Wed. Apr. 5

Constitutional Restrictions on Choice of Law

due process v full faith and credit

due process – both party expectations and state interests

what does full faith and credit add?

Dick - TX had no power. - place of contracting rule Dick - TX had no power - place of contracting rule - no legitimate state interest - applying TX law would upset reasonable expectations of the parties

Pacific Employers Ins. Co. v. Industrial Acc. Comm’n (US 1939)

Allstate Ins. Co. v. Hague (US 1981)

The lesson from Dick and Yates, which found insufficient forum contacts to apply forum law, and from Alaska Packers, Cardillo, and Clay II, which found adequate contacts to sustain the choice of forum law, is that for a State's substantive law to be selected in a constitutionally permissible manner, that State must have a significant contact or significant aggregation of contacts, creating state interests, such that choice of its law is neither arbitrary nor fundamentally unfair.

member of Minn workforce Allstate present and doing business in Minn commuted to work there Allstate present and doing business in Minn Post-event move of plaintiff to Minn

something less than constitutionalizing choice-of-law?

Roosevelt – must be forum neutral it cannot matter that a contact is the forum’s rather than another jurisdiction’s

which choice-of-law approaches are unconstitutional for Roosevelt which choice-of-law approaches are unconstitutional for Roosevelt? which are constitutional?

Phillips Petroleum Co. v Shutts (US 1985)

PJ over (unnamed) plaintiffs?

State must have a significant contact or significant aggregation of contacts, creating state interests, such that choice of its law is neither arbitrary nor fundamentally unfair.

common fund?

plaintiff consent to KS law?

We also give little credence to the idea that Kansas law should apply to all claims because the plaintiffs, by failing to opt out, evinced their desire to be bound by Kansas law. Even if one could say that the plaintiffs "consented" to the application of Kansas law by not opting out, plaintiff's desire for forum law is rarely, if ever controlling. In most cases, the plaintiff shows his obvious wish for forum law by filing there.

P (CA) and D(CA) enter into a gambling contract in CA with performance in CA. P sues D for breach in NV. Can they agree to NV law?

What if Kansas law was more generous to the D?

Sun Oil v Wortman (US 1988)

“Although in certain circumstances standard conflicts law considers a statute of limitations to bar the right, and not just the remedy, petitioner concedes, that (apart from the fact that Kansas does not so regard the out-of-state statutes of limitations at issue here) Texas, Oklahoma, and Louisiana view their own statutes as procedural for choice-of-law purposes…”

Ferens v John Deere (US 1990) P (Pa) sues D (Del/Ill) for Pa injury in federal court in Miss Case then transferred to Pa Miss stat lims used

to certify class action the KS ct presumed that all other jurisdictions’ laws are the same as KS constitutional?

what is the constitutional obligation when interpreting sister state law?

“To constitute a violation of the Full Faith and Credit Clause or the Due Process Clause, it is not enough that a state court misconstrue the law of another State. Rather, our cases make plain that the misconstruction must contradict law of the other State that is clearly established and that has been brought to the court's attention.”

what is a federal court’s constitutional obligation when interpreting state law?

P sues D under Pa law in a NY state court P sues D under Pa law in federal court in Pa P sues D under Pa law in a federal court in NY

assume a federal court in New York has misconstrued NY law assume a federal court in New York has misconstrued NY law? when would the US SCt take such a case to decide whether federal court’s Erie obligation has been violated?

Hughes v Fetter (US 1951)

“We are called upon to decide the narrow question whether Wisconsin, over the objection raised, can close the doors of its courts to the cause of action created by the Illinois wrongful death act. Prior decisions have established that the Illinois statute is a ‘public act’ within the provision of Art. IV, § 1 that ‘Full Faith and Credit shall be given in each State to the public Acts . . . of every other State.’ It is also settled that Wisconsin cannot escape this constitutional obligation to enforce the rights and duties validly created under the laws of other states by the simple device of removing jurisdiction from courts otherwise competent. “

Public Policy Exception?

