Conflicts of Law (Hoffheimer, Spring 2005)

The realm of the conflict of laws is a dismal swamp, filled with quaking quagmires, and inhabited by
learned but eccentric professors who theorize about mysterious matters in a strange and incomprehensible
jargon. The ordinary court, or lawyer, is quite lost when engulfed and entangled in it. - Prosser

I. Recognition of Judgments
A. Introduction - RES JUDICATA
1. Res judicata (claim / defense preclusion)
a. Used to bar a claim (or merge in claim already decided)
b. ELEMENTS
1. Identity of the parties (or privity of parties)
2. Same claim
3. CF. FOUR ELEMENTS in Mississippi
a. Identity of the subject matter of action
b. Identity of the cause of action
c. Identity of the parties (privity of the parties)
d. Identity of the quality or character against whom claim is made
1. EG: Suing Barbour, or suing governor
c. Claim preclusion applies to counter-claims too (if it was a compulsory counter-claim
not raised, then cant litigate in separate suit)
2. Collateral Estoppel (fact / issue preclusion)
a. Can be a small issue, or ultimate issue in case
b. ELEMENTS
1. Issue / fact actually litigated
2. Must be necessary to the judgment
3. Party against whom offered has had day in court
a. Ins. Co. gets declaratory judgment it did not cover X at time of
accident with Y. Y sues and wins against X. Y now sues Ins. Co. Does
Ins. Co. have benefit of claim preclusion on the issue of coverage?:
1. Y never had day in court on issue
4. Use of estoppel must be fair (same incentives, same opportunity to litigate
issue)
a. If sued in justice court for $10, and then sued in circuit court for $10
million, probably not the same incentives
5. OPTIONAL ELEMENT (recognized by some jurisdictions but not all)
a. Mutuality
1. How this might make an impact:
a. If A is convicted of DUI, and B then wishes to sue
A, wanting to have the negligence found per se (due
to conviction); but B must walk through all the
elements (which are all OK, except MUTUALITY,
since B was not a party to the first action, then cant
use as claim preclusion)
2. Not required in MS or federal courts
3. GENERAL REQUIREMENTS
a. Must be a VALID judgment (constitutional; personal jurisdiction)
b. FINAL judgment on the MERITS
1. EG: If not on merits, court itself would not give affect
2. IF something like statute of limitations, then maybe not
4. GENERAL PURPOSES of Res Judicata
a. Consistency
b. Dont want to waste resources (legal economy)

c. Has to be some kind of finality (otherwise, always litigating)

1. Finality sometimes is more important than getting right result
a. WRONGNESS is NOT an exception

Enforcement of Foreign Judgments - International

B. Hilton v. Guyot (1895)
1. An action in personam by a foreign citizen in a foreign country against a U.S. citizen
a. French citizen sued two New Yorkers in France and won judgment
1. Frenchman then sued in New York federal court seeking enforcement
b. NB contrast - If had been an action in rem, then would have been binding
2. Holding turns on RECIPROCITY (comity)
a. France wont recognize U.S. judgments, so U.S. wont recognize Frances
1. This comity wrinkle added since the judgment was one of a citizen of France
vs. a non-citizen (See Richman, 355)
b. Encourages France to recognize U.S. judgments
1. DISSENT - Urges res judicata
a. Looks at doctrine of finality and wasting of court resources on an
already litigated issue
c. PROBLEM:
1. Sticking finger in own eye by not recognizing foreign judgment (not likely
France will now recognize U.S. judgments)
2. Whose decision should this be - courts or lawmakers? (foreign policy
decisions)
d. NB After Erie, Hilton may not be good law anymore
1. Federal courts now may apply state law in same situation
2. Many states have rejected this tit-for-tat principle
3. RULES discussed HERE:
a. Old Rule
1. Foreign ruling is prima facie evidence in favor of party seeking enforcement
2. Does NOT prevent relitigation (ie, could relitigate)
b. New Rule (Story / Kent)
1. Prevents relitigation
2. ELEMENTS (General Requirements)
a. Have opportunity for full / fair trial before competent jurisdiction
b. Regular proceedings
c. Due citation or voluntary appearance of defendant
d. System secure likely impartial administration of justice
e. NON-RECOGNITION IF (DEFENSES):
1. Court had no jurisdiction
2. Obtained through fraud
3. Theres a clear mistake / irregularity
4. If not valid in foreign country, then dont have to recognize
4. Note discussion on PUBLIC POLICY
a. Court explains even though France does not allow cross-examination, allows hearsay
and permits unsworn testimony, these are not repugnant to U.S. sense of justice
5. Tahan v. Hodgson (C.A.D.C. 1981)
a. Court upholds enforcement of default judgment which plaintiff obtained against D in
Israel
1. Though Israeli procedures different (eg., service of process), not enough to be
repugnant to U.S. public policy
b. Does not require reciprocity (even though it is present here)
c. SUMMARY OF THREE ISSUES RAISED HERE:
1. Was there due citation to D?
a. Yes (personal service of process here)
2. Is enforcement of the default judgment repugnant to public policy?

a. No (though rule different from FRCP, not violative of policy)

3. Is there a requirement of reciprocity?
a. No
C. Uniform Foreign Country Money Judgment Recognition Act
1. Foreign money judgments are enforceable
2. APPLIES only to money judgments (not injunctions, child custody, alimony, divorces, etc.)
3. Most states have NOT adopted
a. Essentially this is a blackletter treatment of Hilton
b. Look for other state statutes, case law (MS uses case law)
4. ELEMENTS for judgment thats NOT CONCLUSIVE - (BASIC REQUIREMENTS TO
MEET)
a. If jurisdiction does not provide an impartial tribunal
b. Foreign court did not have personal jurisdiction
c. Foreign court did not have subject matter jurisdiction
d. NOTE:
1. Nothing in UFMJRA prevents collateral relitigation of these issues
5. ELEMENTS for judgment that NEED NOT be recognized:
a. D did not receive notices of proceedings in sufficient time
b. Judgment obtained by fraud
c. Enforcement is repugnant to public policy
1. Matusevitch v. Telnikoff (D.D.C. 1995)
a. Court holds a foreign-country judgment pursuant to libel standards
that are contrary to the libel standards of the United States would be
repugnant to the public policies of Maryland and the United States, and
thus would not be recognized under the UFMJRA
1. In so deciding, court has walked through the UFMJRA list,
finding the problem here with public policy
2. Policy differences
a. Burden of proof between English and U.S. law
(falsity must be proved in U.S.)
b. Actual malice required in U.S. for this type of
claim (higher free speech values in U.S.)
b. Just because English law different is not enough - must also be
REPUGNANT
1. Look to core values here and contrast
d. Judgment conflicts with another final conclusive judgment
e. Proceeding in foreign court was contrary to an agreement between parties (arbitration
agreement)
f. Seriously inconvenient forum
g. OPTIONAL ADD: Reciprocity (as in Texas)
1. Same problems as discussed in Hilton (should courts make this kind of public
policy decision?)

State to State Recognition of Judgments

D. Durfee v. Duke (1963)
1. Court holds where Nebraska court determined that it had jurisdiction of a suit to quiet title to
bottom land situated on Missouri river, then Missouri district court was not free to determine
whether the Nebraska court had jurisdiction over the subject matter
Procedurally how this worked:
a. Accretion (slow, gradual change - goes to other state) and avulsion (rapid change stays with original jurisdiction) is at issue here
b. Nebraska court first found it has subject matter jurisdiction and the river moved due to
avulsion (so land was in Nebraska still)
1. Final judgment entered enforceable

c. In second suit in Missouri, the Court of Appeals finds Nebraska had no subject matter
jurisdiction (so no res judicata to first case)
d. Supreme Court reversed Court of Appeals
1. Once subject matter fully litigated, then binding
2. Required by Full Faith and Credit Clause
a. NB Contrast of mandatory Full Faith/Credit Clause here as opposed
to foreign judgments, where not binding
1. If had been a Saudi Arabia judgment, then state court free to
relitigate whether Saudi Arabia had jurisdiction
2. Since state-to-state, then NOT free to relitigate jurisdiction
once it has been found
E. Fall v. Eastin (1909)
1. Court holds that judgment in Washington for divorce that included a direct affect to title of land
in Nebraska need not be enforced
2. The Land Taboo rule
a. An F-1 judgment that purports to affect directly title to land located in F-2 ned not be
respected by F-2
3. NB Distinctions from Durfee
a. Land at issue here is definitely in Nebraska (contrasted with uncertainty in Durfee)
b. Here it is an order to transfer land (not a quiet title action like Durfee)
c. Parties here are wife vs. new buyer of land (not husband, who lost in divorce)
1. Not res judicata if different parties
F. Chicot County Drainage District v. Baxter State Bank (1940)
1. Court holds the opportunity to raise a jurisdictional issue is sufficient to foreclose it later, even
if the issue is not even raised
a. General Rule: OPPORTUNITY TO RAISE will prevent subsequent litigation
2. EXCEPTION to general rule
a. Kalb v. Feuerstein (1940)
1. Court finds policy behind the subject matter issue here (federal-state relations)
is sufficient to relitigate issue that already had opportunity for full litigation
2. Congress wanted federal jurisdiction automatically in bankruptcy matters
a. State court erroneously decided it had subject matter jurisdiction
b. Need to protect integrity of the federal policy from a possibly hostile
state judiciary was considered strong enough to overcome the general
rule of issue preclusion

Substantive Interests of the Enforcing State

G. Fauntleroy v. Lum (1908) (most important rule out there)
1. Court holds Mississippi courts cant deny judgment from Missouri court concerning futures
even though it was considered gambling in Mississippi
2. NO public policy exception to full faith and credit clause
a. (T)he judgment of a state court should have the same credit, validity, and effect in
every other court in the United States, which it had in the State where it was pronounced,
and that whatever pleas would be good to suit thereon in such State, and none others,
could be pleaded in any other court in the United States. - Chief Justice Marshall
3. State doesnt have to give greater effect, but only as much as would same effect rendering state
would give it
4. CONTRAST
a. RESTATEMENT 103 (which is contrary to Fauntleroy)
1. Judgment rendered in one state need not be enforced in sister state if such
recognition or enforcement is not required by the national policy of full faith and
credit because it would involve an improper interference with important interests
of the sister State.
5. State cant craft legislation to say without jurisdiction
a. Kenney v. Supreme Lodge of the World (1920)

