CONFLICT OF LAWS

CHOICE OF LAWTRADITIONAL RULES (Beale)

Territoriality (states control conduct within their borders)Vested Rights (one’s cause of action follows him to another forum)

NON-INTENTIONAL TORTS- Lex Loci Delicti : law of the place of the wrong determines whether a

person has sustained a legal injury, governs:• Measure of Tort Damages• Punitive Damages• Vicarious Liability• Contributory Negligence

- Last Event Rule: place where the last event necessary to make the actor liable occurred = place of the wrong (Alabama Great Southern RR)

• Last event for negligence = damages• Per Se torts (e.g., defamation) don’t require proof of damages

- Duty to act or not act in one state ≠ duty in another state- Privilege in state of acting ≠ damages in another state- Workers’ Comp:

• statute of state where employment K entered into; or• statute of state of harm

- Remedies: law of forum- Procedure: law of forum

INTENTIONAL TORTS(may be no difference to unintentional torts)- Harm to Property: where force takes effect upon the thing- Bodily Injury: where harmful force takes effect upon the body- Poisoning: where takes effect (not where administered)- Fraud: where loss sustained (not where representations made)- Defamation: place where statement is communicated [modern courts

may use place of P’s reputation]- Alienation of Affections: location of spouse when enticement occurs

[policy is deterrence and punishment] (Marra v. Bushee)

CONTRACTS- Law of Place of Contracting: where the principle event necessary to

make the K occurs, governs:• Validity of K• Capacity to Enter K• Necessary Form, Formalities• Mutual Assent & Consideration• Fraud, Illegality, Other Voidable Conditions• S.O.F. (if prohibits K from coming into being—otherwise, S.O.F. is

procedural evidentiary rule of forum, like 1677 stat)

But see Poole v. Perkins: when K on its face is to be performed in another state, it is presumed that parties intended law of place of performance to govern capacity to enter K

- Unilateral K: where events take place to make promise binding- Bilateral K: where 2d promise is made in consideration of 1st

• Acceptance Sent by Agent of Acceptor: place of delivery• Acceptance Sent by Other Means: place of sending (acceptance by

telephone = place of speaking Linn)- Performance of Loan: place where payment is received Poole

- Capacity to Transfer Land: law of state where land is- Capacity to Transfer Chattel: law of state where chattel is at time of

conveyance

- Law of Place of Performance: where promise is to be performed, governs:

• Manner of Performance• Sufficiency of Performance• Justification for Non-Performance• Illegality of Performance

DOMICILE- Law of the Forum determines domicile

- Federal Diversity Jx: look at citizenship when case is filed • Citizenship = domicile• Federal Common Law defines “citizenship” (not state law) Rodriguez

Diaz (ct. looked to law of the state of residency rather than forum law)

- Domicile: place where person has a settled connection for legal purposes (because home is there or assigned by law)

• Person has only one domicile May have >1 residence or citizenship Mod Law: only one domicile for the same legal purpose

- When person has only one home, domicile = place of home• If home is bifurcated by state line, state of preponderance of dwelling

(if no preponderance, state of principal entrance)

- Domicile of Origin:= father’s domicile (if legitimate);= mother’s domicile (if illegitimate or posthumous); = place earliest traced to (if mother/father unknown).

- Domicile of Choice (2 elements):• Physical presence in new jurisdiction +

Old Law: domicile may shift in itinere (on the way) R1st & Mod Law: must be physically present

• Present intention to make a home (remain indefinitely) “Home” need not be a physical bldg Present intention to make a home not to make domicile Presence Under Compulsion ≠ present intent to make home- Mod Law: prisoner may establish citizenship for §1332;

military may not be considered complusion Domicile is established eo instanti (immediately) if the two

elements are met White v. Tennant

- Married Woman = domicile of husband• Modern Law: divorced/legally separated wife = own domicile

- Minor Child = domicile of parents (unless emancipated)

- Corporation = state of incorporation (only)• Modern Law: state of inc + prin place of bus + HQ

- Law of Domicile Governs:• Marriage• Divorce• Legitimacy of children• Adoption• Intestate succession of personal property White v. Tennant

Lex Situs governs intestate succession of land. Place of Death gives Jx to local probate court.

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MARRIAGE- Law of the Place of Celebration: Marriage is valid everywhere if it

meets the requirements of the state in which it took place.

• Evasion of Law of Domicile: marriage is generally valid—even if parties went to state of celebration to evade law of domicile But see Lanham v. Lanham: marriage in MI by WI domiciliaries

invalid because evaded WI 1-yr restriction on remarriage after divorce stat (power but no right to marry)

• Marriages Are Invalid Everywhere if Declared Void by Domicile: Statute prohibits (Mod Law: fed/state DOMAs) Offensive to public policy (eg, polygamy, incest, interracial)- Need not be blood-line incest. Rhodes v. McAfeeBut see:- In re May’s Estate (MIN rule): NY recognized marriage

between uncle and niece--valid in RI (place of celebratn) and under Jewish law--but not if celebrated in NY

- In re Dalip Singh Bir’s Estate: CA recognizd polygamous marriage for distribution of intestate’s assets (may have disallowed co-habitation, though)

- Common Law Marriage: valid everywhere if recognized by state where the acts took place.

- Legitimacy: governed by law of domicile of parent in question• Legitimacy after birth: governed by parent’s domicile

REAL PROPERTY- Lex Situs: law of place where the land is. Governs:

• Capacity to make a valid conveyance in land Thompson v. Kyle• Validity, Effect, Formalities of conveyance• Capacity to take or hold land• Transfer by operation of law (incl. intestate succession)• Validity and effect of a will/revocation of a will of land

- Lex Loci Contractus: validity of K to transfer, note secured by the property, etc. See Burr v. Beckler (if note invalid under lex loci contractus, mortgage ≠ enforced)

- Tangible Property: law of state where a tangible thing is at time when property interests in it are created govern creation of the property interests.

