I. The Traditional Approach to Choice of Law
Section 1. Traditional Theory: A survey of Jurisdiction-Selecting Rules
A. Introduction
A Short History of Choice of Law (CB 2-6)
Two Settings for Choice of Law Problems
Cases with facts connected to different jurisdictions
Cases involving enactments of different lawmakers within a single jurisdiction
12th Century English Statutists
16th Century Dutch—Principle of Territoriality
Ulrich Huber
Influential scholar
Wrote On the Conflict of Different Laws in Different States
Three Maxims
The laws of each state have force within the limits of that government and bind all subject to it, but not beyond.
All persons within the limits of a government, whether they live there permanently or temporarily, are deemed to be subjects thereof.
Sovereigns will so act by way of comity that rights acquired within the limits of a government retain their force everywhere so far as they do not cause prejudice to the power or rights of such governments or of its subjects.
Holman v. Johnson, 1 Cowper 341 (1775)
Doctrine of common law judges applying the laws of other nations was first formulated.
Lord Mansfield: “Every action tried here must be tried by the law of England, but the law of England says that in a variety of circumstances . . . the laws of the country where the cause of action arose shall govern.”
American Law
Justice Joseph Story
Wrote Commentaries on the Conflict of Laws (1834)
Used the three maxims to organize and explain the seemingly chaotic common law precedents.
Professor Joseph Beale
Urged replacing the principle of comity with a notion of “vested rights.”
His theory was endorsed by Justice Holmes in Slater v. Mexican Nat’l R.R., 194 U.S. 120, 126 (1904).
Made Reporter for the ALI’s Restatement of the Law of Conflict of Laws.
Adopted by courts for the first half of the 20th century.
Restatement (First) of Law of Conflict of Laws (1934)
Reporter was Joseph Beale
After published, it was subject to criticism by realists
Walter Cook, Ernest Lorenzen, David Cavers
Essentially, the critique was based upon the formulaic rules that would be applied based upon rigid formulas
Law is comprised of policies, rather than rules
Brainerd Currie—late 1950s and early 1960s
Developed a comprehensive alternative approach to choice of law known as “governmental analysis.”
Restatement (Second) of the Law of Conflict of Laws (1971)
Retains many of the traditional rules but situates them in a flexible, policy-oriented framework.
Currently, the most widely used tool for resolving choice of law questions.
B. The Place of Wrong
Alabama Great Southern R.R. Co. v. Carroll, 11 So. 803 (Ala. 1892) (CB 6-9)
Π Carroll is a citizen of Alabama, during the time of the injury and case.
Δ R.R. is an Alabama corporation, operating a R.R. from Tennessee, through Alabama, to Mississippi.
Contract between Π and Δ made in Alabama.
Injury suffered in Mississippi.
Defect was in a defective condition in Alabama.
Inspection was to take place throughout the trip.
Under the common law, the defendant is not liable.
There is liability under the Employers’ Liability Act of Alabama with no similar statute in Mississippi.
There can be no recovery in one state for injuries to the person sustained in another, unless the infliction of the injuries is actionable under the law of the state in which they were received.
Qualification in some states
The infliction of the injuries would also support an action in the state where the suit is brought had they been received within that state.
The court holds that the Alabama statute has no efficacy beyond the line of Alabama and that it is to be interpreted in the light of universally recognized principles of private, international, or interstate law, as if its operation had been expressly limited to Alabama, and as if its first line read as follows: “When a personal injury is received in Alabama by a servant or employee.”
The court holds that Mississippi law applies and therefore, the Π cannot recover.
Δ operates a railroad that runs from Tenn, through Alabama, to Mississippi.
Π is a citizen of Alabama
Δ is incorporated in Alabama
Employment contract made in Ala.
For the purpose of the analyisis, the judge assumes that there was a negligent act in Ala.
Ala. has an Employers Liability Act, which enables the Π to maintain a suit against the employer caused by a fellow employee.
Injury occurred in Mississippi.
Miss. follows the common law fellow-servant rule, which holds that a tort is not recognized where an employee injures another employee of the same company.
The Alabama court applies Mississippi law because the injury occurred in Mississippi.
Π’s alternative theory is that the Alabama act is incorporated into all contracts formed in Alabama, thus trying to make contract law apply.
This argument is rejected in this case.
However, it is later accepted in later cases.
This case presents the problem of characterization, which arises when a legal issue logically can be put into more than one subject matter, such as contract and tort. There are no definitive arguments making an issue fall within one legal area, which is a critique of the traditional approach.
