PRIL: Chapter V. Choice of Law

1. Correlation between jurisdiction and Choice of Law
1. Factors that will justify jurisdiction may be the same factors that will determine WON it is proper for the forum to apply its own internal law (same factors for exercise of jurisdiction and internal law application)
2. If forum applies internal law because it has real interest in the case, plaintiff will bring suit in state which has real interest in applying its law (real interest determines jurisdiction and choice of law)
3. More likely forum would apply own internal law, so plaintiff would file before forum, internal law of which is favorable to him (where internal law favorable to him, choose that court)
*But there may be instances where no exercise of jurisdiction but internal law applies, or exercises jurisdiction but its internal law does not apply
2. Approaches to choice of law
2 important questions:
1. What legal system should control
2. What extent should chosen legal system regulate the situation
Ideally, choice-of-law theories should advance both:
*Justice
*Predictability
Classification of Choice of Law: Von Mehren and Trautman
1. Traditional Approach
-emphasize principles of simplicity, convenience and uniformity
2. Modern Approach
-relate to reaching appropriate results in particular cases
1. TRADITIONAL APPROACH
Vested-Rights Theory - Beale
-choice of law rules that are simple in form and capable of easy administration would promote uniformity of result, enhance predictability and discourage forum-shopping
-an act done in a foreign jurisdiction gives rise to the existence of a right if the laws of that state provides so, and this right is vested on the plaintiff and he could enforce it in any forum he chooses to bring suit.
-applies LAW FO THE PLACE OF OCCURRENCE OF THE LAST ACT necessary to complete the COA
GRAY v. GRAY
Facts: Sps Gray lived in New Hampshire
-H & W went to Maine. H drove their vehicle, then accident happened at Maine.
Maine: spouses barred from maintaining action against each other
NH: no prohibition
-W brought action for damages arising from personal injuries before NH
WON W had COA vs. H?
HELD: NO.
W argues that the only relationship with Maine is that the accident and injury happened there.
Status vs. incidents of status
Status: Husband and Wife
Incidents of status: those prescribed by the law of the place where the transactions took place.
-Maine law should be applied because it is where the accident happened, where the COA happened.
Maine law does not merely prohibit a suit between H & W, it provides that the acts complained of (by one against another) do not give rise to any COA. No breach of legal duty
*Local conduct should be governed by local law. Rules and conduct have no force to regulate acts done outside the jurisdiction which made the rules, save as their operation is enforced by control over parties found within the jurisdiction…
(so pano un, basta away mag-asawa wala lang. wala kaming pakialam sa inyo!)
ALABAMA GREAT SOUTHERN RR. CO. V. CARROLL
FACTS
All happened in ALABAMA:
*Carroll is a resident of Alabama
*Alabama Great Southern RR Co. (Company) is incorporated in Alabama
*Contract between Carroll and Company was entered in Alabama
What happened in Mississippi: Carroll got injured in Mississippi for the negligent failure of Company's employees to spot a defective link between 2 freight cars

Mississippi law	Alabama Law
No recovery for negligence caused by acts of "fellow servants"	Absolute liability on the company for injuries sufferred by employees in the course of their employment

