1. 1 Agenda for 1 st Class What is Choice of Law? Administrative Stuff Discussion of a few illustrative cases –Gay marriage –Libel tourism –Guest statutes –Spendthrift –Loss of consortium 10 minute break Summary of choice of law approaches –Traditional Approach –Interest Analysis –Comparative Impairment (California) –Better Law –Restatement Second (most states) –European Union

2. 2 What is Choice of Law? Choice of Law is the body of law which determines which state or country’s laws apply to a particular dispute –Courts do not necessary apply the law of the state in which they are sitting Choice of law is the biggest part of Conflict of Laws Conflict of Laws encompasses 3 topics –Jurisdiction (not covered in this class) –Choice of Law (nearly all of this class) –Recognition and enforcement of judgments (1 class) Choice of law is sometimes called Private International Law –Term used more in Europe than in US –Term can also mean international law that relates to commercial and family matters As opposed to Public International Law, which deals with war, peace, diplomats, etc.

3. 3 Assignment for Next Class Traditional Approach to Torts –Beale (Handout pp. 1) –Carroll, (CB 15-28) Interest Analysis and Torts –Currie (Handout pp. 2-7) –Richman (Handout 8-13) –Hurtado (CB pp. 205-15) Optional –Hoffheimer, Chapter 5 (Traditional Analysis of Torts) –Hoffheimer, Chapter 17 (Interest Analysis) but skip Qs 3, 4, 8, 10 & 12 –Spillenger, Chapters 1 (pp. 1-16 only) and 2A, 2C, 2D, & 2E1

4. 4 Questions for Next Class I 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.

5. 5 Questions for Next Class II 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.

6. 6 Questions for Next Class III 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?

7. 7 Administrative Stuff Did you receive the email I sent? All class information posted to class webpage –www.klerman.com, click on “Conflict of Laws” button at leftwww.klerman.com No laptops or other electronic devices in class Audio recordings posted to web Office hours. Mondays 1:30-2:30 or by appointment Grading, if not writing a paper –20% class participation –80% exam Grading if writing a paper –20% class participation –65% paper –15% presentation of paper

8. 8 Same-Sex Marriage John and Bob lived for 10 years in Canada. Canada allows same-sex marriage. John and Bob got married and lived happily in Canada for another 5 years. They moved to Texas, where a state statutes says that same- sex marriages may be given no effect. John died. John did not have a will. Under Texas law, a surviving spouse is entitled to all of the deceased’s property. If there is no surviving spouse, the property goes to the deceased’s nearest relative. John’s nearest relative is his brother, Sam. Sam thinks homosexuality is evil, did not go to John’s wedding, and has not spoken to John for 20 years. To whom should a Texas court give John’s property?

9. 9 Libel Tourism Rachel Ehrenfeld published Funding Evil: How Terrorism is Financed in the U.S. The book alleged that Saudi businessman, Khalid bin Mahfouz, was a terrorist financier. 23 copies were sold in the UK Under U.S. law, the First Amendment requires that the plaintiff has the burden of proving that statements are false. Under UK law, the defendant must prove that statements were true Mahfouz sued in the UK Assuming that neither Ehrenfeld nor Mahfouz can prove whether Mahfouz was or was not a terrorist financier, should the UK court award –No damages? –Damages resulting only from the harm caused by the 23 books sold in the UK? –Damages resulting from the harm caused by all copies of the book? –An injunction against further sales of the book? If the UK court awards damages and an injunction, and Mahfouz tries to enforce the judgment in the US, should a US court enforce the judgment?

10. 10 Guest Statute I: Babcock v Jackson Jackson and Babcock are friends who live in NY. Jackson gave Babcock a ride to Ontario. Jackson got into an accident in Ontario, and Babcock was injured. Ontario had a “guest statute” which forbade non-paying passengers to sue drivers. NY allows guests to sue drivers. Jackson sued Babcock in NY court. Should recovery be barred by Ontario’s guest statute?

11. 11 Guest Statute II: Neumeier v Kuehler Driver was a NY domiciliary. Guest was an Ontario domicilary. Car accident in Ontario. Ontario has Guest Statute barring recovery. NY does not have guest statute. Guest sues in NY. Should Ontario’s Guest Statute bar recovery?

12. 12 Spendthrift: Lilienthal v Kaufman Spendthrift and his family reside in Oregon. His money is managed by a guardian. Spendthrift has no authority under Oregon law to spend or borrow. Spendthrift went to San Francisco to borrow money from Lender to finance a joint venture relating to binoculars. Lender did not know that Spendthift’s money was managed by a guardian. Loan was to be repaid in San Francisco. Spendthrift’s guardian refused to repay the loan. Under Oregon law, lenders cannot recover money lent to spendthrifts. California law does not recognize any special defenses for spendthrifts. Lender sued in Oregon. Should Oregon require the guardian to repay the loan?

