CONFLICTS OF LAW OUTLINE

Chapter 1: INTRODUCTION Why Study Conflicts? You should always ask yourself the following questions: 1. Where to file the suit Jurisdiction? a. Which State has a relationship that would allow them to render a judgment against the defendant? 2. Which law applies? Substantive or Procedural? 3. What is the effect of the judgment (can it be exported) How do you enforce a judgment somewhere else? The three important topics that conflicts law attempts to resolve: 1. Domicile (legal residence) 2. Jurisdiction Subject Matter Personal o General or Specific o In personum, In rem, Quasi in rem) 3. Choice of law *The concept of conflicts in these various areas does two things: (1) It lends legitimacy to the decisions that are ultimately made (recognition that the parties had a fair opportunity to present their case when they had their day in court); and (2) to bring some uniformity to the results.

Chapter 2 Domicile: The Chosen Point of Entry Domicile: Theoretically, there is but one domicile per individual. In TN, your domicile is a place to which, when you are away from it, you intend to return. A good definition of domicile is as follows: It is where you reside with an intention to abide, to stay there for good. Which, when you are gone from, you intend to return. Why is Domicile important? It is a contact point, the point with which you have a relationship with a sovereign (which would trigger the application of their laws). It's important to resolve jurisdictional issues. In re Estate of Jones: Jones came to America from Wales and became a citizen of Iowa. Jones decided to move back to Wales and he deposited $20,000 in an Iowa bank for safekeeping until he got to Wales. In route to Wales, the ship he was aboard sank and he died. Jones' domicile at the time of his death would determine the distribution of his estate. This case held that Jones' domicile of choice was Iowa at the time of death because he hadn't completely made it back to Wales. A domicile, once legally acquired, is retained until a new domicile is secured, and in the acquisition of such new domicile, both the fact and the intention must occur. Just intending and taking steps toward making Wales his new domicile was not good enough. As soon as you physically arrive with the intent for this to be your domicile...then it is. Three types of domicile: 1. domicile of origin (that of their parents when they were born) 2. domicile of choice 3. domicile by operation of law The Artificial Fiction of Reverter: this is an English rule which provided that: when a person left a domicile of choice intending never to return and it seemed unrealistic to say that the person retained a domicile there, the domicile of origin, originally acquired by operation of law, would renew again by operation of law, until a new domicile of choice had been acquired. The US does not apply this rule. White v. Tennant: White had been domiciled all of his life in West Virginia where his extended family resided. White and his wife then moved to a part of the family farm across the Pennsylvania border. They got there and started unpacking. Wife got sick with typhoid and they were invited to stay in West Virginia with extended family until wife recovered. White got sick and died without ever spending a night in their Pennsylvania home. Under West Virginia law, his wife got everything, under Pennsylvania law, his estate would be split with his wife and siblings. Court held that he had in fact intended to make Pennsylvania his new domicile and that it had become so. In this case, as compared to Jones, White had actually made to his new domicile of choice with the intent of remaining there. He had perfected his choice. *For a change in domicile of choice you must have: abandonment, intention, action and actual arrival at the new domicile. * Ships: it is part of the common law and the law of nations, that a ship on the high seas is a part of the territory of that state to which she belongs; and therefore an English ship is deemed
2

to be part of England. This wasn't mentioned in Jones. This would apply, for example, where an American woman, pregnant, gave birth to a child mid-ocean, on a ship registered to Britain. The ship is territory of where it's registered so the child would have dual citizenship. * Wives & children: domicile by operation of law results generally from the domestic relations of husband and wife, or parent and child. At one time wives' domicile was considered that of her husband but now in the US, the domicile of either spouse is determined by their individual intentions and actions. Until emancipated, a legitimate childs domicile is that of the parents and, if the parent's are separated, that of the parent with whom the child is living. * Declarations of intentions: where a person claims to be domiciled, should be given some weight, however, it may be overcome by evidence of strong circumstances to the contrary * Nationality as a connecting factor: In many continental countries, nationality rather than domicile is used as the basis, or "connecting factor," for determining the governing law for certain personal rights. * Residence: Residence, rather than domicile, is the connecting factor usually found in statutes. However, the context in which the word "residence" is used must be examined closely....because it's possible for a person to have more than one residence...but they can only have one domicile. * Improper Motive: The impropriety of a person's motive in coming to a place does not prevent his acquisition there of a domicile. Legal residence does not depend upon the legality of the object of the residence; it rests upon physical presence in a dwelling coupled with an intent to make that dwelling one's home. * Military: domicile of person in the military is their point of entry into the armed forces. * Voter registration: can be evidence of one's domicile...but it is just one factor to look at. Concerning prisoners, there is a split regarding whether they can consider the prison location their new domicile. In re Estate of Clark: Clark died while domiciled in Virginia with his wife. His estate consisted of property in New York and Virginia, the bulk of which consisted of securities held in a NY bank. His will required that his estate be administered under the laws of NY. Widow elected against the will. There was argument as whether NY or Virginia law should apply to the distribution of Clark's estate. The court held that as between two states, the law of that one that has the predominant, if not sole, interest in the protection and regulation of the rights of the person or persons involved should be invoked. A husband, domiciled in a foreign state, by selecting NY law to regulate his testamentary dispositions, cannot cut off or otherwise affect the more favorable right given his widow to elect by the law of their domicile. Here, the right of a widow to inherit despite the will is not a testamentary disposition, but rather a restriction on the right to make a testamentary disposition. The rights of the widow are more protected under Virginia law, so that is the law that applies. Concerning how property passes: *Real property is governed by the law of the location or situs. *Personal property is governed by the law of the domicile of the decedent.
3

In this case the property in question was personal property situated in NY. In his will, Clark tried to change the law. *The forum law will determine the domicile of the litigants using the forum's law and conflicts law. The forum, the court, will determine domicile of the party or parties using the forum's law, including their own conflicts law. *By mutual agreement, two parties may select the law and forum to apply in case of dispute. However, in a unilateral transaction, one party cannot confer or select the law or forum. Rodriguez-Diaz v. Sierra-Martinez: P lived in Puerto Rico. At age 17, he was involved in a car accident. He subsequently moved to NY. He later filed a personal injury action against the D and a medical facility in US District Court in Puerto Rico. At the time he filed the action, he was 18. Puerto Rico's age of majority was 21, while NY's was 18. The district court dismissed for want of diversity, holding that since P was a minor under Puerto Rico law he was incompetent to change his domicile and thus remained a Puerto Rican domiciliary. A person may change his domicile to another state even if, under the law of the former domicile, he is incompetent to do so. The state of a person's domicile, for purposes of diversity jurisdiction in federal court, is not determined by state law but rather by federal common law. *There is no federal common law as it relates to substantive law in diversity cases, as this is governed by the law of the state. In this case, the P could not file suit and then move to establish diversity jurisdiction. Here though, he moved first and then filed suit. *Whenever one is faced with a question about jurisdiction, 2 analyses' are required: (1) does the court have subject matter jurisdiction; and (2) does the court have in personum (or in rem) jurisdiction Federal courts are courts of limited jurisdiction. They are limited to (1) federal questions and (2) diversity of citizenship jurisdiction. Federal courts cannot have common law applied to substantive law in diversity of citizenship cases, however, the federal courts can have common law regarding the construction of federal statutes, constitution, treaties, etc. They used federal common law to determine the P's domicile in this case because they were interpreting their own statute. Alvord & Alvord v. Patenore: The D's were originally domiciled in NY where they sued by P. However, before they were served with process, they decided to move to Switzerland. Process was served by placing copy in the mail and affixing a copy to their apartment door while the D's were in France in route to Switzerland. Court held that the existing domicile, whether of origin or choice, continues until a new one is acquired. Because D's had not reached Switzerland when service was made, the substitute service was effective and valid. * You must establish domicile by actually getting to the location after a move. To constitute a change of domicile of choice, there must be actual residence in the new place, with intention to abandon the old and to acquire the new one. The mere intention to acquire a new domicile avails nothing, and an actual removal, though not merely temporary, is insufficient without concurrent intent.
4

Chapter 3: JURISDICTION of COURTS Introduction to Jurisdiction and General Considerations Jurisdiction: basis sufficient to allow court to decide & effectuate rights of parties, whether controversy is related to parties or not. In personam: jurisdiction over person. Power which a court has over the defendant's person and which is required before a court can enter a personal or in personal judgment. In rem: power of a court over a thing so that its judgment is valid against the rights of every person in the thing. Quasi in rem: type of jurisdiction of a court based on a person's interest in property within the jurisdiction of the court. Refers to proceedings that are brought against the defendant personally; yet it is the defendant's interest in the property that serves as the basis of jurisdiction. Special appearance: limited appearance to object to court's jurisdiction. General Appearance: submitting to jurisdiction of the court.

TYPES OF JURISDICTION General Jurisdiction: Defendant is resident of where court is. Specific Jurisdiction: cause of action related to contact in forum. Examples: You are driving your Ford in AL and tire blows out. Tennessee Court has general jurisdiction over Bridgestone because company resides here. Alabama court has specific jurisdiction because the cause of action arose there. Buchanan v. Rucker: In this case, the plaintiff sued and received a judgment from a court on the island of Tobago. He brought a copy of the judgment to the courts of London to have it executed. The defendant objected on the grounds of inadequate service. He hadn't been present on the island and the judgment had been awarded by default. Plaintiff countered that it was the law of the island that service could be made on those who were absent from the island by nailing a copy of the summons to the court house door. The court said that even if the law of the island was understood to mean that service could be made on anyone in this fashion, whether or not they had ever been on the island, the courts of that island had no authority or power to bind the citizens of any country in that fashion. Issue: Can the island of Tobago bind the rights of the whole world? Holding: Before the judgment of a court can be given legal effect, the court must have jurisdiction over the parties at the outset of the action. rt does not follow its own rules then other courts will not give it credit.

