Thurs. Mar. 24

complex litigation

In re Air Crash Disaster near Chicago (7 th Cir. 1981)

Filed in: CA, NY, Mich, Hawaii, PR P’s domiciles: CA, CT, Hawaii, Ill, Ind, Mass, Mich, NJ, NY, VT, PR, Japan, Netherlands, Saudi Arabia D’s domicile: McDD: MO, American (NY or TX) Place of harm: Ill. Place of wrongdoing: McDD (CA – designing), American (OK – servicing) Punitives: Yes - MO, TX, OK No – Ill, CA, NY

Illinois – 2 nd Restatement

§ 145. The General Principle (1) The rights and liabilities of the parties with respect to an issue in tort are determined by the local law of the state which, with respect to that issue, has the most significant relationship to the occurrence and the parties under the principles stated in § 6.

(2) Contacts to be taken into account in applying the principles of § 6 to determine the law applicable to an issue include: (a) the place where the injury occurred, (b) the place where the conduct causing the injury occurred, (c) the domicil, residence, nationality, place of incorporation and place of business of the parties, and (d) the place where the relationship, if any, between the parties is centered. These contacts are to be evaluated according to their relative importance with respect to the particular issue.

McD.-D Ill – place of inj. Ca – place of misconduct by D Mo – D’s domicile P’s domicile?

Nor do the domiciliary states have an interest in imposing punitive damages on the defendants. The legitimate interests of these states, after all, are limited to assuring that the plaintiffs are adequately compensated for their injuries and that the proceeds of any award are distributed to the appropriate beneficiaries. Those interests are fully served by applying the law of the plaintiffs' domiciles as to issues involving the measure of compensatory damages (insofar as that law would enhance the plaintiffs' recovery) and the distribution of any award. Once the plaintiffs are made whole by recovery of the full measure of compensatory damages to which they are entitled under the law of their domiciles, the interests of those states are satisfied.

Finally, application of Illinois law comports with the general criteria of the Restatement (Second) which emphasize certainty, predictability, uniformity of result, and ease in the determination and application of the law to be applied. In this case, it is important to resolve the conflict between states by a principled means. Determining that all other factors being equal, the law of the place of injury shall be used, provides a principled means of decision which also creates certainty. Future defendants cannot predict, of course, where airplane disasters will occur. But air transportation companies will now be on notice that, under the "most significant relationship" test, when there is a true conflict between laws of states having equal interests in the issue of punitive damages, and when the place of injury has a strong interest in air safety and in protection of air transportation corporations, the law of the place of injury will apply.

American Ill – place of inj. OK – place of misconduct by D NY – D’s domicile

California - comparative impairment

NY Neumeier rules

Michigan interest analysis with a strong lex fori approach

PR Hawaii

In re Agent Orange (EDNY 1984)

Federal common law?

Kramer: “If choice of law is substantive (in the sense that it defines the parties' rights), then courts should not alter choice-of-law rules for complex cases. The reasoning is straightforward. We start with claims that everyone concedes would otherwise be adjudicated under different laws. We combine these claims, whether through transfer and consolidation or by certifying a class, on the ground that we can adjudicate the parties' rights more effectively and efficiently in one big proceeding. So far, so good. Then, having constructed this proceeding, we are told we must change the parties' rights to facilitate the consolidated adjudication. And that makes no sense. If the reason for consolidating is to make adjudication of the parties' rights more efficient and effective, then the fact of consolidation itself cannot justify changing those rights. To let it do so is truly to let the tail wag the dog.”

cyberspace

Constitutional Restrictions on Choice of Law

Husband and wife from California get in accident in Nevada Nevada has spousal immunity California doesn’t Case brought before Nevada court, which uses 1 st Restatement, which law applied? Case brought before California court which uses interest analysis, which law applied?

