Conflict of Laws

Perritt

 

Final Examination

 

Question I

 

Spring, 1999

 

Model Answers

 

Question I

 

Question 1(a) – Susan needs to show that she was John’s wife at the time of his death and to avoid the unusual intestate succession rules of jurisdiction C.

 

In order to show that she was John’s wife at the time of his death, she needs to establish the validity of her common-law marriage and to show that it was not polygamous, i.e. that John was not still married to Samantha when he married Susan.  The best way to avoid the polygamy problem is to show that John’s divorce from Samantha was valid.  To do that, she needs to persuade the court (which court is discussed later in the answer to this question) to recognize the divorce judgment of foreign country D.  Full faith and credit does not apply to judgments from foreign countries, but comity does.  There is no indication of any irregularity in the country-D proceeding, and default judgments are entitled to recognition just like contested judgments.  The fact that Samantha had notice of the divorce proceeding is the most important element of due process and, Susan would argue – though this is the weakest part of her argument – that all of the details of American concepts of personal jurisdiction need not be applied to foreign country judgments. Thus, the fact that Samantha had no contact with jurisdiction D should not matter.

 

If she sues in State A, she has the strongest likelihood of establishing the validity of her common-law marriage because State A would likely apply its own policy recognizing common-law marriage. The problem is that there is no apparent basis for jurisdiction over an estate matter in State A.

 

She does not want to sue in State C, which clearly would have jurisdiction over the real estate because of the likelihood that State C would apply its own intestate succession laws.  So she probably should sue in State B where she is domiciled, arguing that State B has implicit jurisdiction over the marital estate of its domiciliaries.  If she sues in B, she has to persuade the courts of B to recognize the common-law marriage.  Her full faith and credit argument is weakened by the fact that a common-law marriage is not a judicial act but only arguably a “public act.”  Nevertheless, the usual choice of law rule for the validity of marriages is to look to the law of the place of the marriage, which is State A which would validate her marriage.  The interests of State B presumably are pro-marriage, and this should reinforce her full faith and credit argument that the courts in all

states should defer to the law of the place of the marriage whether or not it is evidenced by a judicial decree. 

 

Now, she needs to avoid application of the intestate succession laws of C.  She would argue that there is at least a minority rule in the United States that all aspects of intestate succession are determined by the law of the domicile of the decedent – State B -- which would give the widow all of the property.  She can reinforce this argument by noting that the interests of State C in applying its rule are limited to circumstances that might actually give operative effect to the incentive to write a will.  Since State C was not the domicile of John, State C should have little interest to whether he wrote a will or not.  Thus, the policy of interests of State C in application of its unusual rule are served only in cases involving decedents who are domiciliaries of that state, which is not the case here.

 

The plaintiff needs some choice of law approach that avoids the traditional rule of lex res sitae.  In advancing these arguments, she must recognize that the traditional rule was applied more strongly to real property than to personal property.  Real property has a fixed location and enforcement of any judicial order affecting it depends on the legal and enforcement sources of the sovereign wherein it is located.  The practical arguments are thus strongly for application of the law of that sovereign than with respect to personal property which is movable from sovereign to sovereign and thus may inherently implicate the laws of multiple sovereigns.   Despite the magnitude of her challenge in overcoming a traditional rule, the plaintiff should assert the eclectic approach embraced by the Restatement (2nd) of Conflict of Laws. 

 

Under § 6 of the Restatement (Second) of Conflict of Laws, governmental interests analysis includes assesment of:

 (a) the needs of the interstate and international systems,

   (b) the relevant policies of the forum,

   (c) the relevant policies of other interested states and the relative interests of those states in the determination of the particular issue,

   (d) the protection of justified expectations,

   (e) the basic policies underlying the particular field of law,

   (f) certainty, predictability and uniformity of result, and

   (g) ease in the determination and application of the law to be applied.

Governmental interests analysis includes, as part of this analysis the four

factors enumerated in the Restatement (Second) of Conflict of Laws

 

§ 145:

a) the place where the injury occurred;

b) the place where the conduct causing the injury occurred;

c) the domicile, residence, nationality, place of incorporation and

place of business of the parties; and

d) the place where the relationship is centered.