13. 13 Loss of Consortium: Erwin v. Thomas Husband and wife were domiciled in Washington Defendant was domiciled in Oregon Husband was injured in Oregon as a result of defendant’s negligence Wife sued in Oregon for loss of consortium –Loss of consortium is compensation for loss of non- monetary contribution to household, care, affection and sex. Oregon permits suits for loss of consortium Washington does not Should wife recover for loss of consortium? 10 minute break

14. 14 Traditional Approach I Developed in Europe Brought to US by US Supreme Court justice Joseph Story (early 19 th ) Greatly elaborated by Professor Joseph Beale (turn of 20 th century) –Primary author of First Restatement of Conflict of Laws Used by all US states before mid-20 th century Still used by 10 US states for torts, 12 for contracts Still used by most of rest of world Can’t understand modern approaches unless understand traditional approach. Categorical & rule-based –Torts. Applicable law is the law of the place of the wrong (lex loci delicti) Place of wrong = place of injury, except for poisoning –Contract Validity. Applicable law is the law of the place where the contract was formed –Contract breach and damages. Applicable law is the law of the place where contract was to be performed –Marriage valid if valid in state where marriage celebrated

15. 15 Traditional Approach II Categorical & rules-based (continued) –Procedural law is law of forum –Rules for other areas of law as well –Lots of specific rules explaining where injury takes place, where contract formed, etc. Multilateral – if applied properly, same substantive law applies regardless of where suit takes place Non-substantive – judge applying traditional approach does not need to inquire into merits or policies of potentially conflicting laws –But public policy exception for situations where foreign law is offensive to forum US state would not recognize polygamous marriage validly contracted abroad US state would not recognize contract by parent selling child into slavery, even if valid where contracted Some southern states would not recognize mixed-race marriages, even if contracted in states such marriages were legal Usually identified with legal formalism

16. 16 Traditional Approach IV Problems –Characterization. Because rules differ depending on whether problem is characterized as tort or contract (or some other part of law), important to characterize properly Characterization not always clear. Is statute allowing employee to sue employer for workplace injuries a statute relating to tort or contract? See Carroll Is statute of limitations substantive or procedural? –Results can seem arbitrary, especially when plaintiff and defendant both domiciled in a place different from the state whose laws are selected. Plaintiff and defendant both from state which allows suit by employee against employer. Accident in state which does not allow such suit. Traditional rule says no recovery. See Carroll. Big advantage of traditional approach is that it seems to provide definitive answers which parties can usually predict in advance –Realist critics say predictability is a illusory –Rules are so complex and malleable that judges can reach results they want through “escape devices” Characterization Public policy exception

17. Traditional Approach V Application to cases discussed before –Gay marriage. Marriage valid in Canada, where celebrated, is valid in Texas unless violates public policy. Gay marriage violates public policy of Texas. So marriage not valid in Texas. –Libel tourism. Injury in UK, so UK law applies. General rule is that plaintiff can recover in one suit for worldwide damages, so plaintiff in UK suit can recover for damages in US and elsewhere. (No enforcement in US, because of First Amendment) –Guest Statute I. Ontario was place of accident, so Ontario guest statute applies. –Guest Statute II. Ontario was place of accident, so Ontario guest statute applies. –Spendthrift. Contract formed in California, so California law applies. No special protection for spendrifts. Possible public policy exception if suit in Oregon. –Loss of consortium. Accident in Oregon, so Oregon law applies. Suit for loss of consortium allowed. 17

18. Interest Analysis I Developed by principally by Brainerd Currie in 1950s & 1960s –Professor at University of Chicago, UCLA, elsewhere Adopted in pure form in only 2 states and in them only for torts But big influence on other modern approaches, such as Restatement 2 nd (majority of states) and Comparative Impairment (California) Reflects legal realism Conflict should be resolved by considering “interests” of various states –In general, a state has an interest if application of its law would have an effect on a person domiciled in that state, e.g. Law which awards compensation to domiciliary Law which imposes liability on domiciliary Law which regulates behavior of domiciliary 18

19. Interest Analysis II Rules –False conflicts. If only one state has an interest in the dispute, then that state’s law should apply –True conflicts. If two states have an interest in the dispute, then forum law should apply –Unprovided-For case. If no state has an interest in the dispute, then forum law should apply. Unilateral – law that applies will vary depending on where suit brought, because of forum law bias Substantive – court must look into policies behind states in order to determine applicable law Problems –Forum law bias Encourages forum shopping –Often difficult to determine relevant interests Is purpose of tort law compensation, deterrence, or both? –Hard to predict outcomes in advance 19

