1 Agenda for 2nd Class Name Cards Traditional Approach –Theory Comity Vested rights –Tort rules Interest analysis –Theory –Conduct regulating v loss-regulating rules –Classic cases Cases and hypotheticals –Carroll –Hurtado –Boy Scouts Evaluation of approaches –Modern defenses of traditional approach Intro to Comparative Impairment Renvoi

2 Assignment for Next Class Comparative Impairment & Torts –Baxter (Handout 1-4). –Bernhard, Kearney (CB215-31) Restatement 2 nd & Torts –Phillips, AOL (CB240-60, ) Questions on next pages Optional –Hoffheimer, Chapter 17 (Interest Analysis) Q10 (Hurtado) –Hoffheimer, Chapter 18 (Comparative Impairment) but skip Q7 –Hoffheimer, Chapter 20 (2 nd Restatement) –Spillenger, Chapter 2, sections E2 and G

3 Questions for Next Class I How would the following cases be decided under the Comparative Impairment and Restatement 2 nd approaches –Libel tourism hypothetical –Babcock (Guest Statute I and Richman article) –Neumeier (Guest Statute II and Richman article) –Erwin (Loss of Consortium and Richman article) –Carroll, Hurtado, Boy Scouts For Bernhard and Kearney –How would you argue, using comparative impairment, for the opposite result in these cases? –How would these cases have come out using the traditional approach, interest analysis, and Restatement 2 nd approach? For Phillips and AOL –How would you argue, using the Restatement 2 nd, for the opposite result in these cases? –How would these cases have come out using the traditional approach, interest analysis, and comparative impairment approach?

4 Questions for the Next Class II In Phillips, the Montana Supreme Court observes that “applying the law of the place of manufacture would be unfair because it would tend to leave victims under compensated as states wishing to attract and hold manufacturing companies would raise the threshold of liability and reduce compensation…. [A state with a high concentration of manufacturing] could enjoy all the benefits associated with liability laws which favored manufacturers in order to attract and retain manufacturing firms and encourage business within its borders while placing the costs of its legislative decision, in the form of less tort compensation, on the shoulders of nonresidents injured by its manufacturers’ products.” (p. 249). –Suppose Montana has a relatively low concentration of manufacturing. Would its citizens benefit from laws which raised the threshold of liability and reduced compensation? Or would its citizens benefit by laws which lowered the threshold of liability and increased compensation? If it lowered the threshold of liability and increased compensation, who would bear the increase in costs? What does this suggest about the fairness of applying Montana law?

5 Questions for the Next Class III In Phillips, the Montana Supreme Court asserted that “we do not believe that the purpose of any potentially applicable Michigan product liability law would be to regulate the design and manufacture of products within its borders. The purpose of product liability law is to regulate interstate sales or sales to residents and to set the level of compensation when residents are injured.” (p. 249) –If the plaintiffs in Phillips had filed the case in Michigan state court, do you think Michigan state judges would have agreed that its laws are inapplicable? What purpose might a Michigan judge ascribe to product liability law to show that Michigan law should apply? Do you see any reasoning in Phillips that is similar to renvoi? Is that reasoning persuasive? Do you see any reasoning in the cases in this assignment which are similar to purposeful availment? Of the choice of law methods we have discussed so far – traditional approach, interest analysis, comparative impairment, and Restatement 2 nd – which do you think is best and why? –Can you think of a different approach which would be better or a way of improving the approaches mentioned above?

6 Administrative Stuff Everyone receive s from me? If writing a paper, please me to set up an appointment Office hours Mondays 1:30-2:30 or other times –Spendthrifts Older procedure –In 19 th and 20 th century, a few states allowed court to declare person a spendthrift and appoint guardian Now people use spendthift trusts –much the same effect –But no court-appointed guardian –Recognized in most if not all states

Traditional Approach: Theory Older Theory (Justice Story): Comity. –Courts never have obligation to apply foreign law –But do so out of respect for foreign state and in expectation that courts in other states will do the same in similar situation Beale: Vested Rights –Individuals acquire rights in particular places –Those rights “vest” –Courts are obligated to enforce those individual rights, even though created under foreign law –So applicable law is generally the law of the place where the last action necessary to create a right or cause of action happened Injury (torts) Breach (contracts Celebration of marriage –Heavily criticized From whence comes the obligation to enforce foreign-created rights? International law? Full Faith & Credit Clause 7

1 st Restatement I The law of the place of the wrong determines –Whether a person has sustained legal injury (378) –Whether the tort requires intent (379) –Whether the plaintiff has been contributorily negligent (385) –Vicarious liability of employer for employee (387) –Whether the action survives death of tortfeasor or victim (390) –Wrongful death rules (391) –Damages (412 compensatory and 421 punitive) Place of defendant’s action determines whether defendant was acting under duty or privilege (382) Worker may recover under Workers Compensation law or either place of contract or place of harm, unless relevant statutes provide otherwise (398 and 399) No action can be maintained upon a cause of action created in another state the enforcement of which is contrary to the strong public policy of the forum (612) –Example in 1 st Restatement: Enforcement of gambling debt. 8

