Transcript Document

Agenda for
th
11
Class
• Personal Jurisdiction in Dick, Allstate, and Shutts
• Constitutional Constraints (continued)
– Austin
– Ely
• Sara Persons’s Presentation
– Forum Selection Clauses: The De Facto Choice-of-Law Clauses
• Choice of Law in Federal Court
– Klaxon
– Van Dusen
• Federal Legislation about Choice of Law
– Gottesman article
Personal Jurisdiction – Allstate & Dick
• Allstate v Hague
– Defendant does not seem to have challenged personal jurisdiction
– No lower court opinions published
– MN Supreme Court. “We are of the opinion that there is no real question of
jurisdiction of the Minnesota court. Where plaintiff is a resident of the state
and decedent's estate is probated in Minnesota, defendant does business in
this state and was properly served with process, the Minnesota court has
jurisdiction of the case.”
– US Supreme Court. “Allstate was at all times present and doing business in
Minnesota…. Here, of course, jurisdiction in the Minnesota courts is
unquestioned…”
• Dick v Home Insurance (First hypothetical discussed in last class)
– US Supreme Court in Allstate v Hague notes. “Dick sought to obtain quasi–in–
rem jurisdiction by garnishing the reinsurance obligation of the New York
reinsurer. The reinsurer had never transacted business in Texas, but it ‘was
cited by publication, in accordance with a Texas statute; attorneys were
appointed for it by the trial court; and they filed on its behalf an answer which
denied liability.’ There would be no jurisdiction in the Texas courts to entertain
such a lawsuit today. “
Personal Jurisdiction – 2 other hypos
• Watson v Employers Liability(2nd hypo)
– No discussion of issue
– District court and Court of Appeals dismissed on other grounds, so did not
address jurisdiction issue
– Supreme Court reversed on choice-of-law grounds, so did not address
jurisdiction issue
– Parties free to litigate on remand
• But no opinion on remand
• Clay v Sun Insurance (3rd hypo)
– Seems to have been no discussion of jurisdiction
Personal Jurisdiction -- Shutts
• Due process standards for class action plaintiffs are not the same as for
defendants
– Defendant must hire counsel and travel to forum to defend self
– Defendant subjected to discovery
– Defendant might have to pay damages
– Plaintiffs stand only to lose claims that could bring individually or in
other class action
– Plaintiffs represented by class counsel
– Plaintiffs protected by class action rules about conflicts of interest
• So due process does not require that plaintiffs have minimum contacts with
the forum (much less purposeful availment)
• Due process requires only minimum procedural fairness
– Notice, opt out, adequate representation
Austin (1975)
• NH imposed commuter tax equal to lesser of 4% or income tax rate of
commuter’s home state
– Effectively no equivalent tax on NH residents
• Maine residents get Maine income tax credit for commuter tax paid to NH
• USSC
– Commuter tax violates Privilege’s & Immunities Clause, b/c falls
exclusively on non-residents
– Not saved by fact that, b/c of Maine tax credit, Maine residents pay, in
aggregate, no additional tax
• Just invites retaliation
• Statutes evaluated in isolation
– Blackmun
• No individual standing, b/c no increase in aggregate taxes
Ely
• Austin shows that it is unconstitutional to treat non-residents differently than
residents, even if just subjecting them to burdens their home state would impose
– NH tax not saved by the fact that NH not imposing higher tax on Maine resident
(4%) than Maine imposes on its own residents (>4%)
• Under this standard, modern choice of law methods are unconstitutional, b/c
frequently disadvantage non-residents by imposing their own law on them.
• DK example
– Suppose Nevada law caps pain and suffering damage at $100,000, while
California law does not.
– Suit 1. Cal plaintiff v Nevada defendant, accident in Cal. No cap on damages
– Currie. True conflict. Cal law applies
– Comparative impairment & Restatement 2nd. Probably Cal. law,
because Cal is forum, location of accident, and plaintiff’s residence
– Suit 2. Nevada plaintiff v Nevada defendant. Cap on damages
– Common domicile case
– Nevada plaintiff is disadvantaged in Suit 2 by having own law imposed on it,
when similarly situated California plaintiff would not
Laycock Example
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Suppose Mary from Maryland and Del from Delaware take turns driving.
One night Mary drives, they get into an accident, and Del is hurt.
Another night Del drives, they get into an accident, and Mary is hurt.
Delaware has a guest statute and Maryland does not.
Mary sues Del in Delaware. Del counterclaims
Mary v Del. True conflict. Delaware guest statute applies
Del v Mary:
– Currie. Unprovided for case. Delaware’s guest statute applies.
• Laycock oddly asserts that Currie would not apply guest statute
– Other modern analyses. Delaware’s guest statute does not apply, because
guest statute to protect Delaware defendants. Nevertheless, Delaware allows
tort suits for car accidents and has an interest in compensating Delaware
residents. So Delaware tort law, without guest statute, applies. (Kramer).
Ely Q’s I
• How general is the problem that Ely is concerned about?
– Can you think of a hypothetical involving contracts that shows discrimination
similar to that in the auto accident cases that Prof. Klerman put in square
brackets to illustrate Ely’s argument?
– Can you think of a hypothetical involving statutes of limitations that shows
discrimination similar to that in the auto accident cases that Prof. Klerman put
in square brackets to illustrate Ely’s argument?
• Ely argues that Allstate v Hague is inconsistent with Austin, because the outcome
would have been different if the plaintiff’s residence had been different. Is that
correct?
• Ely argues for a return to the rules of the First Restatement, except in common
domicile cases, where he agrees that it makes more sense to apply the law of the
state of common domicile. Can you think of a hypothetical under Ely’s proposed
choice of law regime which shows discrimination similar to that in the auto
accident cases that Prof. Klerman put in square brackets to illustrate Ely’s
argument?
