Conflicts of Law OutlineSpring, 2013

Choice of law determines a rule of decision to abide by when more than one jurisdiction is “involved” or “interested” in a case. Every litigated case involves (at least implicitly) a choice of law problem, either chronological, territorial, or by issue characterization. In this situation we must choose between …

1. THE FIRST RESTATEMENT a. Rule/History: The First RST is based on a territorial test, and is concerned with the location of specific acts,

or the lex loci. Justice Story championed the First RST, and emphasized that every state possessed an exclusive sovereignty and jurisdiction within its own territory. Justice Beale supported this notion, proposing that certain rights were “vested” in the territory in which they took place, and were later valid and enforceable everywhere. The First RST places a high value on uniformity of result, predictability, and the discouragement of forum shopping. However, it may be difficult to localize where the “key” event occurred, and its focus on specific facts makes the First RST rigid and mechanical and frequently creating unjust results.

i. In determining what law to apply, look to the law of the state where the right was acquired, as in a K, or where the last event necessary to make an actor liable for an alleged tort takes place.

b. First RST and Contracts : Validity or Performance? i. Validity of a K is determined by law of the state in which it is made (Milliken)

1. Beale: Law of the place where the principal event necessary to make a K occurs is binding ii. Assumptions: Validity and performance could be distinguished, and only one place where they occurred

1. Encourages preemptive forum shopping for where to pick your place of contracting2. System is only predictable if there are attorneys and judges who agree on the facts (unrealistic)

iii. VALIDITY : Law of place of K determines capacity to K, form of promise, mutual assent, consideration, requirements to make K binding, what makes a K void/voidable, time and place to be performed (§332)

1. The forum must look to the contract validity laws of the state in which the contract is made to determine, under their laws, its validity (Milliken, First RST §311)

2. Formal K Effective : If final on delivery, where delivery made (§312)3. Informal Bilateral K : Where second promise is made in consideration of first promise (§325)

a. Place of contracting is where accepted: Where agent delivers or, if sent by mail, place where acceptance is sent from (§326).

b. Acceptance by mail, place of contracting is where acceptance mailed, (2) if telegraph, place where message of acceptance received by telegraph company for transmission, (3) if by phone, place where acceptor speaks his acceptance

4. Informal Unilateral K Effective : Where event takes place which makes promise binding (§323) 5. Milliken v. Pratt : Contract signed in OR, but mailed to Maine by a married Mass woman

a. Holding: K created in Maine, when women could K, so that law applies even though couldn’t K in Mass then - should recognize expansion of women’s rights (P WINS)

b. Vested Rights: Party rights vest at the moment the contract is “made,” not completed when signed, but when goods delivered in reliance on the guarantee (unilateral K)

c. Reasoning: K was complete when guaranty was received and acted on in Oregon- so treated contract as if made and performed in State of Maine

- WHAT IS THE CALL OF THE QUESTION? WHAT STATES AND FACTS ARE IMPLICATED?- WHAT CONTACTS TO THE FACT PATTERN DOES EACH STATE HAVE?

Domicile, place of accident, place of performance, PPB, advertisement, etc. - WHAT COL THEORY DOES EACH STATE ABIDE BY? CONSTITUTIONAL LIMITS ON RESULT? - ESCAPE DEVICES AVAILABLE? WHAT ABOUT RENVOI AND DEPECAGE? - CONSTITUTIONAL LIMITATIONS ON RECOGNITION OR ENFORCEMENT OF THE JUDGMENT?

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6. Notes : What about Mass’ change of law to allow women to K? Makes no difference, because rights invested when K was made, so no change in those rights after vestment OR Mass’ interests in applying its older law is low, so no reason to go back to older way (interest analysis argument)

iv. PERFORMANCE : Duty will be discharged by compliance with law of the place of performance of promise with respect to manner, time, locality, sufficiency, and excuse for non-performance (§332)

1. Law of place of performance controls if: applying law of contracting requires determination of minute details of manner, method and time and sufficiency of performance, and is unreasonable

2. Pritchard v Norton – K was invalid in place of agreement, but valid in place of performance. a. Courts assumed they intended to make K valid and so used law of the place of performance

c. First RST and Torts : Law where Tort Occurred Controls. i. Under First RST §384, the substantive law of the state where the act giving rise to a claim occurred,

determines tort liability. A crime is deemed to be committed and is punished in that jurisdiction in which the result is manifested, not where act is committed. (Carroll)

ii. Alabama RR v. Carroll : AL worker for AL RR, injured working in Mississippi, contract in AL 1. The place of injury rule required that application of Mississippi law, even when both parties were

AL residents, and negligence occurred in Alabama. a. The fact which created right to sue (injury), occurred in Miss. – its law controls

2. Doesn’t matter that contract under which he was operating was in AL- duties and liabilities are not imposed by the contract between the parties

iii. Exceptions: (1) If the law of the place of wrong depends on the application of a standard of care, that standard should be taken from the law of the place of the actor’s conduct (§380), (2) A person required or forbidden to act under the law of the place of acting should not be held liable for consequences in another state (§382).

iv. Policy: If law can be assumed to be generally responsive to the values and preferences of the people who live in that community, then the law of the place of the accident can be expected to reflect the values and preferences of the people most likely to be involved in accidents

1. Tort laws are about incentives for defendants to improve- so wouldn’t you want to address where the negligence occurred?

2. Encourage predictability- maybe Carroll took out insurance and expected to have to pay for that injury (benefited from it occurring a few miles over the boarder) can’t predict accidents

d. First RST and Land : Based on the premise that no state can affect property out of its own territory. A state can prohibit operation of foreign laws within its territory, or allow some but not others

i. Lord Baron: If personal property is disposed of lawful under the law of the country where it is, that disposition is binding everywhere.

ii. Land Taboo Rationale: (1) Power: Officials of State A are the only ones who can lawfully deal with land in that state, (2) Priority: How would you pick between the jurisdictions otherwise? What makes sense that would trump the home-state’s land? (3) Organization: Want to keep searches of land ownership within the law of the situs to apply to have uniformity in searches

1. Majority Rule: Leaseholds are considered immovable for COL 2. Issues: Location of property at the time of litigation? What about intangibles like insurance

policies? Doesn’t further the Conflict goals of uniformity and predictability iii. In Re Barrie’s Estate : Deceased executed a will leaving land in Iowa to a church in Illinois, but will

marked “void,” (improper revocation in Illinois, ok in Iowa), so under intestacy laws of Illinois, property in that state distributed to heirs, but under Iowa, it goes to the Church

1. Iowa courts can interpret a non-resident’s will who dies owning real property in Iowa. But just because the will was revoked in Illinois doesn’t mean it was revoked in Iowa

2. Rule: (Beale): Law of the place the immoveable is located governs the revocation of a will, and the capacity/ of the testator and the effect of the will

a. Statute proffered by heirs is inapplicable because deals with creation of will, not revocation3. FF&C does not apply to real property situated in a state other than the one in which the decree

was rendered (would have worked if it was Illinois property, but not Iowa property)e. First RST and Domicile : Dom is established by (1) physical presence in a location, and (2) intent to remain

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i. To Show Intent: Home/car ownership, registration, voting, church or community organization membership (normally an issue of fact for the jury), intent to remain “for a time at least”

1. Temporary absence doesn’t destroy – change when new one established (only have one) a. Courts consider evidence of change by subjective and objective standards (what they say

their intent was, combined with their objective actions) 2. Look at “totality of the circumstances” – leeway in advocacy, but bad for bright line rules

a. If it’s within your private setting (like estate planning, contracting), declarations of intent are ok- but given less weight in cases involving governmental burdens like taxes (something with governmental burdens)

ii. White v. Tenant : Left home in WV, intending to move to PA farm, moved stuff to new house, got sick, died in WV, no will so intestate where?

1. Holding: Deceased domiciled in PA at death. He left WV with the intention and purpose of making a home in PA– left his home without an intent of returning (PA LAW)

a. Doesn’t matter that he left next day to care for his sick wife in WV2. Rule: Law of decedent’s domicile state at the time of death controls the distribution of his estate.

f. Escape Devices : i. Although bright line rules can be favorable in certain circumstances, they frequently lead to exceptions

to reduce their severity. Because the “interest” argument wasn’t available during the First RST/Traditional approach jurisprudence, judges began employing certain escape devices to address the critiqued arbitrariness in applying the First RST. Three main exceptions arose:

1. All escape devices have equal application, judges have discretion to apply what they wantii. (1) Characterization of the Case: The First RST puts a premium on characterization of the issue

1. As a remedy to the seemingly overly-rigid results of territorial rule, judges used re-characterization of an issue as a rationalizing device to decide whose law applies.

a. Application: Weapon for counsel to use to get favorable lawb. Criticisms: Why bother with re-characterization? Why allow manipulating an intended

bright line rule? Maybe more of a social science than legal?2. How to Characterize :

a. (1) How Characterized by Legislature: Did statute uses SOL for K or for tort? b. (2) Look at Statute’s Purpose: If the law where the parties act doesn’t give legal validity to

their acts – no other law should validate c. (3) Look at Policy/Justice: Is there sufficient interest in case to apply x law? d. (4) Judicial Activism/”Just” Result: Some judges are less willing to imply terms into a

contract, so it’s a judicial deference decision? Or judges want the morally just thing to be done so they pick the law that best suits most rational decision?

3. TORT V. CONTRACT : Even though Caroll is more predictable approach, we feel more just with the holding in Levy –escape devices used to reach decisions based on equities.

a. Levy v. Daniels : Agency rented to driver, accident, passenger sued rental compi. The vested rights doctrine would refer to the law of the place of contracting (CT),

where the agent would be liable to the third-party beneficiary of the lease K for the subsequent tort, BUT by using re-characterization as an "escape device" the situs of the applicable law is shifted from the place of the tort accident (Mass) to the place of the contract (CT).

ii. Holding: CONTRACT claim, not tort. The CT statute making agencies liable for damage done during rental was implied into the contract under CT law

iii. Reasoning: Purpose of CT statute was to give the injured person a right to recover from the rental agency – encourage people to rent to careful drivers to keep the roads safe for everyone

b. Hamschild v. Continental: W sued H for injuries sustained in accident in CAi. Reasoning: Historically, law governing the creation and extent of tort liability is

that where tort was committed – and inter-spousal immunity from liability is governed by the place of injury (Buckeye), but the ability to sue within a family is

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properly decided by the law of the family’s domicile – they have primary responsibility for regulating relationships

ii. Holding: FAMILY LAW/CAPACITY case. W can sue because a spousal immunity case, not a tort case – so look to law of H/W’s domicile

4. SUBSTANCE V. PROCEDURE : When foreign law is applicable, it governs matters of substance, but the law of the forum always governs matters of procedure. Portraying a law, such as a SOL, as procedural or substantive is part of characterization process (Bournias)

a. First RST §584 : Forum determines according to its own conflict of law rules whether a given question is one of substance or procedure

i. However, a party’s legal rights and duties shall not be substantially varied because of the forum in which an action is brought to settle the dispute

b. Barred by Forum SOL but NOT by SOL Where Cause of Action Arise: Barred (§603)c. NOT Barred by Forum SOL, but Barred where Action Arose: Not Barred (§604)

i. BUT if a state’s law conditioned a right to expire after a certain SOL has elapsed, no action begun after that period can be maintained in any jurisdiction (§605).

ii. The SoL is SUBSTANTIVE if bound up in the statute that created the cause of action and it is foreclosed everywhere

d. Test : Was the limitation directed to the newly created liability so specifically aimed as to warrant saying it qualified the right? (YES- subst., NO- procedural)

i. Labeling : How have courts in the past labeled it? Statutes (FRCP)? ii. Linked with COA : If it’s so intertwined with the COA, have to take the bitter with

the sweet, and accept the SOL of that cause of action, but if not part of the cause of action, forum is free to apply its own SOL

iii. Ease of Administration : Limit by what makes application of foreign law in a local tribunal impracticable or inconvenient

iv. Application - If statute is procedural, can be applied retroactively, but if it’s substantive, can’t be applied retroactively

v. Right v. Remedy - Right (substantive), remedy (procedural)vi. Policy : Who has greater interests? Who would be hurt by one over other?

