Conflict of Laws — William K. Carroll —- Spring 2010
I. TRADITIONAL APPROACHES TO CHOICE OF LAW
A. JURISDICTION SELECTING RULES
1. Territorial Rule (Torts):locus delicti (“place of the wrong”)
-> (Beale) Vested rights / traditional approach : 1900 – Beginning of WWII
a. The place of injury received governs (Majority view)
b. Means where the breach occurred (Minority view)
Alabama G. S. R.R. v. Carroll (1893 – AL Sup. Ct.)
P sued the Ala. RR co. when the chains broke in Miss. and he was injured.
– Didn’t sue in Miss. b/c was a Al. citizen
– No COA under AL. law (fellow servant doctrine: no respondeat superior liability)
o Miss. law DID NOT apply in AL
– Didn’t matter that P was employed by the co. OR that breach occurred in AL
o Delicti = here, place of injury received
o Tried to argue it was place of breach
– Didn’t matter that K was formed in AL
o The K was intended to cover only events that occurred in AL
o the provision of AL was not incorporated into the K
– Problem: Forum, P’s domicile, D’s Domicile = AL, but locus delicti= MS
o AL law – corporations liable for torts of employees (but final act of tort must occur in AL)
o MS law – corporations NOT liable for torts of employees
2. Contracts: locus contractus (applies to the “place of the contract”)
a. Characterization of the K can be an escape device
– A K that is valid by the law of the state where made is enforceable everywhere, including states where such Ks are statutorily invalid.
– K rule: binding when final event that brings about mutuality of obligation / acceptance
o Milliken v. Pratt (delivery of guarantee to pay for purchases made by wife)
§ Executed in / P in Maine — Mailed in Mass. to Mass. / COA filed in Mass.
· Unilateral K – promise (guarantee) for performance (sending goods)
§ Issue: Under Mass. law, women could not contract, but could under Maine law. K complete when sent in Ma. (complete when acceptance in mailbox: not here) OR performed in Maine
b. Bilateral K – exists when expression of acceptance to perform (promise for a promise)
State where acceptance governs
c. Unilateral K – promise in exchange for performance – binding when the party performs
State where performs governs
d. Place of performance (“locus solutionis”)
e. When the issue of adequacy of performance is before the court, where performed may govern
Real property: immovable, so law of state of situs governs (but may defer to another st’s judg.)
Full faith & credit: states do NOT have to defer to other states re: real prop. in st.
Res judicata and collateral estoppel also do not apply
In re Barrie’s Estate: Will void in IL but perhaps not under Iowa law. Iowa could recognize other states judgments, so they deferred to IL… BUT the since the statute did not mention revocation, the court would not expand what the legislature meant, so Iowa applied re: revocation
v. Personal property: movable governed by situs, usually
Location when legally acted upon = that state’s law applies when brought before a forum
State law where D had domicile at death controls succession/distribution of estate (pers. prop.)
– Domicile: Traditionally determined by residence AND non-existence of other domicile
o Sometimes turns on why determining domicile b/c may be diff. for diff. instances
§ i.e. public aid (det. by pub. policy, etc.) may be diff. than for tax purposes
o Increasingly important and complicated: mobility of society
o White v. Tennant: Intended to establish a residence in PA, but was staying in/died in WV. Residence at death = PA.
§ One domicile cannot be extinguished until another one is acquired
o In intinere – On the journey / death en route to place
§ English minority rule: future place residence if show intent
§ MAJORITY / Modern rule: must have physical presence to establish domicile in place
· Englishman gets woman pregnant. Leaves and lives in Iowa. Decides to return to England but ship sunk on the way. Iowa court denied illegitimate child’s suit for recovery — he died as a resident of IOWA!
· Does it matter when the person does not even have a residence/house there yet but arrives in the state to look for one?
B. Escape Devices – Modern courts can adhere to traditional approaches but get a diff. outcome
1. Characterization: Court views COA in a different way than would have traditionally been used
o K liability depends on the law of the place of K, unless K will be performed / have its beneficial operation & effect elsewhere, or it is made w/ reference to law of another place
§ Levy v. Daniel’s Drive: passenger sued car rental company. Forum & place of rental K: Ct. — Under Ma. law, could not sue in tort (b/c would have to prove that car was defective when left Ct.) Construed Ct. statute as one of contract law
o Interspousal immunity as a family law rule (law of spouses’ domicile governs) not tort law (where law of place of wrong / locus delecti would govern)
§ Haumschild (WI): WI. couple wrecked in CA. Cannot sue spouse in CA, but can in WI
· CA: (cover reason: no family discord) – Protect insurance co. (for low premiums)
· WI: redress harms– otherwise st. treasury $ to help that injured person
· Traditional rule – Locus delecti – Calif. – place where injury occurred
· Dissent: Fairchild (not in book): We do not need to adopt the characterization. Every state has its own internal law. Look to Calif.’s WHOLE LAW – combines local rules and conflict rules
§ Emery – Characterized spousal immunity as a question of capacity (family law), not tort
o Real property v. security interest (for home loan)
§ Swank v. Hufnagle: Woman entered into mortgage in OH for IN property. Mortgage: 1) promissory note; and 2) transfer of interest in land as security. Split: IN law held that woman could not place house as security
· Property issue. (IN) Situs controls v. Promissory note (OH: locus kt controls)
– If procedural: law of forum governs; If substantive: law of place of injury governs
o Forum decides whether substantive or procedural.
o Creating a new right = substantive.