Ely Qs II
• Ely mentions that according to Huber, an influential 18th century conflict of laws
thinker, contractual capacity, at the time Constitution was drafted and ratified, was
determined by the law of the party’s domicile. Can you think of a hypothetical
involving the contractual-capacity-follows-the-parties’-domicile choice-of-law
regime that shows discrimination similar to that in the auto accident cases that
Prof. Klerman put in square brackets to illustrate Ely’s argument?
– What does this imply about the constitutionality of modern choice of law
approaches?
• Ely argues that Austin is wrong. Do you agree?
• Do you think that modern choice of law approaches violate the Full Faith & Credit
Clause?
Erie Doctrine
• Swift v Tyson (1842).
– Federal courts apply state statutes, but “general common law”
– Rules of Decision Act requires federal courts to apply “state law”
• Common law is not “state law”
• Erie (1938).
– Federal courts in diversity cases must apply state substantive law, including state
common law
– Statutory: Rules of Decision Act.
• Common law is “state law” not “brooding ominipresence of reason”
– Constitution: Neither Congress nor judiciary have power to make tort law or
other areas of common law -- Probably wrong
– Policy of discouraging forum shopping between federal and state courts
• But Erie allows forum shopping between state courts and between federal
courts located in different statess
– Federal courts can apply some federal law
• E.g. FRCP (Hanna)
• Rough distinction between substantive law (state) and procedural law
(federal)
– But Court says that’s not distinction (Guaranty Trust)
– Depends primarily on whether application of federal law would
encourage forum shopping between federal and state courts (Hanna)
Klaxon (1941)
• Issue was pre-judgment interest (like Shutts)
• Federal district courts must apply choice of law rules adopted by
state courts of state where federal court located
• Otherwise federal and state courts sitting next to each other would
apply different law
• Non-uniformity between federal courts is result of federal system
Van Dusen (1964)
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Airline crash in Boston, lots of deaths
Some plaintiffs filed suit in PA
Defendant requested and was granted transfer of case under 1404 to Boston federal
court
Q. Should Boston federal court apply PA or MA choice of law principles
USSC. Boston federal court should apply PA choice of law principles
– Otherwise, transfer could be equivalent to motion to dismiss
• e.g. where transferee court would apply shorter statute of limitations)
– Plaintiffs have “venue privilege” not upset by 1404
– Courts would be reluctant to order transfers if law might change
– Federal diversity jurisdiction should not give defendant’s choice of law advantage
not available in state court
• If in state court, not transfers between state courts, so plaintiff’s choice of
forum and resulting choice of law would be respected.
Note that transfers under 1406 different
– 1404. transfers when venue in original forum proper
• Choice of law of transferor forum applies
– 1406. transfers when venue in original forum improper
• Choice of law of transferee forum applies
Questions on Klaxon and Van Dusen I
• Why is it so important for there to be uniformity of law between federal and state
courts located in the same state?
• Why is it more important that there be uniformity between federal and state courts
located in the same state than between federal courts located in different states?
• The Court in Van Dusen states that a Pennsylvania state court might not apply
Massachusetts’s caps on wrongful death damages, even though that court would
apply Massachusetts wrongful death law. Why might a Pennsylvania state court
decide Massachusetts’s damage caps were inapplicable?
• The Court in Van Dusen states that the plaintiff has a right to choose the court.
Why? Is that a right that plaintiffs should have?
• Is the Court’s assumption that the plaintiff has a right to choose the court
consistent with the existence of 1404, which gives federal courts the power to
transfer cases from one federal court to another?
• The Court assumes that it should respect a plaintiff’s right to select applicable law
by choosing the court. Why? Is that a right that plaintiffs should have?
• Van Dusen involved a transfer of venue requested by the defendant. What if the
plaintiff requested the transfer of venue? Should the transferee court still apply
the choice of law rules of the state in which the transferor court was located?
Questions on Klaxon and Van Dusen II
• If a case is brought in state court in State A, and the state court thinks courts in
State B would be much more convenient, then the court in State A can dismiss the
case on forum non conveniens grounds. In that situation, the plaintiff must refile
the case in state court in State B, and the court in State B will apply its own choice
of law rules. What does that suggest about the law that should be applied in
federal court when a case is transferred under 1404 because the court where the
plaintiff filed was very inconvenient?
• In footnote 2, the Court states that the transferee court “may still apply its own
rules governing the conduct and dispatch of cases in its own court.” How is that
consistent with the holding of Van Dusen? What rules might the Court have been
referring to?
Questions on Gottesman
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Do you agree with Gottesman that American choice of law is “wasteful and unfair”? Can
you think of reasons other than the ones he mentions why the current system is
problematic? Can you think of reasons why the situation is not as problematic as he
describes?
Do you agree that it would be good to have federal choice of law rules that preempted
state laws?
Do you agree that it there should be federal choice of law rules only in frequently
litigated contexts, but that other disputes should be left to state choice of law rules?
Do you agree that Congress rather than the federal courts should generate federal
choice of law rules?
Do you agree with Gottesman’s proposed choice of law approach? Can you think of a
better one?
Do you agree with Gottesman that just about any uniform, federal solution would be
better than the current situation?
Do you agree with Gottesman’s proposed rules for statutes of limitations?
What rule would you formulate for product liability? Do you agree that choosing the
law of the place of wrong (manufacture) would lead to a “race to the bottom” (p. 15)?
Do you agree that McConnell’s solution (law of the place of purchase) “is worse than
the evil to which it is addressed” (p. 17).