-so Carroll bought suit in Alabama
WON Company Liable? (lower courts held YES)
HELD: NO
1. No COA in Mississippi where injury happened.
-there can be no recovery in one State for injuries to the person sustained in another unless the infliction of the injuries is actionable under the law of the State in which they were received
2. It doesn't fall w/n the exceptions
1. ON the negligence which produced the casualty being done in Alabama: no basis
-but even so, no COA arise in Alabama, as the injury was only sustained in Mississippi.
-The laws of Alabama (Section 2590) does not apply beyond Alabama
*SECTION 2590: When personal injury is RECEIVED IN ALABAMA by a servant or employee. The negligent infliction of an injury here under statutory circumstances creates a right of action here, which, being transitory, may be enforced in any other State or country the comity of which admits of it; BUT FOR AN INJURY INFLICTED ELSEWHERE THAN IN ALABAMA out statute gives NOR RIGHT OF RECOVERY, and the aggrieved party MUST LOOK TO THE LOCAL LAW TO ASCERTAIN WHAT HIS RIGHTS ARE.
2. Not entitled to recover under the EMPLOYER'S LIABILITY ACT (it is argued that  this involved an EER in Alabama, with a contract entered in Alabama):  citizenship and domicile of the parties irrelevant to the COA
***
Gray v. Gray: court automatically applied the law of the place of the wrong, rejecting a choice-of-law method based on reason, justice and expediency
-but should have looked behind the policy why prohibit suits between spouses
CRITIQUES to VESTED RIGHT THEORY 1. failure to resolve conflicts cases with reference to considerations of policy and fairness
2. Counterintuitive, arbitrary
Dr. Jovito Salonga:
1. Self-delusion of reasoning: when say that it is NOT the foreign law but the rights under it which are enforced by the courts
2. Not all rights acquired under foreign law are protected elsewhere, their protection not always desirable
3. Protection of rights and interests not the only factors to be considered
4. Not only protect vested rights but also foreign legal relationships which may result to extinction of duties and charges or invalidity of acts
5. Difficult to apply when the material aspect of a transactions equally touch two or more states
Local Law Theory: Walter Wheeler Cook
1. the power of a state to regulate w/n its territory has no limitations EXCEPT such as may be imposed by its OWN POSITIVE LAW
2. In conflict of laws problems the court does not enforce a foreign right but a right created by its own law by treating a case as a purely domestic case that does not involve a foreign element
CRITIQUE:
It tends to the "narrow-minded who may be inclined to depreciate the practical and equitable consideration that should control the adjudication of conflict cases in favor of an exaggerated local policy on the gound that they and the sovereign which they represent can do as they please"
Principles of Preference - David Caver
-choice of law should be determined by considerations of justice and social expediency and should not be the result of the mechanical application of a rule or principle of selection
-steps that must be done by the court:
1. Scrutinize the event or transaction
2. Compare carefully the profferred rule of law + result wich its application might work (vs. rules of forum)
3. Appraise results from standpoint of justice and social policy
-principle of preference: conceived to provide a fair accommodation of conflicting state policies and afford fair treatment to the parties caught up in conflicting state policies
-territorialist: look to the place where the significant events occurred or where the legal relationship is centered
1. MODERN APPROACHES
Place of the Most significant relationships - Willis Reese (2nd Restatement)
-plurality of factors:
(a) the needs of the interstate and international systems
(b)relevant policies of the concerned states
© relevant policies of other interested states and the relative interest of those in the determination of the particular issue
(d)the protection of justified expectations of the parties
(e) the basic policies underlying the particular field of law
(f) certainty, predictability, and uniformity of result
(g) ease in the determination and the application of the law to be applied
Consider factual contacts! Depends on the relative importance and relevance to the issue at hand
Torts:
1. Place where injury occurred
2. Place where the negligent conduct occurred
3. Domicile, residence or nationality of the parties
4. Place where the relationship between the parties is entered
Contracts:
1. Law chosen by the parties and in the absence thereof
2. Place of contracting
3. Place of negotiation of the contract
4. Place of performance
5. Domicile, residence, or nationality, or place of incorporation and place of business of parties
AUTEN v. AUTEN
Facts:
-Husband and Wife Auten married in England. They stayed together for 14 years and had 2 children
-Husband left wife. H went to NY.
-W went to NY to seek support from H. They executed SEPARATION AGREEMENT in NY:
1. H has to pay £50/month through a NY trustee for the support of his wife and children
2. Parties had to live separately
3. W cannot bring action relating to separation
-H did not give financial support, even with the SEPARATION AGREEMENT
-SO WIFE BROUGHT SUIT FOR LEGAL SEPARATION IN ENGLAND (adultery)
>H was served with processes, but nothing happened
-SO WIFE BROUGHT SUIT FOR ENFORCEMENT OF THE SEPARATION AGREEMENT BEFORE NY COURT
Defense of H: wife's institution of legal separation violates their Separation Agreement
(I forgot where I read it but NY law seems to prohibit agreements on Separation, while English law does not)
NY LC: found for H, applying NY Law
HELD: Apply England law so for W
discussion