1. Prof Beale: Decide if policies satisfy reasons for applying the law of forum – if practical convenience in local rule is great, and effect on parties is negligible, then the law of forum controls

2. Morgan: Law of locus is to be applied to all matters of substance except where its application will violate the public policy of the forum, and apply the procedural laws of the locus which have a material influence on the outcome of the litigation

e. SUBSTANTIVE : Out-of court/primary behavior (like pre-filing, or merits of the case, elements of cause of action, outcome-determinative)

i. First RST §606: The Court should apply a limitation imposed by the state where a cause of action arose if that limitation is a qualification of the cause of action

1. Limitations periods in wrongful death statutes are substantive ii. Where foreign SOL is regarded as barring the foreign right sued upon, and not

merely the remedy, it will be treated as conditioning the right and will be enforced by our courts as part of the foreign “substantive” law (Bournias)

f. PROCEDURAL : In-court behavior (methods to bring that cause of action)i. Not supposed to be outcome-determinate (just channel the dispute)

1. Statute of Frauds; SOL; Burdens of Proof; Joinder; counterclaim, right to jury trial; survival or revival of a cause of action (Grant)

ii. Grant v. McAuliffe : Tort (AZ), both drivers from CA, estate in CA1. AZ law – suit dies with the person, CA – suit survives against estate2. Holding: Survival of a statutory cause of action is PROCEDURAL, as it is

more analogous to SOL law, because it doesn’t create a right of action, just dictates when you can bring it

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3. Dissent: Effect of a survival statute is to create a right or cause of action rather than to continue an existing right

4. Notes : But this characterization is tough- survivability could be outcome determinative (substantive), easy to administer (procedural), didn’t affect out-of-court behavior (not substantive)

iii. Bournias v. Atlantic Maritime : Maritime employee, changed boat registration, Statute of Limitations issue about when employee can sue

1. Holding: SOL was PROCEDURAL. The limitations section wasn’t so tied to the substantive cause of action section to consider them together

2. SOL are considered procedural, but an exception to the general rule that when SOL goes to the right itself an not to the remedy

iii. (2) Renvoi: Forum state looks at foreign law, but foreign law looks back to forum state1. Renvoi issues arise when distinguishing between the “internal” law (law applied in purely

domestic cases without multi-state contact), and “whole” law (law including the jurisdiction’s choice of law rules). Renvoi is discouraged in every approach but arises in certain pockets, where the whole law and not just the internal law of a jurisdiction will be applied 

a. Option 1 : Any references to foreign law means internal law only – not their COLi. First RST §7: Directed courts to ignore foreign choice of law rules

ii. EXCEPTIONS: Except for title of land and validity of divorce decree rules which are controlled by situs of land and domicile of parties, respectively

iv. (3) Public Policy: The traditional approach does not require the forum to apply a law that violates its public policy. This exception arises as an escape device to justify using the law that gets the morally right result. Yet this may create an exception that swallows the rule as your rights would never be fully vested if a court could always refuse to enforce rights on public policy grounds.

1. First RST §612: Precluded suits under a cause of action created in another state the enforcement of which is contrary to the strong public policy of a forum

a. (1) Forum Contacts Count . Public policy dismissal is a sign that the forum has some significant relationship with the litigation and by rights its laws should apply

i. Public policy is not determined by referring to the laws of the forum alone, look in the prevailing social and moral attitudes of the community

b. (2) Foreign Sovereigns Deserve Deference . Courts are incompetent to deal with issues arising between two states – that role should be left to the legislature (Learned Hand)

c. (3) Treat Parties Fairly . J. Brandeis: Either dismiss, or bend your public policy for forum to accommodate a “repugnant foreign law” (Holzer, dismissal was the uglier prospect- unfair to apply some but not all of German law denying a remedy)

d. (4) Penal Laws. Court in one state will not enforce the penal or tax laws of another state i. Involve notions of state identity, so inappropriate for another state to decide them

ii. Test: Is it a punishment of an offense against the public or compensation for the loss suffered by the injured party? (characterization by the forum state)

iii. Milwaukee County: No state has a policy against payment of its neighbor’s taxes e. CRITIQUES: Goes against uniformity and protecting reasonable expectations

i. May refuse to impose damages limitation for other states’ wrongful death statutes f. WHAT IS “PUBLIC POLICY”? Look at Constitution or legislative acts, agency procedure, or

membership in community organizations – but little guidance so gives judges discretion 2. Intercontinental Hotels : Foreign law must be inherently vicious, wicked or immoral and

shocking to prevailing moral sense for the foreign claim to be denied local enforcementa. Escape device is applicable only when enforcement of the foreign right would violate some

“fundamental principle of justice, good morals, or deep-rooted tradition.b. Cardozo: Must be an extreme difference to allow a court to refuse case

3. Loucks v. Standard Oil : Decedent was a resident of NY, accident in Mass. a. Facts: Mass had a tort damage limitations, NY didn’t have cause of action or limitation

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b. Statute was not penal (not criminal/sentencing) and NY public policy doesn’t prohibit the Mass cause of action being heard in a NY court, and no reason to refuse a cause of action just because the legislature hasn’t acted on issue in NY yet

c. Holding: Can hear the case in NY. Foreign based rights will be protected unless there is some profound public policy against it – the mere difference in laws is not enough

i. Jurisdiction will be refused unless the statues are “substantially the same” (so need a comparable NY statute), and NY’s constitution ensures atonement for the wrongdoing of another, plus no NY policy forbidding hearing this kind of case

ii. Penalty assessment isn’t extravagant – has some limits to ensure justice 4. Mertz v. Mertz : W sued H accident in CT (no immunity), dom in NY (spousal immunity)

a. Forum’s public policy offered a reason to override the First RST choice of CT lawb. State judges can only refuse to give reciprocity to another jurisdiction’s laws if their

enforcement violates some in-state public policy – here, there is more than a “mere difference in law,” and the application of the foreign law offends NY sense of justice and is a menace to the public because it encourages spousal disharmony

i. Notes: So Loucks set up the law, and Mertz applied it – needed some policy that was the exact opposite in the forum and foreign jurisdictions to refuse to apply foreign law (no reason not to re-characterize as family law)

5. Holzer v. Deutsche Reisbahn : Germ. company fired Jewish/German employee, K claima. Holding: There was no breach of contract because the German government required the

defendants to discharge the plaintiff. Not against public policy to hold people to K’s they make in their country to be performed under that country’s law

i. NY public policy of respecting other foreign sovereignsb. Every sovereign is required to respect the independence of every other sovereign state – the

forum state cannot judge the acts done under a foreign jurisdiction’s laws (if it were 15 years later, Nuremberg trials would change result)

2. MODERN APPROACH: THE RULE OF VALIDATION a. After the First Restatement, several additional approaches were developed in response to the critiques

surrounding the rigidity of the Traditional Approaches. Some statutes were passed mandating specific approaches to conflicts of law questions. Statutory directives are normally more consistent and easier to apply, and they explicitly dictate what happens in multi-state disputes.

i. Rule: Always look to see if there is a statute that addresses the choice of law issues 1. Foreign Wills: Will validity is governed for moveable property by the law of the domicile at

death and for immovable property under law of the situs (First RST §249, 306)2. No-Fault Insurance Provisions: States say that no negligence claims can be made

a. But don’t always dictate what happens out of state, or to non-residents in state 3. Borrowing Statutes: Detail when to dismiss and borrow the foreign SOL

a. Encourage docket clearing, avoid forum shopping, encourage commerce and fulfilling the intent of the parties to a contract (but where did event “arise”?)

b. Rule/History : The Rule of Validation is based on the presumption that when parties get to choose the law that governs their K, without any fraudulent intent, the parties are assumed to have wanted to choose a law that validated K they entered into. This approach moves away from strict territorialism and empowers parties to choose the law governing their contracts, mostly in regards to issues of interpretation. Yet, to permit parties to stipulate the law that should govern the validity of their agreement gives them an artificial device for avoiding the policies of the sate that would otherwise regulate their agreement, thus less deference is given to parties to choose law determining contract validity.

i. Performance – law of place performed; Validity – law of place contract executed ii. Prof Beale: Party autonomy permits parties to do a legislative act – frees from otherwise applicable law

1. Parties may have more control over COL governing a K than the First RST would allow2. So might be attractive to contracting parties, but frowned upon by courts and legislatures 3. Should vindicate state regulatory interests, but balance with maintaining party K freedom

iii. Good Practice: Keep some ties with the place whose law you choose (bank with escrow)

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c. FIRST RST APPROACH TO RULE OF VALIDATION :i. In the absence of fraud, assume parties to the contract would want to make contracts binding, so would

implicitly choose the law that validates their agreement (Pritchard v. Norton)

ii. Pritchard v. Norton - STILL LOOK AT TERRITORY 1. Facts: Appeal bond signed by Pritchard (LA) and Norton (NY) agreeing to indemnify Pritchard

from loss. Under NY law, bond invalid because lacked consideration because appeal bond executed before promise for indemnity (but valid under LA law- no consideration needed)

2. Holding: LA Law controls. Even though this is a validity issue (normally lex loci contractus), a K is governed by the law that the parties had in mind when the K was made, and the bond was made with a view that LA was the place of fulfillment– focus on place of performance

3. Rule: When a person enters into a contract to be performed in a certain place, the parties voluntarily submitted themselves to that local law

d. SECOND RST APPROACH TO PARTY AUTONOMY :i. The Second RST transitions away from territorialist approach, instead requests that the court abide by

the parties choice of law, unless there are extraordinary circumstances in play. ii. What differentiates the legitimate exercises of party autonomy from the illegitimate ones?

1. (1) Substantial Connections. Look at whether chosen law state has an interest in the Ka. Siegelman v. Cunard : Party autonomy can be honored on a validity issue if: (1) the COL is

in good faith/bona fide, and (2) the law chosen must be that of the jurisdiction having some relation to the agreement (either the place of making, or of performance) {implicit: (3) no evidence of an attempt to evade a certain jurisdiction’s policy, (4) existence of contrary statute, (5) whether chosen law is oppressive to one party}

2. (2) Interpretation v. Validity. No clear difference, but for interpretation- (maximum party autonomy) and validity issues (minimum party autonomy)

a. Parties have presumption control over transactions where planning and reliance is at a maximum. There is greater party autonomy for contracts (planned) than torts (accident).

1. Choice of Law for Inter Vivos and Testamentary Trusts2. Hope v. Brewer: Place where trust agreement was executed controls 3. Hutchinson v. Ross: Place of one’s domicile means less and less when your

property can be disposed of easily in other placesb. Siegelman v. Cunard : P sued for injuries wife suffered on Queen Elizabeth (boat)

i. Facts: Under ticket contract, 1 year SOL, but under forum court 2 year SOLii. Holding: Law of ticket contract binds its validity – action is barred by the SOL

1. Even though minimum autonomy in deciding validity issues, wanted to reward good draftsmanship- K tries to make all claims uniform

iii. No attempt by parties to choose a random beneficial law or where their K is legal, and no statute contrary to England’s that prohibits party autonomy in these types of cases, no reason to think that English law is oppressive to passengers

iv. Dissent: Contract of adhesion – standardized with no real bargaining power1. No certainty and uniformity because laws governed by mechanized rules,

without particularized justice c. Wyatt v. Fulrath : Duke and Duchess of Arion – Spanish law would leave half of property

to wife, but NY law would let all husband’s property go to surviving spouse i. Holding: Apply NY Law. The intention of the parties to protect assets under laws

where property sits should govern. Situs selected by the spouses for the safekeeping of their property governs the disposition of the property.

1. Property requested to be governed by NY law should be governed under NY law even though foreign laws have a different method

ii. Dissent: Resolving the dispute by any other law than Spain is incompatible with historic principles – upsets uniform and established rules

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1. Rule of validation goes too far– ok when it saves party’s K from being invalid, but not where it nullifies important policies of parties’ residence

iii. If the parties chose a place, first look at whether it’s sufficient under Second RST §187: 1. Is it a choice of law issue for which they could have resolved with an explicit provision? If so,

then respect party autonomy and apply their chosen law (§187(1))a. Paragraph 1 follows Pritchard and Siegelman- allows parties to choose applicable law

2. Apply the law of the state the parties chose to apply unless: (§187(2))a. (a) Law of the chosen state has no substantial relationship to parties or transaction

i. Don’t want to give parties unrestricted freedom to select governing law ii. Substantial Relationship: Doing business in a sketchy country, and want to have the

US/European law govern the K, or if you have ties to that area (assets, company branches), or transactions for especially large sums or complexity can pick – shows they’re especially sophisticated

b. (b) The law of the chosen states is contrary to fundamental policy of a state which has a greater material interest in the issue and would be the default law to apply

i. Ex : Milliken v. Pratt: Mass law she can’t K, in Maine she can, but considering the case under 2d RST “material interest”/”rule of validation”

3. Absence of a contrary indication of intent – refer to local law of state of chosen law

3. INTEREST ANALYSIS APPROACH a. Rule/History : The Interest Analysis approach is another modern alternative to the traditional territorialist

approach. Critics of the First RST were unhappy with how fine gradations of fact created completely different results, and thus searched for a more fair and predictable alternative. Interest analysis looks critically at the interest of a state involved in the dispute in granting or denying recovery. Professor Currie advocates finding the purposes behind the law in conflict, and apply the laws that would advance those purposes, and ignore the laws whose purposes would not be advanced, even if the latter would be chosen by the traditional approach.

i. This approach is used when either the parties didn’t choose which law would apply, or the legislature either intentionally or unintentionally didn’t address the conflict of law issue.

ii. Babcock v Jackson (NY): first case to reject the traditional approach and look at modern interest analysisb. Critiques : Creates a fractured system- not as predictable as it would be under traditional law

i. Even COL statues are not always dispositive –aren’t exempt from escape devices either 1. Statues can also be subject to the same re-characterization issues 2. Statutes can still be subject to renvoi issues : Richards: US is liable in tort in accordance of law of

place where act occurred- does “law of place” mean internal or whole law?c. How to Identify an “Interest”

I. STEP 1 : Figure out purpose which led to law’s adoption, (2) determine which contacts bring the case within that purpose. TO WHAT PROBLEM IS THIS LAW A SOLUTION? WHAT FACTS ARE IMPLICATED?