1. Court held phrasing a failure to enforce another states judgments in terms of

a lack of jurisdiction in the enforcing court is not an adequate explanation
6. EXCEPTIONS
a. Penal judgments
1. If intent of judgment is to punish a party, then can deny enforcement
2. PROBLEM
a. Unclear what are penal judgments
1. They are NOT (so must be enforced):
a. Punitive damages
3. POLICY
a. Is not enforcing penal judgments good policy, considering sister state
may most want this enforced
b. Workers Compensation
1. Thomas v. Washington Gas Light Co. (1980)
a. Court holds full faith and credit clause does not preclude successive
workmens compensation awards, since a state has no legitimate
interest within the context of the federal system in preventing another
state from granting a supplemental compensation award when that
second state would have had the power to apply its workmens
compensation law in the first instance
b. NOTE difference from precedent
1. Magnolia Petroleum Co. v. Hunt (1943)
a. Court held once choose forum for workers
compensation, then precluded from pursuing
elsewhere (essentially Fauntleroy)
b. DISSENT in Thomas wants to keep this approach
2. Industrial Commission of Wisconsin v. McCartin (1947)
a. Court substantially overrules Magnolia, finding a
worker can pursue a compensation claim in a second
forum unless the first forums legislature has enacted
some unmistakable language forbidding
supplemental compensation
b. CONCUR in Thomas want to use this approach
1. Plurality permits plaintiff to obtain
subsequent judgment in second forum for
damages exceeding first forums liability
2. What if company appeals to court, as
authorized by statute?
c. Four justice plurality applies a balancing analysis
1. Virginias interest in finality of award and wants to limit
liability to employer
a. Court explains full faith and credit clause does not
preclude second forum from finding supplemental
award
2. Both states have interest in providing adequate
compensation
a. This interest is not inconsistent with allowing
supplemental awards
3. Virginia has interest integrity of judgment
a. Factual determinations in first forum are subject to
full faith and credit
1. First forum cant find injured for four
weeks and second forum find five weeks
(must be same)

b. Supplemental awards not inconsistent with this

interest
c. Four justice plurality removes McCartins unmistakable language
exception
1. Since claim is before administrative agency, and
administrative agency is not looking to substantive law from
sister state (ie, could not determine (or have authority to
determine) rights under sister states law); so no need to apply
full faith and credit to preclude seeking supplemental award in
sister state
2. Workers filing such claims are usually not informed fully,
and may later want to file a second, supplemental claim in
second state
2. University of Tennessee v. Elliot (1986)
a. Court finds full faith and credit clause is not applicable to
unreviewed state administrative fact finding
c. Injunctions
1. A problem area
2. Five justices believe there should be an anti-suit injunction exception to full
faith and credit ( a minimal 103 exception)
d. Defense of Marriage Act (1996)
1. Relives states of duty to enforce judgments related to same-sex marriage
a. Distinguish from Fauntleroy - if had been marriage prior to DOMA,
then would have to enforce, but now dont
2. Argue for DOMA
a. Congress can change under Effect thereof part of clause
3. Argue against DOMA
a. Effects clause (of Article IV) cannot be read to undermine or
abolish the full faith and credit obligation (pg 688 - text)
1. The effects clause gives authority only to implement the
constitutional provision, not to amend it
2. Article IV, Section 1
a. Congress may by general Laws prescripe the
Manner in which such Acts, Records and
Proceedings shall be proved, and the Effect thereof.
4. See also Miss. Code Ann. 93-1-1(b)
a. Any marriage between persons of the same gender that is valid in
another jurisdiction does not constitute a legal or valid marriage in
Mississippi

Enforcing States Law of Judgments

H. Statute of Limitations
1. States divided over whether applying statute of limitation is on the merits
a. In MS
1. Can apply longer statute of limitations even if first forum has shorter statute
of limitations (ie, not on the merits)
b. MElmoyle v. Cohen (1839)
1. State does not have to apply another states statute of limitations
I. Union National Bank v. Lamb (1949)
1. Court holds a 1945 Colorado judgment reviving 1927 Colorado judgment on personal service
on defendant in Missouri must be given full faith and credit in Missouri court in which suit was
brought on the revived judgment, notwithstanding Missouri statute providing that judgment cannot
be revived after 10 years from rendition of judgment.

a. Once the sister state had jurisdiction over the parties and of the subject matter, its
judgment was valid and could not be impeached in the State of the forum, even though it
could not have been obtained there
b. HERE - Even though suit could not be revived in Missouri, since it could be revived in
Colorado and was valid, then Missouri had to enforce
2. COMPARE
a. In Mississippi
1. 15-1-43 (Domestic)
a. Judgment within state must be brought for enforcement within 7
years
2. 15-1-45 (Foreign)
a. Judgment rendered without state shall be brought within 7 years
b. If D a Mississippi resident, then shall be commenced within 3 years
3. No other MS statute seems to authorize revival
a. However, courts allow revive if can commence a judgment within 7
years
J. Watkins v. Conway (1966)
1. Court finds Georgia statute requiring all judgment obtained out of state be brought within 5
years after such judgments does not deny full faith and credit (or violate equal protection) even
though domestic judgments are valid for seven years
a. Cf. If sister state revived judgment and its valid, then Georgia must enforce
2. All P has to do is go to Florida to revive judgment and then come back to Georgia to enforce
K. Hart v. American Airlines (N.Y. Sup. Ct. 1969)
1. Airline loses lawsuit in Texas and is sued by another P in New York. Airline claims no
collateral estoppel on liability in second suit since Texas law requires mutuality (same parties).
Court permits collateral estoppel
a. Full faith and credit does not preclude state from giving MORE effect to judgment
b. CONTRAST - If NY plaintiff had sued in Texas, then could not rely on collateral
estoppel
2. CONTRAST
a. Migra v. Warren City Sch. Dist. B. of Educ. (1984)
1. Federal courts may not give a judgment greater effect than would the state
where it was rendered
L. Treinies v. Sunshine Mining Co. (1939) (Last in time rule)
1. Court adopts the last in time rule - the second (or last, if more than two) of two inconsistent
judgments must be given full faith and credit
2. Court upholds Idaho judgment where, (1) Washington state court first held stepfather owned
mining stock then (2) Idaho court found Washington court lacked jurisdiction and then entered
decree that daughter owned mining stock. Idaho judgment was last.
3. BENEFIT OF RULE
a. Simplifies judicial administration - if third court is asked to look at judgment, it need
only inquire whether the last-in-time court had a valid judgment (ie, jurisdiction); if so,
enforce that
4. PROBLEM
a. Creating incentive to not enforce initial judgment
b. What happens when F-1 is also F-3 (being asked to enforce F-2); states resist, though
Supreme Court has indicated should enforce F-2
5. State courts
a. Parsons Steel v. First Alabama Bank (1986)
1. Court holds last in time rule applies to state courts too
2. Challenges to the correctness of a state courts determination as to the
conclusive effect of a federal judgment must be pursued by way of appeal
through the state-court system and certiorari from this Court.

Domestic Relations: A Special Problem of Judgments

Divorces

M. The Williams cases

1. Williams v. North Carolina I (1942)
a. Supreme Court reverses bigamy conviction since not established conclusively that the
parties were not domiciled in Nevada (instead of N.C.) to get ex parte divorces
1. Had either party been domiciled in Nevada, then other states had to give full
faith and credit to divorce
2. RULE: States must give full faith and credit to divorce decress from another
state when one party is domiciled there but other states determination is not
binding on non-domiciled parties
a. Also valid divorce is place of marriage
b. Marriage was historically conceptualized as a res; States could get in
rem jurisdiction over it and enter a decree.
2. Williams v. North Carolina II (1945)
a. Court upholds conviction since jury properly instructed that Nevada divorce judgment
could be found to be void only if the parties did not obtain bona fide domicile
b. CONTRAST
1. If North Carolina had determined Nevada had jurisdiction (ie., parties
domiciled) then could not relitigate whether divorces valid
3. COMPARE
a. In Mississippi ( 93-5-5), must be a bona fide resident for 6 months prior to
commencing divorce (and not here just for purposes of getting divorce)
N. Ex Parte Divisible Divorce
1. Estin v. Estin (1948)
a. Court holds where wife obtained judgment in New York for separation and support,
and husband then obtained divorce in Nevada (without wife being served or present),
then Nevada had NO power to change New York award of support
1. Court makes divorce divisible
a. Gives effect to Nevada decree for divorce
b. Leaves in effect prior support award from New York (ie, Nevada is
ineffective on issue of alimony)
b. MODIFICATION TO WILLIAMS
1. Under Williams, give full faith and credit to divorce decree, but here: have to
have personal jurisdiction to change support order from prior court
a. To modify / eliminate without personal jurisdiction violates due
process
2. May v. Anderson (1953)
a. Ohio court was not required to give full faith and credit to Wisconsin divorce decree
awarding custody of minor children to their father where that decree was obtained by him
in ex parte divorce action in Wisconsin which had no personal jurisdiction over mother
b. NOTE: how can get effective divorce, but theres property-like rights requiring due
process for the child custody matter
1. Also have to weigh in states interests in best interests of the child
2. We find it unnecessary to determine the childrens legal domicile because,
even if it be with their father, that does not give Wisconsin, certainly as against
Ohio, the personal jurisdiction that it must have in order to deprive their mother
of her personal right to their immediate possession.
O. Bilateral Divorce
1. Johnson v. Muelberger (1951)
a. Court explains where a decedent appeared in Florida court in divorce action by his
second wife, and neither second wife nor decedent contested jurisdictional issues, then
decedents daughter would not be permitted by Florida law to attack the divorce decree as
beyond the jurisdiction of the rendering court so as to defeat third wifes widow rights to
decedents estate