CORPORATIONS- Lex Incorporationis (Law of State of Incorporation)/

Internal Affairs Doctrine:• Fact, Validity of incorporation• Ownership of shares• Shareholders’ rights• Director/shareholder liability• Piercing Corporate Veil• Assignment of assets for the benefit of creditors while insolvent

Vanderpoel v. Gorman• Whether corporation may allow its subsidiary to vote shares it owns

in the parent McDermott v. Lewis• But See:

California, by statute, may govern some internal affairs of foreign corporations principly acting in California

Weede v. Iowa Southern Utilities: internal affairs ignored for “pseudo-foreign” or “tramp” corporations

- Law of State Where Corporation Acts:• Effect of an act directed to be done by a foreign corporation• Acts done within the state• Failure to act within state as condition of doing business there

Qualification to do Business Statutes (most states): register to do business + agree to abide by local law

- Rights v. Powers of Corp.• Rights = capacity to act (but may be liable for damages)• Powers = if act is ultra vires, corp lacks capacity (null & void)

Fraudulent Conveyance: Lex situs governs conveyance of land; transferor still liable in tort. Irving Trust

PERSONAL PROPERTY & TRUSTS- Inter-Vivos Trust

• Validity of Trust of Chattels: law of place where each item is located at time of creating the trust. Location of securities as trust res with NY trust company = NY

law governs validity of trust Hutchison v. Ross If document allows for change of situs of trust res, it presumptively

allows for change of governing law. Wilmington Trust• Validity of Trust of Chose in Action: law of place where

transaction creating the trust takes place.• Administration of: law of state where instrument locates.

- Testamentary Trust of Chattels• Validity of: law of domicile at death.• Meaning of Words in: usage at domicile at time of execution.• Administration of: law of domicile at death (unless will indicates

otherwise).

- Transfer Upon Marriage: law of husband’s domicile at marriage.

- Law of Chattel’s Situs At Time of Conveyance:• Capacity to Convey• Formalities of Conveyance• Validity of Conveyance• Nature of Interest Conveyed• Whether Gift of Chattel is Complete• Whether Title to Chattel is Embodied in a Document

Validity of Conveyance of Chattel Embodied in a Document: depends on validity of conveyance of the document (under law of place where document is at time of conveyance)

Situs of accounts, movable goods = debtor’s prin place bus Situs of goods subj to title certificate = state issuing cert Situs of shares of stock = state of incorporation- Validity of transfer of shares of stock viewed under law of state

of incorp, not place were certificates were actually transferred. Morson v. 2d Natl Bank Boston

PROBLEMS WITH TRADITIONAL RULES

CHARACTERIZATION- K or Tort? Incorporate statutory law into a K?

(MAJ = can’t recharacterize tort as K claim)Alabama Great Southern RR =no; Levy v. Daniel’s U-Drive = yes

- Interspousal Immunity = family law governed by law of domicile, not tort law governed by lex loci delicti Haumschild

• FRCP 17: Capacity is governed by law of domicile- “Dépeçage”: dividing a case into various issues governed by

potentially different rules

RENVOI- “Renvoi”: (generally avoided) relying on a foreign state’s choice-of-

law rules in addition to its substantive laws• States may differ on:

Characterization of action as K or tort Choice-of-Law Rule (place of execution v. place of perform) Definitions (e.g., of “domicile”)

- “Whole Law”: conflicts rules + internal law- Forum court’s decision reached by applying a foreign state’s laws may

be different than if the foreign court had heard the case because the foreign court would also apply its conflict-of-law rules. In re Estate of Damato

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SUBSTANCE v. PROCEDURE- What is Substance? Outcome determinative? Guaranty Trust

• Erie Substance Rules: When an action commences for S.O.L. Capacity of foreign corp to sue in the forum Requiring plaintiffs to post a bond Enforceability of arbitration agreements Standard for reviewing jury verdicts

• Erie Procedure Rules: Judge v. Jury questions Sufficiency of service of process

- R1st Substantive Rules: Forum decides what is substantive based on its conflict-of-law rules(“Rights and duties which give rise to a cause of action”)

• Integration of K (lex loci contractus)

- R1st Procedure Rules: Lex Fori (law of the forum) controls (“Machinery for carrying on the suit”)

• Parties Who May and Must Sue and be Sued• Commencement of an Action• Judge v. Jury• Proof of Facts• Admissibility of Evidence, Evidentiary Presumptions• Competency and Credibility of Witnesses• Execution of Judgment/Exempt Property• Limitation on Damages• Burden of Proof• Contributory Negligence

But see O’Leary: Burden of proving “clean hands” may be essential element of the cause of action (substance)—rather than only a matter of defense (procedure)

• Survival of Cause of Action upon Death of D Grant v. McAuliffe

- Federal Ct. in Diversity: follows conflicts rules of state in which it sits. Sampson v. Channell ; Klaxon v. Stentor

STATUTES OF LIMITATIONS- S.O.L.: Forum law controls whether action may proceed

• Action is alive (for tolling, revival, etc.)—just can’t be heard.- “Statute of Repose”: if a cause of action expires after a certain period

of time under the law that created the right, it may not proceed anywhere. Bournias v. Atlantic Maritime

• Action is dead.- “Borrowing Statute”: forum borrows the S.O.L. from the state where

the cause of action arose.• Generally borrows tolling and accrual rules, too.