1. Possible Results: Either (1) one state may be interested (false conflict), (2) both states may be interested (true conflict), or (3) neither state may be interested (unprovided for case)

2. Look to what a legislator had in mind when developing some statute (leg history helpful)a. A court is not obliged to vindicate and enforce unconstitutional interests, thus if there is an

example of an explicit attempt to discriminate against some class, nothing in interest analysis says you have to give deference to that policy.

3. No guidance on determining when a state’s interest is determined. 4. Differentiating between loss-allocating or conduct-regulating – still characterization

a. Conduct-regulating: Outside of the courtroom before lawsuit (like speed limits)i. Place of the tort has a more important interest in regulating

ii. Law of the place of the tort usually applies unless displacing it will advance the relevant substantive law purposes without impairing the smooth working of the multi-state system or producing great uncertainty for litigants.

b. Loss-allocation: After the event, while in a courtroom, regulates burden of injuriesi. Parties’ common domicile has paramount interest in allocating losses

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ii. These cases show that Choice of Law is a concern among states and within a single body of law, and can be resolved under the modern approach through legislative interpretation. Look to the chronology of the laws, the intent behind them, and try to give meaning to as much as possible.

iii. Chesny v. Marek : Civil rights statute v. FRCP for attorney fee recovery 1. Holding: Legislation must be interpreted in light of its purposes (look at policy interests behind

the statute to decide importance), intended to encourage bringing legitimate civil rights actions a. Public shouldn’t be deterred from bringing good faith actions to vindicate the fundamental

rights involved by the prospects of having to pay their opponent’s counsel if they loseiv. Marek v. Chesny : Same facts, but on appeal to SCOTUS

1. Rule: Absent congressional expressions that state the opposite, the underlying statue defines costs to include attorneys fees, so such fees are to be included for purposes of Rule 68

a. Plain meaning of “costs” – only construction that gives meaning to each word in both Rules

v. STEP 2 : Figure out if it’s a TRUE or a FALSE conflict, or an un-provided for case

d. INTEREST ANALYSIS IN TRUE CONFLICTS :i. A true conflict arises when applying one jurisdiction’s law undermines the policies behind the non-

chosen jurisdiction. Several methods can be used to resolve such conflicts. II. APPLY THE LAW OF THE FORUM :

1. One way to decide a true conflict is to simply apply the law of the forum, as proposed by Professor Currie, and as seen in Lillenthall. Where two states have an equal balance of interests in application of their own law to an interstate K dispute, the forum is privileged to apply its own law so as to advance its own public policy. Currie states that there are no objective standards for deciding what is the fundamental law forming the forum’s jurisprudence. Thus, courts should not engage in the political function of assessing values of competing legitimate interests of sovereign states. Instead, until a better option is presented, courts should be consistent and apply the law that they are most familiar with and competent in applying, which is the forum’s own law. This approach has been criticized for oversimplifying the problem, and for ignoring judicial competency to resolve complex issues. Further, it may promote forum shopping.

2. Lilienthal v. Kaufman : D under spendthrift protection in Oregon, no power to enter into K’sa. Facts: D entered into K with P in CA (they didn’t know) (K allowed in CA, not in OR)

i. Oregon Interest- Protect spendthrift/their family, they won’t become wards of state ii. California Interest- Wants its citizen repaid, ensure K validity, avoid fraud

b. Holding: OR spendthrift law applies and P can’t recover. There is a true conflict, and the forum law (OR) should therefore apply. Even though CA had more contacts with the transaction, the forum’s public policy is stronger so it should prevail (econ/social factors)

i. Place of contracting, place of performance and the rule of validation all suggested that CA law should govern but court’s interest analysis found it was a true conflict

c. Concurring: OR legislature didn’t intend to protect CA creditors more than OR citizensd. Notes : Legislature purposefully chose to protect spendthrifts over attracting business

i. Better think just of the policies behind the law (protect spendthrifts’ families), not the state’s broader policy in general (attract business)

iii. Interest Analysis provided an alternative, albeit imperfect method to First RST. While states were adopting Currie’s Interest Analysis method, some states developed additional approaches to resolving true conflicts, including the Neumeier Rules in New York, and comparative impairment and moderate and restrained interpretation in other states.

iv. (ALTERNATIVE 1): THE NEUMIER RULES : 1. Originally developed in NY to handle guest statute rules, courts officially expanded their use to

all loss allocating cases. (but may not apply beyond loss-allocating guest-statute cases in NY) a. Cooney v. Osgood : Looked at Neumeier and found that the local law of each litigant’s

domicile favors that party, have to look at interests involvedi. Used to attempt to ensure predictability for litigants, prevent forum shopping. Only

place where both litigants voluntarily subjected themselves to is place of accident

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b. First Rule : If P and D are both from the same state and that domicile’s law has a loss allocating rule, then apply the law of the common domicile

i. Used for classic false conflicts. Law of place of injury is unlikely to have any of the purposes of it’s loss distribution rules advanced on these facts.

ii. Ex : Tooker v. Lopez or Shultz v. Boy Scouts – common domicile in NJ controlled the immunity for this case that occurred in NY. So long as you’re willing to buy that charity immunity is LOSS ALLOCATING type of rule.

c. Second Rule : If P and D are from different states, look to law of the place of accidenti. (a) D not liable if D conduct takes place in his state and that state says he’s not liable

ii. (b) D liable if conduct occurs in P’s state and state finds D liable (state protects P)d. Third Rule : Place of the injury should govern any remaining cases

i. Look to law of place of accident, but NOT if another law will advance (1) relevant substantive purposes without (2) impairing the working of the multistate systems or creating great uncertainty (too many exceptions?)

2. THEN: What to do in non-tort cases? Look at “center of gravity” in contract cases?a. Look at Second RST for five important contract “contacts” like place of execution,

negotiation, performance, subject matter of contract, domicile of contracting parties

V. (ALTERNATIVE 2): COMPARATIVE IMPAIRMENT : 1. After deciding that there is a true conflict between the laws, the use of the comparative

impairment analysis decides which state’s regulatory interest would be more impaired if its policy were subordinated to the policy of the other state. Comparative impairment analysis helps to make trade-offs to maximize the extent to which each state realizes its objectives in multi-state cases A court should apply law of the state with the stricter law as the other state wouldn’t be impaired by being more strict, but stricter law state would be impaired by being lax

a. Don’t “weigh interests” to decide which is “better/worthier” but allocate domains of lawmaking power – don’t look at wisdom behind the policies

2. Bernhard v. Harrah’s Club: Myers (dom in CA) drove to NV to go to a club (D’s dom) a. Facts: Served too much, then drove home, accident in CA with Bernhard (CA res)

i. Nevada Interest: Protect tavern-keepers from liability which legislature doesn’t impose – every time a drink is poured have liability

ii. CA Interest: Want to protect public from injuries from intoxicated people b. Holding: California law applies. California can’t effectively effectuate its policy without

extending its regulation to include out of state tavern keepers who sell to CA residents with reasonable certainty that they will drive back to CA drunk, and applying CA law doesn’t hurt Nevada, just creates greater liability exposure for them –foreseeable/coverable expense

i. CA law imposes no new duty (already civil liability in NV) on Nevada residents, but application of Nevada law would greatly impair CA regulatory interests

c. Notes : Impairs CA’s interest because this tavern is advertising in CA – so puts itself at the heart of California’s economy so puts more weight on CA regulatory interest

i. Similar to “purposeful availment” like International Shoe - deliberately bringing people into CA, how do they avoid the costs? Who is the cheapest cost avoider?

ii. If you don’t advertise in California then you don’t reasonably expect CA visitors

vi. (ALTERNATIVE 3): MODERATE AND RESTRAINED INTERPRETATION 1. This approach tests whether the social objective underlying the law in question will be furthered

by the application of the rule in cases like that presented. The answer determines the measure of the rule’s importance, and the state’s interest in the conflict at hand. Use as a second step in determining some other, greater interest that cuts against preliminary interest analysis.

a. Like in Bernkrant in contract cases, consider parties’ justifiable expectations, where a statute can be interpreted broadly or narrowly – choose narrow interpretation

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2. When the governmental interest approach reveals an apparent conflict, reexamine policies to determine if a more restrained interpretation is more appropriate. Look at a state’s real interests, not their hypothetical interests. (Bernhard v. Harrah’s Club)

a. Cavers: The M&R Approach is virtually the same as balancing state interestsb. Baxter: Look at what legislatures likely would have wanted had they discussed application

of their inconsistent rules in inter-state disputes c. Kramer: Should adopt policy-selecting rules to direct courts to apply the law that reflects a

generally shared policy or preference – forum sacrifices procedural policies in favor of another state’s substantive policies but gains by having its policies favored when they conflict with a foreign state’s procedural rules in cases outside the forum

3. Bernkrant v. Fowler : House sale, decedent orally promised to forgive debt, buyers sued estatea. California Interest: Wanted to protect estates from false claims on alleged oral contracts, b. Nevada Interest: All contacts in NV – want to protect residents rights who are parties to the

contract, policy that contracts be valid and enforceable c. Holding: Apply Nevada law. At first looks like a true conflict because contract is invalid

under CA (forum/dom), but valid under Nevada (where K made). i. BUT, the court applies a “moderate and restrained interpretation” of the policies

behind the laws in conflict and finds that both laws are trying to protect the reasonable expectation of the parties when they entered into the contract.

d. Policy of enforcing contracts valid under the only law applicable when the K was made, and since the K was entered into in Nevada, apply that law. No reason for the parties to expect that the decedent would later move to CA and there would be a writing requirement

e. INTERESTS ANALYSIS IN FALSE CONFLICTS :i. False conflicts arise when either the policies behind the rules in conflict connect with the factual

circumstances, or, no matter which law is chosen to be applied, the results are the same 1. When P and D are both domiciled in same state, usually but not always a false conflict

a. Usually apply the law of the common domicile (Tooker v. Lopez) i. People with different domiciles aren’t legally “similarly situated” so it makes sense

to treat people of different domiciles differentlyii. Easier to defend law of common domicile – reduces forum shopping, and the

presumption that forum is always biased in favor of the forum law, easy to applyiii. Plus, those parties can vote and change legislation in the forum (forum benefits)

2. False conflicts are really rare because you can usually find several purposes behind most laws . a. So false conflicts only where judges assume away inconvenient argument (Prof. Singer)b. Incentive to find a false conflict oversimplifies interest at stake in a choice of law case

ii. Tooker v. Lopez : Tooker (passenger) killed when Lopez (driver) lost control of the car. NY allows wrongful death recovery for passenger, but MI guest statute bars recovery

1. Facts: Both residents of NY, car registered/insured in NY, forum in NY, MI accidenta. NY Interest: Make sure that passengers injured in accidents are compensatedb. Michigan Interest: Don’t allow passengers and drivers to collude against insurance

companies, encourage people to give guests a ride 2. Holding: NY has the only real interest in whether recovery should be granted, and applying

Michigan law would defeat a legitimate interest of the forum state without serving a legitimate interest of any other state (can’t collude against Michigan insurance when insured in NY)

a. Jurisdiction enacting a law for the protection of guests has no interest in the application of the law if the guests do not reside and are not suing there.