20. Interest Analysis III Application to cases discussed before –Gay marriage. False conflict. Both parties are domiciled in TX, so only TX has an interest in the case. TX law applies. Marriage not valid. –Libel tourism. True conflict. US has interest in protecting defendant. Saudi Arabia has interest in protecting plaintiff (assuming its defamation law is similar to the UK’s). So UK law applies, b/c UK is forum. –Guest Statute I. False conflict. Both parties are domiciled in NY, so only NY has interest. Ontario’s guest statute does not apply. –Guest Statute II. Unprovided-For Case. Ontario guest statue is meant to protect defendants. Since defendant is NY domiciliary, Ontario has no interest. NY law is meant to compensate NY domiciliaries. Plaintiff is Ontario domiciliary, so NY has no interest. So forum (NY) law applies. Ontario’s guest statute does not applies. –Spendthrift. True Conflict. California has interest in protecting lender. Oregon has interest in protecting spendthrift and his family. Forum (Oregon) law applies. No recovery by lender. 20

21. Interest Analysis IV Application to cases discussed before (continued) –Loss of consortium. Unprovided-For Case. Oregon law is meant to compensate plaintiff’s, but plaintiff is Washington domiciliary. Washington law is meant to protect defendants, but defendant is Oregon domiciliary. So forum (Oregon) law applies. Loss of consortium suit ok. 21

22. Comparative Impairment Proposed by Professor William Baxter in 1963 article Adopted by California Similar to interest analysis –Except without forum bias in true conflict cases –Instead, evaluate which state’s interests are stronger Or, equivalently, which state’s interests would be most impaired if not applied –Imagine policymakers from interested states negotiating over which laws would apply in which cases Problems –Very hard to apply –California courts have been criticized for applying badly. –Bias toward forum law Because state judges tend to find that their own state’s laws are most impaired 22

23. Better Law Originates in 1966 articles by Professor Robert Leflar Adopted by 5 states --- Arkansas, Minnesota, New Hampshire, Rhode Island, and Wisconsin Influenced Restatement 2 nd 5 “choice influencing considerations” –Predictability of results –Maintenance of Interstate and International Order –Simplification of the Judicial Task –Advancement of the Forum’s Governmental Interests –Application of the Better Rule of Law 5 th consideration – “better law” turns out to be dominant consideration Advantages –Describes what courts actually do –Courts’ view of better rule influences choice even when not supposed to Disadvantages –Unpredictable –Forum law bias 23

24. Restatement 2 nd I Drafting began in 1950s, promulgated in 1971 Adopted by roughly half of states (24 torts, 23 contracts; 28 either) Mish-mash compromise of various approaches 3 Levels of Analysis I. Basic principles (§ 6) –Needs of the interstate and international systems –Relevant policies of the forum –Relevant policies of other interested states and the relative interests of those states in the determination of the particular issue Like comparative impairment –Protection of justified expectations –Basic policies underlying the particular field of law –Certainty, predictability and uniformity of result –Ease in the determination and application of the law to be applied 24

25. Restatement 2 nd II II. General Principles for each area of law –Generally involve choosing law of state with “most significant relationship” to the dispute –Torts. Consider place of injury, place of conduct causing injury, domicil of parties, place where relationship centered… –Contracts. Consider place of contracting, place of negotiation of contract, place of performance… III. Presumptive Rules –Torts. “Usually” law of state where the injury occurred Like traditional rules –Contracts. If place of negotiation and performance are in the same state, then then the law of that state will “usually” apply Like traditional rules Problems –Very unpredictable –State judges can reach almost any result they want Probably explains why adopted by so many states 25

26. European Union I 1980 Rome Convention on Contracts 2009. Rome-I and Rome-II Regulations on contracts and non-contractual obligations w Updated versions of traditional rules –Largely rule based and categorical Contracts –A contract for the sale of goods shall be governed by the law of the country where the seller has his habitual residence –A contract for the provision of services shall be governed by the law of the country where the service provider has his habitual residence –Consumer contracts governed by country where the consumer has his habitual resdience provided the other party pursued activity where consumer has his habitual residence or directed his activities to that country –Special rules for franchise, distribution, carriage of goods, insurance, etc. 26

27. European Union II Torts –1. Unless otherwise provided for in this Regulation, the law applicable to a non-contractual obligation arising out of a tort/delict shall be the law law of the country in which the damage occurs… Traditional rule –2. However, where the person claimed to be liable and the person sustaining damage both have their habitual residence in the same country at the time when the damage occurs, the law of that country shall apply. Exception for common domicile cases –3. Where it is clear from all the circumstances of the case that the tort/delict is manifestly more closely connected with a country other than that indicated in paragraphs 1 or 2, the law of that country shall apply. A manifestly closer connection with another country might be based in particular on a pre-existing relationship between the parties, such as a contract, that is closely connected with the tort/delict in question. Escape hatch –Article 5-9. special rules for product liability, environmental damage, IP… 27

28. European Union III Very new –Interesting to see how turns out Legislative rule-based approach also has some traction in US –Oregon legislation on choice of law drafted by Symeon Symeonides, US conflicts scholar (2002) –Louisiana also has long had statutory choice of law rules based on early 19 th century Napoleonic Code 28