1. Second divorce valid since neither party contested jurisdiction

b. Non-party (daughter) is bound just as a party would be
P. Modifications: Child Custody and Support
1. Yarborough v. Yarborough (1933)
a. Consent decree in Georgia divorce proceedings fixing permanent alimony for minor
child held res judicata and entitled to full faith and credit
1. Daughter, in South Carolina, sought to have father pay more after divorce
decree entered; but prior non-modifiable award in Georgia
2. PROBLEMS:
a. South Carolina also has interest in how much money daughter
receives
b. Daughter was not a participant in initial divorce proceedings which
set the permanent award
3. NB Not a big problem area today since most alimony awards are modifiable
a. Full faith and credit does not prevent modification of modifiable
award
4. Consider: 28 U.S.C. 1738A - FULL FAITH and CREDIT GIVEN TO
CHILD CUSTODY DETERMINATIONS
a. Under federal law, states must enforce child custody and support
decrees from other states even when theyre modifiable.
b. Courts may not modify a valid custody or support decree from
another state; they must enforce them according to their terms and not
modify a valid custody or support decree from another state, even when
its modifiable unless:
1. first state has lost jurisdiction
2. first state refuses to exercise jurisdiction to modify the
award.
3. second state has jurisdiction
c. To get modifiable decree modified:
1. Go back to state issuing
2. Decree must be supported by jurisdiction and close
connection of child to home state as defined by statute
5. NB also: In MS, state uniform child custody act applies to foreign court order
(Canada)
a. Foreign forum is res judicata (extends Durfee reasoning to foreign
countries)

II. Choice of Law

TRADITIONAL APPROACHES AND FIRST RESTATEMENT
Territorial, vested rights, First Restatement
Approach still followed by some states and many foreign countries (though by 1970s, most states have
adopted something else)

I. General Policy of Traditional Approach

A. Fairness
1. May not be just to apply own law every time
2. Includes constitutional component (due process rights may require application of foreign law)
B. Territorial
1. Since happened in another jurisdiction, should apply that jurisdictions law
C. Parties reliance / expectations
1. Parties rely on law of forum where occurred

2. Something may be legal in one state but illegal in another; parties rely on that
D. Interests of state whose court is hearing the matter
1. Alabama court hearing a Mississippi matter may someday want the Mississippi court to apply
Alabama law (looking at states policy interests)
2. Other state interests
a. Interest of the state in which an action occurred in maintaining its sovereignty.
b. Interest of the state in which an action is brought to bar parties from coming into the
courts of that state for the sole reason to take advantage of the law of that state. These
cases costs money and prevent other citizen from taking advantage of the court system.

II. TORTS
A. Nonintentional Torts
1. Alabama Great Southern Railroad v. Carroll (1892) (LAST ACT NECESSARY rule)

Alabama
Plaint.
Def.
Contract

Miss.
INJURY

a. Railroad employee, injured in Mississippi, could not sue in Alabama under Alabama
law where he had a contract, since the injury occurred in Mississippi and Mississippi
barred such a claim against employer
b. Case illustrates application of territorial approach
c. NB Arguments
1. Tort argument
a. Apply MS law (where tort occurred)
2. Employers Liability Act (Alabama statute)
a. Court holds statute applies only to injury within Alabama
b. Consider REST 398 - Compensation under Act of State of
Employment
1. Seems to envisage recovery, but language in restatement
allows for court to interpret no recovery out-of-state (unless
the Act provides in specific words or is so interpreted as to
apply only to bodily harm occurring within the state
2. Court does NOT want inconsistent outcomes - permit
recovery in one state but not another (here, this is an
underlying concern)
a. MS would not apply ALA statute, so ALA cant
apply even in ALA court
3. Alabama statute has been incorporated in contract in Alabama
a. Court explains since non-liability was never incorporated into
contract prior to the adoption of the Act, then cant presume with
passage of the Act it now is incorporated
2. SUMMARY OF BLACKLETTER RULES
a. REST 377
1. Place of the wrong is in the state where the last event necessary to make an
actor liable for an alleged tort took place (usually where the damage occurs)

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2. EXCEPTIONS
a. Poison
1. Place where harmful effect takes place
b. Deleterious substance
1. Place where substance takes effect
c. To land or chattels
1. Place where force takes effect on land / chattel
d. Loss by fraud
1. Place where loss is sustained (not where fraudulent
representations made)
e. Defamation (reputation)
1. Place where defamatory statement communicated
2. Still have uncertainty
a. Some jurisdictions require proof of damages,
others dont, so where apply?
B. Intentional Torts
1. Same rules from non-intentional torts apply
2. Marra v. Bushee (D. Vt. 1970)
a. Court finds Vermont law applies, rather than New York where wife lived, in alienation
of affection suit where plaintiffs husband lived and met mistress
b. Consider the interest:
1. VERMONTS: D (husbands mistress) lives here (permits cause of action)
2. NEW YORK: P (wife) lives here (no cause of action)
c. Test to apply
1. Lex loci delecti (place of the wrong)
a. Last event necessary for alienation of affection took place in
Vermont
2. Court uses tentative draft of 406 (never included in final restatement first)
a. Rights incidental to relative status are determined by the law of that
state where the person in whom the right is asserted is at the time when
the right is alleged to have been violated.
d. Aside
1. Case reversed on ground that place of wrong was factual question and should
be resolved by jury

III. CONTRACTS
A. General issues
1. Concern of forum shopping
a. Unlike tort where P has little weasel room, in contract matters plaintiff may be able
to manipulate in which forum to have contract
2. Fairness
a. Dont want D to be able to breach in a friendly forum, leaving P without remedy
3. Whole idea of contracts is to create a private law to bind the parties ahead of time
B. Understanding basics
1. PLACE OF CONTRACTING
a. Governs almost everything about a contract (dominant rule)
b. When dispute about where, then factual determination for jury (see notes below for 1st
Restatement rule)
c. NO CHOICE OF LAW exception under the Restatement First
2. PLACE OF PERFORMANCE
a. Governs how performance occurs
1. Manner of performance
2. Time and locality of performance
3. Person or persons by whom or to whom performance shall be made/rendered

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4. Sufficiency of performance
5. Excuse for non-performance

C. Selected 1st Restatement Rules

1. GENERAL THEME IN FIRST RESTATEMENT
a. Last event necessary to make contract binding is place of law applied
2. Mail - contract completed by delivery ( 314)
a. Place of contracting is where the document is posted or is received by the carrier
3. By Agent (delivered K by agent)
a. Place where agent delivered it
D. Poole v. Perkins (1919)
1. Court holds where married woman, incapable of contracting in the state of her domicile (TN),
executed and delivered contract in another state (VA), where she had a right to contract, then the
contract was governed by the latter state (and she could be sued)
a. Important facts:
1. Note was signed and delivered in TN (where she had no capacity)
2. Note was payable in VA (where she had capacity and can be sued)
2. Court looks to INTENT of parties
a. (T)he law of the place with reference to which the contract is made, which is usually
the place where it is made, unless it is to be performed in another place or country, and
then the law of that country. - Prof. Minor
b. NOTE how prior rule applied here is not exactly the same as articulated in 1st
Restatement
c. Concern with intent
1. If were looking at intent, we should be trying to effectuate the intent of the
parties, not what law applies. Its awkward; that might be why its not included
in the First Restatement.
3. Summary of Rules possible to apply to determine CAPACITY:
a. Domicile of parties
b. Law of place with reference to which K is made
1. Court here adopts this rule
2. Effectuates the intent of the parties (not what 1st Restatement does)
c. Law of place of contracting
E. Linn v. Employers Reinsurance Corp. (1958)
1. Court, applying 1st Restatement, finds law of the place of contracting is the place where the
contract is made (here, where it is accepted; ie, where the acceptance is spoken)
a. Jury determination of where acceptance is spoken
2. The conflict is a Statute of Frauds issue
a. Under NY law, the contract would have had to have been to be performed within one
year of the execution.
1. From 1926-1953, the parties performed the contract; performance can take an
oral contract out of the statute of frauds.
2. PA law would have taken it out of the statute of frauds b/c of performance;
NY law would not have taken it out of the statute of frauds
3. NOTE CONTRAST
a. In the Restatement of Conflicts rule for telephones, the place of contracting is where
the speaking occurs, not where its heard
b. In Restatement of Contracts, contracts are made where the speech is heard.

IV. DOMICILE

A. 1st Restatement Rules for Domicile

12

1. Domicil is the place with which a person has a settled connection for certain legal purposes,
either because his home is there, or because that place is assigned to him by the law ( 9)
a. Domicil determined by the law of the forum
b. Everyone has a domicile
B. Determining
1. Today, just have to move with an intent to indefinitely stay to establish new domicile
a. CONTRAST - Before had to move with intent to permanently stay
2. Childs domicile
a. Legitimate - then place of parents
b. Illegitimate - Place of mother at time of birth ( 14)
3. Problem areas
a. Students, prisoners, armed forces
C. Elements of domicile
1. Physical presence
2. Intent to make it home
D. Hypothetical
1. If X is domiciled in Pennsylvania, then moves to West Virginia before moving back to
Pennsylvania and dying, then where is domicile?
a. Likely still Pennsylvania (never had intent to make West Virginia indefinite home
b. Could go other way too

V. MARRIAGE
A. General rule - If marriage is valid in forum, then it is valid everywhere
1. Flip: If not valid in forum, then not valid anywhere
2. EXCEPTIONS to general rule ( 132)- if marriage valid in forum, still invalid elsewhere if
marriage is INVALID in one partys domicile AND:
a. Polygamous marriage
1. Natural law prohibition? Old Testament spoke of
b. Incestuous marriage
1. Natural law prohibition
c. Marriage between different races (overruled by U.S. Supreme Court in Loving)
d. Statutory prohibition (positive law)
1. Marriage of a domiciliary which a statute at the domicil makes void even
though celebrated in another state
E. PUBLIC POLICY
1. A more frontal assault on marriage (not walking through 132 exceptions but
directly prohibiting
2. Note interest against public policy invalidation (to pause before doing so):
a. If there are three wives and marriage invalidated, state may have to
support those three
B. In re Mays Estate (N.Y. 1953)
1. Court holds a marriage between an uncle and niece, valid in Rhode Island, is also valid in New
York
2. Analysis
a. Court first looks to general rule: Marriage is valid in Rhode Island
b. Next, turn to exceptions
1. Natural law exception?
a. Court finds this marriage is not repugnant to public policy
b. Marriage in accord with Jewish faith
2. Positive law exception?
a. No extra-territorial statute in N.Y. prohibiting such a marriage
b. NB DISSENT - Argues only way to give N.Y. prohibition any teeth
is to apply it extra-territorially
c. NB: Miss. Code Ann. 93-1-1 doesnt leave any question that an
uncle/niece marriage is prohibited. What about the half-blood factor?
The MS statute doesnt specifically mention half-bloods.