General common-law requirements for Jurisdiction: 1. Subject matter jurisdiction 2. Notice to defendant 3. Some contact with parties or property

Will one forum recognize the judgment of another forum? We have a federal system in which there are certain constitutional principles that interplay. First, as to how a forum relates to the individual citizen, both as a federal citizen and a state citizen. That is the due process clause. Then we have the full faith and credit clauses of the US Constitution as the states relate to each other. And then we have the Supremacy clause as the states relate to the federal forum. All of these interplay in this analysis. The 5th Amendment deals with due process and Federal action. The 14th Amendment deals with due process and State action. Due process = fundamental fairness. Article IV of the US Constitution is the Full Faith and Credit Clause. It mandates that each state give full faith and credit to the judicial proceedings of sister states. 28 USC 1738 give us a basis for recognizing other states' judgments for enforcement. When a judgment comes across a state line for enforcement, that enforcing court is supposed to make a cursory examination to see that there was (a) subject matter jurisdiction and (b) a type of relationship, a proper basis, for the entry of due process for the judgment. If they dont find it, that state should refuse to enforce the judgment. If we are dealing with foreign forums, international forums, and we are dealing with judgments between sovereigns, then that is a matter of "comity." Not as a matter of right, but a matter of courtesy, acceptance, with the expectation of reciprocal enforcement. Bases of Judicial Jurisdiction Over Natural and Legal Persons In Search of new Jurisdictional Standards: The Era of International Shoe, "Minimum Contacts", and "Fairness" (SPECIFIC JURISDICTION) International Shoe Co. v. State of Washington D (corp) had a salesman in Washington and had a good business there although D did not have an office there. The D did not pay unemployment compensation assessments in the state of Washington so the state sued D by service of process in two manner; 1) serving one of the salesman working in Washington and 2) sending one by mail to the St. Louis office of D. The suit took place in state court and D lost. The State of Washington was trying to hold the company responsible for its local taxes even though the only presence was a small sales force. Issue: Whether the Washington State court had jurisdiction over the D (a corporation located in another state but employing salesmen to work in Washington)... Holding: Yes. The corporation maintained minimum contacts with the state and therefore the state could take it to court. The rule enunciated is that in order to subject the D to a judgment in personum, if the corporation be not present within the territory of the forum, that "he have such minimum

contacts with it that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." Due process requires only that in order to subject the D to a judgment in personum, if he be not present within the territory of the forum, that he have such minimum contacts with it that the maintenance of the suit does not offend traditional notions of fair play and substantial justice. This is the case that established the minimum contacts test Must be a reasonable and fair determination Must consider the inconvenience to D, what they actually did in the state, and how extensive and continuous their contacts are Claim and the parties must be related to the forum

Long Arm Statute Types Specific Up to maximum extent of due process Other Means of Obtaining Jurisdiction In state service of process Consent Appearance Domicile Factors to Consider After Minimum Contacts Established The burden on the defendant The foreign states interest The plaintiffs interests The judicial systems interest o The interest of the several states in furthering fundamental substantive social policies McGee v. International Life Insurance This was the case of the Texas insurance company sued in the California Court even though the company did not have any presence in the state. Texas refused to extend full faith and credit to a California judgment in favor of the plaintiff. Holding:The USSC found that the insurance contract formed sufficient basis for jurisdiction The company did have sufficient contact with the state even though the plaintiff was the only policy holder in the state. Contract was delivered in CA, mailed from there, and the insured was a resident of the state when he died. Company had actual notice and company did not respond she obtained a default judgment. This case went farther than any other and the Supreme Court backed away in three months. Hansen v. Denckla Hansen v. Denckla
7

Trust established in Delaware by Donner who was domiciled in Pennsylvania. Donner later retired and moved to Florida. In Florida, Donner executed another Delaware trust worth $400,000 for the benefit of her daughter and she also executed a will for the benefit of two other daughters. She died and will was probated in Florida. The two other daughters filed an action in Florida court to invalidate the terms of the will and trust, so the corpus would go back into the estate. Delaware trustee filed suit claiming the trust was valid under its laws. Neither the Delaware court nor the Florida court would recognize the judgment of the other. The USSC found only two issues, whether Florida had properly exercised jurisdiction over nonresident defendants, and whether Delaware should have honored the Florida decision. The Florida court had said that its probate authority over the Donner will was enough to give it jurisdiction over the nonresident beneficiaries and trustees. The court disagreed, pointing out that such a position would give all probate courts jurisdiction over all nonresident defendants in all states with no further contacts required. The Florida court found that the execution of the second trust was comparable to the insurance contract in McGee. Court said this case is distinguished because the Delaware trustee never performed any acts in Florida, whereas the insurance co. in that case had made many contacts in California. Since the Florida courts had no jurisdiction over the trustees, they had no jurisdiction over the other parties. Holding: Supreme Court held that there were insufficient contacts with the Delaware trustee to exercise jurisdiction of the trustee, who was an indispensable party to the litigation. World-Wide Volkswagen Corp. v. Woodson Forseeability Test Plaintiffs were NY residents and bought their car from a NY dealer. On a move to Arizona, they were involved in an accident in Oklahoma. They brought a claim against the dealer in Oklahoma and the Oklahoma Supreme Court claimed that Oklahoma did have jurisdiction. Appealed to USSC based on the due process clause. Holding: Court said the main issue was the foreseeability of being brought into court in OK. Dealer did not foresee the vehicle ending up in OK since they primarily did business in NY and NJ. Insufficient minimum contacts. The real purpose of this case was to try to get this case into State court. Two Functions of Minimum Contacts: 1.Protects the defendant against the burdens of litigation in a distant or inconvenient forum (reasonableness or fairness). 2.Acts to ensure that the States through their courts do not reach out beyond the limits imposed on them by their status as coequal sovereigns in a federal system Foreseeability: That the defendants conduct and connection with the forum State are such that he should reasonably anticipate being hauled into court there. Keeton v. Hustler Magazine Plaintiff sued over 5 separate issues of Hustler which she claimed libeled her. She lives in NY but sued in NH. Only contact with NH is circulation of 10K-15K issues a month. NH had a longer statute of limitations. (It was the only state where the statute of limitations had not ran.)
8

The USSC found that there is no justification for restricting libel actions to the plaintiff's home forum. Holding: Hustler does have minimum contacts and is sufficient to support an assertion of jurisdiction in this libel action. Bottom line is that contacts were sufficient and the single publication issue was not addressed. This is an intentional tort and the intent is transferred to the general populace in a defamation act. Stream of Commerce Theory First Seen Here in This Case - Products delivered in the stream of commerce with the expectation that they will be purchased by consumers in the forum State. Calder & Keeton Notes (pg. 84-88) Calder v. Jones (1984) Keeton's companion case was Calder v. Jones (1984), where a CA domiciled actress claimed to have been libeled by an article in the national Enquirer. The plaintiff sued in CA, and the USSC held that both the writer and the editor, who were both domiciled out of state, had minimum contacts with the forum. Court pointed out that the defendant's intentional and allegedly tortuous, actions were expressly aimed at CA and that plaintiff suffered the majority of her harm there and the magazine had its largest circulation in CA. Calder set forth the concept of "the effects of the defendant's conduct out of state on the state exercising jurisdiction." * Whether a court can exercise jurisdiction over an out-of-state parent corporation, when the subsidiary does business in the forum state? The USSC wrote in the Schlunk case, "In the only cases in which it has considered the question, this Court held that the activities of a subsidiary are not necessarily enough to render a parent subject to a court's jurisdiction, for service of process or otherwise. The court in Gallagher v. Mazda Motor of America (E.D.Pa.1992) reviewed the case law and adopted a broadly phrased test: "jurisdictional contacts of a subsidiary should be imputed to the parent, for purposes of service of process when the subsidiary is engaged in functions that, but for the existence of the subsidiary, the parent would have to undertake. When the courts subject the out-of-state parent to jurisdiction in the state in which the subsidiary acts or has acted, they may do so on agency principles or by disregarding the corporate separateness ("piercing the corporate veil"). If, as a result, of "piercing", the two are the same, service on the subsidiary is service on the company. *Whether personal service on a partner gives jurisdiction to bind partnership property outside the state? If the firm were owned by an individual, his presence in the state would be a sufficient basis for a valid personal judgment that could be enforced against his firm's property elsewhere. On the other hand, if the nonresident firm were incorporated, mere presence on personal business of a shareholder, officer, or director would not furnish a basis for an in personum judgment against the corporation.

The Restatement provides some guidance on this topic: Partnerships or Other Unincorporated Associations: (1) A state in which a partnership or other unincorporated association is subject to suit in the firm or common name has power to exercise judicial jurisdiction over the partnership or association if under the circumstances it could exercise judicial jurisdiction over an individual.... (2) A valid judgment rendered against a partnership or association is a binding adjudication as to the liability of the partnership or association with respect to its assets in every state. Comment... d. Effect of judgment. A valid judgment rendered against a partnership or other unincorporated association under the circumstances stated in Subsection (1) will be recognized and enforced in other states, and, as between States of the US, this result is required by full faith and credit. An action to enforce the judgment may be maintained against the partnership or association in another state, provided that it is subject to the judicial jurisdiction of that state and by the local law of that state may be sued in its firm or common name. If by the local law of the second state the partnership or association is not subject to suit in its firm or common name, the action to enforce the judgment may be maintained against the members individually, but recovery will be permitted to be had only out of firm, as opposed to individual property. Compuserve v. Patterson CompuServe is a computer information service out of Columbus Ohio. They offered to purchase computer software to assist them. An attorney out of Texas, Patterson got the contract and agreed to place the computer software on the system. There was an agreement that staid the contract would be governed and construed in accordance with Ohio law. CompuServe started marketing their own software that was so similar to his that he sued. CompuServe filed a declaratory judgment in Ohio. Issue: Does Ohio have personal jurisdiction? Yes. The Ohio long arm statue is one of those that extend to the limits of due process. He entered into a contract agreeing to be governed by Ohio law. He intended to conduct business with the Ohio Company. It was an ongoing relationship. He knowingly reached out to Ohio and benefited by that. Bailey v. Turbine Design, Inc. (W.D. Tenn. 2000) A Florida Company posted defamatory statements about an out-of-state competitor (located in Tennessee) on the Florida Company's own website. The website was viewed by their customers in and around the Florida area. The TN plaintiff tried to bring the defendant to Tennessee to defend the defamation suit. The court held that just posting such statements on their own website was not enough contact to give Tennessee jurisdiction. However, if they had emailed this defamatory material to customers in Tennessee, that might be sufficient contact for Tennessee to exercise jurisdiction. This case is persuasive only--not binding. ecommerce: A passive site like the one in Bailey will probably not give Tennessee jurisdiction. A very active site where the defendant is projecting themselves out of their home state and into
10

