1. Lecture 20 Mar. 26, 2018

2. Constitutional Restrictions on Choice of Law

3. 14th Amendment
“nor shall any state deprive any person of life, liberty, or property, without due process of law”

4. 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.

5. 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? P (Saudi Arabia) and D(Saudi Arabia) enter into a loan contract in Saudi Arabia with performance in Saudi Arabia. P sues D for breach in NV. Can they agree to NV law?

6. Bradford Elect. Light Co
Bradford Elect. Light Co. v Clapper (US 1932) - Clapper – citizen of VT – worked for Bradford (VT corp with principal place of business in VT) - Clapper sent to NH to take care of some fuses - electrocuted - administrator chooses to sue in NH - NH allows election of common law or workers comp - VT requires you to waive out of workers comp in beginning of employment relationship - NH ct applied NH law - SCt reversed

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

8. But the Court was careful to point out that there was nothing in the New Hampshire statute, the decisions of its courts, or in the circumstances of the case to suggest that reliance on the provisions of the Vermont statute, as a defense to the New Hampshire suit, was obnoxious to the policy of New Hampshire….Here, California legislation not only conflicts with that of Massachusetts providing compensation for the Massachusetts employee if injured within the state of California, but it expressly provides, for the guidance of its own commission and courts, that "[n]o contract, rule or regulation shall exempt the employer from liability for the compensation fixed by this act." The Supreme Court of California has declared in its opinion in this case that it is the policy of the state, as expressed in its Constitution and Compensation Act, to apply its own provisions for compensation, to the exclusion of all others, and that "It would be obnoxious to that policy to deny persons who have been injured in this state the right to apply for compensation when to do so might require physicians and hospitals to go to another state to collect charges for medical care and treatment given to such persons."

9. something less than constitutionalizing a particular choice-of-law approach?

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

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

12. 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.

13. 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

14. unfair surprise - member of Minn workforce
unfair surprise - member of Minn workforce commuted to work there - Allstate present and doing business in Minn - post-event move of plaintiff to Minn

15. Minn interests - member of Minn workforce
Minn interests - member of Minn workforce commuted to work there - Allstate present and doing business in Minn - post-event move of plaintiff to Minn

16. Order of United Commercial Travelers v
Order of United Commercial Travelers v. Wolfe (US 1947) - state of incorporation governs validity of terms of membership in fraternal benefits society

17. Phillips Petroleum Co. v Shutts (US 1985)

18. Sun Oil v Wortman (US 1988)

19. “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…”

20. 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

21. what is the constitutional obligation of a state court when interpreting sister state law?

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

23. “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.”

24. Rosen v. PRIMUS Automotive Financial Services (Minn. D. Ct. , 4th Jud
Rosen v. PRIMUS Automotive Financial Services (Minn. D. Ct., 4th Jud. Dist., May 4, 1999). - nation-wide class action in Minnesota state court concerning a identical provision in the U.C.C.s of fifty different states should be interpreted - only seven states’ courts had decided the matter - Minnesota courts arriving at one interpretation - the courts of six other states arriving at a different interpretation - the Rosen court certified a class including actions under Minnesota’s U.C.C. and the U.C.C.s of the forty-three states whose courts had yet to decide the matter

25. what is the constitutional obligation of a federal court when interpreting state law?

26. 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?

27. 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

28. P(NY) enters into a contract with D(Ca) in Ca with performance in Ca the contract is litigated in NY state court under NY choice of law rules Ca law applies what are the NY court’s obligations when interpreting Ca law?

29. Louknitsky v. Louknitsky - California state court determining spousal rights in marital property of couple, now domiciled in Ca., while they were in China - presumed Chinese law was the same as California’s community property system

30. obligation to provide a forum

31. who cares about full faith and credit if you can simply refuse to take jurisdiction of a case under sister state law?

32. Hughes v Fetter (US 1951)

33. “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. “

34. Public Policy Exception?

35. “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. “

36. Forum’s Shorter Statute of Limitations?

37. 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

38. Forum Non Conveniens?

39. “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.”

40. “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.”

41. necessity jurisdiction

42. so what is wrong with what Wisconsin did?

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

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

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

46. 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." 

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

48. 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

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

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

51. can the state creating a cause of action prohibit sister-state courts from entertaining it?

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

53. 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 "

54. 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.”

55. 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?

56. when can a state compel a sister state court to not take the state’s cause of action?

57. Privileges & Immunities Clause

58. State cannot withhold from non-residents something important (something bearing on the vitality of the nation as a single entity)
Unless there is a substantial reason for discrimination
and the means chosen (namely state citizenship) bears a substantial relationship to achieving the end

59. CT has guest statute, New York does not
NY guest and host get into accident in CT
Guest sues host in CT court, which – using interest analysis – does not apply guest statute
Is the P&I Clause violated, because CT provides a protection to CT defendants but not NY defendants?

60. - What if NY guest sues CT host in CT state ct for accident in CT - ct resolves true conflict by applying NY law - any P&I violation? - ct resolves true conflict by applying CT guest statute - any P&I violation?

61. What if CT guest sues NY host for accident in CT state ct
CT court, using interest analysis, does not apply guest statute (because no worry about effect of fraud in CT)
Is the P&I Clause violated, because CT provides a protection to CT defendants but not NY defendants?