the most
important contact would be AZ.
note: Under Beales theory, where crash occured would be law to apply. Under 2d Restatement ( 175 and
178) (p. 125) - states with the dominant interest should be applied. The state where each deceased
person was domiciled though each have a great interest.

Haag v. Barnes
facts: Haag, secy of Barnes became pregant from sexual relatoinsihp with him. They excecuted a K to
provide $275 in child support in exchange for release of any further responssibilities. After 3 years, she
moved to NY and sued to increase payments. He offers agreement to bar obligation. The agreement
stated that it should be governed by IL law. The K was valid in IL but in NY no K could be binding unless
judicially approved.
issue: Should the applicable law be made by applying the law of the state having the MSR?
held:Yes. Ct. applied IL law this time. The ct. relied heavily on fact that K was made in IL, that it would be
governed by IL, and even if not expressly stated, would be given heavy weight. The signficant contacts
in this case include: agreement being executed in Chicago; the child's birthplace being in IL, the
designated agents and their atty's being in IL, all supports being made in IL. The NY contact arose b/c
that was where P became pregnant and that is where P now lives. These contacts are far less
signficant. The support payments more than suffice to satisfy the NY's public policy.
note: How do you reconcile Auten v. Haag? Center of gravity asked the court to choose a law basd on an
overall evaluation w/o providing a mechanism to assign these contacts weight or priority. 6 was
supposed to fill in this gap.
hypo: Wife in NJ separates. She is given $500/mo. She comes to NY to set domicile. She sues in NY to
raise amount of support money. Does NY have jurisd. to increase the amount? Formerly, if there was
a final decision, that could not be modified by another state. This has now changed.

4. Specific application of K problems


a. Capacity to contract:
traditional approach: considered a validity problem
determined by reference the law of the place of making
modern approach: forum usually applies its own rules.
- under the Rest. 2d, if a party is a local domiciliary, the MSR is w/ forum law
- interests approach - ct. would simply assert
its interest in the capacity of local domciliiaries and apply its own law even where the K
was exectuted and to be performed in another state (Lilienthal v. Kaufman)
- if the party is not domiciled in the forum,
reference may be made to the laws of the party's domicile or some other law (e.g., where
K executed) to uphold the K.

b. Sufficiency of consideration/validity: cts. tend to apply whichever law would uphold the
sufficiency of consideration probide the parties could reasonably be assumed to ahve contracted
w/ reference to that law b/c the parties cannot be presumed to have contemplated a law that
would defeat their promises. (Pritchard v. Norton)

Prichard v. Norton
facts: Pritchard had obligated himself in LA to be a surety on a bond for a RR which had to be posted by a RR
in its appeal to a LA judgement. Norton (NY citizen) and Pritchard (P) contracted in NY for Norton (D) to
indemnify P against any loss in connection w/ his suretyship. The RR lost, and P was called upon to
satisfy the bond. D refused to indemnify on the grounds that NY law did not recognize the validity of the
K. P asserted that since the K was to be performed in LA, which recognized was in LA, LA law should
apply.
issue: Where the parties to a multi-state K do not specify controlling law, may the ct. infer an intent based on
the circumstances of the K?
held:Yes. It must be presumed that parties to a K will not enter into an agreement that is not enforceable. Ct.
decided that a bond of indemnity and its validity should be decided by LA law. Only connection to NY
was that Norton was a NY citizen and the bond was excecuted and delivered in NY. No other
performance was required there. The place of contracting will not be material where it is different than
the place of performance.

Siegelman v. Cunard White Star


facts: P sued to recover from injuries incurred on the QE cruise ship. The ticket was purchased in NY. Action
had to be brought w/in one year of injury. Terms of ticket indicated that any dispute would be interpreted
under English law. The NY agent offered $800 in settlement of the passengers claim. Atty. indicated
that he would present the offer, but also that he would file a claim to beat the one year clause. The NY
agent replied that the Cunard offer would remain and the prospect of early agreement made filing the
suit unnecessary.
held:Agent had no authority to waive 1 yr. limitation. Ct. will give effect to partys intention and that English law
should apply to interp. of contract. Parties may always stipuate as to which law will govern interp. since
that will involve no more than a stipulation of definitions.

Parties cannot though stipulate the law by which the validity of the K is to be judged (p. 100). The
stipulation as to validity is an attempt to usurp the proper legislative authority of a state to determine
validity. The choice of law must bear a reaosnable relationship either to the place of the making or the
place of performance. Thus, the selection of applicable law as to validity will not be automatically
validated but can be recognized in the courts discretion insofar as it does not conflict w/ valid authority.
The question of the agent's purported waive is more closely related to validity
than interp.. Thus, it should be considered under applicable English law, which holds the waiver
inapplicable. Even if agent was authorized to waive, no waiver estoppel is present b/c English
requires misrepresentation of facts. .
dissent: The K was ambiguous wrt waiving provisions. The ticket is a K of adhesion. In such one-sided control
of power where the other party has no bargaining power, the usual K rules based on the idea of freedom
of K cannot be applied rationally. Such party cannot in fairness be said to have joined in a choice of law
merely b/c the carrier has inserted a provision that some particular foreign law shall govern.
note:
- 187 2d Restatement - the law of the state chosen by the parties will be applied if the particular issue
is one which the parties could have resolved by an explicit provision.

c. Where claimed illegality violates a statute (in forum or elsewhere), cts. generally refer to the law
that would uphold the validity of the K provided it is reasonably applicable (Intercontinental Hotel
Corp. v. Golden).
where the claimed illegality is more than a
mere regulatory measure (e.g., alleged violation of some strong local policy), the forum
will probably apply its own law (e.g., sales of securities, fair trade practices, marriage and
divorce, etc.).
if measure only violates foreign law, unless
the clear preponderance of the contacts is in that state, the ct. will generally uphold a K
valid under the forum law.
Under Rest. 2d approach, the law of the
place of performance should determine whether the performance of the K would be illegal.
All other questions of illegality should be determined by the law of the state having the
MSR.

Carnival Cruise Lines, Inc. v. Shute (p.109) (King parties choosing a forum - is in effect conferring jurisd. on ct.)
facts:
Held: Upholding choice of forum in K was good for uniformity, lends some advantage to passengers b/c it
would mean the expense that ordinarily was saved would be passed on to passenger.
note: How far should ct. allow private parties to choose party in a K case?

In re Bauer Trust (p.114)


facts: NY resident excecuted to a NY trustee income payable for life. She was donor of power of appoint and
donee. She died in England and resident of England. The exercise of power valid in England not in NY.
NY has a rule against perpetuity.
held:Ct. invalidated appointment, applying NY law as the place where the trust was executed by a then NY
domiciliary even though under English law, the gift was good.
note: What rule should we have applied in this case? Is it not in interest of parties (nieces), to validate trust
rather than invalidate it (rule of validation). That would be preferred. As a result of this case, legislator

d. Formalities: SOF
traditional approach: depends on whether the statute is
characterized as substantive or procedural. SOF provisions were deemed substantive if they
went to the essential validity of the K (e.g., "no K shall be valid unless in writing), but procedural
if declaring for example, "no action shall be brought on an oral contract". Rather subjective and
arbitrary
modern approach: most cts. ignore the substance v.
procedure distinction and assert that SOF should be decided under the choice of law rules
applicabl eto contract generally (Benktrant v. Fowler, Rest. 2 199)

Intercontinental Planning v. Daystrom


NY ct. followed a govt'al interest analysis. A NY broker alleged there was an oral agreement by a NJ corp. to pay
him a finder's fee for services done in NY. Under NJ law, the agreement would be upheld, but under NY SOF, the
claim would be barred. Even though using NJ law would have upheld the agreement, the ct. use NY law, relying on
NY's policy of preserving NY as a center of transactions by protecting principals from claims that are unenforceable
under NY law.

e. Insurance contracts:
all cts. usually disregard any designation of applicable law in
the policy b/c it is a mere adhesion K.
the most significant contact wrt life and casualty insurance is
usually the location of risk (e.g., domicile of the insure or situs of property
liability insurance: ct. usually refer to whatever law would
govern the tort liability of the parties.

C. PROPERTY
1. Characterization
1) decide whether or not the case presents a property problem
2) characterize whether the property is a movable or immovable
2. Test to distinguish movable from immovables: depends on closely the particular interest I
related to land. If the land has any substantial relation to land, it is classified as immovable and the law
of the situs of the land is applied.
a. Rationale: traditionally the law of the situs is the most important contact with the problem, and
there is a strong public policy favoring the application of that law b/c that state has the most
interest in the marketability and transferability of title.
b. examples: leaseholds, proceeds from sale or rental of land, rights to income and profits from
land
c. Forum v. situs to characterize property interest: generally the forum should use its own law,
though the Restatement provides that the situs of the interest should control even the
characterization.
3. Approach to immovables:
a. Traditional: all rights are deemed to be created by the law of situs (Clarke v. Clarke)
renvoi: policy favoring reference to the law of the situs is
usually so strong that cts. apply the whole law (e.g., the ct. will decide the litigation as though it
were sitting as ct. in the situs. If the situs forum would refer the case back to the forum's whole
law, which would bounce the case back to the situs forum, then the forum ct. should simply
apply the internal law of the situs to stop the renvoi.

Clarke v. Clarke (1900)


facts: Mrs. Clarke died leaving a will that directed an equal division of her real and personal property in CT
between Mr. Clarke and their two daughters. One of the daughters shortly died thereafter. Mr. Clarke
served as adminstrator for both his wife and daughter. He sued in SC to obtain a construction of his
wifes will. The ct. held that the wifes will worked an equitable conversion of real property into
personalty and authorized executor to sell the land. When Mr. Clarke brought an action in CT, the ct.
refused to recognize the SC decision and ruled that the CT land was to pass as real property according
to CT law. Under CT law, the land went to the daughter completely. Mr. Clarke appealed claiming that
the SC decree was entitled to FFCC.
- state where property is situated governs (CT)
held:The will did not at time of her death did not work an equitable conversion into personalty. Thus, although
personal property may be governed by law of domicile, the real property is governed by the law of situs.
note: The CT ct denied full faith and credit to SC disposition. What did it ultimately decide? No violation of
FFCC (p.441) b/c the SC ct was not entitled to be followed by the cts. of CT over the real property.
hypo: Client (NY) has real property in CA. What law would govern disposition real property? CA. No matter
where the personal property is located, state of domicile is controlling law.

b. Most significant relationship: in most circumstances, the most signficant contact will be with the
situs (Rest. 2d 222, 236).
c. Policy oriented approach: approach places less emphasis on the situs, but nonetheless the
forum that is not the situs of the land is more apt to find itself disinterested.
4. Specific problems to immovables
a. Contracts to convey, executory land sale contracts, etc.: generally teated as a K problem and
the choice of law is made according to contract rules. The importance of the k'ual undertaking is
deemed usually to outweigh the property factors involved.
note: covenants that run with the land, however, are subject to the law of the situs.
b. Marital property rights: refer to the law of situs. It is possible the situs law may then refer to the
law of the spouse's domicile at the time of acquisition.
5. Movables
a. Traditional approach: two different rules have been applied depending on the nature of the
problem.
1) Death transactions: questions relating to
testate or intestate succession are determined by reference to the law of the owner's
domicile at death. It is presumed that the governing law should be that of the owner's
domicile at death since presumably that is what the decedent would have intended
2) Inter vivos transactions: questions relating to
conveyances, mortgages, sales, etc. of movable chattel are determined by reference to
the situs of the chattel at the time of transaction. (Rest. 1st 255).

b. most significant relationship: domicile is usually the most significant contact for succession and
marital property, and situs the most significant contact wrt inter vivos transactions of movables.
(Rest. 2d 244, 260).
UCC the law of the forum bearing "an
appropriate relation" to the transaction is interp. as the most signficant contact. B/c UCC
is adopted in most states, the choice of law problems has been minimized since all the
states have essentially the same rules.

c. Exceptions to situs rule (P. 30): succession to movable controlled by law of the decdent's
domicile; rights of spouses in anothers movable property determined by domiliary rather than by
situs laws

6. Specific applications to movables


a. Conveyances: the validity and effect of the conveyance is determined by the law of the situs of
the chattel at the time of conveyance (Rest. 2d 244)
b. Testamentary or inter vivos trusts: cts. have tended to depart from ordinary choice of law rules
when dealing with trusts involving movables grounded on the underlying policy of upholding
trusts and the exercise of power thereunder. Cts. thus may prefer to refer to law of whatever
state would uphold the trust.
testamentary trust: depend on the formal
validity of the will (situs law for immovables & decedent's domicile for movable property)
inter vivos trusts (gratuitious transfer): situs
law governs validiity, transfer of movables is vliad if valid where made.

Shannon v. Irving Trust (p. 113) (Most significant relationship approach)


facts: NJ settlor established an irrevocable inter vivos trust in NY but directed that NJ law should govern. The
son wanted to get money quickly so he attacked accumulation provisions as violative of NY law.
issue:
held:Upheld provisions based on NJ law. The domicile of the settlor is no longer the absolute and controlling
consideration. It depends on the facts involved in and circumstances surrounding the particular case.
Though, the express or clearly implied intent of the settlor may control.
note: Leaves a court a lot discretion.

c. intangibles: generally has no situs.


If there is no document representing the intangible,
questions as to the assignability of the right involved should be governed by the law of the
place of transfer. Questions regarding the effect of assignment or the validity of the
particular mode of transfer are generally considered K problems.
If documents exist, the intangible rights are
taken to be embodied in the instrument, and it is an tangible res that justifies referenced to
the law of situs.
d. repossession::applying the law of the place of repossession (Shanahan)
e. marital property rights: determined by reference to the law of hte property owner's domicile at
the time of acquisition. The marital rights should not change merely b/c the spouses move to
another state.
f. Administration of decedent's estates (jurisdictional issues): A decedent's will may be probated in
any of the following place:
decedent's domicile (regardless fo whether any assets are located in that state)
situs of assest (b/c the state where property
is has the power to determine what shall be done with it)

In re Barries Estate
Facts: Barrie was a resident in IL. She had executed a will leaving property in IA to a church. After she died, it
was found that the will had written VOID across it. The law of intestate is the law where she died. She
died in IL (e.g., domiciliary of IL). Such revocation was good in IL. However, in IA, the state court
refused to recognize the revocation.
Held: Normally, the domicile of the decedent controls as to whom the property will be distributed usually.
However, the revocation of a will is governed by the law of the state of the situs of the land.
- notwithstanding, the full faith and credit clause, which requires respecting
judgement of sister state, the rule of real property is governed by the location of the property.

- 250 - the effectiveness of an intended revokation of a will in an interest in land


is determined by the law where the land is.

- outcome probably derived from the fact that land was everything, and that the
situs of the land governs even though in another state the decision would be contrary to full faith
and credit clause. There are certain exceptions to judgements respecting land.

- this rule applies only in reference to land.

Hypo: if property in a safe in IA. The full faith and credit would be given b/c it does not involve real property.