Tolling generally allowed:- Damages not discovered until later;- D absent from Jx and not subject to service of process.

• Claim may “arise” under substantive law, but S.O.L. may not begin to run until “discovered.”

- Forum Non Conveniens:• P has alternate forum;• Good reasons that court should decline to hear the case.

PUBLIC POLICY- “Public Policy”: Fundamental principle of justice, prevalent conception

of good morals, deeprooted tradition of common weal- Implied Exception to FF&C: no action may be maintained on a

foreign cause of action that violates forum’s strong pub policy• “Direct Action” Statute: Foreign substantive law allowing P to sue

insurance co. directly violated pub policy b/c reversible error in forum to tell jury that D is insured Marchlik

• Interspousal Immunity: allowing spouses to sue one another may be viewed as violation of pub policy (or characterized as “family law” of domicile). Mertz

- Defenses that Violate Public Policy: can’t keep a case and bar a defense b/c unfair to D. Bradford Electric Light

• Brandeis Fallacy: P probably has no other forum if court dismisses the whole case.

PENAL LAWS- “Penal”: punishment for an offense against the public/not

compensatory in nature. Huntington v. Attrill (penal judgment)• Generally includes criminal, tax, civil penalties• Judgment usually goes to state, not priv party Lukes v. Std Oil• Punitive Damages: many states do not enforce as penal

- Judge-made law imposing personal liability on shareholders of defective corporation = penal Paper Products v. Doggrell [probably should have relied on pub policy veto instead]

PROOF OF FOREIGN LAW- R1st/Old Law: question of fact; in absence of proof, court may:

• Dismiss the case for lack of prima facie case Walton• Assume foreign law = forum law Tidewater• Indulge in presumptions about foreign law

- FRCP 44.1: question of law (considering any relevant material)• May still assume foreign law = forum law• May take “judicial notice” of foreign law

Most state courts take judicial notice of sister-state law (not foreign country law)

• May certify questions to highest state court 45 states, DC, and PR allow certified questions—even from sister

states.

MODERN RULES

“Center of Gravity” [not really R2d rule]: court groups and tallies the contacts in favor of one state’s law or another’s. Haag v. Barnes (IL child support K)- Traditional rules are just one factor- Express choice of law is just one factor- Problems: what factors are important? dispositive?

INTEREST ANALYSIS

“Strongest Interest”: Which of competing states has the greatest interest in having its law applied? Babcock v. Jackson; Tooker v. Lopez (single-car accidents, all NY domiciliaries in the car; foreign guest-host immunity not applied)

- If victim is dom of state where accident occurs, lex loci deliciti generally controls unless forum’s connection is so sufficient to displace it. Neumeier v. Kuehner (ON + NY dom in car)

- Reverse of Babcock: Locus of Tort = NY, P & D=NJ dom; NJ immunity applies (has strongest interest). Schultz v. BSA

• For OH dom D (Franciscan Bros), NJ immunity also applies b/c it furthers NJ’s interest in having its domiciliaries accept both benefits and burdens of charitable immunity.

- Question 1: What are the significant contacts? Facts or contacts significant in defining a state’s interest are those that relate to the purpose of the law in conflict:

• Parties’ domiciles D’s post-tort change of domicile?

• Locus of the tort• Duration of time in the location• Existence of insurance ought not create liability

- Question 2: Purpose of the Law?• Regulate Conduct = law of locus of tort• Allocate Loss = law of common domicile

Alloc Loss + No Common Domicile usually = law of locus of tort—unless significant interests displace it

• Prevent party from becoming ward of state• Protect medical creditors who provide services to injured party• Deter future conduct in the state• NY labor law = conduct regulating; apply law of locus Padula• Contribution claims under workers comp = loss alloc Cooney

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Currie’s Approach: Don’t weigh interests—just identify if they exist

True Conflicts:- If court finds an apparent conflict in interests, it should reexamine its

policy for a more restrained interpretation.- Forum has interest in application of its policy + Foreign state has interest

in application of its policy = Forum Law- Forum has no interest + 2 Foreign states have conflicting interests =

Forum Law

- Lilienthal v. Kaufman: Forum=OR; P=CA; D=OR; K executed in CA; D defrauded P in CA; D=spendthrift in OR [rare law]; CA does not recognize spendthrift. Both OR & CA have interest in applying their laws. Court applied OR law (voided the K).

• OR’s unique spendthrift law is OK as long as constitutional• What about federal interest in interstate commerce?

False Conflicts:- Forum has no interest in application of its policy + Foreign state has an

interest = Foreign Law- Forum has interest + Foreign state has no interest = Forum Law

- Bernkrant v. Fowler: Forum=CA; P=NV; D=CA (at death); K made in NV, perf in NV; D’s domicile when K made=? (irrelvnt) Court applies NV S.O.F. b/c CA has no interest in applying its S.O.F. to a K made and performed in NV.

• Reasonable expectations of the parties trump.

Unprovided-For Cases:- Neither forum nor foreign state has an interest in applying its policy =

Forum Law

- Hurtado v. Superior Ct.: Forum=CA; P=Mexico; Decedent=Mex; D=CA; locus of tort=CA; Mex has limitation on damages for wrongful death; CA has no limit. Court applies CA law:

• Mex law is to protect Mex Ds [not here]• CA law is to protect CA Ps [not here]

Court tries to find an interest here—says CA unlimited liability law deters conduct in CA

THEORIES TO RESOLVE “TRUE CONFLICTS”

COMPARATIVE IMPAIRMENT (CA Rule): Apply the law of the state whose interests would be most impaired (if such is determinable) by rejection of its policies.- Do not weigh interests; look at scope of policies- Weigh the harm that would result by failure to enforce rule

- Bernhard v. Harrah’s Club : CA ct. followed CA law imposing liability on tavern keepers for accidents caused by intoxicated patrons over NV’s law barring liability.

