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conflict-of-laws-outline-wasserman

VIEWS: 44 PAGES: 156

									                                                                          11/1/2007 9:44:00 PM


Contact info:
          Room 321
          wasserman@law.pitt.edu
          www.law.pitt.edu/wasserman/conflict.htm
          Power point website:
               o www.law.pitt.edu/wasserman/conflict5.htm
Class cancellations:
           Wednesday, Jan 17
           Monday, February 12
           Monday, April 2 (maybe)
       Tuesday, April 3 (maybe)
Make up classes
      Wed, Jan 24 6-8 pm
      Wed, March 28, 6-8
Recommended Books
           Scoles et al., Conflict of Laws
           Weintraub, Commentary
           Richman & Reynolds
Exam:
         48 hour take home
              o Must be completed by Wednesday, May 2 at 5pm.
Three major themes to the course:
           1. Personal jurisdiction
           2. Choice of law and legislative jurisdiction
               o Whether a state has authority to regulate conduct beyond its borders
               o How to choice between competition authorities
           3. Effects of foreign judgments
               o How are they enforced in foreign jxs.


Choice of law is a state law concern
           Different states take different theoretical approaches
                o Territorial approach:
                         Akin to absolute power/absolute powerlessness
                         Appx 20% of states follow this approach, though it has been limited.
                         Under this approach, it is important to determine the critical factor that
                            gives rise to a cause of action
                 Example: where does an injury occur (for tort cases)
                 Example: where the k was made/where the k is performed (for
                  k cases)
          Limitations to this approach:
               Convenience issues
                        Another state which may be more convenient will not
                         be given authority to hear the case based on such
                         convenience
          This approach assumes that there is a single correct answer that is easy
           to apply
                 Problems with this assumption:
                         There are problems with how to classify a case (as a
                          tort, contract, property, etc case?)
                 Also, a state can choose not to apply another state’s law based
                  on fundamental fairness concerns
                      
                      This defeats the certainty characteristics of the
                      territorial approach.
o Modern approaches (2 of them)
     Governmental interest analysis
                 Theoretically important
                         We should not focus on where things happen, because
                          that can be arbitrary (as in the Carroll case). Recovery
                          should not be based on such arbitrary rules, that an
                          injury for example happens to occur in a state
                              o Rather, we should look to the reasons why the
                                  states pass the laws that they do, and look to
                                  whether they would be interested in having the
                                  law apply.
                 Application of this theory to the Carroll case:
                         Reasons for AL for adopting the law that would
                          compensate the employee:
                             o Likely to protect and compensate the employee
                         MS law, on the other hand, does not allow for such
                          recovery
                                             o Reason for not having a law similar to AL may
                                               be because MS has an interest in protecting
                                               employers
                                         Which state would have an interest in applying the law?
                                            o AL seems to be interested in protecting and
                                                compensating AL employees
                                            o MS seems to be interested in protecting MS
                                                employers
                                            o Here there are AL employees, but not MS
                                                employers
                                         This case is an example of a false conflict when
                                          examined under a governmental interest analysis
                          Second Restatement of Conflicts
                               This approach is an effort to combine the predictability of the
                                 territorial analysis and the practicality of the governmental
                                 interest analysis.


Constitution can provide limits on which law is applied
          DP limits
          Full Faith and Credit Clause limitations

Recognition of foreign judgments
           FF&C Clause requires sister states to recognize the judgments of other states
                o But there are limitations to this requirement of enforcement
                         For example: enforcement of same sex marriages in sister states
Extraterritorial scope of US Law


Two issues of Conflict of Law theory
          1. Whether the choice of law inquiry should be an objective one or subjective one
              o Are there some components of conflicts of law that are external to the states
                 that a competing—that is, is there an objective source of authority that is
                 external to the interests of the competing states
                      This external approach is similar to a natural law approach.
                              Problem with this is whether the origin of the approach is
                                 authoritative (law review article versus statute)
              o Subjective approach
                         States will ask whether they have a subjective interest in choosing
                          which law to apply.
                         This approach is similar to the positive law approach.
          2. What kind of factors should we be focusing on? (territorial factors versus personal
           factors)
               o Where the events occurred (territorial factors) as opposed to where the parties
                   are from (personal factors)
Traditional choice of law values
          Ideally, we aim for uniform results
               o If such uniformity was attainable, there would be less forum shopping
               o Additionally, uniformity leads to predictability
        Choice of law rules should be easy to apply
For tomorrow:
          Up to page 23
          Interesting question: what other would an alphabetical approach not achieve
          Territorial approach:
               o State laws have force within the territory of the state, but not beyond.
                        State does not have authority to apply its law exterritorialy
               o Following such an approach would be limiting:
                        Idea of this approach is that the rights of the party vests at a critical
                         time that gives rise to the cause of action.
                              Once this critical event occurs, the state law becomes
                                  portable—parties can carry the state law with them.
               o Jurisdiction selecting rule:
                      Allows determination of which jx will apply based on what ―type‖ of
                         law it is (contract, tort, etc), not the substance or policy of the law.
               o Law regarding torts
                      p. 12
                                 Basically, all these statutes direct you to the place of the wrong
                                 §377 p. 12:
                                         Place of the wrong is where the last event necessary to
                                          make the actor liable.
                                              o Typically, in torts, it is the place where the
                                                 injury occurred
                         §384:
                              Rights, once they vest, become portable.
                         The cause of action can be taken to other places, and it will be
                          recognized there
                                Conversely, if the place of the wrong does not give one
                                 the right to sue, and that person sues in a place that
                                 would give the right to sue, then the ―portability‖ of the
                                 nonsuit also carries.
   Carroll case:
       o Train traveled between AL and MS.
       o There was a failure of duty in AL, but the injury occurred in MS.
       o Common law rule in MS did not allow employee to sue the employer
       o AL law does allow for employee compensation.
       o , AL citizen, employed by AL company hopes to use AL law to gain its
         benefit.
       o Two things to consider
             1. State courts will know their law better than laws of other states
             2. When a state statute is enacted, that statute enacts what the state
                 legislature thinks is the best (presumably the legislature has examined
                 all possible solutions)
                       Similarly, common law rules mean that state legislatures have
                       not acted b/c they think that the common law rule is the best.
       o Why then, would a state ever apply laws from other states?
            To prevent forum shopping
                    A state that doesn’t just freely use its law will prevent people
                       from just running to that state to gain the benefit of their law
            Court may believe that its own law is not the best option, and that the
               other state has a better resolution
                    Court, by doing this, could send a message to the legislature to
                       fix the law in its own legislature
                             This raises separation of powers concerns
             Courts may apply other states’ laws out of respect for the other state’s
                laws, as well as for a hope of reciprocity of those other states applying
                their laws when needed.
             Reliance of the parties
                     The parties may have relied on one state’s laws when they
                        acted.
       o Court uses the place of injury analysis
       Since the plaintiff could not recover in the place of injury (MS), they
        similarity cannot recover in AL.
o Why use a place of injury rule (as opposed to a territorial rule)
     ―blood on the street‖
             Its easier to determine where the injury occurred—―can see the
                blood‖
             State where the injury occurred has an interest in the case
                      
                      That State’s resources are going to be used to address
                      the injury (emergency services, etc)
o What about cases where it is difficult to determine where the injury occurred
   (blood on the street analogy doesn’t work here)
        With negligence, relatively easy to determine the injury
        Other cases, maybe not so much.
o ’s argument:
      While the injury occurred in one state, the negligence occurred in
         another
             Arguably, AL has an interest in deterring negligent acts
             Why should injury be the defining characteristic—why not the
                 place of the negligent act?
          Another possible argument by the  is that this is a k’s case and not a
           torts case:
                The argument is that the AL employment contract embodies
                   AL law.
                         The court rejects this argument—this argument usually
                          does not work, but sometimes it has.
                             o Reasons for rejecting this argument:
                                      1. What about k’s that were made
                                         before state’s enacted a statute.
                                      2. ?
o What if the AL statute said that the employer would be liable even if the
  injury occurred in MS?
       How should the court view this express statement by AL legislature
              Does AL have the authority to make laws determining choice
                 of law
       The argument could be is that the courts would defer when states have
          commented on choice of law issues.
       
          Marra case:
              o Here,  sues in federal court in VT, where the  has acted.
              o This case illustrates the complexity of choice of law in a federal system.
              o What should a federal court do?
                      A federal court sitting in diversity should apply the choice of law rule
                       of the state in which it is sitting.
                             This goes with Erie to promote uniformity (and prevent forum
                                shopping) between state and federal courts in the same state.
                      The federal court in VT will do what the VT court will do.
                              
                              The fed court is at a disadvantage though, b/c they have to
                              predict VT state law.
              o How does the court go about choosing the law to govern this case?
                    Court says that in a particular case like this (intentional tort case), they
                      would apply the place of conduct rule, and not the place of injury rule
                           But even if they apply the place of injury rule, it would be in
                              VT
              o We might think that the marriage is harmed where the women is harmed (in
                VT)—however, the case says that the consortium follows the defendant, and
                therefore the injury occurs there
              o The primary point of this case: treat intentional torts differently and look at it
                from a place of conduct perspective
          For tomorrow
              o p. 23-39

Continuing Marra case:
          Two important aspects of the opinion
             o 1. Federal court—the federal court applies the choice of law law in the state
                where the Fed court sits
              o 2. Assumption that VT would follow the territorial approach.
                    Even if the territorial approach is not followed, the injury happened in
                       VT b/c the marital relationship followed the place where the husband
                       was lured away (in VT).
          The court rejects the place of the injury as the central territorial element
              o What subset of court cases has the case carved out?
                 The alternative theory that is followed is to look to the place of
                  conduct, not to the place of injury for intentional torts
                      Rationale:
                                Tort law has multiple policy objectives
                                    o 1. Compensation of victims
                                    o 2. Deterrence of torts
                                With intentional torts, the primary objective is to deter,
                                 whereas with unintentional, the primary objective is to
                                 compensate.
                                    o The court, in the intentional tort cases, says that
                                         the place of wrongful conduct has the primary
                                         interest in deterring.
       o The first restatement of torts, however, does not support this view
             In fact, some sections support the opposite view.
                      See p. 12, note 2 and 4 under ―summary of rules…‖
                               Fraud and poisoning are intentional torts: with these,
                                we are focusing on the place of injury and not the place
                                of conduct.
                 Going back to Carroll:
                         p. 4: In criminal cases, we are not looking to the place where
                          the crime is committed, but rather to the place where the effect
                          of the crime is manifested.
                 Prof: seems as if the court is very sympathetic to the plaintiff, and the
                  judge is finding a way to compensate the victim.

   Territorial approach with contracts
       o Two critical contracts provisions
                 332, 358
                 §332:
                      Law of the place of contracting is controlling with respect to
                        certain situations
                      (f) is important
                      Generally:
                                A number of contractual issues, including some prelim
                                 situations are governed by the place of k.
                 §358:
                  Look to the place of performance with respect to other
                   situations
          With these two provisions, one is saying place of k for some issues,
           other is saying place of performance for other issues
                But it is hard to differentiate:
                        Example, compare 332(f) with 358(d)—difficult to
                         differentiate
o External nature with respect to contracts:
      It’s easy to see the first restatement as taking an external approach.
              See slides: comment d to §311
o Poole case:
      Note made payable in VA, but k entered into in TN
      Under VA law, the wife would lose…under TN law, the wife would
         win.
      If the first restatement territorial approach was taken, the likely result
         would be TN law (the place of k)
      Likely approaches that court could take
              Place of k
              place of performance
                    domicile of contracting party at time of k
                    domicile of contracting party at the time of performance
                    intent of the parties
                    likely law that would govern
                    law of the place of breach
          Intent:
                    Lender must have intended to make the k enforceable against
                     the wife (thus under VA law)
                    However, some k principles apply regardless of intent or not
                         If the law is designed to apply irrespective of intent,
                          then this reasoning would not be forceful.
          Prof: place of domicile is a good approach
               Reason: state of domicile is the state that has an interest in
                  protecting such laws that TN had here.
               Should it be domicile at the place of k or at the place of
                  performance?
                                        
                                    If examined from the perspective of the state’s interest,
                                    then it seems as if the domicile at the time of
                                    performance is what is relevant.
                    Reason why place of breach isn’t a good argument:
                           You’d like to know whether or not the k is enforceable before a
                            breach would occur.
                    Rationale for place of performance
                           This is similar to the place of intent.
              o Linn case
                          is an insurance broker
                               Finds business for insurance companies
                         An NJ insurance company has agreed to insure, and that company
                          wants to diversify it’s risk by contacting 
                         Problem in this case is that k was an oral k made over the phone.
                              SoF in NY would invalidate k
                         The debate here is where the k was made
                              As opposed to the Poole case as to which approach to follow
                                           Here, the court follows the view that the choice of law
                                            is the place of k.
                         Question: where is the place of k?
          For Tuesday
              o p. 40-57 (check supplement)


From last time, continuing Linn case:
          Offer was accepted by phone
           raised a statute of frauds defense b/c the k was not reduced to writing.
          334(b):
               o Ordinarily, we would look to the place of contracting to look to see whether
                the k should be in writing or not.
              o Problem, here is not whether we take the place of contracting versus some
                other place, but instead, to figure out where the place of contracting occurs.
          Why does it make sense to look to the place of contracting in the face to face context?
             o Analogous to place of injury (blood on the street)
             o You operate under the assumptions/certainties of where you are
             o Additionally, a policy argument is that the place of contracting cares about
                 certain requirements to make a contract.
   Why not look at the place of negotiation?
      o The negotiation itself may be irrelevant
   What about the place of breach?
      o Why not analogize to situations like torts?
               Similar to the arguments from last time with capacity—want to know
                  from the beginning whether or not the k is enforceable.
   It seems as if in the face-to-face context, place of contracting makes sense.
   What alternatives are made to the court:
         o 1. Where the acceptance is heard
         o 2. Whether the acceptance is spoken
                  Court here accepts this alternative
                       Rationale for choosing this
                                 There needs to be certainty in the marketplace: this rule
                                  creates such certainty
                  Look at section §326
                  Downsides to these approaches:
                       Could give the acceptor an advantage in going to a state to
                          accept the offer at a place of his choosing.
   In the case of an oral contract, this problem is magnified b/c there is no written
    evidence of the contract.
   Hypo: business associates negotiating agreement on a high speed train.

   Domicile:
      o Domicile by origin:
               §14 p. 41
                    Assumption: upon birth, domicile is that of your parents
                                  Until you have the capacity to change your domicile, it
                                   is that of your parents
       o Everyone always has exactly one domicile
       o Domicile may be changed when two things are met
             1. Physically present in the location where you want the change
             2. Requisite intent
                    The intent to what varies across cases
                       Objective evidence can help to determine intent
                  The basic idea is that you have rejected your old domicile and now
                   you intend to stay in a place indefinitely.
o Domicile by operation of law
     Assigned a domicile irrespective of intent
             So, for example, children
     Domicile is kept until another is obtained.
             Ex. (College students going out of state retain home state
                domicile)
o White case:
     Husband and wife domiciled in WV, move to PA, but wife is sick so
         husband goes back and forth between WV and PA, and husband dies
         in WV.
                Which law should determine?
                       WV law favored wife; PA law favored spouse’s
                        siblings
         Why focus on the state of domicile rather than state of death for estate
          issues?
               Again, capacity to form requisite intent.
                         You can choose where you are domiciled, but you
                          cannot necessarily choose where you will die
                      Domicile is intended to reflect what people would have
                       wanted.
                Domicile state interest:
                         State of domicile has a more enduring connection with
                          the deceased—state may have an interest in what
                          happens to the deceased.
                      State might have an interest in the distribution of your
                       assets
         How to determine domicile in this case:
             On the facts of this case, it seems pretty clear that the domicile
                 is PA:
                     Intent and presence seem to be clearly met.
                But what would be the result if the husband died on the way to
                 PA (while still in WV)?
                         Physical presence is not met:
                             o But, this opinion seems to place an emphasis of
                                 intent over physical presence
                                  o Court, here, puts heavy emphasis on intent
                                       rather than physical presence, but not all courts
                                       would agree
                        Arguments for weighing physical presence heavily:
                                Why require physical presence when the intent is so
                                 clear?
                                     o One concern would be manipulability: people
                                        would have incentives to lie about their
                                        domicile
                                     o Another argument is that you can have strong
                                       intent, but until you’ve acted upon the intent,
                                       you haven’t actually done anything.
                        The standard rule therefore, puts heavy emphasis on both.
   For next time
       o p. 57-72
       o Continuing domicile
                Rodriguez case:
                     State of domicle for purposes of diversity is the place where
                       one is a citizen.
                        The laws of PR are in conflict to NY law
                                Both have similar rules that govern how to change a
                                 domicile
                                    o The difference between PR and NY is the age of
                                        majority difference
                                    o Under PR law, the person reaches age of
                                        majority at 21, in NY, 18
                                Rodriguez is 18, meaning that he is a minor in PR, adult
                                 in NY.
                                    o Rodriguez needs to be of the age of majority in
                                        NY to achieve diversity. If he is a minor: the
                                        domicile is the one of the parents—he would
                                        have no capacity to change the domicile on his
                                        own.
                        Court on p. 51 says that there is a catch-22:
                                Can’t logically determine whether he is an adult or
                                 where he is domiciled.
               o So how to find a remedy?
               o Court provides some possibilities:
               o Court could apply forum law:
               o Rodriguez initially filed in US Dist Court in PR
               o Court, in this option, means to apply the law of
                 the jx in which the federal court sits.
               o If the court applied this law, Rodriguez would
                 be viewed as a minor (under PR law). Since all
                   the s are citizens of PR, there would be no
                   diversity of citizenship.
               o Court does not reject b/c there would be no
                 diversity of citizenship, but rather, the Court
                 rejects this result b/c there would probably be
                 inconsistent results if Rodriguez, instead,
                 initially filed a different suit in a federal district
                 court in the state of NY. For purposes of one
                 court he would be a minor (and therefore PR
                 domcile), while for the purposes of the other, he
                 would be a domicile of NY.
               o In the federal court system (where uniformity is
                   sought), inconsistent results occur on the
                   question of federal law (that is, citizenship for
                   federal diversity purposes)
   If the above inconsistency would result, how to solve the
    problem?
          Bottom of p. 52
          Focus is upon the physical and mental aspects of the
           plaintiff’s situation.
          Assumption is that (as long as Rodriguez can establish
           intent), he will have domicile in NY.
   But what would have happened if the facts were switched—
    accident occurred in NY but that Rodriguez moved to PR.
          Rodriguez would be deemed to have a NY domicile.
              o No diversity.
                  A local PR court would not have to fear coming out
                   with inconsistent results with NY law. Therefore, PR
                   would likely apply forum law (default to PR law).
          It appears that the concerns that motivate diversity of
           citizenship jx in federal courts are not necessarily present if
           Rodriguez sues in PR.
          Unitary concept of domicile:
                 Domicile is used in a wide range of factual contexts
                    o Divorce
                    o Domicile as a basis to assert personal jx.
                      o Estate/property distrib.
                      o Tax
                      o etc.
                 Should there be a unitary concept of domicile or should
                  it be subject specific?
                      o A unitary concept would provide an ease of
                          application
   Marriage:
        One view: as long as the marriage is valid in the place where
           the marriage occurred, it is valid everywhere else.
               Focus is on the place where marriage is celebrated
          Other considerations, however, come into play
                 One consideration is uniformity:
                     o Couples need to know if their marriage is valid.
                 Another concern is the parties expectations
                 Another concern is having a policy that is supportive of
                  marriage
                     o government laws favor marriage.
          Difference between validity of marriage and incident of
           marriage
                 General territorial rule: look to the place of marriage to
                  determine validity.
                 Contrast this validity from the incident of being
                  married: what consequences result from the fact that
                  one is married?
          In re May’s Estate case:
   NY law would not allow uncle and nieces to get
    married
   RI law does not allow such marriage, but there is an
    exception, which the Mays fell into.
   Issue is whether NY law prohibition voids the marriage
    of the Mays
   NY law: p. 62:
      o Marriage between uncle and niece is void.
   Does the NY court agree or disagree with §121 of
    Restatement rule (marriage is generally valid
    everywhere…)
       o Court seems to generally agree with this rule
       o Court acknowledges two exceptions:
       o 1. Positive law exception
       o Ordinarily, we look to the place of marriage
          ceremony, unless the law is intended to apply to
          domiciliaries regardless of where the marriage
          occurs.
       o 2. Natural law exception
       o Certain relationships should just be prohibited
         b/c they are ―unnatural‖
       o Even if other states allow this, the state may
         refuse to acknowledge it.
   Looking at the NY law:
       o NY law imposes financial and criminal penalties
          for uncles and nieces getting married.
       o Seems to indicate that public policy says that
          they do not want such marriages
       o Why doesn’t this constitute the positive law
         exception?
       o The law hasn’t sought to be applied beyond NY.
       o *If NY wants to regulate its people even when
         they leave NY, they need to make the law that
         explicit to say that the law would apply even if
         the people leave the state.
                                         o Why doesn’t this constitute the natural law
                                              exception?
                                         o It is not against natural law to such a degree
                                         o Deference to Judo-Christian values
              o For next time, why upholdl marriages between domiciliars that would be
                invalid under law of domicile
              o Also, p. 68-77


Make-up tomorrow: 6-8 room 109
Continuing In re Mays estate case
        Why would a state permit a domiciliary to marry under the laws of another state if it
         wouldn’t under it’s own law?
             o One possibility: lack of commitment to the substantive policy
             o Another possibility: Avoid prohibiting marriages based upon technical
               defects
             o Another possibility: State’s hope to acquire reciprocity
             o Important reason: To honor the intentions of the parties.
                    There could be a reliance upon the laws of the other states.
Lanham case:
          WI law didn’t allow Lanham to marry until after waiting a year.
          Instead, Lanhams went to MI to get married (common law)
               o MI law does not have the waiting one year waiting period.
          The result in this case is different than what was decided in Mays.
          Are the legal principles in this case similar to the principles established in Mays?
              o The general rule accepted by both courts is that the law of the place of
                  marriage ceremony determines the validity of the marriage
                        The exceptions here:
                                1. Natural law exception (same as in Mays case)
                            2. Positive law exception (same as in Mays case)
              o The legal principles seem to equate.
          This marriage does not seem to be in violation of natural law.
          So the question is whether the marriage in MI is in violation of WI public policy
               o Is there something is WI’s positive law that suggests that the marriage should
                  not be allowed.
               o WI statute p. 66:
        This statute does not seem to indicate that the law was intended to
         apply extraterritorially
              If we are limited to just the text, then an argument can be made
                  that NY’s statute is stronger in asserting extraterritorial effect.
o Rationale behind the WI law:
      to encourage people to stay married and not divorce to remarry.
      Idea is that this rational is evidence of the policy goal behind the
         statute.
              As a result, WI could not have intended for people to go
                  outside of WI to evade the effects of this law.
                  This same argument, however, can be made for the state of NY
                   in Mays case
                          This is indicative of the differing approaches that the
                           NY court takes versus WI court.
                              o How to explain this difference?
                                        One possibility: The impairment for
                                           marriage at issue in the NY court is a
                                           permanent impairment, whereas under
                                           WI law, the impairment is only
                                          temporary (for one year)
o p. 67: ―Another view…‖
       Rationale: When the couple became divorced in WI, the divorce
          decree incorporated the WI law as part of the decree.
              MI, by remarrying the couple, failed to give full faith and
                  credit to the WI law.
                          Argument is that since the MI marriage violated the full
                           faith and credit clause, then WI is free to disregard the
                           MI marriage b/c the marriage violated the full faith and
                           credit clause
                               o Problems with this argument
                                        1. (discussed later in this course)
                                         Reference to the ―last in time rule‖—
                                         with inconsistent judgments, there is an
                                         obligation to honor the judgment made
                                         last in time.
                                                               If this rule was applied, then the
                                                                MI marriage would be valid,
                                                                dispite the fact that they failed to
                                                                give full faith and credit.
                                                       2. If the argument that the WI law is
                                                        incorporated in the divorce decree, what
                                                        would happen if the WI law had changed
                                                        (such as a life long ban as opposed to a
                                                        one year ban)?
                                                             Also, what if the parties changed
                                                                their domicile to MI. If the
                                                                divorce incorporated WI law,
                                                                then parties may not be able to
                                                                get married in MI even though
                                                                WI would have no interest in
                                                                prohibiting such marriage b/c
                                                                parties are not domicil. any more.
         Common law marriage argument
            o This argument was disregarded.
             o Marriage was illegal to being with.


Same sex marriage
         State legislatures that opposed same sex marriage did, generally, three things:
              o 1. Marriage defined as a union between a man and woman
              o 2. Pass legislation that stated that public policy of the state does not allow for
                  same sex marriage
              o 3. Legislation explicitly had extraterritorial language.
              o Relevant question:
                        Are these legislations consistent with choice of law rules thus far?
                             Yes.
                                        The analysis would lead to the same sex marriage not to
                                         be recognized.
                                             o (valid unless a violation of natural law or
                                                positive law)
                                                     These statutes invoke these exceptions.
                          What about the constitutional questions that concern these
                           legislations?
                                DP and EP arguments against the state laws themselves.
                                Also, there could be a full faith a credit challenge on states
                                   refusing to acknowledge the laws of other states that allow
                                   such marriage.
                                         This constitutional challenge couldn’t be brought to the
                                          state statute by itself.
                                         This argument, however, may not hold.
                                             o States have to give full faith and credit to the
                                                  judgments more so than they have to give full
                                                  faith and credit to the laws of other states.
                                                       This raises the question as to what a
                                                          marriage is. Is it a judgment?
                                                       Divorces seemingly are judgments, but
                                                          it’s hard to argue that a marriage is a
                                                          judgment.
For tomorrow:
          syllabus part f 1, 2, 3

Introduction to the Situs Rule
          Even in states that have rejected the First Restatement of Conflicts, the Situs Rule still
           is followed in those states
          Gist of the rule:
              o The Situs rule provides:
                        The validity and effect of conveyance in land and nature of the interest
                           transferred is determined by the law of the state where the land is.
                                Virtually every selection from p. 72-75 refers to law of state
                                 where the land is.
                o There is a consistency between the situs rule and the ―traditional‖ rules (in
                  Pennoyer)
                      Absolute power/powerlessness of states
                      The ―in rem‖ portions of Pennoyer have held true. (See opinions in
                         Shaffer, etc)
          Rationale for Situs Rule (and the rationale’s critiques):
              o 1. Don’t want the job of the person who has to check title to be too difficult.
               