If matters upon execution	If connected with performance
Includes interpretation and validity of the contracts	Includes breach of contract and excuses for the breach
law of the place where contract is made	law of the place where the contract, by its terms, is to be performed

CENTER OF GRAVITY/GROUPING OF CONTACTS THEORY
-courts, instead of regarding as conclusive the parties' intention or the place which has the MOST SIGNIFICANT CONTACTS
Cons: less certainty and rigidity
Pros: gives the place HAVING THE MOST INTEREST IN THE PROBLEM paramount control over the legal issues arising out of a particular factual context, thus allowing the forum to apply the policy of the jurisdiction most intimately concerned with the outcome of the particular litigation
-enables court not only to reflect the relative interests of several jurisdictions involved, but also to gie effect to the probable intention of the parties
WHY MORE SIGNIFICANT CONTACTS IN ENGLAND:
*separation between British subjects, married in England, had children in England, lived there for 14 years
*H willfully deserted and abandoned W and Children IN ENGLAND
*agreement was signed in US when H only had a temporary visa
*W only went to US because H would not go to England
*W returned to England after making H agree in US
*Support was to be paid in pounds (not dollars)
*H could visit Children in England
Only incidental that the contract was done in US because:
*it is where the H stayed
*Where the trustee stayed
>>>It is England which has the greatest concern in prescribing and governing the obligations of the English husband and father, and in securing to the wife and children essential support and maintenance
HAAG v. BARNES
FACTS: (illinois, Chicago and NY)
Barnes: Illinois Lawyer
Haag: NY Legal secretary
-the two had an illegitimate child
-after being pregnant, Haag went to CALIFORNIA to live with sister
-went to CHICAGO where the 2 entered into a SUPPORT AGREEMENT:
*Barnes would shoulder hospital expenses for birth
*Barnes would pay $275/month until the child reached age 16 to free him from any other obligation
*ILLINOIS LAW would apply

Illinois law	NY Law
Allowed agreements by parents of illegitimate child	DOES NOT allow

-Upon giving birth (in Illinois), Haag went back to work in NY with Child and returned to NY and field this support action (note: not enforcement of the support agreement)
-as defense: Barnes invokes the support agreement (probably the support sought was bigger than the amount in the Support Agreement)
HELD: Support Agreement valid (so in favor of Barnes?)
>Agreement provides in the choice of law clause that Illinois law (which allows it) would apply
>cited Auten v. Auten: even if the parties' intention and the place of the making of the contract are not given decisive effect, they are nevertheless to be given heavy weight in determining which jurisdiction "has the most significant contacts with the matter in dispute"
Contacts considered here:
1. Both parties were designated as "of Chicago, Illinois" + defendant's place of business in Illinois
2. Child was born in Illinois
3. Persons designated to act as agents for the principals are residents of Illinois, and so were the attorneys of both parties
4. All contributions for support were from Chicago
What only happened in NY:
1. Child and mother presently lives in NY
2. Part of the "liason" took place in NY
*The public policy of this state having been satisfied (because the welfare of the child is fully protected), there is no reason why the provisions of the Support agreement should not be enforced under Illinois law and to treat it as A BAR TO THE PRESENT ACTION FOR SUPPORT
***
Restatement 2d: state of the most significant relationship
Auten v. Auten: "center of gravity", "place of the most significant contacts", "Grouping of contacts"

Auten	Haag
The wife's home was the center of gravity	The husband's home was the center of gravity

CRITIQUE:
*used to support virtually any result, hamper sound development of common law
*how to determine (standard) which of the contacts were significant and how to evaluate relative importance of a group of contacts
Interest Analysis - Brainered Currie
-look at the policy behind the laws of the involved states and the interest each state had in applying its own law
-factual contacts alone did not determine the outcome of a case UNLESS they reflected a state policy which would be advanced by application of the substantive state law
-determine which state had the real interest in having its law applied
Babcock v. Jackson
Facts:
This is the case where the neighbor, who just came with her neighbor couple, got injured when they were on their way to Ontario. So she sued her neighbor! (kikisama ka na nga lang eh…)
-Bobcock and the spouses Jackson were neighbors in NY
-they went to Ontario, where Mr. Jackson lost control of the car. Bobcock was badly injured
-Bobcock sued Mr. Jackson in NY