• NV already bars serving alcohol to intoxicated patrons [no new duty by applying CA liability law].

• Financial burden on NV taverns is foreseeable and coverable business expense.

• Court fails to consider that if NV rule applies, NV D avoids liability and P still recovers from tortfeasor (isn’t this better?)

• CA legislature overturned causation issue—not conflicts rule in B&P Code §25602.

- Blamey v. Brown : MN court applied negligence to WI liquor store, even though no insurance to cover loss, no advertisements into MN, no similar WI law. Used “better rule” approach.

“BETTER RULE” (Leflar): 5 Objective Factors:- Predictability of Results- Maintenance of Interstate and International Order- Simplification of the Judicial Task- Advancement of the Forum’s Governmental Interests- Application of the Better Rule of Law

• Milkovich: MN ct. applied forum law to 1-car accident with only ON doms in MN (reverse of Babcock)—because the injured parties were in MN hospitals.

R2d/MOST SIGNIFICANT RELATIONSHIP

R2d §6 Choice-of-Law Principles: if state has no choice-of-law statute, the following factors are relevant:- Needs of Interstate and National System- Relevant Policies of the Forum- Relevant Policies and Interests of Other States- Protection of Justified Expectations- Basic Policies Underlying a Field of Law- Certainty, Predictability, and Uniformity of Result- Ease in Determining and Applying Law

R2d §145 Tort Cases: Law of state that has the most significant relationship to the occurrence and the parties, (under principles of §6), considering:- Place of Injury- Place of Conduct Causing the Injury- Parties’ Domicile, Residence, Nationality, Place of Incorporation, Place

of Business- Place where Relationship between Parties is Centered

- Phillips v. GM: MO court applied MO products liability and wrongful death law where P=MO; D=MI/DE; Locus=KS. Purpose of laws was to regulate products sold in the state and protect and compensate residents.

• R2d §§146, 175: rights and liabilities of parties are to be determined by law of state of injury, unless another state has a more significant relationship.

• R2d§103 Public Policy: allows public policy veto, but ct. says it is subsumed in §6 factors.

R2d§154 Interference with Marriage Relationship: law of place where conduct principally occurred, unless some other state has a more significant relationship.

CONTRACTUAL CHOICE OF LAW- R1st made no provision for enforcement of choice-of-law clauses- R2d explicitly endorses party autonomy to choose applicable law.

R2d§187 Law of State Chosen by Parties: will govern the K unless:- No substantial relationship to parties or transaction; and- No other reasonable basis for the parties choice; or

• Violates fundamental public policy• of state with a materially greater interest• that would have been the default under §188.

- Nedlloyd Lines: Ct applies choice-of-law clause to K and tort claims arising from shareholders agreement (MIN view).

- Banek: because GA law is not materially different in application than MI law, MI public policy is not violated.

- Kipin: Under R2d, choice of law = mistake if it would invalidate an express K provision—default law applies instead. Ct says “Construed” = “Governed” by law (“construed” may only mean “interpreted”).

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R2d§188 Governing Law in Absence of Parties’ Choice: local law of state with most significant relationship to transaction and parties (under principles of §6), considering:- Place of Contracting- Place of Negotiating- Place of Performance- Location of Subject Matter of K- Parties’ Domicile, Residence, Nationality, Place of Incorporation, Place

of Business

If Place of Negotiating = Place of Performance, that law usually governs.

R2d§196 Place of Performance: law of state of performance applies, unless another state has more significant relationship.

R2d§203 Usury: K is valid if permissible under law of a state with a substantial relationship and not greatly in excess of rate permitted by default state under §188.

PROBLEMS WITH MODERN RULES

AFTER-ACQUIRED DOMICILE- Reich v. Purcell: Ct says moving to state does not give state an interest

in protecting the litigant.• Would lead to forum shopping by moving to new Jx.• But, doesn’t state have an interest in protecting its current

domiciliaries?- Miller v. Miller: D’s move from ME to NY + ME’s repeal of damage

cap + No evidence of form shopping/collusion = NY law applied (no cap).

- Clay v. Sun Insurance; Allstate v. Hague: Constitutional to apply forum law over K provision when P moved to forum post-accident or post-K.

- Campanelli v. Allstate: CA’s change in law extending time file claims for Northridge earthquake did not violate Ks Clause b/c the claims were still alive, just not able to be heard under former S.O.L. or K provision.

- Shapiro v. Thomson: Unconstitutional to give new residents different welfare benefits than current residents.

RENVOI- Pfau: When determining a state’s policies and interests, only look to its

internal law, not conflict-of-law rules.

• Some courts look at foreign state’s conflict rule to see if it would protect the litigant in its court—generally only valid if the foreign state has adopted interest analysis (not traditional territorial methods)

- Richards: Federal Tort Claims Act says look to the “law” of place where act or omission occurred. Means “whole law.”

SUBSTANCE v. PROCEDURE- Foreign states have no interest in procedure of forum court, and forum

does have interest in its procedure.- Procedure: rules having to do with how forum handles cases as

opposed to how such cases come out.- Substance: Rules attempting to affect the parties’ liabilities or

behavior.

STATUTES OF LIMITATIONS

Traditional Rule: S.O.L. is procedural (forum) law.