§ BUT Substantive/procedural = legal concepts & mean different things in diff. contexts
o Grant v. McAuliffe
§ Idea: Defer to sister states’ subst. laws about survival COAs
· Some / AZ: when one party dies, the COA dies
· Others / CA: COA doesn’t die and beneficiary succeeds to the COA
§ Distinct from wrongful death – survivor didn’t have right of action until death of deceased. Loss of life creates a new action/ right.
– 1st Restatement on Statute of Limitations: COA can be maintained if not barred by SOL of forum
o Does not matter that it’s barred where action occurred
§ EXCPET If the state that created the right of action makes it a condition that it must be brought w/in a certain time period, must abide by that time period everywhere
o Courts can view SOL as creating a substantive OR procedural right
§ Bournias v. Atlantic Maritime Co. – Was changed to different Panamanian ship. Forum: NY fed. ct. Panama had a 1 yr. SOL
o Language bar – procedural & sister cts. are closed (v. expired: COA dead & therefore substantive)
§ Harrisburg: does the rule bar the RIGHT or bar the REMEDY?
§ This rule applies when the statute creates a new right not recognized under common law
§ Garrison Ex. – Forum law voided COA under stat. of frauds. BUT where K made, law said the COA could not be brought. -> “Could not be brought” does not mean that there is no COA / that the K never came into being… So
o Specificity test (Davis)
§ Subst. / Proc. are different
§ When the COA & limitation period are in SAME statute, limitation period is substantive
o Attribute test: If can be raised for the 1st time on appeal, it’s a substantive bar
§ Though a D atty. did not raise SOL objection at the trial level, can raise this defense on appeal IF the ct. views it as substantive
o Modern: states have abandoned the proc. characterization
on behind the decision: NY wanted people to have confidence that NY law would govern when they placed their money there. However, the couple didn’t ever set foot in NY or expressly state that N law would govern.
2. Choice of law by the parties – 2nd Rst. 187
a. If Parties could have directly provided such an issue in their K, they may do so indirectly by choice of a state whose law requires this issue
i. Problem: Who says they “could have” resolved this directly by the K?
ii. Could have = would be resolved by state’s law
1. If no choice of law, apply the law that would apply to that K
b. Even if they could not directly include this provision in their K, under the law of the state which would apply to this K if no party choice had been made IF
i. the state had substantial relationship to parties or transaction
ii. OR there is another reasonable basis to apply the law
c. AND the law of the place chosen as to this issue is not contrary to the fundamental policy to state in which the law will be applied
*Presumption is that this will apply to the local law only, unless the court expressly adopts the ‘whole’ law of the foreign state.
– Party Choice Advantages: Efficiency — Freedom of K — Certainty / Reliance of parties
o Siegelman v. Cunard White Star Line (Choice of law according to terms of ship’s ticket. Chose English law. English SOL could be waived if in writing by designated official. The court wanted to determine which was enforceable based on competing Amer. and Eng. public policies. Since the ship line catered to international clients, they must be able to rely on 1 body of law. Otherwise, would limit commerce. Dissent: some conduct occurs outside of the K
– Party Choice Disadvantages:
o problem of adhesion / power differentials
o parties given power to legislate (can allow people to escape laws of resident state even though resident state receives consequences of action)
§ i.e. 12 year old can make K in _, so parties agree that _’s law applies
o Problem: If K says 1 state’s law will apply, and it is applied in a different state, the state might apply its procedural law to supersede K’s law choice
§ Since every state had both local/internal laws & conflict laws, need to say that State X’s WHOLE law or X’s law and X’s forum required to litigate
C. Governmental Interest Analysis
1. False Conflicts: Gov’t interest does not conflict with the rule as applied.
– False conflict b/c pub. policy only pertained to insurance co. in foreign st (didn’t apply to these facts)
– Babcock – Everyone/forum, but place of injury was Ontario. Should NY ct. apply Ontario law, which had guest defense?
o NY declined to follow traditional rule, so the ct. determined whether Ontario had any interest in the case. Ontario’s interest = to prevent fraudulent insurance claims
o BUT, if they would not allow guests to sue insurance co. to prevent fraud claims, the ct. is protecting the insurance co., so the insurance co. should reduce their premium rates in Ontario. = Protect the insurance co. where foreign policy requires
However, this court assumes that most people have valid claims AND this insurance co. was in NY (Favoring injured party)