Hypo: If took a ton of dirt from one state to another. Would it be considered real property? Probably since it is
movable.

Applicable law to his will/estate is the state in which he is domiciled at the time of his death (wrt personalty).
However, wrt to real property, look to the law of situs.

Executor at one time could only sue or be sued in his domicile. That is not true anymore. Done by ancillary jurisd.
see p. 552

D. CORPORATIONS
1. traditional approach: all rights and obligations respecting a corp. were deemed to be
created at the law of the place of incorporation
2. MSR approach: (Rest 2d) Refers to the law of incorp. fo rmany conflict questions (creation
and dissolution of the corp., shareholder liablity, etc.)

E. WORKER'S COMPENSATION
1. jurisdiction: worker may file in any state where the employer is subject to jurisd. and the
forum has a legit. interest in regulating the employment relationship (Alaska Packers)
2. choice of law: most worker's comp. bds will apply their own local laws. This is okay provided
the forum has some legit interest in regulating the employment relationship (e.g., forum is place of injury,
hiring employee's residence, employer's place of business, etc.)
3. multiple awards: injured worker may file a claim for compensation under the statutes of
several states that have a legit. interest in regulating the employment relationship unless there is very
clear language that its remedy is exclusive that there is a legit interest in preventing supplemental
compensation (Thomas v . Washington Gaslight).
- limited to largest awared she would have entitled to under the applicable act
(prior recoveries will be credited)
- limitation against multiple recoveries does not apply to an independent tort (or
wrongful death) action against the employer

F. FAMILY LAW
1. marriage
a. validity: determined by the law fo the place where marriage was entered into (state has strong
interest in upholding/deciding validity of marriage when it is held there) unless upholding the
marriage would be grossly offensive to the forum's public policy (polygamy, incestuous, etc.)
b. interspousal property rights:
most states follow the CL approach: property which the
spouse brings into a marraiage as well as any property acquired by his/her individual effort is
separate property.
A few state follow the community property approach: properyt
acquired before marriage is separate, anything bought after is community property.
- relevant time: for determining spousal
property interest is the time of acquisition of assets
- relevant law: domicile of the spouses for movable property, and situs for immovable
There has has been some effort by some states to a general
application of the law of the domicile to cover both movable and immovable assets. Other states
have not accepted that rule (Crichton)

Estate of Crichton (p.114)


facts: Hubby died, but the bulk of property was in LA in bank accts, securities, etc.. Wife and him were
domiciled in NY for first 10 years. At time of death they were separated for 27 years. Will left everything
to children, w/ nothing to wife. She spurned her NY statutory 1/3rd right to the estate, asserting instated
her community property right under LA law. Under community property rights, she would get 1/2 of
property.
held:NY ct. applied NY b/c NY was the marital domicile w/not only the dominant interest in the application of the
law but the only interest. Ct. rejected the situs rule, instead applied dominant interest policy.
note: There had been some expression by both spouses that NY law would control, and it was going to
respect that intent.

A contract effecting property rights after


marriage is goverend by the law of the matrimonial domicile. Though, cts. at the situs
have also upheld the parties' intention to vary their property rights also.

Wyeth v. Fulrath (consensual contractual attempt to change property rights)


facts: The Duke and Duchess of Arion were domicilaries of Spain, and sent money to NY for safekeeping. A
joint acct. WROS (allowable under NY law) was created. Duke died. Under Spain law, the Dukes half
was not subject to complete disposition by him. There were somethings he could not do with his half.
The money by anyone of a couple belongs to both equally in community properly state so long as
earned.
issue: Should we look to law Spain or NY?
held:There was no express intent. Ct. presumed implied intent to rely on the protection of NY law by virtue of
reliance on the forum.

compare

In re Estate of Clark (p. 115) (specifiying forum unilaterally by will)


facts: H & W were domiciled in VA. Hubby died there, but his $23 million estate consisted mostly of securities
in NY bank. His will stated that NY law should control its construction and validity. Will is not a contract
but a will. Left home to his wife. Wife under VA law was entitled
issue:
held:VA had dominant interest in appling its law to protect widow. Ct. did not uphold the testamentary disposition
selecting NY law and setting up NY trust which would have given the widow less than provided by the
couple's domicile VA. NY should defer to VA law.
note: Cf. Wyatt and Hutcheson was shrugged off as involving intervivos transaction, which unlike the
unilateral privisions of a will, traditionally have been upheld if permitted under the law of the place where
the property is located.

Effect of change of domicile:


- the status of a property
right traces its way back to the forum where the property was originally acquired.
If poprety was bought by H in a CL property system, it remains the H's separate
property even after moving to a community property forum
- when death occurs after
change of domicile: intestate succession to movables is normally governed by
the law of domicile at death, but the status of the property remains the same as
discussed above. Situs law would determine W's interest in immovable property.

Miscellaneous Traditional Rules


hypo: Guy takes his 4 wives from Saudi Arabia to NY and marries a 5th wife. Is he guilty of bigamy?
- Court recognized the legitimacy of each of the guys wives when he died (p. 37)
IV. CONSTITUTIONAL LIMITS ON CHOICE OF LAW
A. PRIMARY LIMITS OF LEGISLATIVE JURISDICTION
1. Due process: protects the defendant against the unfair and arbitrary application of an unrelated
law
a. early view: in a series of insurance cases, the S.Ct. had suggested that the DPC (14th Amend.)
required that the law of the place of contracting controlled the validity and consequences of the
K. Had this suggestion been followed, it would have constitutionalized the "vested rights" choice
of law theory.
b. present view: DPC is now seen as a limit on if and when a forum may apply its own law
1) May a forum apply its own law? "[F]or a state's substantive
law to be selected in a constitutionally permissible manner, that state must have a significant
contact or significant aggregation of contacts, creating state interests, such that choice of its law
is neither arbitrary nor fundamentally unfair."

Home Ins. Co. v. Dick


facts: Dick sued Home Insurance, a NY co. in TX on a policy of fire insurance insurance issued in TX. Suit
was brought w/in the SOL of TX but no within the period specified in the K. TX law SOL is 2 years. Is it
Mexican law - 1 yr law that applies. Dick had urged that TX law was a declaration of public policy and
state may refuse to recognize laws that violate its domestic policy. However, none of the events, or
contracting event took place in TX.
Contacts:
- lived in Mexican
- All acts were done in Mex.
- when NY co. agreed w/ Mexican insurance co. to reinsure
them, this contract was effected when it was accepted by NY reinsurers. Why then apply SOL in
Mexico and prevent recovery? Seems there might be sufficient contact to satisfy
constitution (due process).
issue: Does application of a state's own laws to alter the terms of a K sued upon in its cts. violate due process
when the K was neither entered into nor to be partially performed w/in its own borders?
held:Yes. It violates DPC for the forum to apply its own laws when the only contact it has with the problem being
litigated is that it is the forum of litigation. If all the other contacts are with another state or states, the
forum cannot constitutionally refuse to make reference to the appropriate foreign law. "For a state's
substantive law to be selected in a constitutionally permissible manner, that state must have a
significant contact or significant aggregation of contacts, creating state interests, such that choice of its
law is neither arbitrary nor fundamentally unfair."

where there is no reasonable relationship between the forum and the parties or
C/A, application of the forum's law would be fundamentally unfair (e.g., not something the parties
could have foreseen or intended).

Allstate v. Hague
facts: All parties involved resided in WI at time of accident, and car accident occured in WI. Hubby commuted
to and from MN. Wife moved to MN and sued under policy in MN. Allstate argued that WI law should
apply. MN trial ct. found enough contacts with MN to choose MN law, disregarding WI law, which would
have precluded stacking of remedies from each car policy.
issue: Is selection of a state's law to govern a particular issue constitutionally valid as long as that choice of
law is neither abitrary nor fundmentally unfair?
held:Yes. S.Ct. plurarily upheld applicaion of MN law. The ct. relied on three contacts in aggregation (decedent
employed in MN and commuted to MN, D insurance co. did business in MN, and P widow had moved to
MN prior to instituting litigation) to find sufficient minimum contact . Ct. felt that application of the better
law theory favored selection of MN law in view of the recent trend toward stacking in other states.
concur.: Does the FFCC require MN to apply WI law? Does the DP clause prevent MN from applying its own
law? NO. D's failure to establish that MN's refusal to apply WI law did not pose any direct or indirect
threat to WI's sovereignty. Moreover, neither the stacking rule nor MN's allowance for stacking raised
any serious question of fairness.
dissent: While the dissent agreed to the significant contacts test for applying the forum law, it found that the
contacts focussed on by the plurality with the forum state are trivial. A contact, or pattern of contacts,
satisfies the constitution when it protects the litigants from being unfairly surprised if the forum's law
reasonably can be understood to further a legitiatimate public policy of the forum state. The contacts
identified are trivial or irrelevant towards furthering any public policy of MN.
note: The test enumerated in Hague was reaffirmed in Phillips Pet. Co. v. Shutts, holding that a KS ct.'s
application of KS law to all claims in a class action suit involving interest payments on suspended
royalties violated due process b/c over 99% of the leases and 97% of the plaintiffs were had no
connection to KS apart from the suit, and that the states which they connection with (OK, TX) had laws
that potentially conflicted with KS.

Phillips Petroleum Co. v. Shutts


facts: P's brought a class action suit in KS regarding royalty underpayments by Phillips. Only 3% of the P's
had any contact w/ KS. The trial ct. ruled that KS law, which was unfavorable to the D, would apply to all
transations underlying the suit.

issue: For a ct. in a class action to apply forum law to all transactions, must the state have significant cotnact
to the claims of each member?
held:Yes. For a ct. in a class action suit apply forum law to all transactions underlying a suit, the state must have
siginficant contacts to the claims of each member. The mere fact that it is a class action suit does alter
the conflict of law rules. It may not use the assumption of jurisdiction as an added weight in the scale
when considering the permissible constitutional limits on the choice of substantive law. Thus, as to the
non-KS plaintiffs, this action must be remanded for a determination of which law will apply to which
claims.

2) Must a forum apply any particular forum law? Due process


cannot be invoked to compel the forum to apply some particular foreign law. So long as the
forum state has any reasonable relationship to the parties or the cause of action, it may reject all
foreign law in favor of its own law. Only where there are no such contacts does DP impose limits
- on the same rationale of fairness and substantial justice that underlies minimum contacts for
jurisidiction.

NY Life v. Dodge
facts: A MO resident bought insurance from a NY insurance co. at its office in MO. The insure mailed from
MO an application for a laon from the co. on the security of his policy. The appl'n was accepted by
return mail from NY. The insured defaulted on the loan. In accordance with the terms of the loan
agreement, the co. cancelled the policy and used the reserve value to pay off the debt. The insured
died and the widow sued to collect on the policy. The trial ct. applied MO law which forebade
cancellation of an insurance policy.
held:S.Ct. reversed. The parties consummated the loan K in NY, where it was to be performed. Moreover, it is of
a kind that no state by direct action may prohibit its citizen from making outside the state. It would also
impair the liberty of contract guaranteed by the 14th amendment.
dissent: Even though the laon agreement was madein NY, it does not necessarily follow that MO statute was
unconstitutional. The appropriate test is to see if the subject matter is within the reasonable scope of
regulation and that end sought is not arbitrary and unnecessary interference with the right of the
individual to his personal liberty. The ins. co sought to be protected by a K made within the state of NY.
The effect of nulliffying in part that non-forfeiture provision does not invalidate any part of the loan,
rather it leaves intact the ordinary remedies for collecting debts. The statute merely prohibits satisfying
a part of the debt out of the reserved in a manner deemed by the legislature destrutive to protection
against forfeiture.

2. Full faith and Credit: each state must give full faith and credit to "public acts, records, and
judicial proceedings" of every other state.
a. Definitions:
judicial proceeding: refers to judgements of sister states,
including awards made by quasi-judicial state tribunals (e.g., worker's compensation awards by
state commission). Though, the extent to which awards by administrative agencies and tribunals
are entitlted to full faith and credit.
public acts: construed to mean both statutes and case law of
sister states b/c there is no logical or constitutional bassis for discriminating in favor of claims
arising under state statutes v. judge-made law.

b. The requirement that a ct. give full faith and credit to the public acts of another does not compel
the forum to adopt and apply the laws of other states. The choice of which state's public acts
should be applies is still primarily a matter of judicial discretion.
A forum may apply its own law so long as
some reasonable relationship exists between the forum and the parties or transaction so
that the forum has a legitimate interest in doing so. (Allstate v. Hague).
c. Example applications

Worker's compensation: initial cases suggested that the


FFCC required the forum ct. to apply the law of the place of employment (Bradford), later cases
however, upheld reference to other laws where the interest of the place of employment is
outweighed by other factors such as
- the interest of the place of contracting (Alaska Packers) or
- the place of injury (Pacific Employers).
Finally in Carroll v. Lanza, the Ct. held that the FFC did not
require the forum to adopt any particular choice of law rule in worker's compensation suits.

Bradford Electric Light & Co. v. Clapper (1932)


facts: Bradford (VT) worked for VT corp. w/ principal place in VT. Killed accdiently in NH. Wife brought action
in NH alleging that Bradford negligently caused the death. VT law gave exclusive remedy to injured
employee unless express provision to the contrary. D attempted to raise the exclusivity of the VT
worker's comp. as a defense. Ct. applied NH law and gave jury award. D appealed arguing that since
both parties were VT domiciliaries, VT's defense should have been applied.
issue: When the litigants in a suit reside in a state different than the forum, and that state provides a defense to
the cause of action, must the forum state allow the defense to be raised?
held:Yes. NH interest is only casual. VT law applies. The FFCC prohibits a forum state from granting a litigant
therein rights greater than he would be given by the state of domicile. . To hold otherwise would impair
the ability of states to enact effective legislation b/c a litigant could bring suits elsewhere.
note: JL thinks this is a bad opinion. This 1932 decision is hard to reconcile w/ subsequent cases.
- In dicta, the ct. noted that the defense asserted did not violate NH public policy.
Arguably, a defense that did so violate might not be allowed.

Alaska Packers Assoc. v. Industrial Acc. Comm'n (1935)


facts: P executed K in CA, to work for D, an AK corp. to work for it in AK and that he would agree to be bound
by AK law for any injuries. While working in AK, he was injured. He returned to CA and applied for
worker's comp. CA law brought w/in its commission's jurisd. all worker's compensation for employment
agreements made in CA. The trial ct. ruled that AK slaw could not be asserted as a defense to P's
claim. Judgement in CA awarding award to a non-resident CA alien was upheld in state S.Ct.
issue: May a forum state give effect to its own state's law over that of the place of accident if such
extraterritorial law violates the public policy of the forum state.
held:Yes. The interest of AK was not shown to be superior to CA. No persuasive reason was shown for denying
applying CA law. If the FFCC were taken literally, it would require a state to give effect to a foreign law
which competed with a local law under all circumstances and lead to the absurd result of each state
always giving effect to a law other than its own. The proper analysis is to look at competing law and to
consider whether the extraterritorial law embodies a policy strong enough to override the presumption
that a forum state's court may enforce the laws of that state. CA has a stated policy to see a broad
application of its worker's comp. law and to not apply it would violate this policy. (Balancing test) No
rational basis was set forth for denying the CA ct's right to apply its own state's laws.
note: How does this differ from Bradford? Impossible to reconcile the two cases. The ct. rejecte the
argument that application of CA law would violate due process, b/c it did not lack a rational basis or
involve any arbitrary or unreasonable exercise of state power.