               Argument here is that the job of this person would be complicated if
               they had to figure out which state’s law governed the title for each
               transfer of title
             Critique: in disputes between original parties, this explanation doesn’t
               really hold weight.
       o 2. Only the state where the land is located has power over it
             If we are fighting over who gets the land, we need a judgment to
               enforce it, and the only court that can enforce the judgment is the state
               where the land is located.
             Critique: This may justify limiting the suit to the state of location, but
                it doesn’t nec. justify using the law of that particular state
       o 3. This rule is an easy rule to apply
             We can usually determine where the land is
             Critique: Ease of application is not the only concern that we have.
       o 4. The state where the land is has an interest in disputes over it
             Critique: this isn’t always true. another state may have a greater
                interest in having it’s laws apply to its own domiciliaries.
   Distinction between capacity to transfer land and capacity to contract to transfer land.
       o Rule regarding real property §216 p. 73:
                  Capacity to make a valid conveyance is determined by the law of the
                   state where the land is
                        Contrast this rule with the following:
                                  What if, instead of actually transferring, an individual
                                   enters into a promise to transfer.
                                       o Remember that under the contract rule, the law
                                           of the place of contracting applies.
                                       o Distinction between capacity to transfer and
                                           capacity to make a contract.
                                                 Comment to section 333 speaks to this
                                                  distinction
   Burr case:
       o H is a trustee of an estate in FL. H asks the wife to sign a promissory note
           (made payable to W) secured with mortgage
                W executes a note and a trustee (for our purposes a mortgage).
                W while in FL signs the note, but dates it as if she’s located in IL.
o Burr is suing W to foreclose on the mortgage that was used to secure the
  promissor note
        Beckler responds by saying that she lacked the capacity to sign the
           note and put up the mortgage for security.
                Beckler is seeking the protection of FL law, where married
                   women are not capable of contracting (but they are in IL)
o If the situs rule was applied:
        Land is in IL. Beckler would have been liable under situs rule.
                If situs rule was applied, Beckler’s capacity would be analyzed
                   under the law of the place where land is located.
          Beckler, however, prevails in this case
               The court does not reject the situs rule
                         p. 76, paragraph 3:
                              o ―The validity…‖
                         A note is essentially a contract
                             o Analogy: mortgage and promissory note that is
                                 secured with a right/interest in the property.
                         The court here is essentially making a distinction
                          between the mortgage and the note
                             o The note itself is just a contract. A promise to
                               repay that is not connected to the real estate.
                                    Under the traditional contract conflict
                                       approach: the law that applies is the
                                       place where the contract was made.
                                            In this case, the contract was
                                               made in FL. The contract was
                                               ―made‖ when it was placed in the
                                               mail.
                         Problem with this conclusion
                             o Remember Perkins case:
                                     Place of contracting applies only if the
                                        place of performance is the same as
                                        place of contracting. what would
                                        happen here if the place of performance
                                        was not in FL?
                        Bottom line: Beckler’s capacitiy to sign the note is wherever
                         she places the note for delivery.
                        Suit to foreclose on the mortgage:
                            If the property being foreclosed upon in IL, why does
                             Beckler gain the benefit of FL law?
                                  o It seems as if the primary obligation is the note
                                     and the mortgage is given as a way to satisfy
                                     that obligation.
       o What if both H and W signed the note?
            Wife can still mortgage the property under IL law, but she can’t enter
                 into the obligation to repay (under FL law).
              If H also signs the note, H has the capacity even if W doesn’t.
                      W can still secure H’s capacity to pay, with her mortgage.
       o Policy reasons for FL’s law?
              FL seemingly would be interested in protecting their own married
                 women.
              Seems like the policy reaons here are not furthered
       o Policy reasons for IL law?
              IL might be interested in protecting lenders that lend money to married
                 women.
              Seems like a contrary result in this case would better further IL law
                 than the actual result in this case.
                      Here there was an IL woman, with IL land, and an IL creditor.
       o Seems like this case is following FL law when FL law does not have an
         interest while not following IL law when IL does have an interest
   Thomson case:
       o W lacks capacity in AL, whereas in FL W has capacity.
       o W is in AL and the note is payable and executed in AL.
       o Does the W have the capacity to make the note?
             The note is a just a contract to repay money
                    The law that should determine whether W has the capacity to
                      sign a note should be AL law
                               So far it appears that W would not have capacity. But
                                property is located in FL.
                                    o As a result, court applies FL—different than the
                                        result in the Burr case
                                              o How to reconcile Burr and this case?
                                                   In this case, the husband actually signed
                                                      the note (as in the hypo above)
                                                           Here there is a valid obligation to
                                                              repay (by the husband).
                                                              Therefore, now we are worried
                                                              about not whether she had the
                                                              capacity to sign the note, but
                                                              rather whether she had the
                                                              capacity to secure the note. This
                                                                 separates the note from the
                                                                 mortgage. As a result, we look
                                                                 to the state where the land is
                                                                 located.
                 o Same legal standards are used in Thomson and Burr
                       Way to reconcile the two cases is that in Thomson, the H also signs
                          the notes.
                       Policy arguments for each state in Thomson is basically the same as
                          the policy arguments for the state in Burr.
                 o Last remaining issue in this case is the cap on the interest:
                       H and W try to fall back on the usury argument—saying that the
                          interest was too high.
                               Consequence of charging someone in excess of interest (under
                                  AL law) is that you loose the interest.
                                         For next time: which state’s law governs on this usury
                                          interest
For next time:
          To O’Leary case




Continuing Thomson case
          The usurious argument:
              o Which law applies?
                      Court chooses AL law. What was the rationale for this?
                                The note is characterized as a k, which was made in AL. For
                                 the usury issue, the place of k should be determinative.
          When there are different issues in the same case being governed by different state
           laws, this is known as depecage
              o Different issues in a case can be subject to different state laws.


Wrinkles in the First Restatement Theory
          Characterization wrinkle
              o Involves the question as to how a case should be characterized (i.e. contract,
                  tort, real property, etc)
                      Even within the same case, there can be different characterizations.
                       See Thomson case.
              o Once a case is characterized, look to the choice of law rules.
              o Also, another concern is to determine how much of the state’s law do we
                apply?
                    1. Do we take both the procedural and substantive law of that state?
                    2. Do we only take their internal law or do we also take the choice of
                       law law as well? (renvoi)
          Renvoi
              o This is similar to number 2 above.
              o When applying another state’s law, how much of that law should a state take.
                  Renvoi says take the ―whole law‖
              o Terminology:
                      ―Whole law‖ means the state’s internal law as well as the choice of
                        law law.
              o Every case that we’ve looked at so far has not invoked Renvoi.
              o Renvoi is rejected by the first restatement
              o What could result if we followed renvoi
                         The foreign choice of law rules might look back to the forum state
                          (original state) law
                               This is known as remission
                               A goes to B
                               B goes back to A
                               This doesn’t necessarily mean that there’s an infinite loop
                         The foreign state, when looking to another state’s law, the another
                          state’s law could look to a third state’s law
               A goes to B (choice of law w/renvoi)
               B goes to C
               C goes to D.
               This is known as transmission
       The foreign state could look to its own law
               A goes to B
               B goes to B
o In re Estate of Damato case
       Issue: whether or not the trusts are valid
       In this case, the dad dies in NJ, but the trust is established in FL.
          Question is which jx’s law will govern
               Initially, however, there is a characterization problem: what
                  kind of problem does this trust deal with.
                          Ct. p. 120 indicates that they are unsure
                               o But either way, FL law is chosen
                  If renvoi was not applicable, trust would be held to be valid
                   under FL law
                         But the argument is made that renvoi should apply—
                          that the FL choice of law should also govern.
                  If renvoi is applied, remission occurs.
                         FL choice of law goes back to NJ law (b/c FL would
                          look to the domicile of where the holder of the trust is)
                  Following renvoi would lead to an infinite loop.
                          But this doesn’t always happen
                               o Example: If FL doesn’t follow renvoi, then
                                   there would be no infinite loop.
          Is the only resolution to an infinite loop to reject renvoi?
                 Reason:
                          Amount of respect to the other state’s law is
                           diminished.
                  Statutes can have a way to terminate the loop after one time
                   around.
                  *This court rejects renvoi b/c they say that rejecting renvoi is
                   the only way to avoid this infinite loop
                     But this isn’t necessarily true.
          Consequences of rejecting renvoi
                         Not respecting the other state’s choice of law law.
                         There are different results in the two forums.
                                We are not achieving the objective of uniformity by
                                 rejecting renvoi
                                     o A result of this is forum shopping
                                              Example here: If renvoi is not applied,
                                                someone who would ordinarily file in NJ
                                                would try to file in FL. Would shop to
                                                FL.
                         But even following renvoi doesn’t always given a uniform
                          result.
                                When A looks to B and B looks to B, then there would
                                 be uniformity, but in the other situations, uniformity is
                                 not guaranteed.
                         Also, we want to have an approach that is not hard to follow
                                Renvoi seems to be somewhat difficult to follow.
                       Also, it is difficult to predict the result if renvoi applies.
                  As a result, barring some exceptions, renvoi is usually rejected.
   Substance/Procedure
       o §585:
               If an issue is procedural, forum law applies, and not the choice of law
                  rule.
       o §584:
               The forum court determines whether a question is one of substance or
                  of procedure.
       o How does a state decide whether or not something is substantive or
           procedural?
               3 possible ways to make this determination
                         1. Conceptual test
                                   Trying to conceive of the differece between substantive
                                    law and procedural law
                                       o The substantive test says that if it goes to the
                                           substantive right rather than the machinery of
                                           that right, then it’s substantive.
                                       o But if it goes to the machinery, then it’s
                                           procedural
                       Idea is to use logic to determine what is substantive or
                        procedural.
                     This approach is difficult to apply in practice.
                2. Functional test
                       First way to employ this test: look to judicial
                        convenience
                            o Is it difficult to apply foreign law (example—
                               referring to a law of another country that has not
                               been codified)
                            o If it is too inconvenient, then call the law
                               procedural and apply the forum law
                         nd
                        (2 ) Another way: would the choice of law be likely to
                        affect the outcome of the case
                            o If yes: characterize the law as substantive (and
                                therefore apply the other state’s law)
                            o If no: characterize the law as procedural (and
                                apply forum state law)
                            o Outcome determinative test
                       (3rd) Another way: is this an issue where the parties
                        had a reasonable expectation as to what law would
                        govern (meaning expecting another state’s law would
                        govern)
                            o If yes: the law should be labeled accordingly to
                                match that expectation (meaning label as
                                substantive)
                            o If no: label as procedural
                3. ―Better‖ law approach
                       Idea is that though a state might know that the
                        differences are outcome determinative, but the state will
                        still choose to apply its own law b/c they think its
                        better.
o Sampson case:
      (probably the hardest case in the course)
      We don’t know the citizenship of the parties, but we do know that
        there is complete diversity of citizenship
      Accident occurs in ME
   Suit filed in MA.
   Problem: who bears the burden of proof on the question of
    contributory negligence
   Wife sues and wins, but the husband sues and loses
         Question is whether the husband had the burden of proving
             contrib. negligence
          Under ME law, the  had the burden of proving that he wasn’t
           contrib. negl.
          Under MA law, the  had the burden.
                 can avoid liab by proving the  is contrib. negligent
        The burden question matters because if the case is 50/50 in
           terms of contrib. negligence, the party with the burden will lose
   Are there any laws other than ME and MA that are competing for
    application?
        Possibly the Federal Rules of Civ. Proc.
                  Rule 8(c) from FRCP
                      o This rule essentially says that certain defenses
                        must be raised affirmatively by the .
          Federal common law?
                 Before 1938 (Erie) federal substantive law was applied
                  in concert with state procedural law.
                      o In these cases, the federal courts viewed burden
                         of proof as substantive.
   The substance/procedure distinction applies in a variety of contexts
        1. Erie context
                  Fed courts apply state substantive law but federal
                   procedure law
          2. Interstate choice of law cases
                 As here, the suit is filed in state courts in MA, MA
                  would apply ME (place of injuy) substantive law, but
                  MA procedural law
          3. Retroactivity
                  Idea is that state can adopt a law, and the question
                   arises as to whether that law can apply to a situation
                   that occurred before that law was enacted.
               o Courts ask whether or not the law imposes a
                   substantive liability or whether the law is
                   merely procedural.
                        If it is substantive, then it raises a
                           constitutional question. If procedural, it
                           does not (and the law can apply)
   *Just because we figure out that something is
    substantive/procedural in one context, doesn’t mean that the
    same thing carries this classification over to another context.
          Example: If MA changes the law and says that burden
           of proof is now on .
               o If the court makes a determination of
                  procedural/substantive in this retroactive
                  context, that doesn’t mean that the idea of
                  burden of proof is that same classification for
                  another purpose (say, for interstate choice of
                  law cases)
   *Prof: How does the case come out in MA state court?
          Meaning, if this wasn’t an Erie problem, but rather a
           interstate choice of law problem, how would it come
           out?
               o Using the tests for substantive/procedural
                   classification:
                        If outcome determinative test is used,
                           this could be classified as substantive in
                           situations where the case is 50/50.
                        If the inconvenience test was used
                           (under functional test), it wouldn’t seem
                           to be too inconvenient to apply. As a
                           result, it seems like it would be deemed
                           substantive as well.
                          What about the parties reasonable
                           expectation test?
                                Say, for arguments sake, that the
                                    parties did not reasonably expect
                          What about using the Conceptual test:
                                         The substantive liability is the
                                          same, regardless of where the
                                          burden is place—the same rule
                                          applies—as a result it seems that
                                          this is just machinery. It would
                                          more likely be substantive in one
                                          jx which uses comparative
                                          negligence, and one that uses
                                          contribuitorily negligent.
   Here, the court is conducting two different Erie analysis
          1. (number 1 in slide)
                  Choice between FRCP 8(c) and a state law [Hanna part
                   II] (number 2 in the slides)
                        o First question is whether or not there is a clash.
                           Also is the federal law broad enough to cover
                           the problem?
                                Seems like there is a potential clash here,
                                   but the federal law may not be broad
                                   enough to apply.
                                   (If there is a clash and the federal rules
                                    are broad enough to apply, then give that
                                    it’s const. the federal rule applies)
                                          Federal rule is not broad enough
                                            b/c 8(c) just involves who has to
                                            plead it, but not who has to prove
                                            it. 8(c) doesn’t address the issue
                                            of burden of proof.
                  Choice between state and federal law (federal law
                   meaning a federal common law) [Hanna part I
                   (unguided Erie)]
                      o Apply the outcome determinative test (with an
                          eye to the twin aims of Erie)
                               What is the result of the outcome
                                  determinative test:
                               This might be outcome determinative.
                           If this is the case, then the federal court
                            requires the court to apply state law.
   2. Who’s law gets applied in making the choice of burden of
    proof (Still federal versus state) [very subtle in this case]
           *Do we apply federal law in helping us choose between
            the two state law’s application
                o Should fed law help in deciding between ME
                   and MA?
           *Or do we apply one of the state’s laws in helping us
            choose between the two state law’s application
                o Should MA law help in deciding between ME
                  and MA? (Why MA and not ME? Erie—apply
                  substantive law of the state in which the federal
                  court is sitting)
           This same problem was present in the Marr case (but it
            wasn’t addressed)
           MA’s choice of law rule applies burden of proof as
            procedural (see above where we asked how MA would
            determine)
                o As a result MA would apply it’s own burden of
                  proof rule.
           Does the court have to use MA choice of law rule
            (treating it as procedural) or some other body of law?
                o Court here uses MA choice of law law
                          Reason is consistent with the aims of
                             Erie. There is no real federal choice of
                             law law that could be used as an
                             alternative (just as there is no real
                         federal common law to be used over
                         state common law)
   These two Erie problems yield an anomoly:
           For Erie problem 1, we say that burden of proof is
            substantive (from the outcome determinative test). For
            Erie problem 2, the court (in applying MA’s choice of
            law law to choose between MA and ME), we say that
            the burden of proof is procedural.
   Result:
        If the case was brought in state court in ME, then ME would
            apply ME choice of law law.
                 If ME labels burden of proof procedural (like MA),
                  then the results would be inconsistent b/c then ME law
                  would apply.
                      o Now say that that the suit was brought in the
                          federal court in ME
                               The federal court in ME would have to
                                  apply the ME choice of law law, just as
                                 the ME state court would apply ME
                                 choice of law law.
                                      **This yields vertical
                                        consistency of results (between
                                        fed court and state courts sitting
                                        in the same state), but not
                                        horizontal consistency (between
                                        federal courts sitting in the same
                                        states0
                                       This is seemingly a problem, but
                                        maybe not really. (and was a
                                        concern in the Rodriguez case)
                                       Why is this result tolerable here,
                                        but it was not tolerable in
                                        Rodiguez case? Erie was
                                        concerned about forum shopping
                                        between state court and federal
                                        court in the same state. Erie was
                                        concerned with federal/state
                                        forum shopping, not with
                                        federal-to-federal shopping.
                                        Having the ―inconsistency‖
                                        between fed courts sitting in
                                        different states might be in
                                        concert with the 50 state
                                        laboratory idea. Erie was not
                                                                   concerned with state to state
                                                                   uniformity, but concerned with
                                                                   fed/state uniformity within the
                                                                   same state
For next time:
          restatement on public policy part (through F)




O’Leary case:
          Issue of this case: who bears the burden of proof in contributory negligence
          Same conflict was in the case Sampson case
               o But it is different here because this is an interstate case (state courts
                   competing) whereas in Sampson case, there was a federal court involved as
                   well.
               o Sampson case is a complicated version of this problem
          What should a state court sitting in Missouri, once it concluded that IL law will
           govern the substance of the claim.
              o Why is the case governed by IL substantive law?
                       The injury (place of wrong) occurred in IL.
                 o Question for Missouri: is burden of proof substantive or procedural?
                       From the Sampson case, we learned that burden of proof is typically
                          treated as procedural
                               Reason: Under the conceptual test, it is not deemed to go to
                                  the substantive rights of the parties.
                                          Under conceptual test, courts have argued that burden
                                           of proof is procedural. Same result under one of the
                                           functional tests (expectation of parties)
                           Is there disagreement with this conclusion in this case
                                  In this case, the court agrees with this general rule, but does not
                                    reach a conclusion that agrees with the general rule.
                                          Why?
                                             o Both in this case and Sampson, contributory
                                                negligence was a complete bar to recovery.
                                     o Court concludes, however, that one of the
                                       (substantive) elements of the plaintiff’s claim is
                                       freedom from contributory negligence
                                            As a result, the court treats this as
                                              substantive. In order to reach this
                                              conclusion, the Missouri court consults
                                              Illinois substantive law. Why would the
                                              Missouri court look to Illinois law if the
                                              Missouri court agrees with the general
                                              rule that this is a procedural matter?
                                                       Already concluded that Illinois
                                                        substantive law governs. The
                                                        Missouri Court is saying that if
                                                        the Illinois substantive law is
                                                        examined, the burden of proof
                                                        law is part in parcel of the
                                                        plaintiff’s right to recover. Since
                                                        Missouri court is applying
                                                        Illinois substantive law, the court
                                                        will apply this aspect of the
                                                        substantive law as well.
                                                       p. 138: ―Even in those…so
                                                        inseparably…in its entirety‖
                                                       Basic point is that if it is part in
                                                        parcel of the state’s substantive
                                                        law, the court will apply it even
                                                        if that point is part of the forum’s
                                                        procedural law.
   Does the ―part in parcel‖ conclusion mean that the MA rule Levy v. Steiger relied
    upon by the Sampson case is wrong?
       o How to reconcile these two statements?
                In substantive law, elements for a certain cause of action are allocated
                   to the  or .
                  In order to reconcile these two statements, we would have to look at
                   the substantive law in Maine.
                        How does Maine treat contributory negligence?
                                         If Maine says that burden of proof is part in parcel of
                                          the ’s claim, then the MA court may have been
                                          wrong.
                                              o In the Levy case, the MA court actually didn’t
                                                 look to Maine substantive law.
                                                      This raises a question: Would we expect
                                                         an Erie determination of whether
                                                         something is substantive/procedural to
                                                         be the same as a determination for state
                                                         choice of law purposes?
                                                                In the Erie context, we would ask
                                                                 whether or not it is outcome
                                                                 determininative
                                                                In the interstate context, this
                                                                 outcome determinative test is one
                                                                 of the functional tests. So an
                                                                 argument can be made that the
                                                                 results should be consistent.
                                                                Another argument: we shouldn’t
                                                                 expect similar answers—reason
                                                                 is that in diversity cases, the
                                                                 default rule should be state law
                                                                 (reason: only reason the case is
                                                                 in fed court is by the accident of
                                                                 diversity); in the interstate
                                                                 context, the default setting
                                                                 should be forum law (this
                                                                 requires a default setting of
                                                                 procedural).
          Renvoi problem:
              o If a court looks to the substantive law of another state and then that state
                 deems it to be procedural. This could raise a potential renvoi problem


Statutes of limitation
          §603:
              o If the s.o.l. of forum bars it, it is barred no questions asked.
   §604:
       o If the forum statute has a longer s.o.l of the other state, the claim can still go
          on in the forum
   Basically, 603 and 604 together are saying to apply the law of forum
       o 605 is an exception to this:
                 If the s.o.l. is part in parcel, then that s.o.l. has to be treated as
                   substantive.
   These sections on p. 146 are the general rules, but further exceptions have been
    adopted by states (borrowing statutes—a state should borrow the statute of limitations
    from the other state and basically treat it as substantive so that the other state’s s.o.l.
    can apply)
   Duke case:
       o Problem from ’s perspective is that s.o.l. may have run.
       o Procedural problem: which state’s sol law should apply?
       o Why do state’s have s.o.l’s?
                To prevent a ―stale‖ claim from being brought.
                     Claims should be decided on the basis of good proof and not
                        ―stale‖ evidence
                                   This seems to be designed to protect the 
                                
                                Also, this rule seems to be protecting the court (by
                                preventing the court from having to adjudicate a claim
                                with stale evidence)
              Idea of repose: at some point, people should be able to move-on after
                 they committed a wrong.
        o Which test would justify a procedural label for s.o.l. (conceptual and/or
          functional tests):
              Functional tests:
                       The outcome determinative test would indicate that s.o.l should
                           be substantive
                         Expectations of the parties lends support for procedural
                         Ease of administration seems to support substantive (wouldn’t
                           be hard for courts to figure out other state’s sol’s)
                    Conceptual test:
                         Seems that the sol doesn’t effect the rights. The rights still
                           exist, but the means to enforce the rights are cut off.
                                         The substantive right isn’t eliminated, but the
                                          mechanism of enforcing that right is limited
                                The conceptual test seems to be the justification for the
                                  traditional rule.
                 o In this case, Wyoming has a borrowing statute, so they don’t apply Wyoming
                   substantive law.
For next time:
          Why do states have borrowing statutes?
          158-166

Continuing Duke case:
          Borrowing statute of WY: p. 149
              o The borrowing statute, in effect, borrows a shorter statute of limitations
          Why do state’s have borrowing statutes?
             o To prevent forum shopping
             o Also, having a borrowing statute allows the state to avoid the question of
                 whether the borrowing statute is substantive or procedural.
             o Respect for another state:
                      By borrowing another state’s sol, we are deferring to that state’s rules
                         as to how long the  has to litigate.
          Where did the cause of action arise (under the first Restatement—i.e. where the injury
           occurs)?
                 o Imagine that intercourse occurred in VA and in NY the  confessed that he
                   had the disease.
                       In this situation, the injury could likely occur either in VA or in NY (in
                          NY if the virus had incumbated and emerged in NY)
                       p. 12 (§377):
                               Part 2.
                 o Factual complication as to where the injury actually occurred
                       How should a court then decide how to apply the borrowing statute?
                              One approach could be to say that since the defendant wants to
                                 take advantage of the sol, then the burden is on the defendant
                                 to prove where the injury occurred
                                          If there are some states where the sol’s have run, but
                                           others where they have not, the this approach may be
                                           desirable.
                                What about applying the discovery rule?
                                        Without discovery rule, the sol would run from the
                                         date of exposure
                                        Even jxs that have adopted a discovery rule require you
                                         to sue for all damages that you are trying to claim from
                                         the exposure
                         Prof: court handled the case poorly
                              Choosing the state where they last had intercourse might make
                                 some sense.
                                        However, the biggest problem with their approach:
                                           o Top of p. 153, second paragraph: ―or no cause
                                              of action there arose‖
                                                    In some states, a sol has run, in other
                                                       states the court is saying that no cause of
                                                       action arose there.
                                                    When examining the VA law (third
                                                       paragraph), the Court is looking to VA
                                                       law on the theory that the claim arose in
                                                       VA. If the claim arose in VA, then their
                                                        statute of limitations should be applied
                                                        with accompanying provisions (such as
                                                        when the sol begins tolling). Under VA
                                                        sol, the tolling begins upon the date of
                                                        last exposure. The court, however, takes
                                                        the date of last exposure as happening in
                                                        NY, so then the Court says that the claim
                                                        arises in NY. Prof: The court should
                                                        take the date of last exposure (in NY) to
                                                        begin the tolling under the VA sol law.



