Lecture 20 Mar. 26, 2018 - PowerPoint Presentation

Slide1

Lecture 20

Mar. 26, 2018Slide2

Constitutional Restrictions on Choice of LawSlide3

14

th

Amendment

“nor shall any state deprive any person of life, liberty, or property, without due process of law”Slide4

Article IV, Section 1.

Full faith and credit shall be given in each state to the public acts, records, and judicial proceedings of every other state. And the Congress may by general laws prescribe the manner in which such acts, records, and proceedings shall be proved, and the effect thereof.Slide5

P (CA) and D(CA) enter into a gambling contract in CA with performance in CA. P sues D for breach in NV.

Can they agree to NV law?

P

(Saudi Arabia)

and

D(

Saudi Arabia

)

enter into a

loan contract

in Saudi Arabia

with performance in Saudi Arabia

.

P sues D for breach in NV

.

Can they agree to NV law?Slide6

Bradford Elect. Light Co. v Clapper

(US 1932)

- Clapper – citizen of VT – worked for Bradford (VT

corp

with principal place of business in VT)

- Clapper sent to NH to take care of some fuses - electrocuted

- administrator chooses to sue in NH

- NH allows election of common law or workers comp

- VT requires you to waive out of workers comp in beginning of employment relationship

- NH

ct

applied NH law

-

SCt

reversedSlide7

Pacific Employers Ins. Co. v. Industrial Acc. Comm’n (US 1939)Slide8

But the Court was careful to point out that there was nothing in the New Hampshire statute, the decisions of its courts, or in the circumstances of the case to suggest that reliance on the provisions of the Vermont statute, as a defense to the New Hampshire suit, was

obnoxious to the policy

of New Hampshire….Here, California legislation not only conflicts with that of Massachusetts providing compensation for the Massachusetts employee if injured within the state of California, but it expressly provides, for the guidance of its own commission and courts, that "[n]o contract, rule or regulation shall exempt the employer from liability for the compensation fixed by this act." The Supreme Court of California has declared in its opinion in this case

that it is the policy of the state

, as expressed in its Constitution and Compensation Act, to apply its own provisions for compensation, to the exclusion of all others, and that "It would be obnoxious to that policy to deny persons who have been injured in this state the right to apply for compensation when to do so might require physicians and hospitals to go to another state to collect charges for medical care and treatment given to such persons."Slide9

s

omething less than constitutionalizing a particular choice-of-law approach?Slide10

Roosevelt –

must be forum neutral

it cannot matter that a contact is the forum’s rather than another jurisdiction’sSlide11

Allstate Ins. Co. v. Hague

(US 1981)Slide12

The lesson from Dick and Yates, which found insufficient forum contacts to apply forum law, and from Alaska Packers, Cardillo, and Clay II, which found adequate contacts to sustain the choice of forum law, is that for a State's substantive law to be selected in a constitutionally permissible manner, that State

must have a significant contact or significant aggregation of contacts, creating state interests, such that choice of its law is neither arbitrary nor fundamentally unfair. Slide13

member of

Minn

workforce

commuted to work there

Allstate present and doing business in

Minn

p

ost-event move of plaintiff to

MinnSlide14

u

nfair surprise

-

member of

Minn

workforce

commuted to work there

- Allstate present and doing business in

Minn

- post-event move of plaintiff to

MinnSlide15

Minn

interests

-

member of

Minn

workforce

commuted to work there

- Allstate present and doing business in

Minn

- post-event move of plaintiff to

MinnSlide16

Order of United Commercial Travelers v. Wolfe (US 1947)

- state of incorporation governs validity of terms of membership in fraternal

benefits societySlide17

Phillips Petroleum Co. v Shutts

(US 1985)Slide18

Sun Oil v Wortman (US 1988)Slide19

“Although

in certain circumstances standard conflicts law considers a statute of limitations to bar the right, and not just the remedy, petitioner concedes, that (apart from the fact that Kansas does not so regard the out-of-state statutes of limitations at issue here) Texas, Oklahoma, and Louisiana view their own statutes as procedural for choice-of-law

purposes…”Slide20

Ferens

v John Deere (US 1990)