R2d §142: Under §6 principles, generally (unless result is unreasonable):- Forum will apply its S.O.L. to bar the claim- Forum will apply its S.O.L. to allow the claim, unless:

• Maintaining claim would serve no substantial forum interest• And , claim would be barred under S.O.L. of state with more

significant relationship to parties and claim.

Interest Analysis of SOL:- Ledesma: S.O.L. protects the enacting state’s:

• Courts from burdens of prosecution of stale claims (may not have interest in keep S.O.L. open longer).

• Residents from burdens of prosecution of stale claims.• Interest deterring conduct in its territory.

“Accrual” of Action for Borrowing Statute:- Global Financial: Claim accrues at time and place of injury.

• Economic injury = D’s place of domicile

PUBLIC POLICY- Interest Analysis or Most Significant Relationship Analysis should

obviate the need for a separate public policy exception.

- Paul v. Natl Life: WV refused to give up lex loci deliciti, but created a public policy exception for guest-host statutes.

STATUTORY RESOLUTION TO CONFLICTS PROBLEMS- LA and OR have codified C/L rules for choice-of-law.- UCC §1-105(1): in absence of choice of law by parties, state’s UCC law

applies to transactions bearing an “appropriate relation” to the state.• “Appropriate Relation” prob = Most Significant Relationship• Proposed UCC revision just says look to state’s conflicts rules

CONSTITUTIONAL LIMITATIONS

Major Const Due ProcessProvisions: FF&C (pub Acts, records Judicial proceedings)

Priv & ImmunKs ClauseCommerce Clause

Always Ask: Does Const mandate result or just permit result?

CHOICE OF LAW

Due Process—K Provision v. State Law- State has to have some minimal contacts in order to apply its law under

Due Process.- Home Insurance v. Dick: D was deprived of property without Due

Process by enforcing TX statute on time to file claim instead of K provision limiting time to file to 1 yr.

• TX Ct had Quasi In Rem Jx [no longer valid method]• P was Mex resident (TX dom) at time of K (not relevant)• K was executed o/s TX• K was to be performed o/s TX• Ct may not abrogate the rights of parties beyond its borders

having no relation to anything done or to be done within them

FF&C— K Provision v. State Law- Even if state has minimal contacts, it may not apply its law under FF&C

if there were strong reasons to apply the law of another state (much stronger contacts, much greater interest, uniformity of treatment, etc.)—But see Hague (no longer any distinction)

- Delta Pine & Land: Forum could not apply its statute and ignore a right which has lawfully vested elsewhere if the interest of the forum had but slight connection with substance of K obligations.

• Conduct giving rise to insurance claim occurred in MS• MS statute gave more time to file claim• Post-accident change of P’s domicile• MS statute not allowed to be enforced over K provision

Vicarious Liability Statute—No Due Process Violation- Young v. Masci: NY applied its vicarious liability statute to hold NJ

parents liable for son’s accident in NY when he took car there without permission.

Criminal Law Applied Extraterritorially to Citizen of State- Skiriotes v. FL: Florida could constitutionally prosecute citizen for

illegal sponge fishing in international waters.

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Workers Compensation Statutes- FF&C does not prohibit state with enough minimum contacts to satisfy

Due Proc from applying its law.- Alaska Packers: state where employment relationship was formed

could apply its own workers’ comp law to an employee injured in another state.

- Pacific Employers Ins: state of injury may apply its workers comp law to out-of-state employer and employee if employee was injured while working in the state.

Direct Action Statute—Insurance K Provision- Watson: Due Process & FF&C not violated where LA Ct allowed direct

action by LA injured party against out-of-state insurance company, whose contract was with an out-of-state manufacturer.

• Insurance contract covered entire U.S.• LA had an interest in protecting its citizens• FF&C does not req LA to subordinate its interests to MA K law

Post K Change of Domicile Statute v. K Provision- Clay v. Sun Insurance: “World Wide Personal Property Floater” policy

issued in IL to IL dom contained 12-mo claim clause.• FL did not violate Due Process or FF&C by applying its 5-yr claim

statute when P subsequently moved to FL• D was licensed to do business in IL and FL and should have known

that P may have moved anywhere with his property.• K did not have a choice-of-law clause.• Minimum contacts used to analyze Due Process and FF&C

- Allstate v. Hague (plurality): MN “Stacking” law applied to “Continental Coverage” insurance K entered into in WI with WI domiciliaries for an accident that occurred in WI.

• After the accident, P moved to MN.• MN court relied on “Better Rule” approach to apply MN law.• No more distinction between FF&C and Due Process:

To constitutionally select a state’s substantive law, the state must have a significant contact or aggregation of contacts creating a state interest, such that the choice of law is neither arbitrary nor fundamentally unfair.- Decedent commuted to work in MN- D conducted business in MN- P moved to MN (no evidence of forum shopping)

• Yates: Post-change of domicile is not enough alone to allow state to choose its law.

Doing Business in State Not Enough to Provide Minimum Contact- Phillips v. Shutts: KS court violated Due Process and FF&C by

applying KS law in class action where 97% of Ps had no connection at all with KS, and D’s only connection was doing business there.

• Each member of the class must have minimum contacts with KS to apply KS law to its claim.

- VT v. Homeside Lending: VT refused to give FF&C to AL nationwide class-action judgment on grounds that it lacked PJx over VT Ps who were inadequately represented, did not receive notice, and did not have “opt out” opportunity.

Forum May Apply Its Procedural Rules to Foreign Substantive Claims- Sun Oil v. Wortman: Same facts as Shutts, except KS S.O.L. may (but

need not) apply to all claims—regardless of substantive law—without violating Due Process or FF&C.

• Forum may apply its longer S.O.L.