Public Policy Exception
          §612
              o Note the language following the rule
                    If the law underlying the plaintiff’s claim violates public policy, the
                       state doesn’t have to follow it (§613)
                  If the law underlying the defendant’s defense violates public policy,
                   then this situation is different. In this situation, the state may have to
                   honor this law. Why?
                          If the law underlying the ’s claim allows the  to take the
                           claim some place else (but the  may not always be able to go
                           somewhere else to litigate)
                                  The court hasn’t rendered a judgment against the  on
                                   the merits.
                          If the law underlying the ’s defense violates public policy, the
                           court will have rendered a judgment against the  on the
                           merits.
                                  Claim preclusion implications here.
                                      o As a result, the  will never have a chance to
                                          raise his/her defense.
   Marchlik case:
       o No action clauses prohibit a direct action suit against the insurance company.
       o Are the direct action statutes (which allow for direct suit against insurance
          company) substantive or procedural?
               Here, WI has a direct action statute, but the suit is brought in IL where
                   there is no IL statute
                  Here, the place of wrong occurred in WI, so WI substantive law might
                   apply (under tort approach)
                  But the argument could be made that this is a contract case, and
                   therefore that IL substantive law should apply.
                  If this was a tort case:
                         IL will apply WI substantive law and will apply IL procedural
                            law
                                  Is direct action statute a procedural law?
                                       o Either way, the insurance company would pay
                                           for the damages, so the statute just cuts out the
                                           middle man. The ultimate liability of the
                                           insurance company is not affected.
                                       o Another argument is the expectations argument
                                                But what if this was classified as a k?
                                                   The expectations of the insurance
                                                       companies might be different than the
                                                       expectations of the drivers.
                                                            This could effect the
                                                              classification as procedural or
                                                              substantive.
                                               o Another argument: this is really a joinder
                                                   question (whether a third party insurance  can
                                                   be brought into the lawsuit)
                                          Is direct action statute a substantive law?
                                               o Could argue that by providing a direct claim
                                                 (where no direct claim existed before) is
                                                 substantive because a new claim/cause of action
                                                 is created.
                                               o What about the outcome determinative test?
                                                      Jury perceptions of individual driver as a
                                                         versus the insurance company as a --
                                                        concern is that the jury might bias
                                                        against the insurance company
                 o Generally, where do we look to find a state’s public policy?
                           Look to the state statute’s, case law, state constitutions


For next time:
          When is public policy offended? Loucks test p. 163 versus Intercontinental Hotels
           test
          p. 173-179

Continuing the Marchlik case:
          Another argument to classify as procedural
              o Forum state could argue that the forum state’s law is more apt to supporting
                 the substantive law of the other state
                      Example: no direct action statute under IL law might be better to
                        serve the substantive policy tort law objectives of WI (b/c an insurance
                           company would be sitting at the ’s table otherwise).
          In order to invoke the public policy exception, what must a state show?
               o Is a difference in law enough to support a public policy exception?
        Definitely not. If all you had to do to invoke this exception, then
         choice of law laws would be meaningless.
o Mere difference in the law doesn’t seem to be sufficient
      What should the standard be?
              p. 163 ―Louckus test‖:
                         This is the classic definition
                         This standard rejects a standard that allows deference to
                          the judge.
                         ―Fundamental principle of justice, prevalent conception
                          of good morals, deep-rooted tradition of the common
                         weal‖ seems to be the test here
                             o Reference to the tradition: indicates some sort
                                 of subsisting practice
                                      This suggests that this has to be some
                                         longstanding tradition that is
                                         fundamentally important to the forum
                                         state.
                 Intercontinental Hotels test [slides]: (stricter test)
                      Courts should bar enforcement of foreign-based claims
                       on public policy grounds only if the underlying
                       transaction is inherently vicious, wicked, or immoral,
                       and shocking to the prevailing moral sense.
                           o Not a standard that is based on tradition.
o Apply the above two tests to the direct action statute (under IL public policy)
      Intercontinental test?
              Does not seem ―wicked, immoral, etc‖
      Louckus test:
              ―fundamental principle of justice‖
                           Could make an argument for this—defendant insurance
                            company could be prejudiced.
          But court still does conclude that it does violate IL public policy.
           Why?
               What concern does the IL court have?
                         The fact that s are IL insurance co’s influences the IL
                          court’s decision.
                                      
                                     The idea is that IL wants to protect its insurance
                                     companies against direct actions.
                                        o If IL doesn’t invoke the public policy exception,
                                            then the IL insurance companies would be
                                            denied the benefit of IL law that IL legislature
                                            intended to give them.
               o How do we know, in terms of IL law, that direct action is against public
                 policy?
                      p. 160
                            Rule of evidence
                                 §388 of the Insurance Code
          Three kinds of public policy cases
              o 1. Court is trying to get around first restatement restrictions so that the forum
                  state can apply it’s own law.
              o Other two are related
                       The forum is not invoking the public policy exception to protect a
                          party, but rather, they application of the law really is against the state’s
                          public policy
                               2. If there is an offensive law that the comes into a state’s
                                  court, the state may refuse to entertain the claim. State court
                                  believes that the law is so offensive that it should not be
                                  brought within the case. State court says that the plaintiff
                                  should take the claim to another court.
                                 3. Just as in 2, the state court finds the law offensive, but in
                                  this situation, the court does not want the plaintiff to take the
                                  claim to another court, so in this situation, the court renders a
                                  judgment on the merits against the plaintiff to prevent the
                                  plaintiff from even taking the case to another court.


Holzer case:
          Plaintiff alleges two causes of action
               o 1. Breach of contract
               o 2. The ―discharge‖ portion of the contract.
          Seems pretty clear that this is a contract case
              o Under the first restatement, the law of the place of contracting or the law of
                 the place of performance
                          In this case, both situations yield to looking at German law.
         Company’s argument
            o They didn’t breach the k b/c the company relied on German law.
         Plaintiff argues that the German law upon which the company relies violates public
          policy
              o Arguments for violation of NY public policy:
                       It appears that this would violate the federal constitution
                       Seems like this law meets even the stricter Intercontinental test
         Why then, would the court allow for the company’s defense of reliance?
            o Here, it seems like the court doesn’t rely on the public policy exception
                 because the law that is relied upon is a foreign law.
                     Active state law:
                             Rationale is that people should be held liable under the law of
                                their country
                             One justification for this is that if a court were to render
                                German law against public policy, then this encroaches on the
                                executive’s foreign policy goals
                             Additional argument is reciprocity
                             Exception to the active state doctrine:
                                         When a policy is so offensive that it violates
                                          international norms, so that it should not be enforced
                                          anywhere.
         Here, this case is different than Marchlik because the party relying upon the law is
          different
             o Here, if the NY court invokes a public policy exception, then the  never can
               raise this potentially valid defense



Proof of Foreign Law
         Common law rule: foreign law is a question of fact
            o Proof of foreign law would therefore be for the jury to decide
         Most states have changed this common law rule by statute:
            o Most states require that judicial notice should be taken of both sister-state and
                 foreign law.
         p. 176:
              o Rule 44.1 FRCP
                           Even though state statutes and rule permit notice of sister-state and
                            foreign law, there are still problems as to attaining the content of
                            foreign law.
          Tidewater Oil case:
              o Waller doesn’t sue his employer, Spartan, b/c of worker’s compensation
                 issues
              o The issue with respect to Tidewater:
                      Appears that Waller could recover from Tidewater as well.
                              Waller seeks to use Turkish law to get recovery from
                               Tidewater, but sues in federal court in Oklahoma.
                                          Waller relies on U.S. tort law principle but grounds
                                           them in Turkish law


For next time:
          What is the defendant’s argument, and who has the burden of proof of providing
           Turkish law
          p. 181-192



Continuing Tidewater case:
          , , and Court all agree that Turkish law should govern
              o But no one offers the substance of Turkish law
           argues that the plaintiff has failed to assert Turkish law
          Approaches that a court could take if the party with the burden fails to prove foreign
           law:
               o 1. Dismiss for failure to make a prima facie case
                       Think of this as an element of the plaintiff’s claim.
               o 2. Apply the forum law
                        This approach is dismissed in this case
                        This approach has the most useful characteristic in terms of ease of
                         administration
                 o 3. Make certain presumptions of foreign law
                       This approach might be best in situations where the country is a
                         common law country inherited from England.
                              Problem with this is that here, Turkey is not a common law
                                 country.
                                       Then, can we make any presumptions about Turkish
                                        law?
                                           o Here, court uses this approach by making vague
                                               assumptions about Turkey.
         Here, the defendant seems to be better equipped with providing Turkish law content
             o As a result, an argument can be made that the burden of proof should be
                  placed on the defendant (since arguably they have greater access to Turkish
                  law).




Modern Approaches
         Criticisms of First Restatement approach
              o Arbitrariness of the first restatement approach
                      No inquiry as to where a breach of k/place of breach of duty.
                      Seems arbitrary to focus on just one territorial linking factor and not
                         another (place of harm, but not place of breach of duty)
                      Also, the First Restatement is arbitrary in that it focuses on where
                         things happen.
             o Manipulability
                    The cases can be manipulated as to how to classify them (as a tort,
                       contract, etc case)
                    Additionally, there is manipulation with the substance/procedure
                       issues (can call something procedural if a state really wants to apply
                       their own law)
                    Also, the public policy exception allows for a state to apply their own
                       law if they really want to
             o First Restatement did not achieve uniformity
             o Additionally, renvoi problems don’t necessarily accord respect to the states
             o Critics rejected the idea of ―vested rights‖
                    Instead the critics were legal realists—said that you only know what
                       your rights are when the courts tell you what they are, not that you
                       have rights that you take with you.
             o Also, critics rejected ―general law‖
                    Critics state that there is no real general law—each state is individual.
         Haag case:
o This case is an illustration of the center of gravity/grouping of contacts
  approach
o Terms of the contract (p. 184)
           relieves the father against all actions against him after the support
           payments are made
        Choice of law clause—IL law put into the k.
o If this case was analyzed under First Restatement:
        Case would appear to be a contract problem—place of contracting
           would be the applicable law (but not necessarily)
                Which contract provision would govern? §332 or 338
      Arguably, this could be a child support action
o Court here takes a modern approach—applies the place where the center of
  gravity is
      Court declares that IL is the place where the most significant contacts
          occur.
              Why IL?
                          Contract says that both parties are from IL (even though
                           the woman is not from IL)
                          Child is born in IL
                      Father resides in IL where his place of business is
                      Agents and lawyers are in IL
                      Contributions for child support were made from IL
                  What about NY contacts?
                          Child and mother reside in NY.
                              o The mother and child, therefore, could become
                                  public charges in NY if support payments stop
                          The relationship took place in NY and the child was
                           conceived there
                        Mother’s place of business (before pregnancy) is in NY
                        Father induced the mother to leave NY
                        Contributions were made to NY
          Advantages to the center of gravity approach?
               Takes away the arbitrariness from the First Restatement—
                  decided on many contacts rather than just one territorial contact
          But there is a problem as to how to determine the center of gravity
               Can’t just count the number of contacts on each side
                                  Additionally, it is difficult to determine which contacts to count
                                   and which contacts to disregard
                                 One possible way to help determine is to ask what policies are
                                   the state’s trying to promote? But the center of gravity
                                   approach does not seem to have any connection to state
                                   policies
                           What would have happened if the defendant gave a lump sum, rather
                            than continuous payments (with similar release clauses in the contract)
                                 This doesn’t seem to change the contacts list (with IL and NY)
                                   much, but this might make us conclude that IL is not the center
                                    of gravity anymore
                           Another concern with this approach is that a court can refuse to
                            enforce the law of the place w/center of gravity by invoking the public
                            policy exception
                                 This might be problematic because the public policy exception
                                    cannot be applied to a defense—reason is b/c judgment on the
                                    merits will be made


For next time:
          219-223; 227-228



Introduction to Governmental Interest Analysis
          Currie’s theory:
              o The focus should be on governmental policy and interest rather than territorial
                  factors
                       Look to the policies underlying the laws competing for application
                             First: what are the laws competing for application
                              Second: what are the policies underlying these laws
                       Once the policies are determined, then territorial concerns are
                         examined.
                 o Permutations of Currie’s theory:
                       ―False conflict‖:
                              There might only be one state that has an interest in their law
                                 being applied. There may be two competing laws, but only one
                                 state’s interests will be advanced.
                               Under this situation, we should apply the law of the
                                place of interest.
                 The ―forum default‖ (Both states are interested):
                      In this situation, where both states are interested, the forum
                         should apply its own law
                 ―Unprovided for case‖
                      Neither state is interested
                      Looks like there is a conflict, but when we look to the
                         embodied policies, neither state actually has an interest in its
                         law being applied.
                        In this situation, Currie has suggested that forum should apply
                         its own law.
   Factual scenario to demonstrate Currie’s theory:
       o Married woman entering into a k. When the creditor seeks to enforce the
           obligation against her, she invokes coveture laws.
       o Under the traditional rule:
                Law of place of contracting would have determined the woman’s
                   capacity to enter into a contract.
       o [See slides: ―illustration: Married Women’s Contracts; table 1‖]
                 Factors that Currie would consider:
                       Residence of creditor
                       Residence of married woman
                       Place of contracting
                       Forum
                 Situations 1 and 16 are either pure domestic or pure forum
                 Under the traditional approach, we would know the choice of law
                  based only on the place of contracting
                       Currie says that this approach disregards why states have the
                         laws that they have.
                 Pay particular attention to number 4 and 6
                      In number 4: D has an interest, whereas F doesn’t really have
                         an interest (F does have an interest in protecting creditors, but
                         only creditors in F).
                                Currie’s approach would apply D’s law
                                This is the ―false conflict‖ scenario
                          In number 6: same analysis. F’s law would apply under
                           Currie’s approach
   Interest analysis and two overarching issues
        o Interest analysis takes a subjective perspective
                 Here, we are focusing on the positive law of the state.
                         Focused on the state’s own subjective interest
        o Personal factors rather than territorial linking factors
                 The theory is that the state where the parties are domiciled is the state
                    with the most interest
   Babcock case:
       o Ontario had a guest statute which protected the driver from liability
       o If we were to apply the first restatement, which jx’s law would apply?
               Ontario law (this is where the last act to make the actor liable
                  occurred)
       o Relevant contacts
               Insurance contract was signed and delivered in NY
               Parties reside in NY
               Accident occurred in Ontario
               These three seem to be the relevant contacts
             Court, however, adds more NY contacts
       o Center of gravity approach versus the interests analysis
             Here, the Court gets into the policies underlying the laws—seems to
                indicate that they are going into the interests analysis
             Ontario has a concern with Ontario defendants and the insurance
                carriers of Ontario defendants (concerned for fraudulent claims against
                such defendants)
                     How does this rationale hold for insurance companies that are
                        not in Ontario?
                                 As a practical matter, if Ontario residents are more
                                  likely to commit insurance fraud, rates of other Ontario
                                  residence will increase
                                      o This appears to be the policy behind the statute
                                               This policy does not seem to be
                                                  advanced under these facts because here
                                                  there are all NY parties with non-Ontario
                                                  insurance companies
                 NY concern:
                     NY does not have a guest statute—makes it more difficult to
                        determine policy
                     Policy seems to be compensation of the victim
                               If the sole policy is compensation of the victim, NY law
                                wants to protect NY victims from being wards of the
                                state
       o This case seems to present a ―false conflict‖
       o *The interest analysis encourages depecage—applying different laws to
         different issues within one case
                 The opinion in this case makes it clear that with respect to certain
                  rules, the law of the place of the accident would occur. (p. 189)
                       But, the court goes on to say that different issues in the case
                           can have different laws that apply.
                       **reread bottom of page 189
   Hypotheticals:
       o 1. Reversed Babcock scenario
               Two Ontario parties with a NY accident
                    The policy underlying Ontario statute is the same
                                What about NY’s interest
                                     o At first glance, it seems as if NY has no real
                                         interest.
                                     o However, NY may still have an interest in
                                         compensating—reason is b/c NY resources were
                                         used in treating the victim, and if the victim
                                         can’t pay, NY takes the loss.
                     It does appear, though, that Ontario law would apply
                 What if the drive is uninsured?
                     The Ontario interest might disappear
       o 2. Driver from Ontario, passenger from NY
             This is the a ―true conflict‖ situation
             Forum law would apply under Currie approach.
             Under the Babcock approach, forum law might not apply
                     It seems as if the Babcock court uses a balancing test to see
                       which interest in more powerful. Currie approach would not
                       undertake this balancing, but rather would choose the forum.
                 o 3. What if the two passengers are from different jurisdictions
                       One passenger from Ontario, one from NY and an Ontario driver
                       Constitutional problems would result here
                               Ontario passenger may not recover but Ny might recover
For next time:
          223-227



No class next Monday
Lilienthal case:
          This case illustrates the difficulty in deterining what a state’s law is
              o CA does not have a spendthrift statute—difficult to determine what CA’s law
                  is
                        p. 220: indicates that there is no such spendthift protection in CA as
                           there is in OR
          Arguments made in favor of choosing CA law?
              o Territorial argument:
                     The place of contracting occurred in CA
                     Expectations of the parties are such that CA law would apply
          But courts do not apply CA law
              o What argument could be made that CA law violates the Loucks test (p. 222)
                       Seems as if CA law is not in violation of this test (doesn’t seem to
                          violate some sort of fundamental public policy)
              o Bottom of p. 221:
                       This looks like the court is moving to a policy/interest analysis
          Applying the interest analysis:
              o Law of OR:
                      To protect spendthrifts.
                                 Policy reasons:
                                        Concerns with the spendthrift’s family.
                                        Spendthrift seems crazy—who is going to support the
                                         spendthrift’s family? The state of OR.
                                            o Rather than assuming the responsibility of
                                                having to support the spendthrift’s family, OR
                                                would rather declare the spendthrift a
                                                spendthrift
                               OR has a concern with having their contracts being
                                rendered as valid ones
                                     o This is a general concern that every state has
       o In OR, there is a specific policy that is embodied in the statute—in enacting
         such a statute, OR had decided that they would sacrifice some general policy
         concerns in furtherance of the spendthrift statute
              Statute is saying that this specific policy concern (freeing spendthrifts
                 to protect families) is more pressing than the general concerns
       o Law of CA:
              Has a policy concern with wanting contracts made there to be
                   enforced.
   Choosing between CA and OR
       o OR law is concerned with choosing between OR spendthrifts and families.
          This is present here
       o CA law is interested in protecting CA creditors. This is present here.
       o Here, there appears to be a true conflict
               Under the interest analysis rule, in the case of true conflict, you go to
                  the law of the forum
                       Court doesn’t weigh or balance anything. They go straight to
                          the law of the forum.
                                 *True conflict = default to forum law (under interest
                                  analysis test)
                  Defense of the default to forum law rule:
                       ―Courts are instruments of state policy‖ (p. 223)
                                Courts shouldn’t balance interests b/c court’s
                                 (assumedly) are not political branches
                         Courts are not well situated to balance
                                  Courts are not set up to determine which policy is better
                                   than the other
                                  Legislature is better equipped to make such policy
                                   adjustments
   Top of p. 218:
       o §3: seems to move away from forum default a little bit
   What alternatives to forum law?
      o Ease of application for the court (b/c they are applying their own law)
                             But this can’t hold too much weight b/c there are many situations
                              when a court should apply other laws
                 o   Could revert to the First Restatement in true conflict cases
                 o   Balance the competing interests
                 o   Apply the law that is most consistent with the trend in the law (general trend
                     in the law), rather than going with the law that is more of an aberration.
                 o   Consider some sort of multistate policy
          Basic point of this case is that it’s application of forum law in the case of a true
           conflict
          Arguments against forum law?
              o Applying forum law seems arbitrary
              o Also, applying forum law rule doesn’t promote uniformity between states
                when faced with true conflicts


Bernkrant case:
          Interest analysis:
               o NV policy:
                        To uphold contracts by NV parties in NV.
                               On these facts, NV parties are involved. As a result, NV seems
                                    to have an interest in enforcing that contract.
                 o CA policy:
                        To protect estates from fraud
                                Particularly, CA policy is concerned about CA decedents and
                                   CA families
                 o It appears that there is a true conflict here.
                        It seems like CA also has a general policy in favor of enforcing
                           contracts
                                But just like in the Lilenthal case, the CA policy concern to
                                 prevent fraud on estates trumps this general policy in favor of
                                 enforcing contracts (i.e. there was a legislative balance in favor
                                 of preventing fraud over upholding contracts, in these cases)
                 o CA uses a multistate policy, which goes to the expectation of the parties


For next time:
          What are CA’s multistate’s policies
          Next two cases in the syllabus
Continuing Bernkrant case:
          NV has an interest in enforcing k’s to which NV citizens are parties
          CA’s policy is less strong
          This appears to be a true conflict, but it really is not.
              o But court treats this as an apparent conflict—not a true conflict b/c if we take
                  into account that this is a multistate contract
                       Court takes two steps
                               1. Looks at the case as though the decedent lives in NV at the
                                  time the k was made.
                                         If this assumption is made, it looks as a purely domestic
                                          case. Everything is NV.
                                               o As a result, in this situation, it would be
                                                   contrary to the legitimate expectations of the
                                                   parties to the agreement to apply CA law.
                                        Basic point is that CA’s interest is no different if the
                                         decedant lived in NV or lived in CA.
                                 2. This analysis may not make sense if the decedent was living
                                  in CA the whole time.
                                         Why would CA law be disregarded if the decedent was
                                          from CA? Well, the CA interest is only really present if
                                          the decedent were to die in CA.
          Basic point from this case: classification of case (as a true conflict, false conflict,
           unprovided for) is important
              o Here, it appears to be a true conflict, but really it was not a conflict when
                  multistate policies are taken into account.


Hurtado case:
          Mexican s suing CA residents
          Both Mexican and CA law allows for a cause of action for wrongful death
              o The conflict in the case is based on the amount of damages that a  could
                 possibly recover—Mexico had a cap; CA did not have a cap.
          Court uses governmental interest analysis
              o Mexico policies:
                       Why would Mexico have a law that would limit recovery?
                 Purpose might be to say that particularly in a wrongful death
                  claim, the injured party has died. The  should not be put into
                  financial ruin to benefit someone other than the person who
                  was injured (Mexico law might allow for no limit if the injured
                  party was the plaintiff, but here, it is a wrongful death claim).
                 This concern is primarily with Mexican . Here there is a CA
                  .
                      As a result, we know at this point that CA law will be
                         applied.
                        **Under Currie’s interest analysis, once we conclude
                         that Mexico is not interested, since it is not the forum,
                         then Mexico law will not apply
                        **First question should be whether or not the ―other‖
                         state even has an interest. If the ―other‖ state does not,
                         then their law will not apply under Currie’s approach
o CA policies:
     Interest in compensating CA plaintiffs
               Here, there are Mexican s
          Seems to be an unprovided for case.
                 Currie says that the default should be to the forum in this
                  situation.
                 But the court here does find a relevant CA interest:
                       The CA interest seems to be one of deterrence
                            o Prof: seems to be a tenuous argument.
o How to resolve an unprovided for case
     1. Use Currie’s approach
     2. One way to resolve is that instead of using Currie’s approach, is to
        ―find‖ an interest.
                 Here, there are two other kinds of interest that we could ―find‖:
                        1. Altruistic interest—interest in protecting all kinds of
                         people, not just a particular group.
                        2. Mean spirited interest
                            o The basic idea here is that instead of states
                               wanting to benefit their own people w/their own
                               law, states may want to bind people through
                               application of their law
                                                         Example: Instead of finding an altruistic
                                                          interest (such as compensation) in CA,
                                                          we could try to find a mean spirited
                                                          interest in Mexico.
                                                               Maybe Mexico would want to
                                                                  bind its residents through
                                                                  application of this law.
                                            o Court rejects that Mexico has a mean spirited
                                                 interest
                        3. Default to the First Restatement in these cases
                        4. Apply the ―better‖ law
                              Sometimes one of the laws is more advanced/progressive/etc
                                 than the other one.
                        5. Apply the common policy
                              Here, Mexico does limit damages, but they do compensate
                                 victims
                              Additionally, CA law compensates victims as well.
                        *In this case, any of these approaches, except the mean spirited
                         finding, would yield CA law.


Neumeir case
         Another unprovided for case (arguably)
         Question is whether the Ontario  has to deal with the application of the Ontario
          guest statute
         Remember guest statutes from Babcock case
         Policies underlying Ontario law
              o One policy (same as from Babcock case)
              o Protect drivers against ungrateful guests. Want to protect Ontario drivers
         Here, since the driver was from NY, it appears that Ontario does not have an interest.
         NY policies:
             o Compensating injured victims, namely NY victims.
         Here, since we have an Ontario victim, it appears that NY does not have an interest.
         Run these through the possible approaches:
             o Place of the wrong—Ontario law
             o Better law approach—ask which law is more common/what is the trend.
             o Law of the forum—NY law
                 o Common policy approach—
                 o ―Find‖ an interest approach—
                       Argument here could be the mean spirited approach (Ontario might
                          have a mean spirited interest) or altruistic interest (NY might have an
                          altruistic interest)


For next time:
          Examine the rules that the Court adopts
          Schultz case (tough case)



Continuing Neumeier case
          This case serves as another example of an unprovided for case
          Neumeier rules:
              o Three rules specifically designed to handle guest statute problems
              o In Schultz case—courts tries to expand these rules to situations outside of the
                  guest statute context
              o Rules: (p. 198)
                       1. When everyone is from the same state and the car is registered in
                            that state, the law of the domicile should apply
                                 Called the law of the common domicile rule
                                 This rule makes sense if it’s run through the interest analysis
                                     (there will be only one interested state—false conflict)
                           2. Driver’s conduct occurs in the state of his domicile, and that state
                            imposes no liability on the driver, the law of the domicile should apply
                            (the law should not be the law of the person driving with the driver)
                                 Conversely, if guest is injured in the state of his domicile, and
                                     that allows guest to recovery, then the law of the guest’s
                                   domicile should apply.
                                  *If you act at home and your home state law benefits you, you
                                   should get the protection of your home state’s law.
                                            *Wrinkle: what if they travel between the two states—
                                             seems like it goes to where the accident occurs
                           3. When the passenger and driver are domiciled in different states.
                            (that is, not covered by 1 or 2)
                                Here, basically, you start with the territorial default, but also to
                                 do an interest analysis and to ask whether substantive law
                                 objectives will be advanced under interest analysis.
                                The ―smooth working of the multi-state system‖ means forum
                                 shopping—we don’t want parties to forum shop.
                                Apply 2 before 3. If 2 doesn’t apply, then apply 3.
                                       Remember, the law has to help the party for number 2
                                        to apply.
               o Potential equal protection problems here:
                     If an accident occurs in Ontario with two passengers (one from
                          Ontario, one from NY)
                              Ontario passenger is stuck with Ontario law, the NY passenger
                                 can have NY law
                                Ontario  v. NY :
                                     Covered by rule 3.
                                           o Territorial law would be the Ontario default.
                                                   Substantive interests of NY law would
                                                     not be furthered through application of
                                                         NY law (b/c there is no NY )
                                NY  v. NY :
                                     Covered by rule 1.
                                     Under interest analysis, there is a false conflict here
                                        (Ontario has no interest in protecting the NY )
                                EP problems b/c the differentiation between these two cases
                                 comes from the fact that the ’s are from different places.
                                     Is this in violation of the EP or P&I clause?

