Jurisdiction Outline
Professor Richman
Fall 2000
I.
Introduction
 study of conflict of laws centers on transactions that have legal implications
involving more than one sovereign
 conflicts divided into three parts: jurisdiction, choice of law, and judgments
 domicile: something close to, but not identical with, residence. It is a
person’s “pre-eminent headquarters”. The relationship between a person and
his domicile must be close enough to justify the reciprocal right/duty status
denoted by the term. Each person has one and only one domicile at any one
time for any one purpose.
- To fix domicile: establish a physical presence in that
jurisdiction with an intent to make that place home for
the time
- To acquire a new domicile: necessary actually to be
present, at least for a while in that jurisdiction
 jurisdiction: power of courts to adjudicate with respect to a person or a
thing. To exercise jurisdiction properly, a court must have enough
connection with a problem to satisfy both constitutional and statutory
requirements. There must be a sufficient nexus between the defendant or the
res on the one hand and the state on the other to justify the exercise of power
 choice of law: a legal problem to involves incidents or problems concerning
more than one state and a court must determine which state’s legal rules
should control the resolution of the problem. The development of current
approached to choice of law have been revolutionary
II.
Selecting the Proper court
A. Overview
 Jurisdiction over person and property, subject matter jurisdiction, and venue
come together to determine the permissible choice of forum for the P. a
particular court is not the appropriate one in which to bring suit unless it
satisfies all three requirements
 Ask:
- does case belong in state or federal court? (SMJ)
- which particular federal or state court? (juris over
person or property and venue)
 Consider: the jury pool, the knowledge of law in that court, knowledge of
juries, residence or domicile of parties, statute of limitations on damages,
geography (easier and cheaper to sue at home), time (some courts have
longer dockets than others and D’s like longer dockets)
 what are the choices? Which court do we want to sue in? legal/ technical
problem of picking the right court? What obstacles are there (subject matter
jurisdiction, territorial jurisdiction, venue)?
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In the US, there are limits upon the jurisdiction of state and federal courts
imposed by the DP clause of the 5th Amendment and 14th Amendment. A
court that exercises jurisdiction over a D in the absence of a proper
jurisdictional basis has violated her right not to be deprived of property
without due process, and therefore, its judgement is invalid. The kind of
relationship between D and the state that suffices to support an exercise of
jurisdiction is a question of federal law and the Supreme Court is the final
arbiter.
 The Full Faith and Credit Clause controls the states obligations to recognize
and enforce the judgements of the courts of sister states. Subject only to a
few controversial exceptions, the two constitutional clauses are co-extensive.
Thus, if a state has a jurisdictional basis sufficient to satisfy the DP clause,
the judgement of its courts will be entitled to FF&C in other states
 Notice: DP clause requires that adequate notice be given to the D of the
action and an opportunity for him to be heard
- no matter what sort of jurisdictional basis exists, and
no matter whether jurisdiction is exercised in
personam or in rem, the judgement will be invalid if
the D has not been given adequate notice
- Mullane test for in rem and in personam
jurisdiction: (1) is the method of notice chosen
reasonably likely to reach those affected?; and (2) if
conditions do not permit such notice, is the method
chosen about as good as any other?
- Methods: personal service of process by an official of
the court or a private process server; service by mail;
substituted personal service (where the process server
leaves the summons and complaint at the D’s house
with some person of suitable age and discretion
residing therein); and notice by publication;
B. Subject Matter Jurisdiction
1. Generally
 Once it is clear that the state has power to hear a case, another question must
be addressed: Which court within the state has been given competence to
hear this type or class of case? States customarily divide up the judicial
business among their several courts according to subject matter.
- typical division: (1) court of general jurisdiction; (2)
a group of inferior courts; (3) a group of specialized
courts which have competence in such areas as
probate, domestic relations, and appeals from
regulatory agencies
- state and litigants have an interest in their cases
being heard by competent court: jurisdiction over
subject matter cannot be conferred on a court by
agreement of the parties, cannot be waived, and if not
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raised by the parties it must be noticed by the court on
its own motion
SMJ also used to describe the rules (constitutional and
statutory) that control the jurisdiction of federal courts.
The federal courts are courts of limited jurisdiction; if
jurisdiction over a case cannot be found in article III of
the Constitution, it does not exist. The principle
categories of federal jurisdiction are federal question
jurisdiction (cases arising under the laws of the United
States) and diversity jurisdiction (cases in which
citizens of different states are adverse parties).
2. federal question jurisdiction
 Article III, section 2: “the judicial power shall extend to all cases, in law
and equity, ARISIGN UNDER this Constitution, the laws of the United
States and treaties made...”
 Osborn v. Bank of U.S.: question as the what “ARISING UNDER” means
in the Constitution. Court says that a suit arises under federal law if at some
point, a federal question could come up
 1845 Congress passed general federal question jurisdiction statute – 28
U.S.C. §1331.
- Congress gave court federal question jurisdiction b/c :
(1) likes to have uniform application and interpretation
of federal law; (2) allows for expertise (have those
who know federal law interpret it)
- The words “ARISING UNDER” in the statute do not
mean the same thing as the words “ARISIGN
UNDER” mean in the Constitution (statute interpreted
more narrowly)
- Two tests the courts use to figure out original
jurisdiction of the U.S. federal district courts: (1)
Holmes test: suit arises under a law that creates the
cause of action/ claim (property, tort and contract are
state and admiralty and OSHA are federal); and (2)
Smith test: federal question jurisdiction can be proper
where the vindication of a right under state law
necessarily turns on some construction of federal law
(where federal law is an element of a state claim, it
suffices to support federal question jurisdiction only
where it is important to the outcome of the case)
 well pleaded complaint rule: the P’s federal question must appear in the
properly pleaded allegations of his complaint. Rule permits reliable early
determinations of whether the federal court has jurisdiction. An allegation
anticipating a defense based on federal law is not sufficient to raise a federal
question
3. diversity jurisdiction
 Article II, section 2 is the source of diversity jurisdiction
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Purpose is to protect out-of-state litigants from prejudice
Even if all of the prerequisites of diversity jurisdiction are fulfilled, federal
courts have traditionally refused to hear domestic relations cases and to get
involved in probate proceedings. Their power to create such areas of
abstention is not beyond doubt, but the reason normally given is that these
areas have traditionally been the concern of the states
28 U.S.C. §1332 a1, a2, a3 : no diversity of citizenship jurisdiction in a suit
between two aliens; not provided for , so it does not exist
Strawbridge v. Curtiss: complete diversity is required to have diversity
jurisdiction (each distinct interest should be represented by persons, all of
whom are entitled to sue, or may be sued, in federal courts.
Mas v. Perry: for diversity purposes, citizenship means domicile; mere
residence in the state is not sufficient. Complete diversity of parties is
required in order that diversity jurisdiction obtain; that is, no party on one
side may be a citizen of the same state as any party on the other side
DOMICILE for diversity jurisdiction:
- To change domicile: take up residence in a new place
(physical presence) and intend to remain there. Must
have intent to remain there indefinitely (floating intent
to leave new place at some time in the future is not
good enough)
- Corporations: 28 U.S.C. §1332(c) A corporation is a
citizen of a place where incorporated and where it has
its “principle place of business”. Test for “principle
place of business” is : (1) bulk of corporate activities;
or (2) where activities are spread out, rely on where
home office is or where nerve of company is
- Unincorporated Association: no separate legal
existence b/c it is its members. No corporate status, so
the test for citizenship is where the members are
- Limited Partnership: general partners who have
liability and control and limited partners with no
control. Should be treated more like a corporation, but
according to Supreme Court, citizenship of every
partner matters
Manipulating Diversity Jurisdiction: might want to get into federal court
rather than states, so try to manipulate diversity jurisdiction. 28 U.S.C.
§1359 restricts this (but controls only intent to CREATE diversity
jurisdiction, not to DEFEAT it)
- kinds of manipulation that will work: (1) move (all
we require is intent, do not look at motive); (2) class
actions (carefully choose named representatives of
class b/c measure citizenship of named representatives
only – Benhur)
- kinds of manipulation that won’t work: (1) sell
claims to lawyer who is diverse; (2) have administrator
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or executor of estate sue on behalf (legal rep shall be
deemed citizen of the same state as decedent under
§1332(c)(2))
 Interpleader: (if you have one thing and several claim it, bring them all into
one action and let them all duke it out) these cases tell us something about
complete diversity requirements
- 28 U.S.C. §1335: interpleader permitted if two or
more claimants of diverse citizenship and worth at
least $500. As long as minimal diversity exists, the
citizenship of plaintiff-stakeholder is immaterial
- Article III section II permits complete and minimal
diversity
4. Amount in controversy
 diversity statute limited federal jurisdiction to cases in which more than a
certain minimum amount was in controversy. Currently, diversity
jurisdiction is limited to cases involving more than $75,000.
- monetary limit ensures that only substantial cases will
be brought
 the amount is computed as of the date of the commencement of the action.
