Choice of Law in the United States Gregory E

Hastings Law Journal Volume 38 | Issue 6 Article 1 1-1987 Choice of Law in the United States Gregory E. Smith Follow this and additional works at: https://repository.uchastings.edu/hastings_law_journal Part of the Law Commons Recommended Citation Gregory E. Smith, Choice of Law in the United States, 38 Hastings L.J. 1041 (1987). Available at: https://repository.uchastings.edu/hastings_law_journal/vol38/iss6/1 This Article is brought to you for free and open access by the Law Journals at UC Hastings Scholarship Repository. It has been accepted for inclusion in Hastings Law Journal by an authorized editor of UC Hastings Scholarship Repository. Choice of Law in the United States by GREGORY E. SMITH* Perhaps no legal subject has caused more consternation and confu- sion among the bench and bar than choice of law.1 Much of the bewil- derment is attributable to the fact that the modern choice of law era did not begin until approximately 1963.2 Since then, courts have struggled mightily to come to grips with various modern choice of law theories put forth by conflicts scholars. The decisions in any given jurisdiction are often decidedly, perhaps wildly, inconsistent. Added to this is the fact that published conflicts decisions are quite rare. Although conflicts cases arise at the trial level fairly often, many years may pass before a court of 3 last resort is called upon to resolve a difficult choice of law problem. Thus, confounded judges are left to grapple with a smattering of irrecon- cilable and sometimes incomprehensive precedents. It is no small won- der that many judges have dreaded seeing choice of law cases on their dockets. There are approximately a half-dozen separate choice of law theo- * Member, Michigan Bar. B.S. 1983, Defiance College; J.D. 1986, The University of Toledo Law School. 1. "Choice of law" is the phrase generally used to describe that branch of the subject of conflict of laws which deals with the processes by which courts select the substantive law governing particular cases. The term "conflict of laws" is often used synonymously with "choice of law," and will be so used in this Article. Literally, however, the former term is broader than the latter, and includes within its domain such topics as domicile, establishment of jurisdiction, and enforcement of judgments. Choice of law describes only the process courts use to determine the applicable law in a case which concerns more than one jurisdiction. 2. As Professor Sedler has pointed out, 1963 was a watershed year for choice of law in theory and in practice. In that year, the late great Professor Brainerd Currie's writings were collected in B. CURRIE, SELECTED ESSAYS ON THE CONFLICT OF LAWS (1963). Also in that year, Judge Fuld of the New York Court of Appeals wrote the opinion in the most famous of all choice of law cases, Babcock v. Jackson, 12 N.Y.2d 473, 191 N.E.2d 279, 240 N.Y.S.2d 743 (1963). See Sedler, Interest Analysis and Forum Preferencein the Conflict of Laws: A Response to the "New Critics," 34 MERCER L. REV. 593 (1983). 3. In New York, for example, there was not a single choice of law decision in the court of appeals during the thirteen-year span between Neumeier v. Kuehner, 31 N.Y.2d 121, 286 N.E.2d 454, 335 N.Y.S.2d 64 (1972) and Schultz v. Boy Scouts of Am., 65 N.Y.2d 189, 480 N.E.2d 679, 491 N.Y.S.2d 90 (1985). In the interim between these two decisions, each of the seven seats on the court of appeals changed hands at least once. [10411] THE HASTINGS LAW JOURNAL [Vol. 38 ties currently in use. Nevertheless, courts have shown a distinct inability to distinguish them. Courts often say they are using one theory when their opinions clearly show that they are using another. At other times, courts utilize any number of choice of law methodologies in order to reach the desired results, apparently reasoning that twenty conflicts scholars cannot be wrong. This process, known as eclecticism, makes it 4 extremely difficult to sort out the precedents. Unfortunately, the complexity of a legal concept is often directly proportional to its practical importance. Choice of law is no exception. The choice of law decision may determine the success or failure of a lawsuit, the amount of damages recoverable, or the legality of a defense raised. It is essential, therefore, that judges and lawyers be able to sort out the various choice of law theories and to determine which rules gov- ern in their respective jurisdictions. To aid in this determination, this Article catalogues and analyzes all of the significant choice of law decisions handed down in the modern era and, when appropriate, provides forecasts of which theories are likely to prevail in particular jurisdictions in the future. The Article begins with a brief introduction to the choice of law problem, including a description of the various choice of law theories currently in vogue, and then pro- ceeds to make a comprehensive survey of the choice of law methods currently used in the fifty states and the District of Columbia. 