3. Notes : Maybe NY got this wrong, the domiciliary is kind of Michigan because they were going to school there and intended to stay “for a time at least” so maybe not NY domiciliary

iii. Schlutz v. Boy Scouts : P sued Boy Scouts for injuries from molestation by teacher/scoutmaster1. Facts: How to determine the right of recovery in an action by a foreign domiciliary for torts that

are wrong under both jurisdictions’ laws a. Interests: Defendant Boy Scouts HQ’d in NJ/TX (no charity immunity), D school HQ’d in

Ohio (qualified charitable immunity), NY forum, P’s domiciled in NJ

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b. NY Policies: Compensate people injured within their borders, deter people from injuring others within NY state borders

c. NJ Policies: Don’t punish charities – have a good purpose, protect medical creditors, prevent injured tort victims from being public wards in locus state

2. Holding: NJ law applies. NY has no significant interest in applying its own law to the dispute, as it can’t deter people who don’t live there – applying NJ law reduces forum shopping, provides certainty for litigants about how to act where they are domiciled

a. This is likely a loss-allocating case, so look more at parties domicile than tort locationi. Favors jurisdiction of common domicile because want parties to accept benefits and

burdens of living in that jurisdiction and submitting to its authority 3. Reasoning: If a tort, look at rules involving appropriate standards of conduct, so place of accident

usually have higher interest in protecting expectations of parties BUT when case is about allocating losses, state cautionary interest and party reliance are less important

f. Interest Analysis in the Unprovided-For Case i. An unprovided for case arises when neither state has a vital interest in applying their law to the case

ii. According to Prof. Kramer, there is no such thing as an unprovided-for case, but instead it is a product of a misanalysis of state interests. Prof. Weintraub advocates that courts must re-examine state interests to find another policy that would be advanced by applying the law of one of the states

iii. OPTIONS IN THE UNPROVIDED-FOR CASE :1. (1) Apply laws that appears to be “more enlightened and humane” 2. (2) Selfishly apply the law that aids the litigant who is a local resident3. (3) Treat foreign claimants as they would be treated in their home states4. (4) Apply the law of the forum (most chose this one – rational and convenient)

a. Erwin v. Thomas : Erwin (from Washington) was injured by Thomas (from Oregon) in an accident in Washington – Erwin’s wife sued Thomas for loss of consortium in Oregon

i. Washington interest- Believes that wife’s rights to relationship aren’t strong enough to make negligent defendant pay wife (protects D’s)

ii. Oregon interest- Protects rights of married women – but not concerned of rights of non-resident married women injured outside of Oregon (FORUM)

iii. Holding: Neither state has a vital interest, so forum law should apply (Oregon) 1. WA doesn’t care if others require non-WA residents to respond to claims

4. THE SECOND RESTATEMENT a. Rule/History : The Second Restatement arose out of a desire for a return to a unified method of addressing

conflicts after the fragmentation resulting from interest analysis, and from the criticism of the First RST. The Second Restatement developed its “Most Significant Relationship” test (MSR) to determine choice of law issues, and to avoid the confrontation of a true conflict. Unlike the First Restatement, the Second Restatement looks at rebuttable presumptions that identify what most likely has the most significant contacts (Casey Case), evaluated according to their relative importance to the particular issue thus creating more judicial flexibility. This approach gives judges more discretion than First RST, but more clearly articulated guidelines than under interest analysis. Elements used to consider “contacts” aren’t listed in order of importance, and non-existence of any one contact is not dispositive. The MSR test is fact-dependent, and also has characterization issues.

a. Application : In applying the MSR test, a court has to decide whether the purposes sought to be achieved should be furthered at the expense of the other choice of law factors

I. (STEP 1) CHARACTERIZE THE CASE TO FIND RELEVANT PROVISIONS OF 2D RST THAT APPLY1. Based on this characterization, there is a presumptively applicable law under the

appropriate jurisdiction-selecting rulea. Tort : Presumption under §146 that law of place of injury controls b. Contract : Presumption under §188(3) if place of negotiating and performance are

same, that state’s law will usually be appliedc. SOL : Without exceptional circumstances, forum applies its own SOL barring or

allowing claim unless SOL of state whose substantive law applies bars the claim

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d. Land : Presumption under §214 that because land is within exclusive control of the state in which they’re situated, local officials are the only ones who can lawfully deal with them, so their law should apply (plus certainty/convenience)

II. (STEP 2) USE THE FACTUAL CONTACTS TO ID OTHER MAYBE RELEVANT JURISDICTIONS 1. What other jurisdictions might have a relationship with the parties or the events?

Analysis under §145 or §188 helps set the bounds for which jurisdictions might be “in play” in determining the analysis under §6

a. Categorization still is a problem –§7 says “characterization is determined in accordance with the law of the forum” – but is that really helpful?

2. TORT : Second RST §145: Important contacts include:a. (1) Place where injury occurred (all First RST cared about), (2) place where

conduct causing the injury occurred, (3) domicile, residence, nationality, PPB, place of incorporation of the parties, (4) and place where relationship is centered

3. CONTRACT : Second RST §186: Issues are determined by the law chosen by parties under §187 (allowing party autonomy), or otherwise by principles of §188

a. 2d RST §188 : Without an effective party choice of law, important contacts are: i. Place of contracting, place of negotiation of the contract, place of

performance, location of subject matter of the contract, domicile, residence, nationality, place of incorporation or PPB of the parties

ii. Test- Locate a state which is the center of gravity for each issue and apply the law of that state to that issue

III. (STEP 3) ASSESS EACH OF THESE JURISDICTIONS’ RELATIONSHIP TO THE PRESENT EVENT AND THE PARTIES USING §6, INCLUDING, BUT NOT LIMITED TO, STATES’ POLICY INTERESTS

1. Test the presumptive choice against the principles of §6 based on the facts of that case and based on what kind of case it is (tort, contract, etc.)

a. Assess the actual relationship each state has to the case under §62. Second RST §6: Choice of Law Provisions : A court should follow the statutory directive

of its own state’s choice of law, BUT if there is none, relevant factors include:a. Needs of interstate/international systems (no comity discussed in First RST)

i. Want to promote harmony and facilitate commercial intercourse between states (as articulated in Philips v. GM)

b. Relevant policies of the forum c. Relevant policies and interests of other interested states (like interest analysis)

i. Have to consider whether applying the law of a state with a relevant contact would further the purpose that law was designed to achieve – so under the “relevant policy” test compare with facts under §145(a-d)

d. Protection of justified expectationse. Policies underlying particular field of law

i. Torts (include compensation and deterrence), contracts (enforceability)f. Certainty, predictability and uniformity of result

i. Predictability is really only relevant in K/transactional work, not tortsg. Ease in determination and application of the law to be applied

IV. (STEP 4) DECIDE IF RELATIONSHIP IS SIGNIFICANT ENOUGH TO OVERRIDE A PRESUMPTION 1. Here, presumption under §146 that law of place of injury controls – but get to make the

arguments about strength of opposing interests v. Phillips v. General Motors : Car bought in NC with NC address, then moved to MT

1. Facts: Driving from MT to NC, but got in an accident in Kansas a. Deceased were MT residents, Phillips was legal guardian of surviving son b. Guardian lived in NC – probate filed in MT (this case’s forum)

2. Holding: Purposes of MT and NC product liability law are furthered (based on where bought and domicile), but because NC wouldn’t apply its own law, choose Montana law

a. Purpose of state’s liability law is to regulate purchases made within its borders and to protect and compensate its residents – points to MT law

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3. Displaces presumption that law of accident applies. No public policy exception 4. Recognized that application of Beale’s vested rights theory resulted in escape devices to

avoid the arbitrary or unfair results – diminishes traditional rule’s supposed advantages

5. THE BETTER LAW (PROF. LEFLAR’S CHOICE INFLUENCING CONSIDERATIONS)a. Rule/History : During the Modern Era of conflict of laws, another method developed, with broader

application than just for true conflicts. This “Better Law” rule was in response to the rule-bound Second RST, and attempted to dispose of its characterization issues. Professor Leflar attempted to reduce the choice-influencing considerations to a manageable size, and encourage courts to “administer justice” by applying the better rule in cases where there was no firm forum interest. The “Choice Influencing Considerations” are similar to the Second RST §6 MSR tests, however it adds the consideration of what is the “better rule of law.” As seen in Milkovich v. Sarri, this approach supports the premise that those who seek out a forum for their case should be prepared to have the case determined in accordance with the forum’s rules and sense of justice.

i. Yet this approach is criticized for unfairly favoring the law of the forum, as it will nearly always consider its law “better” than the legislative choices of a sister state whose law may be just as legitimate

b. Application : Prof. Leflar’s “Choice Influencing Considerations:” a. (1) Predictability of Results: Plan certain law into your transactions to give results desired

i. Certain industries built around predicting accidents (insurance), for torts or contracts b. (2) Maintenance of Interstate/International Order: Free social/economic commerce is good for world

i. People who seek advantages offered by another state shouldn’t be allowed to avoid the burdens associated with their choice (Jepson)

ii. Assume a state will reciprocate and apply your law in next case where your interests are greater c. (3) Simplification of the Judicial Task: Courts want to use their procedural rules – some outcome

determinative rules, but besides that, look at characterization between rules of procedure & substanced. (4) Advancement of the Forum’s Governmental Interests: Reasonable for a court to act in accordance

with some concern when it involves that state’s important social/legal policy e. (5) Application of the “Better Rule of Law:” A state’s “interest” in a set of facts can only be analyzed

by reference to the content of the competing rules – choice between jurisdictions and what is “right”i. This is just one way to determine the “best” result, don’t want judges to avoid equity/justice, so

maybe best to allow them to do justice by picking “better rule” f. Milkovich v. Sarri : Group domiciled in Ontario came into the US – car insured and registered in Ontario,

got into an accident, guest injured, hospitalized in Minnesota (forum)i. Facts: Ontario has a guest statute (need proof of gross negligence to recover), Minnesota doesn’t

ii. Holding: Minnesota should use its better law – no foreign guest statute allowed. a. (1) Predictability of Result – no place in a tort case because not planned b. (2) Maintenance of Interstate Order – Court identifies it as a true conflict

i. True conflict – (even though common domicile) because no recovery allowed under Ontario law, recovery under Minnesota law

ii. Stop forum shopping – if they game the system, greater chance for interstate chaos c. (3) Simplification of Judicial Task – Not a factor- easy to apply a negligence standard d. (4) Advancement of Forum’s Governmental Interest – All states want to “administer

justice,” but the judges don’t want to do things inconsistent with Minnesota’s conception of fairness and equity (guest statutes go against the spirit of the times)

e. (5) Better Law – Isn’t “better law” just always going to be forum’s law? g. Jepson v. General Casualty: P (Min.) injured in AZ (where he later moved), insurance, work in ND

i. Facts: Stacking policies (combining insurance policies) allowed under MI but not ND law ii. Holding: ND law applies. Neither ND nor the old or the new Minnesota law is ‘better’

1. (1) Predictability/Uniformity of Result – Predictability isn’t a factor for torts, but it’s important for K – reasonably expected state where insurance K issued to govern, so cuts in favor of ND law – but this case involves both contract and tort

2. (2) Maintenance of Interstate Order- Need to reciprocate between states – don’t apply your law if another forum’s interests are greater (punishes P here)

3. (3) Simplification of Judicial Task – not too much of an issue

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4. (4) Advancement of Forum’s Governmental Interest – MI doesn’t have much interests in facts, the move to Arizona is irrelevant – look more at policy of getting benefit of the K

5. (5) Objective “Better Rule of Law” – MI has since changed to prohibit stacking, so that can’t be the better law – but is current one improved? Can’t tell so don’t focus on this

6. PRINCIPLES OF PREFERENCE (PROF. CAVERS)a. Prof. Cavers: Developed principles to guide judges in deciding between conflicting laws

i. Focused on the purposes of conflicting laws, which leads naturally to emphasize the people on whom the laws impact. However, this analysis similarly looks at the interests of the parties to the relationship at stake so easy to just assign interests to the state where the parties are located – may give too much judicial discretion to identify “interests.”

ii. Torts : (1) Law of state of injury should apply if it’s more protective of plaintiff’s than law of defendant’s domiciliary state

1. (2) Law of the state where a defendant acted and caused injury should apply if it’s less protective than the law of the plaintiff’s home state

2. Visitor exposed himself to risks of territory that he voluntarily entered so shouldn’t expect people living there to a financial hazard that their law didn’t create

iii. Contracts : Apply the law of a certain state if the party protected was from that state and the transaction was centered there

7. PROBLEMS IN MODERN CHOICE OF LAW a. While utilizing any of the above listed “modern” choice of law approaches, certain problems repeatedly arise,

for which several remedies have been developed.B. DEPECAGE : In trying to decide between a conflict of law, the use of depecage, or the application of different

jurisdictions’ laws to different issues in a case, can be used to compartmentalize choice of law problems.i. Depecage is a characteristic of cases even today and will be an issue regardless of the technique for

resolving choice of law questions. However, this method is critiqued for resting on hyper-technical distinctions between categorization of an issue, and resulting in inconsistent application of the choice of law principles. Further, under this method, one can have a case resolve in a way that is not allowed under either of the state’s laws chosen to apply to individual issues (Marie v. Garrison).

ii. Maryland Cas. v. Jacek: Drives car from NJ to NY (where insured), wife injured, spousal immunity in NJ, but not in NY, but no coverage under insurance in NJ

1. But the Court applied NJ law to the insurance contract, and law of NY (place of accident) to the tort (spousal immunity) – insurer found liable even though it couldn’t have been found liable either in NJ or NY

C. RENVOI : Renvoi is the use of a foreign jurisdiction’s whole law, or both the substantive and choice of law rules, to decide between a conflict of law. Normally, foreign law would only be applied when the court has determined that the foreign state has a legitimate interest in the application of its law and policy to the case at bar, and that the forum has none, for example in land cases. In other cases, renvoi is discouraged.