Schultz case
          Here, we have NJ s
          Aside:
              o Parents have already litigated the question of which law governs in the
                  previous case (against Archdiocese, who was from NJ) and the parents lost
                      Should issue preclusion be applicable here?
                              Under collateral estoppel, the issue has to be identical. In this
                                 case, the issue is different than the previous case
                                In the previous case, it was a common domicile case,
                                 whereas here, it might not be.
   NY, TX, OH law would not protect the charities; NJ law would
      o What policies underlie the NY, TX, OH laws?
              Compensation for victims (that is NY, TX, OH domiciliaries)
                    Here, there are no NY, TX, OH domiciliaries
              Here, there might be an altruistic interest
                    NY, TX, OH may want to benefit everyone, not just their own.
              Conduct regulating interest:
                    NY, TX, OH may have an interest in regulating the charities in
                         their borders.
                                Is it an interest in regulating charities, or an interest in
                                 regulating charities within their borders
                        Here, if we find a conduct regulating interest underlying NY,
                         TX, OH, we will need to figure out what conduct in particular
                         that these states are seeking to regulate
                                If it’s the abuse from the priest, that occurred in NJ.
                                If it’s where the injuries due to the claim for negligent
                                 hiring, that occurred in (arguably) in OH. (?)
                                If it’s to regulate the actual charities themselves that are
                                 registered in the states
                        State’s interest in regulating people as citizens versus
                         corporations as citizens
                                For choice of law purposes, citizenship is usually the
                                 place of incorporation.
                                     o Difficult to apply the ―intent‖ test to an entity
                                        like a corporation. (intent is one of the purposes
                                        of putting emphasis on domicile)
                                  o Some of the uses of the domicile rational are not
                                      relevant to corporate entities
       o What policies underlie NJ laws?
            To encourage the growth of charitable work.
            Want to protect NJ charities from financial ruin.
                    But what is a NJ charity?
                                One idea: charities domiciled in NJ (but this raises
                                 some of the domicile questions from above)
                                      Second idea: NJ may be interested in protecting
                                       charities, though domiciled elsewhere, are doing
                                       charitable work that benefit NJ people
                                Does NJ have an interest either way?
                                        Here, no defendant is a domiciliary of NJ.
                                        Franciscian Brotherhood from OH
                                        Boy Scouts are no longer headquartered in NJ (now in
                                         TX).
                                This leads to the problem of ―after acquired domicile‖
                                        Boy Scouts had NJ, but changed to TX
                                            o If we were to ask which state was interested in
                                               protecting Boy Scouts as of today, that would be
                                               TX.
                                            o Court focuses on the case as if the Boy Scouts
                                               continue to exist in NJ even if they don’t exist
                                               there anymore.
                                                    Reason: if people could change the
                                                       governing law by moving, people would
                                                       move to avoid liabilities.
                                                       Another reason: we want to protect the
                                                        expectations of parties that arose at the
                                                        time the claim arose
                                        Though there is no NJ defendant, at the time of the
                                         wrong, Boy Scouts were chartered in NJ, so NJ might
                                         have an interest in protecting them.
                                      Also, both the Franscian and the Boy Scouts are doing
                                       work that benefit NJ people
                                From an interest analysis perspective, it appears that NY, TX,
                                 OH don’t have interests.


For next time:
          Why isn’t OH law considered at all? (look in the opinion for this)
          Application of Nuemeir rule in this context
          Paula case (p. 210); Bernhard (p. 241)
Continuing Schultz case:
          If interest analysis is applied:
                o NJ has an interest in protecting NJ charities
                         NJ charities, or charities that benefit NJ citizens, or chartered NJ
                           charities?
                o See last time.
                o TX has no interest.
                         Boy Scouts only moved to TX after issue arose
                o Why isn’t OH law considered
                         Franciscan Bros are HQed in OH
                          p. 202
                                ―for this reason…‖
                                         But what if the ’s claim that OH law applies.
                                         The argument that the court uses here is tenuous at best.
                                          Court gets ride of it by saying that since the  doesn’t
                                          assert OH law, then OH law doesn’t apply.
          Court here, however, applies the Neumeier rules and doesn’t use interest analysis
              o Justification in doing this:
                       NY courts have divided tort law into two categories:
                                 1. Conduct regulating laws
                                        Example: speed limit law
                                        These laws are specifically designed to regulate
                                         conduct—these laws must be regulated by the place
                                         where the conduct occurs
                                 2. Loss allocating rules
                                         Idea is that the laws here are not designed to effect a
                                          parties conduct.
                                        Rather, we’re assuming that there has been a loss, and
                                         these rules govern how the payment will be distributed.
                                             o Purpose of these laws are to figure out who
                                                 bears the loss once the injury has occurred.
                          Two general points:
                              NY places a heavy emphasis on cost allocating versus conduct
                                 regulating
                        When these rules are applied in other senses, these rules make
                         sense for cost allocating purpose, but may not make sense for
                         other purposes.
   Application of the Neumeier rules:
       o p. 198 sets out the Neumeier rules
                 Rule 1: applies to ’s claim against the Boy Scounts
                      This rule is known as the ―common domicile case‖
                      If we treat the Boy Scouts as a NJ domiciliary, then this is a
                         common domicile case, and NJ charity gets the benefit of the
                         NJ charity law
                               Can justify this by saying that NJ is interested in
                                benefiting the charity and will sacrifice the
                                compensatory interest in order to realize this goal.
                 What about for the Franscican brothers?
                     Rule 1 does not apply
                     Rule 2 does not apply b/c FB operated away from home and
                        the home state law does not benefit them.
                               Additionally, the home state law does not benefit the
                                ’s.
                               *Rule 2 basically gives you the benefit of your home
                                state law if your home state benefits you and if you
                                stayed at home
                        Rule 3 applies
                               Where did the place of the wrong occur?
                                  o An argument could be made that it is where the
                                       ’s wrongful conduct occurred (i.e. where they
                                       hired the priest): this may have happened in OH
                                       or NJ
                                    o An argument could be made that the wrong is
                                      where the boys were molested: this would be
                                      NY.
                                          [see slides]—on counts 1 and 4, parents
                                             are suing for their own damages. then
                                             the harm could not have occurred in NY,
                                             but rather, NJ.
                 Prof: this case is an example of where the ―blood on the street‖
                  justifications to figure out where the accident occurs are not so clear.
                  Furthermore, court here rejects the territorial default in rule 3
                       Rule 3 has an exception: ―substantive law purposes‖
                                What substantive purposes are furthered here?
                                   o NJ is interested in denying parents recovery b/c
                                       the parents benefited from the charitable work
                                       (?)
                                            This is an example of the mean spirited
                                               interest
                                Also Rule 3 language ―smooth working of the multi-
                                 state system…‖
                                     o Concern here is to discourage forum shopping.
   Last part of Schultz opinion
       o Address the possibility of invoking a public policy exception before NJ law
           can be applied.
       o NY law did not have to invoke the public policy exception in order to apply
         NY law—they could have applied NY law anyway
       o How does the court tell if the NJ law violates NY public policy?
                 *Apply the Loucks test
                      Fundamental principle of justice…
                      Would application of NJ law violate a fundamental principle of
                        justice
                               There is an argument that it is a fundamental principle
                                of justice is compensating victims, and yet NJ law
                                doesn’t allow for this.
                 Why, then, doesn’t NY invoke this exception?
                     **Court basically says that NY doesn’t have enough contacts
                         to invoke the public policy exception
                                Prof: by why should the courts even look at the number
                                 of contacts?
                                     o *Look at the Holser case (German Nazi) case:
                                             **The key is that charitable contribution
                                               is a defense.
                                                        If a ’s claim was being rejected
                                                         on public policy, then that’s okay
                                                                b/c the  can take his claim
                                                                somewhere else
                                                               *But if we’re denying the ’s
                                                                defense, then the  will lose the
                                                                chance for relying upon that
                                                                defense b/c the defense will
                                                                merge into the judgment


Padula case
          common domicile case
           wants to get the benefit of a NY labor law
          The NY law is clearly a conduct regulating law and also clearly a loss allocating law
              o What happens when a law is both conduct regulating and loss allocating?
                      This was the problem that we started to see in Schultz.
                      *The Court here says that you have to look to the primary purpose of
                          the law—is it primarily conduct regulating or primarily loss allocating
          p. 214(4):
               o Basically, the CB editors are saying that after all this, in NY we’ve gone back
                  to applying the place of the wrong, unless it’s loss allocating and we are
                   covered by Neumeier Rule 1.
          This begs the question as to whether it is even better to try and come up with rules or
           to figure out on a case by case basis?
                o One argument against first restatement is that it bound the courts hands, and as
                   a result, courts manipulated the rules. Having rules like Neumeier have this
                   same concern


Criticisms of interest analysis:
          Biggest criticism: no real solution to the ―true conflict‖ situation
              o having a forum default in this situation seems to be arbitrary.
          Another criticism:
               o All the interests are defined as ones that demonstrate pro-resident concerns
                       Interest is defined as those things that protect state citizens.
For next time:
          233-262
Theoretical Criticisms
From last time:
Critiques of Interest Analysis
Forum preference used to resolve true conflicts is not satisfactory resolution
Pro-resident definition of interests (all interests defined as benefitting locals)
          Discriminatory and potentially unconstitutional (i.e., 2 passengers of different
           citizenship in same car accident would get different levels of "protection"
          May not be true; states may not be interested in benefitting their own citizens
             o NY court in Schultz said that NJ did NOT want the plaintiffs to recover, but
                 rather bind them by a law that doesn't help them
              o States may be more interested in regulating their own people or making them
                 "better"
2/20/2007, 2:00 PM
          Reduces interest analysis to a jurisdiction-selecting rule regardless of the content of
           the law (book says it boils down to one sentence: in cases of shared domicile, apply
           the law of the state of domicile, otherwise apply forum law--middle of p. 234)
Goal of COL should NOT be effectuation of legislative intent, and even if it should be…
Interest analysis defines interest as Currie would, not as legislators did (NONE of the cases
we looked at dealt with legislative history


Comparative Impairment
Comparative impairment approach seeks to resolve the true conflict in a way other than forum
default
Asks which state interest would be more impaired by failure to apply its law
          Doesn't weigh the interests, weighs the HARM
          In true conflicts cases, apply the law of the state whose interest would be most
           impaired if not applied
           Try to imagine how the legislators would solve the problem themselves if it were up
            to them --> imagine asking them where they would suffer the biggest hit if their law
            was not applied
Different from traditional interest analysis in that:
          Interest analysis: Forum applies forum law in true conflict case, even if its interest is
           really weak
          Comparative impairment: forum applies foreign law in true conflict case if harm to
           its interest would not be substantial
Bernhard v. Harrah's Club (Cal. 1976), p. 241
Couple from CA went to NV to drink and gamble, caused accident injuring on the way home (in
CA). Lawsuit against the club for continuing to serve the drivers after the driver was already
drunk (dram shop legislation). NV has no liability rule for servers (although it is a crime, there's
no civil liability), CA does not
First we have to establish that there's a true conflict:
          Policies underlying NV's no liability rule: protecting the NV casinos tavern keepers
           from ruinous financial exposure (would be hard to run business and determine who is
           too drunk to serve) --> NV has clear interest here b/c NV business
          CA has an interest in protecting the public from drunk drivers by holding the servers
           of alcohol liable for serving people who are already drunk --> Victim driving in CA
         so it looks like CA has interest
             o Do they want to keep EVERYONE safe or only CA citizens?
             o Court doesn't focus on a compensatory interest or conduct-regulating interest,
                 they talk about protecting the CA public from accidents by drunks (which
                 seems conduct-regulating), but it's not focused on the servers in CA
How can we resolve the true conflict?
          Currie approach: reexamine with restrained interest? It's likely that Currie would say
           this is a case for forum default
          Resolving true conflict a la Bernkrant: Can we take the reasoning of Bernkrant v.
           Fowler (where they signed K in NV and man died in CA) and somehow conclude
           that CA is not interested?
               o Could argue that they were in NV and had reasonable expectation that NV
                  rules applied
               o NV business wouldn't know where its patrons are from and would have to
                  research the laws of all of the surrounding states and behave as though they
                  were subject to all of them
          Resolving true conflict using comparative impairment: Which state's interest
           would be more impaired if its law is not applied?
              o CA interest in keeping public safe would be severely impaired: NV business
                  is inviting CA drivers and sending them back onto the road drunk
              o Would NV interest in protecting its businesses would impaired?
                        There's a limited impact in NV (as opposed to severe impact in CA), it
                           impairs interest in protecting civil liability only
                        Even if this was a purely domestic case, NV businesses would not
                           have a new obligation b/c they can already be held criminal liable
Problems Wasserman has with this: this concept is still very malleable (room in how to define
the interest and argue that one would be more impaired)
          She would think that the CA interest is in compensating its victims and found a true
           conflict
          THEN, she would have said that victims could be compensated in other ways -->
           going after the other driver, insurance companies
              o The odds of the victim being entirely uncompensated would be very low
              o If you characterize the interest this way, it doesn't appear that CA's interest
                  would be impaired at all, whereas protecting NV business from civil liability
                  would be totally impaired
Is this approach any better than forum default in regular interest analysis?
          Allows the court to reach the same result but it doesn't look so bad
          Apart from malleability, it doesn't seem very different from what Currie says courts
           SHOULD NOT DO (weighing the interests --> just because Currie said don't do it
           doesn't mean that courts won't anyways)


Another conflicts scholar says this approach might be better if it added objective criteria to
make it less malleable
Determine if the law actually achieves its intended purpose
         Ex: if purpose of a guest statute is to deter collusion, does it really do that?
         If the law doesn't work anyways, there would be no impairment if we don't apply it
Ask if the law would further it's purpose ON THESE PARTICULAR FACTS
          Ex: guest statue designed to deter collusion and minimize fraud --> we're not worried
           about serious accidents where people die, since that's not likely to be a fraud plan
           (that would be more likely in a small crash with only whiplash)
               o If it's a big accident where parties have died, we can assume it's not something
                  the parties cooked up to rip off the insurance company
          Ask if the state has abrogated or repealed its law --> if they've rejected the law for
           future cases, they don't have such a great interest


“Better Law”
          Leflar's choice-influencing considerations and the better rule strives for the following
           objectives:
               o Predictability of results: we want people to predict which state's law will
                   govern their behavior at the time that they act
              o Maintenance of interstate and international order: states would be upset if
                their law is disrespected
              o Simplification of the judicial task: choice of law should be relatively easy for
                courts to apply
              o Advancement of the forum's governmental interest: If you have a legitimate
                bona fide interest in the application of your law, there's a strong argument that
                it should apply
              o Application of the better rule of law: point of contention


Milkovich v. Saari (Minn. 1973)
Group of women travel from Ontario to Minnesota, switch drivers and the car crashed in Minn.
Can plaintiff recover under pro-compensation rule that Minn. Has or is she prohibited from
recovery under the ONT guest statute (gross negligence is required under Ontario law--that's a
modification from previous cases)?
          This is a reverse-Babcock set of facts (in Babcock, both parties were from NY and the
           crash was in ONT, court found only interested state was NY)
               o This is reverse --> both parties are from the place that has the guest statute,
                   but the accident is in the place that has the pro-compensation rule
               o Wasserman already asked us what would happen if the facts were reversed in
                Babcock --> we said that the forum would probably apply the ONT law
              o But what we thought would happen is not how the case turned out under the
                better law analysis here
              o Case have turned out under the Neumeier rules: Parties both domiciled in the
                same state --> apply that law (ONT has interest, Minn has none)
          Choice-influencing considerations:
             o Predictability of results: this factor makes a lot of sense where there is
                 planned, consensual conduct, but court says in tort cases it's not significant b/c
                 no one plans to have an accident
              o Doesn't make as much sense in a negligence case where there are unplanned
                accidents
              o Could make argument that parties would have planned their conduct
                differently if they knew that guest statute may or may not apply (i.e., rented a
                van or picked a better driver)

Tomorrow: Read Selections from Restatement (262-64) and Phillips v. GM (264-79)
Continuing the Milkovich case:
          Choice influencing considerations:
              o 1. Predictability of results
              o 2. Maintenance of Interstate and International Order
                       When is interstate order ever disrupted?
                              Concern is that if a state were to apply its law to a case where it
                                had no connection, and the other interested states might feel as
                                if the state that has no connection to the controversy is
                                 intruding by applying that state’s own law.
                                      As long as there is some connection, it isn’t likely that
                                       there would be a concern with the maintenance of
                                       interstate order consideration.
                    Though this factor is relevant, it is not likely to effect the outcome of
                      many cases at all.
              o 3. Simplification of the judicial task
                    Concern here is to ensure that the court’s task is not too complicated
                    This also is not a determinative factor
                         What about in this case?
                             Will it be tough for Minnesota to apply Ontario law?
                                     
                                    Not at all—b/c of the guest statute in Ontario, it might
                                    be easier for the Minnesota court to apply Ontario law
                                    rather than its own law.
              o 4. Advancement of the forum’s governmental interest?
                    What is the policy underlying Minnesota’s law?
                          (In the NY cases, we always said that the primary interest was
                            compensation)
                                If we were to view Minnesota’s interest in compensation,
                                 Minnesota would primarily be interested in compensating
                                 Minnesota victims
                                        Here, the court is articulating a compensation interest
                                         evne though the victims are not from Minnesota—
                                         reason is b/c there are MN doctors, MN hospitals, etc.
              o The concern is that if the  doesn’t recovery
                from the , then MN hospitals and doctors may
                go unpaid.
                     Particularly though, in this case, the
                       doctors have already been paid—so the
                       concern with having medical creditors is
                       not as strong in this particular case
                            Prof: court may not be focusing
                               on the facts of this case in using
                               this rationale.
                                 p. 259: ―we are loath to place
                                  weight in the individual case for
                                  frea that it might offer even
                                  minor incentives to “hospital
                                  shop”.
                                 In the above quote, the court is
                                  concerned with victims having to
                                  decide whether they should go to
                                  a MN hospital (therefore creating
                                  an interest for MN)
                                 ―create litigation-directed
                                  pressures…‖
                                 **Court seems to be saying that
                                  as long as there is a MN accident,
                                  the court will assume that there
                                  are medical creditors and that the
                                  medical creditors have not been
                                  paid
   What about any conduct regulating interest?
          Usually, we consider guest statute cases as loss
           allocating ones.
          But, if we can find a conduct regulating aspect in MN’s
           procompensation rule, then MN has an interest in
           regulating conduct that occurs in its state. Here, the
           accident occurs in MN, so the procompensation aspect
           of MN law might give MN an interest
             o 5. Application of the better rule of law
                   How does the majority make the conclusion that MN law is better?
                          p. 259: ―we are convinced the judicial system…‖
                                       The court here is saying that some people are going to
                                        use the law to collude to rip off insurance companies.
                                        This is the reason why Ontario has the law that they do
                                            o But the court is saying here that Ontario’s law is
                                                overinclusive. By denying compensation to the
                                                victim b/c of the possibility of collusion is
                                                overinclusive according the the MN court.
         How should a court determine which law is better?
            o Is a forum default better or a better rule better in a true conflict situation?
                    Can we assume that a forum is always going to conclude that its own
                       law is better? If we can, then this doesn’t really do anything to the true
                       conflict situation than what the interest analysis would have done.
                    Will the forum always find its own law to be better?
                            Note 6 p. 261
                                       There continues to be a forum bias in applying the
                                        better rule
                                Note 5 p. 261:
                                       Weintraub says that there should be some objective
                                        measure as to what law is better?



2nd Restatement Approach
         This approach has the most states behind it.
         Prof doesn’t like the 2nd Restatement approach even though most states follow it
         There are four key elements:
             o 1. Presumptive rules (for example §154 p. 264)
                      There are provisions that set forth a presumption that a certain state’s
                          law will govern.
                      There are a lot of presumptive rules
             o 2. ―Most significant relationship‖ (for example § 145(1), p. 263)
                      Virtually ever section in the 2nd Restatement directs the court to the
                          state with the most significant relationship to the occurrence and the
                          parties.
                        §145 is the general tort provision
                 o 3. List of connecting factors (for example §145(2) p. 263)
                        These connecting factors are relevant in determining which state has
                           the most significant relationship
                 o 4. §6 of the Restatement (p. 263)
                        §6(2) sets forth a number of factors to be considered.
                                Some of the ―choice influencing consideration‖ are reflected
                                  here
                                (b) and (c) are important
                        What §6 has done is that it has converted an approach that was more
                            territorial in nature to one that now requires some form of interest
                            analysis in connection with every case.
          Depecage
              o This is the idea of looking at a case issue by issue.
              o **Here, depecage is required by every section
                     We are supposed to be finding the relevant law for each issue
                             Very likely can lead to the possibility that one state law can
                                govern one issue, another can govern another issue
              o Difficulties
                           The illustrations provided in the restatement are not very helpful (as
                            compared to the helpfulness of illustrations in other restatements)
                                Reason, illustrations are written from the perspective of a
                                    neutral forum
          Phillips case:
               o Which state’s law will govern
                        Three apparent choices:
                             NC
                             Montana
                                 Kansas
                           (fourth) option:
                                 MI


For next time:
          re-read Phillips
          280-291
Continuing Phillips case
          Difficulties with the opinion
               o Court doesn’t really articulate the differences between whichever laws are
                  competing for application
                        Why does it matter which law governs?
                                First is because Kansas law has a cap on punitive damages
                                Also, Kansas law has a cap on non economic loss
                                Additionally, it seems that NC does not have strict liability—
                                  this might be very important to the defendant
          Preliminary:
               o When you know that the second restatement will govern, how do you
                  approach the problem?
                       Section 6 of the second restatement:
                              §6(1): This is an important section that almost never applies
                                        Basically says to the forum court—before doing
                                         anything else, the state court should look to see if a
                                         forum court has adopted a choice of law statute
                                             o But almost every state has not adopted choice of
                                             law statute
                            §6(2) seems like the first place to start
                     Maybe we could also look to § 145
                     Also (see p. 270), §146 and §145
                            §146 deals specifically with personal injuries
              o There seems to be three possible places to start once we know that we are in
                the second restatement realm
                     1. §146 directs us to a presumption of the place of injury
                            What is the nature of the presumption?
                                        The presumption can be overcome in the situation
                                         where another place has the most significant
                                         relationship
                                        In a case where we are not sure which state has the
                                         most significant relationship, then this section might be
                                         helpful. Otherwise, it is not.
                             o Only a small subset of cases will rely on this
                                 assumption—place with most significant
                                 relationship will dominate in most cases.
                             o *Basically, finding that there is a presumptive
                                 rule may not be helpful at all
      2. §145 tells us to look at the state with the most significant
         relationship
      3. §6 gives us a list of factor
o Prof: seems to say that starting with §145 and then doing §6 is a good
  approach
          Court does it the other way—looks at §6 and then does §145
          Following the Prof’s approach
                1st part: [apply 145]
                         §145(2)(a): [the place where the injury occurred]
                             o probably Kansas, but could also be NC (where
                                 the child is now)
                         §145(2)(b): [the place where the conduct causing the
                          injury occurred]
                              o Conduct of the driver that caused the injury
                               occurred in Kansas.
                                   But the driver that caused the injury is
                                      not part of the injury. Therefore, it is not
                                      this conduct that we are concerned with.
                                      The conduct we are concerned with is
                                      where the car was manuf.
                             o Conduct occurred in MI b/c car was manuf’d in
                               MI
                         §145(2)(c) [the domiciled, residence, nationality, place
                          of incorp and place of business of the parties]
                              o Domicile of the people involved in the crash is
                                  Montana
                                      *But ask, who is the actual party?
                                                 is the guardian of the child,
                                                 who is now living in NC.
                                                But remember, this is a case of
                                                 after acquired domicile. We
                                  should be concerned with where
                                  the boy was domiciled at the time
                                  of the crash. He moved to NC
                                  after the crash.
                                 We should continue looking at
                                  the boy’s domicile as Montana
                               ’s domicile is MI b/c GM’s
                                principle place of business
               o 145(2)(c) gives us room to consider DE law
                 though (place of incorp)
         §145(2)(d): [the place where the relationship, if any,
          between the parties is centered]
              o Here, NC probably wins out for this factor.
     nd
   2 part: [apply §6]
          §6(2)(a)
              o Court here says that as long as you apply the
                  Second restatement, this part will always be met
          §6(2)(b) and 6(2)(c) are interest analysis
              o This is the heart of the second restatement. See
                  below
          §6(2)(d)
              o Court says that GM doesn’t really have an
                  expectation.
                       Reason: this is a negligent action—as a
                          result, no one planned for the accident to
                          occur.
              o In a negligence case, the expectations of the
                  parties (§6(2)(d) are not likely to be important )
          §6(2)(e)
              o Basically asks if there is a common thread
                  between the laws vying for application
              o Court basically says that this factor is only
                  really relevant when the various laws are
                  generally similar, but that there are minor
                  variations
                       Here, there are a lot of variation
       o Another way to look at this is to look at a broad
         approach
             What is common among general tort
                laws in the states?
                    Compensation.
                    But court doesn’t use this broad
                        approach.
   §6(2)(f)
       o In situations where the parties plan their
            behavior, we want the result to be the same
           regardless of where the suit is filed.
                In tort cases, though this factor has some
                  importance, it’s not as relevant b/c the
                  behavior is not planned.
   §6(2)(g)
       o This factor isn’t really given that much
           emphasis
               Might be applicable when it’s difficult to
                 even say what the law is (like a law in a
                 foreign language that is hard to translate)
       o In interstate disputes, this factor is not very
         likely to be relevant.
   §6(2)(b) and (c):
       o Montana: Montana seems to be concerned with
           protecting its domiciliaries
                Court assumes that that Montana did
                   have an interest here.
       o North Carolina: it might appear that NC has an
           interest in compensating the child (but
           remember the after acquired domiciliary
           problem).
                Additionally, NC’s interest should be
                   disregarded b/c NC’s law has no strict
                   liability compensation.
          Prof: you should look at the laws that
           the states actually have to determine
           state’s policies
          p. 272 second paragraph, NC follows the
           first restatement approach—that is NC
           would not have applied NC law b/c the
           crash occurred in Kansas. NC is not
           interested in having their law applied.
          NC does not have an interest b/c NC
           would not have advanced their own
        policy interest (based on NC’s choice of
        law law)
      This sounds a lot like renvoir
o Kansas: why does Kansas cap punitive
  damages?
      One reason might be because they don’t
        want to over deter companies from
        coming to Kansas (presumably these
        would be Kansas companies). no
        Kansas company here
      Another reason: tort reform. If Kansas
        lets people sue for millions of dollars,
        the insurance prices go up. As a result,
        doctors might leave the state, etc.
        Kansas is worried about insurance rates
        in Kansas. No Kansas insurance
        company here.
o Michigan:
          If MI had a pro-defendant law, it seems
           like MI should have an interest. why
           does court disregard MI law? Court
           looks to see what MI would do in this
           case (like renvoir)
          Additionally, court disregards MI law
           b/c if we consider MI’s interest in
           protecting the automobile industry, then
                                                        in any lawsuit involving an automobile,
                                                        the MI law would always apply—Court
                                                        says this is unfair b/c this gives one state
                                                        the power to regulate this type of law.
                                                       Prof: this might not be a good result.
                                                        Why should all the weight be placed on
                                                        Montana’s interest and not any weight
                                                        on MI’s interest.
                                                       Prof: doesn’t seem fair to use the fact
                                                        that because they would have an interest
                                                     in a lot of cases, then MI law shouldn’t
                                                     apply
                                Why don’t we consider the public policy exception?
                                        To the extent that we had the first restatement public
                                         policy exception to allow interested states to find ways
                                         to protect their parties, §6 of the second restatement
                                         demands that we exam the policy considerations of the
                                         state.
                                             o Prof: but this isn’t completely satisfying.
                                                Reason is because there may be a situation
                                                where the forum is not interested in applying its
                                                own law.
                                                    §6 has a separate public policy
                                                       exception. This may be relevant in cases
                                                       where the forum is disinterested, but
                                                       thinks the other state’s law is horrible.