others might suffice to establish sufficient contacts so that it would not violate due process to make the defendant go to those other states and defend such a suit. Gibbons v Schwartz-Nobel (TN. Ct. App. 1996): Defamation case based on the Switched at Birth case. One of the children sued based on inaccuracies and pain and suffering. Her claim was based on unauthorized use of her name and story. No real contacts in Tennessee. The only contact with TN was that the video was distributed to a library in TN by email. The plaintiff was from Florida and the defendant company was in California. The claim was dismissed and affirmed on appeal. ***In Federal District Court, in diversity cases, the federal district courts only have jurisdiction if the underlying state court would have in personum jurisdiction. It uses the same standards as the states. Burger King v. Rudzewicz Fairness factors This was a case of a Michigan franchisee who defaulted on his agreement with Burger King and was sued by BK under Florida law. The Florida Corporation sued the defendant in Florida over not paying franchise royalties. The agreement stated FL law was to settle disputes. The FL court exercised jurisdiction over the defendant and the USSC upheld that exercise. Holding: A contract can be a sufficient contact with a forum. Defendant purposefully reached out and negotiated with a FL corp. and purposefully availed himself of its benefits. The defendant had a 20 year contract with Burger King which involved negotiations with the plaintiff headquarters in FL as well as the purchase of equipment from FL and ongoing supervision from FL. All agreements were to be made and enforced in Florida. Defendant knew this and voluntarily consented to FL jurisdiction. A contract with a choice of law provision, in itself, is not sufficient to confer jurisdiction...but is a factor in making the jurisdictional determination. The defendant in this case purposefully established minimum contacts by reaching out beyond Michigan and purposefully negotiating the contract with the Florida Corporation. The cause of action MUST relate to the minimum contacts. A single purchase within a forum does not necessarily give in personum jurisdiction over the person (specific or general). Where individuals purposefully derive benefit from their interstate activities it may well be unfair to allow them to escape having to account in other States for consequences that arise proximately from such activities; the Due Process Clause may not readily be wielded as a territorial shield to avoid interstate obligations that have been voluntarily assumed. Once Defendant purposefully established minimum contacts with the forum state, these factors are to be considered to determine whether assertion of personal jurisdiction comport with fair play and substantial justice. o 1. The burden on the defendant o 2. The states interest in adjudicating o 3. The Plaintiffs interest-convenient and effective relief. o 4. Judicial systems interest in obtaining resolution o 5. Shared interest of the several states social policy A contract is but a contact
11

Choice-of-law provisions are a factor that may be considered for jurisdictional purposes but the court does not tell us how they can be considered. R. deliberately reached out beyond Mich. And negotiated with a Florida Corp. for the purchase of a franchise and its benefits. The Burger King case is good for the plaintiff's bar.

Asahi Metal Industry Co., Ltd. V. Superior Court of California This is the tire stem case that deals with the Japanese manufacturer (Asahi) who provided the stems to a tube company in Taiwan. The tube causes an accident in CA and everyone is sued. The tube Co. brings Asahi in as a 3rd party defendant and Asahi files a motion to quash summons claiming the Court has no jurisdiction. The key issue is does an awareness that your product will reach the U.S. subject you to the jurisdiction of the Courts here. Holding: No. There was no purposeful act directed at this forum. There is no fair play since Asahi would have to transverse a great distance to defend itself. Interests and contacts are so slight that they do not rise to the level required by International Shoe. Stream of commerce concept is still up in the air with the USSC. Even if contacts are met is it fair? To allow an exercise of personal jurisdiction (due process) the action of the defendant must be purposefully directed at the forum State, something more than the mere act of placing a product in the stream of commerce. "The placement of a product into the stream of commerce, without more, is not an act of the defendant purposefully directed toward the forum State." Sometime the circuit court misinterpret the decisions of the supreme court and continue to rule differently. This is what happened after World-Wide Volkswagen; therefore, the supreme court ruled on this case which is so similar to Volkswagen. 4-4 On the Stream of Commerce personal jurisdiction. The substantial connection. . . Between the defendant and the forum state necessary for a finding of minimum contacts must come about by an act of the defendant purposefully directed toward the forum state. As long as a participant in the process is aware that the final product is being marketed in the forum State, the possibility of a lawsuit there cannot come as a surprise. Nor will the litigation present a burden for which there is no corresponding benefit. Purposefully directed factors: o 1. Designing the product for the market in forum. o 2. Advertising in the forum. o 3. Establishing channels for providing advice to customers in the forum. o 4. Marketing the product through a distributor in the forum state. 8-0 on the exercise of jurisdiction not meeting the fair play and substantial justice standard. Factors: Burden on defendant, interest of the forum, plaintiffs interest, interstate judicial systems interest and shared interest of the several states.
12

Pavlovich v. Superior Court Pavlovich is a resident of Texas and president of Media Drive a Texas company. He posts information and a company out of California finds out about it and files suit in California. The company said he misappropriated their trade secrets knowing that his actions would virtually impact an array of substantial California business and industries. The court said no jurisdiction in California. The website merely posted information. It was not transacting any business. His acts were not to cause intentional harm to the company. Knowledge alone was insufficient. Courts have applied the effects test to other intentional torts, including business torts. . . Courts have struggled somewhat with Calders import, recognizing that the case cannot stand for the broad proposition that a foreign act with foreseeable effects in the forum state always gives rise to specific jurisdiction. Passive posting is the opposite end. Simply posting information that is accessible in a foreign jurisdiction is not enough. Middle ground-Where a user can exchange information jurisdiction depends on a examining of the level of interactivity and the commercial nature of the exchange. California joins with other jurisdictions that require additional evidence of express aiming or intentional targeting. Internet-At one end of the spectrum are situations where defendant clearly does business. Enters contracts, knowingly and repeated transmissions over the internet-personal jurisdiction is proper

*Moki Mac River Expeditions v. Drugg (page 110) Trying to analyze the minority view in Helicopteros. But for those contacts, the C/A would never have arisen. This considers contact that occur over the entire course of events. Substantive Relevance/Proximate Cause. This requires forum-related contacts to be substantively relevant, or even necessary, to prove the claim. Here purposeful contact that is a proximate cause of injury. Sliding Scale This approach examines the relationship between forum contacts and the litigation along a continuum. As forum contact goes up, the degree of relatedness to the litigation necessary for specific jurisdiction goes down. Substantial connection to operative facts. The forum contacts are a critical step in the chain of events that led to injury. Adopted by this court. Special Jurisdiction -??? Make sure you understand General Jurisdiction real well for this course. The United States Supreme Court has recognized that a nonresident who places products into the stream of commerce with the expectation that they will be sold in the forum state is subject to the forums jurisdiction. Purposeful availment alone will not support an exercise of specific jurisdiction. Purposeful availment has no jurisdictional relevance unless the defendants liability arises from or relates to the forum contacts. The arise from or relate to requirement lies at the heart of specific jurisdiction by defining the required nexus between the nonresident defendant, the litigation, and the forum.
13

For a nonresident defendants forum contacts to support an exercise of specific jurisdiction, there must be a substantial connection between those contacts and the operative facts of the litigation. General Jurisdiction Perkins v. Benguet Consolidated Mining Co. (1952) The defendant was a Philippine mining corporation. During the Japanese occupation of the Philippines, its operations had been halted. The president of the corporation continued to transact company business from Ohio. After the war, still from Ohio, the president also supervised the corporation's recovery from the occupation. The president was served with process in Ohio. The U.S. Supreme Court ultimately held that the Ohio courts were not obliged by due process to exercise jurisdiction. Neither is prohibited from doing so. In this case, the cause of action did not relate to any incident in Ohio. The Ohio Court has jurisdiction over the defendant if it wants, because the defendant is there in Ohio. This is an example of power based jurisdiction. This is a general jurisdiction case. The fact that the defendant was physically present in Ohio is what counts. The fact the claim is not related to any event makes virtually no difference. The Supreme Court of the United States held that the due process clause of the Fourteenth Amendment did not compel Ohio to open its courts to such a case. On the other hand, it held that the activities in Ohio were sufficiently continuous and systematic so that Ohio could, consistently with due process, (1) entertain the cause of action if it wished to do so, even though it was unrelated to the Ohio activities, or (2) refuse to hear the case, if that was its own local rule or policy.

*Helicopteros Nacionales de Columbia, S.A. v. Hall U.S. Supreme Court (1984) General Jurisdiction First time Supreme Court establishes that there is a difference between specific and general jurisdiction. Helicopter crashed in Peru killing four Americans who worked for a Peruvian company with Texas connections. No permanent presence in Texas even though there were contacts. Relatives of deceased filed suit in Texas even though none of the decedents or survivors were domiciliaries of Texas. The president of the company had traveled to Texas to negotiate a contract. The company had also purchased helicopters from Texas and had sent representatives to Texas for training. Courts there found for them and the company appealed. The U.S. Supreme Court held that Texas did not have jurisdiction over the corporation because they did not have continuous and systematic business contacts which would give them general in personam jurisdiction. Holding: Just the fact that purchases were made in Texas is not enough to sustain general jurisdiction. Purchasing from the state, as opposed to selling merchandise in the state, is generally not a basis for the exercise of jurisdiction. Holding: There is not general jurisdiction on the basis of continuous and systematic conduct by the defendant. And we do not have specific jurisdiction through the exercise of a long-arm
14

statute because we do not have sufficient contacts under the 14th Amendment to justify assertion of that special statutory criteria for that in personam jurisdiction. Mere purchases, even if occurring at regular intervals, are not enough to warrant a States assertion of in personam jurisdiction over a nonresident corporation in a cause of action not related to those purchase transactions. Dissent - Contact between petition Helicol and the state of Texas are sufficiently related to the cause of action to make it fair and reasonable to exercise jurisdiction.