NY	Ontario
Requires a tort-feasor to compensate his guest for injuries caused by his negligence	Has a statute that makes the driver/owner of the vehicle liable for bodily injury of a person being carried in that vehicle IF IT IS OPERATED IN THE BUSINESS OF CARRYING PASSENGERS FOR COMPENSATION

-Defense of Mr. Jackson: Ontario law governs (since he is not a passenger vehicle driver, he is not liable…)
WON Mr. Jackson should be liable
HELD: YES. More contacts in NY. Ontario only involved because it is where the accident happened.
Interests of the 2 states compared

NY	Ontario
To make tort-feasor liable for the injury resulting from his negligence	To prevent fraudulent assertion of claims by passengers, in collusion with the drivers, against insurance companies

>Ontario has no conceivable interest in denying a remedy to a NY guest against his NY host for injuries suffered in Ontario by reason of conduct which was tortious under Ontario law.
*the rights and liabilities of the parties which stem from their guest-host relationship should remain constant and not vary and shift as the automobile proceeds from place to place
*where the issue involves standards of conduct, it is more likely that it is the law of the place of the tort which will be controlling but the disposition of the other issues must turn, as does the issue of the standard of conduct itself, on the law of the jurisdiction which has the strongest interest in the resolution of the particular issue presented.
Van Voorhis, Dissent:
Auten v. Auten not applicable in the ralm of torts.
-simply a form of extraterritoriality if apply law to other states…
-no overriding consideration of public policy which justifies or directs the change in the established rule…
****
Babcock: application of NY Law advanced the policy reflected in that law, while the failure to apply Ontario law did not impair the policy behind the law.
Critique:
*conflicts cases were ordinarily concerned only with private and not governmental interests
*unworkable, it will require the court to decide each case in an ad hoc basis
*not all state legislatures published committee reports that explained the background and purpose of the laws - courts speculate
*not all laws reflected policy or had a purpose other than to decide cases
Comparative Impairment - William Baxter
-subordination of the state objective which would be least impaired
-courts weigh conflicting interests and apply the law of the state whose interest would be more impaired if its law were not followed
Functional Analysis - Donald Trautman and Arthur Von Mehren
-after determining the concerned jurisdiction or interested state
-looked into:
> the general policies of the state beyond those reflected in its substantive law
>policies and values relating to effective and harmonious intercourse between states
e.g. *reciprocity
*advancement of multistate activity
*protecting justifiable expectations
*evenhandedness in dealing with similar cases
*effectiveness
-then consider the relative strength of a state policy (policy-weighing)
e.g.
Miliken v. Pratt (1981)
Facts: Daniel Pratt, resident of Massachusetts, was sued by Miliken and Co. as a guaranty on his wife's loan, as required by the company.
-loan executed in Maine

Massachusetts law	Maine Law
Spouse can't act as surety for the other's obligation	Spouse can be a surety for the other's debt

-suit brought in Maine
HELD: DANIEL LIABLE
-contract was complete when Miliken received Daniel's guaranty and extended credit on the strength of his guaranty
-place of contracting was Maine
 Trautman and Von Mehren comments: at the time the decision was made, restrictive policy on the right of women was on the wane in Massachusetts so at that time, the contract was made not based on a strongly held policy.
-functional analysis: consider WON the law of a state reflects an "emerging" or "regressing" policy
Choice-Influencing Considerations  - Robert Leflar
(1) predictability of results
(2) maintenance of interstate and international order
(3) simplification of judicial task
(4) application of the better rule of law
(5) advancement of the forum's governmental interests
Vs. interest analysis which apply a particular rule of substantive law in order to implement a policy reflected therein
-courts would prefer rules of law whether they are forum law or another state's law as long as they make "good socioeconmic sense for the time the court speaks and are sound in view of present day conditions
Critique: absence of principled and objective standards by which superiority of law over another may be determined.