1. If the forum state refuses to consider the choice of law rules of a state to which it refers, it “rejects” renvoi, but if it follows the foreign choice of law rules, it “accepts” the renvoi

a. Remission- when state accepts renvoi, and that law returns the case back to forum b. Transmission- when state accepts renvoi, and that law sends case to third state c. Partial- Foreign choice of law rules is found to refer to the internal law of a stated. Total- If the foreign reference is to the whole law of that jurisdiction

ii. Option 1 : Any references to foreign law means internal law only – not their COL1. First RST §7: Directed courts to ignore foreign choice of law rules

a. EXCEPTIONS: Except for title of land and validity of divorce decree rules which are controlled by situs of land and domicile of parties, respectively

b. BUT a badly organized system yields disorganized exceptions 2. Under Currie’s interest analysis method, don’t use the whole law to determine a state’s interest

a. COL rules intended to limit scope and meaning of substantive law – so reflect a state’s decision about how to extend local law (ignoring may betray purpose of interest analysis)

b. Maybe the conflict of law is an extension of substantive law – so should treat the foreign state’s decision of its territorial scope with the same deference given its substantive laws

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iii. Option 2 : Replace rules with “rebuttable presumptions” against applying whole law of foreign state 1. Reference to the law of the situs necessarily entails a reference to the whole law of that country,

including the conflict of law rules (Schneiders Estate – esp if land in foreign jurisdiction)2. RST 2d §8(2): Recognizes renvoi whenever the forum’s goal is reach the same result on the very

facts involved as would the courts of the foreign state iv. Option 3 : Accept renvoi back to forum, but prevent door from going on forever

1. Use whole law of foreign jurisdiction as a justification for applying law of forum – just as logical to stop at second as third revolution (Griswold)

a. Renvoi should end because court made decision not to agree with that other court’s law – allowing another state to dictate the applicable law is “nothing less than an abdication of sovereignty” (Lorenzen)

b. Renvoi methods may encourage reciprocity, and discourage forum shopping. Foreign COL rules are informative, but aren’t binding and don’t need to be considered unless the forum finds it useful to resolve a case

v. In Re Schneiders Estate : US citizen from Switz, domiciled in NY left property in Switz1. Swiss law (property of a foreign national is split among heirs), NY law (will decides). Swiss

conflict law said foreign national issues are decided by domiciliary internal law2. Holding: NY Law Applies. Actions concerning real property are properly decided only before the

courts of the situs BUT under NY law the forum has to look to the whole law of Switzerland. Under Swiss law, court looks to NY law (domicile), NY law says it’s valid, so the transactions surrounding the Swiss property under the will are valid.

a. Following the whole Swiss law ensures uniformity of result, and still gives them the sovereign rights to decide how land in their jurisdiction is disposed

VI. Pfau v. Trent Aluminum : Plaintiff (CT domicile) injured while a passenger in a car in Iowa1. Facts: Car driven by a NJ resident, owned by a NJ corporation, insured in NJ

a. Iowa has a guest statute (driver not liable), CT and NJ would allows guest recoveryb. Iowa Interest: Discourage litigation, prevent collusion, encourage sharing ridesc. CT Interest: Want to allow guests to recover (implicated here because P is a domiciliary)

2. Holding: No. Applies Connecticut law – and only the local law, not the whole lawa. CT law looks to the place of the injury – which is Iowa (whose policies don’t matter)b. Because Iowa has no interest in the litigation and the substantive laws of CT and NJ are the

same, it’s a false conflict, so CT plaintiff should be able to show negligence

D. RULES V. STANDARDS: The First and Second RST and Interest Analysis approaches are criticized as being either overly rigid or overly flexible. However, this distinction between rigid rules and flexible standards appears to be really a false conflict because whatever method people actually adopt is going to combine elements of both. Rules create characterization problems because they have gaps and ambiguities, but standards will create rule-like patterns of decisions.

i. Rules: It is cheaper and easier to have rules – fixed principles announced beforehand limit arbitrariness of decisions, improve predictability, let people plan ahead

1. Rules create arbitrary results – need some subjective case-by-case analysis to be fairii. Standards: RST’s are intended to restate patterns of decisions into something more rule-like

III. Paul v. National Life : WVa (forum) residents injured in Indiana (has guest statute gives immunity)1. Holding: WVa law applies. Indiana law applies because it was the place of the tort, but the guest

statute there goes against WV public policy – so decides not to use ita. Court looked at all conflict of law methodologies, eventually decided to use the traditional

approach, coupled with their public policy exception to change the law applied when the foreign guest statute law is against the public policy of West VA

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WHAT KIND OF CASE DOES EACH PLAINTIFF WANT TO BRING?’1. MULTI-JURISDICTIONAL/MASS CLASS ACTION

a. Litigants want to bring class-actions in a place that assures that the class will be certified, as a court is likely to deny class certification when a COL inquiry points to multiple states with conflicting laws. Yet courts seem to go to great lengths to bend COL rules so that only one law is selected to govern all claims.

i. Good Practice: For difficult class certifications, could create sub-classes and resolve the class that way – different COL for each sub-group (semi-depecage for class actions)

ii. ALI §6.01 : Transferee court shall choose the law governing rights, defenses of parties with the objective, if feasible, of applying a single state’s law to all similar tort claims assessed against a D

1. Certify classes to be efficient, but efficiency goes away with too many COL rules to applyb. (1) In multi-state class actions, COL inquiry can be dispositive, courts can’t certify an unmanageable class

i. Ex : Product liability action against Bridgestone and Ford – PREVENTED IT1. Indiana was a lex loci jurisdiction, so since financial losses occurred in all 50 states and not in

D’s headquarters, so the class is unmanageable and un-certifiable ii. Ex : Product liability action against tobacco manufacturers – ENABLED IT

1. P’s from all states, claim alleged conspiracy to conceal data, punitive damages for conspiracy in NY where D’s HQ’d (certified – doesn’t want NY to be a haven for corrupt corporations)

c. (2) Some black-letter doctrine exists regarding choice of law in multi-state litigation i. Not black letter, but courts have an institutional preference to find a single state’s law that applies in

complex litigation – Air Crash (applying IL law for punitive damages) ii. Klaxon : Erie: A federal district court in diversity has to apply the COL rules of state where it sits

iii. Van Dusen : When a case is transferred between federal district courts, the court where it’s transferred to applies the law of the sate where it was transferred from

D. In Re Air Crash Disaster Near Chicago : Residents from numerous states (118 wrongful death actions)I. Facts: Place of crash and the Forum (7th Cir- Klaxon): Illinois

ii. Difference in Law: No punitive: Illinois, CA, NY, Punitive: Missouri, TX, OK iii. Holding: Illinois applies. Can’t arrive at a “moderate and restrained” interpretation to avoid a true

conflict, and no rebuttal of the presumption to apply IL, so no punitive damages. 1. Step 1: Is there a true conflict? YES- Look at COL rules of states where the actions were filed

– some allow punitive damages, some don’t, so true conflict which can’t be reconciled2. Step 2: So, apply the conflict-of-law theories of the forum states

a. MO has an interest in preventing wrongful design and manufacture – to not include their interest would be to encourage companies to locate in numerous states

b. CA has an interest- want to encourage people to do business in the state (protect companies from punitive damages)

c. So looks at forum/injury: IL has an interest in promoting airline safety but also of encouraging airlines to do business in that state

3. Step 3: Is Second RST presumption overcome? NO- IL COL says place of injury has the MSR under §175, and CA or Missouri don’t have a MSR than Illinois- plus they conflict)

E. In Re Agent Orange Product Liability : Vietnam war veterans and families sued I. Facts: Court had to apply COL rules of original transferor courts (under Klaxon and Van Dusen)

ii. Holding: Apply a “national consensus law” - J. Weinstein: Sensible to treat all veterans the same for injuries fought in a foreign war, and under Prof. Lefler’s, Second RST and Interest Analysis, and traditional rules, and lex fori approach – probably all same result – national consensus law

1. Likely each state would look to a federal law for manufacturer’s liability, punitive damage 2. Too many states with relevant contacts under Second RST §145 and §6 plus three countries

a. Couldn’t identify the interest of any one state as being sufficiently greater than any other to justify application of that state’s law

iii. Notes : Court basically yelled at congress for not addressing the agent orange issue 1. Wanted to create sub-classes on common issues of fact, didn’t articulate standard because he

was encouraging them to settle (admonished by 2nd Circuit Court of Appeals later on)

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iv. Would be easier to overrule Klaxon and Van Dusen to enable federal courts to develop a federal common law choice of law – help solve the complex litigation issues and reduce federal uncertainty in decisions because of applying uncertain state rules

f. G. W. Bush’s Congress passed “ Class Action Fairness Act ” i. Class action can be removed to a district court without regard to whether any D is a citizen of state

where the action brought, except such action may be removed by any D without consent of all D’sii. So now: “Fine to kill the class on the ground that more than one state’s law will apply”

1. So really like the “Anti-Depecage Act” because federal judges won’t want to break things up and apply different laws to sub-classes

WHAT SUBSTANTIVE LIMITATIONS DOES EACH STATE HAVE? WHAT ARE DIFFERENCES IN LAW? 1. ARE THERE SOL OR STATUTORY LIMITATIONS ON THE RIGHT TO HEAR THE CASE ?

A. Bournias – argument, SOL is not general but specific to this cause of actionb. Sometimes the SOL can be so limiting that it is a de facto denial of a forum c. Any state - federal court interaction? Klaxon: Erie: A federal district court in diversity has to apply the COL

rules of state where it sits (Van Dusen: Court where transferred to applies state law where transferred from)

2. CONSTITUTIONAL LIMITATIONS ON CHOICE OF LAW: Can the Forum Constitutionally Apply Its Own Law?a. The constitution protects individual parties by avoiding unfair surprise, and encouraging inter-state harmony

by requiring full faith and credit (FF&C) to be given to sister state judgments. Although there are no explicit restrictions in the constitution limiting which choice of law method to apply, the constitution does impose restrictions on the result that can be reached under those methods.

i. (1) Fairness : If it’s constitutionally unfair to hold one party to a certain law, then the application of that law to the parties is unconstitutional (Home Insurance)

1. The state must have significant contacts or aggregation of contacts to the parties or the transaction creating state interests such that the application of a state’s law is neither arbitrary and fundamentally unfair (Allstate Insurance)

2. The parties getting benefits of one state’s law might also have to subject to its burdens (take bitter with the sweet) (but Bradford shows that having any contact is not enough)

ii. (2) State Interest : Find sufficient forum contacts to justify finding a state interest in application of forum law (AK Packers, Pacific Employers, Bradford)

1. There must be at least some minimal contact between a state and the regulated subject matter or transaction before the state can, consistent with the requirements of Due Process, exercise legislative jurisdiction (Gerling Global)

a. State Interest: Has to be: (1) Legitimate/constitutionally valid (no valid state interest in discriminating), AND (2) engaged in these case’s specific facts (not just interests behind law, but the interests are connected –his lines if policy is connected to facts)

b. Sufficient Contacts: The exercise of jurisdiction does not offend DP if the pertinent party has certain minimum contacts with the jurisdiction such that the maintenance of the action does not offend traditional notions of fair play and substantial justice.

2. Can have PJ contacts without sufficient COL contacts (Gerling – was within the PJ of the FL courts, but FL couldn’t apply FL law to company)

a. Schutts: Courts had PJ in Kansas, but Kansas law couldn’t apply b. PJ : Look at contacts between the regulated party & the statec. COL : That PLUS contacts between regulated subject & the state

b. DUE PROCESS : If the use of a certain COL method results in the application of the law such that unfair surprise is triggered, then the constitution won’t allow it, as it becomes a due process violation.

i. A court will uphold application of the forum law unless it’s an arbitrary and unnecessary interference with the individual’s right to personal liberty. (right to contract)

ii. As long as forum has a reasonable relationship to the parties or the cause, it may reject all foreign law in favor of its own law, but where there are no such contacts, due process imposes limits.