5 4. Professor Reppy, in his wonderful article, Eclecticism in Choice of Law: Hybrid Method or Mishmash?, 34 MERCER L. REv. 645 (1983), identifies seven "types of eclecticism" used by the courts. They are: (I) "methodless ad hoc decisionmaking" - the judge decides which party he wants to win and writes an opinion to match; (2) "pure better law in dis- guise"--the judge makes his choice of law decision on the basis of which substantive law he likes better, but disguises his method by referring to more policy-blind considerations; (3) "confused lower court or federal court judge"-conflicting precedents create confused decisions; (4) "kitchen sink" - the judge purposely utilizes all available choice of law theories and gives each theory one "vote" toward his selection decision; (5) "odd-numbered mishmash" - differs from the "kitchen sink" only in that not all available theories are given "votes"; (6) "blend of coffee" - using a second choice of law method to resolve a conflict left unresolved after application of the primary method; and (7) "uninformed judge" - the judge doesn't know what he is doing because he is incapable of recognizing the characteristics which distinguish one modem choice of law theory from another. Id. at 651-55. 5. The inspiration for this project was provided by Herma Hill Kay in her leading article, Theory into Practice: Choice of Law in the Courts, 34 MERCER L. REv. 521 (1983). Pro- fessor Kay was interested in determining precisely in what manner the theories developed by her academic colleagues were being applied in the courts. Her emphasis was on the judicial development and utilization of choice of law theory. My focus is instead on the courts them- selves: What exactly have the courts of any given jurisdiction done in regard to choice of law, and where are they likely to go in the future? August 1987] CHOICE OF LAW I. Choice of Law Systems A. First Restatement The Restatement of Conflict of Laws, 6 historically the primary reference for choice of law decisions in the United States, requires in each case the application of the law of the geographical place where the key event occurred by which plaintiff became possessed of a cause of action. This key event, in the case of a tort, is the place where the defendant allegedly committed the wrong.7 The place of wrong, in turn, is the place where the last event necessary to create the defendant's liability occurred.8 Ordinarily, this last event is the plaintiff's injury. For this reason, the place of wrong rule is often renamed, as is done here, the place of injury rule. The First Restatement also provides an all-encompassing rule for choice of law in contract cases. Under that rule, the validity and con- struction of a contract will be determined with reference to the law of the place of making, 9 where "the principal event necessary to make a contract occurs."10 Issues concerning the sufficiency of performance under a contract are governed not by the place of making, but by the law of the place where performance is to occur. 1 In the great majority of cases, the place of making and the place of performance are within the same jurisdiction. In cases where they are not, however, the court's characteriza- tion of the issue as one of validity or performance of the contract becomes crucial in the choice of law process.' 2 The courts did not question the appropriateness of these broad rules 6. RESTATEMENT OF CONFLICT OF LAWS (1934) [hereinafter First Restatement]. 7. See id. §§ 377-397. 8. See id. § 377. 9. See id. §§ 311-347. 10. Id. § 311 comment d. 11. Id. §§ 355-372. 12. Indeed, one of the criticisms of the First Restatement's contract rules is that a court may avoid the application of the law called for by the rule through the expedient of recharacterizing an issue of contractual validity as one of performance, or vice versa. In conflicts parlance, this is known as an "escape device," an exercise in creative verbiage by which a court makes an a priori decision as to which law it will apply, and then defines the issue in such a way as to lead to the desired result. Another escape device is the familiar substantive/ procedural dichotomy, under which issues relating to the merits of the case are determined via the normal choice of law process, but issues which can be presented as relating merely to procedure are governed by the law of the forum.

Load more