Subsequent events (like part payment) do not defeat jurisdiction
 the jurisdictional amount requirement is satisfied unless the plaintiff’s
complaint shows to a legal certainty that she could not recover more than the
minimum amount. The claim for damages set forth in the complaint is
determinative if made in good faith. The fact that the actual recovery does
not exceed the jurisdictional amount dos not affect the jurisdiction of the
court
 Aggregation: whether separate claims for less than the jurisdictional amount
can be aggregated to satisfy the requirement depends on several factors:
- Only claims for which all defendants are jointly liable
to the plaintiff may be combined. Joint liability would
arise in a few situations such as co-owners of property,
but not joint tortfeasors
- The claims of multiple plaintiffs can be aggregated
only if they have a common undivided ownership in
such claims
- - All claims of the plaintiff against a single defendant,
whether or not related, can be aggregated to meet the
minimum
 Tag-along: when one claim already meets the minimum requirement on its
own, other claims that do not can be tagged along (ride the coat tails)
- Zahn v. International Paper Co.: for amount in
controversy, amount must be met for each member
5. the diversity controversy: ( Federal Courts Study Committee article)
 Congress should limit federal jurisdiction based on diversity of citizenship to
complex, multi-state litigation, interpleader, and suits involving aliens.
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Federal diversity of citizenship jurisdiction is a major source of the federal
courts’ caseload
 A substantial majority of the committee strongly recommends that Congress
eliminate this basis of federal jurisdiction, subject to narrowly defined
exceptions b/c no other class of cases has a weaker claim on federal
resources and no other step will do anywhere nearly as much to reduce
federal caseload.
 State courts are better able to handle caseload
 Courts should: prohibit plaintiffs from invoking diversity jurisdiction in their
home states, deem corporations to be citizens of every state in which they are
licensed to do business, specify that the jurisdictional floor does not include
punitive damages, or non-economic damages
 Dissent: pp. 22 of supplement
6. supplemental jurisdiction:
 federal courts now have the power to hear disputes that do not fall squarely
into the categories of federal question or diversity jurisdiction but that are so
related to a federal question or diversity case that there is “supplemental
jurisdiction” over them.
 Anchor claim: first case with federal jurisdiction; Supplemental claim:
claim otherwise not jurisdictional
 United Mine Workers v. Gibbs: (§1367(a)) Had a federal claim and a state
claim and the district court had the power to hear the state claim b/c there
was common nucleus of operative fact/ the two claims arose out of the same
controversy . The goal of supplemental jurisdiction is to promote judicial
economy and consistency of decision by removing obstacles to having all
related controversies decided in one proceeding.
 Aldinger v. Howard: trying to sue supervisor under §1983 claim and then
sue the county under state law and get pendant jurisdiction. Court says there
is power to hear both b./c there is a common nucleus of operative fact. But
Congress has spoken (no §1983 against counties)
- tests is: (1) is there a common nucleus of operative
fact for constitutional power? And (2) has congress
said that there CANNOT be jurisdiction?
 Finley v. U.S.: sues city of San Diego and San Diego Power Co., later
realizes that FAA is responsible, not the city. Brings case in federal court (b/c
of FAA) and wants to bring in cases against state. Court says there is a
common nucleus of operative fact, but changes the test for jurisdiction:
- NEW test is: (1) is there a common nucleus of
operative fact for constitutional power? And (2) has
congress said that there CAN be power?
- With new test, there will rarely ever be jurisdiction b/c
Congress usually expresses no intent about
supplemental jurisdiction
- Second sentence in §1367(a) overrules Finley and
changes test back to - Has congress said there
CANNOT be power?
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Owen Equipment v. Kroger: Iowa P sues Nebraska D, Nebraska D
impleads Iowa D, then iowa P adds claim against Iowa impleaded D.
Supreme Court says there is no supplemental jurisdiction over claims by
plaintiff when it would be inconsistent with §1332 (requirement of complete
diversity)
 Conditions and limits are statutorily defined in 28 U.S.C. 1367 (Gibbs,
Aldridge, Finley, and Owen all codified here)
 Statute grants federal courts that have original jurisdiction over a claim
supplemental jurisdiction over all other claims that form part of the same
case or controversy under Article III. The focus of the constitutional inquiry
is whether the claims sought to be added to those within federal jurisdiction
are part of one constitutional case or controversy
7. removal jurisdiction
 Allows a defendant to shift a case from state court to federal court when the
plaintiff has chosen to sue in state court. Although there is no mention of
removal jurisdiction in the Constitution, some form of removal jurisdiction
has existed since the federal court system was first created.
 In general, an action that the plaintiff could have originally filed in federal
court can be removed by the defendant. U.S.C. §1441(a) (pp. 35 of
supplement)
- if federal court has original jurisdiction, can be moved
to federal court
- if there is original jurisdiction, the case can be
removed to federal court without regard to citizenship
- court chooser (D) can’t use diversity to get into federal
court if can be subject to its own courts (P sued D in
D’s home state)
- only D’s can remove
C. Territorial Jurisdiction
1. Intro
 Judicial jurisdiction in the most inclusive sense refers to the power or ability
of a court to hear a dispute and render a valid judgment in the sense that it
will be recognized in other courts
 Buchanan v. Bucker: mailed complaint to courthouse door in the islands
(case stands for the fact that the state must have some connection or
relationship with the defendant or his property to exercise power over him
 types of territorial jurisdiction: connections that suffice for jurisdiction are
referred to by courts and scholars as jurisdictional bases (or predicates)
- in personam: permits a court to enter a judgement
that is personally binding on D, either ordering her to
do or refrain from doing a certain act or decreeing that
the P may collect a certain amount of damages from D
- in rem: permits a court to adjudicate rights of all
claimants to a specific piece of property.
- Quasi- in rem: formerly included two types of cases:
(1) cases involving disputes about property under the
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2. History
court’s control and (2) cases involving personal
disputes where court lacked personal jurisdiction over
D, but had jurisdiction over D’s property. Property
would be seized and used to satisfy claim if needed
Mullane: as noted above, the DP clause, which requires the existence of
acceptable jurisdictional basis, also requires the defendant to be given
adequate notice of the proceeding and the opportunity to be heard. Two part
test: (1) notice reasonably certain to inform; or (2) method chosen is as good
as any other chosen
Collateral Attack: error of jurisdiction asserted in a new proceeding
Direct Attack: an appeal asserting error (motion to vacate) in the same
proceeding that issued judgement
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theory of jurisdiction that governed until 1900 is the Territorial Power
Theory or the International Law Model of Jurisdiction (power of U.S. in
International Law Model is limited to territory of U.S.)
a. early dogma
 Pennoyer v. Neff: Supreme court announced a theory of state court
jurisdiction that was to stay in place for nearly 70 years. Territorial power
theory relied on a conception of the states as nearly independent sovereigns.
“Every state possesses exclusive jurisdiction and sovereignty over
persons and property within its territory” and “no state can exercise
direct jurisdiction... over persons or property without its territory.” But
the court was not able to develop a standard for determining when the forum
involvement of the out-of-state D was sufficient to justify substituted service
on a state officer. Invoked concepts of “implied consent” and “presence.”
There are five acceptable jurisdiction bases under this theory:
- service of process: on D while in territory establishes
power over him
- domicile:
- consent to jurisdiction: by making an appearance
- incorporation: as a corporation within the forum.
state can disassemble/ rescind the corporation’s charter
- in rem: state had in rem over an y property, real or
personal, w/in the state
b. stretching the dogma by fiction:
 territorial theory and the exceedingly narrow jurisdictional practice that it
required proving to confining for the courts as modern methods of
transportation, communication, and commerce made interstate litigation
more common
 courts and legislatures faced a choice: scrap the outmoded theory or
stretch it to reach more out-of-state Ds. Chose the second option with the
doctrine of implied consent (D did not actually consent to the court’s
jurisdiction, but rather the D conducted certain activities in the forum and
consent was inferred from those activities)
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Supreme court upheld these statutory fictions in cases about motor vehicles
of residents or non-residents on highways, Ds involved in any sort of closely
regulated activity within the state, and foreign corporations
- “consent” and “presence” proved to be adequate
theoretical justifications for the exercise of jurisdiction
over foreign corporations. But how much contact was
required in order to find that the corporation consented t
jurisdiction or that it was present in the forum? Court
used the “doing business standard” – fairly substantial
connection between the D and the forum.
c. the revolution
 by the 1940’s,the theory had proved its inadequacy and that it was out-ofstep with recent advances in technology and communication
 defects of theory rendered it obsolete and the law of jurisdiction had to
change
 International Shoe Co. v. State of Washington: Co was incorporated in
Del. With its principle place of business in Missouri. Employed a
Washington resident to solicit orders there, and send them back to Missouri.
Washington sued Co. to collect unemployment tax on salaries. Supreme
court affirmed lower court decision that personal jurisdiction existed over D,
but divested corporate “presence” of the special significance it had in
Pennoyer. Court dumped original Pennoyer tests and said that what matters
is minimum contacts with the state so that it doesn’t offend notions of
fair play and substantial justice
- Shoe left it unclear whether we look at contacts or we
simply look at fairness
- Court identified two types of contacts a non-resident
could have with the forum: (1) D’s activity within the
forum state related to the controversy; and (2) D’s
unrelated contacts
 McGee v. International Life Insurance Co.: Court says that if a foreign
corporation’s contacts with the forum state were single or isolated, but the
case arose out of those very contacts, the suit was based on a contact which
had a substantial connection with that state. Established beyond question the
forum’s authority to exercise jurisdiction over non-resident D’s in lawsuits
resulting form their forum-directed activities. High-water mark for personal
jurisdiction
 Hanson v. Denckla: complicated facts, but Court decided that a power
theory was refined in International Shoe and under this theory, submission to
suit is a fair exchange for the benefits and protection a non-resident D
receives from a forum state. Without minimum contacts between nonresident D and the forum capable of supporting the power theory, no deal.