To get specific jurisdiction, you must satisfy the minimum contacts standard of International Shoe and the claim must "arise out of" or "relate to" those contacts with the forum. Remember, the factors to look at to establish minimum contacts are: (1) quantity of the contacts, (2) the nature of the contacts and (3) their connection with the cause of action. *Notes*: In general jurisdiction, the cause of action doesn't have to relate in anyway to the forum. If the pleading had alleged pilot error because they were poorly trained--there would be specific jurisdiction. There is no case where specific jurisdiction has been made out on the concept of "relation to." The conduct must arise "out of." Page 114 regarding the question of the relatedness of the contacts: "But For" Test: The broadest notion of relatedness is the "but for" test. I.e. in Shute v. Carnival Cruise Lines, the court held that the defendant's in state advertising activities were "related" contacts because they ultimately led to the plaintiff's injuries, which were suffered on the high seas aboard one of the defendant's cruise ships. The court held that the "but for" connection between the defendant's activities and the ultimate injury suffered was enough to make the contacts related. "Substantive Relevance" Test: This would require that the contacts be relevant to the substantive theories in the case before being treated as related. Contacts such as those in Shute would not be related under this test, because the advertising in the forum had little or no relevance to the defendant's negligence in causing the plaintiff's injuries while on board. "Proximate Cause" Test: This is a variant of the substantive relevance test, which requires a stronger link between the forum activities and the cause of action than a mere "but for" relationship. Continuance of Jurisdiction Michigan Trust Co. v. Ferry U.S. Supreme Court (1913) Decedent was domiciled in Michigan, where he died. Ferry was appointed executor and he eventually moved to Utah where he became incompetent and was appointed a guardian. Later, heirs of the decedent petitioned the Michigan court to remove Ferry as executor and to account for balance of the estate. The Michigan court found for the plaintiff and decreed that Ferry owed them money. Plaintiffs tried to register the judgments in Utah for execution but the
15

Utah court said that the Michigan Court didn't have jurisdiction over Ferry. USSC reversed holding that the Michigan court had continuing jurisdiction as a result of the initial proceeding over the decedent's estate. Once jurisdiction attaches, then the court has jurisdiction, even if one of the parties takes off. Once the jurisdiction attaches, then the fact that one of the parties leaves the jurisdiction does not defeat the jurisdiction of the court. It does, however, require some kind of reasonable notice, especially here where there is a gap of several years. When the power over a person exists and is asserted by service at the beginning of a cause, or if the party submits to jurisdiction, it is no longer necessary to maintain physical power over the person." The same force is given to the judgment whether the party remains in the jurisdiction or not. The whole administration of the estate is a single proceeding and is subject to the court until it is closed or until the executor distributes all that he receives. Jurisdiction over "Things" In Rem Jurisdiction: In Rem Jurisdiction: Where a thing is subject to the judicial jurisdiction of a state, an action may be brought to affect the interests in the thing of all persons in the world. Quasi in Rem Jurisdiction: 2 types 1. Plaintiff asserts an interest in a thing and seeks to have his interest established against the claim of a designated person or persons 2. Plaintiff asserts a claim against the defendant personally and seeks by attachment or garnishment of the thing to apply it to satisfy his claim against the defendant * The property or "res" becomes the flashpoint of the litigation. Once a judgment has been rendered, the plaintiff can take it to another state for domestication as long as notice is given. That is not quasi in rem. With quasi in rem 2 there is no final judgment. There is a problem with due process because one of the parties seizes anothers property in order to litigate. The issue is not over the property but the claim. Combs v. Combs: Defendant brothers owed plaintiffs a large sum of money. Defendants secured the debt with property in Arkansas. The defendants and some of the plaintiff were Kentucky residents. None of the parties were Arkansas residents. Plaintiffs sued the defendants for payment in KY. Defendants avoided service for some while. In the meantime, one defendant brother filed an action in equity in Arkansas to remove the lien from the property in Arkansas. The court in Arkansas proceeded entirely upon constructive service on the creditors and determined the rights of the parties, allowed defendants to pay money and removed the lien. Then the brothers brought the Arkansas judgment to Kentucky and offered it as a defense against the proceedings in KY, arguing that the matter had been resolved. The KY trial court disallowed the defense of res judicata and found for plaintiffs. Defendants appealed. * Arkansas had jurisdiction over the land in Arkansas. They do not have jurisdiction over the creditors. The Arkansas Court could release the lien on the land, but they could not determine
16

the rights of the parties. Arkansas court did not have personal jurisdiction over the creditors because there was no service of process. The lien secured an underlying obligation over which they could not get jurisdiction. The Arkansas judgment was not entitled to full faith and credit. The court had jurisdiction over the res. But no jurisdiction on the underlying note. Harris v. Balk: Harris, the defendant, owed Balk, the Plaintiff $300, and both were residents of North Carolina. Balk owed $180 to Epstein, a resident of Maryland. Harris traveled to Maryland on a temporary trip, and Epstein served a notice of attachment on him and sued for $180 in a Maryland court. The Maryland Court recognized the debt of Harris to Balk as an asset of Balk that resided in Harris and entered judgment against Harris, which he paid. Balk then sued harries for the $300 debt, and Harris asserted as partial defense the $180 already paid to Epstein. The NC court ruled that the Maryland court did not have jurisdiction over the intangible asset of Balk and entered judgment against Harris for the full $300. * A debt owed a creditor is an attachable asset of the creditor that resides in the debtor and valid attachment can be had wherever the court has personal jurisdiction over the debtor. The situs of a debt is not immovably tied to its place of origin. If Harris had moved permanently to another state, Balk could have sued him there for collection. If the laws of Maryland allowed the attachment of an asset within its jurisdiction in satisfaction of a debt, which they do, the presence of Harris in Maryland, no matter how temporary, conferred jurisdiction on the Maryland Court to attach the asset of Balk that he carried. The judgment of the Maryland court was valid. That portion of the debt attached by Epstein must be viewed as a partial discharge of the debt owed by Harris to Balk. * This rule only applies in those cases where the creditor is given notice of the foreign state attachment so that he might be given opportunity to contest the validity of the debt owed by him to the person attempting the attachment. Since that procedure was observed here, Harris may properly offset his payment to Epstein in satisfying the judgment as to Balk. * Indebtedness is transitory and moves around wherever the defendant is located. The USSC found that even the temporary presence of Harris in Maryland was sufficient to extend jurisdiction over him. Likewise, Maryland had in rem jurisdiction over the debt because the debt traveled with Harris. This is the second type of quasi in rem jurisdiction that we are talking about. The intangible is not related to the controversy between the parties to the litigation. Shaffer v. Heitner: Heitner owned one share of stock in the Greyhound Corporation. Greyhound was incorporated in Delaware and had its principal place of business in Arizona. Heitner brought a derivative suit against corporation in Delaware to recover damages for actions of the directors that had resulted in suits and criminal contempt fines in Oregon. Heitner filed a motion for sequestration of the Delaware property owned by the defendants. The sequestrator seized 82,000 shares of Greyhound stock owned by 19 of the 28 defendants. Under Delaware law, the situs of ownership of all Delaware corporations is Delaware, whether the stock certificates are present or not. Those defendants whose property was seized made special appearances to contest the court's jurisdiction under International Shoe v. Washington.
17

The court held that all future exercise of quasi in rem jurisdiction must meet the fairness test under International Shoe v. Washington. The Delaware had based its exercise of jurisdiction purely on the constructive presence of defendant's property within Delaware, and that basis has been overruled, so Delaware's exercise of jurisdiction over the defendants must meet the International Shoe v. Washington test, if possible. By attaching the stock here, the property of people outside of the forum was being seized. These stockholders were not in Delaware. This the new standard associated with the second part of quasi in rem. The International Shoe standard has to be superimposed on the in rem, which will also require that the subject of the dispute deal with the contacts. VERY IMPORTANT CASE. Competence of Court and Notice Thompson v. Whitman: Plaintiff brought suit against the sheriff of Monmouth County, NJ, for the seizure of a sloop and its tackle. Sheriff asserted that the sloop was seized in the waters of Monmouth County where plaintiff was engaged in raking clams in violation of NJ law. The sheriff made a seizure and brought the matter before justices in NJ, in accordance with the law of that state. At the instant trial, the sheriff produced the court record from NJ and argued that it was bar to the instant proceeding. The jury determined that the boat was not seized in the waters of Monmouth County. Therefore, applying NJ law, the justices of Monmouth County were w/o jurisdiction to hear the matter. The NJ is invalid for lack of jurisdiction. The court must have subject matter jurisdiction. The full faith and credit clause requires a state to recognize and give force only to judgments validly entered in a sister state. In order for the judgment to be valid, the rendering court must have had the requisite jurisdiction. The jurisdiction of the rendering court may be challenged by evidence disproving that jurisdiction. A court's record showing facts establishing jurisdiction, as this one does, creates only a prima facie showing of jurisdiction which may be rebutted by contradictory evidence. * Note *: If in fact you litigate the jurisdictional issue, you have to pursue it on appeal--no collateral attack--if you want to follow through. If do not enter an appearance then can collaterally attack the final judgment in another state. There is no litigation in that first case in which a party came in and argued against that particular proceeding. In other words, they seized the boat. The owner does not get to attend. And they make a judgment there. The fact that they make that determination does not speak to the fact that the real party in interest was there and had an opportunity to litigate that issue. Because, if they had been there, they would have had in personum jurisdiction over those folks, and a determination in the record by the trial court that they had a finding of jurisdiction would have to be remedied by an appeal. This is a collateral attack. Normally, where there is litigation and people appear and there is a record that they have jurisdiction, you had better appeal it. You will not be able to run off to some other jurisdiction and file a lawsuit and collaterally attack the first decision. This case is unique because this is an in rem seizure. See Durfee v Duke. Two individuals litigating over the boundary of land. The got a determination of what the boundary was in Nebraska. Unsatisfied the other party runs across