Pacific Employers Ins. Co. v. Industrial Acc. Comm'n


facts: MA employee working for MA co. and injured while working for the co. in CA. He filed a claim for
benefits under the CA Workman's Comp. Act. D contended that MA workman's comp. should apply
since that is where the employment contracts entered into. The MA statute provided that the employee
waived his rights to recover under another state's law unless he gave written notice of an election not to
waive. CA statute provided that CA would have exclusive juris. over accidents occurring in its state.
Both statutes gave the respective states juris. over injuries outside the state where the K for hire was
entered. D contended that the FFCC required CA to recognize the provisions of the MA act.
issue: Does the FFCC require a forum state to enforce the laws of another state despite a strong public policy
in the forum state to control accidents within its borders?
held:No. The statutes vesting jurisd. in the MA ct. and the CA ct. are both constitutional. Each state also has a
valid interest in providing for the welfare of its employees that are injured. However, to force CA to
enforce the MA provisions would be to deny CA the right to effect to the strong public policy of that state.
The employee was: (1) injured in CA, (2) his benefits are payable there, (3) any medical bills or other
attendant expenses will be incurred there. To enforce the FFCC would be deny CA the right to apply its
own remedy in its own ct.. The FFCC does not empower one state to legislate for another or to project
its own laws across state lines, where to do so would offend the public policy of the other state.
note: Alaska set forth a balancing test. Pacific Employer weakened it. An interested state, it seems, can
always apply its own laws (suggesting no balancing at all) provided there is sufficient contact (signficant
contact theory).
- this exemplfies a rjection of the vested rights doctrine
- the S.Ct. has generally enforced the FFCC only in those circumstances where
the state having jurisd. over the parties has asserted its laws.
Under the significant contact theory, the court (very discretionary):
i) looks at the conduct of the parties and the location of where
that conduct occurred
ii) next, the ct. determines activities are relevant to the issues
of the lawsuit and where those relevant activties occurred.
iii) The state which has the most number of significant or
relevant contacts is deemed to have the most appropriate law to apply.

- critics note that this approach is very discretionary, leading to a loss of uniformity and
predictability of result.

Carroll. v. Lanza p. 277


facts: A resident of MO, working for MO sub-contractor, injured in AR. Received compensation under MO
compensation law. MO said it provided an exclusive remedy. AR provided remedy against 3rd parties.
P sued general contractors in AR, and ct. upheld award of damages, relying on Pacific Employers.
Held: AR interests are large and considerable. The problems of medical care and of possible dependents are
among the concerns. Under MO compensation act, which provided an exclusive remedy, that cannot
bind AR by virtue of the full faith and credit clause.

BUT SEE

Order of Commerical Travelers v. Wolfe (exception to Pacific Employers approach).


facts: An OH ass'n sold insurance to a SD member. The policy required that the claim be filed within 6mo. of
his death. SD ct. applied its own law to invalid the time limitatio
held:S.Ct. reverse under the FFCC. The law of the state of incorporation of a fraternal benefit society hsould
control the validity of the terms of membership in that corp. The weight behind the general statute of SD
does not outweigh that which makes necessary the recognition of the same terms of membership for all
members whereever the beneficiaries may be.
note: Hard to reconcile with Pacific Employers. This is a little different from workmans compensation b/c it
involved a commercial corporation selling life insurance

statute of limitations: the only apparent restriction on the


forum's right to apply its own SOL is that the forum law may not discriminate against foreign
judgments or claims arising under foreign law. E.g., a state that would provide a shorter
limitation period for biringing suit on a foreign judgement than on a domestic judgment would
violate the FFCC.

Wells v. Simonds Abrasive: S.Ct. upheld the


forum's application of its own shorter SOL since the forum had reasonable contacts with
the subject of the litigation.

Sun Oil Co. v. Wortman: S.Ct. upheld the


forum's appl'n of its longer SOL even though the contacts with the dispute were limited to
its status as the forum of litigation.
B. OBLIGATION TO PROVIDE A FORUM
1. FFC limit on forum's power to exclude foreign claims and obligation to provide a forum
Must you provide a forum for all cases that you have some contact with your state? No
a. Although the FFCC does not generally compel a forum to apply foreign law, it does limit the use
of local public policy as a defense to the appl'n of foreign law. National interest in uniformity of
decisions and policy of res judicata are both held to outweigh local policies against recognizing
public acts/judgements of sister states.
b. As long as the forum state itself has at least some minimum contacts, choice of law remain
largely a matter of judicial discretion rather than constitutional compulsion (again leading to
divergence of choice of law rules)

Huges v. Fetter
facts: Hughes (IL) was injured fatally in a car accident in IL by Fetter (D) (WI). His excecutor sued Fetter on
an IL statute in WI. Trial ct. granted SJ denying P right to C/A in WI b/c the WI wrongful death statute
precluded reocvery where the death occurred outside WI.
issue: May the forum state be required by the FFCC to give force to a sister state's law that conflicts with its
own public policy (and thereby give effect extraterritorial rights to IL residents)?
held:No. While the FFCC does not require the forum state to give force to a sister state's law that conflicts with its
own public policy, the forum state cannot deny recovery merely b/c the act giving rise to the C/A
occurred outside its borders.

S.Ct. held that WI's statutory policy which excludes this IL C/A is forbidden by the national
policy of the FFCC. Because both the D and the D's insurance co. are domiciled in WI, there is
sufficient contact for WI to provide a forum. Certainly the state though, has no real feeling of
antagonism against wrongful death suits in general. In addition, the exclusiion cannot be justified on a
blanket statutory policy of "forum non conveniens" b/c in many circumstances WI might be the only state
where jurisd. can be had over the D, amounting to deprivation of all opportunity to enforce valid death
claims. At least where all elements of the wrong occurred in the sister state, the forum cannot refuse to
recognize the existence of a C/A created under that state's statute w/o a finding that it offends a strong
public policy of the state.

dissent: Process is important. In commerical law, where certainty is of high importance, the majority has
imposed a rigid rule that a state must defer to the law of the state of incorp. or to the law of the place of
K. No reason is apparent why the interest of IL is so great, it can force WI to recognize IL law. The Ct.
should not require that the forum deny its own law and follow the tort law of another state when there is
a reasonable basis for the forum to close its courts to the foreign C/A. WI may not wish to subject
residents to suits where out-of-state witnesses are difficult to bring before the court, and where the ct.
will be faced with the complex task of applying foreign statutes, that may conflict with WI law on
important issues. The diversity of difference in wrongful death statutes reasonably suggest that that
matter is complex and it would better to have application by local judges well versed in the law.
note: Really, according to JL, theres nothing wrong here b/c it is the FFCC, not IL that is forcing WI ct. to
enforce the laws of another state. The IL act of law renders it applicable to FFCC.

WI's type of statute may violate the interstate privilegs and immunities of national citizenship
b/c it discriminates against person injured or killed outside the forum.
Potentially, Hughes, may weaken the doctrine of forum non conveniens and the theory that a
forum state need not enforce the penal or revenue laws of another state. If F2 cannot constitutionally
refuse to recognize the C/A created under a foreign statute or a foreign judgement, the discretion of F2
to refuse to hear certain C/A (on the theory of forum non conveniens) seems also limited. Thus far, cts.
have limited Hughes to its facts and have not used it as authority for the proposition that the FFCC
requires a state to provide a forum for all foreign C/A.

Crider v. Zurich (p. 306 important case) (again difficult to reconcile all of these cases
facts: AL resident was inured in AL while working for a GA corp. The AL trial ct. awarded a remedy under the
GA compensation act despite the provision that made enforcement of the act exclusive to the GA
compensation bd.
held: Citing Pacific Employer and Carrolll v. Lanza, the S.Ct. argued that AL could choose to enforce its interest in
providing recovery for residents injured within its own borders.
note: Suugests that a forum can ignore the provision for exclusive enforcemtn by a special admin. bd.

Tennessee Coal, Iron, & R.R. Co. v. George


facts: George (P) was employed by Tennessee Coal in AL as an enginneer. He was injured when a defective
train throttle caused the train to run over him. AL has a statute which provides that an employer is liable
for injuries to an employee caused by defective equipment, and abrogated C/L defenses of the
employer. P brought suit in GA under the AL suit. D moved to dismiss on the grounds that the AL statute
required suits under it be brought in AL cts. only.
issue: Where a transitory C/A is created by statute, will the reqmt. that actions under the statute be brought
only in local cts. be enforceable when the suit is brought elsewherre?
held:No. While the statute creating this C/A also restricted suits under it to AL courts, the C/A by its terms is
transitory. This is not a case where the right and remedy are so united that the remdy cannot be
enforced except by a specific ct. If the D or P have moved since the accident, AL ct. may not be the
best venue. So long as GA is capable of trying the case according tot he AL statute, FFCC requires it do
so. Judgement in favor of P affirmed.
note: In other cases, it has ben held that the forum state must recognize the C/A for the wrongful death, but
need not recognize the maximum limit imposed by the same statute. Justified on the basis that the right
created is substantive, while the recovery limit is procedural, which is not entitled to full faith and credit
enforcement.

COMPARE

Broderick v. Rosner
facts: NY enacted legislation to pierce the corporate veil and make bank stock holders perosnally liable for a share
of the banks debts. Banks sued in NJ on NY statute. NJ ct. dismissed action b/c NJ required that such
actions be brought in the form of an equitable accounting in which the corporation's officers, stockholders,
debtors, and creditors were all necessary party. This made such an actin practically and legally impossible.
held: The FFCC compels NJ to entertain suit regardless of NJ statute. While a state may adopt a system and
form of remedy as it sees fit, it may not under the guise of merely affecting the remedy, deny enforcement of
claims otherwise within the protection of the FFCC when its cts. have general jurisd. over the subject matter
and parties.

All residents of a state should not be enabled to escape performance of a voluntarily assumed statutory
obligation, to contribute to the payment of a bank of another state of which they were stockholders. NY had
a expressly declared policy of protecting creditors to enhance the credit of banks in general while NJ has
declared no conflicting policy of protecting its residents, as stockholders, against such liabliity.

C. UNCONSTITUTIONAL DISCRIMINATION IN CHOICE OF LAW


1. Privileges and immunities clause/Equal protection clause: the citizens of each state shall
be entitled to all privileges and immunities of citizens in the several states.
a. Both the Privileges and Immunities and the Equal Protection Clauses prohibit the application of
discriminatory forum law to out-of-state parties unless the distinctions drawn exist for a
legitimate purpose.
b. In addition, the imposition on a non-resident of a disadvantageous rule of local law which does
not apply to residents may constitute an impermissible burden on interstate commerce.
d. Only "essential" activities and "basic" rights are encompassed by the PI clause.
Example: imposition of a much hihger
hunting license fee on non-residents did not violate the PI clause.

Supreme Ct. of NH v. Piper


facts: Catherine Piper lived in VT, about 400 yards from NH. Applied to take Feb. NH bar exam. She
requested a dispensation from residency requirement. She was rejected b/c of a ct. rule mandating
residency reqmt. on bar members. P challenged this as a violation of the privileges and immunities
clause (Art. IV, 2). The privilege and immunity clause of Art. IV provides that the citizens of each state
shall be entitled to all privileged immunities of citizens of the several states.
issue: May a state disqualify a bar applicant b/cof non-residency?
held:No. A privileges and immunities analysis requires two steps:
1) Determine whether the right asserted is a privilege or immunity w/in the
meaning of the clause (is it something really important).
- right to livelihood has long been so considered
2) Does the state deprviation bear a substantial relationship to a legit. objective
- justifications could include guaranteeing
familiarity w/ local rules maintaining discipline, ensuring availability, and encouragin pro
bono work.

None of these justifications, however, appear to be significantly advanced by the challenged


rule. Thus, the PI clause bars the challenged rule. The prohibition by privilege and immunities clause is
not absolute. Only if there is a substantial state interest that is furthered by discrimination against out
of state citizen should the clause be excepted. The reasons given by NH were insufficient to prevent
application of PI clause.
note: What effect does constitution have on choice of law? Not clear which interests would be protected.
Ostrager indicating that crime victim compensation is not fundamental. Realize, Art. IV law has been
considerably weakened by Slaughterhouse cases.

n. 7 - no ct. has ever held a choice of decision unconstitutional under either PI clause or the
equal protection clause. Evidence that we really need a S.Ct. case upholding PI clause to reinvigorate
the clause.
V. JURISDICTION OF COURTS
A. INTRODUCTION
1. definition of jurisdiction: refers to the power of a state to establish or to alter legal
relationships between individuals.
2. Essential reqmts.
a. Sufficient contacts between the state and the person or thing (Constit. due process reqmt.)
b. Ct. must authority under the local statutes to entertain the action in question
c. Reasonable and notice and opportunity to be heard (procedural due process)
3. minimum contacts: for the forum ct. to be able to excercise jurisd. over an interstate case
and apply its own law, the forum must have minimum contact with the parties, property or underlying
event such that application of its law would be fair. Thus, a determination of proper jurisd. may (though
not always) justify a cts application of its own state's laws.
- a judgement of ct. w/o proper jurisd. is considered void
4. Evolution of the conecept of jurisdictional power of cts.
a. Traditional view: Under the "territorial power" theory established in Pennoyer v. Neff, a state had
to have physical power over the parties or poerty in order to excercise judicial jurisdiction. Thus
a state could excercise jurisd. over person or property present in the state even though the state
had no underlying connection with the transaction at issue.
b. Present view: actions relating to interests in or status of property, if the D is not present in the
state, minimum contacts is necessary to provide jurisd. so that the forum's exercise of jurisd.
does not offend "traditional notions of fiar play and substantial justice". See Shaffer v. Heitner,
infra.

Pennoyer v. Neff
facts: While living in OR, Neff hired Mitchell to do legal services. Neff failed to pay and Mitchell sued to recover
debt in OR ct. Neff had moved to CA and Mitchell did not know his whereabouts. Mitchell served Neff
constructively by publication in OR newspaper. He got OR ct. to order his Neffs property seized, which
Mitchell then purchased at Sheriffs sale, and resold it for a profit. Neff sued Pennoyer in OR, claimining
he had original title. Pennoyer defended that he held a good title.
note: It used to be that you could only be validly served in the state where you resided. E.g., state has power
only within its power to subject someone to jurisdiction of its courts (territorial power theory).