P (Pa) sues D (Del/Ill) for Pa injury in federal court in Miss

Case then transferred to Pa

Miss stat

lims

usedSlide21

w

hat is the constitutional obligation of a state court when interpreting sister state law?Slide22

t

o certify class action the KS

ct

presumed that all other jurisdictions’ laws are the same as KS

constitutional?Slide23

“To constitute a violation of the Full Faith and Credit Clause or the Due Process Clause, it is not enough that a state court misconstrue the law of another State. Rather, our cases make plain that the misconstruction must contradict law of the other State that is clearly established and that has been brought to the court's attention.”Slide24

Rosen v. PRIMUS Automotive Financial Services

(Minn. D. Ct., 4th Jud. Dist., May 4, 1999).

- nation-wide class action in Minnesota state court concerning a

identical provision in the U.C.C.s of fifty different states should be

interpreted

- only

seven

states’ courts

had decided the

matter

- Minnesota

courts arriving at one interpretation

- the

courts of six other states arriving at a different

interpretation

- the

Rosen

court certified

a class including actions under Minnesota’s U.C.C. and the U.C.C.s of the forty-three states whose courts had yet to decide the

matterSlide25

w

hat is the constitutional obligation of a federal court when interpreting state law?Slide26

a

ssume a federal court in New York has misconstrued NY law?

when would the US

SCt

take such a case to decide whether federal court’s

Erie

obligation has been violated?Slide27

P sues D under Pa law in a NY state court

P sues D under Pa law in federal court in Pa

P sues D under Pa law in a federal court in NYSlide28

P(NY) enters into a contract with D(Ca) in Ca with performance in Ca

the contract is litigated in NY state court

under NY choice of law rules Ca law applies

what are the NY court’s obligations when interpreting Ca law?Slide29

Louknitsky v. Louknitsky

- California state court determining spousal rights in marital property of couple, now domiciled in Ca., while they were in China

- presumed Chinese law was the same as California’s community property systemSlide30

o

bligation to provide a forumSlide31

w

ho cares about full faith and credit if you can simply refuse to take jurisdiction of a case under sister state law?Slide32

Hughes v Fetter

(US 1951)Slide33

“We are called upon to decide the narrow question whether Wisconsin, over the objection raised, can close the doors of its courts to the cause of action created by the Illinois wrongful death act. Prior decisions have established that the Illinois statute is a ‘public act’ within the provision of Art. IV, § 1 that ‘Full Faith and Credit shall be given in each State to the public Acts . . . of every other State.’ It is also settled that Wisconsin cannot escape this constitutional obligation to enforce the rights and duties validly created under the laws of other states by the simple device of removing jurisdiction from courts otherwise competent. “Slide34

Public Policy Exception?Slide35

“We hold that Wisconsin's policy must give way. That state has no real feeling of antagonism against wrongful death suits in general. To the contrary, a forum is regularly provided for cases of this nature, the exclusionary rule extending only so far as to bar actions for death not caused locally. “Slide36

Forum’s Shorter Statute of Limitations?Slide37

Wells v. Simonds Abrasive

(US 1953)

PA state court may apply its procedural limitations period to Alabama action even though Ala. substantive limitations period is longerSlide38

Forum Non Conveniens?Slide39

“The Wisconsin policy, moreover, cannot be considered as an application of the forum non

conveniens

doctrine, whatever effect that doctrine might be given if its use resulted in denying enforcement to public acts of other states. Even if we assume that Wisconsin could refuse, by reason of particular circumstances, to hear foreign controversies to which nonresidents were parties, the present case is not one lacking a close relationship with the state. For not only were appellant, the decedent, and the individual defendant all residents of Wisconsin, but also appellant was appointed administrator, and the corporate defendant was created under Wisconsin laws.”Slide40

“We also think it relevant, although not crucial here, that Wisconsin may well be the only jurisdiction in which service could be had as an original matter on the insurance company defendant. And while in the present case jurisdiction over the individual defendant apparently could be had in Illinois by substituted service, in other cases, Wisconsin's exclusionary statute might amount to a deprivation of all opportunity to enforce valid death claims created by another state.”Slide41

n

ecessity jurisdictionSlide42

s

o what is wrong with what Wisconsin did?Slide43

a

company needs

people who can speak English

so they refuse

to hire

anyone

of Mexican ancestrySlide44

Testa

v.