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1. Hartford v. Delta : A state may limit/prohibit certain contracts within its own territory, but it can’t extend the effect of its laws beyond its borders to destroy or impair the right of citizens of other states to make a contract not operative within its jurisdiction, and lawful where made

iii. A state doesn’t need to substitute the statutes of other states for its own statutes dealing with a subject matter concerning something that it is competent to legislate

1. Forum is always privileged to apply its own procedure, but choice of its procedure can be unconstitutional if the rule itself is unconstitutional (too surprising), so application of state’s procedural law in its own forum is likely constitutional

c. PRIVILEGES & IMMUNITIES/EQUAL PROTECTION : Sometimes constitutional argument can be framed as a non-discrimination argument. Courts are forbidden from discriminating against another state just as you’re forbidden from discriminating against an individual (state or the individual can be the beneficiary of a right)

i. Both explicit discrimination (Hughes) and implicit (Broderick) are invalidII. Forum Opening Rule : A forum must open their courts for foreign based causes of action, unless:

1. (1) The forum has real antagonism against the foreign state’s lawa. Court needs a sufficient justification to refuse to enforce a foreign judgment, and must

tailor the discrimination to fit that justification B. Ex : if WI’s statute prevented hearing any wrongful death causes from anywhere

2. (2) The case doesn’t meet forum non conveniens requirement (Ex: Administrative difficulty)

iii. Privileges & Immunities Clause protects more than just the economic or commercial interests 1. Not states discriminating against other states’ causes of action or forums, like previously, but

here discrimination against another state’s citizens2. So if there is some federal or national interest served by the mobility of the population, good

chance that P&I will strike down any local restrictions a. Prof. Laycock: If legislatures acted generally on Currie’s view that they owe nothing

to the citizens of sister states, the Union would be destroyed 3. Ex : Recreational licenses can be restricted in a way that professional licenses cannot (no

fundamental need to fish, but fundamental need to work) a. No problem with traditional choice of law – phrased without regard to where parties

were domiciled, just looked at vested rights based on where x happenedb. But with interest analysis – recognized domiciles as important state interests, so that

increased importance of P&I clause in reducing discrimination4. Limitations of the P&I Clause:

a. (1) Prevents discrimination only against citizens , not residents of other states i. Piper FN 6- “citizen” and “resident” are used interchangeably

b. (2) Protected privileges were only those which are fundamental in some sense i. The opportunity to practice law is a fundamental right, legal profession is

important in the national economy, and also attorneys play a non-commercial role and should be protected under the P&I clause (Piper)

ii. Only those P&I’s that bear on the vitality of the nation as a single entity are protected (like something restricting doing business across state lines)

iii. Baldwin: Hunting elk isn’t a “fundamental” right under the P&I clause 5. Piper : NH Supreme Court rules limit bar admission to state residents

a. P&I Clause does not prohibit discrimination if there is: (1) a substantial reason for the difference in treatment, and (2) where the discrimination practiced against nonresidents bears a substantial relationship to the state objective

b. State offers reasons why discrimination is needed – Court rejectsi. State can test non-resident attorneys to ensure their familiarity with the rules, no

reason to think they would behave dishonestly and they’re susceptible to the same disciplinary rules as in-state lawyers

c. Rehnquist (dissent): Here, shouldn’t look at each state reason and find a better way to accomplish that goal than the one chosen – that’s legislating

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iv. Equal Protection Clause functions similar to the P&I clause by: (1) preventing discrimination against “foreigners” (the test of the reasonableness of the distinction is the same in P&I and EPC), (2) and the EPC forbids unreasonable distinctions between citizens of the state whose law is in issue

1. Under interest analysis a state that is interested in applying is law because a party is a resident withholds the protection of that law from a non-resident in the interest of comity- to leave room for the non-resident’s home state law

v. No State May: (1) Discriminate against foreign based CAUSES OF ACTIONS by systematically depriving its local courts of jurisdiction over them (Hughes)

1. Laws that promote a state’s objectives by withholding jurisdiction from local courts to hear foreign causes of action are subject to STRICT SCRUTINY REVIEW (Hughes)

2. Laws that promote a state’s objectives by defining the parties substantive rights in a particular way get the RATIONAL BASIS DEFERENCE under the FF&CC (Hughes)

3. Hughes v. Fetter : Accident in IL, sued in WI under IL wrongful death statuteA. Facts: WI’s wrongful death act doesn’t allow other statutes to be heard in WI courtB. Holding: WI must provide a forum. Wisconsin’s statute which excludes an Illinois

cause of action is invalidated by the FF&C because it discriminates against causes of action heard outside the state

C. Reasoning: Interest in unifying principle of FF&C clause, but WI has a public policy interest against allowing WI courts to hear any other state’s wrongful death claim

i. Discriminatory because WI has a policy supporting wrongful death actions, and no conflict with IL against hearing a wrongful death actions – only closed the courts to actions that arose outside of WI

D. Rule: A state cannot escape the constitutional FF&C obligation to enforce the rights and duties validly created under the laws of other states by removing jurisdiction from courts otherwise competent to hear the claims

e. Dissenting: Suspicious of any rule that forbids forum from applying its own law i. Sufficient reasonable basis for WI law to apply so shouldn’t make forum choose

another law, because if the reverse were true (died in WI, sued in IL), IL court would dismiss the suit, so no need for WI not to dismiss it too

vi. No State May: (2) Discriminate against foreign FORUMS (Tenn Coal) by limiting disputes under its law to its own courts

1. Tennessee Coal v. George : George worked for TN Coal in AL, sued in GA under AL statute a. Facts: AL statute said that cause of action must be brought in AL, nowhere elseb. Holding: Can hear in GA because AL’s exclusive remedy provision discriminates

against GA courts. Can’t deny other courts the ability to hear cases because it impedes upon their state sovereignty by discriminating against their courts/

c. Rule: A transitory cause of action can be maintained in another state even though the statue creating the cause of action provides that the action must be brought in local domestic courts – can’t create a transitory cause of action and then destroy the rights to sue under it in certain courts

d. Reasoning: Where liability clause is coupled with a clause for a special remedy, that remedy alone must be employed, but here, the right and remedy aren’t so intertwined that the right is dependent upon it being enforced in a particular tribunal

D. FF&CC : DO THEY HAVE TO GIVE FF&C TO ALL “PUBLIC ACTS” MEANING STATUTES? POLICIES? i. Art IV, § 1 : FF&C shall be given in each state to the public acts, records, judicial proceedings of

every other state. And the Congress can by legislating prescribe the manner in which Acts, records, and proceedings shall be proved and the effect thereof

ii. FF&C does not enable one state to legislate for the other or to protect its laws across state lines so as to preclude the other from prescribing for itself the legal consequences of acts within that state’s territory (Pacific Employers)

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1. Requires that a state respect the legitimate interests of other states and avoid infringement upon their sovereignty, however, it does not require the forum state to apply foreign law every time foreign states have any contact to transaction

2. FF&C is violated only if application of forum law threatens federal interest in national unity by unjustifiably infringing upon legitimate interests of another state

iii. Policy: Interstate tensions will be reduced if states are required to recognize and enforce the acts of other states (needed to make one nation out of many sovereigns – ensure interstate respect)

1. A rigid and literal enforcement of FF&C would lead to an absurd result, that a forum would always be forced to apply the law of the other state involved.

E. CAN THE FORUM CONSTITUTIONALLY APPLY ITS OWN LAW?I. YES: FORUM CAN CONSTITUTIONALLY APPLY ITS OWN LAW

1. Burden rests on people who challenge application of forum’s law to prove the superiority of another state’s interest – so presumption in favor of forum applying its own law if there is a minimal connection to the transaction or the parties (Alaska Packers)

2. Alaska Packers v. Industrial Accident – DUE PROCESSa. Facts: Non-resident employee sued employer’s insurance in CA for injuries in AK

i. Applied for workers compensation in CA for an injury he sustained in AKb. Holding: CA law applies. CA’s interest is sufficient to justify its legislation, and

Alaska doesn’t have a strong enough interest for its law to be used in place of CA’si. No due process violation because the state of CA had a rational basis and wasn’t

an arbitrary or unreasonable exercise of state powerc. Rule: Every state is entitled to enforce in its own courts its own statutes, BUT the

person alleging that the foreign state’s law should be applied has the burden to show that the foreign state has a superior interest in the conflict

i. Balances FF&C by looking at the interests of the state’s in the result of the conflicting policies (balancing test)

ii. CA state supreme court said that giving effect to the Alaska statute is contrary to the policy of the state

d. Notes : Different than Clapper where the VT statue explicitly applied to injuries out of state, but CA didn’t have a provision like that (plus employee was a non-CA resident which cuts against it, but court ignored)

3. Pacific Employers v. Industrial Association – FULL FAITH & CREDIT/DPa. Facts: Mass employee injured in CA while working for Mass employer (common

dom), CA workers comp applies to all injured within the state, MA workers comp waives employees common law right of action or any other forum’s law to recover for injuries unless they give written notice to the employer that they intend to do so

b. Holding: CA can apply its law. The interest of Mass in safeguarding the compensation of out of state employees isn’t great enough to overcome CA’s interest in regulating safety and economic protection of people within its borders

i. The FF&C clause doesn’t require one state to substitute its own statute for the conflicting statute of another state – CA had a rational basis for promulgating worker protective legislation, and for CA to apply the Mass statute, need a reason for the CA courts to decline to apply their own statute

c. Reasoning: An interested state can always apply law notwithstanding the interest of the other state as long as there are any interests (threshold test)

i. Don’t need superior interests, just sufficient interests ii. Obnoxious to the CA legislature to deny persons the right to compensation

under the CA act because they’re applying another statue 4. Allstate Insurance v. Hague – DUE PROCESS

a. Facts: Accident in WI, both drivers were WI dom’s, P worked in MI where insurance covered his cars, after accident before case, wife moved to MI

i. Under MI law, can “stack” insurance policies, but not in WI

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ii. Minnesota Interest: Stacking allows broader distribution of accident costs through premiums than the non-stacking rule (more modern law)

iii. Wisconsin Interest: No stacking so potentially improves uniformity?b. Holding: Minnesota had sufficient aggregation of contacts for the application of its

law to the insurance dispute to be constitutionali. Court abandons the balancing-of-sovereign-state-interests approach to conflicts

of law under the Full Faith and Credit Clause c. Reasoning: Important contacts: (1) Mr. Hague worked in Minnesota (workplace has

important police powers, his insurance cover him during his work commute)i. (2) Allstate was doing business in Minnesota – licensed there

1. No unfair surprise that it would be liable to suit there2. Is state interest implicated? The business in Minnesota had nothing

to do with the contract in question here – this was a WI contract3. (3) Executor of estate was a Minnesota resident

a. Is state interest implicated? No because creates unfair surprises if post-accident occurrences can count as contacts

d. Stevens (concurring): Defendants alleged no threat to Wisconsin’s sovereigntyi. Wisconsin interests aren’t threatened because parties didn’t make their contract

in reliance on Wisconsin law – no COL in contract ii. Presumption for forum law application – significant interest to apply their law-

fair and efficient administration of justice to apply law you know welliii. Nothing in the K that talked about “stacking” – could have contracted around,

and Allstate should have known they could be sued throughout USe. Powell/Roberts/Rehnquist (dissenting): Have to determine whether the contacts

present a reasonable link between the litigation and the state policyi. Court should invalidate a forum state’s decision to apply its own law when there

are no significant contacts between the state and the litigation ii. Test is the same as the plurality – just Brennan thinks there are enough contacts,

and Powell doesn’t think there are f. Notes : Go through the two part test to determine of constitutional under DP/FF&CC

i. State Interests : Court found an interest in the state’s desire to compensate residents so that the state is protected from creating dependents

ii. Unfair Surprise : Allstate probably had notice that Hague drove from WI to MI every day – knew the stacking policy could K around

5. Watson v Employers Liability : Hair product injury to LA resident, sued in LA against a company HQ’d in Massachusetts but manufactured in Illinois

a. Holding: Forum (LA) can apply its own law – court found no DP issue i. No problem with unfair surprise – insurance K in Mass, but was to protect

subsidiary against damages suffered anywhere in the USii. No problem with state interests – LA resident was injured in-state, sold in

Louisiana, LA had a direct contact statute b. Holding: LA doesn’t have to subordinate its law to Mass contract rules – too difficult

to make a LA resident serve process in Mass or IL – unfair to injured party 6. Nevada v. Hall : SCOTUS upheld CA’s application of CA law with no damage cap in place

of Nevada’s $25k damage cap – got huge damage award instead of $25ka. No interference with NV’s sovereignty for accident occurring outside of Nevada

ii. NO- FORUM CANNOT CONSTITUTIONALLY APPLY ITS OWN LAW1. Home Insurance v. Dick – DUE PROCESS

a. Facts: Texas citizen sued a Mexican corporation to recover on a fire insurance policy (2 year SOL in Texas, 1 year SOL in Mexico)

b. Holding: The forum (TX) cannot constitutionally apply its own laws – insufficient contacts between the forum and the parties/transaction to apply forum law.