13

C. Lanham v. Lanham (Wis. 1908)

1. Wisconsin woman, who divorced husband, went to Michigan to remarry older man in order to
skirt Wisconsin prohibition on remarrying within 1 year; court invalidates second marriage
2. Court gives extra-territorial effect to positive law prohibition on one-year restriction
a. (P)ersons domiciled in this state, and who are subject to the provisions of the law,
leave the state for the purpose of evading those provisions, and go through the ceremony
of marriage in another state, and return to their domicile, such pretended marriage is
within the provisions of the law, and will not be recognized by the courts of this state.
D. Same-sex marriages
1. States have passed positive law prohibitions
a. Congress, through DOMA, also sought limit states recognition of same-sex marriage
1. Question of DOMAs effectiveness not yet fully litigated
b. MS - 93-1-1 (restricts same-sex marriage)
2. Under the First Restatement approach, states w/o non-recognition statutes probably wont be
required to recognize same-sex marriages because of a strong Natural Law argument.

VI. REAL PROPERTY

A. Generally
1. All substantive questions are governed by the law of the place where the land is
2. Exceptions
a. Interpretation ( 214, 251) (only time deviate from everything rule of property)
1. If have pure question of intent, and law of state where land is does
not give operative effect either (incl. under doctrine of worthier title),
then look to:
a. 214 looks at law of domicile of conveyor at time of
conveyance
b. 251 looks at law of domicile of testator at time when will was
made
c. POLICY
1. Better place to look to understand what person meant is
domicile
B. Burr v. Beckler (1914)
1. Court holds note executed and delivered by married woman in state where she cant do that
cannot be enforced on theory that it would be enforced in her domicile
a. Put another way: Woman is able to sign note in place where land is. She executes note
in place where she cant execute notes. Court explains note invalid.
b. Court is looking to law of Florida to determine validity of transfer of land in Illinois
C. Thomson v. Kyle (1897)
1. Court, consistent with Rest. 1, holds:
a. Woman who has no capacity in her domicile to execute land transfer, but
b. Executes transfer for land in another state where she would have capacity, then
c. Transfer is valid because look to the law where the land is

VII. CORPORATIONS
A. General rule
1. Apply the law of the place of incorporation
2. Internal Affairs Doctrine - requires that law of the state of incorporation should determine
issues relating to internal corporate affairs
B. McDermott Inc. v. Lewis (Del. 1987)

14

1. Court applies internal affairs doctrine (law of place of incorporation in Panama) to allow
subsidiary to vote shares it held in parent company (even though such a vote would be invalid
under Delaware law)
C. Direct liability
1. For agents and directors ( 188) (piercing the corporate veil)
a. State can impose liability on directors or agents of a foreign corporation doing business
in the state for acts done within the state
1. EG: Della hypo - she makes muffins and sells them in foreign state, where
theres a poisoning - then D can be liable
2. For shareholders ( 191) (piercing the corporate veil)
a. Liability for a shareholder for an act caused by a foreign corporation can be imposed
by law of state where act is done only:
1. If shareholder is domiciled in state
2. Shareholder has taken part in doing the act or causing it to be done
3. Shareholder has notice that corporation was formed to do business there.
a Ambiguous here - may only apply for notice at time of incorporation,
not for subsequent business

VIII. PERSONAL PROPERTY AND TRUSTS

A. Inter vivos transactions
1. General rule - Apply law of place where chattel is at time of transaction
a. Parties can be domiciled elsewhere (does not matter)
B. Succession at death
1. General rule - apply land where decedent is domiciled (validity of will - 295) (or intestate
succession)
a. NOTE MS distinction - apply MS law on matters of intestate succession
2. Interpretation of wills - absent controlling authority otherwise, look to law of decedents
domicile
C. Morson v. Second Natl Bank of Boston (1940)
1. Court holds inter vivos transfer, made in Italy for stock in Massachusetts, is valid transfer
(applying Massachusetts law) even though it would have been invalid in Italy
a. NB Shares of stock here not ordinary tangible chattels, according to court, so not
apply where paper is (Italy) but where stock interest is for corporation (Massachusetts)
b. LEGAL INTEREST HERE
c. CONTRAST
1. EQUITABLE INTEREST
a. TRUSTS - Look to where chattel (trust property) is at time trust
created
1. BUT NOTE: Questions of administration governed by law
of state where trust locates the administration
b. TESTEMENTARY - general law of testators domicile at time of
death
2. Interpretation
a. Look to domicile of settler of trust at time of
execution of instrument that created it (usage at time
drafted)
2. NOTE
a. Legal / equitable interest and chattels ( or not chattels) creates are for
manipulation
b. EXAMPLE - Stock
1. Is that a legal interest or an equitable interest
D. Wills
1. No separate restatement for wills

15

2. Generally - governed by what property interest is in will (governed by Restatement sections

dealing with that type of property at issue)
a. Real property - where the land is
b. Personal property - where decedent domiciled
c. Equitable interest - where testators domicile at death
3. Will-borrowing statutes
a. Supplement validation of will (if will complies with law where testator domiciled, then
valid here)
b. MS has no will-borrowing statute
E. Hutchison v. Ross (N.Y. 1933)
1. In New York, court applies law of where the trustee is to validate a second trust created by
husband (which creditors sought to invalidate) and not invalidating a first trust (in Canada, which
under Canadian law can not be modified)
F. Wilmington Trust Co. v. Wilmington Trust Co. (Del. 1942)
1. Court, inconsistent with First Restatement, says Delaware law should apply when original New
York trustee (where trust created) moves to Delaware
a. Contradicts First Restatement since should apply law where trust created (here, N.Y.)

IX. WRINKLES IN THE THEORY

A. Lack of uniformity
1. Rules themselves are not universally applied
B. Rules themselves are different in application
C. Characterization
1. Renvoi
a. Occurs when have a conflicts case and apply whole law of foreign state
1. Also means to send to a third state
2. First Restatement general rule for renvoi:
a. Apply local substantive law (and not conflicts law) of other States
except in cases involving
1. Validity of divorce decrees
2. Title to land.
b. In re Estate of Damato (1965)
1. New Jersey court applies only Floridas local law (and not whole law) to
determine disposition of balance of a decedents bank account, awarding it to
son
a. NB If had applied Floridas whole law, then it would have kicked the
law back to New Jersey (and would not pass balance to son) (NJ had a
traditional approach - look to law of place of trustee, who was in NJ)
b. But Florida had Trotten trust theory
1. Explains presumption of absolute trust at death
2. Had to apply Florida law, or would be frustrating
decedents intent
c. University of Chicago v. Dater (1936)
1. Illustrates use of renvoi in contracts case
2. Michigan court looks to whole law of Illinois (in contract case where D was a
Mich. woman and note was executed in Illinois)
a. Illinois, would in turn, look to domicile of woman for capacity
b. Thus, Michigan wound up applying its own law to allow a coverture
defense to the woman under Michigan law that would have been
invalid under Illinois law
2. Substance / procedure
a. Forum applies procedure laws: 585
1. Examples of procedure:

16

a. Capacity of parties
b. Evidence rules
c. Burdens of proof
d. Joinder, counterclaim
e. Survival / revival
f. Equitable relief
b. Sampson v. Channell (1st Cir. 1940)
1. Massachusetts federal court should apply Massachusetts burden for
contributory negligence instead of law of Maine, where tort occurred in Maine
but Massachusetts characterizes burden as procedural
a. Note unusualness here: Since in diversity in federal court, federal
court must consider burden to be substantive (outcome determinative)
so it has to look to state law, which in turn considers it procedural
c. OLeary v. Illinois Terminal Railroad (Mo. 1957)
1. Court considers burden to prove P acted with ordinary care to be substantive,
thus governed by foreign law
2. Note inconsistency with Sampson (only reason: have two different courts
applying law)
d. Grant v. McAuliffe (Cal. 1953)
1. Court applies California law for survival actions, analogizing it to statutes of
limitations, which are procedural and subject to forum law
a. CONTRAST - Under First Restatement, seems survival actions
should be governed by the place of the wrong, not the forum
e. STATUTES OF LIMITATIONS
1. Under First Restatement, treated as procedural, so forum law applies
a. EXCEPTIONS (substantive statutes of limitations)
1. When substantive effect of the statute of limitations is to
cut-off right and not just time-bar (eg., adverse possession)
2. When time period for litigating a claim is made substantive
condition of the right by law or statute (i.e.., a condition of
right)
a. Is it textually embedded in the statute
b. Not common
3. Statutes of repose
a. Cut off remedy along with rights
2. Mississippi borrowing statute ( 15-1-65)
a. If foreign statute of limitations is longer than MS statute of
limitations, then apply forum law (MS borrowing statute only applies
SHORTER statutes of limitations)
1. NB exception for MS residents:
a. If cause of action accrues in their favor outside of
MS and is barred by foreign law but not MS, then
apply MS statute of limitations
b. Could be equal protection and privileges and
immunities issues here; as well as when is one a
resident
b. If MS plaintiff
1. Then always use the longer MS stat. of limitation, even if
time-barred in foreign jurisdiction
c. NB No will-borrowing statute in MS
3. Public policy exception
a. Defined
1. (States) do not close their doors unless help (to the other state) would violate
some fundamental principle of justice, some prevalent conception of good
morals, some deep-rooted tradition of the common weal. (Cardozo) (pg 163)
b. Marchlik v. Coronet Insurance Co. (1968)