Majority made clear that: (1) focus on the relationship between the forum and
D was both central and indispensable to the minimum contacts inquiry; and
(2) contacts would achieve the minimum only if they were sufficient to
support the power theory
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reflects a reversal of usual pattern
Hanson harks back to Territorial Power Theory
After Hanson, McGee regarded as law and Hanson as
a throwback
 Shaffer v. Heitner: most famous for its unification of in personam and in
rem jurisdictional analysis under the International Shoe standard. In the one
hand, it rejects the territorial power theory in Pennoyer; on the other hand,
other parts of the opinion are not as supportive of a theory of jurisdiction
based on fairness. Clearly committed to contacts rather than fairness analysis
d. Constitutional limits on state court jurisdiction – modern doctrine
 After 1977, the court ended its 22 years of silence – and issued 12 major
decisions
 General Jurisdiction: D relationship with the forum justifies jurisdiction
over him based on any claim, even one unrelated to the forum
 Specific Jurisdiction: Connection between the forum and the acts of nonresident D generate the controversy. Claim arises in the state, so D amenable
to jurisdiction. Much less contacts with the forum
 World Wide Volkswagen Corp. v. Woodson: Robinson’s take car to new
home in Arizona, but on their way get into an accident in Oklahoma. Sue
NY auto dealer and NY/NJ distributor in Oklahoma. Court hold s there is no
jurisdiction. Announces a two part tests for exercise of jurisdiction: (1)
minimum contacts; and (2) id overall jurisdiction fair or reasonable?
(combines the tests in International Shoe). Courts says that foreseeability
that the car might have reached Oklahoma is possible, but foreseeability
alone has never been a benchmark for personal jurisdiction. DP analysis
requires not the mere likelihood that the product would end up in forum state,
but hat the D’s conduct and connection with the forum are such that he
should reasonably anticipate being haled into court there
- stream of commerce theory: if D loses a product in a
stream of commerce, D is amendable to personal
jurisdiction wherever the product ends up through this
stream (chain of distribution). Everyone in the stream
is amenable where stream ends
- may be no amenability where consumer happens to
take product
- case makes clear that nonresident D is not subject to
personal jurisdiction unless he has directed acts
towards the forum
 Keeton v. Hustler: P sued Hustler for libel. Connection with NH is that
10,000 copies of the magazine sold there. Court decides that NH has an
interest in the case (but seems to dig up ridiculous reasons why) and seems
stuck on contacts being more important than fairness. Fairness seems to
point away from jurisdiction this case, though there are some contacts. Court
seems to be saying that even if exercise of jurisdiction might result in
unfairness, if D has established contacts with the forum, there will be
jurisdiction.
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Some scholars seem to think this case represents courts
way of aggregating contacts related to claim and those
unrelated to claim in order to reach minimum contact
standard (indication that neither related nor unrelated
contacts would have been alone sufficient
- Single publication rule: in defamation suit, must get
damage done in all states paid in just one state – do it
all at once – can’t bring another suit. P is free to pick
court anywhere
Helicopteros v. Hall: Texas state wrongful death action as a result of
Peruvian crash of helicopter operated by Helicopteros. Supreme Court
decided that Texas did not have personal jurisdiction over Helicopteros.
Court said no general jurisdiction b/c contacts between Helicopteros and TX
when seen as unrelated to controversy were insufficient. Court said no
specific jurisdiction b/c not raised in briefs (but this is a lie) and injury did
not arise in TX (yet, but for negotiations in TX injury never would have
happened). Court said injury did not “arise out of or relate to activities in
TX” and court seemed to want no part in figuring out when claim arises out
of forum.
- as the number or importance of contacts increases,
there can be jurisdiction with a weaker connection
between the claim and the forum
- as the number or importance of contacts decreases,
jurisdiction requires a stronger connection between the
claim and the forum
- purchases by foreign entities in the US are something
we want to encourage
- perhaps we need a doctrine of jurisdiction by
necessity?
Burger King v. Rudzewicz: ordinary kind of franchise dispute where BK
sues D in Florida. Brennan subtly reformulates the contacts and fairness test
into : “commercial actors’ efforts are purposefully directed towards residents
of another state.” Used to be that test was activities actually IN the forum
state, not just directed TOWRDS it. Brennan says that fairness factors
sometimes serve to establish the reasonableness of jurisdiction upon a lesser
showing of contacts than would otherwise be required. This statement
reduces the rights of Ds in jurisdiction cases and changes the burden in
fairness issue (once P meets burden on contacts, D has burden on fairness).
- mail order specter: courts reluctant to exercise
jurisdiction over foreign consumer who used mail order...
more willing to exercise over foreign sellers
Asahi Metal Industry v. Superior Court: products liability case where P
sued in California b/c of serious accident there killing his wife. D
manufactured tire in Taiwan and attempted to bring in Asahi, the
manufacturer of the tire’s valve assembly. Court said that whether or not
minimum contacts exist between the forum and Asahi, California’s attempt
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to assert personal jurisdiction exceeded the reasonableness standard of due
process.
- First case where Supreme Court rested holding on
fairness component
- Modification of stream of commerce test: World
Wide Test is too P friendly, so should require
additional evidence that D was purposefully availing
himself of forum
- Opinion described as s primer for foreign
manufacturers to read to figure out how to avoid being
amendable in U.S.
e. bases for jurisdiction
(1) traditional bases reconsidered: U.S. constitution, discussed above, is not the only
source of law governing the jurisdiction of state courts. The mere fact that an
exercise of jurisdiction does not violate the DP clause, does not mean that it is
permissible. A state can exercise jurisdiction only if state law gives it the authority
to do so. Traditionally, state law has authorized jurisdiction when: (1) the D is a
domiciliary of the state; (2) the D is served with process while present in the state’s
territory; or (3) the D consents to the state’s exercise of jurisdiction.
 Personal Service of Process: gives notice no matter where accomplished,
but serves jurisdictional basis only if accomplished within the state. Basis
for general jurisdiction. Traditionally, the state could always exercise
personal jurisdiction over anyone who could be served within its borders, and
it could exercise jurisdiction ONLY over people who could be so served.
International Shoe, requiring non-present D to have minimum contacts in
order for jurisdiction to exist, flew in face of this traditional thinking (though
service like this would disappear b/c no minimum contacts). Shaffer said
that ALL exercises of jurisdiction must satisfy minimum contacts and
fairness standards of International Shoe.
- Burnham v. Superior Court: couple living in NJ
separates and wife moves to CA. Wife files suit
against husband in CA and when he enters the state to
see his kids, he is served with process. All justices say
there is jurisdiction, but Brennan and Scalia debate
about why. Brennan justifies jurisdiction based on
Shoe and Shaffer (used highways, used cops protection
while there, traveled to CA, so can expect to be
amenable there). Scalia justifies based on tradition
(define DP by tradition and history. Shoe was directed
only towards non-present defendants)
 Domicile: provides adequate basis for the exercise of general jurisdiction.
Reciprocal rights and duties of the citizen and the state and has a justification
based on necessity: there should always be some place where the D is
continuously amenable to suit in any cause of action. Maximal contacts and
expected, so easy to justify under Shoe and Shaffer test.
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Appearance and consent: D with no contact with state in which she is used
has three options: default, appear specially to object to the court’s
jurisdiction, or appear generally and litigate on the merits.
- If she takes the last course she has consented to
jurisdiction without any contact with the state and this
is an acceptable basis for the exercise of general
jurisdiction. Does not matter whether D is appears
personally or attorney appears for her (she need not set
foot in the state to appear, and therefore, to consent).
Courts divide on whether D’s appearance to defend
original action is an adequate basis for jurisdiction
over claims added by subsequent amendment. Forum
does have jurisdiction, though, over the original claim
AS WELL AS counterclaims.
- General appearance is essentially a consent after
the fact (may take the form of a document nominating
a particular state official or private person as agent to
accept service of process or it may take the form of
contract to consent to court’s jurisdiction (Szukhent:
jurisdiction consent clauses are valid even in adhesion
contracts) (Bremen: forum-selection clauses are
prima facie valid and should be enforced unless the
clause is unreasonable or unjust, it was procured by
fraud or is overreaching, it violates the forum’s public
policy, or it would be inconvenient.
- Special appearance: device that permits a D to appear
for the purpose of litigating the court’s jurisdiction
over her without making a general appearance and
thereby consenting tot he court’s exercise of
jurisdiction. If D loses her jurisdictional challenge,
some courts make her appeal right away (if she doesn't
she is held to have appeared generally and cannot later
attack jurisdiction on appeal). Most courts, though,
say that D can plead on the merits without losing the
right to assert objection on appeal. Bauxite’s: D can
waive jurisdictional objection by refusing to
participate in discovery.
- Class Action Plaintiffs ( Phillips Petroleum v.
Shutts): Court says that if no minimum contacts, we
can justify jurisdiction over absent class members
based on consent. Class Ps are different from typical
Ps b/c courts protect them and they don’t have to hire
lawyers. Court wants to promote these nationwide
state court class actions to free up federal docket.