18

and starts another lawsuit claiming the first state did not have jurisdiction. Cannot do this because of full faith and credit. Should have appealed in the Nebraska. Mullane v. Central Hanover Bank & Trust Co.: NY, like many states, had passed a statute whereby trustees of small trusts might join together into a kind of group administration under a corporate trust company. The idea was to make the administration of small trusts more efficient, because otherwise such trusts could not take advantage of the benefits of being administered by large corporate trustees. All trust assets would be pooled and administered by the corporate trustee. The various beneficiaries of the small trusts would share all proceeds and expenses according to the size of their contribution. The original trustees had no ownership or controlling interest in the trust properties. The corporate trustee would be required to periodically make a judicial accounting. That accounting would serve as an absolute bar to any action against the trust or trustees for any loss suffered by the beneficiaries. By statute, the corporate trustee was required to publish in a newspaper chosen by the court the names of all the small trusts that were affected by accounting. No other notice of any kind was required. At the time of the accounting, the court appointed an attorney as special guardian of the interests of all persons not appearing who had an interest in the accounting. The guardian made a special appearance, claiming that the accounting was invalid for lack of notice under the 14th amendment. Trial court overruled and the NY appellate court affirmed. The USSC acknowledged that the state courts had jurisdiction over a trust action even where the beneficiaries were out of state. The fact that the trust was organized and administered by the courts of the forum state alone created such contacts as would pass constitutional muster on the question of jurisdiction. The court also acknowledged that constructive notice or other notice that fell short of actual notice was justified under some circumstances. Interested parties might be difficult to find, etc. For all these reasons, notice by publication in a local newspaper might be the only means available to the court. Such notice is adequate and satisfies constitutional requirements, even though it is likely to be ineffective. In the instant case, notice by publication was adequate as to those beneficiaries who were unknown to the trustee or difficult to identify. BUT there were also known beneficiaries, whose names and addresses were readily available to the corporate trustee and the court at the time of the accounting. Such notice must be reasonably calculated under the circumstances to apprise interested parties of he presence of the action and afford them an opportunity to present their objections. That was not done here. Reversed. * Whenever there is a better available way to put person's who have an interest on notice, one must pursue that method. Certified mail is approved here. Personal service, obviously. Volkswagenwerk Aktiengesellschaft v. Schlunk: Plaintiff's parents were killed in an auto accident. Plaintiff filed suit, arguing that design defects in the car in which they were driving resulted in their death. Plaintiff served process on Volkswagon of America (VWoA). VWoA answered saying that it did not design the car in question. Plaintiff then amended his complaint and served VWoA as agent for VWAG. VWAG made a limited appearance for the purpose of moving to quash service. VWAG argued that it could be served only in accordance with the Hague Treaty. Trial court refused the motion, saying that since VWoA was registered to do business in Illinois, and since it was a wholly owned subsidiary of VWAG, it was permissible to serve VWoA as agent for VWAG, thus avoiding the need for international service of process.

19

The USSC found that the question of local vs. international service was governed by state law. The convention itself provided that all international service would be governed by the convention, but the convention did not specify when international service was required. Therefore, the question of adequate service is governed by the law of the forum. * Caution*: Just because you have a subsidiary corporation, do not think that you can just serve that subsidiary and have that be an agent for the principal. (piercing the corporate veil) This case is unique driven factually by the facts that many board members were common to both companies; when the American Corp was initially served, they forwarded it to the German Corp--they were given an opportunity to be heard. If you have an independent business, without that commonality of directors, etc., things might be different. Chapter IV. Limitations on the Exercise of Jurisdiction This chapter deals with situations where states choose not to exercise judicial jurisdiction they undoubtedly have. This may be the result of an agreement between the parties or the fact the court deems itself to be an inconvenient forum. The conferral of jurisdiction by means of a contractual choice of court clause is known as prorogation. A jurisdiction limiting effect of a choice of court clause is known as derogation. Modern decisions usually give effect to private agreements except when they are unfair or unreasonable. (adhesion contract) Limitations Imposed by Contract M/S Bremen v. Zapata Off-Shore Co.: A German Corp. contracted with an American Corp. to tow an oil rig from Louisiana to Italy. By contract, the German Corp. would not be liable for any loss sustained by the plaintiff on the trip, and any controversy would be tried in London. The rig was damaged in the Gulf of Mexico and the American Corp. brought suit in Florida. The German Corp. moved to dismiss for lack of jurisdiction, citing the choice of forum clause in the contract but the motion was dismissed. Had the suit been brought in London, the German Corp. would have prevailed as a matter of law as a result of the exculpation clause in the contract which is invalid under American Law. So the choice of forum here determined the outcome of the case. The USSC overruled the trial courts decision in this case and remanded for further proof on the convenience of litigating in Florida. The court stopped short of finding that such agreements must always be enforced as written. Where there is overreaching, fraud, or other unfairness intrinsic to the agreement, or where there can be a showing that some legitimate American public policy would be undermined by enforcing such agreements, they can be set aside. While it is true that the American Corp. would suffer from enforcement of the exculpation clause, they knew that when they struck their deal. Further, the damages were suffered in international waters. No compelling interest would prohibit enforcement of the choice of forum agreement. * Remember, there is a difference in choosing the forum and choosing the law. Usually those things are paired together...but they are two different things. This case cited Bisso v. Inland Waterways Corp. where the only difference was that they were still in US territorial waters and the court refused to honor the agreement. So M/S Bremen doesn't overrule Bisso. In this case, you have foreign nationals as well as Americans in international waters in a case dealing w/ Admiralty. Under those facts, the USSC says to enforce the agreement. The main purpose has to do w/ the expectation of the parties. They had certain expectations as to their liabilities as to dealing with a particular forum and the certainty of the laws there. That allows that negotiation to take place.

20

Carnival Cruise Lines, Inc. v. Shute: The plaintiff bought tickets through a local agent in their home state of Washington for a cruise on Carnival Cruise Lines, a Panamanian Corp. with its principal place of business in Miami, Florida. Payment was forwarded to Miami, and the tickets were issued there. The tickets also constituted the Contract of Passage which contained a forum selection clause in favor of Florida. After the plaintiff was injured in a fall when the ship was in international waters, she filed suit in Washington. The court of appeals held that the forum selection clause was unenforceable because it was not freely bargained for, the plaintiffs were physically and financially unable to pursue litigation in Florida, and the defendant's Washington contacts were sufficient for the exercise of specific jurisdiction. Issue: Where individuals are given notice of a forum provision in a contract, is such a forumselection clause enforceable? Holding: Yes. Where individuals are given notice of a forum selection provision in a contract, such a clause in enforceable. The plaintiffs essentially have conceded that they had notice of the provision. It can't be said that a non-negotiated forum selection clause in a form ticket contract is never enforceable simply because it is not the subject of bargaining. Such a clause may be permissible for a number of reasons, including the likelihood that a cruise ship which typically carries passengers from many locales could be subjected to litigation in several different fora. Further, FL is not a "remote alien forum" and this dispute is not essentially a local one inherently more suited to resolution in Washington than in FL. The plaintiffs have not satisfied the heavy burden of proof required to set aside the clause on grounds of inconvenience, and the court of appeals' conclusory reference to the record provided no basis to validate the finding of inconvenience either. There is no indication that the defendant had nay bad faith motive for selecting FL as the forum for resolving disputes, since that was its principal place of business. * Why choose forum selection clauses: you know where the litigation will be brought, lower prices, maybe even selection of law. In this case, the court had subject matter jurisdiction to hear the claim...it was an admiralty claim. Washington also had subject matter jurisdiction, as well as, in personum because the defendant had sufficient contacts (they did business there, advertised, had agent there, etc.). There was a forum selection clause written on the ticket. It is appropriate to have these in form contracts as long as there is reasonable notice. Forum selection clauses give in personam jurisdiction not subject matter. Carnival Cruise Lines II and notes: In a later case the same year, passengers on a Carnival Cruise Ship were injured during a storm, and a California trial court refused to enforce a forum selection clause in favor of FL, identical to the clause in the Shute case. The USSC reversed and remanded for reconsideration in light of its decision in Shute. On remand, held: "The forum selection clause is unenforceable as to any particular plaintiff if the trial court determines that such plaintiff did not have sufficient notice of the forum-selection clause prior to entering into the contract for passage. Absent such notice, the requisite mutual consent to that contractual term is lacking and no valid contract w/ respect to such clause thus exists. * Choice of forum agreements have sometimes been denied effect. For example, because it was "clearly and palpably unreasonable, the court in Caldara v. Diehl ignored a provision purporting to give an Italian court exclusive jurisdiction over any action on a ticket for transportation from New Orleans to Italy. Plaintiff was a Louisiana resident and the defendant a Louisiana Corp.

21

* In diversity of citizenship cases, the federal court will take the state substantive law. Regarding the enforcement of these forum selection agreements, the majority view is that there is a body of federal common law, that would support these forum selection provisions. *Notes*: There has to be notice to satisfy due process. Fraud, Force & Privilege Terlizzi v. Brodie: Defendants were New Jersey residents who were involved in an accident in new Jersey in which plaintiffs were injured. Plaintiffs were domiciled in NY. Defendants received a phone call offering them free tickets to a Broadway show if they would answer a questionnaire. Defendants attended the show, and after the performance, they were served with process by a man who had been sitting behind them. At trial, defendants moved to vacate the process which was denied. The appellate court reversed, saying that service was invalid where it was obtained by fraud. The general rule is that a fraudulent inducement into the jurisdiction will almost always mean the court will decline to exercise jurisdiction. (w/ regard to civil cases--in criminal cases, as soon as you have there body here, you have them.) If in fact there were some legitimate situation in which they came into the jurisdiction and were not induced to do so by the plaintiff, and plaintiff had someone serve them, there would be no problem. Because they were not fraudulently drawn into the jurisdiction. You cannot serve process by fraud or deceit. In criminal cases the jurisdiction of the court over the defendant is usually held not be impaired by the fact that he was unlawfully extradited or brought in by force. In Eichmann they allowed him to be kidnapped to try him. In Tenn. You have protection under our statute if you have been subpoenaed to testify in another case. Forum Non Conveniens Gulf Oil Corp. v. Gilbert (leading case on forum non conveniens): A Virginia resident suffered a loss from fire, which he asserted was the result of negligence on the part of the Pennsylvania corp. who mishandled a gasoline shipment causing plaintiff's warehouse to burn down. Virginia resident sued the Penn. corp. in NY district court. Penn. corp was qualified to do business in NY & Virginia. Gilbert brought suit in NY and the court there dismissed noting it was better brought in VA. Gilbert appealed. The court held that the court properly dismissed on forum non conveniens. Both states had jurisdiction but the acts occurred in VA. It would have been prejudicial to the defendant to try this case outside of VA. Unless the balance is strongly and clearly in favor of the defendant the court must sustain the plaintiff's choice of forum. The USSC agreed that the federal venue statutes would allow plaintiff to bring suit in NY. The federal courts have no express list of factors that the court must consider when ruling on a motion for forum non conveniens, but there are numerous policy issues that the court may consider. A particular venue may not be used to harass the defendant. The availability of witness and subject matter is to be considered when more than one court has proper jurisdiction. Forum non-conveniens is part of the courts inherent supervisory power over its own jurisdiction. It is usually raised by a motion to abate or dismiss the action. This is treated as a general appearance. It is available in federal and state courts. Must have jurisdiction in both places to apply. It is up to the courts discretion. If the court finds that the local forum is a seriously inconvenient place for trial it may either stay or dismiss the action. A statutory extension of forum non conveniens is found in 28 USC 1404 which provides that a federal court that determines that it is not a fair and appropriate place for trial of an action may transfer
22