For next time:
          296-303



Tomorrow moot court room 7pm


Contractual provisions in 2nd Restatement
          §186 is a roadmap provision
       o 186 seems to guide you which other section to apply, not which state’s law to
         apply
       o Divide between 187 and 188 is whether the parties themselves have included a
         choice of law clause
             If it has a choice of law clause, then 186 directs you to 187
             If not, 186 directions you to 188.
   There is a divide between the sections and within the sections
   §188 is the contract analog to §145
       o If no choice of law agreement, then the most substantial relationship test
           should be used, with some applicable contacts listed
   Nedlloyd Lines case
       o Seawinds claims that an implied provision of dealing in good faith was
           breached
                Basically, a breach of fiduciary duty and implied provision breach is
                  alleged
                       It’s important to determine which law governs b/c these claims
                          are not allowable under hong kong law
       o Why would contracting parties include a choice of law clause in their
           agreement?
                One of the reasons might be to avoid the uncertainties, headaches
                 associated with having to figure out which law applies (i.e. having to
                 go to prelim hearings, satellite litigation, etc)
              A contracting party may want one law to govern the potentially large
                 number of transactions with parties in several jxs
       o [slides] ―Language of Choice of Law Clause…‖
              The clause here has both a choice of law clause and choice of forum
                 clause
                      The choice of forum clause may be included to, for example,
                        waive any personal jx concerns.
                      Choice of forum clause might be included to open up the
                        option of possibly bringing a suit in another jx. (but not nec.
                        choosing that jx.).
       o From a previous case, we know that CA law applies interest analysis. Why
         are they applying 2nd restatement now?
              Here, the question is not what CA would do in the absence of choice
                 of law provision (when the interest analysis might be applicable), but
         rather, what CA should do when there is a choice of law clause—CA
         court is asking whether they should enforce the choice of law clause
              CA court is applying the 2nd restatement for this purpose only,
                 not to over ride its general interest analysis approach.
o Divide between §187(1) and §187(2)
      187(1):
              ―will be applied‖
                          This says that the choice of law clause will be honored
                           under certain circumstances:
                              o ―If the particular issue is one…‖
                                          There are certain provisions in contract
                                           law that you cannot contract around.
                                                Example: requirement to be 18
                                                   to enter into a k—and the parties
                                                   contract out of it.
                   Basic point of 187(1) is that you can choose whatever state’s
                    law that you want in order to achieve a desired contractual
                    result
          187(2)
                   Applies when 187(1) does not apply
                   Idea of this provision is that even if you’ve chosen a law that
                    you are not permitted to opt out of, you can still be allowed to
                    choose the law, but you can’t just choose any law
                          You have to meet certain requirements for the chosen
                           law
                               o The law chosen must have some reasonable
                                 connection to the controversy.
                                      What is the point in restraining this,
                                           while 187(1) lets you do whatever you
                                           want?
                                               The whole point is that these are
                                                  laws that you are not supposed to
                                                  be able to opt out of.
                                               We don’t want to give parties the
                                                  option of avoiding a law that
                                                  otherwise should have applied.
                                            We want to prevent parties from
                                             just finding a law that allows
                                             them to validate the agreement
                                             (hence the reason for the
                                             reasonable connection)
o How do we know if the fiduciary duty is one that we can opt out of?
     What if one state’s allow for opting out, but another state does not
        allow for this?
             Comment to section 187
                        Basically says that in deciding whether governed by
                         187(1) or 187(2), the principles of §188 should be
                         applied to make this decision under 187
                            o The comment gives us guidance as to which
                                state’s law to look to see if we can opt out.
                                     §188: Which law would apply if we
                                         didn’t have a choice of law clause
                                     Basically, even in situations where we
                                         do have a choice of law clause, we have
                                         to look to §188 to see whether or not we
                                        can enforce the choice of law clause—
                                        kind of circular
o Here, does HK law meet the 187(2) requirements?
      If there is a significant relationship, then there seems to be a
         reasonable basis
              Can you ever have a reasonable basis if there is no significant
                relationship?
                      Yes. But usually, you will have both.
                 187(2)(a) is met
          Fundamental policy exception 187(2)(b)
               Here, the idea is that we don’t want you violating the public
                 policy of a state that would have otherwise applied under 188
                 by choosing some other jx’s law
                        If the state that would have applied under 188 has a
                         materially greater interest and this law would violate
                         their public policy, then the state chosen would not
                         apply.
                 o When do we do a 188 analysis
                      If there is a reasonable basis and there is no fundamental policy
                            violation (that is if 187(2)(a) and (b) are met), then we do not do a 188
                            analysis
                           If, on the other hand, a fundamental public policy is violated, then 188
                            analysis is conducted
                           187(2)(a) counsels in favor of HK law
                           187(2)(b) Court says that there is no violation of a fundamental policy
                                  The fact that the provision is implied versus an express
                                     statement that says what the parties actually wanted, the court
                                   concludes that 187(2)(b) is not problematic.
                                          Prof—logic is not very solid
For next time:
           Does the choice of law clause apply to the breach of duty claim, which is a related
            tort claim?
           Reread Kipin
           303-309



2/28/2007

Scope of 187 – For the tort claim, would this clause govern the breach of fiduciary duty claim?
           If you wanted to make the argument that it did not apply, what argument would you
            make?
                o The clause itself is restricted to contractual claims ―This agreement‖ is
                   governed…
                o Could say the other claims – torts, etc. shouldn’t be governed by the COL
                   clause.
           Court deals with this by focusing on ―governed‖ instead (pg 286)
               o It’s the only evidence of their intent
               o They are business people
               o If they really wanted some other law to govern other causes of action, they
                   would have said – reasonable business person in their shoes would have
                   wanted
               o NOTE – this is not the only interpretation that could be made
           Which jurisdiction’s laws will govern on the question of scope?
                  o 1st point court makes (footnote 7 on 286) – Question of scope arises under the
                    contract – Hong Kong law deals with scope question
                  o 2nd point – No one has showed a Hong Kong case that shows the breadth of
                    COL in Hong Kong, so the court goes with CA law
                  o Court applies Hong Kong law for scope
                  o Casebook editor argues another finding – using 187(3) – local law (not choice
                    of law law) – editor says the scope question should have been dealt with using
                    CA law


Kipin v. Van Deilen (pg 296)
(6th Cir, 1999)


Is lien-waiver provision enforceable (KY law)?
        Ct says – yes


Liens:
            When someone promises to pay you for work, there is a possibility they would not
             pay – no security
            Law has a special ―soft spot‖ for people who work with their hands and supply
             materials – Wass thinks they should have some special claim to getting paid
                o They get a right to file a lien against the building – to foreclose on that
                    property to get paid


Here, the co. had the contractors sign to waive their right to file a lien.

No payment.
            The Ps file a claim, but they are in line
            They file a mechanics lien

VDI says:
            You can’t file a lien – you waived your right

It’s AK steel’s property – they were probably upset with VDI about the lien –

VDI posts a bond – says the money is there to get rid of the lien (and protect the worker)
Now P says – okay – we want the money from the bond
          Bond shouldn’t kick in if the lien should never have been filed in the first place
           (THIS IS IMPORTANT)


What’s complicated is that we have a choice of law clause – ―K should be construed in accord.
With MI law‖ – MI (union state possibly reason) has a law that disallows lien waivers.


In K: (problem)
          Waive lien
          MI law controls – disallows waiver

1st question: SCOPE
          Ct says ―construe‖ - construe is a narrower phrase than ―govern‖
               o Narrow – ―construe‖ would mean to use MI law to help us to understand what
                  the contract means, but wouldn’t apply the substantive K law of MI (just the
                  interpretive part)
               o Broad would be when there’s a COL clause, they want MI law to govern


Why doesn’t 187(1) apply?
          187(1) says that we can apply the law that was picked (even if it doesn’t apply to the
           dispute at hand) – will apply the chosen law as long as it was something that could
           have been contracted out in their agreement
               o The lien waiver could not have been resolved in their agreement under MI law
               o Under KY they could have put in that provision
               o SO WHICH STATE DO WE LOOK TO – TO DECIDE WHETHER THE
                  PARTIES COULD HAVE PUT THIS IN THEIR AGREEMENT?
                        Law of state that would have applied in the absence of a choice of law
                          clause (188(1) and (2) and (on pg 301? – what else does court use))
                         KY law, therefore, is used
          So….it should have been governed by 187(1), but the court doesn’t mention it
             o Conclusion under 187(1) – since KY would allow the lien waiver, COL clause
                  is enforceable – so used MI law b/c COL clause says to
          Does chosen state have a significant relationship to the parties?
              o If corp is incorp there or principle place of business there
              o Can satisfy 187(2)(a) – Go with MI law
              o COL is going to govern either way
Problem: MI law would invalidate the waiver
          Contract has the waiver

What to do?
          Under 187(1) and 187(2) – looks like MI law. (But see problem supra)
          Court resolves this problem – if clause that chooses a law that invalidates their
           agreement’s clause (here, lien waiver), then the choice of law must have been a
           mistake
               o They gave thought to the contract
               o If KY law would have kept them from waiving the lien, too, then the waiver
                 would have been invalid, but since KY allows waiver of lien, the clause for
                 waiver of lien is valid


Have to do 188 analysis if you want to use 187(1).
Can we avoid doing 187(2) analysis?
          If chosen law doesn’t violate anyone else’s fundamental policies (that are competing
           for application)


Here, the court skips 187(1) analysis (W doesn’t know why)
Thought to skip the 188 analysis, but they later did that analysis, so she’s not sure why they went
to 187(2).


(Student observation) Tricks to avoid doing analyses:
          Avoid 188 analysis – if you can satisfy the 187 analyses and….
          If chosen law is inconsistent with the terms in the agreement, then assume that COL
           clause would be okay but for this conflict – so do 188 analysis (avoid 187 analysis)


On exam – do all of analyses. In life, you may want to do both, too.



Lesson:
1. courts may see ―construe‖ as a very narrow meaning rather than ―govern‖ – if you intend to
choose a state’s law to govern then you may want to use ―govern‖ or ―construe and govern‖
2. If you want the state law to apply to all issues than just governing the specific K – then don’t
use ―construe‖ and may not want to use only ―govern‖
          Maybe ―all claims arising out of…‖ to have them all governed by that law

3. When you choose the law, are you only choosing substantive law, or also procedural law?
          More of a stretch that you’d be choosing procedural law (may go against 187(3))

4. When have a choice of law clause, and don’t know about its scope, whose law applies to
understand scope of laws?
          Chosen law (Nedlloyd)
          Forum law (editor) (local law) §187(3)

Next time: Reich v. Purcell
All of section G on pg 6 of syllabus



Wrinkles in the Theory
          Purcell case
              o It seems that in some respects, this is a domestic case
               o CA , CA .
               o Treated as an interstate dispute for several reasons
                      First, it is an out of state accident
                      Second, the decedants were living outside of CA at the time of the
                         accident
               o CA begins with standard interest analysis
               o Missouri has a cap on wrongful death damages, CA has no cap.
               o Here, there is no Missouri defendant that was involved—therefore it seems as
                 if Missouri has no interest
               o What are CA’s interests?
                    CA may have an interest in compensating victims
                            Particularly, CA has a concern in compensating CA family
                              members that have survived
                                       
                                      Here, there is a CA surviving member—but not
                                      really—this is an after acquired domicile
               o Arguments in favor of CA’s interest here:
        There may be an ongoing risk for medical care once the family moves
         the CA
      Additionally, the CA family, after moving the CA might become
         public wards if the person that was killed was the breadwinner of the
         family.
o This case is a classic illustration of after acquired domicile
      The father and son have physically moved and have established the
         requisite intent
               But they weren’t CA citizens at the time of the accident.
                         Court disregards the CA’s interest in protecting the
                          after acquired domicile
                              o Reason for this seems to be concerns for forum
                                  shopping.
o Is the court really concerned about forum shopping?
          A  is usually never accused of forum shopping when they sue at
           home. Here the  is a CA (albeit after acquired), but they are still
           suing at home.
          CA does not really seem to be concerned about forum shopping.
                The real concern seems to be over domicile shopping
                         A problem with this is that the  might be no worse off
                          under OH law that he was under CA law.
                              o This may not be a case where the  moved to a
                                place where there was better law.
                        Also, another problem with this is that we know that 
                         was moving the CA anyway, so he wasn’t shopping for
                         a home simply to recover damages.
o Should we then try to figure out why people moved, rather than just simply
  ignoring after acquired domicile?
          Assuming that we could identify the cases where people are home
           shopping, what’s the harm in applying a state’s law like CA law here?
               One concern might be that doing this would frustrate the
                  expectations of the parties.
               Also, it seems to be wrong that simply b/c a person moves, the
                  application of the law changes
                        that is, if an event occurs giving rise to a casuse of
                         action, the application of the law shouldn’t change b/c
                         of something that happens after the event.
o Does the fact that if a new state’s law hurts the  effect its application?
      The argument for considering the law of the state where there was
         after acquired domicile is stronger if moving hurts the defendant
              Argument: who would move to the new state if they would be
                 subjected to, say, higher valued lawsuits.
o Does it matter if it is the  or the  that moves?
      It seems that there is more of a risk of both forum shopping and home
           shopping if the  moves.
               The reason is b/c the  would then be stuck with the ’s
                  forum.
                        That is, if  wanted CA law,  would just look to a
                         state that would look at states and determine where to
                         move
                             o  can manipulate the home and the forum to get
                               the desired result, where as  does not have
                               such control.
o Common criticisms with this and First Restatement
     Arbitrariness as to location of accident
           What if the Reichs actually got to CA and then the accident
               occurred?
                        Then Reichs would have become CA domiciliaries,
                         whereas if the Reichs were just across the CA border,
                         they weren’t CA domiciliaries yet.
                             o Same criticism of ―why does it matter where the
                                accident occurred‖
          Focus is only on one linking factor
               The very first case of the course:
                        One criticsm of this case was that it focused only on
                         one territorial linking factor, rather than severl
                 Similarly here:
                        The focus is only on one personal linking factors (that
                         is, domicile)
                                      o Things like where you are living, where you are
                                        domiciled, pricp. place of business, place of
                                        incrop are all personal linking factors
                               If these personal factors vary over a period of time, the
                                problem with interest analysis is that it forces you to
                                focus at a linking factor at one discrete period of time.
       o Another criticism of interest analysis turns on the domicle of the parties—this
         application does not translate well at all for corporations
             But where are corporations domiciled.
                     Remember that domicile requires a requisite intent.
                                 But corps cannot necessarily form this requisite intent
                                 Kind of like asking when a corporation can get
                                  divorced—doesn’t make sense to try to figure this out.
   Pfau case:
       o Students both attending college in Iowa
             One is a NJ citizen ()
             Other is a CT citizen ()
             Accident occurs in Iowa
       o Note the tie in this case with Purcell case
               We’re not treating Iowa as a domicile for either party. But the
                students may have established a requisite intent to move to Iowa and
                satisfied domicile requirements—parallel to Purcell case
       o Iowa has a guest statute
             Iowa seems not to have an interest—reason that Iowa would have a
                guest statute is to protect Iowa insurance companies or Iowa
                defendants
                     Policies underlying Iowa guest statute would not be furthered.
       o Connecticut:
                  CT has an interest in compensating victims. Here there is a CT victim,
                   so CT has an interest
       o NJ:
                  NJ does not seem to have an interest b/c there is not a NJ victim
       o What arguments could ’s make as to why CT does not have an interest?
            Argument is that if CT is interested, then CT’s substantive law should
               not only be applied, but rather CT’s choice of law law should be
               applied
                     CT choice of law would apply Iowa law.
             Problem with this is that CT’s choice of law law might look to Iowa
                choice of law law, and that Iowa choice of law law might not apply
                Iowa law
                     basically, the point is that looking to CT’s choice of law law
                        might not necessarily mean that Iowa law would apply.
       o Here court is basically rejecting the argument that since CT is interested, CT’s
         whole law should be applied
       o *What if NJ (the forum) employed interest analysis?
             If the forum was applying interst analysis and the other state is
                applying interest analysis (other state being CT), then it might make
                sense for the forum to look to the other state’s choice of law law, b/c
                looking to that state’s choice of law law might reveal the other state’s
                policies.
                     But here, CT does not follow interest analysis, so this argument
                        cannot really work.
       o Could make another argument: Since CT follows the first restatement
         approach in it’s choice of law law, NJ could argue that CT is not interested in
         having their own law apply at all.
                  This argument would hold even with the fact that CT does not follow
                   interest analysis


   Substance versus procedure and the public policy exception
       o Substance procedure problems are handled in the following way:
               1. If it is a truly procedural law, they always should be false conflicts,
                  and the forum law should apply.
                       Paper example on bottom of p. 315
                       The same result occurs from whatever approach if there is
                          purely procedural laws.
                  2. More difficult when a law with a substantive objective creates a
                   procedural problem for the forum state
                       Example: posting of a bond for a class action lawsuit.
                                 Substantive goal: to legitimize the suit
                                 Procedural problems: forum is not equipped to deal
                                  with the posting of the bonds.
                                  This is not a false conflict anymore. The state with substantive
                                   law and also the forum state have some sort of interest
                                          *In this situation, the forum will default to it’s own law.
For next time:
          Public policy exception in the modern theories
          Choice of law on internet: 813-15; 840-845; 845-48; 854-56 (notes 2, 3 and 6)

Public policy exception with respect to the modern approaches
          Under modern approaches, if forum law has a policy that would be advanced and the
           instate party would benefit, all the forum has to do is state that they are interested.
                 o If the other state is not interested—false conflict
                 o If the other state is interested—true conflict w/ Currie’s forum default rule.
                 o This differs from first restatement, where public policy exception is subject to
                   manipulation by the forum court.
                         In the modern approach, all you need is the form being interested and a
                           benefit to an in state party
                                Then why have a public policy exception at all in the modern?
                                          A public policy concern may be where the forum state
                                           does not have an interest, but the foreign law is really
                                           offensive to the forum policy.
          §90 of Second restatement:
              o Comments following §90:
                      First comment: it is not enough if the foreign law is different than the
                         forum law. Mere difference is not enough
                              The foreign law must violate Loucks standard
                                       That is, foreign law must be truly offensive, deep
                                        seeded, etc.
                           Second comment: speaks directly to the availability of the exception
                            with respect to defenses
                                Remember first restatement and not wanting to use public
                                    policy in situations of the defendant’s defense (estopple)
                                Second restatement deals with defenses by saying that §90
                                    does not allow for striking down defenses
                                          Basically, second restatement has an even stronger
                                           language that indicates that defenses should not be
                                           stricken.
Choice-of-Law and the Internet
          Internet complications exist in 3 conflicts area
               o 1. PJ
               o 2. Choice-of-law
               o 3. Enforcement of judgments
                       Efforts by states to regulate internet activity through the application of
                          their law.
                         Even if there is PJ over the s and it’s permissible for forum to apply
                          its own law, what good is the judgment if the  is foreign
          We’re only concerned with (2) in this class
          One thing to consider: how unique are internet choice-of-law problems?
          2 general problems:
               o 1. Complexity
               o 2. Situs
                       Unknown/undeterminable locations
          Unilateral approach
              o Basically, just a yes or no question. Ask whether or not the forum can apply
                  their own law. If no, then the court will not hear the case.
              o Could argue that interest analysis is unilateral (but could also it is multilateral
                as well)
          Are we better off with multilateral or unilateral approaches when dealing with
           internet cases?
          AOL case (p. 840)
             o PJ problems are nonexistent here. Reason is b/c  is sued at home.
             o Federal questions and supplemental state law claims too
                      Choice of law question is which state law should govern the
                         supplemental state law questions
                            Since fed court is in Iowa, Iowa choice of law rules apply.
              o §6(1) does not help—no Iowa choice of law statute
              o Court does not use §145 factors:
                    Court finds these factors to be unhelpful.
                    Why?
                            145(2)(a):
                                        Difficult to tell where the injury occurred. Who’s
                                         injury are we focused on?
                                             o Server harm happens in VA; financial harm to
                                               company also in VA
                                             o The AOL users harms occur everywhere (AOL
                                               is, with some respect, suing on behalf of their
                                               customers)
                               (2)(b):
                                         Place where the conduct causing the injury occurred:
                                          Many potential locations (even just assuming one
                                          spammer) GA (where the head spammer was); Kansas
                                          (Wilms located); Iowa (where NHCD is located)
                               (2)(c):
                                     Easily determinable
                               (2)(d):
                                    
                                   Does AOL have a relationship with NHCD? Even if
                                   they do, difficult to find a place for it.
                  Basically, 145 only accomplishes potential states—Iowa, Viriginia,
                     maybe could argue for others
             o Move on to §6
                  Court (as in Phillips case) immediately knocks off a few factors
                       §6(2)(b) and (c) are applicable
                              This was also the most important parts in the Phillips case
             o   Iowa’s potential interest:
                       Iowa created the NHCD corporation
             o   Virginia’s interest:
                       VA has an interest in compensating it’s victim, here AOL.
             o   Kansas and Georgia have arguments, though tenuous
             o   Is this case more complex than other choice of law cases?
                       Compare this case to a plane crash involving people from every state
                   Also, comparison to asbestos cases
                   prof: this case seems to be as difficult as the Phillips case
             o Should a multilateral approach be used or unilateral?
          World Interactive Gaming Corp case:
               o Uses the unilateral approach
                      Question is whether to apply NY law—yes or no
For next time:
         845-48; 854-56; 848-51;854-55; 851-57
Internet conflicts of law case
          In each of these cases (World Interactive Gaming, Jeri-Jo, and Yahoo) a unilateral
           approach is taken
               o Why is such an approach taken in these cases?
                           Remember that unilateral approach is a yes or no question. If the
                            forum cannot apply its own law, they won’t try to hear the case
                           One possibility is that there are international cases
                           Another possibility is that these are public law cases versus private law
                            cases
                         There have been other cases involving international cases, and those
                          cases had used the multilateral approach (such as the Ontario guest
                          statute cases)
                 o What law gets applied in a criminal trial choice of law conflict?
                      If a state has jx to prosecute a criminal trial, then the state applies its
                          own law
                               This goes to the public/private argument—if the state can
                                  regulate, then the state will; if they can’t then they won’t hear
                                  the case.
                 o A fundamental question: can a territorial government, like NY or France,
                   regulate the Internet?
                       One approach may be whether the underlying law is rational (with
                           regards to a constitutional analysis)
          Technological solutions
              o Should, for example, ISPs be required to have filtering to block content from
                 reaching certain jxs?
              o Who bears the cost of the technological fix?