17

1. Illinois court, finding direct-action statute of Wisconsin is substantive for

Wisconsin wreck, refuses to apply as repugnant to public policy
a. At time, only three states had direct action statutes
c. Holzer v. Deutsche Reichsbahn-Gesellschaft (1938)
1. New York court allows defense of Nazi under German law
2. Traditionally, public policy exception applies only to:
a. Claims (not defenses)
1. Defenses dont have same public policy implications as
claims (immoral prosecution of claims)
2. Note if didnt allow defenses, then leaving without remedy,
whereas on claims, if is against public policy, can always go
back to where happened and sue there
4. Penal law exception
a. Defined
1. (T)o be, in its essential character and effect, a punishment of an offense
against the public. (pg 171)
b. Cant enforce penal laws of one state in another ( 611)
c. Paper Products Co. v. Doggrell (1953)
1. Court finds Arkansas law, which provided that a group which failed to
incorporate so under Arkansas law would be subject to joint-and-several
liability, is a penal law and not be enforced
5. EXAMPLE
a. Haumschild v. Continental Cas. Co. (Wis. 1959)
1. Court holds that capacity for wife to sue husband is determined by domicile
of couple, not by location of tort
2. Note - trial court characterized as a tort case and applied law where tort
happened; appellate court reversed, characterizing issue as one for family law,
thus law of domicile
a. POLICY - Husband and wife probably expect domicile law to apply
b. NB - Restatement would characterize as a tort
c. Additionally on renvoi
1. If had applied law of tort (Calif.), then Calif. would have in
turn looked to law of domicile to determine capacity to sue
here
D. Proof of foreign law
1. Old approach
a. Presumption that law is identical to forum law unless adequate proper proof
b. Proof of foreign law was a matter of FACT
2. Modern approach
a. Proof of foreign law is a question of law
1. No different than proving own states law (Miss. Code Ann. 13-1-149)
a. Have briefs, arguments, citations to case law, etc.
b. FRCP 44.1
1. If raising foreign law, must
a. Give notice by pleadings (or other reasonable written way)
b. Court may consider any relevant material or source
c. Treat as a question of law
3. Tidewater Oil Co. v. Waller (10th Cir. 1962)
a. Case illustrates what happens when no proof of foreign law, though trying to assert
foreign law (here, law of Turkey being used in Oklahoma court)
b. When NO PROOF, court has three options
1. Dismiss claim (P had the burden to prove law and didnt)
2. Assume law of foreign country identical to forum
3. Indulge in some similarities (presumption of similarity, though not identical)
a. Tidewater court uses this approach

18

1. Turkey has adopted a strict liability approach for plane

crashes, but Oklahoma court here says only that Turkey must
provide some remedy for such a cause of action
4. Certification procedure
a. Discretionary process for court to ask another court what the law of that state is
1. Forty five states have some type of procedure like this
b. In Mississippi, only allow U.S. Supreme Court and Court of Appeals to certify
questions

NEWER APPROACHES
-Most often applied in areas of contracts and torts
I. Evolution of New York approach
-New York was first state to experiment with departures from First Restatement
A. Haag v. Barnes (1961)
1. New York court, applying a new contacts approach, holds Illinois law should apply for child
support agreement instead of New York law (which would have invalidated agreement) since
contacts in Illinois were greater (D there, K there, child born there, contributions made here) (P in
N.Y.).
a. NB This holding would have been consistent with First Restatement holding too (just
new test here)
b. Test language: most significant contacts with the matter in dispute
2. Tension here
a. Counting up contacts versus a state interest in applying its law
b. Can manipulate contact count (double-counting)
B. Babock v. Jackson (1963)
1. New York court, applying both a contacts and interests analysis, determines New York law
should apply in guest-statute dispute from Canadian wreck involving N.Y. P and D.
a. Canada, which has a guest statute, does not have as much interest in enforcing its
guest-statute in a dispute between New York P and New York D for wreck in Canada
1. Must characterize as a loss-shifting rule, not a conduct-regulating rule
b. NB Canada would not have looked at interest here
2. NY court sees interest TIED to residency
3. Again note how can manipulate test to get result want
C. Tooker v. Lopez (1969)
1. New York court, applying primarily an interest test, determines Michigan guest-statute should
not apply to Michigan wreck involving New York P and D
a. Court looking more to interests than contacts now
1. Note how Michigan could have interest too (wreck there; what if this a
conduct-regulating rule)
D. Neumeier v. Kuehner (1972)
1. New York court applies Canadian guest-statute for dispute involving a New York D, but a
Canadian P and the wreck was in Canada
2. Rules articulated for guest-statute disputes:
a. If both P and D are from same state (and car registered there), apply that states law
1. Babcock-like
2. Law of common domicile
b. If D is in home state, and P from foreign state, and wreck happens in Ds home state,
apply Ds state

19

c. If P is in home state, and D from foreign state, and wreck happens in Ps home state,
apply Ps state
1. Neumeier-like
d. In other situations when P and D are from different states, normally apply where wreck
happened unless there are relevant substantive law purposes to apply something else
without impairing smooth working of the multi-state system or produce great uncertainty
for litigants
1. Generally like First Restatement approach (lex loci delicti)
3. Here, N.Y. has no interest (only D from there)
4. Possible, Canada has no interest either (so this could be an unprovided for case?)

New York D

Canada D

IN NEW
YORK
New York P

apply NY

apply NY

Canada P

apply NY

apply Canada (unclear)

IN CANADA
New York P

apply NY

apply Canada

Canada P

apply Canada

apply Canada

E. Schulz v. Boy Scouts of America, Inc. (1985)

1. New York court, finding parties are co-domiciliaries of New Jersey but tort committed in New
York, should apply New Jerseys charitable immunity statute
a. Courts holding consistent with Neumeier
1. Those black letter rules formulated for guest statutes are generally applicable
2. Using a greater interest analysis
3. NB Since not enough contact between New York and the claim, then no need
to look at whether the charitable immunity in N.J. is against New Yorks
fundamental public policy
b. New York has no significant interest in applying its law (permitting suit against the
charity for the sex-abuse) but New Jersey, which is a common domicile that has set up its
own loss-shifting rules for torts, has a significant interest
1. NB Had New Yorks regulation permitting suit against charities been
conduct-regulating, the New Yorks interest would have been greater
a. But, rule considered merely loss-shifting here
1. Debate on whether to call something loss-shifting or
conduct-regulating (e.g., guest statutes are generally going to
be loss-shifting, but here the charitable immunity provision
may be conduct-regulating as well as loss-shifting)

20

2. NB Uncomfortable rule here: Had the little boy been from New York, then all
of the sudden New York has a greater interest to protect; but not the same for a
New Jersey boy
c. Three reasons offered to sometimes apply forum law in cases like this (ultimately
rejected):
1. Protect local medical creditors
2. Prevent injured parties from becoming public wards of the state
3. Deterrence
4. ANALYSIS
a. Court rejects first two because they are pro-plaintiff
b. Also rejects deterrence, though seems strange (why is deterrence of
bad conduct less for non-residents)
2. Complication
a. The charity moved from New Jersey to Texas post-transaction. Now, the D is in
Texas, which has the same law as New York, and the parties do not share a common
domicile. Should the New York court, then, have applied New York law (the lex loci)
instead of New Jersey?
F. Padula v. Lilarn Properties Corp. (N.Y. Ct. App. 1994)
1. New York court, finding rules regarding protective devices during construction were conductregulating, applies Massachusetts law where injury occurred in Massachusetts but both P and D
are New York domiciliaries.
a. Since conduct-regulating rules, then look to the law of the place of injury
2. Court explains its two-step analysis:
a. First, look at the interest of each forum by examining contacts
b. Second, look to see whether the purpose of law is conduct-regulating or loss-shifting
1. If conduct-regulating - apply lex loci
2. If loss-shifting - apply lex loci unless there is a common domicile between the
parties
II. INTEREST ANALYSIS
-Approach created by Professor Brainerd Currie
-Law is purposive in nature - those who made the law sought to serve various social goals
-Applying the law would achieve a policy goal sought by the sovereign which promulgated the law
A. Generally applying forum law (default rule)
B. Analysis
1. What are the interests of the different jurisdictions
2. If forum interest, apply forum law (even if there is a foreign interest too)
3. If NO forum interest
a. If there is a foreign interest, apply foreign law
b. If NO foreign interest, apply forum
c. If TWO foreign interests, then apply forum law
d. UNPROVIDED FOR - If NO interest by any state, apply forum law
C. Understanding terminology
1. True conflict
a. Both forum and foreign state have interest
b. Lilienthal v. Kaufman (Or. 1964)
1. Oregon court, finding D was an Oregon spendthrift who entered into a K with
a California P in California, applied Oregon law (preventing Ps recovery
against D b/c K was voidable under Oregon spendthrift law)
2. Conflict - California permitted K and Oregon didnt
a. So Oregon determines its policy precluding spendthrifts from
entering into contracts was more of an interest than Californias, so
apply Oregon law

21

b. CONTRAST with First Restatement - would have applied law of

place of contracting (here, California, not Oregon)
2. False conflict
a. Only one jurisdiction actually has interest
3. Apparent conflicts
a. Unclear whether conflict or not
b. Bernkrant v. Fowler (Cal. 1961)
1. California court applies Nevada law regarding oral K made in Nevada, where
P lived, and where the land was, although D died in California before fulfilling
promise of K and Californias statute of frauds would have invalidated the oral
K
2. Judge Traynor determined Californias interest was to protect party
expectations in contract cases (here, the K was made in another state and parties
could not know the promisor might die in California)
a. Turns case into a false conflict
3. Case further illustrates how characterizing interest (here, partys expectations
rather than finding Californias interest was to prevent fraud by oral Ks, giving it
greater weight)
a. California could also have determined statute of frauds was
procedural (so apply forum) instead of substantive, which allowed it to go to
Nevada
4. NB - Under First Restatement, would apply law of place of contracting, which
would have been Nevada (so here it is consistent, just get there a different way)
4. Unprovided for cases
a. Apply forum
b. Hurtado v. Superior Court (Calif. 1974)
1. Court, in deciding which law to apply regarding limitation of recovery where
neither California or Mexico has interest, finds the forum law (California)
should apply
2. Break-down of analysis:
a. Mexican residents sue in California against a California resident for
accident in California
b. Mexico imposes limit on recovery, but no interest here in limiting
recovery
1. Note - Mexico could characterize its interest in limiting
recovery is aimed at ungrateful passenger (conduct-regulating)
and so becomes an interest for Mexican law to apply
c. Californias does not limit recovery, but this is a loss-shifting rule, so
no real interest in applying its law
1. Note: Could characterize as a conduct-regulating rule to
encourage safe driving and does create interest
d. Court applies forum law (California)
D. Examining problems with Interest Analysis
1. Favors forum law
a. Promotes forum-shopping and makes hard to know as a potential D what law will be
applied
2. Unclear characterizing between conduct-regulating and loss-shifting
a. How define will often determine which law applies
3. Lack of uniformity
4. Lack of predictability
5. Unsatisfactory solutions in true conflicts cases (easy answer (forum), but not always clear
forum has most interest)
6. Use of domicile
a. Is this fair? Not always clear where domicile is.