the action to another appropriate federal district if the action could have been filed there originally. A transfer under section 1404 has no effect on jurisdiction or choice of law. The court will apply the choice of law rules in effect in the state in which the transferring court was located. This case would not be ruled upon the same way today, because of 28 USC 1404(a), the statutory mandate in the federal courts to transfer cases among their divisions...so you do not get into forum non conveniens in the federal courts. * There are 2 categories of factors to be applied in forum non conveneins, private factors and public factors. Some of the private interest factors include: * the relative ease of access to sources of proof; *availability of compulsory process for attendance of unwilling, and the cost of obtaining attendance of willing witnesses; *possibility of view of premises, if view would be appropriate to the action; *and all other practical problems that make the trial of a case easy, expeditious and inexpensive *enforceability of a judgment if one is obtained. The court will weigh relative advantages and obstacles to fair trial. It is often said that the plaintiff may not, by choice of an inconvenient forum, "vex," "harass," or "oppress" the defendant by inflicting upon him expense or trouble not necessary to his own right to pursue his remedy. But unless the balance is strongly in favor of the defendant, the plaintiff's choice of forum should rarely be disturbed. Some of the public interest factors include: Factors of public interest also have a place in applying the doctrine. Administrative difficulties follow for courts when litigation is piled up in congested centers instead of being handled at its origin. Jury duty is a burden that ought not be imposed upon the people of a community which has no relation to the litigation. In cases which touch the affairs of many persons, there is reason for holding the trial in their view and reach rather in remote parts of the country where they can learn of it by report only. There is a local interest in having localized controversies decided at home. There is an appropriateness also in having the trial of a diversity case in a forum that is at home with the state law that must govern the case, rather than having a court in some other forum untangle problems in conflict of laws, and in law foreign to itself. 2. In re Union Carbide Corp. Gas Plant Disaster at Bhopal, India in December, 1984: In response to the devastation wreaked by the industrial disaster at the Union Carbide (D) plant in Bhopal, India, the Union of India (P) filed a consolidated lawsuit against the defendant in the US federal court. The plaintiff filed in the US because it believed that it did not have jurisdiction over the defendant (a Connecticut corp.), as the defendant owned a majority of the stock in the corp. that operated the destroyed plant. The defendant brought a motion to dismiss the action on the grounds of forum non conveniens, claiming that India would be the proper place to bring suit. Issue: When another adequate and more convenient forum clearly exists abroad, is there any reason to press the US judiciary to the limits of its capacity? Holding: No. When another adequate and more convenient forum clearly exists abroad, there is no reason to press the US judiciary to the limits of its capacity. The Indian legal system is in a better position to hear the case. The Indian courts have greater access to all the information needed to arrive at a just decision, including witnesses, evidence and a majority of the claimants. Additionally, the costs of litigating this case in the US would put an enormous
23

burden on American taxpayers. No US interest outweighs the interest of India in applying Indian law to the case. Motion granted. * The doctrine of forum non conveniens is applicable only when the forum has judicial jurisdiction over the defendant and the forum is a proper venue. A prerequisite to its invocation, except in extremely unusual circumstances, is an alternative forum. Whether or not to apply the doctrine is within the sound discretion of the trial court. * Plaintiff could sue in US federal court because they submitted to our jurisdiction. When the plaintiff submitted in this case, it didn't matter that the plaintiff had no contacts w/ the US. * One of the prerequisites of a dismissal under forum non conveniens is that there must be another forum that has jurisdiction. So the idea here is to get the case to the forum with the most contacts, the most interest in this particular proceeding. In re Union Carbide Corp. Gas Plant Disaster at Bhopal, India in December, 1984 (Case II): The defendants motion to dismiss the complaint based upon the grounds of forum non conveniens was granted with certain conditions conditions, among them being that the defendant agree to satisfy any judgment rendered and upheld on appeal, so long as it complied with "minimal requirements of due process" and that discovery be subject to the US Federal Rules of Civil Procedure. Defendant appealed the imposition of these conditions. Issue: Must conditions imposed pursuant to a dismissal on forum non conveniens grounds comply with basic due process and fundamental fairness concerns of the dismissing forum? Holding: Yes. Such conditions must comply with basic due process and fundamental fairness concerns of the dismissing forum. The defendant's consent to the enforceability condition was based in part on the erroneous assumption that the Plaintiff might not be able to enforce a judgment obtained in India against the defendant in the US. Once there has been a dismissal on forum non conveniens grounds, however, the district court is w/o the authority to monitor the litigation. The court's concerns with due process are adequately addressed in this case by an existing state statute providing for recognition of foreign country money judgments. It was thus error to impose the "enforceability" condition on the dismissal. The second condition requires no reciprocal discovery privileges on the part of the plaintiff. Fundamental fairness requires that unless the Indian courts will sanction mutual discovery pursuant to the federal rules, the parties will be limited to applicable Indian discovery methods. Affirmed as modified. * Also made a condition in this case, unchallenged by the defendant, was the condition that defendant submit to the foreign jurisdiction and waive all statute of limitations defenses. This condition has almost become part and parcel with a dismissal on forum non conveniens grounds. So long as the court is convinced that the interests of both sides will be respected, such a dismissal will be granted. Due process defenses can be raised in any subsequent action to enforce the judgment in US courts.

Notes and Full Faith and Credit, Multiple suites pg 180-190: Full Faith and Credit is part of the US Constitution. It envisions the ability of parties to come to a conclusion in one state and that decision be transferable to another state where the appropriate jurisdictional basis exists. The first judgment that goes down is entitled to full faith and credit across state lines. If a state refuse to grant FF&C it is an action violating the US constitution. * If I have a forum non conveniens dismissal, it is without prejudice. It has no effect on the later litigation.
24

* What if the other forum has a defense unknown to this forum that might defeat the claim? Would that be a basis for the court to deny dismissal on the basis of forum non conveniens? You have the potential for dismissal on the grounds of prescription. That could be a basis for the forum to decline their ability. It is within the sound discretion of the court whether or not to make this decision to dismiss on the basis of forum non conveniens. * English common law recognizes forum non conveniens as a fairly standard thing. Civil law jurisdictions do not recognize it. In fact, you can see that the Brussels Convention provides that if another court gets the case first, other courts are to decline jurisdiction. * Why do you want a race to judgment? Full faith and credit. You want to choose a forum that you think will be favorable to you. Race in there and get your decision. Then you can use it against any proposed litigation in a less favorable forum. This happens in state courts but not federal courts. Zurik v. Inman - TN adopts Gulf Oil Analysis Holding: Tennessee courts of record can invoke forum non conveniens between different states (NOT BETWEEN DIFFERENT COUNTY WITHIN STATE). Package Express v. Snider Foods Tennessee courts apply forum non conveniens TN corp sued Mo. corp. Dismissed for forum non conveniens. Factors from Zurik. In re Bridgestone/Firestone and Ford Motor Company Tire Litigation- Tennessee Forum Non Conveniens Case of Mexican litigants bringing suit in Nashville, Tennessee concerning 20 automobile accidents that occurred in Mexico. Review of a trial court's application of forum non conveniens on appeal is limited to whether there has been an abuse of discretion. When determining whether to apply forum non conveniens, a court must first ensure that there is at least one forum other than the forum chosen where the plaintiff may bring his cause of action, and if such a forum is available, the court must then consider a series of public and private factors that guide the court's decision on whether dismissal is appropriate. When determining whether to apply forum non conveniens, the relevant inquiry encompasses the availability of an alternative forum, but not its adequacy, and the plaintiff's ability to bring suit is, by itself, determinative of the issue of availability. If a court finds that the private interests of the litigants favor litigation in another forum, then dismissal of an action on forum nonconveniens grounds is appropriate. If the private factors counsel against dismissal of an action on forum non conveniens grounds, then the court considers various factors involving public interests, and if these factors weigh in favor of the party moving for dismissal, then the court may dismiss the case. The relevant rule in a forum non conveniens analysis is that the application of the laws of another state becomes a factor when it is shown that the laws of the foreign state, applicable to the case, are so materially different from the laws of the forum state that their application would present difficulty to the court. Other Limitations Imposed by the Forum U.S. v. First National City Bank: In connection with a federal grand jury investigation into anti-trust violations, City Bank (D) was served with a subpoena to produce certain customers' records held in its branch in Germany. Defendant refused to honor the subpoena on the grounds that a German Bank Secrecy Act would subject the Bank to civil liability for complying with the subpoena. A federal district court found the defendant in contempt and the defendant appealed.
25

Issue: May a person within the jurisdiction of the court be compelled to produce records under his control in a foreign country where production would subject him to possible civil liability in that country? Holding: Yes. The defendant concedes the federal court has the power to order compliance with the subpoena but argues that the power should be limited by the circumstances. While production of the records would not impose criminal or governmental sanctions on the defendant, it would be subject to civil suits for violations of the Act. However, no showing has been made that any public policy of Germany would be violated nor has either the US government or the German government expressed a view on this case. The potential civil liability is too speculative to override the great governmental interest in enforcing our antitrust laws. Balancing test between the US interests in antitrust law enforcement vs Germanys potential for civil liability. May have swung the other way if Germany was subject to criminal liability. * One of the key elements in ordering an act to be done outside the court's jurisdiction is the ability of the court to control and enforce its order. Where personal jurisdiction is retained, contempt proceedings are available. Further, the court may order the posting of a performance bond. Where the person ordered can show substantial hardship in compliance, performance has been excused in some cases, although criminal sanctions remains the strongest defense. * Some countries have passed "blocking statutes". The USSC has rejected that argument. It is well settled that such statutes do not deprive an American court of the power to order a party subject to its jurisdiction to produce evidence even though the act of production may violate that statute. Slater v. Mexican National R. Co.: Slater was employed by Mexican National Railroad (D), a Colorado Corp., on its line running from Colorado to Mexico. Slater was killed while on duty, and his widow (P) brought suit in a Texas court for wrongful death. Since the death occurred in Mexico, the Mexican statutes were relied upon to create liability. These statutes provided that support payments in the nature of alimony were the exclusive remedy. The TX court awarded plaintiff a lump-sum judgment. Issue: Where foreign law is used to create liability, must the forum court also award a judgment in accord with the foreign law? Holding: Yes. Where the action giving rise to the suit occurred outside the forum's jurisdiction, the local law of the accident will control as to liability. Both Mexican law and TX law recognize an action for wrongful death. However, Mexican law provides that the exclusive remedy will be periodic payments based upon need to the survivors subject to the plaintiff's remarriage or the children reaching majority. The TX courts were w/o power to render such a judgment. A lumpsum commulation of the estimated value of such an award is far too speculative to be sanctioned and is prohibited by Mexican statute. The TX court was w/o power to grant a remedy in this action, and the plaintiff must resort to Mexican courts for relief. This is called dissimilarity and is no longer good law. * Unique remedies available in another state or country will support a motion to dismiss where the forum court can't render such judgments. Where the remedy is penal, only courts of the place of the occurrence may enforce them. In other cases involving similar facts as the principal case, American courts have followed the alimony analogy and allowed recovery on that basis.
26