(2) long arm statutes: traditional bases for jurisdiction were adequate until Court
broadened theory in International Shoe. Gap between traditional bases and the
13
constitutional limit on jurisdiction. Filled with long arm statutes (necessary b/c w/o
them court can only exercise jurisdiction up to traditional bases) Two kinds:
- California: (most effective way to do it using the
least amount of words). “Exercise personal
jurisdiction without violating DP.” Yet these statutes
don’t give D very good notice as to what kinds of
behavior puts him at risk
- Enumerated Act: (list those acts that make you
amenable to personal jurisdiction). Greta notice to Ds,
but may run the risk of leaving something out. Statute
intended to take jurisdiction to constitutional limits, so
why not just enact a California type (about half of the
states read them as if they were anyway)? Some
courts say enumerated acts matter, but should be
interpreted broadly. TRANSACTING BUSINESS
IN THE STATE (much broader than “doing
business” could be one deal), CONTRACTING TO
SUPPLY IN THE STATE (contact can be executed
anywhere), TORTIOUS INJURY IN THE STATE
(does not require local injury, but only local act –
reaches resident manufacturer), FOREIGN ACT
WITH LOCAL TORTIOUS INJURY (injury in this
state by act or omission outside state), INTEREST
OR USE OR POSSESSION OF PROPERTY IN
THE STATE (generates personal jurisdiction, not in
rem – simply used property as a connector),
CONTRACTING TO INSURE IN THE STATE
(contract can be executed anywhere – all we care
about is where risk insured is)
________________________________________________________________________
PERSONAL JURISDICTION ATTACK STRATEGY:
 Does a traditional bases generate jurisdiction?
PEOPLE: served with process, domiciliary, consent
CORPORATION: incorporated, doing business, consent
 Does a long arm statute generate jurisdiction?
CALIFORNIA: go directly to Constitutional issue
ENUMERATED ACT: does one of the sections apply in this case?
 If yes to either of first two questions, is it constitutional? (certain
minimum contacts so that maintenance of suit does not offend
traditional notions of fair play and substantial justice)
CONTACTS:
1. measured for general jurisdiction – enough contacts that any
claim can be litigated there
14
2. measured for specific jurisdiction – does claim arise out of
controversy> number? Claim relatedness? Did D initiate
contacts? Stream of commerce?
FAIRNESS:
1. burden on D severe?
2. Forum have an interest?
3. P have convenient alternative?
4. look at interstate judicial system’s interest
5. advance shared interests of several states?
________________________________________________________________________
(3) jurisdiction for federal courts: as a Constitutional matter, can exercise jurisdiction
over anyone with minimum contacts with U.S. (might be unreasonable, but passes
contacts test). Usually the jurisdiction is the same as state courts across the street b/c
of statutory restrictions
- FRCP Rule 4(k): can establish jurisdiction over
person of D
(1)(A): jurisdiction over those by corresponding
jurisdiction of state court (minimum contacts)
(1)(B): jurisdiction over D joined by Rule 14
impleader or Rule 19 (minimum contacts with forum
state or bulge area)
(1)(C): jurisdiction over those subject to federal
interpleader under 28 U.S.C. §1335 (Minimum contact
with US)
(1)(D): jurisdiction when authorized by statute of US
– national long arm statute (minimum contacts with
US)
(2) A federal long arm statute and gap filing exercise
that says that if there is a federal question and D has
minimum contacts with US, there is jurisdiction
3. Jurisdiction Over Things (more precisely the jurisdiction over the interest of
persons in things)
a. the traditional taxonomy
 distinction between personal and in rem jurisdiction is that a court with
personal jurisdiction can do pretty much anything – any form of remedy the
court gives. In rem jurisdiction or any form of property based jurisdiction
gives the court a vastly more limited power (all court can do is create and
destroy interests in the thing, or “res”).
 Types:
- in rem: least controversial; forum court adjudicates
interests of everyone in the thing. The power to do so
rests on the power over the thing – don’t care bout
contacts. P asserts and court adjudicates title to the
thing as against all of the world. Justification is
15
necessity. Exists in relatively few cases (admiralty,
forfeiture, probate, condemnation)
- quasi in rem: about claims of ownership asserted by
the P in the property. Different from in rem b/c there
is a particular D named and the suit is not against the
whole world. Common to have suits that remove
cloud on title. All the court can do is change interests
in the property.
- Attachment: based on a claim that has nothing to do
with the thing (it can, but usually does not). Usually is
just b/c P can’t get personal jurisdiction over D (P
concedes that D owns property and says “I can’t get
personal jurisdiction over you, but I can hold your
property hostage”). If P wins, the property is sold and
P gets the proceeds up to the value of the claim. If P
loses, can go somewhere else D has property.
b. the development of attachment jurisdiction
 Pennoyer v. Neff was also the first to set out the theoretical basis for
attachment jurisdiction. The narrow holding of Pennoyer was that the
presence of D’s property within the forum and its attachment at the
commencement of the action are absolute prerequisites to a proper exercise
of attachment jurisdiction. The principle permitted a court, if it attached real
property of the D at the commencement of the action, to adjudicate a
personal claim against the D even though there was no personal jurisdiction
over him and even though the claim had nothing to do with the attached
property. The main limitation was that a court with attachment jurisdiction
could not issue a personal judgment against the D; its power was limited to
the authority to award the property to the P or to order the property to be sold
and the proceeds to satisfy the claim.
 Seems to fly in the face of International Shoe’s standards of minimum
contacts and fairness, yet it is very difficult to have property in a state
without having minimum contacts. Argument for tangible property is weaker
b/c the property is not permanently located anywhere and it is much easier to
have it without having minimum contacts with the state.
 Harris v. Balk: Court held that the obligations of a debtor to pay his debt
clings to and accompanies him wherever he goes. That obligation represents
intangible personal property of the creditor, which can be attached to provide
a basis for attachment jurisdiction, even though the creditor has no
connection with the forum state. Very potent instrument of unfairness
 Seider v. Roth: Took the rule of Balk to its logical extent. As long as D
had an insurer who did business in all fifty states, he was amenable to suit in
any of those states, no matter where the injury occurred.
c. the in rem revolution
 Shaffer v. Heitner (again): Court says that a huge hunk of traditional in rem
jurisdiction is not ok. All exercises of jurisdiction must comply with the
traditional notions of fair play and substantial justice. Court also says,
16
though, that quasi in rem and in rem actions are usually in state where
property is located (this seemed to save in rem and quasi in rem) As for
attachment jurisdiction, seems to suggest that attachment actions where tort
or contract is related to the property meets the tests of fairness.
ATTACHMENT CLEARLY EXISTS IF D HAS MINIMUM
CONTACT WITH THE STATE. (amount of contacts required might be
less than required for personal jurisdiction). Necessity says that must have
attachment jurisdiction when used to enforce an in-personam judgment (P
using attachment jurisdiction in F2 to enforce a personal judgement of F1
where D has plenty of property.)
- Justice Powell in dissent says that perhaps in case of
land, attachment jurisdiction without contacts is ok
(controversial b/c implies larger doctrine of
jurisdiction by necessity
4. Limits Upon The Exercise of Jurisdiction
a. force , fraud, and privilege:
 a court will not exercise jurisdiction over a D or his property if jurisdiction
has been obtained by force or fraud
 for policy reasons, courts typically have held some D’s immune from service
and refused to exercise jurisdiction over them (a person who enters a state to
serve as a witness in a proceeding in the state’s courts will typically be
immune from service and a person who enters a state to appear as a
defendant in a criminal or civil proceeding has immunity)
 b/c of long arm statutes, force and fraud are not big deals today
b. forum non-conveniens
 common law: permits a court to refuse to exercise jurisdiction if it is a
seriously inconvenient forum for the action and if another more convenient
forum is available to the P. Does not give the D a right to avoid suit in an
inconvenient forum, rather, its application depends heavily on the exercise of
sound discretion of the trial judge
- interests to be considered are the proximity and
accessibility of tangible evidence, the availability of
compulsory process for unwilling witnesses, the travel
costs for willing witnesses, the possibility of viewing
the relevant property, etc.
- Supreme Court has stated that the balance must tilt
heavily in favor of the D in order to upset the P’s
choice of forum
 options: if judge decides that D is inconvenienced seriously, she cannot
simply transfer the case to the courts of another state. The simplest option is
to dismiss the case outright and assume that the P will bring the suit in
another more convenient forum. Another option is to condition dismissal
upon the D’s waiver of any objection he may have to a suit in another more
convenient forum (person, venue, statute of limitations, etc.). Finally, the
court may stay the action pending P’s demonstrated ability to bring suit
against the D in a more convenient forum.
17

Federal transfer: within the federal court system, the doctrine of forum
non-conveniens has been supplanted largely by statute: 28 U.S.C. §1404(a)
provides that for convenience of parties and witnesses, in the interests of
justice, a district court may transfer any civil action to any other district or
division where it might have been brought. The remedy is not dismissal; the
federal court simply transfers the case to a more appropriate forum. Statute
permits transfer on a lesser showing of inconvenience than does the common
law. Serious choice of law problems can occur with the federal transfer
statute. The new forum may have choice of law principles or substantive law
rule that are less favorable to the P’s claims that the law of the original
forum. §1406 allows a court in which is filed a case laying venue in the
wrong divisions or district shall dismiss, or if it be in the best interests of
justice, transfer it to the district or divisions where it could have been
brought.
- Van Dusen v. Barrack: Court held that nay transfer
of jurisdiction under §1404(a) carries to the new forum
the law of the state where the suit was filed originally.
Indicates that when the Supreme court has control over
the transferee court, it will ensure that a change of
courts does not result in a change of law
- Piper Aircraft v. Reyno: Supreme court said that a
change in substantive law should ordinarily not be
given conclusive or even substantial weight in the
forum non-convenien inquiry. Can’t require Scotland
to apply American law.