OBLIGATION AND RIGHT TO PROVIDE A FORUM- Hughes v. Fetter: WI law prohibited its courts from hearing wrongful

death cases arising under foreign law was invalid under FF&C.• Hearing an IL wrongful death claim did not violate WI public policy

(state has no policy against compensation for wrongful death)• It is a FF&C violation to refuse to honor sister-state statutes.• Not forum non-conviniens case b/c not sure that there was an alternate

forum.

FF&C—Forum S.O.L.Wells v. Simonds Abrasive: FF&C does not require forum to use foreign-state’s S.O.L.

• Forum may apply its shorter S.O.L.

Sovereign Immunity- State of NV v. Hall: Neither 11th Amend nor FF&C required CA to

enforce NV statutory damages cap (that violated CA pub policy) in suit by accident victim against the State of NV.

• How will the judgment be collected? States apply their own law to the collection of judgments.- Such rules may not discriminate based on residency.

INTERSTATE DISCRIMINATIONPriv & Immun only protects “citizens” (not states, corporations)- Does not require “absolute equality”- Does a court that applies a different substantive law to different litigants

(e.g., based on domicile) violate P&I or Eq Protection?• Ct is not applying a law that discriminates on its face (applying

different legitimate laws to different facts)• State is just arbitrator, not litigant

Commuter Tax- Austin v. NH: Priv & Immun violated by tax on non-residents for

income earned in NH, when residents were neither taxed on their in-state or out-of-state income.

• Even though out-of-state taxpayers receive a credit in their home state (their tax bills are not increased by the law)

- Pennsylvania v. NJ: S Ct denied cert on a refund claim of taxes diverted from PA to NJ under credit/commuter tax almost identical to Austin.

• Equal Protection and Priv & Immun protect citizens, not states

Residency for Divorce- Sonsa v. IA: 1 yr residency requirement prior to obtaining a divorce is

constitutional.

Tolling S.O.L.- G.D. Searle: NJ statute that tolls the S.O.L. against foreign corporations

that have no in-state agent for service of process survived rational basis scrutiny under Equal Protection challenge, even after state enacted long-arm jurisdiction. [case remanded for Commerce Clause consideration—see Bendix]

• Unrepresented corp may be difficult to locate• May take longer to serve corp out-of-state• Corp may still plead laches• Corp may appoint an agent and get benefit of S.O.L.

EXTRATERRITORIAL & INCONSISTENT REGULATIONS

Dormant Commerce Clause: facially discriminatory regulations = strict scrutiny; discriminatory effects = Pike balancing.

- Brown-Forman Distillers: Statute requiring liquor sellers to affirm that it will not sell for lower prices in another state violates Comm Clause.

• NY law tries to apply o/s its borders to prices in other states.- Bendix Autolite: OH law that tolled S.O.L. for foreign corps unless

they appointed agent for service of process and thereby consented to general Jx in the state was violation of Comm Clause.

- BMW v. Gore: AL punitive damages award intended to change practice lawful in other states violated Comm Clause.

- Quill v. ND: ND law requiring mail-order company to collect use tax was valid under Due Process, but violated Comm Clause.

Corporate Internal Affairs- CTS v. Dynamics: IN law gave minority shareholders in IN

corporations the right to block a takeover—gave minority shareholders super-voting rights when an entity acquired control.

• Does not violate Comm Clause.• Effects in-state and out-of-state takeover offerors equally.• Only applies to creations of state law—state can do what it wants

with its corporations.

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RECOGNITION OF JUDGMENTS

Direct (same court or jurisdiction) v. Collateral Attacks (different court)

Res Judicata (claim preclusion)- “Bar”: effect of the original judgment in preventing relitigation of the

cause of action that was actually litigated.- “Merger”: effect of the original judgment in preventing litigation of

matters that are considered so closely related to what was actually litigated that they should have been litigated all at once.

- Requires same parties or privies

Collateral Estoppel (issue preclusion) facts determined in previous litigation were:- Litigated by the parties- Determined by the tribunal- Necessarily so determined- Mutuality has been relaxed (issue is binding a party/privy in future

litigation but others not a party are not bound)

FF&C and 28 USC §1738 require state and federal cts to honor judicial proceedings of other states (S Ct has always also required cts to honor federal judicial proceedings—prob Supremacy, Due Process grounds)- “Judicial Proceedings” = judgment and process before judgment

JURISDICTIONAL REQUIREMENTS

Finding Facts to Give Ct Jx- Durfee v. Duke: Absent fraud, a judgment is entitled to FF&C—even to

questions of PJx and SMJx—if the questions have been fully and fairly litigated and finally decided in first court.

• FF&C requires a court to give a judgment as much res judicata effect as it would have in the state where it was issued.

• Judgment is conclusive on the merits only if the court had power to pass on the merits (had Jx). Ct may not quiet title to land or dissolve a divorce in another state

(in rem actions). But questions of location of the land or domicile of party to divorce are questions of fact that may not be relitigated.

• Fraud is exception to FF&C.

Title to Real Estate = Exclusive Jx of Court of the Situs- Fall v. Eastin: An out-of-state court could not decree ownership of land

located in the state; a deed created by an out-of-state commissioner does not get FF&C.

• The out-of-state court may have Jx over the parties, and may compel them to transfer land, but the remedy is in personam.

Federal Bankruptcy Law- Kalb v. Feuerstein: State courts lack Jx to allow foreclosure and eject

debtor while bankruptcy in progress.• Allows collateral attack (even if preemption of local law by bankr.

statute was not raised in ejectment proceedings) on previous decisions No res judicata effect

Modern Trend is to Enforce Res Judicata- Allen v. McCurry: can’t re-litigate legality of search and seizure in civil

case after decided in criminal case.- Kremer v. Chemical Construction: administrative agency findings

reviewed by state court are res judicata in federal courts.