* If the US cannot give the type of remedy requested then the court cannot fashion its own remedy. Since it cannot give the remedy asked for, it should dismiss. In federal practice and when the claim arises under federal law, most federal circuits follow a "first filed" rule: "all the issues are, or can be... joined in the first forum and the balance of convenience appears to be in favor of that action. In deciding between competing jurisdictions, it has often been stated that the balancing of convenience should be left to the sound discretion of the trial courts...An example of when departure from the first filed rule is justified is where forum shopping alone motivated the choice of the situs for the first suit. Thus, the 2nd filed action may be entertained when the first filed action was brought in anticipation of the second: non-application of the first filed rule in these circumstances protects the "real Plaintiff", as it were, in his traditional right to choose a forum. Conversely, the first forum may seek to protect its jurisdiction by enjoining litigation elsewhere.

Under the Supremacy Clause, states cannot refuse to enforce federal policy. Even if they contradict the state public policy they are going to lose. See Mondou v NY (FELA), Testa v Katt.(EPCA) regarding federal acts the states cant ignore. When state courts enjoin parallel litigation in state or federal courts of other states, violation of the injunction may result in the imposition of penalties in the first state; however, recognition and enforcement by the second state does not seem to be required. The USSC has not had occasion to determine whether an injunction against suit in another state is entitled to full faith and credit. Usually courts have disregarded the sister state injunction and have permitted the action to proceed. The Ill. Supreme Court recently revisited the issue and found that an injunction against suit in another state rested on the court's equitable power to restrain a person over whom it has jurisdiction from instituting a suit or proceeding with a suit in a foreign state.....However, courts do not, in such cases, pretend to direct or control the foreign court, but the decree acts solely on the party. Limitations Imposed by the State of the Transaction Buttron v. El Paso Northeastern Railway Co.: Plaintiff was injured allegedly due to El Paso's (D) negligence. The injury occurred in the New Mexico territory but the plaintiff brought suit in TX where he resided. Defendant asserted as a bar to the action the judgment of a New Mexico court holding defendant not liable to plaintiff's injuries arising out of the accident. The judgment was rendered under a new Mexico law which allowed a potential defendant to file suit against the potential plaintiff to litigate liability. Although personally served, plaintiff did not appear in the new Mexico trial, and a judgment of no liability was rendered in defendant's favor. Holding: The major objection to this judgment, as this court perceives it, is that it is based on a statute that allows a defendant in a personal injury suit to assume the role of plaintiff in bringing the issue to trial. But this is a rule of procedure which is a valid exercise of legislative power. While unorthodox, there can be substantial justification for this type of procedure in ensuring a speedy resolution for the issues while evidence is still fresh. A judgment based on the statute must be accorded full faith and credit in the state of TX. Judgment for defendant was sustained. Tennessee Coal, Iron & Railroad Co. v. George: Plaintiff was employed by TN Coal, Iron & Ry. Co. (D) in Alabama as an engineer. He was injured when a defective locomotive throttle
27

caused the locomotive to run over him. Alabama has a statute which provides that an employer is liable for injuries to an employee caused by defective equipment. This statute abrogated the common law defenses of an employer. Plaintiff brought suit in Georgia under this statute, but defendant moved to dismiss on the grounds that the Alabama statute required suits under it to be brought in Alabama courts only and that to allow the suit to be brought elsewhere would deny full faith and credit to the legislative acts of Alabama. Issue: Where a transitory cause of action is created by statute, will the requirement that actions under the statute be brought only in local courts be enforceable when the suit is brought elsewhere? Holding: No. While the statute creating this cause of action also restricted suits under it to Alabama courts, the cause of action is, by the terms of the statute, transitory. This is not a case where the right and the remedy are so united that the remedy cannot be enforced except by a specific court. The statute allows any court in Alabama to hear this type of suit. But if either the D or the P have moved since the accident, an Alabama court may not be the best venue. So long as Georgia is capable of trying the case according to the Alabama statute, full faith and credit requires she do so. Since Georgia was able to try the case, the judgment in favor of P is affirmed. * The USSC agreed that such statutory provisions are permissible where the nature of the relief granted under the cause of action is tied to the forum in which the cause of action is brought. * When it is shown that the court in the other jurisdiction observed such conditions, and that a recovery was permitted after such conditions had been complied with, the jurisdiction thus invoked is not defeated because of the provision of the statute" requiring the suit to be brought in the district where the plaintiff resides or where the defendant, if a corporation, has its principal place of business. * Some variations on the circumstances in the principal case have occurred where a wrongful death suit is brought in one state based upon the wrongful death statute of a sister state. It has been held that the forum state must recognize the cause of action but need not recognize a maximum recovery limit imposed by the same statute. This has been justified on the basis that the right created is substantive, while the recovery limit is procedural and procedural matters are not entitled to full faith and credit enforcement. * There are many cases where right and remedy are so united that the right cannot be enforced except in the manner and before the tribunal designated by the act. For the rule is well settled that "where the provision for the liability is coupled with a provision for a special remedy, that remedy, and that alone, must be employed. There is a problem with giving full faith and credit to legislative pronouncements. Then the law of another case is being imposed upon a sovereign. Transitory action is one that can be brought basically anywhere the defendant can be found. JC Penney v National Bank v Johnson Whether JC Penneys relationship with the state of Tennessee satisfied the substantial nexus clause that is required under the Commerce Clause. 4 part test under Compete Auto case: substantial nexus(presence), fairly apportioned, nondiscriminatory and related to services provided by the state. A forum selection provision could have an arbitration in it. T.C.A. 24-2-106. Scire Facias; Opportunity to Show Cause:

28

Upon return of the scire facias issued for the penalty, the witness may be relieved by showing sufficient cause for failing to attend; otherwise, on motion, judgment will be given against the witness and execution issue accordingly. T.C.A. 26-6-101. Short Title: This chapter may be cited as the Uniform Enforcement of Foreign Judgments Act. T.C.A. 26-6-102. Construction of Law: This chapter shall be so interpreted and construed as to effectuate its general purpose to make uniform the law of those states which enact it. T.C.A. 26-6-103. Definitions: As used in this chapter, "foreign judgment" means any judgment, decree, or order of a court of the United States or of any other court which is entitled to full faith and credit in this state. T.C.A. 26-6-104. Full Faith and Credit: (a) A copy of any foreign judgment authenticated in accordance with the acts of congress or the statutes of this state may be filed in the office of the clerk of any circuit or chancery court of this state. (b) The clerk shall treat the foreign judgment in the same manner as a judgment of a court of record of this state. (c) A judgment so filed has the same effect and is subject to the same procedures, defenses and proceedings for reopening, vacating, or staying as a judgment of a court of record of this state and may be enforced or satisfied in like manner. T.C.A. 26-6-105. Service of Process; Enforcement Proceeding Delayed: (a) At the time of the filing of the foreign judgment, the judgment creditor or the judgment creditor's lawyer shall make and file with the clerk of the court an affidavit setting forth the name and last known post office address of the judgment debtor, and the judgment creditor. (b) Promptly upon the filing of the foreign judgment and affidavit, the clerk of the court wherein the judgment is filed shall issue a summons to be delivered for service to any person authorized to serve process. This person shall serve the summons and return endorsed thereon shall be proof of the time and manner of service. (c) No execution or other process for enforcement of a foreign judgment filed hereunder shall issue until thirty (30) days after the date a summons has been served upon the judgment debtor. T. C. A. 26-6-106. Appeal or Stay: (a) If the judgment debtor shows the court of this state that an appeal from the foreign judgment is pending or will be taken, or that a stay of execution has been granted, the court shall stay enforcement of the foreign judgment until the appeal is concluded, the time for appeal expires, or the stay of execution expires or is vacated. (b) If the judgment debtor shows the court of this state any ground upon which enforcement of a judgment of any court of this state would be stayed, the court shall stay enforcement of the foreign judgment for an appropriate period. T.C.A. 26-6-107. Rights of Creditors: The right of a judgment creditor to bring an action to enforce the creditor's judgment instead of proceeding under this chapter remains unimpaired.
29