- Ferens: P inured by lawnmower and waited five years
to sue. Couldn’t bring action in PA b/c statute of
limitations had run, but could bring it in Mississippi
and move for a transfer. Court allows this b/c P
already had right to Mississippi law and locked in
Mississippi statute of limitations. Plus, better to have
one rule than two (same rule for both Ps and Ds)
c. limits imposed by contract – jurisdiction ouster clauses
 many contracts today routinely include forum selection clauses and courts
routinely enforce them
 valid forum selection clause can be seen as yet another limitation the exercise
of jurisdiction
d. other limitations
 our law has long distinguished between local and transitory actions. Local
actions are usually those involving land and can be heard only by the court in
the situs state. No good policy supports the refusal of a court with personal
jurisdiction over the parties to hear their action
 another set of limitations on jurisdiction involves claims that the forum will
not entertain based on policy reasons
- penal laws: courts will not enforce the criminal laws
of other states
18
-
taxes: state will not entertain an action brought by a
sister state to enforce the sister state’s tax laws. No
good policy supports the tax limitation rule, so in the
past couple of years many state courts have heard
these actions
- public policy: notion that the law upon which the
cause of action is based offends the public policy of
the forum. Convenient escape device
e. multi-district and complex litigation
 Congress passed the Multidistrict Litigation Act: permits a special panel to
transfer civil cases which involve common question of fact to one judge for
all pre-trial proceedings. The cases are then transferred for trial to the
districts in which they were filed.
 complex litigation is becoming overwhelming for courts, so proposals
include: mass consolidation, transferring all cases to one court for trial, and a
uniform choice of law rule.
D. Venue
1. In general Venue: the way states divide up the judicial business geographically by rules
that indicate which county or judicial district within the state is the appropriate place to
bring the action. Rules of venue give the D a privilege not to be sued in an inconvenient
forum; they do not affect the power or competence of the court.
2. forum non-conveniens, transfer, limits on the exercise of jurisdiction
a. forum non-conveniens
 under common law, as stated above, court has discretion to dismiss, stay, or
dismiss in condition is inconvenience to D is great enough
 federal transfer statute allows judge to transfer
b. transfer
 28 U.S.C. §1404 allows federal judges to transfer to other federal courts
where the action may have been originally brought. Does not apply to state
courts.
c. jurisdiction ouster clauses
 courts routinely uphold jurisdiction selecting clauses
III.
Choice of Law
A. Introduction
 Started with Justice Story – right of a state to control what went on in its
courts
 First Restatement and Beale: idea that the moment a cause of action arises,
rights vest according tot he law of the place where the crucial event occurred
 Second Restatement: law was and should be functional, and legal rules
should be tailored to serve societal goals. Hard and fast rules in favor of a
general principle that the law of the state with the most significant
relationship to a transaction should control.
 Currie: choice of law process should focus on the policies behind the state
substantive law rules; whether a rules should be applied should depend upon
whether the policy underlying the rule would be advanced by its application.
Known as Interest analysis
19
B. The Traditional Approach – The first Restatement (Hard and fast rules with escape
devices)
1. Introduction
a. Theory: vested rights
 vested rights theory provided an alternative view of the choice of law process
(old view was applying foreign law based on notions of comity). This new
view was more acceptable to the territorialist and formalist jurisprudence of
the early 20th century.
 Since foreign law could never operate outside the territory of the foreign
sovereign, vested rights theory proposed that the forum’s use of foreign law
could be explained in terms if the creation and enforcement of vested rights.
When an event occurred in a foreign territory, a right was created. B/c the
only law that could operate in a foreign territory was the law of the foreign
sovereign, the existence and content of any such right was determined by the
foreign law. The forum court simply enforced the right which had vested in
the foreign territory according to foreign law.
 Important, under the theory, to know when and where a particular right
vested, b/c the law of the place where the right vested would control the
content of the right
 System of a few, broad, relatively rigid choice of law rules that each
governed a major area of the law by a identifying a particular contact as the
trigger for the vesting of the right.
b. Practice
 law consists of a few. Broad single-contact jurisdiction selecting rules
coupled with an array of escape devices
 jurisdiction-selecting rules: they pick between competing states, not between
competing rules. The court does not consider the scope, content, or policy of
the substantive rule of law until after the state is chosen. Not concerned with
which substantive rule is better or which validates the parties’ intentions, or
which is motivated by a policy that can be advanced by its application.
Concerned only with identifying a particular event and the jurisdiction in
which the event occurred.
 Rely on only one salient connection between the dispute and the state.
2. The Rules
a. Torts
 First Restatement specifies the LAW OF THE PLACE OF THE WRONG
for nearly all issue in torts
 Law of the place of the wrong is the state where the last event necessary to
make the actor liable for the alleged tort takes place (in almost all
circumstances , this is the injury to the P, so the place of the wrong rally
means the place of injury or the place where the harmful force first takes
effect on the body)
 A few limited exceptions:
- section 387 provides that vicarious liability of the D
for the acts of another is determined by the place of the
20

wrong only if the D authorized the person to act for
him in that state
- section 382 shields from liability a person who acts in
state X pursuant to a legal duty or privilege and causes
an injury actionable in state Y
- argument for exceptions is that the actor in each case
justifiably relies on the law of the state where he acts;
his reasonable expectation should not be frustrated bc/
of the fortuity of an out of state injury.
some torts involve non-physical injuries, and locating such injuries is not
always easy
b. contracts
 LAW OF THE PLACE OF MAKING is the choice of law rule that
governs the validity of contracts b/c it is certain in application, easier for
parties to ascertain and follow
 law of place of making governs such issues in contract validity as capacity,
formalities, consideration, and defenses.
 Place of making is where the principle event necessary to make the contract
occurs. For formal contract, the principal event is delivery; for an informal
unilateral contract, the offeree’s performance; for a bilateral contract, the
offeree’s promise. Section 326 adopts the mailbox rule and provides that the
state where the acceptance was transmitted is the place of contracting.
 One major exception to the place of making rule: section 358 provides
that questions concerning issues of performance are to be governed by
the law of the place of performance (matter of performance, time and place
of performance, the persons by and for whom the performance shall be
rendered, the sufficiency of performance, etc.) this exception is so large that
it threatens to swallow the rule
c. Property
(1) immovables, the situs rule
 First Restatement requires application of he law of the situs (the location of
the land) to nearly all questions concerning interests in the land (rule applies
to conveyances, adverse possession, mortgages and liens, marital property,
trusts, and succession by will)
 Modern courts continue to apply the situs rule b/c: (1) only the situs has
absolute power over land, so all courts should apply the law the situs would
apply – then situs will enforce orders; (2) tittle searching should be made as
easily as possible and the searcher should be able to apply the law he knows
best rather than some other forum’s law; and (3) situs is the state with the
greatest interest in the land
(2) movables, inter-vivos transfers, succession on death
 for nearly all inter-vivos transactions of movables, the First Restatement
prescribes the law of the place where the moveable was located at the time of
the transaction. Thus, the situs rule applies to conveyances, adverse
possession, etc.
21
-
It is immaterial that the parties to the transaction live
elsewhere, or that the agreement to make the
transaction occurs elsewhere or that the movable
arrived at the situs only by chance.
 succession on death: the First Restatement refers questions concerning
testamentary disposition of movables and intestate succession of movables to
the law of the decedent’s domicile at the time of death. Rationale is that it is
desirable to have an entire estate pass according to a single plan
3. Escape Devices:
 judges felt illegitimate giving reasons that were not cold logic for breaking
with the cold formalism of the vested rights theory, so they used formalist
tricks to obtain the right results.
 Devices can be and often are manipulated to “escape” the otherwise
inflexible regime imposed by traditional choice of law rules
a. Characterization
 the jurisdiction selecting rules of the First Restatement required each case to
be labeled in order to determine which choice of law rule applied.
Obviously, the result could turn on which label the court chose for the
problem and often it was not clear why the court picked one name tag rather
than another.
 Can come in many forms:
- tort > contract
- substance > procedure
- property > contract
- equitable conversion
- tort > domestic relations case
 manipulation by judge and lawyer was very possible b/c what label was
chosen was never really explained.
 Undermines uniformity and predictability in decision-making by permitting a
judge to avoid explaining real reasons for his choice
 Creates a disconnect between the why and the how of the case – the reasons
for the decision are not those stated
 Arkansas Telegraph Cases: to obtain favorable results, in case #1 the court
called the case a tort, and in case #2 called the case a contract action. Hard to
read this precedent.
 Equitable conversion: really specialized characterization device which
permits a court to re-characterize real property as personal property
- Duckwall v. Lease: decedent dies and leaves
instructions in will for land to be sold and the proceeds
to go to her legatees. Courts characterizes problem as
one not of land, but of movable property (the money
they get for it)
 Domestic relations: court may want to re-characterize a tort as a domestic
relations case, b/c in these cases the forum applies the law of the marital
domicile
b. Renvoi
22

in American conflicts law, a reference to the law of another jurisdiction is
almost always a reference to the law that the foreign state would apply to a
purely domestic problem. The focus, in conflicts parlance, is not the “whole
law” of the other state (its substantive plus its choice of law rules), but rather
it is internal law (rules the other state would use in a purely domestic
problem)
 Occasionally, though, as an escape device, courts would apply the whole law
of a state instead of just its tort law or contract law. Renvoi is applying
another state’s choice of law rules (read the word “law’ to mean “whole
law”)
 Why? It is important sometimes to get a certain case to have the same result
in one forum as it would have in another forum b/c :
- power: if case involves real property and we do what
the situs would have done, the situs will enforce the
judgement
- uniformity: decedent has personal property in MI and
France. MI says law of domicile and FR says law of
decedent nationality. France applies own choice of
law rules and distributes according to law of N. In MI,
read our choice of law rule to refer to French choice of
law rules, the red French to refer to N.