 

Section 6 interest analysis applies to choice of law regardless of the nature of the issue.  Section 145, on the other hand, is intended to apply to court issues.  Section 6 thus is applicable to disputes involving intestate succession to real property, while Section 145 is applicable only as a guide or by analogy.

 

The first factor of Section 6 requires that the courts of State B give careful consideration to the appropriateness of applying the substantive law of another sovereign. That is           of little help to Susan.  The second factor allows Susan to argue that the policies of her domicile and the domicile of her deceased husband should be paramount, especially those allowing the widowed spouse to take the entirety of an intestate estate when there are no children.  They, she would argue, are premised on ensuring that the widowed spouse receive the benefits of contributions she had made during the marriage to the acquisition of marital property, and to making sure she does not become a burden on that sovereign’s welfare system.  She would argue that the third factor does not militate, as it might seem, in favor of the application of the law of State C, because its policies, encouraging the making of wills, are relevant only to its own domiciliaries and not to domiciliaries of other states and to the administration of decedents’ estates located in other states, as to which the laws of domicile traditionally applies.

 

The fourth factor cuts against her, because of the traditional nature of the majority rule applying lex res sitae.  She can turn the fifth factor in her favor, arguing that the basic  policies underlying intestate succession law are best served by centralizing and simplifying the administration of a decedent’s estate.  That is best done by applying the law of the domicile of the decedent rather than possible application of many different laws from many different states depending on where the property in the estate is located.

 

She can argue that the sixth factor and the seventh also militate in her favor because centralization and application of a single state’s law to a state administration is predictable and simple.

 

Question 1(b)  – Samantha needs to show that she was still married to John when he died and to avoid application of State C’s intestate succession  rules.  Samantha gets two bites of the apple to show she was still married to John.  First, and strongest, is the argument that the divorce decree from foreign country D is invalid because it was unsupported by personal jurisdiction.  There is nothing in any of the major cases on personal jurisdiction that comes close to suggesting that mere notice is enough without some sort of contacts with the forum state.  Samantha never had any contact with foreign country D, and thus it would violate due process to recognize that divorce judgment because it was unsupported by personal jurisdiction, which is an aspect of due process.  Accordingly, she was still married to John when John purported to enter into a common-law marriage to Susan in State A.  Because State A does not recognize polygamous marriages, even under the law of State A, the common-law marriage between Susan and John was invalid. 

 

Accordingly, Samantha is John’s widow and entitled – but to how much?

 

As in the analysis in the answer to Question 1 (a) Samantha, like Susan, needs to avoid the application of State C law, which means she probably should avoid suing in State C, which is the most logical place from the standpoint of personal jurisdiction.  The courts of State C definitely have jurisdiction over the property located there.  She may have difficulty establishing jurisdiction over the estate of John if she sues in her own state – presumably State F.  Accordingly, she probably should sue in State B – the domicile of  John at the time of his death.  In the courts of State B, she will argue, just as Susan argued in the answer to Question 1 (a), that both the law of the domicile of a decedent should apply to questions of intestate succession and that interest analysis does not suggest that the unusual law of State C should be given effect to persons not domiciled there and they might have written a will. 

 

I should note that for both Susan and Samantha, the “best rule of law” approach might be helpful because the rule of State C is so unusual and the usual interest in providing for the widowed spouse is diluted by giving half the estate to the state to the situs of the property. 

 

 

 

 

Question 2 (a) – The best argument for the plaintiffs is to persuade the court to apply the substantive law of jurisdiction E, but not its mandatory arbitration provisions.  The mandatory arbitration provisions are discussed in the answer to Question 2 (c). 