For next time:
          341-349; 354-56; 358-59

Constitutional limits on choice of law
          5 different Constitutional clauses that are of concern
               o See p. 641
               o Two categories
                        1. Restraint on a state’s ability to apply its own law:
                         DP, FF&C, Commerce Clauses
                               We won’t really look at commerce clauses
                      This seems to be a limitation on the state’s flexibility to apply
                         its own law
                 2. Limitations on the state’s ability to discriminate against
                  nonresidents
                      P&I clause, EP clause
                     EP may not be discussed in the course
   Home Insurance Co. v. Dick case (p. 343)
      o At the time the policy is issued, the boat is in Mexican waters
              Only covers damages in Mexican waters to a Mexican beneficiary
       o The insurance k limits the period of time in which a claim may be filed on a
         policy to one year.
              After a loss, a suit has to be brought within one year.
       o This, on a first look, seems to be a purely Mexican dispute
              Problem is that before the loss was suffered, the policy was assigned
                 by Bonner (the original beneficiary) to Dick, who lives in Mexico but
                 is a TX domiciliary
       o Why does Dick sue in TX?
                 One reason: Dick seems to have moved back to TX
                 Another reason (more likely): Dick waited too long to sue in Mexico.
                      TX had a statute that set a minimum time of two years for a
                         suit to be able to be brought.
                      See statute p. 344.
                                Potential reasons for this law: may be difficult for
                                 people to bring suit in a year (disruption in lifestyle)
                                    o Idea is that people need a longer period of time
                                        to bring suit.
                              ―Shall ever be valid in this state‖
       o Here, there is no dispute as to which law should govern, but instead, there is a
         defense that TX law cannot be chosen (not b/c of choice of law analysis) b/c
         choosing TX law is unconstitutional.
       o Detour:
              Who does Dick initially sue?
                     Dick cannot get jx over the Mexican corp in TX
                                Note that this is a pre-International Shoe decision.
                  The Mexican insurance corp does not have an agent in
                   TX, and the corp is not present in TX
                  Even under an International Shoe analysis, the Mexican
                   corp did not purposefully avail themselves in TX.
          Dick gets jx by seizing the ’s property (quasi in rem, pre-
           Shaffer)
                  What property did the Mexican corp have in TX?
                     o The Mexican insurance company took out
                         reinsurance policies—basically getting another
                         insurance company to insure part of their risk.
                               Franklin Fire Insurance Co. and the
                                Home Insurance Co. (NY Insurance
                                Co’s but they have agents in TX)
                      o The reinsurance companies owe the Mexican
                        insurance companies something—in a pre-
                        Shaffer environment, the debt follows the
                        debtor.
                             Here, the obligation was the obligation
                                owed by the NY insurance co to the
                                   Mexican insurer—this is property to the
                                   Mexican insurance company. But this
                                   property traveled with the debtor.
                                        Dick can seize the Mexican
                                           insurance co’s property by
                                           attaching the NY insurance co’s
                                           debt.
   The whole point of this is that today, after Shaffer, this may not
    happen (quasi in rem must meet International Shoe)
          More importantly, there is jx over the Mexican insurance co.
           Does this mean that it is also necessarily allowable to apply TX
           law to them?
                  Court does not have a constitutional problem with TX
                   asserting personal jx over Mexican corp., but the Court
                   does have a problem in asserting TX law over Mexican
                   corp.
                             o Today, the result is different (courts are more
                               restrictive with personal jx and less restrictive
                               with choice of law DP concerns)
                        What should ’s be more concerned about (choice of
                         law DP or personal jx DP)?
                            o In most cases, the choice of law is more
                              important to  than the personal jx.
o Why does TX choose to apply its own law?
     One reason may be that TX is interested in protecting its own citizens
     If this statute is seemed to be procedural, then TX would apply its own
         law. TX may have seen this law as somewhat like a statute of
         limitations law.
o Given these reasons, why does the Court conclude that this is
  unconstitutional?
o DP clause:
          Of what ―property‖ is the  being deprived?
               One way to answer this: if TX court enteres a judgment
                 against Mexican insurance co, a liability is being imposed on
                 the Mexican insurance co.
                Another way: Mexican co. is losing their immunity from being
                 sued after one year (according the k), which is arguably a
                 property right of the Mexican co.
o So why is it unconstitutional?
      If Dick had been a Mexican citizen the whole time, and after the loss if
        he moved to TX, many courts (regardless of constitutional concerns)
        would not allow Dick to apply TX law.
              But here, it isn’t really a case of after acquired domicile.
                        What if it was more apparent that Dick was a TX
                         resident? What if Dick lived in TX before the accident
                         occurred?
                             o An argument can be made that if Dick was
                                always a Texan, it would be constitutional for
                                TX law to apply.
                             o Counterarguments?
                                                        Looking at this from a territorial lens—it
                                                         shouldn’t matter where the parties are
                                                         from.
                                                        An additional argument may be that the
                                                         policy might have cost less b/c suit had
                                                         to be brought within a year
                                         What if the policy covered the tug not just in Mexican
                                          waters, but wherever the tug went?
                                             o One side of the argument: The expectations of
                                                  the parties may be somewhat different—if there
                                                 is a loss in TX, isn’t there a possibility that there
                                                 could be a lawsuit in TX? In future cases, the
                                                 Court finds this argument very convincing.
                                         What if the contract had not possessed the one year
                                          provision, and then suit in TX by Dick?
                                             o Is it unconstitutional now?
                                                       TX has no greater connection to this suit
                                                         than they do in the actual suit
For next time
          1. Why is the full faith and credit clause not mentioned in the Dick case?
          2. Can TX raise the public policy exception as a justification for choosing its own
           law?
          356-359

Continuing Home Insurance Co. v. Dick case
          TX has made it clear in its statutes having a one year limit is not good
          Why can’t TX invoke the public policy exception?
              o Last sentence of ―Third‖ paragraph p. 346
                         Problem is a lack of contacts—basically not enough contacts for TX to
                          invoke a public policy exception.
                              This was also present in the Boy Scouts case
                                         Court refused to apply public policy exception b/c of
                                          lack of contacts—this was criticized before. But it
                                          seems to make more sense now.
                                              o TX can’t refuse to hear the case b/c of public
                                                 policy b/c of preclusive effects to the  if the
                                                   TX court were to not allow  to assert their
                                                   defense.
                                                        The TX court would actually be hearing
                                                           the case, but rejecting ’s defense based
                                                           on public policy—concerns preclusive
                                                           effects
          What doesn’t the Court consider the Full Faith and Credit Clause
             o DP is saying to the forum that you cannot apply your law
             o FF&C is saying that you must apply the law of some other jx.
             o Why isn’t FF&C clause argument raised?
                          FF&C does not speak to giving credit to the laws of other countries
                               The other jx whose law is competing for application is not one
                                of the United States


Watson v. Employers Liabliity Assurance Corp case
          Contract says that no suit can be brought against the insurance company until the
           insured company is found liable.
               o This is allowable in IL
          But in Louisiana, there is a direct action state that allows for suit directly against
           insurance co.
          Insurance co is saying that it’s unconstitutional to apply Louisiana law
          Does Louisiana have any great contacts here than TX did in the Dick case?
               o In the Dick case, the loss occurred in Mexico, not TX.
                       Here, the accident occurred in Louisiana
                               But this is a contract claim, not a tort claim as in the Dick case,
                                  so this may not be too helpful.
               o Also, the policy itself insured Gillette anywhere in the United States, whereas
                  in Dick the policy itself insured against loss occurring only in Mexico
                          The scope of coverage here is much broader
          Here, the injured party is a resident of Louisiana.
              o Louisiana had an interest b/c if  is not compensated, Louisiana will have to
                   support her.
                        But compare this Dick case, where the person was also a TX resident,
                          but little emphasis was placed on this
          Here, also, it seems as insurance company has more ties to Louisiana than Watson has
           to Illinois
          Other Louisiana interests:
              o Providing a convenient forum. Concern for a local victim where the victim
                  should be able to sue at home.
                      Argument in favor of convenient forum is not as strong in the Dick
                         case
          Why is she suing the insurance company and not Gillette?
             o PJ problems with Gillette in Louisiana
                      Note that International Shoe had only recently been adopted—states
                         were slow to adopt long arm statutes
                              Maybe Louisiana should have adopted a better long arm statute
          Here is a case where FF&C should also be considered
              o Argument is that even though Louisiana would have enough contacts for DP
                   to allow Louisiana law, FF&C Clause may nevertheless require the
                   application of another law if the other state has a greater interest than
                   Louisiana
              o Why does the FF&C argument fail?
                        First, note the language of FF&C (p. 341)
                               Here, is there a ―public Act, record or judicial proceeding‖?
                                       MA/IL is claiming that the MA/IL law is entitled to
                                        FF&C
                                           o Is the MA/IL law a public act?
                                                   The legislature typically makes a states
                                                      law and typically acts in a public setting.
                                                          *Statutes by a state legislature
                                                             are interpreted to be a public act
                                                             under the full faith and credit
                                                             clause
          Different goals of DP and FF&C
               o The beneficiary of DP is the individual liberty interest
               o The FF&C is designed to protect the relationship between the states (as well
                  as the P&I clause)
                       Cohesiveness between the states


For next time:
          356-375
Most Important Facts Covered Today:

Clay v. Sun Ins. Office, Ltd. (US 1964), p. 356
Facts similar to the Dick case. FL had a law that invalidated K clauses that gave people less than
5 years to sue. Issue is the constitutionality of FL's decision to apply its own law
          Two perspectives:
             o DP --> does it violate DP for FL to apply its own law here? (looking @ things
                 from individual perspective)
             o FF&C --> is FL required to apply IL's law? (looking at IL sovereignty and
                 interstate relationships)
          Court concludes that the application of FL law is constitutional -- but why? This case
           looks a lot like Dick (which held it unconstitutional)
              o Court says that FL has more contacts (than TX did in the Dick case):
              o Loss was suffered in the forum state (unlike Dick)
              o P was living in FL not only at the time he sued, but also at the time of the loss
              o The domicile in FL was after-acquired (b/c it came after the K was formed),
                   but it came before the loss
              o Scope of coverage was different here:
                        In Dick the boat was protected only in Mexican waters
                     Here, the property was protected worldwide
               o Expectations of the parties:
                     Because they provided worldwide coverage, the ins. co could have
                        foreseen a loss in FL (or any part of the world) because it was
                        moveable personal property
                     Link b/w foreseeability and constitutionality: part of the DP clause is
                        protecting the expectations of the parties, or preventing unfair surprise
                             How do we assess the reasonableness of expectations?
                             The company knew they could be sued in FL because they did
                                   business there and had an agent authorized to receive process
                                   there --> they knew they could get sued there and forum law
                                   may apply
               o It's a combination of the broad scope of coverage and their amenability to jx
                 there
                       If you distinguish between the ex ante expectation and the ex post
                          reality, having them amenable to suit anywhere w/that forum law
                         applying just b/c they did business all over doesn't seem fair (i.e., on
                         the facts of this case, but in a NJ court with NJ law applying)
               o This court doesn't distinguish b/w the DP & FF&C clauses, simply says it sees
                 no difficulty under either
               o There's no weighing of the state interests
               o If they looked at the two cases differently, there can be a difference in the
                 outcome (with NJ example --> here it seems ok b/c the loss was in FL, but the
                 Court focuses more on foreseeability, but ANYWHERE could be foreseeable)
          What if P had been living FL, but the loss were suffered somewhere else? What if the
           loss was in FL, but he'd been living somewhere else?
               o There's no clear answer
               o We're trying to determine the outermost limits of a state's capability to choose
                 its own law and still satisfy the constitution
          What if the policy didn't have a 1-year suit provision but instead had a choice of law
           clause that favored IL?
               o In the actual case we disregarded a specific provision, but we're not
                   undermining the choice of law since there was none
               o In the hypo it'd be the reverse…
           Is the case for jx here stronger or weaker than Watson?
                 o Why it may be weaker:
                 o Watson never left LA, so from her perspective it would have been
                     unreasonable to apply the law of a place where SHE had no connection (even
                     though the K did)
                 o Clay moved around --> there'd be nothing unreasonable about subjecting Clay
                     to IL law
                         
Allstate Ins. Co. v. Hague (US 1981), p. 359
This is the first case that tries to articulate a standard for constitutional limitations on choice of
law
          Dual majority/plurality case:
              o A majority of the court signs onto the standard (7 - Brennan opinion and
                 Powell dissent)
              o A different majority agrees on the result (5 - Brennan opinion and Stevens
                 concurrence)
          This looks like a purely WI transaction: parties were from WI, accident was in WI,
           insured in WI (husband died in motorcycle/car accident)
       o Problem is that the drivers didn't have insurance --> she wants to stack the
         uninsured coverage (she had 3 policies, each one gave them $15,000 of
         uninsured motorists coverage)
       o Choice of law will determine the amount the wife can recover
       o WI will not let her stack coverage
       o MN will let her stack coverage
       o What's her basis for trying to apply MN law?
       o After the accident, she moved to MN and remarried
       o She probated her husband's will in MN
   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 interest, such that choice of its law is neither arbitrary
    nor fundamentally unfair
       o FF&C: We want to be sure that the state has an interest so that they don't step
           on the sovereignty of another state
       o DP: We want to look out for the individual so that we don't unsettle their
           reasonable expectation
       o What type of interest are we're looking for?
       o Some suggest that this case does not require the same interests that we look
           for in governmental interest analysis
                It doesn't appear that there WAS that kind of interest here
                The court makes clear that choice of law is for the states to decide--
                   with whatever approach that they want (MN used "better rule")--and
                   it's not up to SCOTUS to dictate what kind of approach, and if they
                   were to require a governmental interest analysis TYPE of interest, it
                   would look like they were imposing that requirement of analysis on
                   the state
                Defining state interest is a matter of statutory construction --> if
                interest analysis is a brand of statutory construction, it would be very
                odd for SCOTUS to be defining constitutionality according to state
                statutory construction
       o Dissent thinks it should be the same type of interest that we look for in interest
         analysis
   The contacts that the plurality relies on:
       o MN employee/commuter
       o Idea is that MN has an interest in the decedent b/c he was employed there
               o If he had LIVED, MN might have an interest in compensating him b/c they'd
                 want him to be able to afford get better quickly and get back to work
               o "Minnesota's work force is surely affected by the level of protection the state
                 extends to it, either directly or indirectly"
                       Are you really going to choose to work in MN because you like that
                          MN allows stacking?
                       Google gives you free food and transport in Seattle…wouldn't you go
                          there instead?
               o It's not a stretch to say that MN has an interest in its employees generally, but
                 is the Court over-emphasizing it?
               o ---end of class--
               o Allstate does business in MN
               o P's after-acquired domicile
          Next time: read the Phillips case

No class on April 2
Make up class this Wed 6-8
Exam:
          Can pick up on W (26), F (27), M (30)
          Exam has MC and essay

Continuing the Allstate case:
           argues that MN court violated constitution by choosing the MN stacking rule
          Plurality opinion of the court:
               o One majority:
                        The standard (plurality and dissent) agree on the standard
                               *The state must have a significant aggregation of contacts
                                  under DP and FF&C (p. 371?)
          Decedent was employed in MN
              o Court makes a big deal that the decedent commuted to MN
                      What if, for example, the decedent commuted to MN to see a family
                        member
                            Is it b/c he is present in MN or is it b/c he has a family member
                              in MN
                                        Court doesn’t make it clear that the employment in MN
                                         matters
   If Allstate does business in MN, MN might have a reasonable expectation to be
    subject to MN law
        o But this does not necessarily mean Allstate should be subject to MN laws with
            WI parties
                 Why should Allstate’s presence in MN matter for purposes of this
                    case?
                          Also, Allstate probably gave the decedent nationwide
                           coverage
   What about Mrs. Hague’s after acquired domicile?
      o Here, MN has an interest in protecting Mrs. Hague—ward of the state
                 But this is true in all of the other cases that involved after acquired
                  domicile
                      In those cases, we said that after acquired domicile does not
                          matter
                      Here, the concern of this seems less relevant
                                 What about concerns with forum shopping concerns?
                                    o Court basically said that mrs. hague has a bona
                                        fide reason to move
                                    o Basically the court is saying that she didn’t
                                         move for benefit of the MN law
                                            But compare this to the Reich case—
                                               family that was moving to CA and got in
                                               an accident on the way.
                                                    This point can be called into
                                                       question in view of the Reich
                                                       case
                                                    See footnote 28 and 29 and
                                                       compare them—basically these
                                                         two together indicate that the test
                                                         focuses on the aggregation of
                                                         contacts. But if the after
                                                         acquired domicile is worth
                                                         nothing, it should be worth
                                                         nothing for the aggregation of
                                                         contacts
   Stevens concurrence:
                 o Unlike any of the other justices, Stevens differentiates between the DP and
                   FF&C analysis
                       Everyone seems to do the same analysis for both DP and FF&C
                       For DP: Can a state apply its own law
                       For FF&C: Must a state apply some other law
                 o Stevens basically says that FF&C is not applicable because neither party
                   specifically said that they wanted WI law
                       Maybe FF&C would be a problem if WI law was chosen r if the k
                           provided for stacking
                 o Stevens doesn’t really give guidelines as to when the federal/national interests
                   will be disturbed (i.e when we should have a FF&C problem).
                 o DP analysis
                        DP would be violated if the law is arbitrary or unfair
                                Stevens says that if a forum applies its own law, its never
                                   arbitrary or unfair
                                       Reason: forum is most familiar with its own law
                           Footnote 15:
                                Sets forth Stevens more comprehensive DP analysis
                           DP analysis seems to be much broader than the plurality
             Powell’s dissent
                 o In Powell’s view, a more substantive interest for MN is lacking
                 o Powell basically doesn’t see the nexus between MN law and the accident
             Ideological issue
                 o Liberal justices—in the plurality
                 o Conservative justices—in the dissent
             Loose ends with this case
                 o First:
                         what is the meaning of interests?
                 o Second:
                       What is the significance of ―potential contacts‖
                 o Third:
                       How much weight can after acquired domicile bare?


Shutts case
          Kansas court says that as a matter of Kansas law and as a matter of equitable
           principles, the fair thing would be to give the interest to the members of the class at
           the equitable rate
               o Problem with this is that the federal rate was higher than the rate by the
                   statutory rate
          Here, a clear majority of the courts adopt the Allstate standard (see p. 379 quote from
           the Allstate case)
        Bottom of p. 379 are a list of contacts that the Kansas SC looks at.
For next time
          Why does the majority conclude that these contacts are not sufficient
          383-392

Continuing Shutts case
          Issue: is it consistent with DP and FF&C for Kansas to apply its own law
          Relevant contacts
               o The money that is being sought is analogous to a common fund
                         There is no ―account‖ or segregated money set up in Kansas
                         Here, there is no discrete amount of money
                         Court basically said that since there is no limit to the ’s liability, the
                          idea of a common fund contact is rejected
              o What about the fact that ’s chose the forum and want Kansas law?
                   Argument is that the ’s, by initiating suit in Kansas, they had
                      implicitly gained an interest in being governed by Kansas law
                           The problem with this is that the class members don’t neces.
                              choose the forum, but instead that the class representatives
                              chose the forum.
                                         The most that the s did is not opt out. It’s not like the
                                          s affirmatively opted in.
                                             o Court basically says that they can’t read into the
                                                  failure to opt out as a consent to Kansas law
                                              o But Court also says that even when a 
                                                voluntarily chooses a forum, that doesn’t mean
                                                that it’s constitutional to apply the forum law.
                                                     This is important because think of an
                                                         after acquired domicile situation—if
                                                         ordinarily the after acquired domicile
                                                 isn’t relevant, then this ―intent‖ by the 
                                                 (via filing a suit in the forum) should
                                                 also not be relevant
                                                      p. 380: basically limits Allstate
                                                          by saying that in Allstate the
                                                          after acquired domicile was
                                                          before and unrelated to the law
                                                          suit
       o What about the fact that  does business in Kansas
            The court places some doubt on the unrelated business activities
                   occurring outside of the state
                  This seems to be in tension with the Allstate case that subjected the
                   Allstate to the MN court
                        Might be a way to reconcile—could be foreseeable to apply
                       Kansas law to Kansas s
       o 100s of Kansas of Ps involved
               Seems to be clear—fine for the Kansas s, but what about the other
               
               s?
       o Kansas familiarity with the claim:
                  If this was entirely dispositive, then there would never be a
                   constitutional limitation b/c ever state would apply their own law
                  This contact seems some what irrelevant
   Why should it matter that this is a class action versus a regular case?
      o Remember that in this type of class action, there has to be a question common
          to the class members that predominates
               Kansas was probably under the impression that they could resolve
                  these issues entirely though application of their law
                       But the problem with this is that there is only a common
                          question if the same legal standard is applied to everyone
                                 If different states’ laws apply to different s, then there
                                  may not be common questions predominating
   What about nationwide class actions?
      o If Kansas cannot use their law to create a common question, are nation wide
          class actions undermined?
               Court basically says that a forum law with little or no contact cannot
                  ―bootstrap‖(bottom p. 380-81)
                                 Basically saying that certifying a nationwide class action and
                                  needing a common question does not allow you to avoid the
                                  requirements of Allstate
                                         So how to proceed with class actions?
                                             o Here,  is incorp in DE, pric. place of business
                                                in OK:
                                                     Theoretically, DE or OK law could be
                                                        used for the common question (parties
                                                        would probably expect that they would
                                                        be governed by DE or OK)
                                              o Also, there could be subclasses, in which
                                                different states laws could apply to the different
                                                subclasses
                                              o So, arguably, there are ways to proceed with
                                                class actions even in light of the fact that what
                                                the Kansas court did is unconstitutional


Sun Oil case
          Facts are virtually the same as the Shutts case
          Here, the primary question is whether it is constitutional for the forum to apply its
           own statute of limitations on the forum
          Secondly, there is a challenge, under FF&C, to the determination of the amount
           owed.
          Important here that the focus is in FF&C, not on DP
              o most of the other decisions either focused on DP, or focused on DP and FF&C
                  simultaneously
              o Why is there a shift in focus from DP to FF&C?
                       One explanation is that the parties focused on FF&C, so he is just
                          responding to what the parties presented
                               Why did the parties focus on FF&C?
                                       The reason is b/c there have been two prior USSCT
                                        decisions that say that FF&C is applicable
                         Another possible explanation
                              Here, there is an allegation that the forum is required to give
                                credit to a state statute of limitations
                                      The argument is that statutes are more strongly ―public
                                       acts‖ and therefore that FF&C should apply
                                           o Prof: not very strong. there were statutes also
                                               in the Schutts case
        Part II of the opinion—there is no articulation of the Allstate standard
             o Why?
                       Scalia distinguishes between the constitutional limits when a state uses
                         its substantive law versus when a state uses procedural law
                               *bottom p. 383-384
                                      *Sets forth a blanket rule: it is constitutional for a state
                                       to apply its own procedural rules
                                      As a result, the question is whether the statute of
                                       limitations is considered procedural for purposes of
                                       FF&C
                                           o *So rather than asking about contacts that would
                                               make it constitutional for a state to apply its
                                               own law, Scalia asks whether the statute of
                                               limitations is a procedural law
        So, then, is the statute of limitations procedural for purposes of FF&C?
             o Scalia uses a historical argument—international statute of limitations at the
                time of framing were deemed to be procedural
                      Argument against this is that this view is outdated
        What’s the argument that a statute of limitations is substantive?
           o The statute of limitations is outcome determinative and therefore we may
               view it as substantive
           o Also, by saying that a claim is time barred, you’re saying that the substantive
               law will not be applied—some sort of substantive loss is suffered when the
               statute of limitations is enforced
                       Moderns USSCT opinions (such as in Guaranty Trust) have viewed
                        sol’s as substantive. Then why not find it substantive in this case too?
                             Reason is because this determination was made for purposes of
                                Erie
Tomorrow:
        Sun Oil
        Erie
        Klaxon
          Van Dusen
          Semtek

Continuing Sun Oil case
          Note that in Kansas, the sol is longer than the other states at issue (OK, TX, LA)
          Court here does not apply the Allstate contacts/interest test
              o Instead, the Court starts with the proposition that it is automatically
                  constitutional for a court to apply its procedural law
                        Scalia uses a historical argument to say that statute of limitations are
                          procedural
          One way to determine whether something is substantive or procedural:
              o Outcome determinative test in the York case
                      But Scalia says that this is for Erie purposes, and that something that is
                         substantive/procedural for Erie purposes is not sub/proc for choice of
                         law purposes
                              Note that this is consistent with Sampson case
                      But how convincing is this? There is an argument that the outcome
                         determinative test should be applied to this sub/proc problem
                              Some states treat sol’s as substantive (see borrowing statutes
                                  that apply another state’s sol—borrowing statutes suggest that
                                  sol’s are substantive)
                                 Scalia is not saying that it’s wrong for states to view sol’s as
                                  substantive.
                                         Scalis is basically saying that if history is placed aside,
                                          something should be looked to (state statutes, federal
                                          statutes). But aside from these, the old historical notion
                                          is not unconstitutional
          Constitutionalization of renvoi?
              o p. 386 footnote 3 (second sentence)
                       FF&C tells states that they must apply other states laws when that
                          other state has a right to have its law apply
                               But if the other state doesn’t think the other state’s law applies,
                                  then the original state does not have to apply the other states
                                  law
                                         How do we know that Oklahoma here doesn’t think
                                          Okalahoma’s sol should govern?
                                     o Reason is b/c Oklahoma views sol’s as
                                       procedural (look to Oklahoma choice of law
                                       law)—Oklahoma, therefore doesn’t expect
                                       Kansas to apply Oklahoma choice of law law
       o In answering the question ―must Kansas apply Oklahoma sol under FF&C‖,
         Kansas looks to the choice of law rules of Oklahoma, which under renvoi, we
         would not do.
       o footnote 3 (first sentence)
              Why is FF&C argument entirely dependent on DP?
                      Related to the renvoi problem above
                          If the conclusion that applying Oklahoma law violates DP, then
                           FF&C is also violated (?)
   DP argument
       o p. 387—quote says that DP is not violated
              Historically this has been practiced, so how can it violate DP? Court
                says it can’t
       o p. 387 also shows DP inquiries
       o Does the state have a procedural interest?
             Yes—Kansas has a procedural interest for the state to apply its own sol
   Part III of the opinion
        o Shutts said that the statutory interest rates of the different states must be
         applied to the s from those states
       o The s here are saying that the Kansas court misinterpreted TX law as to how
         TX law would have applied the interest rate (Kansas said that TX law would
         not apply the state court interest rate but would have applied the federal
         statute interest rate—but TX might not have done that)
              Scalia says that it’s not enough that Kansas just got the TX law
                  wrong—getting it wrong is not in violation of FF&C
                  O’Connor disagrees:
                       **last paragraph p. 392
                                  O’Connor is basically saying that Kansas was finding a
                                   way to easily get around the TX application of the
                                   interest rate law
   Brennan’s opinion
       o Brennan agrees with Scalia’s conclusion but Brennan does not rely on history
                   Instead, Brennan would apply the Allstate test and ask whether there is
                    an interest that Kansas has
                         Taking this approach, you have to ask why states have sols
                                   Reasons: to prevent stale claims, ensuring that s have
                                    enough time (etc)—see previous notes
                                        o Basically, sols are viewed as a balance
                          *If a statute has a shorter sol:
                                  Claim would be viable in OK, TX, LA, but not viable in
                                   KS
                                      o Would it be constitutional for KS to apply
                                            shorter sol
                                                 In this case, Brennan says that this is an
                                                    easy case—here the forum is interested
                                                    in preventing stale claims (KS has an
                                                    interest in protecting its own courts)
                          If a statute has a longer sol:
                                  (See graph on slides)
                                  When a forum says to another state that the other states
                                   shorter sol, the other state’s interest in protecting their
                                   courts is not present b/c the case isn’t filed in the forum
                                  The argument is that how can it be a violation of
                                   FF&C—the forum state is wiling to hear a claim that
                                   the other states value, but that the forum is willing to
                                   entertain it for a longer period of time
                                  But this is all assuming that both states have similar
                                   periods of repose
                                       o *What if the states have different repose
                                           periods?
                                                  Brennan just says that this analysis is too
                                                   complicated—and once the analysis just
                                                   becomes too complicated, the forum has
                                                   a procedural interest in having a way to
                                                   figure out the mess



Erie Doctrine
   Reason why we have Erie unit:
       o Figuring out which state’s law will govern is even further complicated when a
          court is not a state court but is not a federal court (problems with vertical
          uniformity coupled with the problem of figuring out which state’s law to
          apply)
   §34 of the Judiciary Act of 1789:
       o quoted on bottom of p. 566
       o Statute directs the court to apply the laws of the several states
                But the question is what does ―laws‖ mean?
                        This issue was addressed in Swift and Erie
   Erie case
        o Railroad door hits a person walking along the railroad tracks
        o Victim files suit in NY federal court saying that Erie Railroad is negligent
                 Potential reasons for filing in NY?
                        Maybe concerns about PJ (this is before Int’l Shoe)
        o At this time, the federal courts were apply a ―general‖ theory of law (akin to
            federal common law)
                 Victim says that if you look to these general views of tort law, then the
                    Railroad is negligent
               PA law, however, says that the Erie would not be negligent (willful
                and wanton standard as opposed to standard duty of care standard)
       o Railroad is arguing that if PA law applies, then the victim loses
             Also, railroad is arguing that the PA law does apply
       o The court has to deal with the Swift case
             Swift case interpreted the word ―laws‖ in the Judiciary Act narrowly—
                that ―laws‖ meant ―statutes‖
                      For questions of general principles of law, Swift court said that
                        this wasn’t governed by state statutes. Rather the Swift case
                           said that the federal court was capable of figuring out this
                           general law
                          Why did the Swift court interpret ―law‖ in this way?
                                 The court didn’t view legislatures as ―making‖ law—
                                  rather they saw ―laws‖ in the natural sense…that laws
                                  were already out there but that they were being
                                  discovered
                                     