- Erie: a fed court sitting in diversity will apply law of
the state where it sits (to avoid forum shopping) say to
federal court, apply tort law and choice of law of the
state in order to avoid forum shopping
 First Restatement courts also applied renvoi when they felt like it as an
escape device.
 University of Chicago v. Dater: court gave no reason for the use of renvoi.
Horrible b/c no rule as to when a court can use and when not. Seems choice
of law is up for grabs in every case. Every choice of law precedent is
unreliable
c. Public policy
 Court confined by the rules of the First Restatement had an ultimate escape
device available to avoid an unpalatable results... by invoking the “public
policy” device, a court could sweep away the results called for by the
traditional rules and usually, without much explanation, apply its own law to
achieve the desired results.
 Court gave no standard for determining when public policy escape device
should be invoked
 Judges tried to make the formula objective, but really couldn’t. “Inherently
vicious, wicked, and immoral” was the language used.
________________________________________________________________________
What is good about the first Restatement?
1. easy to apply and simple if you apply it right out of the box (until we add escape
devices)
23
2. fairly uniform and predictable (but with escape devices uniformity goes away)
3. often lauded as forum neutral
4. decreases incentive for forum shopping
 escape devices were sign that something was wrong
- reasons in the opinions did not accurately reflect
reasons of decisions
- can’t accurately predict results
________________________________________________________________________
C. New Approaches to Choice of Law
 judges made tentative moves away from First Restatement in the 1950s
 courts started to experiment with other choice of law rules
1. Center of Gravity (A first step)
 Auten: Judge Fuld noted that recent cases had adopted the “center of
gravity” or “grouping of contacts” theory, which looks not tot he place of
making f the contract, but emphasizes the law of the place which has the
most significant contacts with the matter in dispute. Although the approach
affords less certainty and predictability, he adopted it b/c it the focus on
specific legal issues permitted application of the policy of the jurisdiction
most intimately connected with the case. Permitted the court to consider
both party and governmental interests in its quest for justice
- an important change in law
- influenced the drafting of the Second Restatement
- primary effect was transitional
Haag v. Burns: court measures number of contacts, not quality of contacts
2. Interest Analysis (Choice based on Policy Behind the Competing State Law Rules)
 method of analyzing choice of law problems developed by the late Professor
Brainerd Currie.
a. description of the method
 Currie based his system upon the observation that law is purposive in nature
– that those who made the law sought to serve various social goals. Anonmechanical approach to choice of law must be sought b/s rote application of
domestic law to choice of law problems may not optimally advance various
social goals implicated in a multi-state problem.
 Currie argues that, in a choice of law decision making process, the
government interests of each jurisdiction in having its own law applied
should be considered. This helped ensure that law will not be applied unless
applying that law would achieve a policy goal sought by the sovereign which
promulgated the law.
 Forum law should supply the rule of decisions; so the burden is on the party
seeking to displace forum law to show that it would be proper to do so.
Court must examine the policies that different laws seek to implement, using
the ordinary processes of the construction and interpretation. The aim of that
construction is to ascertain the policy of the law as it might be applied in a
purely domestic case.
 Compare reason for rule with the contacts case has with a state
24

False conflict: the policy of only one state would be furthered by applying it
in the case at bar ... APPLY THE LAW OF ONLY INTERESTED
STATE
 True conflict: the policies of each state would be furthered by the
application of its law to the case. FORUM SHOULD APPLY OWN LAW
 Unprovided for case: the policy of no state would be advanced by applying
its law in the case at bar. FORUM SHOULD APPLY OWN LAW b/c there
is no important policy reason to displace the normal presumption in favor of
the forum law.
b. the false conflict
 only one state interest advanced... apply the law of the only interested state
 Babcock v. Jackson: guest statute case (two NYers involved in an accident
in Ontario. NY is clearly the only state interested even though accident
happened in Ontario)
c. the true conflict
 each state has a policy that would be advanced by the application of its law.
The policy of each state points to a contact in that state. Most of the time the
forum will apply it own law in these situations
 Currie originally took the position that courts should not weigh or balance the
competing state interests bc/ assessment of the respective values f competing
interests of two legitimate sovereigns is a political function. Forum law,
therefore, should apply, in the absence of a governing statute, to resolve a
true conflict. If the interests do conflict, no reason exists to ignore the
normal rule that the forum law should not be displaced unless good reason
for doing so
 Many cases were embarrassing to Currie and his initial view... applying
forum law in all cases simply did not make sense all of the time
- People v. One Ford Victoria: Currie was
embarrassed by this result. Applying forum law in this
kind of case is a stretch.
 Currie responded by qualifying his rule that the forum law should always
apply it won law: when a court recognizes a true conflict, it should reexamine its own law to see if a more moderate and restrained interpretation
of the policy behind the law will show that its purpose does not require
application in a particular case. That may turn a true conflict into a false
conflict.
 Comparative Impairment: Baxter proposed that state laws generally have,
in addition to domestic policy objectives, external objectives which are based
on the state’s need to have its own policies respected by other states. The
external objective of theses state whose internal objective will be least
impaired shall be subordinated to its competitor. (apply law of state whose
policy will be least impaired)
 Relative commitment: asks who cares more about its policy? Not every
policy is held as dear as every other policy
d. the un-provided-for case
25

neither state’s policy refers to an in-state contact; hence neither policy would
be advanced by applying its own law to the problem at bar. Currie argued
that forum law should be applied b/c no good reason exists for doing
otherwise. He rejected the approach of applying the “better law” b/c it might
place the court in the position of condemning the law of its own state.
e. manipulating the system
 judicial manipulation is possible under the system
 case that is a false conflict can re-characterized as a true conflict. Choice of
law would then shift from law of interested state to forum law.
 No system can completely escape the curse of characterization and
manipulation
3. Leflar
 in a series of articles, Leflar identified five “choice influencing
considerations” that he perceived as providing a working basis for judicial
decision-making. Argued that his considerations embody the factors which
actually motivate courts and the public discussion of the considerations by
judges in their opinions was an essential condition for proper decision
making.
- Predictability of Result: knowledge of likely result
encourages planning and reliance by parties to a
consensual transaction and also discourages wasteful
litigation
- Maintenance of interstate and international order
- Simplification of the judicial task: ease of judicial
administration is important. Need to expedite
litigation and conserve scare judicial resources
- Advancement of the forum’s governmental
interests
- The better rule of law: more progressive, more
recovery generating, more validating
 Leflar has helped pinpoint the factors that influence judicial decision-making.
The concern with this approach, however, if that it does not really discipline
judicial thinking; rather it may tend to encourage ad hoc decision making and
unprincipled selection. Its great merit is forcing judges to consider openly
the comparative merits of the underlying substantive laws. If they explain
their choices honestly and carefully, the considerations Leflar has identified
certainly can improve the quality of the judicial product.
4. The New Territorialists (Counter Revolutionaries)
 interest analysis shifted the focus in choice of law cases away from the
vested rights theory and it was not long before a counter-revolution set in and
attempts were made to restore primacy in some form to the territorialism
choice of law system.
 Cipolla: Court relied on Professor Cavers work as authority. Cavers argued
that choice of law decisions should be influenced substantially by territorial
considerations, both b/c governments are organized along territorial lines and
26
b/c party expectations have a strong territorial cast. Expectations, in other
words, derive largely from the territory in which the activity takes place
 Cavers derived a set of seven Principles of Preference from his analysis of
common choice of law problems. These principles which specifically address
only a limited number of problems in tort and contract law emphasize
fairness to the parties and deference to their territorially defined expectations.
 Combination of policy, party expectations, and territorialism. Combo helps
the court achieve predictable results, and at the same time the narrow focus
of the principles means that they are more likely to advance relevant
substantive policies than the broad rules of the First Restatement.
5. The Second Restatement
a. in general: presumptive references and the most significant relationship
 a court must follow a statutory choice of law, if one is available. If there is
no statutorily directed choice, the Restatement provides specific jurisdiction
selecting presumptions to resolve some issues. For most issue, however, the
Restatement prescribes the law of he state with the most significant
relationship to the issue. Significance is determined by evaluating the
consideration listed in §6.
- §6: factors relevant to the applicable rule of law
include: (1) the needs of the interstate and international
systems;(2) the relevant policies of the forum; (3) the
relevant policies of the other interested states and the
relative interests of those states in the determination of
the particular issue; (4) the protection of justified
expectations; (5) the basic policies underlying the
particular field of law; (6) certainty, predictability, and
uniformity of result; and (7) ease in determination and
application of the law to be applied
- varying weight will be given to a particular factor or to
a group of factors in differing areas of choice of law
 specific choice of law presumptions are organized by subject matter (torts,
contracts, property, trusts, status, corporations, and administration of estates).