1 st Restatement II Restatement 377. The place of the wrong is the state where the last event necessary to make an actor liable for an alleged tort takes place. –Note 1. Except in the case of harm from poison, when a person sustains bodily harm, the place of the wrong is the place where the harmful force takes effect upon the body If A, standing in X, shoots B, standing in Y, and B dies in Z, then law of Y applies –Note 2. In poisoning cases, the place of wrong is where the deleterious substance takes effect and not where it is administered If A, in X, mails poison candy to B, who received and eats the candy in Y, gets sick in Z and dies in W, then law of Z applies –Note 3. When harm is caused to land or chattels, the place of wrong is the place where the force takes effect on the thing –Note. 4. When a person sustains loss by fraud, the place of wrong is the place where the loss is sustained, not where fraudulent representations are made –Note 5. Where harm is done to the reputation of a person, the place of wrong is where the defamatory statement is communicated. Q where is wrong in loss of consortium cases? –Husband injured in Oregon. Husband and wife domiciled in Washington. 9

Interest Analysis I Critique of traditional rules –Arbitrary –Vested rights are legal fictions –Traditional rules ignore realist insight that laws are always based on policies Traditional rules can result in application of law not in accord with policy of any interested state –Courts implicitly take into account policies and interests anyway Public policy exception, characterization, etc. 10

Interest Analysis II Theory –Choice of law is like purposivist statutory interpretation Examine purposes behind each state’s laws and then see if those purposes suggest application in particular case –Law always reflects interest of state which promulgated laws Contrast to vested rights / traditional approach, which focuses on individual rights and interests –In case of true conflict, not appropriate for courts to weigh or evaluate conflicting state interests or quality of state laws Hence use forum law –Because law of sovereign which appointed judges Later. “If the court finds an apparent conflict between the interests of the two states it should reconsider. A more moderate or restrained interpretation of the policy or interests of one state or the other may avoid conflict.” Rules –False conflicts. Apply law of interested state –True conflicts. Apply forum law –Un-provided for case. Apply forum law 11

12 Questions on Carroll How would Carroll have come out if the court applied interest analysis? Diagram Carroll using the method described in Richman article Consider the following variations on Carroll under both the traditional approach and interest analysis using diagrams. Unless otherwise state, assume all other facts are the same as in the actual case. –1. The suit was brought in Mississippi rather than Alabama. –2. The railroad was a Mississippi corporation rather than an Alabama corporation. –3. The railroad was a Mississippi corporation, and suit was brought in Mississippi rather than Alabama. –4. The injured employee was a Mississippi domiciliary. –5. The injured employee was a Mississippi domiciliary, and suit was brought in Mississippi.

13 Questions on Hurtado & Boy Scouts Hurtado –Diagram Hurtado –Your casebook puts this case under the heading “Unprovided-For Cases.” Is this how the court saw the case? –Does it matter whether Hurtado is categorized as a “false conflicts” case or “an unprovided-for” case? –Would it matter if defendant were also domiciled in Mexico? –Under the court’s interpretation of interest analysis, what is the difference between interest analysis and the traditional approach? How would the following case be resolved under the traditional rule and under interest analysis: –A boy residing in NJ was sexually molested in NY and NJ by a Boy Scout leader. The boy committed suicide, and the parents sued the Boy Scouts for wrongful death in NY. The Boy Scouts of America is a charitable organization incorporated in NJ. NJ gives tort immunity to charitable organizations. NY does not.

14 Evaluating the Approaches I Consider the 9 cases we have discussed so far -- the 6 illustrative cases in today’s slides, Carroll, Hurtado, and the Boy Scouts hypothetical on the prior slide. –In which cases do the traditional approach and interest analysis reach different conclusions? –In which do they reach the same conclusions? –Which approach, the traditional approach or interest analysis, accords more with your views of what makes the most sense in these 9 cases? –All things considered, which approach is better? Other than reaching outcomes more in accord with what you think makes the most sense, what other considerations are relevant to choosing the best choice of law rule? –Can you think of a better approach than the traditional approach or interest analysis?