“We hold that Wisconsin's policy must give way “We hold that Wisconsin's policy must give way. That state has no real feeling of antagonism against wrongful death suits in general. To the contrary, a forum is regularly provided for cases of this nature, the exclusionary rule extending only so far as to bar actions for death not caused locally. “

Forum’s Shorter Statute of Limitations?

Wells v. Simonds Abrasive (US 1953) PA state court may apply its procedural limitations period to Alabama action even though Ala. substantive limitations period is longer

Forum Non Conveniens?

“The Wisconsin policy, moreover, cannot be considered as an application of the forum non conveniens doctrine, whatever effect that doctrine might be given if its use resulted in denying enforcement to public acts of other states. Even if we assume that Wisconsin could refuse, by reason of particular circumstances, to hear foreign controversies to which nonresidents were parties, the present case is not one lacking a close relationship with the state. For not only were appellant, the decedent, and the individual defendant all residents of Wisconsin, but also appellant was appointed administrator, and the corporate defendant was created under Wisconsin laws.”

“We also think it relevant, although not crucial here, that Wisconsin may well be the only jurisdiction in which service could be had as an original matter on the insurance company defendant. And while in the present case jurisdiction over the individual defendant apparently could be had in Illinois by substituted service, in other cases, Wisconsin's exclusionary statute might amount to a deprivation of all opportunity to enforce valid death claims created by another state.”

necessity jurisdiction

so what is wrong with what Wisconsin did?

a company needs people who can speak English so they refuse to hire anyone of Mexican ancestry

Testa v. Katt, 330 U.S. 386 (1947) state courts may not discriminate against federal causes of action

Assume Wisconsin court had applied Wisconsin law and then dismissed for failure to state a claim because the accident was not in Wisconsin

The present case is not one where Wisconsin, having entertained appellant's lawsuit, chose to apply its own, instead of Illinois', statute to measure the substantive rights involved. This distinguishes the present case from those where we have said that, "[p]rima facie, every state is entitled to enforce in its own courts its own statutes, lawfully enacted." 

Can Wisconsin say that it is OK to kill Wisconsiners outside of Wisconsin?

Broderick v Rosner NY law allows piercing the corporate veil concerning NY banks to get to shareholders NJ doesn’t like this and wants to protect NJ shareholders Sets up impossible procedural hurdle: Only way in which one could pierce corporate veil for banks in a NJ court is to have all parties present (all officers stockholders debtors and creditors) Suit in NJ against New Jersey shareholders of NY bank SCt holds NJ law violates FF&C

is public policy exception, as applied to sister state law, a violation of full faith and credit?

is are any choice-of-law approaches a violation of full faith and credit under Kramer’s reading?

Tennessee Coal, Iron & RR Co v George (US 1914)

There are many cases where right and remedy are so united that the right cannot be enforced except in the manner and before the tribunal designated by the act. For the rule is well settled that "where the provision for the liability is coupled with a provision for the special remedy, that remedy, that alone, must be employed." But that rule has no application to a case arising under the Alabama Code relating to suits for injuries caused by defective machinery. [I]t is … evident that the place of bringing the suit is not part of the cause of action -- the right and the remedy are not so inseparably united as to make the right dependent upon its being enforced in a particular tribunal. The cause of action is transitory, and, like any other transitory action, can be enforced "in any court of competent jurisdiction within the State of Alabama. . . ."

Crider v Zurich Ins Co (US 1965) Alabaman injured in Ala while working for Ga corporation Ala Ct awarded remedy under Ga workers comp statute even though Ga statute said action had to be brought before Ga Comp board The rule of Tennessee Coal “has been eroded by the line of cases beginning with Alaska Packers and Pacific Insurance.”

Pearson v NE Airlines (2d Cir Pearson v NE Airlines (2d Cir. 1962) NYer killed in place crash in Mass Flight from NY to Boston Fed Ct in NY used Mass law, but not Mass damage limitation Claimed PPE applied Also claimed issue was procedural but could court have said there was NY interest in NY law applying even though Mass law could apply otherwise?