Collateral Attack Allowed for Lack of SMJx- Thompson v. Whitman: lack of SMJx in one proceeding allows

collateral attack in a second one.

Personal Jx- General Appearance: objection to PJx waived- Special Appearance: only litigates PJx issue.

• If party loses, he is bound by the factual finding.• If he appeals only that issue, he waives defense on merits.

- York v. Texas: Due Process not violated by failing to give litigants a special appearance option (ability to collaterally attack a default judgment is sufficient).

SUBSTANTIVE INTERESTS OF THE ENFORCING STATE

Errors of Law NOT an Exception to FF&C of Judgment- Fauntleroy v. Lum: judgment based on an arbitration award is

conclusive and deserving of FF&C:• Even though based on mistake of law.• Even though subject matter of the underlying K violated the criminal

laws and public policy of the state of enforcement.

Re-Examining Domicile in Ex-Parte Divorce Allowed- Williams v. NC: state court could re-examine the supposed domicile of

one party to an ex-parte divorce to see if rendering ct actually had Jx.• Jx in divorce is based on domicile• Ct will never apply foreign law to a divorce• Facts were not fully and fairly litigated

Penal Judgments Excepted- Huntington v. Attrill: one state need not enforce “penal” claims of

another, even if embodied in a judgment.• Punishment for public wrong v. providing private remedy

Punishment for Disobeying Ct Orders- Settle v. Settle: if a court order depriving mother of custody was

intended to punish her for disobeying court orders, need not be enforcedPunitive Damages- Holbein v. Rigot: TX punitive damages allowed FF&C by FL S Ct

because did not purport to redress a public wrong.- State Farm v. Campbell: $145mm punitive damages award set aside by

US S Ct as violation of Due Process.Tax Judgments- Milwaukee Cty v. ME White: one state does not have to enforce tax

judgments of another state

Workers Compensation Awards- Washington Gas Light (plurality): a state has not legitimate interest in

preventing another state from granting a supplemental compensation award when the second state would have had power to apply its workers comp laws in the first place.

• Second award gave full effect to findings of fact in first award and credit for payments already made

• First award granted by administrative agency of limited Jx (could not apply any law other than forum law) FF&C must be given to determination first tribunal had authority

to make, but not issues it had no power to decide

Anti-Testimony Injunction- Baker v. GM: a state lacks authority to shield a witness from another

jurisdiction’s subpoena power in a case involving persons and causes outside the first court’s governance.

• Concurrence says that the injunction would not have preclusive effect in courts of the issuing jurisdiction; therefore, it is not owed FF&C.

- Anti-Suit Injunctions: do not violate FF&C, but S Ct has not decided whether they are owed FF&C

Defense of Marriage Act (DOMA)- Recognition of marriage is generally choice-of-law issue (not judicial

proceeding)- Public policy exception applies to choice of law- But what about judgments based on same-sex married couples?

• Some say DOMA is unconstitutional because it undermines or abolishes FF&C—not allowed under implementing clause

• Others say Congress may implement FF&C clause by restricting its application.

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ENFORCING STATE’S LAW OF JUDGMENTS

Judgment does not carry with it enforcement powers. Must convert judgment from first state to judgment of second state.

Revival of Judgments- Lamb: Second state must give FF&C to a judgment that was validly

revived under another state’s laws, even though it would not have been able to be revived in the second state.

S.O.L. of Enforcing Judgment- M’Elmoyle v. Cohen: state may apply its S.O.L. to a foreign judgment- Watikins v. Conway: statute that requires foreign judgments to be

brought within five years of being obtained did not violate FF&C or equal protection because permitted revival under law granting the judgment.

Giving Judgment More Credit than Issuing State Would- State Courts: may Hart v. American Airlines (NY court gave TX

decision collateral estoppel effect even though TX required mutuality and NY did not)

- Federal Courts: may not Migra v. Warren City School District (28 USC §1738 says “same effect”)

Lack of Jx- Treinies v. Sunshine Mining: in interpleader, the issue of the first

court’s Jx could not be re-litigated because it was litigated in the second court. The second court’s decision is res judicata.

• Durfee v. Duke does not apply b/c diff. parties in second court

Anti-Injunction Act- Parsons Steel: party of suit in state court (that may have erroneously

given improper res judicata effect to a federal court decision) may not go to the first federal court and get an injunction against the state court under the Anti Injunction Act.

• Party must exhaust remedies in state court to review the decision to determine its effect in that state.

DOMESTIC RELATIONS

Divorce action is in rem. (Separation agreement is in personam.)- Good against the whole world.- Affects status.- Marriage relationship is the res.- Res is located wherever either party is domiciled.- Domicile (not just PJx) are necessary for divorce to have FF&C.- Court always applies forum divorce law.- Support agreements are divisible from the divorce decree.

Ex-Parte “Divisible Divorce”- One party does not appear (not necessarily not served).- Usually default judgments; uncontested.- Estin v. Estin: Spousal support order survives ex-parte divorce decree

(although the decree is still valid).• “Permanent alimony”=good until altered (not unchangeable).• Second state cannot take away alimony property rights without

having PJx over wife.- May v. Anderson: Child custody agreement is in personam (custody of

child is like property right—today best interests of child standard would apply).

- Carr v. Carr: ex-wife of decedent brought an action to invalidate a Honduran divorce in order to get decedent’s pension benefits. NY Ct said that the real defendant was the new wife, who had no contacts with NY.