 Restaters sought to provide specific guidance to specific problems while
permitting the selection of a more appropriate law through flexible general
provisions. Presumptive choice of law can usually be trumped if some other
state has a more significant relationship with the problem
b. Torts
 most significant relationship test forms the centerpiece of the Second
Restatement’s approach to tort matters. The state with the most significant
relationship with an issue is determined by considering, in addition to the
factors listed in §6, a list of contacts found in §145(2):
- the place where the injury occurred
- the place where the conduct causing the injury
occurred
- the domicile , residence, nationality, place of
incorporation, and place of business of the parties; and
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-



the place where the relationship, if any, between the
parties is centered.
contacts are to be evaluated according to their relative importance with
respect to the particular issues
combination of §6 and §145 gives the court a great deal of maneuvering
room
when the laws of all states having contacts with the problem are identical, the
Restatement provides that there is no conflict and the case should be treated,
for choice of law purposes, as if the conflicts were all grouped in one state.
If the laws of at least two states do conflict, then the procedure is to apply the
Restatement section addressing the specific problem (if there is one).
c. Contracts
 Second Restatement departed significantly for its predecessor in the
provisions dealing with the choice of law in contract matters. Here, as
elsewhere, the most significant relationship tests plays and important role; its
general use frees contract choice of law rules from the iron grip of the law of
the place of making, which dominated the First Restatement. At least as
important in both practice and theory, however, is the authority granted the
parties to designate the law that will govern their contract. The Second
Restatement also provides a number of discrete residual presumptive
references to handle common problems not dealt with expressly by the
parties.
 §187: provides that the parties can choose the law to govern rights and
duties arising under the contract.
- §187(1) provides that the law chosen by the parties
will be applied if the issue is one that could have been
resolved by express provision in the contract. Does
not specify a rule of law at all; rather provides a means
by which parties may incorporate by reference certain
provisions from foreign law into agreements
- §187(2) permits the parties to choose foreign law in
circumstances that extend beyond its incorporation by
reference for the purposes of interpretation and
construction. Even if the issue is not one which under
forum law could not have been controlled by an
express provision in the contract, the parties may still
be able to choose it. Two limits: (1) must be a
substantial relationship between state law chosen and
the issue or some other reasonable basis; and (2) can’t
be contrary to fundamental public policy of the MSR
state.
 Restatement provides two general techniques for handling contracts
cases in the absence of a valid choice of law clause. The first is a series of
presumptive references in the several specific categories of cases. The second
is the old standby – most significant relationship doctrine.
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-
several of the specific sections do not select a
jurisdiction at all but merely refer the court back to the
Restatement’s general contact choice of law sections,
§187 (party autonomy) and §188 (most significant
relationship)
- where a party sets forth a presumption concerning a
specific problem, it usually maintains the MSR tests in
reserve
 §188: lists a number of factors a court should consider, in combination with
those mentioned in §6, in determining the jurisdiction with the most
significant relationship. These include:
- the place of contracting
- the place of negotiation of the contract
- the place of performance
- the location of the subject matter of the contract;
and
- the domicile, residence, nationality, place of
incorporation and place of business of the parties
 §193: for contracts of insurance, don’t look at the place of making, but place
where the parties thought the risk would be (huge departure form First
Restatement and almost uniformly adopted)
 §203: validation principle – pick law of state with MSR to validate contract
________________________________________________________________________
Does Contract have choice of law clause?
YES
NO
§187
§6 and §188
is the issue one that parties
or specific sections
could have resolved by explicit
terms?
YES
Validate/ enforce
Choice of law
Clause
NO
enforce unless:
§187(2)(a)
contrary to
No substantial
public policy
relation and
of MSR state
no reasonable
basis
________________________________________________________________________
d. property
 closely resembles the First Restatement with a few differences:
- willingness to provide rationales for the choices it
made
- adoption of a general principle that says that the
interests of the parties in a thing are determined,
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depending on the circumstances, either by the law or
by the local law of the state, which with respect to the
particular issue, has the MSR to the thing and the
parties under the principles stated in §6.
- Revoi used more than in First Restatement when
uniformity of result is the primary objective
 the situs rule usually controls all questions concerning land. Dos its best to
eliminate those escape devices getting around situs rule by dealing
specifically with the problems. Provides in each instance a specific reference
to the situs law in an effort to remove the temptation to indulge in ad hoc
decision making
 universal adoption of the UCC has eliminated many of the choice of law
problems involving movables by codifying law of sales and secured
transactions.
D. Impact of the Constitution
1. Introduction
 a state is not free to apply any law it wished to solve a particular problem;
that choice is limited by several provisions of the US Constitution
 Legislative jurisdiction: whether the US Constitution permits the state to
apply its law to the legal problem (jurisdiction to legislate)
 Judicial jurisdiction: the authority of a state to apply its law, statutory or
judge made.
 Early Lochner Era: Rules of First Restatement were nearly
constitutionalized
 New Deal Era: forum’s interest balanced against lex loci interest in the case
 Modern Era: as long as forum has an interest in the case, its law can be
applied (roughly coincident with rational basis scrutiny)
 DP clause protected people from wrong choice of law and FF&C clause
protects another state from wrong choice of law
2. Restrictions on Choice of Law – Due Process and Full Faith and Credit
 Allstate: Court says that for state’s law to be chosen, there must be
significant contacts so that application is neither arbitrary nor unfair. We
now know from Allstate that: (1) standard is significant contacts; (2)
standard has no teeth (little restriction on state’s ability to apply own law to
dispute); and (3) DP clause and FF&C clause standard are the same
 Shutts: Supreme court says must go through Allstate calculation of contacts
for each state involved in class action suit. Now know that Allstate does
have some teeth: teeth are that court MUST go through the analysis
 Wortman: per se rule that forum’s use of own statute of limitation is per se
constitutional b/c it is traditional.
E. Choice of Law in Federal Courts
 Federal courts underwent a profound change in 1938. Before that date they
applied state rules of procedure and federal general common la on questions
of substantive law not covered by state statute. After 1938, Federal courts
applied the newly enacted Federal Rules of Civil Procedure and the
substantive law of the state where they sat
30
1. The Erie Question
 Put an end to the possibility of forum shopping by an out-of-state litigant by
requiring a federal court sitting in diversity to apply the substantive law of
the state where it sits
 Scope of Erie clearly depends on how much of the state law the federal
courts must apply. A crucial problem after Erie was how to distinguish
between procedural and substantive law
 Guaranty Trust Co. v. York: expanded scope of Erie. It held that a federal
court exercising diversity jurisdiction must apply the state statute of
limitation to an action in equity. Far more important than the holding,
though was the test the court announced for distinguishing matters of
substance from matters of procedure for Erie purposes: the tests is the
Outcome Determinative Test (instructs the district court to apply state law
to any issue that could affect the result of the action)
 Byrd v. Blue Ridge Rural Electric Cooperative: court began to chisel
away at the Outcome Determinative Test. Indicated what while strong, the
Erie/ York principle might have to yield in cases to other important principles
 Hanna v Plumer: Court effectively insulated the various federal rules
dealing with procedure from any Erie- based attack. Outcome
Determinative Test = state law to be applied to any issue that affects
outcome. Reformulated, the test might best be renamed the Forum Choice
Determinative Test: it counsels the use of state law when a difference
between state and federal law would prompt a litigant to choose one forum
rather than another.
 Stewart Organization v. Ricoh: makes clear what analysis should be
followed in Erie cases where a federal statute is involved: when a federal
statute arguably conflicts with state law, there is no need for fancy footwork.
Rather the focus is on ordinary Supremacy Clause analysis: If straight
forward exercise in statutory interpretation show that the statute covers the
point, the federal law prevails.
- court said question should be “is issue governed by
FRCP, FR criminal procedure, FR admin. Procedure,
FRE, FR appellate procedure, or a federal procedural
statute?” If answer is yes.... apply federal rule
- this above expanded question governs all courts
 Erie triggered whenever there is a claim by one litigant that federal law
controls and a claim by another litigant that state law governs
 Existence of Erie problem has nothing to do with whether there is subject
matter jurisdiction. In state court, no Erie question, could not come up.
 Federal courts are no longer bound to follow mechanically the decisions of
lower state courts, nor even the decisions of the state’s highest courts if these
decisions are old and eroded. Rather, a district judge, under Erie, must
consider all relevant expression of the state law in order to predict how the
state’s highest court would rule on a particular issue.
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_____________________________________________________________________________
Is the Issue Governed by a FR?
YES
NO
Apply the Federal Rule
(Hanna)
Hanna alteration Outcome
Determinative Test: Is the issue
forum choice determinative (pick
one court over other?)
YES
Balance b/c of Byrd
NO
inconsequential
(apply federal law)
Erie v. Federal Judicial Admin. Policy
that stands behind federal rule
in conflict with state rule
_____________________________________________________________________________
2. Klaxon
 On question of what rules of choice of law a US District court is supposed to
follow, Court said that federal court in diversity must apply the choice of law
rules of the state where it sits
- can get from chart above: FRCP not applicable, and
issue is forum choice determinative. Can’t balance
Erie with federal choice of law b/c there is no federal
choice of law, so obviously Erie wins
 cost of Klaxon: we get intrastate choice of law uniformity, but we lose
interstate uniformity (could only get uniformity of all if there was a federal
choice of law system that applied to the state courts through the Supremacy
Clause and Allstate makes it clear that this will never happen b/c state have
plenary power)
 federal court’s obligation under Erie and Klaxon: must use all data
available to predict what state court might do
3. Forum Non-conveniens and Transfer
 Ferens: any transfer of jurisdiction under §1404(a) carries to the new forum
the law of the state where the suit was originally filed.
IV.