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III. COMPARATIVE IMPAIRMENT

-Promulgated by Professor William Baxter
-Variation on interest analysis
-Based on external objectives for each states policies to be recognized elsewhere
-Applying the law whose state policy would be most impaired if not applied
-SAME application of basic interest analysis EXCEPT for true conflicts
A. Bernhard v. Harrahs Club (Cal. 1976)
1. California court, finding Nevada tavern owner (D) served drinks to California P who was in
wreck in California, applies California law allowing recovery even though Nevada law would
have prohibited recovery
2. Analysis
a. There is a true conflict
1. So, turn to state law most impaired by non-application
a. Nevadas interest here is purely loss-shifting
b. Californias interest is both conduct-regulating (protect highways)
and loss-shifting (provide full compensation to P)
3. NB Under First Restatement, and regular interest analysis, California law would also apply
4. CONTRAST
a. What if accident happened in Nevada and Nevada didnt advertise in California for
business?
1. Harder to find Californias interest is more impaired than Nevadas in this
situation
B. Problems with approach
1. Comparative impairment only works when multiple jurisdictions adopt, not just one
a. E.G., If California adopts approach, but Oregon doesnt, then Oregon is in win-win but
California isnt (it cant control what Oregon will do or rely on Oregon to apply
Californias law when it would be most impaired)
2. Larger states have to adopt for the approach to matter much
IV. THE BETTER RULE
-Promulgated by Professor Robert Leflar
-Only a few jurisdictions have adopted this approach
A. Five choice-influencing considerations
1. Predictability of Results
2. Maintenance of Interstate and International Order
3. Simplification of Judicial Task
4. Advancement of Forums governmental interest
5. Application of the better rule of law
B. Milkovich v. Saari (Minn. 1973)
1. Minnesota court, finding both P and D are from Ontario and car registered in Ontario, applied
Minnesota law when accident happened in Minnesota and Minnesota had the better rule (no
guest statute, opposed to Ontario which precluded recovery)
2. Analysis
a. Walk through the five choice-influencing considerations
1. Predictability
a. Irrelevant in this nonconsensual transaction
2. Interstate system order
a. Satisfied as long as law of state with substantial connection was
selected
1. In looking at its connection, Minnesota finds in protecting
local creditors (if someone hurt in state, then will have to pay)

23

(nb how this rationale turns every case into one where forum
has interest)
3. Simplification of judicial administration
a. Not problem here (either rule easy to apply)
4. Forums interest
a. Here, Minnesota has interest (status as a justice-administering state)
5. Better rule
a. Minnesota finds its lack of a guest statute is a better rule
C. Problems
1. Unclear what better rule is
a. If clearly a better rule, shouldnt all jurisdictions adopt
2. Should a forum apply a foreign law on basis foreign law is better rule
a. Shouldnt changing law be province for lawmakers if there is a better rule
V. RESTATEMENT SECOND - Most significant relationship test
-Completed in 1971
-Dont apply renvoi (look to local law)
A. Choice-of-law principles ( 6) (POLICIES)
1. Follow statutory directives of state, subject to constitutional limitations
a. Adds very little
2. Needs of interstate and international systems
3. Relevant policies of forum
4. Relevant policies of other interested states and relative interests of those states
5. Protection of justified expectations
6. Basic policies underlying particular field of law
7. Certainty, predictability and uniformity of result
8. Ease in determination and application of law
B. TORTS - Choice-of-law principles ( 145) (CONTACTS)
1. Presumptively apply law of place of injury, unless displaced by more significant relationship (
146)
2. Apply local law of state with respect to each issue with most significant relationship to
occurrence and parties
3. FOUR FACTORS to consider from 145:
a. Place of injury
b. Place where conduct causing injury occurred
c. Domicile, residence, nationality, place of incorporation and place of business of parties
d. Place where relationship, if any, between parties is centered
4. For each one of the 6 factors, look at the contacts in 145
5. Phillips v. General Motors Corp. (Mont. 2000)
a. In answering certified questions, Montana court explains it has adopted the
Restatement Second approach, and Montana law should apply to a suit involving injury
in Kansas
1. P was a Montana resident, and Montana has interest in preventing defective
products from causing injury to its residents
b. Montana court emphasized the 6 policy factors to reach its conclusion
1. No need to do a public policy exception analysis under Restatement Second
(it would be redundant to most significant relationship test)
6. McDaniel v. Ritter (Miss. 1989)
a. Mississippi court, finding Tennessee law should apply to almost all aspects of suit
involving TN plane, TN pilot, Miss. P, and crash in Missouri, holds that Mississippi law

24

should apply regarding comparative negligence, rejecting Tennessees contributory

negligence (assumption of risk) standard.
1. In short, its a public policy exception b/c Tenn. has most significant
relationship to crash, but Miss. cant enforce Tenn.s law regarding assumption
of risk
C. CONTRACTS - Choice-of-law principles ( 186, 187, 188)
1. FIRST QUESTION
a. Is this a K governed by the UCC?
1. If yes, then see flow chart:

UCC Contract

There is a CHOICE OF LAW in the contract

NO CHOICE OF LAW in the contract

Is there a reasonable relationship between the choice of

law and matter?

Then apply FORUMs UCC (see UCC 1-301

below) (see also old 1-105 - appropriate
relationship, then forum)

Yes

Choice of Law is Valid

No

Not valid choice of law, so go to NO CHOICE

OF LAW

2. If NOT a UCC contract, then APPLY forums general choice-of-law (e.g.,

Restatement Second)
b. Under UCC 1-301(c):
1. (T)he rights and obligations of the parties are determined by the law that
would be selected by application of this States conflict of laws principles.
2. Provision replaces UCC 1-105, which provided law of forum applies if
transaction bears appropriate relationship
c. If NO choice of law in K and under general choice-of-law under Restatement Second,
then:

25

Restatement Second
(NON-UCC Contracts)

Can you have a choice

of law in this contract?

Yes

No choice of law
for this contract

No
Then valid
choice-of-law

Look to most significant

relationship (188(2)
contacts)

Still valid choice

of law, unless:
No substantial relationship
to transaction and no
reasonable basis for choice

Contrary to fundamental
public policy of state with
materially greater interest
1. Restatement Second 188(2) CONTACTS
a. Place of contracting
b. Place of negotiation
c. Place of performance
d. Location of the subject matter of the contract
e. Domicile, residence, nationality, place of incorporation and place of
business for parties
2. NB Unclear 188(3)
a. If place of negotiation and performance SAME, then that local law
USUALLY will be applied
1. Is this a presumption? And if so, what kind?
2. Nedlloyd Lines B.V. v. Superior Court (Cal. 1992)
a. California court finds contract, specifying choice of Hong Kong law to govern and
there are significant Hong Kong contacts, should be governed by Hong Kong law (which
does not recognize breach of fiduciary duty or breach of implied covenant of good faith,
unlike California law)
1. In the scheme of analysis, this follows:
a. Under Restatement Second (Non-UCC contract)
b. Could not have had this choice under California law (cant choose no
breach of fiduciary duty, etc.)
1. Still Valid unless:
a. No substantial relationship (there is in Hong Kong)
b. Contrary to fundamental public policy (Not a
fundamental policy for California)

26

c. So, Hong Kong law validly chosen and applied

3. When chosen choice-of-law in contract CONTRADICTS contract
a. Kipin Industries, Inc. v. Van Deilen Intern, Inc. (6th Cir. 1999)
1. Court, finding parties chose to have no liens which directly contradicted
chosen Illinois law, assumes there is NO choice of law for that provision and
goes under Restatement Second (most significant relationship test)
a. In scheme of analysis:
1. When contract contradicts choice of law, assume NO
CHOICE, then apply Restatement Second
a. Dont invalidate, simply assume no choice
D. WRINKLES
1. Forum-Selection Clauses
a. Permissive forum-selection clause
1. Basically creating jurisdiction for a dispute
a. Courts honor
2. Does not preclude jurisdiction elsewhere
b. Mandatory forum-selection clause
1. Restrictive clause requiring disputes to be in certain jurisdiction
2. Trend to enforce today as long as reasonable
a. Historically, disfavored
2. Domicile
Important factor in Restatement Second
1. After-acquired domicile
a. Reich v. Purcell (1967)
1. California court, finding Ds were domiciled in Ohio at time of Missouri
accident before moving to California, are subject to Ohio law; in short, court
wont consider after-acquired domicile to determine what law applies
a. Both parties were in Ohio at time of accident
b. Although Ds moved after the fact, Ohio had strongest interest
(California applying an interest analysis for this choice of law)
c. NB Accident was in Missouri, but under this interest analysis, dont
always apply law of place of wrong (here, the rule in play was a lossshifting limit on amount of damages, so Missouri had little interest)
b. Jurisdictions split on whether to consider after-acquired domicile
1. Miller v. Miller (N.Y. 1968)
a. New York court, finding D moved to N.Y. after an accident resulting
in death, chose to apply New Yorks wrongful death (with no limit on
damages) instead of Maines (limited damages), finding no evidence D
moved there for a more favorable legal climate and Maine had no
interest in nature of recovery awarded
c. Concern with after-acquired domicile
1. Forum-shopping
a. But consider: How would a court know intent of move (engaging
in a kind of psycho-analysis)
3. Renvoi
1. Pfau v. Trent Aluminum Co. (N.J. 1970)
a. Court, finding P is a domiciliary of Connecticut and has interest in applying its
passenger-can-sue statute, applies Connecticut local law instead of its choice of law
(which would have picked Iowas law, where the tort occurred)
b. BREAKDOWN of analysis
1. Suit brought in New Jersey (domicile of D)
a. P wants Connecticut law to apply
b. D wants Iowa law to apply b/c it has guest statute
1. Tort occurred in Iowa
2. Connecticut has interest in seeing its P compensated for injury
a. So, court decides Connecticut has strongest interest