 

Under Erie, a federal court sitting in diversity must apply state substantive law.  Under Klaxon, this includes the state choice of law rule.  Thus, the federal court must apply the choice of law rules of State B.  I assume that these choice of law rules are in the mainstream of American law. As such, they would point to the substantive law of State B under the tradition rule of lex loci delicti (the law of the place of the wrong) which clearly is State E.  That is where the accident occurred.  Thus, under traditional choice of law principles, the federal court would be obligated to award punitive and treble damages.  Also, under the most significant contacts test, State E’s damages rule should apply as well although there were contacts (domicile) with State B, the more significant contacts – the operation of the motor vehicle, the drunk driving, and the accident -- all occurred in State E.  Also, under the interest analysis approach, State E substantive law should apply.  State E has an interest in deterring drunk driving on its roads, and seeing guests from other states driving on its highways fully compensated for their injuries.  State B has no interest in regulating drunk driving on State E’s roads, and its interest in seeing its domiciliaries fully compensated for their losses is not interfered with by the more complete compensation provided for under State E’s law.

 

Since this is a tort case, the factors of Restatement Section 145 are directly applicable.  The first two of these militate in favor of the application of the law in State C.  The third is a toss-up because of the different domiciles of the parties.  The fourth factor really does not come into play because the relationship between plaintiff and defendant is not really centered in any one state.

 

Question 2 (b)

 

The plaintiffs may best be served by arbitrating in State E, while the defendant may best be served by litigating in some other state because of the likelihood that forums prefer their own substantive law.

 

Under the interest analysis framework of Restatement, set forth in the answer to Question 2, the defendant can argue that the policies of the forum are best served by applying local law, which strikes the appropriate balance between plaintiff and defendant interests rather than applying the law of a foreign forum which embodies an idiosyncratic approach that is too pro-plaintiff.  He also can argue that simplicity, predictability of result, and protection of expectations are better served by applying the more traditional damages rule rather the special rule of State E.  He can expect to be confronted by the counter arguments that the second factor strongly militates in favor of application of State E law because the accident occurred there and his misconduct occurred there.  Moreover, the traditional rule of the law of the place of the wrong more completely serves the expectation factor and the simplicity factor.

 

The defendant drunk driver needs to avoid the application of State E’s substantive law.  One way to do that  is  to  argue  that  the entire  package of  the  State E

wrongful death statute, including its mandatory arbitration provisions, should be applied and therefore that the lawsuit in court in State B must be dismissed.  That possibility is discussed more fully in the answer to Question 2 (c).  Because there is a possibility that the arbitration provision could be severed from the substantive provisions of State E’s  law, as discussed in the answer to Question 2 (c), the defendant also must have arguments as to why State B substantive law, eliminating federal damages, must be applied.  Preliminarily, it would note that under Allstate and Sufa, State B is entitled to apply its own law because it does have an interest in some contacts in State B.  One of the plaintiffs and the decedent were domiciliaries of  State B.

 

Next, the defendant should argue that lex loci delecti is an obsolete and unduly rigid rule, and therefore should not be accepted as the choice of law rule of State B.  In terms of contacts, the defendant should argue that State B has more contacts than State E.  The contacts of State E were purely fortuitous; it is not even clear that the decedent knew that he was in State E.  There is no reason that the fortuity of his presence in State E should result in a windfall for the plaintiffs, who had no contacts with State E at all.  The defendant would argue that the damage rules requires striking a balance between the interest of the plaintiff and interest of defendants, and that State B has done this, and State B’s substantive laws reflecting that balance should be applied.  Moreover, the State E rule is unusual and hardly can be characterized as the “best rule.”  State B’s rule is more common and therefore is the better rule. 

 

A weaker argument for the defendant is that damages are procedural and therefore the law of  the forum should  be applied.  Of course, if the choice of law rule of State E is such that it would point back to State B, renvoi be used in the defendant’s favor. 

 

Question 2 (c) – Whether arbitration or judicial resolution is used to resolve a dispute as a procedural issue, and therefore the law of the forum should be applied, which would result in the case not being arbitrated.  On the other hand, what is procedural and what is substantive depends on how closely linked the provision in question is to the clearly substantive provisions of law.  Because the arbitration provision is contained in the wrongful death statute of State E, it is tightly bound up and might seem to be substantive.  Probably the strongest argument against applying arbitration derives from federal law. Just as in the case, in which federal 7th Amendment and other procedural interests militated against outright application of the New York provision relating to appellate re-examination of facts decided by juries, the federal interests mandate access to federal court.  Application of State E’s mandatory arbitration provision would conflict with this and must give way. 