Foreign Judgments – Full Faith and Credit
A. Introduction
1. Basic Principles – Claim Preclusion and Issue Preclusion
 the effect of a judgment in F1 is controlled by the law of res judicata or
former adjudication
 law of res judicata is composed of two major branches: claim preclusion and
issue preclusion (collateral estoppel). Claim preclusion prohibits a second
suit on a claim or cause of action which was asserted in a prior suit, which
proceeded to a final judgement on the merits. The judgment in the first
action precludes not only all questions which were actually litigated, but also
all issues which might have been litigated. Issue preclusion, more limited in
scope, prohibits re-litigation of factual issues actually decided in a prior
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proceeding, regardless of whether the second proceeding is based upon the
same claim or cause of action
 primary right theory holds that a singles cause of action consists of the
violation of a single primary right
 the transactional theory defines a cause of action as a single transaction or
occurrence, or an interlocked series of transactions or occurrences.
 Who is bound by a judgement and who may benefit from a judgment?
The answer is typically the parties to the action and those in privity with
them.
 Principles of res judicata are constitutional only is they bind only those who
have had a day in court
2. Interstate Finality
 Full faith and Credit shall be given in each state tot he public Acts, Records,
and judicial proceedings of every other state
 28 U.S.C. §1738 exceeds the constitutional mandate by requiring FF&C for
the judgements of territories and possession and by requiring that federal
courts give FFC to state court judgements. Supreme Court has
constitutionally required that state courts grant FFC to federal court
judgments
 governing law of FFC might be described as the interstate application of the
doctrines of claim preclusion and issue preclusion. (congress has made only
minimal efforts to implement the FFC Clause so courts have had the primary
responsibility)
3. Enforcement of the F1 Judgement in F2
 In order to get an F1 judgement enforced in F2, P must bring an action in F2
based on the F1 judgement. The result of the action in F2 is an F1 judgement
which may be then enforced by a writ of execution in F2 by the appropriate
F2 officials.
 In federal courts, Congress enacted a statute in 1948 which provides that a
judgement of one district can be registered in any other district. A registered
F1 judgement becomes essentially and F2 judgment, which can be enforced
directly like any other F2 judgment
 Law of claim preclusion and issue preclusion is not the same from state to
state, so, the Supreme court requires that state court judgements be given the
same faith and credit as have in courts of such state from which they are
taken
 Mutuality: stranger can never use results from suit #2.
 Modern non-mutuality: stranger can use results
 F2 must apply F1’s law of judgments when F1 is more preclusive than
F2. When F1 is less preclusive than F2, F2 should give the F1 judgement
at least as much preclusive effect as F2 judgement and no more.
B. Full Faith and Credit for In Rem Judgments
 an F1 in rem, quasi in rem, or attachment judgment is entitled to FFC in F2.
(A court that has only property based jurisdiction cannot order D to perform
an act, nor can it decree that D is a judgement debtor of P. all that it can do is
adjudicate the rights of person in the thing over which it has jurisdiction. Its
33
judgement can do no more than create or destroy interests in the res. F2’s
obligation under the FFC clause, then , is to simply recognize as valid the
interests created by the F1 judgement).
 If F1 court with only property based jurisdiction exceeds its limited powers
and purports to issue a personal judgement against D, that judgement is not
entitled to FFC in F2. If, in an in rem, quasi in rem, or attachment action in
F1 the D makes a limited appearance and the parities litigate on the merits,
the F1 court’s on the findings actually litigated will preclude subsequent relitigation of those issues in F2 even though the F1 court lacked personal
jurisdiction over the D.
C. The Reach and Limits of Full Faith and Credit
1. The Iron Law
 If the F1 court has jurisdiction over both the person and the subject matter,
this judgment is entitled to FFC in F2, even though that judgment is based
upon a mistake of fact or law (or if F2 just smiley hates the law!!) . If the
losing litigant wishes to correct such a mistake, she must do so in F1’s courts.
Once the F1 judgment is final according tot he law of F1, however, the FFC
clause prohibits collateral attack in F2. This might be called the Iron Law of
FFC.
 FFC applies to judgments, not laws. One state can reuse to apply the law of
another (on policy grounds), but one cannot refuse to apply the judgement of
another state.
 In your face disgrace case: must have interstate recognition of a judgment
to have a country.
 If F2 screws up and refuses to give FFC to F2 when it should, F3 cannot
refuse FFC to F2. Must fix error in F2 by appeal, not by F3 refusing FFC.
When two inconsistent judgments, later judgement in time is entitled to FFC)
2. Exceptions I: Defects in the F1 Judgment
a. not on the merits
 a judgment not given preclusive effect in F1 need not be given preclusive
effect in F2. Judgements not on the merits make up one large class of
judgements without claim-preclusive effect. (typically said to be on the
merits when it rests on a determination of the validity of the parties’ claim
and defenses under the applicable substantive law)
 F1’s definition of “on the merits” and F1’s law about “on the merits” applies
in F2
b. finality
 a judgment not final under the law of the state which rendered it is not
entitled to FFC.
 In many jurisdictions this rule embraces judgments on appeal. Some courts
say vacated judgment until affirmed on appeal. Other courts say vacated
upon reversal upon appeal
 A judgment subject to modification (such as custody or alimony) is also not
considered final.
 Finality must be defined according to F1’s law
c. Fraud
34



F2 need not grant FFC to an F1 judgement that was procured by fraud.
Define fraud according to F1
Extrinsic fraud: fraud that prohibited fact finder from even seeing question
(F1’s usually say that in this case judgment can be attacked)
 Intrinsic fraud: F1 fact finder had fraud before it (perjured testimony,
forged documents) (F1’s historically would not support attack in F1 based on
this, so no attack in F2)
 BUT law has changed: Restatement 2d adopted a less preclusive stance.
Judgment can now be attacked for extrinsic fraud and intrinsic fraud if
litigant could not have , by reasonable means, learned the truth of the matter
d. lack of jurisdiction
 when a court lacks jurisdiction over the subject matter or jurisdiction over the
person its judgement is void and therefore, not entitled to FFC in F2 That
rule, perhaps as basic as the Iron Law of FFC, is subject to an important
qualification: A court’s finding on jurisdiction, like its finding on any other
relevant issue, may preclude re-litigation of that issue.
 Litigated > Precluded (if litigated in F1, precluded in F2) and Not Litigated
> Not Precluded YET EACH OF THESE PRINCIPLES HAS A
COUNTER EXAMPLE:
- Kalb v. Foyerstein: Fed Bankruptcy Court refused to
give F! judgment FFC even though it had heard and
decided SMJ issue
- Chicot Co.: jurisdiction was not contested, litigated,
and determined in F1, yet court said it was precluded
in F2)
e. the land taboo
 An F1 judgement that purports to affect directly title to land in F2 need not
be respected by F2.
 Fall v. Eastin: majority in Fall stands for the principle that one state cannot
directly affect the title to land located in another state.
 This is a little rule: b/c forum can have in personam jurisdiction over Ds,
forum can have a massive effect on land in F2 (just can’t do it directly).
Key is that an F1 court with personal jurisdiction can order a person over
which it exercises control to do ANYTHING ANYWHERE (if he doesn’t do
it, hold him in contempt)
3. Exceptions II: Ignoring a Valid F1 Judgment
a. no competent court in F2
 the law is well settled that a state may not refuse to enforce a sister state
judgement o the ground that the original action could not have been brought
in the state in which the enforcement is sought.
 A claim that has been reduced to judgment must be enforced by another state
even though the claim is one that could have not been brought there
originally. There are only two limits: (1) a state need not permit a suit to
enforce a judgement by one who lacks capacity to sue under forum law and
35
(2) the judgement creditor is seeking must be available in the forum
(ordinarily no problem b/c most ask for money and all courts can do this)
b. penal judgments
 the courts of no country execute the penal laws of another. So, valid F1
judgments based on purely penal claims are not entitled to FFC in F2.
 What is penal defined not according to the law of F1, but according to
constitutional definitions
 Huntington: case that instructs what penal means: F2 need not grant FFC
to judgment that is penal only if it is penal in the international sense: (1)
recovery in favor of the state; (2) purpose is to punish NOT to compensate
c. public policy
 Restatement §103: a judgment rendered in one state of the United States
need not be recognized or enforced in a sister state if such recognition or
enforcement is not required by the national policy of FFC b/c it would
involve an improper interference with the important interests of the sister
state
 sounds like the in-your-face-disgrace-case, but it should really say
“recognition is not required by FFC b/c it would be an interference with
important domestic and governmental affairs.” Means that courts cannot
interfere with important governmental affairs.
 Good example are anti-suit injunctions: A sues B in F1, B sues A in F2 to
enjoin A from continuing to prosecute in F1. F2 can’t do this – can’t interfere
with he governmental machinery in F1.
 Supreme court approached the issue in two other contexts: domestic
relations and workers compensation
- domestic relations: permitted NC to refuse FFC to
what would have been a valid divorce in NV
- worker compensation: three cases all summarized in
Thomas v. Washington Gas Light. Supreme Court
generates the limited choice of law
argument...USUALLY an OH court hearing a suit on
MI P can make a decision about whose law it will
apply. It will consider the interests of MI and will
incorporate it into its judgment. B/c of this, MI is not
free to disregard judgement and reconsider its own
interest. In Workers Comp cases, always use only one
state’s charts for figuring out compensation and never
give any though to the other laws. B/c of this, I can
refuse the judgement and consider its own interest.
DANGEROUS b/c now any time there is a limit on
choice of law capabilities, there can be re-adjudication
 §103 is probably the law if stated correctly in narrow holding about anti-suit
injunctions.
36