                                     But another reason was that there was a hope that using
                                     ―general‖ law would promote uniformity
                                         o Argument is that if the federal court was
                                             allowed to provide general principles of law,
                                             then this would promote states to follow suit
              o Problems with the Swift case
                    The goal of uniformity is not realized
                    Also, in state parties are being treated worse than out of state parties
                           Reason:
                                        Since there is no uniformity, there will be a difference
                                         between the state law rule and the federal law rule. One
                                         law will favor one party, the other law will favor the
                                         other party
                                             o Person choosing forum will benefit (as is the
                                                 case in forum shopping)
                                                      But the complication is that with these
                                                         different rules—the out of state party
                                                         gets the benefit of selecting (and not
                                                         really the plaintiff).
                                                               If the out of state party wants the
                                                                state law sues in state court
                                                               If the out of state party wants
                                                                federal law, the out of state party
                                                                can remove b/c of diversity
                                                       The idea is that it is not the ’s choice
                                                        (which is the case even now with forum
                                                        shopping) but rather that it is the choice
                                                        of the out of state party


For make-up session
          Up to Van Dusen
       

Continuing the Erie case
          Idea of forum of shopping by choosing fed court versus state court by out of state
           party
   From the perspective of the state
       o State assumes that they have the power to regulate transactions within its
           border by applying its law
               The Swift case rejects this idea if the other party is from out of state
       o Example of this is the Taxicab case
               By chosing federal court, a party was able to avoid the state law bc of
                  federal courts application of ―general‖ law
   Also, there was difficulty in applying Swift
       o To the extent that Swift said that fed courts can apply ―general‖ law on
            matters that are not strictly local—not clear as to what was deemed strictly
           local
   Also, there is evidence that Congress intended the Judiciary Act to include state
    common law as well.
   (See the ―but‖ sentence on p. 569)
   What constitutional clause is violated here?
       o One way of reading Erie is that it’s in violation with the 10th Amendment
                The idea that whatever is not given to the federal government is
                   limited to the states or the people
                        Today, however, we may argue that this problem is gone due to
                       commerce clause powers
       o Another argument: even though congress may have power, the federal courts
         don’t have power b/c congress didn’t delegate it to the federal courts
       o Another argument: Article III
             Federal judicial power should extend between citizens of different
                states
                     This doesn’t give the courts the power to provide the
                       substantive law behind these cases.
                               But, compare this to Admiralty cases—it’s understood
                                that in Admiralty cases, the federal courts here can
                                make the substantive admiralty law
             Erie case basically says that this grant of authority is much broader
                than things such as Admiralty so the Court refuses to read into this
                grant to hear the case, the right of the court to make the substantive
                law behind the case
       o Essential holding: in diversity cases, state law applies
                     But it isn’t this simple b/c federal rules can apply to these cases (see
                      York case)
              o Does Erie extend to choice of law rules?
                    Erie leaves this question open
                            How to we know that this is an open issue from Erie
                                        In Erie, Court presents the choices between PA law and
                                         NY law.
                                             o There’s not even a hint that NY law would
                                                 apply.
                                                     Explanations for this:
                                                               1. This case was decided before
                                                                the choice of law revolution—
                                                                that is every state is using the
                                                                ―place of the wrong‖ approach
                                                               2. Maybe the Court thought that
                                                                the federal court was free to
                                                                choose which state law to apply
                                                                (in essence that the federal court
                                                                was free to apply federal choice
                                                                of law rule)
                                                               Note that Court doesn’t tell us
                                                                how they got to PA substantive
                                                                law
Klaxon case
         Best efforts clause in the contact is allegedly breached
         Not told if there is a federal interest law, but we do know that there is a NY state
          interest law
              o The fed court sitting in DE is faced with the question as to whether they
                 should apply NY interest law or (if this is deemed procedural) to apply DE
                 interest law
         What is the choice between?
            o the choice is not between fed interest law and state interest law, but rather
                 between fed choice of law principles and state choice of law principles
                      In other words, when the fed court has to decide whether to apply NY
                         interest law or DE interest law, what choice of law law does the fed
                         court look to in making this decision?
                        Fed choice of law principles or choice of law principles of DE
                         (the state that they are sitting in)
       o So here, there are two state interest laws competing for application (DE and
         NY), but also more fundamentally, there is a fed/state dispute as to which
         choice of law to look to
   *Rule from this case: federal court is bound to apply state choice of law rules—state
    choice of law rules of the state in which it sits
   Rationale:
       o What would the state courts do if it was in the state court? The states would
           look to their own choice of law. If DE views the interest rule to be
         procedural, the DE court would apply their own law. If substantive, the DE
         court would apply NY law
       o If the fed court applies the state choice of law rule, we’ll achieve the
         uniformity sought in Erie
       o If the federal court isn’t bound by the Klaxon rule, the federal court may
         classify interest differently than the DE court
               That is, the fed court may deem that interest law is substantive, NY
                  law would apply whereas if the DE would view it as procedural, DE
                  law would apply
   Erie may be distinguishable, however for several reasons
        o One reading of Erie is that there is no federal authority to make law in the area
           which was governed by Erie (federal tort law)
                  In this case, there is federal authority
                        p. 341: ―effects clause‖ of the FF&C
                                 Here, Congress has power to legislate on the effect that
                                  state law has
                                      o That grant of federal power is arguably broad
                                          enough the vest the federal government with
                                       law making power in the choice of law area
                                            Though this power is assigned to
                                               Congress and not the Courts, the concern
                                               of Erie of there being a lack of federal
                                               power is not present ehre
       o Also, in Erie we were choosing between state substantive tort law and federal
         substantive tort law
             In this case, there is not federal interest law vying for application
                         The choice is between two state interest laws, not between a
                          federal substantive law
                               it seems like it would make more sense to let an
                                impartial federal court to choose between the two laws
       o Rules of decision act (p. 566-67)
             Note the language ―in cases where they apply‖
                     Arguably, this is not a case in which the choice of law choice is
                        not applicable
   Costs of the Klaxon approach
       o Granted, the Klaxon approach preserves federal uniformity
       o But Klaxon does not do anything between interstate forum shopping
             Klaxon, actually, might increase intrastate forum shopping
                    Say for example that a state previously followed first
                      restatement but now their modern approach might be second
                      restatement
                                 The , if they want the benefit of first restatement,
                                  should file in fed court b/c the fed court has to stick
                                  with the previous state court rulings until otherwise
                                 The , if they want the benefit of the likely new trend,
                                  should file in the state court
                                     o State courts have more freedom to change their
                                      approach—if this helps the , then the  should
                                      file in state court.
       o Also, Klaxon seems to waste federal judicial talent
             If the federal courts were able to come up with a really good choice of
                law approach, the federal courts have no authority to impose it on any
                state
   Alternatives to Klaxon
       o If Erie did not actually compel Klaxon (that is, Erie doesn’t require adopting
           Klaxon rule), how would the above problems be solved?
                Klaxon rule may be overruled
                        This would accomplish the result that in federal diversity cases,
                          federal choice of law rules would apply
                               But there would still be different choice of law rules
                                among the 50 states
                         Another accomplishment
                                        Federal courts could fill in the gaps between state
                                         choice of law rules that would apply in both state and
                                         federal courts
                                        Some have argued that we need these federal common
                                         law rules crafted by the federal courts


Van Dusen case
         Case involves 1404(a) transfer statute
             o This statute permits a transfer from one judicial district to another
             o Statute language on p. 582
         One relevant question:
             o Why is this such a huge deal?
                     One reason is that the families may not want to deal with litigation that
                        is far from home. But this is not likely
                     Likely this is a big deal b/c of the laws that would apply in MA and
                        PA
                              MA: damages for wrongful death are limited
                              PA: no cap on wrongful death
                     Another important difference between the two states
                              MA: damages based on culpability
                              PA: damages not based on culpability but rather based on
                               compensation
             o Here, the district court is worried that if we transfer the action to MA, there
                  are more s in MA, so it might be more convenient
         The court in which the action was initially filed is called the transferor court (here, it
          is the E.D.Pa)
         The court in which the action is to be transferred is called the transferee court
         Rule: transferee court must apply the same law as the transferor court
             o The transferor court would solve the choice of law problem by looking to PA
                 choice of law law (b/c of Klaxon)
                      It doesn’t matter for purposes of the Philly suit what MA would do if
                         the suit was filed in federal court in MA
         What’s the rationale?
            o Three rationales
                      1. Erie rational
                             This is probably the least intuitive rationale
                        had a choice: When the  chose to sue in E.D.Pa, she could
                        have sued in state court or she could have sued in federal court
                             If she sued in state court, she would lock in what law
                              the state court (PA) would have applied
                                  o Under Erie, we want to make sure that she
                                      would get the same deal as if she sued in the
                                      federal court in the same rule.
                                           This explains Klaxon
                       How does it explain Van Dusen
                               The only way that it could have been transferred to MA
                                federal court is b/c it was filed in federal court in PA.
                                    o For example,  could not have transferred from
                                      one state court to another
                               We need to make sure that when the  sues in federal
                                court in PA that the  can lock in the same benefits as
                                if she filed in state court in PA
                2. If the law were to change upon transfer, then s would use 1404(a)
                 for forum shopping devices
                      But 1404(a) wasn’t meant as a forum shopping device—don’t
                        want to reward the 
                     We can give the ’s the benefit of what the law was meant to
                        achieve—that is a convenient forum, but we won’t give s the
                        benfit of using 1404(a) to forum shop
                3. Purpose of 1404(a) is to foster efficiency and convenience
                     If there will be a change in law upon the transfer, a court might
                        hesitate before issuing a transfer order even if the transfer order
                        will be more convenient
                               You don’t have to worry about this concern if you don’t
                                change the law—you can just look to see if it is
                                convenient or not
   bottom of p. 587:
        o ―we do not attempt…non conveniens‖
        o ―What if‖ questions:
                1. What if it was the  rather than the  that sought the 1404(a)
                 transfer?
                       Why would  do this since the  chose the forum?
                 may have made a mistake and may want to correct it
                Problem with letting  do this is that the  can sue in a
                 fed court to lock in the law that they like, and then use
                 1404(a) after locking in the law to transfer to a more
                 convenient forum
          Supreme Court (in Ferens case—which we didn’t read) says
          that the Van Dusen rule applies also to s
                Reason is because the  is no worse off b/c the  was
                   entitled to lock in the law to begin with
   2. What if a court of the transferor state would have dismissed the
    case on forum non conveniens grounds
          That is, what if the state court would not give the  the benefit
           of the state law?
                  Now what happens if the suit is filed in that same state
                   but in the federal court?
                       o Arguably, now the Erie rationale does not work
                           b/c in the state court you wouldn’t have locked
                           in that state’s law.
          What law would the  ultimately have if filed in the state court
           that dismisses?
                  Either the  would have no law or the  would have
                   the benefit of a law of a state where she files
                   somewhere else
        Here, maybe the Van Dusen rule should not apply
   3. What if the transfer was not sought under 1404(a), but rather 1406?
        1406 permits the transferor court to transfer to a different
          district court
                  But the premise is that the initial filing was not a
                   proper forum (as opposed to 1404(a) which presumes
                   the initial filing was proper).
          Here, there is no need to preseve consistency between state and
           federal court b/c  wouldn’t have gotten benefits in the state
           court
          Here, Van Dusen case would not apply
          (That is,  would not benefit from application of Van Dusen)
                         4. Should Van Dusen principle apply to a 1404(a) transfer in a fed’l
                          question case when the transfer is to a different circuit with a different
                          interpretation of federal law
                               Different federal courts interpret federal questions differently
                               One district court may apply one circuits interp while another
                                  district court may apply another circuits interp
                               Note that this question isn’t a diversity case—Erie is not
                                  relevant
                               Note 3 p. 588
                                     Says that USSCT should resolve this question
                                Prof: some opinions say that the transferee circuit’s interp
                                 should apply (that the law should change with the transfer)
                                        **This suggests that when there is no Erie concern
                                         anymore, that the Van Dusen rule goes away
For next time:
          619-625;
          639-642;
          642-46; 651-52



Semtek case
          Issue: which jx law if any determines the preclusive effect?
          Difficult case to classify
               o One way of classifying this case is as an Erie type case
               o Another way to look at this case is as a judgment case
          Typically, when we under go Erie analysis, we ask what the laws competing for
           application are?
              o One possibility: federal law
                         If it’s federal law, the source of the federal law is the FRCP
                                Specifically FRCP 41(b)
                                        [see slides for text of rule]
                                         takes the position that 41(b) applies
                                             o Argues that 41(b) has claim preclusive effect—
                                                 that is when the federal district court dismissed
                                                 the claims on the merits with prejudice, then
                                    rule 41(b) gives this judgment claim preclusive
                                    effect
          The question is whether the statute of limitations has a preclusive
           effect such that a suit cannot be brought anywhere
          Hypo: What if suit is filed in a convenient forum for  and in
           inconvenient forum for 
                Judgment for  b/c of lack of PJ
                Most jxs would say that the dismissal for lack of PJ was not
                  on the merits and was not intended to preclude any additional
                  litigation against 
               But different jxs have different claim preclusion doctrines
          There is a second federal option other than FRCP
               Under Erie situations, when the federal laws were not codified
                  in FRCP, other federal laws were competing for application:
                        Federal common law could be vying for application
                         (federal common law dealing with preclusion)
o Another possibility: state laws
      CA preclusion laws
             CA may have a preclusive rule that governs
       What about MD law?
             We can dismiss MD state law is b/c under the FF&C , it is the
                preclusive law of the rendering state that determines the effect
                of the first federal court’s judgment
o Does Rule 41(b) apply here?
      Under Hanna case, you apply FRCP as long as it is constitutional and
        as long as it is within the scope of the Rules Enabling Act
             When we studied Erie, which court is making the choice
                between federal law or state law?
                        It’s always the federal court sitting in diversity
          One reason why Hanna doesn’t dictate is b/c this isn’t a standard Erie
           problem—that is, a federal court is not choosing between FRCP and
           state law (here, a state law has to determine preclusive effect)
          Why doesn’t Rule 41(b) apply?
                Court views this rule as a unusual place to house federal
                   preclusive doctrine
                  Why is it peculiar to have a federal preclusion doctrine
                   housed in the FRCP?
                      o The FRCP is like an operating manual for
                          federal district courts entertaining lawsuits
                          (basically tells what the fed courts to do when
                          it’s the first federal court hearing a case)—it’s
                          peculiar to have a rule governing preclusive
                          effects of rulings in other courts in this
                          operating manual
   The court here seems to be suggesting that if we understand 41(b) as
    articulating the claim preclusive effect, it might violate the Rules
    Enabling Act
         Reason: Under Hanna, the FRCP applies over state law as long
            as it’s within the scope of the Rules Enabling Act (see above)
                  How to determine?
                     o Does it abridge, enlarge, or modify a substantive
                         right?
                              Here, the substantive right still
                                subsists—the substantive rights itself
                                 does not go away b/c of the s.o.l.
   2 other reasons why 41(b) doesn’t apply:
         If the federal judgment were to be given claim preclusive effect
           b/c of 41(b), the  could not sue again if the claim goes
           forward in federal court, but the claim can go forward if the 
           can sue in state court.
                  This will lead the  to remove to federal court to avoid
                   the suit—this is exactly the type of vertical uniformity
                   that Erie was trying to address
                       o Court basically says that if 41(b) is read in this
                          preclusive way, Erie problems will result.
          Court also says that 41(b) language should be read along side
           the 41(a) language
                  What does ―dismissal without prejudice‖ mean?
                     o That the  can come back to the same court (for
                         example, failure to state a claim upon which
                         relief can be granted)
                         Court here says that ―adjudication on the merits‖ should
                          mean the opposite of ―dismissal without prejudice‖—
                          this means that the court is saying that this language
                          means that the  cannot come back to the same court.
                             o This does not mean that the judgment precludes
                                the  from suing on the other parts
                     That is, 41(b) is interpreted that the same claim cannot
                        be brought back to the same federal district court (not
                        as a preclusive law)
o Now that 41(b) is gone, which law governs?
          Bottom of p. 623:
               Seems to say that federal common law
                         What is the content of this federal common law rule?
                            o The Court tells us that federal law governs, but
                                 that the content of that federal preclusion law
                                 borrows from state law
                                      For the content of the federal common
                                         law, we look to the state law of the court
                                         in which the federal rendering court sits
                                         (here, CA).
                                              When we’re trying to figure out
                                                 what effect this dismissal on sol
                                                 grounds has on other suits, we
                                                 look to the CA state law (that is,
                                                 it’s really state law that applies)
                                              Unless…if there is a
                                                 countervailing federal interst that
                                                 would be frustrated in application
                                                 of the state law. Example:
                                                 imagine federal court dismisses
                                                 as a matter of sanction (such as
                                                 failure to give discovery);  sues
                                                 on same claim in another court—
                                                 this case says that you look to the
                                                 state law of the court in which
                                                 the federal court sits. if a state
                                                        court here would allow for
                                                        another suit (not likely), then this
                                                        would frustrate the federal
                                                        interest in making sure that
                                                        things like sanctions against
                                                        failure to give discovery get
                                                        enforced.
                                What is the benefit of looking to state law to find the
                                 federal common law rule?
                                     o One benefit is that we have the kind of vertical
                                     uniformity that Erie was designed to achieve
                                 o Also, achieves the goal of no vertical forum
                                     shopping
       o What about FF&C concerns:
            Court says that state courts don’t require state courts to recognize
               federal judgments, but that historically, courts have always required
               such recognition by the state courts
                    On what basis?
                                court has found arguments (such as supremacy clause)
   Wrinkles from Semtek:
       o Assume suit is dismissed by C.D. Cal for failure to state a claim, and CA
          doesn’t accord such dismissal claim preclusive effect
                That is, if the suit were filed in CA state court you could sue again.
                      1. What would happen if the second suit was filed in C.D. Cal?
                                Rule 41(b)—cannot be brought in the same federal
                                 court. (unless the court otherwise specified, the court in
                                 Semtek says that 41(b) says that you cannot go to the
                                 same court with the same claim)
                         2. what would happen if the second suit is filed in state court
                          in Cal?
                               Semtek says that federal common law would look to
                                CA state law to see if the judgment has preclusive
                                effect
                                     o Then, theoretically, the CA state court claim
                                         could go forward—no vertical uniformity
                         3. What if the second suit is filed in the N.D. Cal?
                                        Sektek would still look to federal common law and
                                         borrow CA state law to figure out the preclusive effect
                                        41(b) does not apply here b/c it’s not the same federal
                                         court
                                        Arguably, you don’t get the same result with two
                                         federal courts sitting in the same state
For Weds
          646-51



Introductions to Judgments
         Effect that a judgment renders in one system will have in another system
         Res judicata [claim preclusion]
         Collateral estoppel [issue preclusion]
Policies served
          Claim preclusion
              o When a judgment is rendered in a suit, it will preclude the same parties from
                  litigating the claim a second time
                        Precludes litigation by the same party or those in privity with those
                          parties.
                         Also bars them from litigating not only matter presented to the court
                          but also matter that was part of the same claim
                               Example: car accident—lawsuit for negligence
                                        The theories, evidence that you offered the first time,
                                         and even the things that you didn’t offer the first time
                                         are merged into the judgment
              o Claim preclusion applies to the  regardless of whether the  wins or if the 
                loses
                         One crack at the apple
              o Claim preclusion applies to  too
                    If  has a defense to ’s claim and  fails to bring it,  can’t seek to
                       undue the judgment in a second suit by bringing the defense
                                ’s defenses merge into the claims
          Issue preclusion
               o Idea is that the parties may be litigating on a different claim
               o The parties may be precluded from relitigating the same issue
       o If the issue was actually litigated, and it was necessary to render the judgment
         and if the party against whom preclusion is sought had a full and fair
         opportunity to argue their case
       o Defensive vs. offensive nonmutual collateral estoppel, etc, are not discussed
         here.
   Policy interests served with preclusion
        o Finality
                 Want the claim to end. Won’t let one party keep on harassing another.
        o Efficiency
                 Doesn’t make sense to bring several law suits for the same basic idea.
               (Can’t bring mini lawsuits for separate pieces of her claim)
       o Respect for judgments
             If we were allow parties to relitigate, we run the risk of getting
               inconsistent results
   Rendering court will be referred to as the ―F1‖ court
   Enforcing court will be referred to as the ―F2‖ court
   FF&C plays an effect to make sure judgment in F1 court is protected by the F2 court
       o Two things to note
                1. FF&C speaks to interstate obligations
                         Also, FF&C doesn’t speak to the federal obligation to give
                          respect to each other or state judgments
                  2. Focus now is on the judicial proceedings of other states
                       The amount of credit that the FF&C gives to with respect to
                          public acts is different than FF&C gives to judicial proceedings
   §1738 of Judicial Act on p. 641
       o p. 641 ―Such Acts…‖ is the substantive and important part
                2 important points from here:
                       1. It imposes an obligation to state courts to give FF&C but it
                          also requires that every court within the territory of the US to
                          do so.
                               State and federal courts are required to give FF&C to
                                the public records…
                                     o This speaks to obligation to every court in the
                                        U.S.
                         2. What is meant by ―full‖ credit in FF&C
                                 statute tells us that these proceedings shall have full
                                  faith and credit.
                  Basically, these two things mean the following:
                       *We look to the preclusion doctrine of the rendering court state
                          law, not to the F2 law
                       *Also, we know that the F2 court have to give it the same
                          credit—not more or less
   Durfee case
       o Action to quiet title—filed in state court of NB
       o In order for a court to have jx to hear a suit, the property has to be located in
           that state—if the property is not located in that state, then the court lacks jx.
                p. 642—court says this (―The Nebraska court had jurisdiction over the
                    subject matter…‖)
       o First suit—judgment for 
       o Second suit-- sues  to try to quiet title
              But this court is not filed in NB, but is filed in Missouri
                     Removed to federal court
                       is seeking to collaterally attack the suit
       o The  (original ) might try to make the argument of collateral estoppel—
         case has already been litigated
                   might rebut by saying if the rendering court lacked SMJ, then the
                   original judgment can be invalidated
                        How does USSCT respond?
                                Court says that they can consider whether the F1 court
                                 has SMJ—also says that in some cases, the F2 case has
                                 the duty to look at SMJ
       o §1738 tells us that the federal court in Missouri has to give the NB judgment
         full faith and credit
                  So to answer this question, what would a NB court have said if a
                   second suit was filed
                          It’s likely that the NB court would say that both the  and the
                            are bound by res judicata
                          Even if this was viewed as a distinct claim not barred by claim
                           preclusion, issue preclusion would prohibit this from being
                           relitigated
                         Basically, 1738 says that they have to give this judgment the same
                          credit that the original court would have given it.
                 o What if the parties never litigated in SMJ in suit 1
                           This could still be barred by claim preclusion-- could have raised the
                            issue in the first case.
                           Whether SMJ was litigated or not in the F1 court, we won’t allow a
                            collateral attack in the F2 court so long as the F1 court views the
                            judgment as binding (either for claim or issue preclusion purposes)
                 o What about with PJ problems and a  shows up to contest PJ
                      Issue preclusion would prevent the  from raising this again. Here,
                         it’s collateral estoppel
                         If the  does not challenge PJ, then res judicata (claim preclusion)
                          would apply b/c PJ is a defense that  could have raised. Here it’s res
                          judicata
                 o But there are exceptions
                       1. What if you never show up to challenge PJ?
                                Res judicata says that if you never showed up in F1, then you
                                  can raise PJ in F2. This is a circumstance in which you can
                                  collaterally attack a judgment
                 o p. 645 footnote 4:
                        Tells us when collateral attacks are permitted
                               Note that the Court doesn’t adopt these provisions, but just
                                  indicates that these might be exceptions
                                          Basically, we don’t know to what extent the court
                                           would accept these exceptions
                 o This case tells us that with respect to SMJ, there is a possibility that you can
                   collaterally attack for SMJ if the issue wasn’t litigated.


