Professional Documents
Culture Documents
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.
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.
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
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.
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.
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.
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)
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.
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.
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
(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.
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.
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
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).
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
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.
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.
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.
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)
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.
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.
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.
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.
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.
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?)
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)
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
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.
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.
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.
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.
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?
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)
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.
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
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.
- 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.
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)
compare
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.
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.
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
- critics note that this approach is very discretionary, leading to a loss of uniformity and
predictability of result.
BUT SEE
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.
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.
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)
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.
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?
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.
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.
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
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.
5) Non-commercial actions
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.
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.
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.
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.
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.
- inconsistent judgements would result if 3rd ct. were allowed to follow first ct.,
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)
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.
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.
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)
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.
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.
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.
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.
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.
Alternatively, one might hold all commercial transactions to be subject to state forum (no Cleaarfield
doctrine) and that a uniform code should be employed.
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?
- 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.
private international law (refers to conflict of law), while public international law refers to international law as we
know it.