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i. It is a Due Process violation if the TX courts impose an additional burden on the Mex transaction that the parties didn’t contract for – TX courts do not have the power to invalidate contracts made and performed in MEX

ii. Seizing property in payment of the obligation violates the guarantee against deprivation of property without due process of law

c. Reasoning: Different because the parties expressly agreed upon SOLi. TX has a right to refuse foreign rights that violate its public policy, but the

entire transaction happened out of state – only brought to TX by the suit ii. Notes : Like Bournias: SOL is substantive because of risk of unfair surprise

because of its application – wrapped up in the cause of action 2. Bradford Electric v. Clapper – FULL FAITH & CREDIT

a. Facts: Clapper (VT) employed by Bradford (VT corporation, PPB in VT), but injured while working in New Hampshire (forum)

i. NH allowed workers comp or tort action, VT limited to workers compb. Holding: VT law applies. The constitution prevents an employee from asserting in

NH rights which would be denied him in the state of his residence i. Rights created by VT statue are entitled to protection even when they’re brought

in a NH court, without this, the Vermont law would be impaired c. Holding: No sufficient public policy reason for NH not to enforce VT law

i. Want to help employees by giving them a speedy remedy without proof of fault, and want to help employers by giving them a certain level of liability

d. Reasoning: Just because Vermont legislation doesn’t conform to NH law doesn’t mean that it’s obnoxious to NH public policy to give effect to Vermont statue

i. Only VT residents are involved – no subversion of NH policy to give a VT remedy to VT company/residents, and even though NH law is impaired by applying VT law, doesn’t matter because no citizens of NH to be protected

ii. Bradford Electric does business in NH, so no unfair surprise really that there would be injury there (unlike TX which had no contacts with transaction)

3. Gerling Global Reinsurance v. Gallager – DUE PROCESS a. Facts: Insurance companies with affiliations with German insurers who issued

policies to Holocaust victims before 1945 sent subpoenas requesting policy infob. Holding: Forum can’t apply its law because there were insufficient contacts, and the

subject matter was improper to allow the reportingi. None of the insured parties issued policies to Holocaust victims before 1945,

and only one of the insurance companies existed at that time, but the companies are now affiliates of German insurance groups

c. Rule: A state must have a significant contact or aggregation of contacts, creating state interests, so that choice of its law is neither arbitrary nor fundamentally unfair.

i. Look at both subject matter and individualized contacts with the state1. The parent companies aren’t registered to do business in FL, no

offices or employees in the state, no contacts with FL except some policy beneficiaries may reside in the sate

2. Can do investigations to decide if the insurer is fit to do business in the sate, but this isn’t the statute’s purpose

4. Phillips Petroleum v. Shutts : Leased mineral rights from 30,000 people, set royalty %a. Facts: DE company with PPB in OK, royalty owners in all 50 states, land in 11

i. Phillips didn’t pay lessors interest on the increase in royalty payments owedb. Holding: KS’ lack of interest in the out of state claims makes application of its

substantive law to the non-forum state claims arbitrary and unfair – unconstitutional i. Reiterates Allstate – no sufficient contacts with most parties and subjects in the

case. No “common fund” located in KS would require or allow the application of KS law to all claims (but doesn’t say which law applies)

c. Reasoning: KS cannot revoke the rights of parties beyond its borders having no relation to anything done or to be done within them. The forum’s interest alone is an

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insufficient contact because it only became relevant because of a post-occurrence decision to bring the suit in Kansas (just like Home Insurance)

i. Just because forum law is a presumption doesn’t mean that if it has no other contacts the presumption stands. Can’t “bootstrap” use of forum law as a reason not to look at other states. Parties didn’t expect KS law to be applied

d. Stevens (dissent): No conflict between KS law and other state law – false conflict5. Franchise Tax Board of CA v. Hyatt : - FULL FAITH & CREDIT

a. Facts: Hyatt filed a “part” tax return in CA, CA tax board thought it was suspiciousi. The Tax Board audit said he was a CA resident until April 3, 1992 and imposed

civil fraud penalties, Hyatt sued for intentional torts in Nevadaii. NV state agencies had no immunity from intentional torts committed during

employment, but CA had given this immunity b. Holding: Nevada law applies. Nevada does not violate the FF&CC by ignoring the

CA immunity statute and hearing the intentional tort claims against CA tax agencyi. Applying CA sovereign immunity law would violate Nevada’s own legitimate

public policy – Nevada was competent to legislate in that areac. Reasoning: No threat to cooperative federalism from applying Nevada law in place of

CA law – balancing test of Alaska Packers didn’t survive, replaced with balancing test of Pacific Employers

i. Didn’t want to balance sovereign interests – can’t compare educational and tort and sovereign immunity interests (too difficult and no valid difference)

6. Yates : Post-occurrence change of resident is insufficient standing alone, but maybe can be supplemented with other facts to form sufficient “aggregates”

CONSTITUTIONAL LIMITATIONS ON RECOGNITION & ENFORCEMENT OF JUDGMENTS 1. RES JUDICATA

a. The FF&CC is interpreted to require another court to apply the res judicata law of the rendering state, meaning that a second forum has to give effects to the final judgments considered in the first forum. The FF&CC attempts to prevent the re-hearing of claims once a forum has decided certain matters, thus minimizing the judicial energy devoted to each case, establishing certainty and respect for court judgments and protecting the policy relying on the previous judgment against continuous litigation

i. Federal courts have to give FF&C to state judgments, and states have to give effect to federal courts too, but this is under 28 USC §1738, not the constitution

II. WHAT IS THE SAME CAUSE OF ACTION?1. (1) Substantive and procedural law are applicable to both actions, (2) the same right is alleged to

be infringed by the same wrong in both actions, (3) the judgment sought in the second action would infringe rights established in the first, and (4) the same evidence would support both actions, or (5) the operative facts are the same in both actions

2. Administrative orders are treated the same as judgments if the agency is empowered to adjudicate rights BUT FF&C and preclusive effect is NOT given to an un-appealed arbitration proceeding – arbitration without a court review isn’t a “judicial proceeding” under the meaning of the FF&CC (Thompson v. Washington Gas)

iii. DIRECT ATTACK: An appeal of the case within the same jurisdiction, or new trial, or setting aside a judgment for newly discovered evidence (res judicata)

1. Claim preclusion- Prevents further suits upon same cause of action after final judgment (can’t litigate issues actually decided – first decision is just as likely to be correct as a second, desire to hear all issues in one case, not piecemeal)

iv. COLLATERAL ATTACK: A case challenging the previous litigation using different cause of action but same set of issues (collateral estoppel)

1. Issue preclusion - Prevents rehearing of issues that were litigated by the parties, determined by the tribunal and necessarily so determined (but can bring the case if the judgment wasn’t on the merits, dismissed procedurally)

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2. DOMESTIC LIMITS OF LEGISLATIVE JURISDICTION :a. Exceptions to FF&C Preclusion : There is no public policy exception to the recognition and enforcement of

judgments under the FF&CC. However, the general preclusive rule of the FF&CC is subject to limited exceptions. In certain situations, F2 may refuse to enforce a judgment of F1. These pockets of exceptions have arisen to balance the harshness of its application in certain circumstances.

b. (1) Procedure: Can refuse to enforce if F1 lacked PJ or SMJi. Durfee v. Duke : Land near Missouri river, Nebraska court decided, enforced in Missouri

1. Holding: The issue of F1’s jurisdiction over the case cannot be re-litigated in F2 a. There is no reason to collaterally attack the issue of SMJ because that gives parties two

chances to have their day in court, and a second court’s decision is no more likely to be correct than the first one.

2. A judgment is entitled to FF&C even to a question of jurisdiction when: F2’s inquiry shows that F1 fairly and fully litigated and decided those issues

a. Includes: Full and fair trial where you voluntarily appear and contest issuesi. Fair here because parties had opportunity to litigate issues in F1

b. Doesn’t Include: Default judgment, or first judgment was fraudulent, then ii. Thompson: BUT if the case has not been fully litigated, F2 has an interest in not recognizing judgments

where there was no SMJ in F1. F2 is entitled to inquire into the jurisdictional issues, and if they’re insufficient, F2 doesn’t have to give F1 judgment FF&C

1. Jurisdiction of the court by which is judgment is rendered in any state may be questioned in a collateral proceeding in another standing

iii. Chicot- Judgment in F1 is binding on F2 despite the fact that the issue of constitutionality hadn’t been raised or litigated in the first case

c. (2) Collateral Attacks: A state may have valid collateral attack grounds i. For cases of fraud, duress, or coercion

ii. First RST §451 : A collateral attack is allowed in F2 against F1 if: (1) the lack of SMJ was clear, (2) the determination of jurisdiction depended upon a question of law not fact, (3) the court was of limited and not general jurisdiction, (4) the question of jurisdiction was not actually litigated, (5) and policy against the court’s acting beyond its jurisdiction is strong

1. If these elements don’t show up, then parties cannot collaterally attack the judgment on the ground that the court did not have jurisdiction over the subject matter

iii. RST of Conflicts §97 : Balancing test to decide when a collateral attack on SMJ is allowed:1. Look at due process limitations in limiting a sister state’s jurisdiction, and state policy reasons

(territory in F2’s state?), whether lack or jurisdiction/competence is clear, whether issue was on law or fact, whether court has general or limited jurisdiction, whether jurisdiction question was actually litigated, strength of policy denying jurisdiction to the second court

d. (3) Public Policy: Normally the federal policy of FF&C outweighs any state interests in not enforcing a sister state’s judgment BUT there are rare occasions where recognition of a sister state’s judgment requires too large a sacrifice by a sate of its interests in a matter with which it’s primarily concerned.

i. Supported by RST §103, Justice Stone’s dissent position in Yarborough ii. Can use this limited exception if a state interest is profound, legitimate and implicated in these facts.

iii. However, this exception must be limited, and cannot be allowed to swallow the rule. IV. PUBLIC POLICY IS ENOUGH (CONSIDERED FUNDAMENTAL STATE POLICY):

1. LAND TABOO : F2 has interest in land within its own boundaries, and in keeping land records clear (Clarke)

a. Historically looked to the land’s state to effectuate its policies, but doesn’t relate with the modern federal system. Property doesn’t care who owns it, but people who live around certain property benefit from property laws

b. Prof. Currie: Either a judgment is rendered without jurisdiction, in which case due process of law is denied by finding it conclusive, or it is rendered with jurisdiction, in which case it is entitled to full faith and credit

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i. After Fall, little left of the Clark case – just a pleading requirementc. Good Practice: Don’t claim that F1 judgment directly affects title to land, but instead

get remedial powers in F1 to do indirectly what can’t do directlyi. Don’t bring an action for ejectment or possessory action

d. Clarke : Wife died (dom in SC) leaving property (CT) to her husband and surviving daughters, but one died (CT law land to sister, SC passes to dad)

i. Holding: Courts of decedent’s domicile could construe her will as to property within that court’s state, but the land in CT was beyond the SC court’s jurisdiction

ii. Law of the state where land is controls its transmission by will or by intestacy, but here there is no FF&C violation for ignoring F1’s decision when F1 didn’t have SMJ over the land in question

iii. Notes : A bad argument because have to approach taboo culturally, so the rule is about more attenuated interests (neighbors)

e. Fall v. Eastin : Married in IN, moved to NB, bought landi. Facts: Husband filed for divorce in Washington, wife claimed that they had

already divorced in another state where she got the land, and husband fraudulently recorded a deed which clouded her title (want to create a valid recording system)

ii. Holding: FF&CC requires a Nebraska court to recognize a Washington court’s decree in a divorce action in Washington

1. F2 not obliged to enforce the decree of F1 –F1 judgment can be recognized without being enforced

2. F1 doesn’t transfer title, but recognized because precludes re-litigation of merits of the F1 judgment about ownership

iii. Rule: When a court uses its equity powers (contempt) to force a result, it’s allowed to indirectly do what it otherwise cant do directly

1. F1 can’t make a decree to operate as such conveyanceiv. Reasoning: A state cannot directly effect title to land in another state as only situs

state has jurisdiction over its own property (land taboo), BUT F2 can indirectly effect title to the land by forcing a conveyance by parties under its jurisdiction

1. Exception to the land jurisdiction rule – because W never executed the deed to H, WA court’s requirement for H to convey the property to the wife was binding in Nebraska

2. Decree can’t be of legal title, but it can compel obedience through contempt or attachment – if it’s to impact a person holding legal title to property not in the forum’s jurisdiction

v. Holmes (concurring): Personal obligation goes with the person – WA decree for specific performance would be entitled to FF&C between the parties in NB

f. Livingston v. Jefferson: Action for trespass to Louisiana land was “local” so it couldn’t be maintained outside Louisiana – rejected by court of appeals

i. People can look up other laws, flexibility for a transitory actiong. RST §87 : Allows actions for harm done to land in another state

2. NON-FINAL SUPPORT DECREES : Divorce, custody and support decrees a. SCOTUS hasn’t explicitly required enforcement of sister-state judgments that remain

subject to modification in the state of renditioni. Judgment lacks finality if further judicial action by the court rendering the

judgment is required to resolve the matter litigated ii. Local law of rendering state determines whether judgment is “final”

b. UIFSA : Spousal Support: Issuing state has continuing, exclusive jurisdiction to modify the order, so can’t be modified in any other state

i. Child Support: F1 loses exclusive jurisdiction if all parties move out of state where order was issued (Elkind), but waivable

c. Worthley v. Worthley : Divorced in NJ, wife got $ judgment, then he moved to CA