Katt

, 330 U.S. 386 (1947

)

state courts may not discriminate against federal causes of actionSlide45

a

ssume Wisconsin court had applied Wisconsin law and then dismissed for failure to state a claim because the accident was not in WisconsinSlide46

The present case is not one where Wisconsin, having entertained appellant's lawsuit, chose to apply its own, instead of Illinois', statute to measure the substantive rights involved. This distinguishes the present case from those where we have said that, "

[p]

rima

facie,

 every state is entitled to enforce in its own courts its own statutes, lawfully enacted." Slide47

Can Wisconsin say that it is OK to kill

Wisconsiners

outside of Wisconsin?Slide48

Broderick v

Rosner

NY law allows piercing the corporate veil concerning NY banks to get to shareholders

NJ doesn’t like this and wants to protect NJ shareholders

Sets up impossible procedural hurdle: Only way in which one could pierce corporate veil for banks in a NJ court is to have all parties present (all officers stockholders debtors and creditors)

Suit in NJ against New Jersey shareholders of NY bank

SCt

holds NJ law violates FF&CSlide49

i

s

p

ublic

p

olicy exception, as applied to sister state law, a violation of full faith and credit?Slide50

is

are any choice-of-law approaches a violation of

full faith and

credit under

Kramer’s reading?Slide51

c

an

the state creating a cause of action prohibit sister-state courts

from entertaining it?Slide52

Tennessee Coal, Iron & RR Co v George

(US 1914)Slide53

There are many cases where right and remedy are so united that the right cannot be enforced except in the manner and before the tribunal designated by the act. For the rule is well settled that "where the provision for the liability is coupled with a provision for the special remedy, that remedy, that alone, must be employed." But that rule has no application to a case arising under the Alabama Code relating to suits for injuries caused by defective machinery. [I]t is … evident that the place of bringing the suit is not part of the cause of action -- the right and the remedy are not so inseparably united as to make the right dependent upon its being enforced in a particular tribunal. The cause of action is transitory, and, like any other transitory action, can be enforced "in any court of competent jurisdiction within the State of Alabama. . . ." Slide54

Crider v Zurich Ins Co (US 1965)

Alabaman injured in Ala while working for Ga corporation

Ala Ct awarded remedy under Ga workers comp statute even though Ga statute said action had to be brought before Ga Comp board

The rule of Tennessee Coal “has been eroded by the line of cases beginning with Alaska Packers and Pacific Insurance.”Slide55

Pearson v NE Airlines (2d Cir. 1962)

NYer killed in place crash in Mass

Flight from NY to Boston

Fed Ct in NY used Mass law, but not Mass damage limitation

Claimed PPE applied

Also claimed issue was procedural

but could court have said there was NY interest in NY law applying even though Mass law could apply otherwise?Slide56

w

hen can a state compel a sister state court to not take

the state’s cause

of action?Slide57

Privileges & Immunities ClauseSlide58

State cannot withhold from non-residents something important (something bearing on the vitality of the nation as a single entity)

Unless there is a substantial reason for discrimination

and the means chosen (namely state citizenship) bears a substantial relationship to achieving the endSlide59

CT has guest statute, New York does not

NY guest and host get into accident in CT

Guest sues host in CT court, which – using interest analysis – does not apply guest statute

Is the P&I Clause violated, because CT provides a protection to CT defendants but not NY defendants?Slide60

- What if NY guest sues CT host in CT state ct for accident in CT

- ct resolves true conflict by applying NY law

- any P&I violation?

- ct resolves true conflict by applying CT guest statute

- any P&I violation?Slide61

What if CT guest sues NY host for accident in CT state ct

CT court, using interest analysis, does not apply guest statute (because no worry about effect of fraud in CT)

Is the P&I Clause violated, because CT provides a protection to CT defendants but not NY defendants?