B. TYPES OF JURISDICTION
1. In personam jurisd.
a. A ct. w/ in personam jurisd. has the authority to determine the rights and duties of the party and
bind the party personally.
b. Enforcement: in personam decrees or judgements can be enforced directly against the person
or property.
2. In rem jurisd.
a. If the subject of the action is some item of property (e.g., a res) located within the state, the ct.
may exercise in rem jurisd. as to that property to determin the rights of the entire world as to that
specific property. No personal jurisd. is required.
b. Enforcement: decree alone is effective to alter the status of title or otherwise determin the rights
of everyone in the world on the subject property.
3. Quasi in rem jurisd.
a. A ct. may determine the rights of a particular person in a specific property within the court's
control. Unlike in personam jurisd., the ct. cannot impose a personal obligation upon the parties,
and unlike in rem jurisd., the ct. cannot determine the rigths of all persons in the thing before the
court.
b. Types of quasi in rem jurisd.
1) Jurisd. to affect title of particular persons
- e.g., quiet title, mortgage foreclosure
- cts. power the res makes its decree
effective by itself to alter or affect the interest in the property. Ct. is limited to affect only
the interest in res; it cannot impose personal obligations w/o personal jurisd. over the D.
- all persons whose interests are to be
affected must be named as party-defendant and given adequate notice and opportunity to
be heard.
2) QIR jurisd. to enforce in personam claim
- e.g., the ct. assumes jurisd. over assets
and thereafter treats the action as in rem to the extent of the assets before it, even though
the claim sued upon is totally unrelated to those assets, those assets can be used to
satisfy the liablity.
- Example: A sues B for $5000 for a personal
injury claim. Although A could not get personal jurisd. over B, A could attach whatever local
property B had. If the ct. finds B liable, its judgement could be enforceable against this
property only.
- Impact of Shaffer: S.Ct. held that in cases
where P's claim is unrelated to the specific property attached or seized as the basis for
QIR juirsd., exercise of jurisd. is invalid. However, if P's claim is related tot he D's property
(e.g., P was injured on D's land located in the forum), then exercise of jurisd. is generally
valid.
4. Distinguishing In personam v. in rem actions
a. Determinative factors turns on the type of relief sought. If P seeks to assert or acquire rights in
a specific piece of property (real or personal), the action is in rem or QIR. If the P is asserting
only a general claim against the D, the action is in personam.
b. Examples:
QIR: foreclose a lien, effect a partition,
quiet title, action in ejectment, recovery of specific chattel
In rem: probate, escheat proceedings, admiralty
in personam: suit for injunctions, dmagaes,
other monetary claims, suit for trespass or injury to land (b/c relief sought is monetary)
c. "local" v. "transitory" actions
in rem and QIR actions are local (e.g., they
may be brought only in the forum of the situs of the property involved
In personam actions are "transitory" and
may be maintained against the D in any forum where personal jurisd. can be had (subject
to the forum's wililngness to hear the case)

C. GENERAL BASES FOR EACH TYPE OF JURISDICTION


1. Bases for in personam jurisd.
a. Personal service on D physically present in state
temporary physical present in the state served is sufficient
(e.g., present in a plane flying over)
If the D is served is served in some representative capacity
(i.e., executor of an estate), D must be served in that representative capacity. He cannot merely
be in the forum on vacation.

1) Transient jurisd. was forced to be re-examined in light after


Shaffer, which rejected the sufficiency of a "single contact" arising solely from a D's ownership of
property unrelated to the C/A. Burnham v. Superior Court re-examined transient jurisd. in light of
Shaffer.

International Shoe
facts: WA sought to recover on taxes on income paid to salesman in WA. Orders obtained were transmitted to
outside WA.
held: IS abandoned Pennoyer.Jurisidction was upheld and ct. flatly rejected Pennoyer. (p. 324).
note: Test handed down: tradition of fair play and justice.

Shaffer v. Heitner
facts: Heitner (non-resident of DE) owned one share of stock in Greyhound (D) , which is incorp. in DE. D had
been subject to a alrge antitrust judgement in OR. Jurisd. was based on seqeustration of Greyhound
stock which was deemed to be in the state of incorp. The DE sequestration statute allowed property
within the state to be seized ex part to compel the owner to submit to the in personam jurisd. of the
court. None of the stocks were actually in DE. D made a special appearance to challenge the the ct's
jurisd. , arguing there was insufficient contacts to justify an exercise of jurisd.
issue: Did it meet test of International Shoe, by serving in DE simply where stock certificate was located?
(does not seem fair). May a state assume jurisd. over an issue merely b/c the D's property happens to
be within the state.
held:No. Due process clause does not contemplate to make binding a judgement over person which has no
contacts. We expressly dispprove the line of cases that has permitted jurisd. merely b/c the property
happens to be within the state. If sufficient contacts do not exist to assume jurisd. absent the presence
of property within the state, it cannot be invoked on the basis of property within the state. Here the
stock is not the subject of the controversy, there is not claim to ownership of it, or injury caused by it.
The D's do not reside in DE or have nay contacts there. The actual injury occured in OR and no
activities complained of were done within the forum.
concur.: I would only disagree as to cases involving property permanently within the state (real property). Such
property should ocnfer jurisd.
dissent: While I concur on the min. contacts test, I would hold that a deriv. suit may be brought in the state of
incorp. D's choice of incorp. is a prima facie showing of submission to its jurisd.
note: The suit in the present case, is against the directors, not against the corp. and neither the site of the
wrong nor the domicile of the directors is in DE.

Burnham v. Superior Ct. of California


facts: Mr. Burnhams was married, and moved to NJ. In 1987, the Burnhams decided to separate and agreed
to have Mrs. Burnham would move to CA and take custody of the kids. Mrs. Burnham unsuccesfuly
triedto induce him to file divorce based on irreconcilable differences. When Mr. Burnham went to CA on
business, he stopped to visit his children. While there, he was served with CA ct. summons and a copy
of Mrs. Burnhams divorce peitititon. He made a special appearance to contest the courts jurisdiction
b/c his only contacts w/ CA was a few short visits for purpose of doing business and visiting children.
Trial ct. denied motion. Appeal ct. uphold denial, and found there was valid service.
issue: Key question as a basis for decision - was this jurisd. compatible with test laid down in International
Shoe. Must a state have minimum contacts with a D to exercise jurisd. over him if he is served w/
process while physically present therein?
held:No. Notions of fair play and substantial justice are satisfied from transient jurisd. A state may fully exercise
its jurisd. over a person in that state. This ct. has held that "minimum contacts" must exist for juirsd. to
be exercised over an absent D. Minimum contacts have always been a substitute for physical presence
and are completely irrelevant when a D can be found in a jurisd.
note: Transient jurisd. = in a jurisd. only there for a short time
JL is unconvinced that this test is met. Nothing they said removes reqmt. stated by Shaffer.
This service did not satisfy due process arguably. What is reason being given for person is subject to
jurisd. merely b/c he is there? There are certain services you availing yourself from our jurisd. and
therefore you should be subject to our jurisdiction.

p. 399 - Kulko - playing tag jurisd. - w/ process server chasing after person before he leaves
the forum.. criticism: JL feels this is a dangerous case. Why?

2) Traditional exceptions to permissible transient jurisd.


fraud or force: where P tricked the D into
entering the jurisd. where he was served or D was seized and dragged into the state,
personal service is insufficient.
b. Domicile, residence or nationality
domicile alone is constitutionally sufficient basis for in
personam jurisd. even while the domiciliary is outside the state. Persons domiciled within a state
receive enough privileges and rights to subject them to suit within the state as an incident of the
domicile.
- it must appear that the state has, by
statute, conferred power on the cts. to have jurisd. over domiciliaries outside the state.
- procedural due process requires that the
absent domiciliary be given adequate notice and opportunity to be heard. If his
whereabouts are known outside the state, personal service reasonably calculated to give
the person actual notice of the proceeding is required. If his whereabouts are not know,
then constructive service by publication may suffice if it is the best method known.
residence is substantial enough to make exercise jurisdiction reasonable.
nationality is suffiicient contact for personal jurisd. over a US
citizen by fed. cts, even when he is outside the country

White v. Tennant
facts: White moved w/ his wife to PA with his livestock. His wife got sick. She stayed in WV with husbands
relatives. He returned to PA to care for livestock while returning to take care of his wife in WV. He
eventually died from typhoid. Relatives wanted to establish domiciliary in PA so that they would be
entitled to half of the estate.
held:Domicile is established by (1) physical presence in the residence, with (2) the intention to make the
residence your domicile.
- for people with multiple homes, their domicile is singular.
note: Common classes of people
- college person: depends on his intent to stay in state where college is.
- baby: domicile by birth is that of his parents
- emancipated minor: domicile
- under 1st Restatement, A person does not cannot acquire a domicile of choice
by his presence in a place under physical or legal compulsion. (e.g., prisoner, drafted soldier)

note: suppose a person wants to make a home in CA and he sends out his wife to search for a
house. Is that his domicile? Under 1st Restatement - No, he must go himself. Under 2d Restatement,
yes. Physical action by an agent by wife, may, at least on occasion serve as a substitute. .
Winans - suppose person died in a city w/o having found a permanent home despite intention
to eventually settle down, the ct. held there was a change of domicile.
- seems arguably has not occurred b/c he has not abandoned his prior domicile yet.

General Trend under 2d Restatement: A person does not usually acquire a domicile of choice
by his presence in a place under physical or legal compulsion.

c. Appearance or consent
An appearance either in person or through an authorized
attroney is sufficient contact. There is no due process violation b/c the D always has the
alternative of not appearing and collaterally attacking the judgement on the basis of lack of
jurisdiction.
- all states permit a D to appear "specially"
for the sole purpose to object to jurisd. of the forum w/o subjecting him to jurisd. based on
such appearance
- by appearing, a D submits to jurisd. of the
forum state only wrt to the action in he appears and only as to the C/A pleaded in the
complaint. If the P amends the complaint to set up new C/A, he must obtain jurisd. over
the D to those new C/A.
- likewise, a non-resident P who files suit in a
forum state is submitting himself to the personal jurisd. of the forum wrt to any C/A that the
D asserts by way of counterclaim or cross-action.
express consent given either before or after suit is
commenced, will serve as a suffiicient basis for in personam juirsd. in that action
- consent may be gratuitous or grow out of a
K. However, if the consent is unsupported by consideration, consent may be revoked at
any time prior to suit.
- the most common form of consent is by a
clause in a K. Such an agreement effectively confers personal jurisd. over the consenting
parties even if she has never been in the state and has had no dealings or contacts with
that jurisd.
- Consent in a K is strictly interpreted. For
example, an agreement that "rights under this contract shall be determined by the law of
state X" (i.e., choice of law provision) does not, without more, confer personal jurisdiction
over the contracting parties.
implied consent may: usually relied on by long arm statutes. A
party who engages in certain acts or conduct w/in the state is usually deemed to have
consented to the jurisd. of local courts even where he explicitly states that he does not consent.
- example: non-resident motor statutes.
Today though, most courts do not rely on the implied consent fiction, finding that there is
sufficient minimum contacts for valid exercise of personal jurisd. over the person.

d. Minimum contacts w/ forum ("doing business")


the only reqmt. for in personam juirsd. over a foreign corp. is
that there is "certain minimum contacts" with the forum state such that maintenance of the suit
does not offend "traditional notions of fair play and substantial justice." (International Shoe)
- the fact that min. contacts may exist
between a state and partnership does not suffice to give jurisd. over the non-resident
partners individually (e.g., could not get at the person's non-partnership personal assets)
general jurisdiction: min. contacts clearly exists when there
are such regular and systematic dealings between the non-resident and the forum state as to
justify the conclusion that the non-resident is "doing business" locally, effectively showing the D's
presence in the state.
- factors include: whether it maintains a local
office, personnel, assets, bank accounts, telephone listings, soliciting business to out-of-
state residents, having a local independent distributor who performs the function of a local
office, etc., and whether the non-resident's activities are continuous and systematic.
- this form of jurisd. allows the party to be
sued on any and all transitory causes of action, wehther or not related to his local
activities. Thus, he may be held liable in that forum state for his acts anywhere,
regardless of the lack of relationship to his local activities (though, where the C/A is not
related tot he non-resident's local activities, cts. generally require much more substantial
contacts w/in the forum state).
- The S.Ct. has held that domicile is enough
to bring a D w/in the state's jurisd., noting that the state which accords him privileges and
protection to him and his property by virtue of his domicile may also expect reciprocal
duties. Arguably, it would seem better to focuse on residence instead.

ABKCO (p. 369 - ) former manager of the Beatles sued members. Jurisd. over Ringo was based on his extensive
recording composing activities in the state even though these activities were unrelated to ABKO's claim. - whether
jurisd. exists depends on the underlying theory of general jurisd.
Perkins v. Benguet (p. 366)
facts: P, a nonresident of OH, sued there to recover unpaid dividends and damages caused by D failure to
issue her stock certificates. The disruption of immediate post-war years forced the company to move its
operations to OH. State ct. found that due process prohibited it from exercising jurisd. The president,
returned to his home in OH, where he maintained an office and conducted his personal affairs there. He
maintained bank acct. in OH and carried on business there.
issue: Is service in OH fair even though company (factory) was situated in Philippines? Did the contact satisfy
general jurisdiction (allowing you to sue on anything you have a claim for)?
held:Citing International Shoe, the key issue is fairness to corp. If you carry on a business in interstate
commerce, then you should be liable to general jurisd. if you are served for any action of the company. If
the non-resident's activities and contacts with the forum is enought to support the conclusion that he is
"doing business" in the forum, he is subject to the general jurisd. of the forum state, and can be sued on
any and all tarnsitory causes of action, wehther or not related to his local activities.
note: p. 367 - discusses distinction between natural persons and corporations. In Milliken, domicile was
enough to bring an absent D within the states jurisd.
Hypo: A is domiciled in ID and want to bring action against A. But at time, he is not in ID. Is it alright if we serve
him by substituted service in ID where he is domiciled? Yes. Is it better to focus on residences, which a
person can have more than one of?
limited jurisdiction: a state may also assert personal jurisd.
over a non-resident who is not "present" locally if the non-resident has purposefully initiated
some liability producing actiivty w/in the forum state. Jurisd. is limited to suits arising out of such
activities (McGee v. International Life)
- Test asks whether it is fair to expect him to
appear and defend in the forum state. Relies on two major elements: Hanson v. Denkla (p.
326 n. 7)
1) Purposeful forum-
related activity by which he obtained real benefits from the forum state or
otherwise relied on the privlleges or protection of its laws.

the quality and nature rather than number of acts, is


the important factor, such as whether he has intentionally availed
himself of the benefits, privileges, or protection w/in the forum
2) Reasonableness of suit
in forum, including the factors involved in forum non conveniens, such as:
hardship to the non-resident P to appear and defend locally
hardship to P to have to litigate elswhere

interest of the forum state in the litigation or


regulation of the activity involved.
- Examples:
1) soliciting insurance
outside of the state (McGee) A TX ins. co. was held subject to the jurisd. in CA
b/c it sold a single policy to and collected premium from a CA resident even
though the co. did not regularly do business in CA and its only contacts w/ CA
was through the single policy holder by mail.
2) Distributing magazines:
a publisher who distributes magazines in a distant state may be held accountable
in that state for dmages resulting from an allegedly defamatory story. (Keeton v.
Hustler Magazine)

Keeton v. Hustler
facts: Keeton was libeled by Hustler and wanted to sue. However, in most states, the SOL barred her suit
except in NH. She sued in NH. Even though only 15,000 copies were sold in NH, many more was sold
in other states. NH ct. was found to have jurisdiction.
held: Ct. rejected categorically that the 1st amend. may defeat jurisd. that is proper under due process. She
recovered for damages in all the other states.