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i. Holding: F2 does not need to give FF&C to a modifiable judgment. Since NJ decree is prospectively and retroactively modifiable, they’re not constitutionally bound to enforce D’s obligations under it because it wasn’t a final judgment

1. But they can enforce it if they want – enforcing state has as much power to change the decree as the original state

ii. Rule: A decree does NOT have to be modified exclusively in the courts of the state where the support decree was originally rendered – CA can change just as well as a NJ court- no need require parties to litigate issues in NJ

1. Actions to enforce retroactively modifiable decrees have to be litigated in a forum that has personal jurisdiction over both parties

iii. Dissent: Too much confusion because multiple courts could modifyd. Lynde v. Lynde : If unpaid installments for an alimony order are considered un-

modifiable, that judgment must be enforced by sister statesi. Equitable F1 judgments not enforceable in F2 – doesn’t deserve FF&C, but a

modifiable order (as determined by local law where issued), then other states can modify it if there is no clear language manifesting a limitation

3. PENAL AND TAX JUDGMENTS : State conviction characterization a. Characterization of conviction was a matter of F2 law, and that elements of the F1 crime

would be analogized to F2 crimes to decide (State v. Menard)4. WORKERS COMP :

a. Thomas v. Washington Gas: DC resident injured in VA working for DC company, got workers comp agreement with VA Agency, later tried under DC Workers Comp Act too

i. Holding: F2 can reopen an F1 judgment in the area of workers compensation1. All agreed that “the proceeding” before the VA Commission was a

“judicial proceeding” within the meaning of the FF&CC ii. Stevens – plurality (4): F2 award is not barred – overrules Magnolia, recasts

McCartin from a statutory interpretation case into an interest analysis case (DC’s interest in the injured worker Thomas is sufficient)

1. DC court not bound by a VA workers’ compensation award because the VA agency had no authority to decide rights under DC’s law, so no constitutional objection to hearing those rights in a new proceeding

2. Different than Magnolia’s unmistakable language so McCartin applies a. Magnolia is rarely followed, so there is little danger that there

has been any significant reliance on itiii. White – concurrence (3): F2 award is not barred, follows McCartin’s original

“unmistakable language” test and rejects the interest analysis1. Shouldn’t be a difference between judgments coming out of agencies

and coming out of courts, and there was no unmistakable language in Virginia statute, so DC can reopen the judgment

2. Doesn’t like the thought of allowing a litigant a second bite at the apple if they could choose between two forums at the beginning

iv. Rehnquist – dissent (2): F2 is barred, applies Magnolia and would abandon McCartin and not recast it as endorsing an interest analysis approach

1. McCartin is unwarranted delegation to states to determine FF&C issuesb. McCartin : F1’s worker’s comp law should NOT be interpreted to preclude subsequent

laws unless it contained UNMISTAKABLE LANGUAGE.I. PRACTITIONERS RELY ON MCCARTIN IN ITS ORIGINAL FORM AT THEIR PERIL

ii. Six justices in Thomas think McCartin is wrong, they want to reopen the case c. Magnolia : Worker’s comp laws PRECLUDE judgments in other states

i. Simple rule of Magnolia is endorsed by only 2 dissenting members in Thomas

v. POLICY IS NOT ENOUGH: 1. CHILD SUPPORT : The interests of children to get payment from deadbeat dads isn’t enough to

refuse to recognize a holding in F1

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a. Yarborough v. Yarorough: Divorce decree in GA for daughter's maintenance (F1), then daughter moved to SC (F2) and sued there for more money

i. Holding: The 5th Circuit must give FF&C to GA decree, and can’t enter an additional amount for father to pay because his rights have been pre-established

ii. GA's decree was intended to absolve father of future liability, and was final and non-modifiable - fulfilled the duty he owes his daughter under GA law, so SC can’t re-litigate his duties

iii. Stone (dissent): Daughter lives in SC so that state now has a special interest in her welfare, enough to overcome FF&C – courts should be able to re-evaluate alimony based on changed conditions

2. PREVENTION OF GAMBLING : Policy preventing gambling in futures isn’t enough a. Fauntleroy: Two Miss citizens had gambling contract, one brought dispute to

arbitration, enforced in Missouri courts, over D’s argument that K was illegal in Mississippi – tried to have Missouri judgment enforced against defendant in Mississippi (where K made, but where K illegal)

i. Issue: Does Mississippi have to enforce a judgment made by Missouri courts about a contract invalid under Mississippi law?

ii. Holding: Yes. Although Missouri was in error upholding the K, Mississippi has to give FF&C to the Missouri judgment

1. F1’s error on the merits (even if it’s a misapplication of F2’s law) is not a ground for refusing FF&C to F1 in F2.

iii. Reasoning: More important to ensure inter-state accord in normal cases than to prevent the weird case seen here

iv. Judgment of a state court should have the same credit and effect in every other court of the US as in the state where it was pronounced

v. Dissent: This permits a state to "overthrow" another's public policye. Congressional Limitations : Congress can make laws prescribing the manner in which acts, records, and

proceedings shall be proved and the effect thereof but Congress hasn’t taken advantage of it, so courts are often without guidance as to what the national policy is

i. Presumption of FF&C – federal courts have to give FF&C to state court judgments 1. If Congress passes law preventing FF&C, need the statute to explicitly say that there is no FF&C

given to certain judgments (clear statement rule, Matsushita Electric) 2. If congress is silent about an exception to FF&C, then no exception is presumed

ii. Matsushita Electric v. Epstein: Shareholder suit for fiduciary breach, settled in state court1. Holding: Absent a partial repeal of the FF&CC, 28 USC §1738, by another federal statute a

federal court must give the judgment the same effect that it would have in the courts of the state in which it was rendered – even for exclusively federal claims

a. State court didn’t adjudicate the federal law claims, the parties really did 2. A judgment entered in a class action, like any other judgment entered in a state proceeding, is

presumptively entitled to FF&C under the terms of the Act3. Step 1 : Federal court should first look to the law of the rendering state to decide the effect of the

judgment – is it final? Would it be barred from litigation in a court of that state? Is it entitled to res judicata in F1? (F1 law measures FF&C in F2)

a. DE court would have found that judgment bars subsequent pursuit of claim 4. Step 2 : If final, then is there an exception to §1738 that allows the federal court to refuse to give

preclusive effect to the state courts? Need irreconcilable conflict between the federal statutesa. Nothing in the statute shows explicit congressional intent to contradict the requirements

of §1738 (hard to imply in intent to repeal) 5. DE court never trespassed upon the exclusive territory of the federal courts – it just approved a

settlement – it never purported to resolve the merits of the federal claim iii. 28 USC § 1738: Does it preempt federal courts to fashion federal C/L rules of preclusion?

1. U. Tenn. v. Elliott : Un-reviewed determinations by state agencies aren’t entitled to FF&C under §1738 because it predates development of administrative agencies

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IV. THE DEFENSE OF MARRIAGE ACT1. Traditional Rules: Marriage is valid everywhere if the requirements of the marriage law in the

state where contract of marriage takes place are complied witha. First RST: §132 – Marriage valid in the place of celebration may be invalid depending

on the law of the domicile. Wanted to eliminate disparity in treatment of husband/wifei. Beale: Situs state always had power to apply its own law but it deferred to the

state of domicile on matters of succession/marital rights b. Second RST: §283 – Marriage which satisfies the requirements of the state where

contracted will be recognized as valid everywhere unless it violates the public policy of another state which had the MSR to the spouse and marriage at the time of marriage

i. Revision to modern understandings of women’s competency ii. Person will not have a sufficient relationship to a place to warrant holding that as

his domicile unless he is there for a time at least (not on his way there) iii. Person doesn’t usually acquire a domicile of choice b any act done under legal or

physical compulsion (prisoner in jail)2. 28 U.S.C. §1786 : “Congress can by general laws, prescribe the manner in which acts, records and

proceedings, shall be proved and the effect thereof”a. Seems like Congress has the power to decide what effect, if any, there is, BUT if it’s the

“manner of the effect” – then has to give it an effect, but just can describe what kind b. OR “General laws” – Maybe it can’t just be a type of marriage licenses, has to be all

marriage licenses, so picking and choosing what kinds of cases is unconstitutional (this is being too particularized)

3. 28 U.S.C. §1738(c) : No state shall be required to give effect to a public act of another state respecting a same-sex relationship that is treated as marriage under the laws of another state

a. No traditional violation of FF&C for F2 to not recognize same-sex marriage certificate from F1 - F2 has always had the power to assess the legitimacy of marriage in F1, and could ignore marriages they considered inacceptable

i. Ex : Interracial, polygamous, between first cousins, etc.4. Congress allegedly wanted states to deliberate on same-sex marriage issue, free from the threat of

federal constitutional compulsion of the FF&CC, so under DOMA Congress used federal power to ensure FF&C didn’t spread the Hawaii decision

a. E. Holder’s letter to Boehner: Classifications based on sexual orientation warrant heightened scrutiny and that, as applied to same-sex couples legally married under state law, Section 3 of DOMA is unconstitutional

5. Divorce is typically a court-adjudicated proceeding because state is involved in a way that it’s not with respect to marriage – validity of marriage is a choice of law question, but divorce is considered a judgment subject to FF&C guarantees

a. Williams v. NC: When a court of one state alters the marital statutes by granting them a divorce, cannot say that the decree shouldn’t be excepted from the FF&C just because the enforcement or recognition in another state would conflict with the policy of the latter (Under DOMA marriages & divorces of same-sex couples get NO FF&C)

f. Recognition v. Enforcement : Difference between whether judgment is entitled to any recognition in F2 AND whether that judgment should be treated the same in F2 as it would be by a F1 court

i. 28 USC §1738: “Judicial proceedings” – seems to include all decrees ii. Historically, money judgments were enforceable at law but equitable relief, like injunctions or

garnishment, were thought to be territorially limited 1. Equity engages state sovereignty– more of an invasion of your autonomy by state than for

remedies at law (damages), or alternatively, equity judgments may have been considered inherently modifiable, so they were never final enough for FF&C

2. After Erie, federal courts are supposed to use the enforcement regime of the state in which the court sits, which is strange because this then gives state laws a say in foreign affairs

a. Don’t want to give states discretion to decide foreign policy (and don’t want 50 different approaches) – no supremacy clause application because no federal law on the issue

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iii. In the Modern Era, under Baker, a final judgment in one state, if rendered by a court with authority over the subject matter and persons, is to be recognized everywhere, but enforcement questions don’t travel with sister state judgment as preclusive effects do – remain subject to control of forum law

1. Step 1 : Have a valid judgment entered in F1 (have both PJ and SMJ)2. Step 2 : Second state recognizes the first state’s judgment3. Step 3 : Then F2 forum decides how to enforce this F1 judgment

a. Don’t have to adopt the time/manner/mechanisms for enforcementb. Enforcement is a matter of remedy (offensive), but recognition is a way to preclude

additional litigation on the same issue (defensive)4. FF&CC doesn’t require F2 to adopt enforcement mechanisms of F1, or to create a remedy that

doesn’t already exist in F2, but if they are available, F2 has to recognize the judgment, and employ available remedies if judgment is otherwise enforceable

5. Ex : Legal money judgments were enforceable (like Fauntleroy), but equitable relief, like judgments was thought to be territorially limited

6. Ex : What about damages cap in MD but not in DC? Not a fundamental exception to FF&C so still have to recognize the higher F1 damage award than cap allows in F2

iv. Baker v. GM : GM employee, bad retirement, settled a deal in Michigan, claim that he wouldn’t testify against them again, but testified in a case in Missouri, GM asked for an injunction to stop his testimony

1. Holding: Other states have to give FF&C to a final judgment in one state, if rendered by a court with SMJ and PJ authority under the judgment, but Michigan has no authority to command obedience elsewhere on a matter the Michigan court has no authority to resolve

a. Michigan has no authority to control courts elsewhere by preluding them from determining what evidence is relevant in their courts – Michigan can’t shield a witness from another state’s subpoena power

2. Reasoning: No public policy exceptions to judgments – SC’s decisions “support no roaming public policy exception to FF&C” (still dicta)

a. Equity decrees for paying money are considered equivalent to judgments at law entitled to nationwide recognition – no FF&C law/equity distinction

b. FF&C doesn’t mean that F2 states have to adopt time/manner/mechanisms for enforcing judgments from F1, plus the consent decree stipulated that if another court ordered him to testify, it wouldn’t violate order – so he wasn’t

3. Scalia (concurring): Enforcement measures don’t travel with sister state judgments like preclusive effects do. GM asked the Missouri court to enforce the Michigan injunction – it wasn’t obligated to do that –rule of evidence, not jurisdiction

4. Kennedy/O’Connor/Thomas (concurring): Look first at the judgment’s effect in the issuing court state – don’t have to look at effects of FF&C exceptions because the first step shows that issuing state wouldn’t give the judgment preclusive effect because it was modifiable

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