27

3. D argues should apply Connecticuts WHOLE LAW (which would include its
choice of law, which would pick the lex loci as law to apply (here Iowa))
4. Court rejects D, applying only the local substantive law of Connecticut
a. New Jersey has no interest either in applying or not applying guest
statute
b. NB Irony - if suit had actually been brought in Connecticut, then the
choice of law would have been Iowa and P would have lost; (same if
suit brought in Iowa)
5. Case is consistent with RESTATEMENT SECOND
2. Scholarly consideration
a. Argument out there that court should consider states whole law when determining
interest
1. EG: If look to state to see interest, and state itself would apply another states
law, then that should weigh to diminish the interest
b. Many courts, unlike Pfau, do look to the whole law for interest
4. Statutes of Limitations
1. Ledesma v. Jack Stewart Produce, Inc. (9th Cir. 1987)
a. California court, finding tort occurred in Arizona, D was in Arkansas, and California
had little interest in applying its own one-year statute of limitations, applied two-year
statute of limitations of Arizona
1. Arizona has greater interest in its law applying
a. Regulating conduct of roads
1. But this statute of limitations could be characterized as a
loss-shifting rule, and diminishing Arizona interest (versus an
arguably stronger California interest in finality and access to
courts in its one-year statute of limitations)
b. NB Court here is not starting off with whether this is procedural or substantive, but
instead engaging in a comparative impairment analysis right from the beginning (No
substance or procedure characterization)
1. CONTRAST - In Mississippi, would first characterize as substance or
procedure and apply accordingly (here, stat. of limit is procedural, so apply
Miss. law)
2. Mississippi only gets to Second Restatement when substantive (when
procedural, apply Miss. law)
a. NB The Miss. borrowing statute would NOT apply in this type of
procedural situation (only substantively)
3. Mississippi borrowing statute
a. Adopt foreign statute of limitations when:
1. Cause accrues outside of state
2. And is time-barred by that jurisdiction
3. And is NOT a MS plaintiff (who gets benefit of longer MS
statute of limitations)
2. 142 STATUTE OF LIMITATIONS (presumption for forum in conflict)
a. Unless exceptional circumstances for claim against defense of statute of limitations,
court will apply:
1. Its own statute of limitations barring claim
2. Its own statute of limitations permitting claim UNLESS:
a. Wont serve any substantial interest of the forum
b. Claim would be barred under the statute of limitations of state having
more significant relationship to parties and occurrence
5. Substance / Procedure
1. (T)he traditional rule that the procedural law of the forum should apply seems quite consistent
with interest analysis and its cousins.
2. Issue: Whats procedural and whats substantive
a. PROCEDURAL

28

1. Rules having to do with how the forums courts handle cases are procedural
b. SUBSTANTIVE
2. Rules having to do with how cases come out
6. Public Policy
1. Jurisdictions split on whether this analysis would be redundant with interest analysis
SUMMARY OF BASIC CHOICE-OF-LAW INQUIRY
1. What choice-of-law does jurisdiction apply?
a. First Restatement
b. New York approach
c. Interest analysis
d. Comparative impairment
e. Better Rule
f. Restatement Second most significant relationship test
2. What states law should apply?
3. Is that law constitutional?

III. Erie, Federal Torts Claims Act, and Federal Choice of Law
A. Federal Torts Claims Act
1. Richards v. United States (1962)
a. Court explains under Federal Torts Claims Act the law of place of act/omission
means apply the WHOLE LAW (which includes choice-of-law)
b. Court applies whole law of Oklahoma where negligence occurred in Oklahoma but
plane crashed in Missouri
c. Statutory language of FTCA unclear, so court just picked whole law (ie., court finds
Congress wanted a flexible rule to apply as it would if it were two individuals involved)
B. Erie Railroad v. Tompkins (1938)
1. Federal courts must follow the rules of the states in substantive matters
a. As a matter of forum-shopping:
1. Applying state substantive law still leaves open forum-shopping from stateto-state
2. BUT it takes away forum-shopping between state court and federal court in
same state
2. Hanna v. Plumer (1965)
a. If federal rule is procedural, then apply federal rule
3. Klaxon Co. v. Stentor Electric Mfg. Co. (1941)
a. Court holds federal court must apply states choice-of-law, not follow its own
conception of the better view
b. Here, lower court should have applied conflict-of-law of Delaware (and only go to
New York law if the Delaware conflicts stated to) in a breach of contract action brought
in Delaware
c. EXCEPTION TO KLAXON
1. Ferens v. John Deere Co. (U.S. 1990)
a. Court holds transferee forum (from a 1404 transfer) must apply law
of transferor court regardless of which party initiates transfer (here, P)
1. Can create problem of forum-shopping
2. BUT

29

a. If dont allow, Ps will still go to distant forums to

litigate
b. Would lead to other complications (what happens
if court transfers on its own, or both parties move to
transfer)
3. Van Dusen v. Barrack (1964)
a. Already had held if D transfers, still apply
transferring courts law
2. NB If transfer for any other reason than 1404, then NOT within exception

Constitutional Limitations
C. A look at the various clauses in play:
Due Process
Clause (in 14th
Amendment, 1)
Equal Protection
Clause (in 14th
Amendment, 1)
Full Faith and
Credit Clause (in
Art. IV, 1)
Privileges and
Immunities
Clause (in Art.
IV. 2)
Commerce
Clause (in Art. I,
8)

Prohibits

States from
depriving

Persons

Life, liberty,
property

Prohibits

States from
depriving

Persons

Equal protection of
the laws

Mandatory

States give Full

Faith and Credit

Mandatory

States entitle

Mandatory

Congress shall
regulate

To Public Acts,
Records, Judicial
Proceedings
Citizens of States
(means natural
persons, not
corporations)
Commerce with
foreign nations and
among several
States

To Privileges and
Immunities in the
several states

Due Process issue

D. Home Insurance Co. v. Dick (1930)
1. Court finds Texas statute void in its application to a Mexican contract (made and performed in
Mexico)
a. Texas would strike down contract provision limiting suits to be brought within one
year (must have at least two years under Texas law)
b. Contract specified only one year
1. Court voided Texas law, in part, because it would have expanded obligations
under the contract
2. Understanding the constitutional issue: its a due process violation to apply Texas law
a. If Texas statute applied, then there would have been breach and a taking of property
from Mexican D once reduced to judgment, thus resulting in a due process violation
3. Result from this case is still looked upon favorably (though no clear-cut rule here)
Full faith and credit issue
E. Pacific Employers Ins. Co. v. Industrial Accident Commission (1939)
1. Court finds California can apply California law where worker injured in California, even though
worker was from Massachusetts, had a K with employer in Massachusetts, and Masschusetts law
said it was the exclusive remedy for such workers comp claims
2. Court explained once it found California had some substantial interest (here, worker hurt there),
then it could apply its own law (in fact, either state in this situation could have applied its own law
and not been in violation of the full faith and credit clause)

30

3. Full faith and credit does not here enable one state to legislate for the other or to project its
laws across state lines so as to preclude the other from prescribing for itself the legal consequences
of acts within it. - from opinion
Due process and full faith and credit issues
F. Watson v. Employers Liability Assurance Corp. (1954)
1. Louisiana court can apply direct-action statute against Massachusetts insurer (where contract
with insured made) since state had significant interest in tort that occurred within Louisiana and P
is domiciled in Louisiana
2. As long as state interest, within full faith and credit and due process restrictions
Due process and full faith and credit issues
G. Clay v. Sun Ins. Office, Ltd. (1964)
1. Court holds Florida law can apply in action involving a Florida P and loss of boat in Florida,
although K with insurance company was made in Illinois and P lived in Illinois at time K signed
a. Reasoning:
1. Insurance company knew P had moved to Florida with boat
2. P is a citizen of Florida
3. Insurance company licensed to do business in Florida
4. Loss in Florida
2. Court focuses on state interests here
a. If state interests are too slight, then due process kicks in
1. Here, though, state interests are significant
3. Conflict in law here:
a. Under Illinois law, suit had to be brought in 12-months under the K
b. Under Florida law, any restriction on suits less than five years was null and void
1. Contrast with Dick
a. No contacts analysis in that earlier case, but upon reflection, Texas
had no contacts with the parties
Due process and full faith and credit issues
NOTE: Due Process and Full Faith and Credit are tested by single, same test
H. Allstate Insurance Co. v. Hague (1981)
1. Court holds Minnesota court, in considering wreck claim from Minnesota accident, could
stack three insurance policies issued in Wisconsin for Wisconsin domiciled resident and despite
fact Wisconsin forbids stacking.
a. NB Minimum contacts for personal jurisdiction are NOT same as significant contacts
or significant aggregation of contacts for conflicts analysis
2. No due process or full faith and credit clause violations
a. Court identifies THREE contacts with Minnesota to establish significant contact or
significant aggregation of contacts creating state interest that was neither arbitrary nor
fundamentally unfair. (thus, it was constitutionally permissible)
1. Hague commuted to work in Minnesota
2. Allstate did business in Minnesota
3. P, Hagues wife, became a resident of Minnesota before filing suit
a. No indication she moved there just to sue
3. Minnesota is using the better rule approach here
a. NB Had Minnesota been under either First Restatement, Second Restatement then
claim would have been brought in Wisconsin
b. Even if Minnesota has a poor choice of law, that does not render it unconstitutional
4. Implied sub-rules for Allstate (if it expands a contract, then no)
a. Home Ins. Co. v. Dick (1930)
1. Single contact with Texas (domicile of P) was purely formal contact and not
enough to establish significant contact
b. John Hancock Mutual Life Ins. Co. v. Yates (1936)