3) Products liability:
manuf. of defective products that cause injury may be subject to personal jurisd.
wherever they send their products, even though the D-manuf. had no other
"contacts" with that forum. Manuf. may be subject to personal jurisd. in any state
where it is reasonably foreseeable that their produts will sold, used, or
consumed.
- but see in Worldwide Volkswagen

Worldwide Volkswagen v. Woodson


facts: P (NY) bought a car from Audi in NY. The were about to move to AZ, but got into accident in OK. P
sued in OK, (1) the manuf, (2) the importer, (3) the national distrib. of car, (4) and the dealer from which
they bought the car.
issue: Did ct. have jurisidiction over dealer and regional manufacturer?
held:Retail dealer and regional distrib. were not subject to jurisd. of the OK ct b/c the car was fortuitously in the
state, and they could not reasonably foresee the possibility that they would be haled into the ct. in OK.
If a D could not foresee that he would be held liable in jurisdiction outside jurisdiction where he sold,
then he cannot be held liable. Neither the retailer or regional distributor did any business there, shipped
or sold any products there, had any agents for service of process, or advertised in any media calculate
dto reach customers in that state. Mere foreseeability that the P might drive to the forum state is not
enough to justify personal jurisd. over the retailer or regional distributor.
note: JL finds holding unreasonable. They should realize the mobile article can move anywhere. To claim that
there is no foreseeability is silly.
dissent: D's purposeful action in choosing to become part of a ntaionwide network for marketing and servicing
cars and the acknowledged unique mobility of the car as a product should suffice to find that it would be
foreseeable to be haled into OK.

Asahi Metal Industry


facts: Between 1972-1982, shipped 100,000 tires to Cheng Shin in Taiwan, which were then sold in CA. P
was severely injured while driving motorcycle. Filed liability suit in CA, alleging that the accident was
caused by the explosion of a defective tire. Manuf. of the tube was named as one of the D (Cheng
Shin). D sought cross-complaint naming Asahi (Japanese) as a codefendant. Thousands of Asahis
tires were sold throughout CA. It seems there should be sufficient contact. Under the std. set by
McGee, would it seem unfair to hold them liable?
issue: Is mere placement of a product into the stream of commerce coupled with the awareness that its
prodcut would reach the forum state sufficient to sustain jurisdiction (e.g., enough min. contacts)?
held:No. There was insufficient minimum contact with CA, therefore Asahi was not liable. This was a repetion of
Worldwide VW. They had no reason to foresee they would be haled into CA. To satisfy minimum
contacts, there must be some act by which the D purpsefully avails itself of the privilege of conducitng
activities w/in the forum state. The unilateral act of a consumer bringing the product to the forum state
is not sufficient. P had not availed itself of the CA market b/c it does not do business, conduct activities,
maintain offices or agents, or advertise in that state. Furhtermore, it had nothing to do with Cheng
Shin's distribut. system, which brought the manuf. part to the CA.
note: JL feels that if you put defective valve into tire, you should be liable. Might cause insurance to rise, but
at least anyone hurt b/c of negligence would be compensated by injury.

4) Commercial activities
directed out of state

Hanson v. Denkla
held: A DE was held not subject to the jurisd. of FL ct. simply b/c the creator of a trust had moved his domicile
to FL and the trustee thereafter mailed distributions to him there. The D-trustee had not purposefully
initiated a relationship with FL or done anything to avail itself of the benefits, privilegs, or protections of
FL law. It had merely continued serving a client who had previously lived elsehwere.

Interdyne Co. v. SYS Computer Corp.


held:Where a CA seller sought out a NY buyer for its goods, and the buyer had not contact with CA other than
replying to the seller by mail and telephone, the NY buyer was held not subject to jurisd. in CA b/c the
buyer had not purpusefully initiated the transaction in CA and would have been unfairly disadvantaged if
forced to defend far from home.

5) Non-commercial actions

Kulko v. Superior Ct.


held: A NY father was held not subject to CA jurisd. in a child support case where the mother moved w/ her
child to CA after the separation. The Ct. concluded that he had not received sufficient benefits from his
child's presence in CA to make him susceptible to suit in that forum.

6) Limited scope of jurisd.:


remember, the C/A available is limited to the D's liablity producing acts in the
forum state. The D cannot be sued on other, unrelated causes of action.

Helicopteros Nacionales v. Hall


facts: Colombian corp. provided helicopter transportation for oil and construction co. in South America. One of
the helicopters owned by co. crashed in Peru. Four Americans died in crash. At time of crash,
decedents was employed by Peruvian Consorcio in Peru. Consorcio is a joint venture w/ a headquarter
in Houston, TX. Helicol appeared to attack jurisdiction (special appearance) and dismiss for lack of in
personam jurisd., which was denied. Judgement was entered against Helicol. TX Ct. ruled that TX ct.
had jurisd. over Helicol under states long arm statute, which reaches as far as due process clause
permits.
issue: For a state to have jurisd. over a D regarding an accident that occured elsewhere, must the D's contacts
w/ the state have been continuous and systematic?
held:Yes. Helicols contact w/ TX were insufficient to satisfy the due process clause and support in personam
jurisd. over a wrongful death action where its only contacts consisted of sending its CEO to TX for a K-
negotiating session, accpeting checks in NY drawn on a TX bank acct, purchasing goods and services
from a TX corp., and sending its employees to TX for training.
dissent: Brennan felt that there is specific jurisd. p. 365 - (JL agrees there is at least specific jurisdiction.) He felt
that wrongful death claim is significantly related to undisputed contact between Helicol and forum. Thus,
due process clause allows TX ct. to exercise specific jurisdiction. It had a bank acct. in TX, and were
closely concerned about operations of TX companys actions. Why cant we sue them b/c they are so
involved that suit on this company would be considered a suit on the TX companys actions?
note: Is there any reason why Helicol should not have to pay for what they have done?

e. Long arm statutes: unless a LAS of some type is enacted, local cts. cannot exercise personal
juirsd. over a non-resident, regardless of the activities or contacts that may be present.
The LAS may be general, as far as the
DPC allows (e.g., CA) (comporting w/ "traditional standards of fair play and substantial
justice"
- while the broad
constitutional std. in CA avoids the interpretive problems of specific jurisd.
statutes, it also creates considerable uncertainty as to the scope of juirsd.
conferred. It must be worked out on a case by case basis.
Alternatively, the LAS may be specific,
covering specific acts, which, if committed in the state, will submit the actor tot he state
jurisd. wrt any C/A arising from the act.
- ownership of property
situated w/in the state: mere ownership of local property is not sufficient to
subject a non-resident to personal jurisd. in matters unrelated to the property. A
state can confer jurisd. over a non-resident as to C/A arising from the ownership,
use or possession of property w/in the state.
- breach of contract: a
statute that purports to subject non-residents to personal jurisd. in local cts. on
C/A arising from K entered into or to be performed within the state may be too
broad.

- the validity of such statutes depends on on whether


there is min. contacts within the forum. A K may be technically made
where the offeree mails the acceptance, but if the offeree was merely
through the state at th time, this is probably not sufficient contact.

Burger King
facts: Franchise in MI. A written agreement was executed in MI. The K called for payments to be made to the
Miami office, and that its terms would be interpreted and enforced under FL law no matter where you
are or where franchise is. Provision also provided that any action shall be brought in FL. Trial ct. found
that D breached K agreement. State D has not really consented arguably.
issue: Is it fair for a forum to exercise jurisdiction provided solely by virtue of a contract of adhesion, even
though P may reside far from the agreed upon forum? Is a choice of law provision in a K relevant to the
determination of personal jurisdiction over a defendant?
held:Yes. A choice of law provision in a K may be considered in detemining whether a D has availed himself of
the protection of the forum state. While not dispositive, this element may be used to show the D's
consent to abide by and avail himself of the laws of the state. In this case, the D purposefully
directed activity to residence of the forum. Modern transportation has made it less burdensome and not unfair to
subject to D to litigate in D. The constitutional touchstone is whether D purposefully established minimum contact in
the forum state. Ds consent to the provision may be considered in seeing if D has availed himself of the forums
jurisd.
dissent: Given that all the negotiations were done in MI, and that MI office of BK was charged with dealing D, he
had no reasonable expectation of being sued elsewhere. There is a significantly element of unfairness
to have case tried in the forum chosen by the franchiser.
note: Could this franchisee reasonably foresee he would haled into ct. in FL? JL - does not think so.
- first case wrt jurisd. limit in consensual transactions (K) cases (p. 357)
- can contracting superior party make any state the forum state?
- e.g., if there are any disputes in the K and D wants the right
to sue, the forum shall be in state X Would that be alright. Under this case, appears theres no
limit. By buying something from L.L. Bean, can they then sue anybody in ME?
Would the choice of law clause in the BK franchise agreement been easier if the K had limited
the choice of forum perhaps.
- p. 358 n. 4 - National Equip. - upholding a K provision requiring appointment of
an agent in the state to receive service of process.
- Bremen - enforcing clause requiring suit to be brought in England even though
application of a law would result in application of law less favorable to the plaintiff.
- Carnival Cruiseline - ticket bought in WA by P for a trip to Mexico from CA. K
required suit to be brought in FL, where D was headquartered. Provision was upheld.

2. In rem and QIR bases of juirsd.: the mere presence of a res w/in the state, absent other
contacts, is not sufficient basis for excercising jurisd. in actions unrelated to the property. A proceeding
involving property is really a proceeding against a person, accordingly to justify its exercise of juirsd. the
ct. must assert power over the interests of the person and min. contacts is required.
a. The former concept QIR juirs. based solely on seizure of non-resident property is no longer
viable.
though Shaffer expressly reserved for
future consideration cases where no other forum is available to the plaintiff.
b. If the action in question relates to the local property, mere present of the
res in the state generally satisfies the min. contacts stadnard permits in rem and QIR jurisd.
c. While a non-resident ownership of local assets is not enough to confer
jurisd. to adjudicate claims unrelated to the property, the local ct. can still order attachment of
those assets as security for judgement being sought elsewhere where the non-resident is
subject to personal jurisd. Otherwise the wrongdoer who had all his assets in one state but was
not subject to personal juirsd. there could frustrate any attempt to collect judgement.
d. Intangible property: it must be shown that the claim in question is sufficiently grounded within the
forum state so that jurisd. is proper.
where intangible rights are connected with
some document or tangible asset, the situs of the document or asset may determine the
situs of the intangible.
- Examples: negotiable instruments, promissory notes, stock certificates
purely intangible property: whether jurisd.
over the debtor is enough by itself to give a ct. jurisd. over the debt, particularly where
conflicting claims are being made by non-resident claimants is controversial. Today, in
view of Shaffer, juirsd. over the debtor w/o more cannot be sufficient for due process to cut
off or affect the rights of non-resident claimants over whom it has not personal jurisd.
- jurisd. over all the
claimants is required in such matter provided that other contacts are sufficient to
justify jurisd. over them.

Atkinson v. Superior Ct.


held:A local musicians union was engaged in a K dispute w/ a national union over control of pension funds paid
for by the local employers. Garnishment of those funds was sufficient basis for jurisd. to adjudicate the
conflicting claims even though the national union was not subject ot personal jurisd. in CA. It found, in
light of the totality of contacts (e.g., the K, the employees, the services rendered), the maintenance of
suit locally was held to be consistent with traditional standards of fair play and substantial justice.

debtors are protected against double


liablity: so long as the ct. has an adequate basis for QIR jurisd. its decree is effective by
itself to establish title to the debt and extinguish all conflicting claims. The judgement is a
good defense if sued by another claimant later.

d. Insurance policy: a state cannot get jurisd. over a non-resident D based on the presence within
the state of his insurer (Rush v. Savchuk). The ct. insisted that the insured, not the insurer is the
true D, hence the contacts between the insured and forum state must be examined. In addition,
a direct action suit against the insurer, to try to bypass the necessity of a prior judgement against
the insured, still requires as a prerequisite, jurisd. over the out-of-state insured before suing the
insurer.

Seductive in rem label p. 385 - skim note


Traditionally, lawsuits were divided into either being in personam (suits to determine personal obligations) and in
rem (suits to detemine interest in proiperty). The distinction is not always so bright when one realizes that an action
to impose personal obligations affects property, and likewise, action to determine rights in property affects the rights
of people.

Schafter and in personam jurisd.


read note on p. 389
VI. RES JUDICATA/FULL FAITH AND CREDIT TO JUDGEMENTS
A. OVERVIEW OF POLICIES
1. State ct. judgments
a. FFCC requires a ct. in F2 to give an F1 judgement the same effect it would receive in F1
(Fauntleroy v. Lum)
b. Enforcement procedure: Effect of F1 judgement is determined by the law of the forum (F2).
Thus, the P is entitled only to those "procedures" allowed in F2, even if the judgment would have
been enforceable in by different procedures in F1.

Fauntleroy v. Lum
facts: MS prohibited forms of gambling in futures. It inhibited cts. from giving any effect to any K in violation of
this conduct. Two citizens made K in MSin violation of both the civil and criminal MS statutes. P went to
MO and brought an action in MO, recovering a judgement based on the K, on person who was
temporarily in MO. This judgement from MO was brought to MS for enforcement.
issue: Must the cts. of one state give full faith and credit to t he judgement of another based on an agreement
which violates public policy of the state asked to enforce the judgement?
held:Yes. The judgement of a state ct. should have the same credit, validity and effect in very other ct. in the U.S.
If the judgement of MO ct. was wrong based on a mistake of interp. MS law, then the judgement should
have been appealed in MO.
note: The merits of a foreign judgement can never be examined when enforcement is sought. The only legit.
challenge can be to the jurisd., personal or subject matter, of hte foreign ct. to render judgement.

2. Fed. ct. judgments


a. Recognition is required under 28 U.S.C. 1738 between state and federal cts.

Allen v. McCurry
facts: P was arrested and convicted for dealing heroin. P questioned the constitutionality of the search and
seizure conducted. The ct. denied
his suppression motion in part and
he was convicted. He was not able
to seek a fed. writ of habeas
corpus b/c he did not assert that the
state ct had denied him a full and
fair opportunity to litigate his search
and seizure claim. Nonetheless, he
brought a 1983 damage suit
against officer for an
unconstitutional search and seizure.
The trial ct. granted SJ finding that
McCurry was precluded from
relitigating the search which was
decided in state ct. already. The ct.
of appeals decided that preclusion
did not apply b/c habeas corpus
was available for a full and fair
litigation of that claim regarding the
alleged unfair search.

issue:
held: P is precluded. 1983 does not bar the application of collateral estoppel.
note:
dissent: Legislative history of 1983 and fed. policy, support issue preclusion. Congress had enacted the
statute in response to states failure to provide adequate remedy. The premise of 1983 is that state
courts do not provide an adequate opportunity for the vindication of federal rights, giving a state-court
judgement preclusive effect would undermine the statutory principle.