 

Question II

 

Question 1 – Collins must argue that the English judgment is not entitled to recognition under the doctrine of comity.  (Full faith and credit does not attach to this English judgment because it comes from a foreign country.)  Collins best argument is that the English court lacks personal jurisdiction over him.  Thus, to recognize the English judgment would violate the due process clause of the United States Constitution, interpreted in the personal jurisdiction context in international Shoe.  Collins would argue that none of  the traditional bases for personal  jurisdiction  existed to support the English because he was not domiciled there, had never been there, and conducted no business activities there.  Cyberplex will counter by arguing that Collins reached out to England by contacting its web server and purchasing stock in an English company.  He thereby purposefully availed himself of English law and it is thus fair to subject him to the jurisdiction of the English court.  Cyberplex probably has the better side of this argument, so Collins faces an uphill battle to avoid enforcement of the English judgment 

 

The Brussels convention has nothing to do with this part of the problem because it only governs jurisdiction and judgment recognition among signatories to the convention, and the United States is not a signatory.  Article 4 of the EEC Jurisdiction and Judgments Convention applies the law of the forum to determine jurisdiction over a defendant not domiciled in a Contracting State.  Thus English law, rather than the Convention applies to the suit by Cyberplex against Collins.

 

If Collins entered into a valid contract with Cyberplex or with the issuer of the stock and the contract contained a forum selection clause consenting to jurisdiction in the English courts, Collins is sunk.  But the question does not suggest the existence of any such contract.

 

The question does not say what substantive law was applied by the English court. If English  law rather than Illinois law were applied, Collins also might have some prescriptive jurisdiction arguments, but they probably would be weak because so much of

the stock purchase transactions and the issuer were located in England, thus giving England a legitimate interest in applying its own law.

 

Question 2 – The English courts can be expected to apply the same comity doctrines explored in the answer to Question 1.  As in Question 1, the Illinois judgment is not entitled to recognition if it was unsupported by personal jurisdiction.  Collens will argue that the Illinois courts had personal jurisdiction over Cyberplex because it engaged in business in Illinois by making its web site available to Illinois residents for them to purchase stock.  The problem with this argument is that it is a stream of commerce argument rejected in Worldwide Volkswagen and not accepted by the majority of the Supreme Court in Asahi.  If facts exist that somehow suggests targeting of Illinois by Cyberplex, then Collens has a much stronger argument that Cyberplex purposefully availed itself of Illinois law and therefore that personal jurisdiction is appropriate.  The rules that the comity doctrine would suggest be applied for determining personal jurisdiction are those governing adjudicative jurisdiction in international law, which are basically similar to those adopted by International Shoe and its progeny.  Another basis for denying enforcement of the Illinois judgment in England would be that the English judgment was valid and preceded the Illinois judgment, and therefore that raised res judicata bars in the Illinois Court.  That would depend on the substantive claims asserted in England and Illinois, and we have no information about the nature of those claims.

 

Because we have no information about the nature of the claim asserted in Illinois, there is no reason to suppose that there is any prescriptive jurisdiction argument available for Cyberplex.  In any event, this appears to involve a securities dispute, and  U.S. cases are abundant in their authority for the proposition that U.S. securities laws applies even to the extra territorial aspects of a transaction involving a U.S. stock purchaser.

 

Question 3 – It would make some difference, but not much.  Full faith and credit under the United States Constitution would apply rather than comity to the recognition of the judgments.  On the other hand, judgments unsupported by personal jurisdictions are not really judgments, and therefore are not entitled to full faith and credit.  The same arguments on both sides of the personal jurisdiction question involving both the Illinois and Alabama judgments reviewed  in the answers to Questions I and II would apply in analyzing Questions III.