Wed. Mar. 26
Constitutional Restrictions on Choice
of Law
Home Ins. Co. v Dick (US 1930)
article 5545 of the Texas Revised Civil
Statutes
• “No person, firm, corporation, association or
combination of whatsoever kind shall enter
into any stipulation, contract, or agreement,
by reason whereof the time in which to sue
thereon is limited to a shorter period than two
years. And no stipulation, contract, or
agreement for any such shorter limitation in
which to sue shall ever be valid in this State.”
• Dick urges that article 5545 of the Texas law is a
declaration of its public policy; and that a state
may properly refuse to recognize foreign rights
which violate its declared policy. Doubtless, a
state may prohibit the enjoyment by persons
within its borders of rights acquired elsewhere
which violate its laws or public policy; and,
under some circumstances, it may refuse to aid
in the enforcement of such rights. But the
Mexican corporation never was in Texas; and
neither it nor the garnishees invoked the aid of
the Texas courts or the Texas laws. The Mexican
corporation was not before the court. The
garnishees were brought in by compulsory
process. Neither has asked favors. They ask only
to be let alone.
• The statute is not simply one of limitation.
It does not merely fix the time in which
the aid of the Texas courts may be
invoked. Nor does it govern only the
remedies available in the Texas courts. It
deals with the powers and capacities of
persons and corporations. It expressly
prohibits the making of certain contracts.
NY one year statute of limitations is
bound up with NY contract action
Can a Texas court entertaining such
an action apply its two year
procedural limitations period?
SCt has not answered this question
Parties to a NY contract include a
provision demanding in-hand
service for any suit under the
contract – this is valid under NY law
Can a Texas court entertaining such
an action use its own service rule?
Yes
14th Amendment
• “nor shall any state deprive any person of life,
liberty, or property, without due process of
law”
Full Faith and Credit
• Article IV, Section 1.
• Full faith and credit shall be given in each
state to the public acts, records, and judicial
proceedings of every other state. And the
Congress may by general laws prescribe the
manner in which such acts, records, and
proceedings shall be proved, and the effect
thereof.
Bradford Elect. Light Co. v Clapper
(US 1932)
- Clapper – citizen of VT – worked for Bradford
(VT corp with principal place of business in VT)
- Clapper sent to NH to take care of some
fuses - electrocuted
- administrator chooses to sue in NH
- NH allows election of common law or
workers comp
- VT requires you to waive out of workers
comp in beginning of employment
relationship
- NH ct applied NH law
- SCt reversed
Pacific Employers Ins. Co.
v. Industrial Acc. Comm’n
(US 1939)
• “Although Massachusetts has an interest
in safeguarding the compensation of
Massachusetts employees while
temporarily abroad in the course of their
employment, and may adopt that policy
for itself, that could hardly be thought to
support an application of the full faith
and credit clause which would override
the constitutional authority of another
state to legislate for the bodily safety
and economic protection of employees
injured within it. Few matters could be
deemed more appropriately the concern
of the state in which the injury occurs, or
more completely within its power.”
• But the Court was careful to point out that there was
nothing in the New Hampshire statute, the decisions of its
courts, or in the circumstances of the case to suggest that
reliance on the provisions of the Vermont statute, as a
defense to the New Hampshire suit, was obnoxious to the
policy of New Hampshire….Here, California legislation not
only conflicts with that of Massachusetts providing
compensation for the Massachusetts employee if injured
within the state of California, but it expressly provides, for
the guidance of its own commission and courts, that "[n]o
contract, rule or regulation shall exempt the employer from
liability for the compensation fixed by this act." The Supreme
Court of California has declared in its opinion in this case
that it is the policy of the state, as expressed in its
Constitution and Compensation Act, to apply its own
provisions for compensation, to the exclusion of all others,
and that "It would be obnoxious to that policy to deny
persons who have been injured in this state the right to
apply for compensation when to do so might require
physicians and hospitals to go to another state to collect
charges for medical care and treatment given to such
persons."
Allstate Ins. Co. v. Hague
(US 1981)
• Footnote 10: “This Court has taken a similar approach
in deciding choice of law cases under both the Due
Process Clause and the Full Faith and Credit Clause. In
each instance, the Court has examined the relevant
contacts and resulting interests of the State whose law
was applied. Although at one time the Court required a
more exacting standard under the Full Faith and Credit
Clause than under the Due Process Clause for
evaluating the constitutionality of choice of law
decisions, see Alaska Packers Assn. v. Industrial
Accident Comm'n, 294 U. S. 532, 294 U. S. 549-550
(1935) (interest of State whose law was applied was no
less than interest of State whose law was rejected), the
Court has since abandoned the weighing of interests
requirement.”
• The lesson from Dick and Yates, which found
insufficient forum contacts to apply forum law,
and from Alaska Packers, Cardillo, and Clay II,
which found adequate contacts to sustain the
choice of forum law, is that for a State's
substantive law to be selected in a
constitutionally permissible manner, that
State must have a significant contact or
significant aggregation of contacts, creating
state interests, such that choice of its law is
neither arbitrary nor fundamentally unfair.
• Prior to the advent of interest analysis in the state courts
as the "dominant mode of analysis in modern choice of
law theory," the prevailing choice of law methodology
focused on the jurisdiction where a particular event
occurred. See, e.g., Restatement of Conflict of Laws
(1934). For example, in cases characterized as contract
cases, the law of the place of contracting controlled the
determination of such issues as capacity, fraud,
consideration, duty, performance, and the like. Hartford
Accident & Indemnity Co. v. Delta & Pine Land Co., 292 U.
S. 143 (1934), can, perhaps, best be explained as an
example of that period. …That case, however, has scant
relevance for today. It implied a choice of law analysis
which, for all intents and purposes, gave an isolated
event -- the writing of the bond in Tennessee -controlling constitutional significance, even though there
might have been contacts with another State (there
Mississippi) which would make application of its law
neither unfair nor unexpected.
• member of Minn workforce
– commuted to work there
• Allstate present and doing business in Minn
• Post-event move of plaintiff to Minn
Phillips Petroleum Co. v Shutts
(US 1985)
We also give little credence to the idea
that Kansas law should apply to all claims
because the plaintiffs, by failing to opt out,
evinced their desire to be bound by Kansas
law. Even if one could say that the
plaintiffs "consented" to the application of
Kansas law by not opting out, plaintiff's
desire for forum law is rarely, if ever
controlling. In most cases, the plaintiff
shows his obvious wish for forum law by
filing there.
We think that this is something of a "bootstrap" argument.
The Kansas class action statute, like those of most other
jurisdictions, requires that there be "common issues of
law or fact." But while a State may, for the reasons we
have previously stated, assume jurisdiction over the
claims of plaintiffs whose principal contacts are with
other States, it may not use this assumption of
jurisdiction as an added weight in the scale when
considering the permissible constitutional limits on
choice of substantive law. It may not take a transaction
with little or no relationship to the forum and apply the
law of the forum in order to satisfy the procedural
requirement that there be a "common question of law."
Sun Oil v Wortman (US 1988)
“To constitute a violation of the Full
Faith and Credit Clause or the Due
Process Clause, it is not enough that a
state court misconstrue the law of
another State. Rather, our cases make
plain that the misconstruction must
contradict law of the other State that is
clearly established and that has been
brought to the court's attention.”
P sues D under Pa law in a NY state
court
P sues D under Pa law in federal
court in Pa
P sues D under Pa law in a federal
court in NY
Ferens v John Deere (US 1990)
P (Pa) sues D (Del/Ill) for Pa injury
in federal court in Miss
Case then transferred to Pa