3. Judgments of foreign countries


a. FFCC does not apply to judgments rendered in a foreign country. Nevertheless, foreign
judgments often are recognized under two theories.
1) reciprocity: fed. ct.s should recognize and
enforce judgments of a foreign country if it would accord an American judgment similar
treatment. This doctrine does not bind states. (Note: under diversity jurisd., fed. cts. apply
the recognition law of the state in which it sits)
2) comity: most states will recognize
judgements provided that the foreign ct. had proper jurisd. and that it employed fair
procedures in adjudicating the claim according to the recognizing state's standards.

B. REQUIREMENTS FOR RECOGNITION OF FOREIGN JUDGMENTS


1. Generally: Before F1 is entitled to FFCC, it must appear that F1 had proper jurisd. (e.g.,
adequate basis for jurisd., ct. competency, adequate notice); and that F1 judgment is final
2. reqmt. that the foreign judgment be final:
a. F1 laws govern finality. Usually final if no further judicial action by the rendering ct. is need to
resolve the litigation. Different states view finality differently when on appeal, some consider it
final until actually overturned, others don't consider the judgement is entitled to recognition.
b. Finality of alimony/child support decrees:
where accrued payments are not
modifiable, tehy are treated as sufficiently final for FFCC purposes. A different result might
be warranted if the judgement could be modified retroactively.
FFCC need not be given to future
modifiable alimony installments b/c the fact that F1 reserved the power to modify its
decree means that the order is not final in F1. Nonetheless, many states will recognize
and enforce sister-state alimony and child support decrees.
Child custody: b/c the paramount concern
is for the child welafare, the ct. making the decrees usually reserves the power to modify
the decree upon a showing of changed circumstances.
- majority view: decrees
are entitled to limited FFFC only as to facts and circumstances existing at the
time of the decree.
- other cts. place the child welfare first, and give no FFCC
- alternatively, some cts.
will refuse jurisd., thereby forcing a disgruntled parent to go back to F! to seek
modification
3. F1 judgement be on the merits: the judgement must involve the substance of the P's
claims. When a judgment has been rendered, the ct. judgment extinguishes the C/A
C. EFFECT OF FOREIGN DECREE
1. Res judicata effect: if the F1 judgment is final ont he merits, it is entitle to any or all of hte
following res judicata effects in F2 (as it would receive in F1)
a. merger: the C/A is merged into the judgment so that P cannot sue on the original C/A (claim
precluded)
b. direct estoppel: even where the first judgment is not final, or is not a judgment on the merits,,
whatever has been fully litigated in the first proceedingis conclusive in subsequent proceedings
against the same party (issue preclusion)
2. Persons affected by F1 judgment:
a. All persons in privity according to F1 law
- though no person will be bound by F1 where to do so would
violate due prcoess such as where a non-resident who is sought to be found had not notice or
representation in the F1 ct.
b. Class suits: F1 will bind all members, even absent, provided they had adequate notice and
opportuntiy to be heard
3. Scope of relief allowed:
a. Ordinarily P cannot seek any other or supplemental relief in F2 beyond that granted in F1
b. Exception

worker's comp. awards: a worker may have right to recover


under the compensation law of injury the place or residence, or the employer's principal place of
business
Cts will uphold F2 right to grant worker's
comp. in addition that previously granted by F1, if F2 could have made a worker's comp.
award in the first place (e.g., F1 state had no expressed legit. interest in preventing
another state w/ sufficient interest in applying its own law (Thomas v. Washington Gas
Light Co.)
Note: although a worker may recover in
both F1 and F2, amounts paid in F1 are credited against the F2 recovery. The effect is to
ensure the highest recovery to which he would have been entitled (not double recovery)

Thomas v. Washington Gas Light Co.


facts: P worked in VA and D.C. He sustained injury in VA. He recovered benefits pursuant to an award of a
VA commission. He subsequently went to D.C. to obtain additional compensation under D.C. statute.
D opposed claim b/c he already had an award from VA. VA award had excluded any other recovery.
issue: Does state of VA have any legislative authority over D.C. to limit what they can do wrt compensation
award? (Case of legislative jurisdiction).
held:p. 427 - We hold that a state has not legit. interest in preventing another state from granting supplemental
compensation award when that state would have had power to give compensation award. FFCC should
not be construed to preclude successive workmens compensation awards. Overruling Magnolia. It is
the lack of "unmistakable language" in the F1 determination or underlying statutory remedy precluding
an F2 add-on recovery which supports the conclusion that preclusive effect was not intended.
note: Effect of full faith and credit clause on VA decision is limited if it proves obnoxious to the D.C.

foreign decree concerning title to local land: F1 does not have


power to enter a decree in rem as to F2 lands. Any such F1 judgment would be void for lack of
jurisd. F1 can enter, however, where there is personal jurisd. over the relevant party, a decree in
personam commanding the person to convey title, etc.. thereby indirectly affecting title to F2
lands.
- traditional view: F1's decree is not entitled
to FFC b/c only the situs has subject matter jurisd. to affect title (Fall v. Eastin)
- There's varying views towards whether full
FFC should be given or partial (to the facts found by F1, allowing F2 to makes its
determination as to the decree

Fall v. Eastin (foreclosure of jurisdictional issues)


facts: In a divorce settlement, P (Mrs. Fall) was awarded by decree NB property by state of WA. He
conveyed title to the land to his relatives in violation of the decree. P brought action in NB to quiet title,
though husband was not a party to the NB suit. The NB ct. refused to give FFC to the WA decree.
held:The WA decree is null and void b/c it cannot take land in NB.
note: What is effect of decree and conveyance executed under it? Why must we not give effect to that
decree? If NB wanted to recognize decree, it could have done so.
concur.: WA decree for specific perf. would be entitled to FFC as betwen parties in the NB. B/c issue concerns
land, a state need not give FFC (land taboo).
note: See also Clarke v. Clarke.
very difficult to defend Fall v. Eastin. Today, many states (though maybe not
majority) do not follow Fall v. Eastin. It has been overruled in many places.
How to avoid being trapped by Fall v. Eastin (p. 449 n. 8)
- Get a declaratory judgement so that ct. will then
subsequently recognize the DJ. DJ action provides precedent for a declaration of rights that
binds a party against whom it is asserted. This is very important tool b/c it would bind him
against all other parties.

D. DEFENSES TO RECOGNITION OR ENFORCEMENT OF FOREIGN JUDGMENTS


1. Generally: policies behind FFC and res judicata may be outweighed by other policies such
that the forum may assert the right to relitigate the C/A
2. Defenses raising invalidity of judgement
a. Lack of jurisd. in F1
where D did not appear in F1, F2 can inquire into the
sufficiency of F1's jurisd. regardless of F1's finding. The suffuciency is measure by due process
and F1's own standard though.
however, if D appeared in the F1 proceeding either by
general or special apperance, then F1's finding as its own jurisdiction will be binding on F2. Had
D not appeared, he could attack the F1 judgement in F1 on the issue of jurisdiction (known as
boot strap doctrine). F1's "finding" may be conclusive even where the issue was not actually
raised, as long as the issue could have been litigated therein.
- the boot strap doctrine applies to F1's
findings as to its jurisd. over parties and subject matter (Durfee v. Duke)
limitations: there may be some situations where F1's findings to its own jurisd.
will not be given effect regardless of whether it was litigated
1) particularly common where federal statute makes jurisd. exclusive of fed. cts.
2) where judgement is not final under the law of the rendering state or is not on the merits

Durfee v. Duke (limitations on full faith and credit)


facts: Durfee brought an action in NB to quiet title to bottom land along MO river. NB had jurisd. over the
subject matter only if the land was in fact in NB. In full litigation of the issues, the NB ct. found that it
had jurisdiction. The water shifted so that the boundary line marked by river was different. Duke
brought suit in MO to quiet title to same land. By diversity, the case was removed to dist. ct., which
held that the land was in NB, by virtue of the NB ruling.
held:The matter cannot be relitigated in MO even though the F2 ct. disagreed w/ F1's finding.
note: When state A sues state B, S.Ct. has original jurisd. MO should have sued NB.
concur.: Intimated that the issue re: boundary of land is not res judicata between states. It may be res judicata
against particular parties to the prior litigation.

Union Natl Bank v. Lamb (equitable & non-final decrees)


facts: In 1927, Lamb got a judgement in CO. He tried revive and enforce judgement in 1945 in MO. In MO,
however, statute limited revival of a judgement to 10 years in MO.
issue: Once the ct. of a sister state has jurisd. over th parties and the subject matter, is its judgement valid and
unimpeachable in the forum state even though it could not have been obtained here?
held:
note: While there is an obligation to enforce sister state judgements, but not in every judgement (see, e.g., land
taboo),

b. Defenses recognizing ct. discretion not to enforce valid judgment


F1 judgment not last in time: if there is a later inconsistent
judgement between the same parties relating to the same C/A, the judgment last in time
supersedes any earlier inconsistent judgment (Perkins v. Benguet, Treinies v. Sunhsine Mining)

Treinies v. Sunshine Mining p. 438 (major case)


- 1st suit - decided by WA - holding that it had jurisd.
- 2d suit - decided by ID hled that WA did not have jurisd., ignoring WA judgement
- 3rd suit - Pelkes started 3rd suit (bill of interpleader) in a 3rd ct.
- if there is a policy for insurance, which owner A tries assigning to B. A dies, each contests who owns
policy. Interpleader gives ct. means to decided who owns single policy.
- ID dist. ct. was found unassailable except for fraud or lack of jurisd.
- Under Trenies, assume ct. 1 says it has jurisd. but ct. 2 says that ct. 1 does not have jurisd. but ct. 2 is clearly in
error. Under Trenies, 3rd ct. must follow ct. 2, even though in error (see p. 439). It is later, not earlier action that
should be accorded res judicata (last-in-time rule).

- inconsistent judgements would result if 3rd ct. were allowed to follow first ct.,

Contrary to public policy of F2 - generally allowed in very


limited circumstances
Claim barred by SOL of F2 (no good usually) F2 may not
refuse to enforce an F1 judgement on the ground that the SOL for the analogue claim in F2 has
run.
- if however, P takes an F1 judgement that
has elapsed in F1 b/c of its SOL, and takes it to F2 which would permit suit on judgments
beyond the elapsed time and gets an F2 judgment, F1 must respect that F1 decision so
long as the nature of the proceeding was to create a "new" judgement rather than merely
extend the life of the original F1 judgement.
Claims based on tax (no good) or penal liablitilites (ok claim):
Recognition may be demanded on a tax judgment since the judgment for taxes is simply one for
money. Recognition not required for unadjudicated tax claims, though many states do now
enforce such claims.
Failure to comply w/ F2 procedure - no enforcement okay if P
fails to comply w/ F2 procedural reqmts.
- F2 may apply its own SOL even though the
F2 SOL is shorter than F1's (McElmoyle v. Cohen)
Forum law preventing cts. from enforcing foreign judgment (no good)
- A state cannot escape it constitutional
obligation to give FFC to the judgment of sister states by denying jurisd. to otherwise
competent cts. to entertain suit on a foregin judgement. (Kenney v. Order of Moose)

Kenney v. Order of Moose


facts: P went to IL, where ct. refused to entertain a suit based on an AL wrongful death judgement,r elying on an
IL statute forbidding actions for deaths occurring outside the state.
held: Reversed. There are limits to the power of exclusion. The fact that here the original C/A could not have
been maintaind in IL is no an answer to a suit upon the judgement. It is plain that a state cannot escape its
constitutional obligations by the simple device of denying jurisd. in such cases to courts otherwise
competent. Ct. is closing its doors.
note: Rationale is an extension of Fauntleroy v. LUm (e.g., F2 must give the same effect to an F1 judgment as it
would have been received in F1 regardless of how much it offense F2's public policy.

E. FAMILY LAW JUDGMENTS


1. Divorce
a. Choice of law rule: the law of the P-spouse domicile determines the grounds of divorce.
b. Ex parte divorces: The divorce granted by any state in which the P-spouse is domiciled is
entitled to full faith and credit (mostly) (Williams v. North Carolina I)

Williams v. State of NC (ex parte divorce)


facts: Petitioners went to NV and obtained residency in NV. Got divorced, then went back to NC and got
married. Petitioners were arrested for bigamy b/c NC would not recognize divorce decree. NC claims
that there is no valid jurisd. b/c wife was never properly served, moreover, she entered an appearance
there.
issue: Must NC recongize a divorce garnted in NV where NVs finding of domicile is not questioned by the NC
ct.?
held: Yes. The divorce must be respected even though the D neither appeared nor was served w. process in
NV. Prima facie every state is entitled to enforce in its own ct. its own statutes, lawfully enacted. One
who challenges that right, because of the force given to a conflicting statute of another state by the full
faith and credit clause, assumes the burden of showing, upon some showing rational basis, that the
conflicting interest of the foreign state are superior to those of the forum. Otherwise, the guy would be
lawfully married in one state but bigamist in another.
note: Illustrates how CL changes. p. 476 Haddock v. Haddock - overruled.
assuming A is married to B, then A marries C before becoming divorced from C. Second
marriage is not valid. How that can be considered bigamy is unclear.
same sex marriage - not recognized okay, despite full faith and credit, b/c it may be against
public policy of the state
dissent: NC was free to ignore the judgement b/c of the lack of personal jurisd. (p. 482).

The marital relationship is the "res" brought


w/ the P-spouse, which the local cts. have dissolve provided jurisd. is proper. Jurisd. over
the D-spouse is not needed.
limitations on ex parte divorces:
1) P's domicile must be established in accordance w/ the law of the forum.
2) Due to the strong
interest of the forum for the D-spouse, the determination of P's domicile in F1
(and thus the validity of F1 divorce jurisd.) may be collaterally attacked in F2
(Williams v. NC II). Attack may be made by anybody not bound by the F1 decree.
There is at least a presmption of validity in F1's findings, and F1 cannot apply
some novel or arbitrarily high stad to invalidate an out-of state divorce (though it
can apply its own standard in testing the sufficiency of the P's domicile in F1).

Williams v. State of NC (II)


held: A decree of divorce is conclusive adjudication of everything except the jurisdictional fact upon which it is
founded, and domicile is a jurisdictional fact. A jurisdictional finding by one state should be given weight
in a sister state. Such jurisdictional finding may only be rjected if the party urging rejection can
overcome the burden of proof and provide ample evidence of hte lack of jurisdiction.
concur: NV had unquestioned authority, consistent w/ due process to grant divorces on whatever basis it seems
fit to all who meet its statutory requirements and to give its divorce decreea absolute and binding finality
withint he confines of its borders.
hypo: Assume husband went to NV, and he gets an ex parte divorce. Two years later after ex parte divorce is
granted, the wife comes to NV and enters an appears nunc pro tunc (now for then). That appearance is
no longer ex parte, and jurisd. is conclusive (boot strap doctrine) that there is full jurisd. - If wife
petitioned that she be given X amount of dollars, the court has jurisd. which cannot be attacked
collaterally.
Assume she was told to come to NV on some false pretense that would benefit the husband in
this situation. The ct. would not hold there was full jurisd. However, if she came a few years later, then
by bootstrap doctrine, the ct. obtains full jurisd b/c she has made an appearance and opportunity to
make an appearance.
Suppose you were in charge of devising a law of divorce in the U.S., would you want a national
divorce law?

