Agenda for Last Class
• Questions on Seth’s Presentation
• Choice of Law in EU
• Presentations
– Celina Kirchner, Internet Defamation
– Ryan Moore, Copyright
• Extraterritorial Application of Federal Law (if time)
Seth’s Presentation
• Critics argue that modern choice of law is subject to 3 biases
– Forum law, pro-recovery, pro-resident
• Prior empirical research largely confirmed biases
– More often than not, courts chose forum law, law which favored plaintiff, and
law which favored in-state resident
• Prior research does not control for individual case characteristics
– Suppose MA plaintiff sues MA defendant about Ontario guest statute in MA
court, and court decides that guest statute does not apply.
– Prior research would count that as a Pro-Forum and Pro-Recovery decision
– But does that show bias?
• Seth created new data set of 100 tort decisions
– Coded them by fact pattern – e.g. common domicile cases analyzed separately
– Compared outcomes to what one would expect given sensible application of
modern choice of law methodologies
– Found that results are largely predictable
– Bias, if any, not nearly as pronounced as prior research suggested
• B/c had counted as bias outcomes which were sensible based on facts
Conflict of Laws in EU
• In 20th century, European countries largely adhered
to traditional conflict rules
– But many differences in application
• Recently established uniform conflict of laws rules
for contracts and torts
– Still no uniform rules for marriage, inheritance, etc.
• Rules apply even when parties are not from EU
countries and even when applicable law might be
law of non-EU country
Rome I (2008/2009)
• II.3. Freedom of choice
– Choice-of-law clauses respected, unless
• “all other elements relevant to the situation are located in a country other
than the country whose law has been chosen” AND chosen law would
“prejudice the application of provisions of [that country’s] law … which
cannot be derogated from by agreement.”
• “all other elements relevant to the situation are located in one or more
[EU] member states” AND chosen law would “prejudice application of
provision of [EU] … which cannot be derogated from by agreement”
• II.4. Applicable law in the absence of choice
– 1. Specific rules
• (a) Sales – law of country where seller has habitual residence
• (e) Franchises – law of country where franchisee has habitual residence
– 2. Others – “law of country where the party required to effect the characteristic
performance of the contract has his habitual residence”
– 3 & 4. Law of “country which is most closely connected” if not covered by
above rules OR if that country “manifestly more closely connected” with case
Rome I (continued)
• II. 6. Consumer Contracts
– Law of place where consumer has habitual residence if
• Professional “pursues his commercial or professional activities in the
country where the consumer has his habitual residence” (1a)
• Professional “directs such activities to that country or to several countries
including that country” (1b)
• Services NOT provided exclusively in country other than that in which
consumer has habitual residence (4a)
• Otherwise see rules for non-consumer contracts (3)
– Choice of law clauses not valid if deprive consumer of protections “which
cannot be derogated from by agreement….” (2)
• Public policy exception (III.21)
– See also II.9 “overriding mandatory provisions”
Rome II (2007/2009)
• Applicable to “non-contractual obligations”
• II.4. General rule
– Law of country in which damage occurs, unless
• Both parties reside in same country, in which case that country’s
laws apply
• “it is clear … that the tort/delict is manifestly more closely connected
with [another] country….”
• II.5. Product liability
– Law of the country in which the person sustaining damage had his or her
habitual residence when the damage occurred, unless
• product not marketed there, in which case law of country where
product acquired, if product marketed there
• Product not marketed where product acquired, in which case law of
country of damage, if product marketed there
• Defendant could not “reasonably foresee the marketing of the
product” in that country, in which case the country of defendant’s
habitual residence
• “it is clear …. that the tort/delict is manifestly more closely
connected” with another country
Questions on Rome I and Rome II
• Are the rules of Rome I and Rome II more like the traditional rules or the modern
approaches?
• In what specifics are the rules similar to the results likely under U.S. choice of law?
• In what specifics, are they different from US choice of law?
• Gottesman thinks any uniform system of choice of law would be better than the
current system in the US. Would you agree that enacting the EU rules in the US
would be better than the current system?
• Are there any specific changes you would advocate to Rome I and Rome II before
enacting them in the US?
• Do you think litigation under Rome I and Rome II is likely to be more predictable
than in the US?
• Do you think litigation under Rome I and Rome II is likely to be fairer than in the
US?
Wall v Mutuelle
• English motorcyle driver sued French insurance company in England
for accident that occurred in France.
• Issue: French or English law relating to expert witnesses
• Decision: English law, because Rome II excludes “evidence and
procedure”
• Questions
– How would this case have come out if it were litigated in the US?
– Even if the result would have been the same, how would the
opinion likely have been different?
Hillside v Baasland
• Baasland (Norwegian) lost money using internet gambling site run by Hillside
(English) and sued in England
• Norwegian law more protective, would require refund of money
• Court:
– If tort, applicable law is law of place of damage
• Damage occurred in England, because loss occurred when money in
“wallet” (in England) used to place bets (in England)
– If contract, applicable law is country of party whose “performance which is
characteristic of contract”
• Hillside “offers the facility for placing wagers,” which is performance
characteristic of contract
– Consumer contract provision don’t apply, because no advertising in Norway
• Oddly applies Rome convention, not Rome I
• Questions
– Can you use the same legal materials (Rome I and II) to argue for the opposite
outcome?
– Norway is not a member of the EU, and Rome I and Rome II do not apply there.
If Rome I and Rome II applied in Norway, and if Baasland had sued Hillside in
Norway to reclaim its money do you think the Norwegian court would have
reached the same decision on choice of law?
– How would this case have come out if it were litigated in the US?
Extra-territoriality I:
Lauritzen v Larsen (1953)
• While in NY, Larsen, a Danish citizen, joined the crew of the Randa, a Danish ship
owned by a Danish citizen.
• Contract, in Danish, stated that governed by Danish law
• Larsen injured in Havana, Cuba
• Larsen sued in SDNY under US Law (Jones Act)
• Jones act provides recovery to “any seaman who shall suffer personal injury in the
course of his employment.”
• Should Jones Act apply?
• Would result be different if Danish owner were domiciled in US (but still a Danish
citizen)?
EEOC v Arabian American (1991)
• Aramco Service Corp (ASC) was a Delaware Corporation headquartered in TX
which does a lot of work in Saudi Arabia.
• ASC hired Boureslan, a US citizen, in Houston, and transferred him, at his request,
to Saudi Arabia
• ASC discharged Boureslan
• Boureslan sued in USDC in TX under Title VII claiming discrimination
• Defendant filed motion for SJ arguing lack of subject matter jurisdiction, because
Title VII does not extend to US citizens employed abroad by US corporations
• Title VII applies to any employer “engaged in an industry affecting commerce.”
– “Commerce” is “trade …. among the several states; or between a state and any
place outside thereof; or within the District of Columbia, or a possession of the
US; or between points in the same State but through a point outside thereof.”
– But not “employer with respect to the employment of aliens outside any state.”
• How should court rule?
• Would the result be different if ASC were a Saudi corporation headquartered in
Saudi Arabia?
• Should the district court apply Saudi employment law?
Hartford Fire (1993)
• US and foreign insurance companies allegedly
conspired abroad to standardize policies in US
insurance market
– E.g. count legal costs against policy limits, limit pollution
coverage, etc.
• 19 US states and private plaintiffs sued the
insurance companies under Sherman Act.
– Sherman Act applies to any contract or conspiracy that
“has a direct, substantial, and reasonably forseeable
effect” on domestic or import commerce
• Does US law apply?