For next time:
          Durfee bootstrap
          Fall
          Kalp case



Continuing Durfee
           Point of this decision is that the F2 court is bound by the rendering by the first court
            that the first court had SMJ
                o From this holding, we have extrapolated a comparable rule in the PJ context
                o Also, we considered what would happen if you didn’t litigate the jx defense
                          In PJ, you should up and don’t raise PJ, it’s waived
                          Also, Durfee suggests that SMJ may not be collaterally attacked if you
                             showed udp but didn’t raise SMJ
                                  That is, if you didn’t raise SMJ in the F1 judgment, you can’t
                                     collaterally attack..
                                         Durfee raises possible exceptions to this in footnote 4,
                                          and also the Kalb case
           Durfee bootstrap
               o We could have a court that actually has no jx (Such as a state not having PJ
                 over a ) concluding that they have jx. In order to correct this mistake, it
                 would have to be challenged during the F1 proceeding b/c the jx question
                 could not be collaterally attacked.
                     The bootstrap works if you show up and challenge jx
               o General rule: bootstrap will work for PJ and SMJ


Fall case
           Property acquired by married couple in NB
               o Married couple moves to Washington
           WA court says that husband should sign the deed over the the wife, but husband
            refuses to.
                o Husband takes out a mortgage on the property and also assigns the property to
                    his sister
           Question of the court: what effect does the F1 judgment (Washington judgment)
            have in the F2 proceeding?
           Did the Washington Ct. have PJ over the parties?
               o Undoubtedly, the WA court has PJ over the parties
           Did the WA court had SMJ over the parties?
               o Remember, the land is not located in WA, but is located in NB
               o In order for the WA court to have SMJ, at least one spouse needs to domiciled
                   in WA
           The WA court did have PJ over parties and SMJ to proceed with divorce
               o Could the WA court have ordered the husband to transfer the property?
   The H could have been placed in criminal contempt for violating the
    court order—put the H in jail to compel him to comply with the order
   Then why didn’t WA do this?
        ―Zeroth‖ potential reason: there really was no SMJ
            (questionable)
        One potential reason: no state can interfere with land located
            elsewhere
                 But if this is true, then what good is it for the WA to
                  allocate the goods of the property when the H can just
                  frustrate the judgment of the court?
                  This may indicate a narrow exception for real estate
                   cases
          Another potential reason: The problem is not just that WA
           can’t directly impact NB land, but that the WA didn’t know
           what they should have done to effectuate the transfer of land
                 Ex—even if everything is in WA, if no change of title
                  occurs on the books, title will not be allowed to pass
                  between H and W
                     o The bottom line is that in a purely domestic
                          case, the judgment isn’t automatically binding
                          (other things have to be done, like registering
                          the title)
                 Potentially, the problem in this case is the failure to
                  register the deed—but it’s more complicated here b/c
                  the property is located in NB
                 Assume that there was no real property at issue: say
                  that this is just a breach of k claim.
                      o If  has no property in WA, but  has property
                          in NE, can the  directly enforce the WA
                          judgment in NE?
                               No.
                                      **The judgment has to be
                                         converted into a judgment of the
                                         second state—reason is because
                                         the mechanism in the F2 place is
                                                                   only in place to enforce F2
                                                                   judgments
                                                                  Basically, what you do is bring
                                                                   some sort of action to register
                                                                   your F1 judgment in the F2 state.
                                           So back to this case—if W couldn’t have taken a money
                                            judgment (like in the above example) and enforce it in
                                            the F2 state without a conversion as an F2 judgment,
                                            then W certainly couldn’t have the equitable
                                            distribution judgment enforced in the F2 state
                                               o W should have the title change recorded on the
                                                 books. W failed to do this.
            Remember that Durfee came after this case
                o There is little to support that this case indicates that any allegation that F1
                  lacked SMJ is subject to collateral attack
            Follow up questions
                 o What if the sister had been a party to the WA divorce action?
                        If the problem in the Fall case was that the judgment had not been
                           recorded (thereby potentially harming the sister who would think she
                         has good title), then here, the sister cannot claim that she thought she
                         had good title b/c she was a party to the first suit.
                o What if W sued H in Nebraska
                o How could W have protected herself?
                     W may not have been able to sue in NE b/c of the domicile
                         requirement
                     Lis pendens (or alternatively, notice of pendency)
                              This is a notice that you file with the clerk in the county where
                                the property is located
                                           Basically, this is to put everyone on notice that there is
                                            dispute to title to the land.
                                                o The point of this is so that someone can’t get the
                                                   land thinking that they have good title (such as
                                                   H’s sister)

Kalb case:
            Farmer files for bankruptcy after a foreclosure proceeding
          No party asks for a stay in the WI proceedings
          Argument is that the judgment/confirmation of sale was void
              o Basically that the WI court was deprived of jx and that any state that the WI
                  court took after the bankruptcy proceeding was void for lack of jx
          Did anyone in the WI action question the jx of the WI court to proceed?
              o It seems like here, the lack of jx defense was not raised
                      In Durfee, we learned that if you challenge it or not, you can’t
                         challenge the F2 court for lack of jx.
                              So here, why is the issue of jx raised in the F2 court?
                                          Here, Congress had acted to confer jx to the courts
                                              o here, we are dealing with the effect of a federal
                                                  statute
                                                       In Durfee—a state court and federal
                                                          court in different states
                                                              Question was what the effect of a
                                                                  state court in one state had on fed
                                                                  court in anotehrs state
                                                       Here, the F1 court is a WI court, and
                                                          court asked to ignore judgment of F1 is a
                                                        court of the same state
                                                             Therefore, the FF&C is not really
                                                                implicated here. The question
                                                                isn’t how much judgment of a
                                                                court in one state entitled to
                                                                judgment in another state
                                              o The point of this case is that when WI acted
                                                after the bankruptcy petition was filed, they
                                                acted without authority and therefore that action
                                                  was void b/c of the federal statute
                                                       Why does federal law determine the
                                                         effect of the judgment—Supremacy
                                                         Clause
                                                       So really, this is a Supremacy Clause
                                                         case, not a FF&C case
                o The point of this case is that the WI lost effect of its judgment in its own state
For next time
          Are there exceptions to FF&C itself
          657-62;677-87



Continuing Kalb case:
          Question regards the effect of the third judgment
              o Could it be challenged for lack of SMJ?
          This case is not a FF&C case
              o Here, the courts are all state courts—no inter-jx preclusion questions.
              o The question is whether Congress has power to deprive the state courts of jx
                           Supremacy Clause case
          Additionally, it looks like there is an incongruity between Durfee v. Duke and Kalb
           case
               o Here, the court seems to be saying that in a later proceeding (Suit 4), we can
                  challenge a suit 3 for lack of SMJ
                       Durfee says that you can’t do that
                       How to reconcile?
                                One way: here, no FF&C issue
                                Another way: in Durfee, the court said that the rule of jx
                                   finality is not without exception
                                      You can say that this is an exception
                                      Durfee cites to Kalb case as an exception.
                           Durfee’s general rule: can’t collaterally attack decision for lack of
                            SMJ
          If the second suit had been brought in a different state court or a federal court, then
           there would be a full faith and credit problem and a Supremacy Clause problem
                o How to reconcile a case like this with Durfee?
                        One suggestion might be in the Full Faith and Credit Clause itself
                                  ―and the congress may by general Laws…‖
                                          Effects clause
                                               o Congress gets to legislate the effect.
          Congress has authority to make law in this area (Bankruptcy):
              o The argument is that congress has authority to make exception in FF&C too
                      How to know whether congress has made an exception?
                             No clear answer, but an illustration will demonstrate the
                                 problem:
                                         [See slides Allen v. McCurry]
                                             o State court would issue preclude
                                                       But §1983 created a federal right to
                                                         bring a federal cause of action
                                                       In crafting the §1983 remedy, Congress
                                                         meant to create a FF&C exception
                                                       Court rejects the argument that 1983 is
                                                         an exception to 1738, but it leaves open
                                                         the possibility that Congress could create
                                                         an exception


Fauntleroy case
          People in MS enter into a futures k.
              o A futures k is something where someone purchases a right to buy a
                  commodity in the future at a fixed price
                       Reason for doing this: avoid price fluctuation
                             Somewhat of a gamble
              o MS says that such transactions are like illegal gambling
          Plaintiff wins arbitration in Mississippi and doesn’t try to enforce it in Mississippi
              o  serves the  as soon as the  crosses into MO to try to enforce the
                arbitration award in MO
              o In the arbitration proceeding, the issue of the illegality of the transaction was
                not raised
                     As a result, MO enters judgment
                                  couldn’t convert the judgment in MO, so  tries to enforce
                                  the judgment of the MO court in MS.
                                          objects b/c  says that underlying the judgment is an
                                          illegal transaction.
          Question is whether MS has to enforce the judgment
           comes up with the argument that MS lacks SMJ to hear the third suit
              o This is different than the other cases
                       Here, the argument is that the F2 court lacks SMJ
                       What’s the argument?
                              p. 657
                                         The argument is that MS, in saying ―shall not be
                                          enforced by any court‖ mean to deprive the court
                                    o What’s the response to the argument?
                                         Court draws a distinction between jx and
                                            duty?
                                                  jx—can they hear the case
                                                  duty—what rule should they
                                                    apply when they hear the case
                                         Court here says that the language here
                                            goes to the duty of the court
                                                  Basically, the court has to decide
                                                    whether or not the language was
                                                       meant to deprive of jx or to just
                                                       define the duty of the ct.
                                                      Here court decides that the
                                                       language wasn’t meant to deprive
                                                       court of jx.
                                                      Something more explicit would
                                                       be needed to deprive the court of
                                                       jx
   MS feels strongly (b/c of their laws) that parties shouldn’t have engaged in the
    contracts that they did
       o by enforcing such a judgment, it would violate MS public policy—but court
           rejects this argument
                 How does this public policy analysis compare with other public policy
                    cases?
                         Can an F2’s public policy exception survive FF&C?
                                This case says that public policy exception does not
                                 work
                                    o How to square this with other cases that invoked
                                        public policy exceptions
                                            One way: here, this is in the judgment
                                                context. Other cases have dealt with
                                                choice of law (not judgments)
                                                    F2 court can’t use public policy
                                                       to avoid enforcing a judgment;
                                                       compare this to a court being
                                                       allowed to avoid another state’s
                                                                  choice of law (no judgment is
                                                                  present)
                                                        Prof: states are required to give FF&C
                                                         to ―Law‖ and ―Judgments‖ of other
                                                         states, yet the amount of credit that is
                                                         owed to ―Public Acts/Laws‖ is very low;
                                                         whereas the amount of credit that is
                                                         owed to ―Judgments‖ is very high
                                                              Same constitutional clause,
                                                                  different outcome
          The FF&C says that the MS court has to give the judgment the same effect as the MO
           court
              o The MO court would have said that the defense of lack of SMJ would have
                 been precluded
                     This result is consistent with the policies underlying claim preclusion.
                             Finality
                             Consistency


Baker case:
          GM settle the first suit and gets an injunction against Elwell from testifying in the
           future.
          Question is whether the federal court in MO required to enforce the injunction issued
           by the MI court
               o Two arguments made as to why the fed court in MO did not have to enforce
                       First argument: it violated MO public policy
                              Public policy—having people speak freely
                              this argument is that the federal court in MO can essentially
                                 disregard the MI injunction b/c it violates MO public policy
                                         Court easily dismisses this argument b/c of the
                                          Fauntelroy case (previous case)
                                             o Can’t enforce public policy exception with
                                                 respect to judgments
For tomorrow
          Baker
          DOMA
          Supplement 4
         696-700



Continuing Baker case
         From last time:
             o Amount of credit owed to laws is low, while amount of credit owed to
                 judgments are high
             o Court says that for purposes of FF&C, equity judgments and money
                 judgments are treated the same (that is an equity judgment has the same effect
                 as a judgment at law)
         Why isn’t MI injunction entitled to recognition in MO?
            o MI cannot tell MO what evidence to admit, who can testify, etc.
                     This is only part of the Court’s rationale.
                             How to reconcile this with the conclusion of the court that a
                                judgment has both issue and claim preclusive effect?
                                       One way: MI court is trying to make the scope of the
                                        injunction to go beyond to reach parties that were not
                                        parties to the original law suit
                                            o Kennedy’s opinion says that since these are
                                               nonparties, the non parties cannot be bound by
                                               the judgment (non party cannot be bound unless
                                               they are in privity b/c it deprives the non party
                                               of their DP rights)
                                       So what’s different about the majority’s opinion and
                                        Kennedy’s opinion?
                                           o What about Scalia’s take?
                                                    Scalia: Says that while the judgment in
                                                       MI is preclusive against the parties, it is
                                                       not itself enforceable in other courts.
                                                            Similar to the Fall case, where
                                                               the judgment had to be converted
                                                               in the forum state in order for it
                                                               to have effect
                                                            Scalia views the problem here
                                                               very similarly—MO court
                                                              Two distinct theories as to why
                                                               the MI injunction is not
                                                               enforceable: Kennedy—non
                                                               parties; Scalia—direct
                                                               enforcement in MI is sought
                                                               when this direct enforcement is
                                                               not allowed (Scalia says that the
                                                               judgment is just entitled to
                                                               preclusive effect between the
                                                               litigated parties)
                                            o Majority’s take?
                                                  A little bit of both Kennedy and Scalia
                                                  bottom of 681:
                                                          First part of the paragraph sounds
                                                             like Scalia
                                                          Second part of the paragraph
                                                             sounds like Kennedy
                                                  But there’s a little bit more to the
                                                     majority’s opinion:
                                                              Bottom of 679 (last paragraph):
                                                               Majority appears to be saying
                                                               that MI has authority to
                                                               adjudicate the dispute between
                                                               the parties before it (that MI can
                                                               decide the merits of that suit), but
                                                               the MI court does not have the
                                                               authority to adjudicate anything
                                                               else that is not before it. The
                                                               right for Elwell to testify was not
                                                               before the MI court—this is for
                                                               MO to decide
                                                              Kennedy is concerned about the
                                                               scope of this.

Treinies case:
          Tough case to read, but a simple and important idea behind it
   Facts:
       o Woman has stock and dies
            Husband is named executory of the estate
            Daughter (from previous marriage) and Husband agree as to
              distribution
                   Dispute between D and H arise after this (probably when they
                      realize that the stock is not worthless anymore)
            D says that she should get 50%; H says that he should get all of it.
   First lawsuit:
        o Filed in WA state
                 Probate proceeding
                      H was executor of wife’s estate.
                      D petitions to have the H removed as executory (D complains
                         that H never filed a report as to the distribution of assets; also
                         D complains that H dissipated the stock)
                              We know that H assigned the stock to Treinies
                        H counterclaims against D seeking a declaration that he is
                         entitled to the stock
                              
                              D claims that this question is beyond the jx of the court
                                  o WA court concludes that it does have jx.
       o H and Treinies are WA citizens, D is an ID citizen
   Second law suit:
       o D, for whatever reason, decides to bring a second lawsuit in ID
               D is seeking to litigate (in ID) who is entitled to the stock
               Prof: H and Treineis should argue that this question has already been
                  litigated
               Remember that the WA proceeding was in a probate court, which is a
                  court of limited jx
                     This would be a good argument for D
                 What is a good argument for H?
                     H should say that D had a full and fair opportunity to litigate in
                         WA
                               The question of whether the WA court had jx is exactly
                                the same question that was litigated the first time
                        ID rejects the conclusion that WA had jx
                                 Prof: ID could have made a mistake
                              o ID in fact could have acted in violation of the
                                constitution (―mistake of constitutional
                                dimension‖) by failing to give the WA court
                                judgment FF&C
                      Result is that suit 1 is won by H, suit 2 is won by D
o So H brings a third lawsuit in WA basically seeking to enforce the WA
  judgment
      Sunshine Company, which is probably frustrated, invokes an
         interpleader action (that is, they put the property into the court and
         make all parties interested in the property enter the suit)
             This is the fourth law suit
o *The question is which judgment should go into effect
      *Rule: The judgment rendered last in time is the judgment entitled to
        preclusive effect
             The ID judgment is the judgment that is rendered last in time,
                so as a result, the ID judgment is entitled to preclusive effect
             How fair is this result?
                         Seems unfair at first
                         Prof: if you are the first court hearing a claim, you
                          might misinterpret a law
                             o Can a second court avoid recognition of the first
                                  court’s judgment by saying that the first court
                                  made a mistake?
                                      If a second court could do this, this
                                          would be entirely inconsistent with the
                                          FF&C clause. You will not be able to
                                          relitigate the question in the second
                                          court.
                                               That is, if an F1 court makes a
                                                mistake in the interpretation of
                                                the law, that mistake should be
                                                fixed in F1
                              o Assume that the F1 court renders and judgment
                                and there is a challenge in F1 as to that court’s
                                jx.
                                                      The F1 court is going to have to resolve
                                                       the question of its jx
                                                      When enforcement is sought in F2, the
                                                       F2 court is supposed to give the
                                                       judgment the same effect that it would
                                                       have in F1
                                                            The F2 court has to give the F1
                                                              judgment the same effect as it
                                                              would have in F1 (example, in
                                                              Alaska, you can’t relitigate, so in
                                                              Penn. you can’t relitigate either)
                                            o How to fix the seemingly unfairness?
                                                   The whole point is that if it is unfair, you
                                                      should fix it in the F1 court—if Alaska
                                                      (or Idaho here) got it wrong, fix it in
                                                      Alaska (Idaho)
                                            o But what if the F2 court (ID) makes a mistake as
                                              to giving the F1 court judgment
                                                   Can you collaterally attack the ID court?
                                                       No
                                                               Just like you can’t collaterally
                                                                attack the judgment—if the
                                                                nature of the mistake is that the
                                                                F2 court didn’t enforce the
                                                                proper judgment, fix it in F2
For next time:
          Monday: DOMA stuff, recognitition of foreign judgments, 723-725, 735-45; 745-52
          Tuesday: 752-65



Defense of Marriage Act
          What extent does the FF&C require states to recognize the marriages of other states
          Many states and congress enacted statutes that defined marriage as between man and
           woman
             o Additionally, some states enacted statutes that said same sex marriage was
                 against their public policy
                  The concern of the legislature was to make sure that no one would
                   have to struggle to find their state public policy
                  Some states went further to say that their courts were not obliged to
                   recognized same sex marriages in other states (as a belt and suspenders
                   approach)
                        Additionally, Congress decided that it would reinforce the view
                          of many states that states would not be required to recognize
                          same sex unions
                        Issue then arose that, despite this statute, must states still
                          recognize
   In the absence of DOMA, must state courts recognize same sex marriages?
        o Does PA have to recognize a MA marriage?
                One approach—amount of credit given to public acts is pretty slim, but
                   the amount of judgment owed to judicial proceedings is big.
                        Is marriage a public act or a judicial proceeding (or a record)?
                                 Marriage does not seem to be a judicial proceeding
                                  (prof—marriages are definitely not judicial
                                  proceedings); marriage might be deemed as a record
                                  (but we don’t really know how much credit is given to
                                  ―records‖ under FF&C)
                                 Must the forum look to its own law to determine the
                                  marriage’s validity? If we look at the issue in this light,
                                  then this is really a choice of law problem.
                                      o General rule: law of the place of celebration
                                          governs
                                                But there are exceptions—is there is
                                                   positive law exception?
   What if the dispute is something like benefits to a same sex couple, married in MA
    but benefits are sought in PA?
        o What if there is litigation in MA, and the MA court says that the marriage is
           valid, and then later the employee is transferred to PA?
                 IF the question is whether the couple was married, as a matter of
                    collateral estoppel, then MA wouldn’t permit relitigation so PA
                    wouldn’t permit relitigation
                         The public policy argument would have been merged into the
                            judgment
                                  So what is the PA to do with any legislation that they have that
                                   it’s against their public policy?
                                             Seems pretty clear that PA would have to honor the
                                              marriage.
          This tells us that in the absence of litigation, DOMA is not really required—the state
           can just deny recognition to the marriage under their own law (subject to substantive
           constitutional challenges [beyond the court’s scope])
              o If there has been litigation, in the absence of DOMA, it would appear that the
                   states would have to honor the marriage regardless of any public policy
                   qualms
                          So does this mean that DOMA is unconstitutional?
                               It seems relatively clear that DOMA is saying to states that the
                                  states don’t have to recognize certain judgments
                               To argue that DOMA is constitutional, where would you look
                                  for congressional authority to do this?
                                             The ―Effects‖ clause of the FF&C
                                             If you are trying to argue that congress had the
                                              authority to enact this law, you’d say that congress is
                                              legislating the effect of a specific type of judicial
                                          proceeding
                                  To argue that DOMA is unconstitutional?
                                             Argument is that Congress is bound by the first
                                              sentence of the clause
                                                  o ―shall‖ in the first sentence, and that this clause
                                                     is binding upon congress
                                                  o Argument is that congress cannot circumvent
                                                     the point of the FF&C by creating this exception
Extraterritoriality of Federal Statutes
          In some of these cases, we see a unilateral approach
               o If US law applies, then US law will apply; if US law does not apply, the case
                  is dismissed.
                       This makes it somewhat different than the other choice of law cases.
                               Why are these cases treated under a unilateral approach
                                 whereas others are treated under a multilateral approach
                                 (reminiscent of the internet cases)
          EEOC v. Arabian Case
                 o Court here made very little of the fact that this was a jurisdictional challenge
                 o When the question is whether US law applies, if the challenge is that US law
                   does not apply outside the borders of the US, is the challenge to the SMJ of
                   the court or is it a different type of challenge?
                        In some cases, the court has treated it as a lack of SMJ
                        Scalia would say that this is a question of legislation jx rather than a
                          question of the competency of the court
                        Prof: this question is raised in the court although not discussed
For next time:
          nothing else



Extraterritorial approach:
          EEOC case
             o Most of the cases in Conflicts employ a multilateral approach
                     Body of law 1 or body of law 2
             o Unilateral approach:
                     Asks whether a law can be applied. If it can’t, then dismiss the suit
                      (don’t apply the other law)
                       This came up in internet cases
                 o The fact that this is an international case doesn’t fully explain the unilaterally
                   applied (see the Ontario cases)
                       The more persuasive reason is b/c this is more of a public case—
                          seeking to regulate public entity and a party
                       Another possible reason: the penal law exception
                               This exception says that states won’t apply the penal laws of
                                   other jxs
                                           This is seen the most in criminal laws
                                               o Criminal laws seem to take a unilateral
                                                    approach
                                           Why shouldn’t penal laws from other state’s be
                                            applied?
                                               o One explanation is that when we apply the law
                                                   of another jx, we have to decide whether or not
                                                   it violates our public policy
                                    Concern with respect to penal laws is
                                     that the other sovereign is deeply
                                     invested in its penal law—the other
                                     sovereign might be offended if a forum
                                     refuses to apply their public policy
                                          In the international law context
                                             with respect to public law, this
                                             penal law reason might make
                                             more sense
                             o Another explanation—we don’t want courts to
                                mess with international relations
                                     If we run the risk of applying another’s
                                       law incorrectly, we might mess up
                                       international relations
o Issue: does Title VII extend beyond the territory of the U.S.?
       Where would Congress even get the authority to regulate beyond the
         borders of the U.S.?
              See the Commerce Clause—congress can regulate commerce
                 with foreign nations
                        Explicit congressional authority
                        What we’re asking is the limit on Congressional power
                         for congress to do this.
                             o DP clause can limit the authority of the state to
                                apply its law; similarly, the DP clause can limit
                                the authority of Congress to assert its power to
                                apply federal law
                                     DP sets limits on the application of U.S.
                                        law extraterritorially
                                       note that we are not looking to the
                                        FF&C to a limit on federal authority
                        What about international law? Does it limit U.S. law?
                           o International law, standing alone, does not
                               restrict Congress
                                    Congress can violate international law if
                                        its intent to do so is express, but there is
                                        a presumption:
                                               Congress is presumed that they
                                                do not wish to violate
                                                international law
                                       Also, there is a presumption against
                                        extraterritoriality
                                             Presumption that congress only
                                                intends that the law apply within
                                                the boundaries of the U.S.
                                             Rational for this presumption:
                                                the concern is that if this
                                                presumption was not applied,
                                                then we would be interfering
                                                with the prerogatives of other
                                                countries that U.S. law would be
                                                applied outside its borders—that
                                                there would be conflict between
                                                the U.S. and other countries
                                               These rationales seem to be a
                                                lot like the First restatement. So
                                               is this presumption vulnerable to
                                               the critiques that the First
                                               Restatement is also vulnerable to.
o Assuming that we will apply the presumption against extraterritoriality
      In order to overcome this presumption, we need to look to see if there
        is Congressional intent that this law applies extraterritorially
             Arguments that there is such intent:
                         1. Definition of commerce
                             o top of p. 737
                             o Response to this argument—Congress could
                               have stated it a lot more explicitly
                                    Look at the Lanham Act, for example.
                                             The language that was used in
                                                the Lanham Act was not used
                                                here.
                             o The court declines to determine which side of
                               this part of the argument is right.
                                                Reason: the plaintiff has to overcome
                                                 the presumption. If there are good
                                                 arguments on both sides, then the  has
                                                 not overcome the presumption
                                 2. Alien exemption:
                                     o If the statue was meant to apply outside of the
                                         US makes it clear that the statute generally does
                                         apply extraterro. b/c of the exemption
                                     o Court says that if you read the statute in this
                                         way, then the statute would apply to noncitizens
                                        by non-US employers in foreign countries. This
                                        cannot be allowed to happen, and there is no
                                        limitation on this. As a result, since there is no
                                        limitation, this cannot be the right interpretation
       o Courts give deference to interps of legislation with respect to agencies that
         interpret the law
              Idea is that when you have an agency charged with enforcement of the
                 law, the Courts are not free to enforce the law as if they are writing on
                 a clean slate—rather Court has to look at the agency charged with
                  enforcement
                          argues that EEOC’s interpretation should be given deference
                              Reasons:
                                     o At the time the statute was initially enacted, the
                                         EEOC was not given enforcement power at that
                                         time
                                     o Previously, the EEOC had interpreted the statute
                                         differently—as a result, the interpretation was
                                         not made at the time the statue was enacted
                                     o There is a conflict between the previous EEOC
                                       interpretation and the current EEOC
                                       interpretation
                                 As a result, the Court refuses to give deference to the
                                  EEOC interp.
   Larsen case
       o Danish citizen employed in NY seeks to recover under US law (Jones Act)—
           injury occurred in Cuba.
       [see slides for Jones Act text]
o The idea is that the US law will determine remedies available to any seaman
  injured in the course of employment
       The law is written very broadly—does not limit the remedies available
          to Americans
o ’s argue that the Danish guy already has a remedy under Danish law, and as
  a result, he shouldn’t gain the benefit of US law.
       Danish guy doesn’t deny that Danish law applies, but he also says that
          he should get the benefit of US law as well.
o Similarity from the previous case:
          Here, we are viewing this as a question of Congressional intent
          Also, we are not limited by international law acting independently
          If we apply US law to non US citizens on a foreign boat, other
           countries might do the same thing to US citizens acting on US boats
          In this context, relying on the body of international law, the way that
           courts handle these problems is to look at the connects between the
           transactions and the governments vying for application
                This is different than the previous case
                This looks a lot like the Second Restatement whereas the
                  previous case looked a lot like the First Restatement
                         Reason why it’s different is b/c we are deferring to the
                          general international law
                         What factors are considered?
                            o Place of the wrongful act (but this is only really
                                 helpful when the wrongful act occurs in the
                                 water and not on shore)
                                      Here it’s Cuba
                            o Factor that’s given the most weight—law of the
                                place of the flag
                                     Law of the place where the ship is
                                       registered
                                     Denmark
                              o Domicile of worker
                                     Denmark
                              o Domicile of shipowner
                                     Denmark
                                         Contacts in favor of US law
                                             o Place of contract
                                                      Not relevant b/c this isn’t a breach of
                                                         contract claim
                                             o Place of the forum
                                                      Not persuasive




Exam review
Exam:
           Essay with fact pattern
               o Only discuss renvoi if specifically directed to do so
               o Exam will differentiate between choice of law and constitutional—that is only
                   answer constitutional questions if directed to do so.


First restatement:
       Issues with characterizing the case (contracts case, torts case?)
Nuemier rules
          Apply these rules if you are directed to do so
          If you are not told how courts resolve unprovided for case, explain all ways, including
           Nuemier rules
In second restatement cases:
           Start with the presumptive rule for the particular characterized case, but you can’t
            stop there—then look to the general provisions that apply (like §145 for example)
           *Almost always you have to do a §6 analysis
           Three central provisions regarding k cases
               o 186: road map
               o  187: 186 directs courts here if there is a choice of law clause
               o  187(1)—did the parties opt out
               o  187(2)—if not allowed to opt out, still apply with some restrictions
               o  188: if no choice of law clause
                       Here, do a 188 + §6 analysis
Two constitutional clause
           DP and FF&C
           Don’t discuss constitutional questions on exam unless asked to do so.
           Pre-allstate v. hague cases are not highly relvant today
           Apply the Hague test unless it’s procedural—then apply the Sun Oil test
                o *Also note the Justice Stevens analysis (that is, how would it come out under
                 both DP and FF&C)
Glaxon isn’t compelled by Erie b/c unlike Erie, there is constitutional authority (―Effects clause‖
in FF&C).
        Also, Glaxon plays no role in federal cases if there is no supplemental state law
Ordinarily, lack of SMJ cannot be raised collaterally (Durfee w/ some exceptions)
           Exceptions:
               o Kalb case
                   o Sovereign immunity (Indian tribe in state court…)
                   o Other exceptions in circumstances in footnote 4 in Durfee case
Extraterritorial
           ―Charming Betsy‖ presumption: congress is presumed not to have extraterritorial
            effect
11/1/2007 9:44:00 PM
11/1/2007 9:44:00 PM

								
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