Who are barred from collateral attack:


- A P in F1 (Krause v.
Krause)
- A D-spouse who
participates in the F1 proceeding may not collaterally attack the judgement in F2
(Sherrer v. Sherrer)
- Persons who are in
privity w/ either party before the F1 ct. are bound (Johnson v. Muelberger)
- 3rd parties generally will not be permitted to attack the decree
- non-appearing spouse - if
that spouse was responsible for instigating the proceeding (paid wife to go to NV
and get divorce)

Krause v. Krause
facts: Husband tried to claim ex parte divorce was invalid to avoid his support obligation to his second wife.
held:Estoppel precludes a party who has procured or benefitte from an out-of-state divorce from later attempting
to repudiate it.

Sherrer v. Sherrer
facts: Married in NJ and domiciled in MA. She went to FL w/ kids to hook up with boyfriend. She got divorce.
issue: Must FFC be given to the divorce decree of a sister state where such decree was granted after personal
appearances by both parties and litigation of all issues including jurisd?
held: Yes. One state must give FFC to a sisters states judgement if a party has had the opportunity to fully
and fairly litigate the issue, you are bound. (In accordance w/ bootstrap doctrine. E.g., if a person has
an opprotunity to object to jurisd, but fails, then another ct. may assume jurisd. is proper and it is too
late to attack that judgement.)
compare: Later in time rule
Johnson v. Muelburger p. 513
facts: After the death of his first wife, Johnson remarried, which ended in divorce after his 2d wife got a divorce
decree in FL. Johnson, although a resident of NY, sent an atty. to represent him in FL to contest the
allegations of wrongful acts. Although the 2d wife had not copmlied w/ the statutory residence reqmt,
this issue was not raised and decree was granted. After Johnson died, his daughter (D) was to receive
his entire estate by will, however, Johnson's 3rd wife contest interposed a claim for herself. The
daughter contended that the 3rd marriage was invalid b/c the FL lacked jurisd. to grant a divorce from
wife 2.
held: A deceased husbands appearance in his second wifes FL divorce precluded his daughter from
collateral attack upon the resulting judgement even though the wife had not complied w/ FLs
juirsdictional 90 day resident reqmt. Johnson and his wife had ample opportunity to litigate jurisd. at the
time of decree. The fact that they did not foreclosses attack by either party. If D is in privity w/ her father,
then she is also bound. If she is to be considered a stranger, then she has no standing b/c here interest
in her father's property was merely expectancy. Since FL would not permit D to attack the decree, NY
will not allow it.

c. Jurisd. to divorce and attack on migratory divorce decrees (is something less than domicile
constitutionally sufficient?)
Divorce in foreign states will generally be recognized in most
states, except in maybe less civilized countries where stoning a divorcee is allowed.
Virgin Islands (p. 509) made a bid for US migratory divorce
business by enacting a statute by effectively removing domicile and obligatory perjured
testimony concerning intent to stay there. This attempt was invalidated by the 3rd Cir. on two
grounds.
1) lack of authority under the Virgin Islands
Organic Act to pass legislatiion granting divorce to persons domiciled elsewhere
2) violation of the due process clause.
- adherence to the
domiciliary requiremnt is necessary if our states are really to have control over
the domestic relations of their citizens.
- the DPC of the 5th
amendment conflicts with the Virgin Island statute. Domestic relations are a
matter of concern to the state where a person is domiciled.
In NY, cts. are authorized to assert divorce jurisd. over parties
married in NY regardless of domicile at the time of divorce. The NY ct. has also recognized
Mexican quickie divorces, at least where one of the parties if physcially present in Mexico when
the decree is granted and the other has submitted to jurisd. by appearance of local counsel
(Rosentiel v. Rosentiel)
- the S.Ct. has yet to rule on the consitutionality of NY's law.
- jurisd. based on residence on the one hand
seems to conform to the reality of many of these ex parte divorces. On other hand, it goes
gainst policy of discouraing divorces.

Rosenstiel v. Rosenstiel
facts: Former hubby of D got a divorce from wife in Mexico. P and D got married in NY. The hubby sought to
annul marriage on grounds that divorce was invalid. Thus, Ds wife was alleged incompetent to contract
to marriage. The divorce law of the Mexico provides that the ct. may exercise jurisd. either on the
basis of residency or of submission.
issue: Should NY recognize bilateral Mexican divorces as not offending that states public policy?
held: Yes. This was a bilateral divorce. Recognition should be given. As a matter of comity, it offends no
public policy of NY. In cases where the parties have had no personal contact w/ the foreign jurisd. ,
divorce has not been recognized. Kaufman was physically within the jurisdiction, before the court w/ the
usual incidents and and the implicit consequences of voluntary submission to foreign sovereignty. He
did also establish at least a statutory residence there. Moreover, the the appearance of the wifes atty.
give further support to an acquired jurisd. over the marriage.
hypo: Could rep. for child to contest divorce in foreign state? Perhaps.
note: NY is the state which has recognized bilateral, consensual Mexicans divorces. It has however, never
recognized ex parte unilateral Mexican divorces or Mexican mail order divorces.
ethical problems w/ migratory divorces
- suppose one party comes to you and wants a divorce. Is it unethical to advise
him that he may go to another state to get an ex parte divorce, particularly where he intends to
return to the home state, b/c you are effectively advising him to perjure himself to establish phony
residence there.

d. Divisible divorce doctrine: w/o personal jurisd. over the D-spouse, the forum cannot grant in
personam relief against the absent spouse for incidentals to the marriage (Estin v. Estin)
basis of personal jurisd.: may be obtained
by long arm statute. For example several states provide statutes that jurisd. may be
exercised over a non-resident spouse if the forum was the matrimonial domicile (domicile
where they last lived together as man & wife)
jurisd. to support judgments for payment
obligations: must have personal jurisd. over the D-spouse to get enforceable
alimony/support payments (the D himself must have brought about the relationship
between the forum and himself, the P's relationship to the forum is not enough) (Kulko v.
Superior Ct.)
- Once personal jurisd. is
obtained, it continues as long as the action is pending, enabling a ct. to modify or
increase support later.
- rights of obligee-spouse cannot be affected w/o personal jurisd. (Estin v. Estin)
- But note: if a spouse's
property rights depend upon him/her being married, the ex parte divorce will
effectively cut off such rigths (Simons v. Miami)

Estin v. Estin (known for divisible divorce)


facts: H had been ordered by a NY ct. (having personal jurisd. over him) to pay W for seperation maintenance.
He went to NV to get an ex parte divorce. In subsequent proceeding in NY, H contende that the NV
decree freed him of any further obligation to W.
held: NV decree was divisible. While entitled to FFC in NY insofar as terminating the marital status, it is
ineffective to cut off W's support b/c she was not subject to the person jurisd. of the NV ct.
note: Realize one can divided status from obligations. One cannot free themselves from obligations owed to
an obligee unless the ct. has personal jurisd. also over the obligee.

Simons v. Miami
H got an ex parte divorce from W and later died. W was held not entitled to dower rights in H's property b/c she was
not his wife at the time of death.

Finality of support judgements:


- Support obligation
reduced to a money judgeemtn is entitled to FFC just like any other money
judgement
- Accrued installment
payments, even if not reduced to judgement but not modifiable in the rendering
state are entitled to FFC
- When retroactively
modifiable and where future installments are modifiable, the F1 decree is not
final. F2 therefore need not give the judgment FFC, though there is no reason
why it should recognize the F1 judgment. If F1 would modify, then F2 shoudl
modify the decree itself using F1 standards, even for future installments.
Worthley v. Worthley
facts: Worthleys were married in 1943 and divorced in 1946. In NJ action, Mrs. Worthley got a decree for
$9/week. Mr. Worthley refused to comply with order and left state. A defense existed was that if a
decree was modified, it was considered not-final and could not be touched by an out of state court.
held:The cts. of one state should recognize and enforce the alimony and support decrees of a sister state
whether or not they are modifiable, and must afforrd the D an opporutnity to litigate the issue of
modification. If there is prospective modifciation, the issues determined will be res judicata so long as
the parties circumstances remain unchanged. The law of the state in which the support obligation
originated can be judicially noticed and applied by the forum state.

2. Child custody: really no choice of law rules. Cts. will apply whatever law they feel best
serves the interests and welfare of the child
a. All states have adopted the Uniform Child Custody Jurisd. Act, which establishs a "home state"
as having primary jurisd. to award child custody. Other states are required to defer to the home
state's jurisdiction.

In re Marriage of Ben-Yehosua (p. 524)


facts: Domiciled in Isreal for 13 years. While visiting her parents in CA, Mrs. BY filed a petition for seperation after
14 days of her arrival. Mr. BY accepted service, appeared w/ counsel at al the proceeding arising from the
petition. An interlocutory award of custody was given to her. He later violated the ct. order giving custody of
their children to Mrs. BY, by removing them from CA and taking them back to Israel. In Israel, he obtained
an award of divorce and custody of the children. She did not appar in person or through counsel. The CA
ct. granted her a divorce and custody of the children.
issue: Can subj. matter jurisd. over a custody quesion be obtained by consent, waiver, or estoppel?
held: No. The exclusive method of determining subj. matter jurisd. is by the Uniform Child Custody and Jurisd.
Act. UCCJA confers jurisd. on several bases. Subj. matter jurisd. cannot be confered by consent, waiver,
or estoppel, and it does not provide for the establishment of juirsd. by the mere presence of hte parties or
by stipulation or consent as attempted here. The children were here only in CA for two weeks before the
proceeding was filed. There must be maximum rather than minimum contact with the state in view of that
interest of the child is served when the forum has optimum access to relevant evidence about the child and
family. Submission of the parties to a forum is not suffiicient w/o additional factors establishing closer ties to
the state.
note: The UCCJA confers jurisd. on grounds, such as the childs home state, that a significant relationship exists
between the state and the child and parents to make it in the best childs interest for that states courts to
assume jurisd.

Arguably, CA might be the better place for the child, in terms of opportunities, supporting jurisd. by the
CA ct.

In re Matter of B.B.R.
facts: Rogers (D) gave birth to a child and decided to adopt the child to the Platts (P). After the child spent two
days in CA, the Platts took the child to D.C. Rogers changed her mind and instituted an action to obtain
custody of the child. The Platts responded by filing a similar action in D.C. The disctrict ct. entered a
decree awarding custody to the Platts. Rogers appealed.
issue: May a custody action be filed when another action is pending in a ct. of competent juirsd.?
held: No. A custody action may not be filed when another action is pending in a ct. of competent jurisd. The
Parental Kidnapping Prevention Act (PKPA) was meant to deal with the recurring prob. of interstate custody
disputes w/ conflicting ct. rulings. The act provides that when the cts. of one state properly entertains
custody dispute, the ct. of other states may not so entertain. The natural mother is a resident of CA, and
clearly has contacts with that state. While the child lives in D.C., it was born in Ca, and given to the Platts in
CA, thus the child has significant contact with CA. Therefore, the CA custody action, which preceding the
D.C. proceeding is the only allowable action.
note: p. 542 - interstate child - like an army brat who just does not have a state b/c theyre always travelling?
View espoused by Traynor suggests that two state may have concurrent jurisd. Though, this approach may
encourage the losing parent to remov ethe child to another jurisd. and start over again.

- see Foster, Child Custody Jurisdiction, 27 NYL Sch. L. Rev. for excellent overview of UCCJA and
PKPA, and the conflicts that exist between them
VII. CONFLICTS BETWEEN FEDERAL AND STATE LAW
A. ERIE DOCTRINE
1. Where fed. rights are involved: fed. law alone will be applied to the issue (Supremacy clause).
If the suit is brought in state ct. the procedural rule of the state should apply subject to the limitation it
cannot defeat a claimant's rights under the federal law.
2. When no fed. issue involved: fed. cts. are free to apply their rules of procedure, but any issue
of substantive law must be determined according to the law of the state.
a. Characterization of whether it is a substantive or procedural issue is a fed. Q, controlled by fed.
precedence
b. Former substantive test ("outcome determinative): any issue that might have a material effect on
the outcome of the case was substantive and thsu subject to state law (Guranty Trust v. York)

Erie RR Co. v. Tompkins


issue: Was the trial ct. in error refusing to recognize state case law as the proper rule of decision in deciding
the substantive issue of liablity (outcome determinative issues)
held: PA is the law to look at for liability. If a procedural matter, look to the federal rules. Otherwise, apply the
rules of the state where the federal ct. sits. Swift introduced grave discrimination by non-citizens
against citizens by forum shopping. Federal cts. do not have the power to use their judgement as to
what are the rules of common law in a state.
note: Brandeis assumed that you should look to PA for the law. He failed to look to NYs conflict of law! In the
case of diversity jurisdiction, you must look to the conflict of law of the state where the federal court is
situated. see Klaxon v. Stentor to explain why PA law applies.

Guaranty Trust Co. v. York


issue: Where a suit brought in fed. ct on diversity would be barred by statute if borught in the state ct. may the
fed. ct. nevertheless entertain the suit?
held: No. When sitting in diversity, the fed. ct. is but another state ct. The controllin factor is whether by
reason of application of differing fed. rules, an outcome substantially different would result than if the
case were brought in state ct. The rules of law applied to the case cannot allow or bar recovery in fed.
ct. where an opposite result would occur in state ct. If a rule is outcome determinative, even viewed as
procedural, then state law must apply (e.g., stat. of limitations).
note: The outcome determinative test enunciated in this case had developed to a point where fed. cts.
became uncessarily slavish to the states. The pendulum swings back in Byrd and Hanna, particularly.
Ragan v. Merchants (p. 597)
Held that the manner in which a SOL is tolled (for instance by service on the D rather than by filing with the clerk)
is substantive for Erie purposes b/c the issue is outcome determinative. The Ct. rejeced the contrary rule under the
FRCP. (Overruled by Hanna v. Plumer)

c. Modern test:
FRCP prevails (e.g., all such matters are
presumptively procedural and need not yield to state law under Erie) (Hanna v. Plumer).
Although the 1789 Judiciary Act compelled reference to state law, the 1934 REA is said to
amend the adoption of procedural rules for fed. cts.
- but see Walker v. Armco.
It had been widely beliefed that FRCP 3, which provides that an action
commences upon "filing of a complaint" with the ct. takes precedence over state
law and tolls the forum state's SOL. The SCt. decided otherwise in Walker.
Other federal policies (countervailing
considerations) may also outweigh state rules (Byrd v. Byrd)

Hanna v. Plumer
facts: P was injured in MA. OH action was brought against executory of a deceased MA resident in MA dist.
ct. for accident in SC. D was served complying with the rules of FRCP (served complaint with someone
of suitable age and discretion residing there). MA, however required in-hand service. D moved to
dismiss on the ground that the the rule is outcome determinative and hence must be followed.
issue: Where a question arises under a FRCP, should the fed. rule be applied?
held: Yes. The FRCP should be applied unless it is shown that the S.Ct. and Congress erred in their prima
facie judgment. Under the REA, the FRCP would apply if it does not abridge, enlarge, or modify a
substantive right. It simply allowed case to go on.
hypo: If have a fed. case under diversity, use the FRE, notwithstanding it may effect the outcome.
Suppose someone has a copyright on a book and wants to assign that copyright to a publisher.
The royalties that was agreed to was not given to him and both parties are from NY. Where does he
sue to recover royalties? There is no diversity, and copyright act is not being alleged violated. State ct.
has proper jurisd.