Comparison of Approaches CaseTraditional Approach Interest AnalysisClass Poll Same Sex MarriageTexas Can 5, TX 3 Libel TourismUK US 6, UK 2 BabcockOntarioNYOnt 5, NY 3 NeumeierOntarioNYOnt 6, NY 2 LilienthalCAORCA 4, OR 4 ErwinOR OR 4, WA 4 CarrollMIALAL 6, MI 1 HurtadoCA CA 7, MX 0 Boy ScoutsNY &/or NJNJNY 4, NJ 2 15

16 Modern Defenses of Traditional Approach I Posner –Law of place of accident is efficient, because conditions vary from place to place, and state where tort happens is the state which has the best information and is thus most likely to design the efficient rule Goldsmith/Sykes –Applying law of place of accident is necessary to allow firms to compete on a level playing field Suppose US firm and French firm are both producing oil in Nigeria Suppose US courts apply choice of law rules which apply (stricter) US law to accidents that take place in Nigeria caused by US firms Suppose French courts apply traditional rule, so French firms are subject only to (more lenient) Nigerian law US firm is at a disadvantage Need to apply law of place of accident to level the playing field –DK But then US firm operating in US is at disadvantage compared to US firm operating in Nigeria Need to apply US law to US firm operating in Nigeria to level the playing field

17 Modern Defenses of Traditional Approach II Restatement 2nd “presumptive rules” are partial return to traditional approach EU and Oregon codifications attempt to bring back some of traditional approach’s rule-based approach Query –Would traditional approach make more sense if place of wrong was defined by place where defendant took wrongful action rather than place where plaintiff suffered harm –Align better with purposeful availment doctrine in personal jurisdiction –Hypothetical If plaintiff buys car in NY, drives it to Oklahoma, gets into accident there, and sue manufacturer and seller for product liability –No personal jurisdiction in Oklahoma, because defendant did not “purposefully avail” itself of Oklahoma –But Oklahoma law applies under traditional approach (and many modern approaches)

18 Intro to Comparative Impairment Many dissatisfied by forum law bias in Currie’s interest analysis –Seems arbitrary, possibly unconstitutional –Encouraged forum shopping Obvious solution is to compare interests of relevant states and apply law of state with greater interest –In essence, that is solution of both Comparative Impairment and Restatement 2 nd Choice of law is not zero sum game –In particular case, one state “wins” and one state “loses,” but some wins (and losses) are bigger than others –If each state “wins” when its interest is bigger and “loses” when its interest is smaller, over multiple disputes, all states come out better than under approach which always applies forum law to conflicts –Imagine legislators negotiating in a single session over applicable law in a large number of conflict of laws situations Then would bargain to solution which maximizes total gains and minimizes total losses Would allow foreign law to apply when forum state’s interest is smaller (less impaired) than foreign state’s interest Would apply forum law when forum state’s interest is greater (more impaired) than foreign state’s interest Not supposed to “weigh” state interest –Unclear what Baxter meant. Comparative impairment is weighing. –Perhaps he meant not supposed to evaluate which rule is better Adopted by Cal and, in modified form, by Louisiana

19 Intro to Comparative Impairment II State X imposes liability on food processors only if there was negligence State Y imposes strict (absolute) liability on food processors Consumer (Plaintiff) State XState Y Processor (Defendant) State XNo conflict X law applies (neg) True conflict. Depends on other factors, e.g. whether consumer resides in X or processor has PPB in Y State YUnprovided for case. Baxter silent? No conflict Y law applies (SL)

20 Intro to Comparative Impairment III State X imposes negligence per se liability for driving faster than speed limit State Y does not impose negligence per se liability Accident in State X –X has regulatory interest in preventing accident, b/c accident in state X –X has loss-distribution interest in allocating losses, if there is party from X –Y has loss-distribution interest, if there is a party from Y Victim (Plaintiff) State XState Y Driver from State X No conflict X law applies (per se) X has regulatory and loss-distribution interest (?) Y has only loss-distribution interest (?) X law applies (per se) Driver from State Y X has regulatory & loss- distribution interest Y has only loss distribution interest So X law applies (per se) X has only regulatory interest Y has only loss-distribution interest Y law applies, because regulatory interest not significantly impaired by rare non-application of per se rule Y law applies (not per se)

Renvoi I Englishman dies intestate with 2 kids while domiciled in France Disposition of assets in England decided by English court England and France have different substantive rules about distribution of assets upon intestacy –E.g. English law might say wife gets 50% and kids get 25% each –E.g. French law might say wife and kids get equal shares (33% each) England and France also have different choice of law rules –English choice of law principles say applicable law is law of domicile E.g. French law –French choice of law principles say applicable law is law of citizenship English law Should English court apply French substantive rule (e.g. 33% to wife and each child) Or should English court apply French choice of law rule and therefore apply English substantive rule (50% to wife and 25% to each child) (Renvoi) Or should English court apply French choice of law rule and therefore apply English choice of law rule… (Renvoi & infinite regress) 21

Renvoi II First Restatement rejects renvoi (7 and 8) –Court always looks to foreign substantive law –Court never looks to foreign choice of law rules Interest analysis –Currie thought 2 nd Restatement –Generally rejects renvoi –But see Phillips Comparative Impairment –Silent? 22