- Harford v. Superior Ct: Ct refused to declare that boy was the son of an out-of-state man over whom the Ct lacked PJx.

Bilateral Divorce- Usually both parties want it (may be collusive of fraudulent) to achieve

in the easiest forum.- Johnson v. Muelberger: Daughter could not collaterally attack the

validity of her parents divorce because in FL (place of issuing the judgment), the daughter is considered a “privy.”

• FF&C only applies to U.S. state divorces.- Alton v. Alton: 3d Cir refused to recognize a Virgin Islands divorce that

the other party did not contest.• Foreign divorces are usually given comity if appear regular and

individual is really a domiciliary of the foreign country.- Boyter v. Commissioner: IRS is bound by state law on whether

taxpayers are married, but remanded to determine if year-end Dominican divorces were “sham” transactions to avoid the “marriage penalty” and not deserving recognition under IRC.

Modifications: Child Custody & Support- Yarborough v. Yarborough: Child brought suit against father for

additional support. Ct said original, unmodifiable support settlement (to which child was not a party) was res judicata.

• In re Gault (giving minors full Due Process rights) may have changed this result.

- Parent Kidnapping Prevention Act (28 USC §1738A): allows first court to continue Jx over visitation as long as the child or any contestant remains in the Jx.

INTERNATIONAL

Treaties = supreme law of the land.- But, Congress may override them with ordinary laws. The Chinese

Exclusion Case

ACT OF STATE DOCTRINE & FEDERAL C/L OF FOREIGN RELATIONS- Banco Nacional de Cuba v. Sabbatino: Act of State Doctrine prohibits

courts of one country from sitting in judgment on the acts of another government done within its own territory.

• Foreign relations/scope of Doctrine is exclusively federal law.• Judicial branch will not rule on expropriations which may violate

customary international law (absent specific U.S. statute or treaty).• Forum may not use public policy veto over the foreign law.

- Zschernig v. Miller: Dormant Foreign Affairs Preemption Federal courts preempt state law that intrudes into the exclusive federal foreign relations powers.

• Invalidated OR statute denying inheritance to an East German who could not establish reciprocal inheritance rights for Americans.

- Barclays Bank v. FTB: upheld the constitutionality of CA’s unitary tax system against federal preemption challenge.

EXTRATERRITORIALITY OF FEDERAL STATUTES

Territorialism- State Statutes = no extraterritorial application- Federal Statutes = presumption against extraterritorial application- EEOC v. Aramco: Title VII does not apply outside U.S. (statute later

amended by Congress).- King v. Eastern Michigan Univ: Title IX applies extraterritorially to

study abroad programs.

Contacts and Effects- Lauritzen v. Larsen: Law of the flag applies to tort actions on board

ship (ship is like a piece of foreign territory) under Jones Act. Most factors pointed toward law of flag.

- Hellenic Lines v. Rhoditis: Applied Jones Act to Greek ship owned 95% by U.S. domiciliary who was Greek citizen.

Comity- Hartford Fire Insurance v. CA: Sherman Act (antitrust) applied to

British reinsurers who collusively acted outside the U.S. to retrain trade inside the U.S.

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Universal Jx and Passive Personality- Filartiga: Alien Tort Act looks to international laws for substantive tort

law (does not just give Jx and refer back to the law of the place of the wrong)—overrides forum non conviniens.

• Punitive damages may be awarded, even though not allowed under foreign law.

• No requirement that parties have exhausted local remedies first.- U.S. v. Yunis: presence of U.S. passengers on airplane gave U.S. Jx to

assert its criminal law (not applicable to civil cases).

EXTRATERRITORIALITY AND THE CONSTITUTION- Generally, Constitution applies abroad.- U.S. v. Verdugo-Urquidez: Criminal statute applies abroad; 5th

Amendment (self incrimination) applies abroad, but 4th Amendment (search and seizure) does not.

• 4th Amed protects “the people” (U.S. people)• 5th Amend protects “persons” (all persons)• Why does government power extend abroad but not governmental

limitations?- Frisbee: U.S. may kidnap suspect and bring him into U.S. = Jx for

criminal law.- U.S. v. Tiede: says Const applies all or nothing, but really applies

amendment by amendment- U.S. v. Davis: respects the law of the flag.

• Does not apply 4th Amend to search of boat on the high seas.

RECOGNITION AND ENFORCEMENT OF FOREIGN JUDGMENTS- Matusevitch: “merger” doctrine does not apply to foreign judgments.

• Court may refuse to enforce for public policy reasons.• U.K. libel law requires the speaker to take care that statements are not

false.• U.S. 1st Amend only requires the speaker to know or recklessly

disregard the untruthfulness.• Revision au fond: revision from the beginning (not de novo, but looks

at the judgment and the underlying proceedings).- Hilton v. Guyot: foreign judgments are generally enforceable but need

not be enforced if the country from which the judgment came does not enforce U.S. judgments.

Substantive Rules of Law:

• Fellow-Servant Rule: employer not liable for torts of fellow workers• Interspousal Immunity: inability to sue spouse in tort• Guest-Host Immunity: invitee lacks capacity to sue host in tort; or P

must show gross (rather than ordinary) negligence to recover• Alienation of Affections / Enticement: loss of consortium of married

person• Seduction: luring an un-married person• Criminal Conversations: adultery• Coverture: condition of being a married woman; under former law, a

woman under coverture was allowed to sue only through the personality of her husband.

• Spendthrift: protects an individual; he lacks capacity to K• “Stacking”: allowing multiple uninsured motorist claims for one

accident (one claim per policy purchased).

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