Creates a forum shopping opportunity because of the lack of uniformity where two states follow different rules.
Traditional Choice of Law Theory (CB 9-14)
Places a high value on uniformity of result, predictability, and the discouragement of forum-shopping.
Classic Judicial Formulation of the Vested Rights Doctrine
“The theory of the foreign suit is that, although the act complained of was subject to no law having force in the forum, it gave rise to an obligation, an obligatio, which like other obligations, follows the person, and may be enforced wherever the person may be found.” Slater v. Mexican Nat’l R.R., 194 U.S. 120, 126 (1904) (Holmes, J.).
Problem with Vested Rights Theory
It is circular
Local Law Theory
The forum enforces not a foreign right but a right created by its own law.
Territorial Principle
The governing substantive rule was derived from the law of the place where the relevant events had occurred.
Problem with territorial sovereignty Theory
It is indeterminate
The Place of Wrong (CB 14-17)
R.1 § 384
Provides that the existence of a cause of action for tort depends upon the law of “the place of wrong.”
Depecage
Def.—the application of different laws to different issues in the same case.
Generally disfavored at common law.
Is the place of wrong the place of the negligent act or injury?
R.1 § 377
“The place of wrong is in the state where the last event necessary to make an actor liable for an alleged tort takes place.”
Two Exceptions
If the law of the place of wrong depends upon “the application of a standard of care,” that standard should be taken from the law of the “place of the actor’s conduct.” R.1 § 380(2).
A person required, forbidden, or privileged to act under the law of the “place of acting” should not be held liable for consequences in another state. R.1 § 382.
Note—Bodily Harm
“Except in the case of harm from poison, when a person sustains bodily harm, the place of wrong is the place where the harmful force takes effect upon the body . . . . The person harmed may thereafter go into another state and die from the injury . . . . The place where this last event happens is . . . immaterial. The question is only where did the force impinge upon his body.”
Not
in the M company. B, in state Y, fraudulently persuades A not to sell the shares. The value of the shares falls. The place of wrong is X.
5. Where harm is done to the reputation of a person, the place of wrong is where the defamatory statement is communicated.
Illustration:
7. A, broadcasting in state X, slanders B. B is well and favorably known in state Y and the broadcast is heard there by many people conversant with B’s good repute. The place of wrong is Y.
C. The Situs of Property
In re Barrie’s Estate, 35 N.W.2d 658 (Iowa 1949) (CB 26)
Barrie, a resident of Illinois, died in Illinois, with will having the word “void” written across its face, on its cover, and on the envelope containing it.
The Illinois Supreme Court found the will to be revoked and refused to admit it.
Barrie’s property located in Illinois was distributed under Illinois intestate laws.
The First Presbyterian Church, a named beneficiary of the will, offered the will in Iowa.
The doctrine is clearly established at the common law, that the law of the place where the property (speaking of real immovable property) is located is to govern as to capacity or incapacity of the testator, the forms and solemnities to give the will or testament its due attestation and effect.
The revocation of a will is governed by the law of the state of situs of the land.
The effectiveness of an intended revocation of a will of an interest in land is determined by the law of the state where the land is.
The court holds that the Illinois judgment denying probate to the will is not binding in Iowa, so far as the disposition of the Iowa real estate is concerned.
The Situs of Property (CB 28-30)
The general rule is that a court must give a judgment of another state the same effect it would be given in the state where the judgment was rendered.
Cases involving interests in immovables are traditionally governed by the law of the situs.
R.1 §§ 214-254
Apply the situs rule to issues respecting immovable property, including the creation of original title, the validity and effect of a subsequent transfer, the creation of encumbrances or subsidiary interests, and the legal effect of such events as marriage or death.
Many questions pertaining to movable property are treated similarly to that of immovable property by the law of the situs under traditional theory.
Cammell v. Sewell, 5 Hurl. & N. 728 (Ex. Ch. 1860)
English underwriters insured a cargo being shipped aboard a Prussian vessel from Russia to England, which was forced to stop in Norway where it was damaged beyond repair.
The cargo was sold at auction to Clausen in Norway, who eventually resold to the defendants, and later shipped to England where it was sold by the defendants.
The underwriters sued, lost at trial, and on appeal.
The court ruled that “if personal property is disposed of in a manner binding according to the law of the country where it is, that disposition is binding everywhere.”
Two Problems of Applying Situs Rule to Movable Property