Walker v. Armco Steel


facts: Walker (P) filed a personal injury action in fed. district ct. against Armco baed on diversity. Under the OK
SOL, an action is not considered commenced against a D until service was effected. The ct. rejected Ps
argument that commence of an action occurred upon filing, and dismissed the action under OKs 2 year
SOL.
issue: In a diversity action, does state law regarding when an action is commenced prevail over FRCP?
held: Yes. In Hanna it had addressed the situation in which a fed. rule clashed w/ the rule of state law. Thus, the
first step is to see if a clash exists.

P contend when the FRCP conflicts w/ a state rule, the fed. rule must apply. This is true only when the
scope of the fed. rule is broad enough to truly conflict w/ state rules. There is no indication that FRCP 3 was
intended to deal w/ the SOL, rather it merely set the point form which the various timing requirements of the
federal rules were to begin running. No conflict exists.
The ct. has long held that the SOL is a matter of substantive law, which fed. cts. are bound to
follow in a diversity case. Anything which would tend to toll or extend the statute, also, must be
considered a matter of substantive law and state law must prevail in such situation.

Byrd v. Blue Ridge Electrical Cooperative


facts: Byrd (P) was an employee of a subcontractor to Blue Ridge. He was injured on the job in SC. P sued Blue
Ridge in SC on the grounds of diversity jurisd. D asserted as a defense that Byrd was a
statutory employee of Blue Ridge, and accordingly his exclusive remedy was in
workmans compensation. In addition, the issue whether Byrd was a statutory employee
was to be decided by the judge not jury b/c the S.Ct. of SC had held that this was fact for
the judge to decide. The trial ct. submitted the determination of a jury, which found for
Byrd.
issue: Must a fed. ct. sitting in diversity give force to a substantive law or policy of the state where there exists an
express fed. policy to the contrary.
held: No. The state ct. decision it appears relied on a rule based on habit and custom rather than substantive
policy. Although cases following Erie evince a broad policy to conform to state rules even if done as a
matter of form, there is a strong countervailing federal considerations such as the 7th Amend. policy of jury
determination of facts. In view of a lack of a compelling state policy to disrupt the judge-jury relationship in
fed. ct. and the existence of a strong fed. policy, the trial correct was correct in submitting the issue to jury.
Lastly, there is not present sufficient certainty that a different result would follow if one rule were followed
over another.
note: Key factor that case hinged on: 7th amendment guarantees trial by jury. Ordinarily, Erie suggests that state
law should be followed b/c it appears to be possibly outcome determinative. . However, countervailing fed.
policy takes precedence over outcome determinative rules.

Byrd Balancing (p. 601)


the "countervailing considerations" notion envisions a balancing of state and fed. interests. Since Erie
rests on constitutional as well as policy grounds, "countervailing considerations" cannot overcome the
constitutional objection when there is no fed. law making authority
n. 3 p. 601 - Brennan suggests that the choice betwen bench trial and jury trial may not be outcome
determinative. Suppose judge is prejudiced?

SUMMARY
1. In the absence of fed. law or fed. law maknig power, Erie requires in diversity cases, that fed. ct. apply the law of
the state in which it sits.

2. When there is fed. law making power, the policy underlying Erie may still favor state law so that intrastate
uniformity will be furthered and state interests in the application of its own law preserved. (See infra for fed. common
law discussion). Nevertheless, there may be countervailing considerations which argue in favor of uniform national
rules.

3. Displacement of state law takes place by FRCP when there is a direct clash between the two rules, taking into
acct. the intended function of the fed. rule (Walker)

d. Forum non conveniens: It is rule of venue (e.g., procedural) not a rule of decision so fed. not
state law should apply.

Stewart Organization v. Ricoh Corp.


facts: Forum selection clause in a K requiring disputes on the K be litigated in NY. Stewart sued Ricoh for breach
of K in an AL fed. dist. ct. Ricoh moved to transfer the case to NY under 28 U.S.C. 1404(a) (change of
venue). The dist. ct. denied the motion, holding that the transfer was governed byAL law, which disfavored
forum selection clauses.
held: Fed. transfer statute, not fed. CL applies. The forum-selection clause which represents the parties
agreement as to the most proper forum should receiv neither dispositive consideration nor no consideration,
but rather the consideration for which Congress provided in the fed. transfer statute.
note: A fed. ct. for the convenience of parties and witnesses may transfer a civil case to any other fed. ct. which
the case could have been first brought in the first palce.
- 1404(a) has substantially repalce the CL dismissal for forum non conveniens. Though, forum
non conveniens remains important for international cases in which 1404(a) doe snot apply.

B. CHOICE OF LAW IN FED. CT. INVOLVING STATE-CREATED RIGHTS


1. A fed. must adopt the state's choice of law rules where it sits and apply them as its own (there
are no federal choice of law rules in this context) (Klaxon Co. v. Stentor)
a. Fed. ct. must characterize issues as the state ct. would for choice of law purposes. It is
immaterial that the fed. ct. may have characterized it as substantive for purposes of the Erie
doctrine.
b. Even after an action is transferred, the fed. transferee ct. must apply the same choice of law
rules as the originating state from which the case came from. (Van Dusen)
2. Only in exceptional where will fed. choice of law be recognized
fed. rather than state law determined indemnity and contirbution in an air
disaster. Held justiffied b/c of the prevailing fed. interest in uniform air regulation. (Kohr v. Allegheny
Airlines)

Klaxon Co. v. Stentor Elec. Mfg.


facts: P (Stentor) transferred its entire business to Klaxon (D) in return for a contractual promise by D to use best
efforts to promote sale of certain items upon which Stentor retained patent rights. Klaxon was a DE corp.
The agreement was executed and performed in NY. P sued in diversity juirsd. for breach in fed. dist. ct. in
DE. Judgement was rendered for P. P then moved to modify the judgement to add interest to the
judgement under a NY statute. Dist. ct. granted on the grounds that the issue was substantive, and that
NY law governed the dispute.
issue: In a diversity jurisd. must the fed. ct. apply the conflict of law rules prevailing in the states in which the ct.
sits?
held: Yes. Fed. ct. must follow the choice of law of forum where fed. ct. sits in for diversity cases. Filled gap left
by Erie case. There must be uniformity within each state so as to avoid forum shopping between fed. and
state cts. within each state. The fed. ct. must determine what the state is, not what the law should be. Any
other decision would lead to a disruption of the equal administration of justice in state and fed. cts. which sit
in the same state and apply the same state law.
note: criticism (p. 618-621) Van Dusen v. Barrack

Van Dusen v. Barrack


facts: Numerous actions arising from a MA plane crash were filed in fed. ct. in PA. The P argued that transferring
the action to MA would not serve the interest of justice (as required by 1404(a)) b/c it dminishes their
recovery. MA limited wrongful death statute to $20K, and the fed. ct was more likely than its PA coutnerpart
to apply MA law.
held: Transfer approved. Where the D seeks to transfer, the transferee dist. ct. must apply the state law that
would have been applied if there had been no change of venue. A superficial reading that the fed. ct should
apply the law of the state in which it sits. The history behind 1404(a) does not justify the conclusion that
one might get a change of law as a bonus for a change of venue.
note: 1404(a) - transfer provision. If a case could have been brought in NY or CA, but case brought in NY. In CA
is where most of the evidence and witnesses are. D asks to shift case to CA. If transfer allowed, then all
the laws of the old forum are shifted to new forum.

Suppose action starts in NY in fed. ct. (D is diverse b/c he originally was domiciled in NY). D moves
to CA, and D wants to transfer to CA as a ploy to throw case out. Suppose CA is where the P resides and
principle place of business) and D also has a residence there. Transfer would lead to loss of diversity. Can
CA ct. retain diversity jurisdiction?
- at the Ds motion, the case moves to CA, where one finds both domiciled.
- 1404(a) allows case to place where action could have been brought originally.
- would ct. permit ploy to move to new state to destroy domiciliary? Probably not.

Ferens v. John Deere Co.


facts: Injured in an accident on his farm in PA caused by John Deere Tractor, Ferens filed suit in MS fed. ct. to
take advantage of the states SOL. Ferens then had th ecase transferred back to PA where it was too late to
sue.
held: The P may request transferrence to another ct. The transfer statute was not intended to affect the outcome
of the case.
dissent: Van Dusen requires the opposite result. It is unlikely that Congress in enacting 1404(a) meant to
provide the D a mean to manipulate in his favor the substantive law to be applied in a diversity case. It
is similarly unlikely that Congress meant to provide the P with a means to appropriate the law of a
distant and inconvenient forum in which he does not intend to litigate and to carry that prize back to the
state.
note: Unlike prior case, it was the D who sought another jurisd. Here P, sought another jurisdiction. It seems fair
in this particular circumstance to enable justice.

Under UCC, provision exists to set aside any agreement or provision of the agreement that is
unconscionable. It has been largely ignored -- some feel it gives cts. too much discretion. This is a
powerful provision.

C. FEDERAL COMMON LAW


1.

Clearfield Trust Co. v. US


facts: US (P) sought reimbursement on a check it issued to Barner, who never received it, but was endorsed
through forgery and was honored by Clearfield.
issue: Are the rights and duties of the US on commercial paper which it issues governed by federal rather than
local law?
held: Ct. applied fed. CL to determine the USs liablity on commercial paper. The ct. has jurisd. based on fed.
Q jurisd. This is governed by federal rather than local law, where the U.S. is a party. The authority to issue
the check was derived from the Constitution, which the US issues on a vast scale and in all states so that
the application of state law would subject the rights and duties of the US to great uncertainty.
note:

Bank of America Natl Trust v. Parnell


facts: Parnell (D) and others converted bonds that apparently was stolen from Bank of America (P). The bonds
were guaranteed by US, though they are not govt. bonds. Under state law, the burden of proof shifts to
Parnell (D) and the banks to prove they got the bonds innocently and honestly. Under fed. law, the burden
of proof rests ont he P to show that Parnell acted in bad faith.
issue: Does the mere involvement of a federally insured commercial paper in a transaction necessarily require the
applicaion of fed. CL by a fed. ct?
held: No. Here the transaction is essentially a private one betwen private parties, local law must govern. The
federal rights are involved only to the extent of the govts insurable interest in them. The question of
whether a tort of conversion has occurred does not alter this interest, and it should be determined by local
state law as any diversity suit between diverse private parties.
dissent: Argue for a per se standard for commercial paper cases. The y would treat all such cases as fed. CL
cases.
note: Need diversity of citizenship here.
Arguably, where US has endorsed bond, it is a federal obligation which provide fed. Q jurisd. under the
Clearfield doctrine.

Alternatively, one might hold all commercial transactions to be subject to state forum (no Cleaarfield
doctrine) and that a uniform code should be employed.

Banco Nacional de Cuba v. Sabbatino


facts: The Cuban govt. expropriated American sugar interests in Cuba for illusory compensation. Farr entered
into another K to buy the sugar from the Cuban govt. After
Farr took a shipment of sugar, rather than pay the Cuban govt.
it turned the proceeds over to a receiver. The Cuban Natl Bank
sued in fed. ct. to recover bills of lading for sugar from the
receiver. Sabbatino urged that the expropriation should not be
recognized b/c it is in violation of interational law.

issue: May a fed. ct. rule on the validity of the expropriation of American property by a foregin govt. within its own
territory, if the govt. is recognized by this country at the time of suit?
held: No. The act of state doctrine provides that the courts of one country will not sit in judgement on the acts of
the govt. of another done within its own territory. The judicial branch will not eamine the validity of an
expropriation by a foreign govt. within its own territory as long as that govt. is recognized by the U.S. in the
absence of a treaty or other agreement regarding controlling legal principles even if a violation of
international law is alleged.
note: p. 714 - see Zschernig v. Miller: Ct. struck down an OR statute providing for the escheat of decedents
estate when an alien heirs country would not allow US citizen reciprocal rights of inheritence. The statute
was aimed at Communist countries, and was held to be an invalid intrusion by the state into the field of
foreign affairs, which the constitution entrusts to the president and Congress.

Somportex v. Philadelphia Chewing Gum Corp.: Issue: was this really an act of govt in a foreign state?

Schibsy v. Westenholz: action in England to enforce a default judgement. The P was a dane, and
resident in France, and the D was a Dane, resident in England. The english ct. refused to recogniz jurisd.
b/c there was not adequate service or notice, flying in the fact of our own statutes regarding notice and
appearance. Thus, there was a jurisdictional defect that should lead to non-recognition. Example where law
would not be recognized.

Suppose for example, a foreign country murdered people and demanded money from our banks.
Under the Act o f state doctrine suggests that we must comply? Morally we should not. Do we need to go
to the President or congress to intervene? What are the limits of Banco?

p. 701 - judicial cognizance of foreign acts of state.


- the Hickenlooper Amendment enacted in response to Sabbatino:
No ct. in the US shall decline on the ground of the federal act of state doctrine to make a determination
on the merits giving effect to the principles of internationl law in a case in which a claim of title or other right
to property is asserted by any party including a foreign state ... based upon a confiscation or other taking ...
by an act of that state in violation of the principles of international law

- Does this amendment bind the president wrt acts of a foreign govt? President has the power and is in charge of
foreign relations. Appears that maybe pres. could ignore for violating the separation of power b/c Conress cannot
tie the Presidents hands. .
- The amendment appears to overrule Sabbatino, though cts. have confined it though interpretation to a relatively
narrow class of cases. Most cts. hold that the Amendment applies only if the specific property directly involved in
the allegedly unlawful foreign act is in the US.

outlines of an act of state


- while state does not have power to strike down legislation; perhaps president might have power.
Henkein - Foreign Relations of ct.

limits of legislative jurisd. in international law (p. 649)

private international law (refers to conflict of law), while public international law refers to international law as we
know it.

Dice v. Akron, Canton & Youngstown RR


facts: Dice, a RR fireman was injured when Akrons train derailed. When he received payment, he signed a
receipt that was represented nothing more than a receipt, when in fact it was release of liablity on the part of
D.
issue:
held:
note: