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Constitutional Restrictions on Choice of Law. Home Ins. Co. v Dick (US 1930)

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Presentation on theme: "Constitutional Restrictions on Choice of Law. Home Ins. Co. v Dick (US 1930)"— Presentation transcript:

1 Constitutional Restrictions on Choice of Law

2 Home Ins. Co. v Dick (US 1930)

3 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.

4 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.

5 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.

6 14 th Amendment “nor shall any state deprive any person of life, liberty, or property, without due process of law”

7 Full Faith and Credit

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

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

10 Footnote 10: “This Court has taken a similar approach in deciding choice of law cases under both the Due Process Clause and the Full Faith and Credit Clause. In each instance, the Court has examined the relevant contacts and resulting interests of the State whose law was applied. Although at one time the Court required a more exacting standard under the Full Faith and Credit Clause than under the Due Process Clause for evaluating the constitutionality of choice of law decisions, see Alaska Packers Assn. v. Industrial Accident Comm'n, 294 U. S. 532, 294 U. S. 549-550 (1935) (interest of State whose law was applied was no less than interest of State whose law was rejected), the Court has since abandoned the weighing of interests requirement.”

11 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.

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

13 Phillips Petroleum Co. v Shutts (US 1985)

14 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.

15 Two Californians enter into a gambling contract in CA with payment in CA P sues D for breach of contract in Nevada state ct May D consent to Nevada law?

16 We think that this is something of a "bootstrap" argument. The Kansas class action statute, like those of most other jurisdictions, requires that there be "common issues of law or fact." But while a State may, for the reasons we have previously stated, assume jurisdiction over the claims of plaintiffs whose principal contacts are with other States, it may not use this assumption of jurisdiction as an added weight in the scale when considering the permissible constitutional limits on choice of substantive law. It may not take a transaction with little or no relationship to the forum and apply the law of the forum in order to satisfy the procedural requirement that there be a "common question of law."

17 Sun Oil v. Wortman (US 1988)

18 “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 [citinmg cases]”

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