Home Ins. Co. v Dick (US 1930)

“Jurisdiction was asserted in rem through garnishment, by ancillary writs issued against the Home Insurance Company and Franklin Fire Insurance Company, which reinsured, by contracts with the Mexican corporation, parts of the risk which it had assumed. The garnishees are New York corporations.”

article 5545 of the Texas Revised Civil Statutes “No person, firm, corporation, association or combination of whatsoever kind shall enter into any stipulation, contract, or agreement, by reason whereof the time in which to sue thereon is limited to a shorter period than two years. And no stipulation, contract, or agreement for any such shorter limitation in which to sue shall ever be valid in this State.”

The statute is not simply one of limitation. It does not merely fix the time in which the aid of the Texas courts may be invoked. Nor does it govern only the remedies available in the Texas courts. It deals with the powers and capacities of persons and corporations. It expressly prohibits the making of certain contracts.

What if the contract said that the recovery was not possible unless the service in the suit was in-hand (and such specification was valid under Mexican law)?

It is true also that a state is not bound to provide remedies and procedure to suit the wishes of individual litigants. It may prescribe the kind of remedies to be available in its courts and dictate the practice and procedure to be followed in pursuing those remedies. Contractual provisions relating to these matters, even if valid where made, are often disregarded by the court of the forum, pursuant to statute or otherwise. But the Texas statute deals neither with the kind of remedy available nor with the mode in which it is to be pursued. It purports to create rights and obligations. It may not validly affect contracts which are neither made nor are to be performed in Texas.

What if Mexico had built in a one year statute of limitations into its contract cause of action? May the Texas court use its two- year procedural statute of limitations anyway?

It is true that a state may extend the time within which suit may be brought in its own courts if, in doing so, it violates no agreement of the parties. And, in the absence of a contractual provision, the local statute of limitation may be applied to a right created in another jurisdiction even where the remedy in the latter is barred. [fn. 7 Whether a distinction is to be drawn between statutes of limitation which extinguish or limit the right and those which merely bar the remedy we need not now determine.] In such cases, the rights and obligations of the parties are not varied. When, however, the parties have expressly agreed upon a time limit on their obligation, a statute which invalidates the agreement and directs enforcement of the contract after the time has expired increases their obligation and imposes a burden not contracted for.

The Texas statute as here construed and applied deprives the garnishees of property without due process of law. A state may, of course, prohibit and declare invalid the making of certain contracts within its borders. Ordinarily, it may prohibit performance within its borders, even of contracts validly made elsewhere, if they are required to be performed within the state and their performance would violate its laws. But, in the case at bar, nothing in any way relating to the policy sued on, or to the contracts of reinsurance, was ever done or required to be done in Texas.

Article IV, Section 1. Full faith and credit shall be given in each state to the public acts, records, and judicial proceedings of every other state. And the Congress may by general laws prescribe the manner in which such acts, records, and proceedings shall be proved, and the effect thereof.

14 th Amendment “nor shall any state deprive any person of life, liberty, or property, without due process of law”

NY Life Ins. v. Dodge (US 1918) MO resident purchases insurance from NY ins. co at MO office Applied for loan on ins. policy Accepted in NY MO resident Defaulted Under term of policy and NY law ins. co. could cancel policy MO resident died and widow wants to collect MO ct applied MO law, which prohibitted cancellation

Delta & Pine land Company doing business in TN and Miss entered into ins. contract in TN w/ CT insurance company Insurer agreed to pay delta for losses due to employees anywhere Loss in Miss, Delta sues in Miss Company claimed too late under policy But Miss ct applied Miss law SCt reversed

Dick urges that article 5545 of the Texas law is a declaration of its public policy; and that a state may properly refuse to recognize foreign rights which violate its declared policy. Doubtless, a state may prohibit the enjoyment by persons within its borders of rights acquired elsewhere which violate its laws or public policy; and, under some circumstances, it may refuse to aid in the enforcement of such rights. But the Mexican corporation never was in Texas; and neither it nor the garnishees invoked the aid of the Texas courts or the Texas laws. The Mexican corporation was not before the court. The garnishees were brought in by compulsory process. Neither has asked favors. They ask only to be let alone.