Conflict of Laws March 26, 2014.
Home Ins. Co. v. Dick (continued)
Plaintiff argues for the use of a Mexican cause of action, under the contract, but wants to
use the public policy exception to knock out the defense (the 1 year statute of limitations under
the contract). This is not the correct public policy exception, it is like the Nazi law case (where
the Plaintiff in that case wanted to exclude the law requiring people to fire Jews).
What is relevant are the expectations of the Mexican defendants. You could say it is a
procedural law, that the forum could normally apply, but the Court viewed the Texan law as
substantive because it went to the substance of the contract.
But what if: NY had a one year SOL bound up with a NY K action, could a Texas Court
apply its procedural two year SOL? The Court hasn’t answered this.
However, If NY contract parties require hand service, and this is valid under NY law,
could a Texas court entertaining this action use its own service rule? Yes, it could.
Constitutional holding: DPC means that the reasonable expectations of defendants have to be
considered for choice of law issues by courts.
Bradford Elect. Light Co. v Clapper (US 1932)
An attempt to constitutionalize something like comparative impairment: a precursor to
the modern development of interest analysis.
Vt citizen worked for a Vt. Company with primary place of business in Vt. He is injured
in NH. NH allows you to sue under common law or the workers comp system (common law
more money), Vt requires you to waive out of the workers comp at the beginning of the
employment relationship.
NH ct applied the NH law (place of the harm), but the Court reversed because it argued
that Vt had a strong regulatory interest in its workers compensation system to work. This interest
is so strong that it makes the NH court’s application of its own law as unconstitutional.
Pacific Employers Ins. Co. v. Industrial ACC. Comm’n (US 1939).
Mass. and California have a difference in the workers compensation system, where
California would pay more money. The accident happened in California, but the person was
domiciled in Mass. The court said that this Full Faith and Credit could mean that a Mass. ct
would have to apply California law, and vice versa, but the court didn’t consider that every court
could apply the law of the state that has the most important interest.
However, because California has a legitimate regulatory interest in its workers
compensation system, that is enough to fulfill the constitutional requirements of the Full Faith
and Credit interest (it need not be the greatest interest, merely an acceptable one). California
does have an interest in protecting workers in its state.
Allstate Ins. Co. v. Hague
Plaintiff and husband lived in Wisconsin, husband worked in Minnesota, an accident with an
uninsured motorist where the husband died. Then the wife moved to Minnesota, and then sued
there to recover on the policy. There were three vehicles, so the plaintiff and the local court
wanted to “stack” the policies so that they could recover more money: the defendant argued that
this case should be under Wisconsin law that didn’t allow stacking. The local court applied
Minnesota law as the “better law” under Leflar’s approach.
The court plurality argued that, as long as there were significant contacts so that the
choice of law was neither arbitrary nor fundamentally unfair (really focusing on the interests of
the parties).
Three such contacts 1). Worked in Minnesota, 2). Allstate does business in Minnesota, 3), Wife
moved to Minnesota (even though this was after the accident).
Powell dissent: he doesn’t think that any of these were significant enough: sure the
deceased husband worked in Minnesota, but this accident doesn’t have anything to do with
Minnesota’s stacking law nor with the safety of the Minnesota workforce. Minnesota may be
interested in his safety, but it can’t be in whether its stacking law applies.
Allstate’s business in Minnesota have nothing to do with the plaintiff, and they couldn’t
predict his wife moving after death. Thus Allstate could reasonably anticipate the application of
Minnesota law for DPC reasons.
However, there was no choice of law provision in the contract, and the Allstate policy
applied to out of state accidents. Allstate knew that he regularly went to Minnesota with his
commuting. This is enough for the DPC interests of the defendant to be satisfied.
Really about the interests of the states involved. If we look to the Pacific Employers
interest, that doesn’t seem to be related to the stacking rule, that is to compensate a person who is
a domiciliary of Minnesota. The second one proves too much: that would apply to any state’s
law since Allstate is in all states.
However, the post event move of the plaintiff to Minnesota creates a full faith and credit
interest. It wants a Minnesotan person to be able to recover fully, that is a totally normal (and full
faith and credit compliant) interest. The fact that Allstate couldn’t anticipate this was irrelevant,
as the FFC isn’t about the expectations of the parties.
Phillips Petroleum Co. v. Shutts (US 1985)
Mineral rights in 11 states, a Delaware and Oklahoma corporation, the plaintiffs live in
fifty states. The case is in Kansas, and the court wanted to apply Kansas law about the interest
from leases that were almost all not in Kansas. The Kansas state court was asserting power over
all the plaintiffs on personal jurisdiction ground because class action suits don’t need to satisfy
international shoe as long as you have 1). procedural due process, 2). notice, and 3), the ability to
opt out.
Ct doesn’t want to allow plaintiffs to have the ability to consent to any law that they
wanted to in light of the interests of the defendants. Defendants didn’t consent, of course, and
there are also FFC issues, as well as the DPC. Assume that you have a gambling contract in
California, where the contract is illegal in California. One party breaches, and then there is a suit
in Nevada (where the contracts are illegal). This court can’t apply Nevada law under the FFC,
because Nevada has insufficient contacts with the parties and that contract.
Procedural interests that allow the court to have jurisdiction over the case can’t itself
create the substantive contacts required to then apply Kansas law. It can only use a different from
the ordinary choice of law rule for class action suits when all the applied laws are constitutionaly
applicable: you can’t make something unconstitutional constitutional by the use of procedural
interests.
The court reversed on the application of Kansas law to the leases and possible interest
payments that were not in Kansas.
Sun Oil v. Wortman (US 1988)
Question was whether Kansas could use its longer statue of limitations rule for a class
action suit under the FFC clause. As long as personal jurisdiction exists, then the DPC is ok for
that. Scalia said that these SOL from the founding forward were traditionally procedural, and
thus the forum was permitted to use its own statute of limitations. Even the sister states didn’t
want their statutes of limitation to follow the causes of actions. If the forum wants its law, and
the sister state doesn’t show evidence that it treats its SOL as substantive, then that is ok. The
question of whether a forum state’s procedural SOL will beat a substantive sister state’s SOL has
not been answered.
There is also the question of what limits are there on forum states when interpreting sister
state law when they are constitutionally required to apply the sister state law. The Court says it
isn’t only that you get it wrong: there has to be a violation of clearly established (i.e. a clear
statement by the Sister state supreme court), and it has to be brought to the Court’s attention.
This is different from the Erie obligations that a Federal court has when hearing a
diversity case. That court has to predict what the relevant state court would do, and follow it.