31

1. After-acquired domicile in Georgia was not enough contact to apply Georgia

law to New York contract
a. Could there be some different result for a tort?
I. Phillips Petroleum Co. v. Shutts (1985)
1. Court finds application of Kansas law to investors claims, when 97 percent of investors had no
connection to Kansas, violated due process and full faith and credit clauses
a. Court notes OK for Kansas to exercise jurisdiction for this class-action
b. But Kansas cant apply its law to all of the claims
1. EG Texas, with Ps there, may apply different rate of interest on claims than
Kansas would
2. Given Kansas lack of interest in claims unrelated to that State, and the
substantive conflict with jurisdictions such as Texas, we conclude that
application of Kansas law to every claim in this case is sufficiently arbitrary and
unfair as to exceed constitutional limits. - opinion Judge Rehnquist
J. Sun Oil Co. v. Wortman (1988)
1. In same fact situation as Phillips Petroleum, lower court deftly concluded that all other states
with interest in the royalty litigation would apply the same liability rules as Kansas, so it was
permissible to apply Kansas law - UPHELD by U.S. Supreme Court
a. By finding as it did, lower Kansas court crafted a false conflict with other states, so
avoiding constitutional issues
b. U.S. Supreme Court only reviews misconstruction of other states laws to see if it
contradicts clearly established law
2. Statute of Limitations
a. Lower court also applied its own statute of limitations (5 years) to all of the claims,
even though many of the claims would have been time-barred in other states - UPHELD
by U.S. Supreme Court
b. Statute of limitations reasoned to be procedural issue, governed by forum law
c. NB how majority opinion distinguishes Substantive versus Procedural for
constitutional issues
1. CONCUR (Brennan) - Applying Allstate, determines contact state has with
claim simply being there creates sufficient procedural interest to apply its own
limitations period (a functional approach)

Obligation and the Right to Provide a Forum

K. Door-closing problem
1. Hughes v. Fetter (1951)
a. Court holds Wisconsin could not refuse to enforce Illinois wrongful death claim based
on Wisconsin statute that recognized only Wisconsin deaths under the statute (which the
lower court incorrectly reasoned created a public policy for recognizing wrongful deaths
elsewhere)
1. Refusing to enforce Illinois statute violated full faith and credit clause
a. Full faith and credit bars door-closing when its just because cause of
action is from another state
b. NB distinction if had been Canada
L. Reverse door-closing problem
1. Tennessee Coal, Iron & Railroad Co. v. George (1914)
a. Court holds P can sue in Georgia court under an Alabama statute that stated use of the
statute must be brought in a court within Alabama (ie., cant stop other states from
enforcing same liability elsewhere)
1. In short, Alabama cant force Georgia NOT to take the cause of action
M. Sovereign Immunity
1. Nevada v. Hall (1979)

32

a. Court holds doctrine that no state may be sued in its own courts without its consent
affords NO support for a claim of immunity in another sovereigns courts
b. Analysis
1. Nevada employee (from university) goes to California and has wreck
a. Being there enough to establish in personam jurisdiction in
California
2. California court applies California law in action
a. Nevada argues its own sovereign immunity limit for damages should
be applied under the full faith and credit clause and argues under the
11th Amendment
1. Court holds nothing in 11th Amendment prevents state-tostate suits in state court
2. Court holds full faith and credit does not require application
of Nevada law
3. Essentially, NO SOVEREIGN IMMUNITY must be
recognized in sister state
a. DISSENT CONCERNS
1. State-to-state retaliation
2. Weaker states at mercy of bigger
(stronger) states
2. Foreign Sovereign Immunities Act (adopted 1976)
a. Subject matter jurisdiction over foreign countries
1. Article III, 3, cl. 1
a. Have jurisdiction state versus a foreign country
b. Have jurisdiction citizen of state versus foreign country
c. NO jurisdiction foreign country citizen versus foreign country
b. General rule ( 1604)
1. Foreign state shall be immune to jurisdiction
a. NB Not a trial defense, but a complete defense to cause of action
2. EXCEPTIONS ( 1605)
a. Waiver of immunity
b. Action based upon commercial activity AND
1. Carried on in the United States
2. Act performed in United States in connection with
commercial activity elsewhere
3. Outside United States but has direct effect on United States
4. NB COMMERCIAL ACTIVITY
a. Broadly defined, either regular activity or just a
single act
b. Republic of Argentina v. Weltover, Inc. (1992)
1. Court holds Argentina engaged in
commercial activity with direct effect on
United States when it issued bonds as part of
currency stabilization plan and New York
was place of performance for foreign
sovereigns ultimate contractual obligations
and bondholders designated their accounts
in New York as place of payment
c. Saudi Arabia v. Nelson (1993)
1. Court holds allegation that Saudi
Government failed to warn American citizen
of hidden dangers associated with his
employment in Saudi Arabia did not bring
claim based on citizen's alleged detention
and torture in Saudi Arabia within
"commercial activity" exception to Foreign

33

Sovereign Immunities Act's bar to exercise

of federal jurisdiction.
2. There must be a nexus between
commercial activity and the claim (a
narrower reading of the statute)
c. Property right issues in United States (succession, gifts, etc.)
d. Certain torts (injury in United States)
e. Certain arbitration agreements
f. Violation of human rights
1. NB Must be a state sponsor of terrorism
g. Certain admiralty claims
h. Counterclaims against foreign in U.S. courts ( 1607)
c. Extent of liability ( 1606)
1. In the same manner and same extent as private individual under like
circumstances
2. NOT liable for punitive damages
d. Act covers (breadth):
1. Political subdivisions of foreign states, agencies and instrumentalities
a. Agency, instrumentality means entity which is a
1. Separate legal person, corporate or otherwise AND
2. Is an organ of a foreign state or political subdivision, or a
majority of whose shares is owned by foreign state or
subdivision
b. EG: Air France (falls under Foreign Sovereign Immunities Act)
1. In order to sue, would have to show certain things just to get
jurisdiction

Constitutional Limitations on Interstate Discrimination

N. Generally looking at:
1. Privileges and Immunities Clause
a. Applies to citizens (means natural persons, not corporations)
2. Durational Residency Issues
a. EG: Alaska cant give money to people based upon how long they have lived there (see
Zobel v. Williams (1982))
3. Equal Protection
Privileges and Immunities
O. Austin v. New Hampshire (1975)
1. Court holds New Hampshire commuter tax violates privileges and immunities
a. Cant tax out-of-state residents and not tax home-state residents
b. NB Could have challenged under equal protection as well
c. Underlying issues of claim
1. Basically want to treat people similarly, but whats wrong with giving some
favor (preference) to some (the prodigal son) (two children situation)
2. Court explains must be a substantial equality of treatment for taxing residents and
nonresidents
a. Here, commuter tax is not treating both nonresidents and residents substantially equal
1. NB New Hampshire might have argued that even though residents dont pay
commuter tax, they make up balance in high property, sales taxes while
nonresidents get disproportionate benefit of roadways and infrastructure
3. Prior cases
a. Ward v. Maryland (1871)
1. Court holds scheme requiring nonresidents to pay $300 per year for license in
trade in goods while requiring resident traders to pay only $12-$150 violated
privileges and immunities clause

34

b. Travelers Insurance Co. v. Connecticut (1902)

1. Court upholds scheme requiring nonresidents stock be assessed at market
rate while residents were assessed at market rate minus proportionate value of
all real estate
2. Court finds this is a reasonably fair distribution of burdens.
c. Shaffer v. Carter (1920)
1. Court upholds scheme placing special tax on income from nonresident
property when state also taxed income of citizens from whatever source derived
2. Nonresident was not treated any more onerously than resident
3. Benefit of having property there offset burden of special tax
4. Later case
a. Baldwin v. Montana Fish & Game Commission (1978)
1. Court upholds scheme charging out-of-state persons more fees for fishing and
licensing than in-state
2. Only those privileges and immunities that bear on the vitality of the nation
as a whole were deemed to be within the protection of the clause. - pg 420
Durational Residency Issues
-Cant do durational limits strictly for administrative convenience
-Cant do durational limits just to save money (cost-saving measures)
P. Shapiro v. Thompson (1969)
1. Court struck down one-year residency requirement before getting welfare benefits
2. Saenz v. Roe (1999)
a. Court struck down statutory limit on welfare benefits during persons first year of
residency
3. Other cases
a. Voter registration
1. Dunn v. Blumstein (1972)
a. Court struck down one-year residency requirement before allowing
to vote
b. In-state tuition
1. Vlandis v. Kline (1973)
a. Court struck down statute prohibiting person from becoming resident
while still a student
c. Divorce
1. Sosna v. Iowa (1975)
a. Court upheld statute requiring one year of state residence prior to
obtaining divorce
b. State interests
1. Dont want to be a divorce mill
2. Want to protect judgment from collateral attacks
3. Relief still available, only delayed (unlike welfare benefits,
which are gone forever)
Equal Protection Issues
Test (1) have a legitimate state interest and (2) means are rationally related to achieving interest
Q. Metropolitan Life Ins. Co. v. Ward (1985)
-Consider (1) whether state can discriminate to promote domestic business, and (2) how we frame the issue
affects outcome of the case
1. Court holds Alabama may not favor its own residents by taxing out-of-state corporations at a
higher rate based solely upon their residence
2. State argues:
a. Interest in promoting domestic business
b. Encourage investment in Alabama

35

3. Court rejects, finding cant discriminate against out-of-state corporations as a legitimate state
interest
a. Court finds tax is to punish out of state corporations, not to balance interstate
commerce (ie, its not some sort of retaliatory tax to make foreign state come in line, as
in Western & Southern Life Ins. Co. v. State Board of Equalization of California (1981))
1. Allied Stores of Ohio, Inc. v. Bowers (1959)
a. Court upheld tax that encouraged foreign corporations to build
warehouses within the state (ie, granted exemption on value of
merchandise if stored in warehouses in state)
b. Court concerned with federalism issues
1. Dont want one state passing its tax burden onto out-of-state residents who
have no say in the Legislature (shifting the tax burden)
4. nb Could not raise privileges and immunities challenges because corporations are NOT citizens
protected

Sample Flowchart of Analysis for Mississippi and Restatement Second

FIRST ASK: Is the issue substantive
or procedural?

Substantive

Procedural

Apply Restatement Second

Apply forum law

Consider Public Policy

implications
Consider constitutional implications
(due process, full faith and credit, equal
protection, privileges and immunities

36

37