T.C.A. 36-6-229. Child Custody Determinations; Registration: (a) A child-custody determination issued by a court of another state may be registered in this state, with or without a simultaneous request for enforcement, by sending to the appropriate court in this state: (1) A letter or other document requesting registration; (2) Two (2) copies, including one (1) certified copy, of the determination sought to be registered, and a statement under penalty of perjury that to the best of the knowledge and belief of the person seeking registration the order has not been modified; and (3) Except as otherwise provided in 36-6-224, the name and address of the person seeking registration and any parent or person acting as a parent who has been awarded custody or visitation in the child-custody determination sought to be registered. (b) On receipt of the documents required by subsection (a), the registering court shall: (1) Cause the determination to be filed as a foreign judgment, together with one (1) copy of any accompanying documents and information, regardless of their form; and (2) Serve notice upon the persons named pursuant to subdivision (a)(3) and provide them with an opportunity to contest the registration in accordance with this section. (c) The notice required by subdivision (b)(2) must state that: (1) A registered determination is enforceable as of the date of the registration in the same manner as a determination issued by a court of this state; (2) A hearing to contest the validity of the registered determination must be requested within twenty (20) days after service of notice; and (3) Failure to contest the registration will result in confirmation of the child-custody determination and preclude further contest of that determination with respect to any matter that could have been asserted. (d) A person seeking to contest the validity of a registered order must request a hearing within twenty (20) days after service of the notice. At that hearing, the court shall confirm the registered order unless the person contesting registration establishes that: (1) The issuing court did not have jurisdiction under this part; (2) The child-custody determination sought to be registered has been vacated, stayed, or modified by a court having jurisdiction to do so under this part; or (3) The person contesting registration was entitled to notice, but notice was not given in accordance with the standards of 36-6-211, in the proceedings before the court that issued the order for which registration is sought. (e) If a timely request for a hearing to contest the validity of the registration is not made, the registration is confirmed as a matter of law and the person requesting registration and all persons served must be notified of the confirmation. (f) Confirmation of a registered order, whether by operation of law or after notice and hearing, precludes further contest of the order with respect to any matter that could have been asserted at the time of registration. Hinkle v. Cravens ( Tenn. 1966): York, the defendant was an officer of a loan & finance corp., a TN corp. with its principal place of business in Crossville, TN. The Corp. acting through the defendant, filed a civil suit in Knox Co. against Hinkle for a debt. Mr. York went from Cumberland County to Knoxville to testify in the case on behalf of the plaintiff corporation. It was stipulated that Mr. York was there in his official capacity as an officer of the Cumberland Loan & Finance Corporation and that he was in Knox County for no purpose other than in his official capacity to represent the corporation and to testify in the case. While Mr. York was in the Knox County Courthouse, he was served with the original summons and a copy of the
30

declaration in the instant case, the suit being filed by Mr. Hinkle against Mr. York, for alleged malicious prosecution in a previous transaction. It was stipulated that Mr. York was not in Knox County under subpoena. Issue: Whether a corporate officer is immune from service of process while attending court in a county other than that of his residence, in order to testify on behalf of the corporation. Holding: Yes. It is provided by statute in this State that actions may be abated by plea of the defendant: (2) Where the process is served upon the defendant while attending his duty at a muster of militia, or election, or a witness or juror. T.C.A. s 20--903. It is further provided in T.C.A. sec. 24--213: During the attendance of any person summoned as a witness, and during the time that he is going to and returning from the place of such attendance, allowing one day for every thirty (30) miles of travel, no writ, process, warrant, order, judgment, or decree in any civil cause, subpoena to testify as a witness only excepted, shall be served upon him. It has long been held in Tennessee that while both of these Code sections refer only to witnesses, parties to suit are exempt as well as witnesses, while in attendance at or going to or coming from the place of suit. In the case of Sewanee Coal, Coke & Land Co. v. Williams & Co.,120 Tenn. 339, 107 S.W. 968 (1907), this Court held that the exemption of a witness from service of process while in attendance as such applies to a suit against a corporation, with service of process upon its officer while a witness, as well as to a suit against such officer individually while a witness. There, one Earl Martin was attending a United States Circuit Court in Davidson County, under subpoena before the grand jury in that court. While he was in Davidson County for this purpose, a separate suit was begun in the state court against the corporation of which Martin was the secretary, and service of process was had on Martin. The employer-corporation filed a plea in abatement, which was held insufficient by the trial court. The Supreme Court reversed the action of the trial court, pointing out: Jurisdiction can be obtained of the corporation only by service of process on its officers or agents, who are presumed to be interested in the corporation. We see no reason why the exemption should not apply to a suit against the corporation, with service of process on its officer, as well as if it were a suit against the individual. He is interested in either event. 120 Tenn. at 344, 107 S.W.2d at 969. In the present case it was stipulated that Mr. York was in Knox County solely in his capacity as an officer of a corporation which was plaintiff in a separate action. He was not subpoenaed, but the corporation of which he was an officer was a party-litigant, and we hold that Mr. York was immune from service of process under the circumstances shown in the stipulated facts. Chaffin v. Norwegian Cruise Line (Tenn. Ct. App. 1999): The plaintiffs brought a class action against the defendant. The claims were based upon Tennessee Consumer Protection Act violations and fraudulent misrepresentations. This class action is based on the manner and method in which Defendants lure customers with very attractive all-inclusive prices for
31

their cruises and then, in addition to the advertised price, assess customers with non-existent or artificially inflated Port Charges. Each of these forum selection clauses essentially provided that any and all claims, disputes, or controversies whatsoever arising from, in connection with, or incident to each cruise contract must be litigated, if at all, in a particular forum. The forum selection clause in Norwegian's cruise contract established "Dade County, Florida. The trial court dismissed Plaintiffs' claims based upon forum selection clauses contained in written cruise contracts. Issue: Whether the forum selection clauses were enforceable? Holding: Yes. The court held that the clause was valid and enforceable based upon the reasoning in Shute and other cases. The court's decision was based upon the fact that the forum selected in the provision to govern any disputes (Florida in this case) would have enforced the unique provisions of the TN Consumer Protection Act. This goes to the reasonableness test in determining if the forum selection clause is valid. .In M/S Bremen v. Zapata Off-Shore Co., the United States Supreme Court recognized that, under federal law, forum selection clauses in particular cases can be found to be invalid and unenforceable if they are shown to be unreasonable or unjust under the circumstances, or if the clause was invalid for such reasons as fraud or overreaching. The Court subsequently elaborated upon its fraud reference in Scherk v. Alberto-Culver Co., wherein the Court stated the following: In Bremen we noted that forum-selection clauses "should be given full effect" when "a freely negotiated private ... agreement [is] unaffected by fraud...." . This qualification does not mean that any time a dispute arising out of a transaction is based upon an allegation of fraud, as in this case, the clause in unenforceable. Rather, it means that ... [a] forum-selection clause in a contract is not enforceable if the inclusion of that clause in the contract was the product of fraud or coercion. The Supreme Court has further recognized that parties seeking to have forum selection clauses set aside based upon unreasonableness "should bear a heavy burden of proof." A contractual choice-of-forum clause should be held unenforceable if enforcement would contravene a strong public policy of the forum in which suit is brought, whether declared by statute or by judicial decision. Plaintiffs would have us conclude that enforcement of the forum selection clauses would contravene the TCPA and, therefore, the public policy underlying the TCPA. In order to determine whether Plaintiffs will be able to assert substantially the same rights and seek substantially the same remedies in a selected forum, two questions must be answered. First, could the same rights and remedies be asserted under the law of the selected forum? Second, could the TCPA claims be asserted and litigated in the selected forum? If the answer to answer to either or both of these questions is yes, then the substantive rights or benefits established under the TCPA are not limited or waived, the TCPA's purpose is not contravened, and the applicable forum selection clause is enforceable. In this case, the forum selection clauses that are applicable to three of the named defendants, Norwegian, Carnival, and Royal Caribbean, designated Florida. The forum selection clause that is applicable to the remaining defendant, Princess, designated California. Plaintiffs,
32

however, have not raised and averred either Florida's or California's laws. Because they have failed to raise these foreign laws, and because the foreign laws are not included in the record on appeal, we find it unnecessary for this Court to ascertain and judicially notice any such laws. Therefore, we must presume that the consumer protection laws of Florida and of California are the same as the laws of the state of Tennessee. Accordingly, we find that enforcement of the forum selection clauses will not limit or waive Plaintiffs' substantive rights and remedies afforded under the TCPA and will not contravene the TCPA's purpose. As such, we conclude that enforcement of the forum selection clauses will not "contravene a strong public policy," and that the clauses are enforceable. We find that the subject forum selection clauses are neither invalid based upon fraud nor unenforceable based upon unreasonableness. Moreover, we find that the subject forum selection clauses do not contravene a strong Tennessee public policy. Accordingly, we find that the forum selection clauses are enforceable and that the trial court's dismissal was proper. We therefore affirm. * Note* This case is good authority for the proposition that forum selection clauses are valid if all the prerequisites are met (i.e. knowledgeable, reasonable and no fraud or overreaching.)

Zurich v. Inman (Tenn. 1968): Plaintiff, from GA, sued Defendant, from AL in TN circuit court after a car accident that occurred in GA. P sued in TN because he was treated at a Chattanooga Hospital. D attacks jurisdiction on grounds of forum non conveniens. Courts of general jurisdiction in TN have inherent power to apply the doctrine of forum non conveniens as a ground for refusal to exercise jurisdiction over a cause of action arising beyond the boundaries of TN. The doctrine of forum non conveniens presupposes the court has jurisdiction of both the parties and the subject matter. The doctrine also presupposes there is at least one forum other than the forum chosen where the P may bring his cause of action, and it is necessary the trial court determine such other forum is available. If this case were tried in TN, the court would apply GA law as long as the law of the foreign state wasn't against public policy. The fact that another state's law are so materially different from the forum state that their application would be difficult or is against public policy would be a factor to consider under forum non convenien doctrine. The fact that there are out of state witnesses is not of itself enough to support an application of the doctrine. This factor has to be supported by facts showing why, due to out-of-state witnesses, there is a strong likelihood D will be done an injustice if forced to go to trial in the forum selected by the P. This can be done by giving the names of the witnesses, nature and materiality of their testimony, and any other applicable facts. Three factors supporting the application of the doctrine of forum non conveniens: 1) non-residency of the parties; 2) construction and application of foreign laws; and 3) out of state witnesses.

33

One, all, or a combination of these factors could, upon proper showing, support an application for the doctrine. * This case recites the public and private factors to look at as cited in the Gulf Oil case. * Notes*: Forum non conveniens requires at least two forums that have jurisdiction. Remember, forum non conveniens is not necessary in federal court system because of the transfer statute. Package Express Center v. Snider Foods: Tennessee Corp. sued a Missouri corp. in Greene County, TN based on a forum selection clause in the contract between the two. The defendant in Missouri makes a limited appearance contesting jurisdiction. The defendant filed an action for forum non conveniens and the Chancellor determined that Missouri had jurisdiction and grants the defendant's motion. Chancellor applied forum non conveniens in contravention to the contract language and Package Express appealed. Holding. Chancellor found that forum non conveniens was appropriate to apply considering all the factors in the case. In this case, it was not considered an abuse of discretion for the trial court to rule that the forum selection clause was defeated by the doctrine of forum non conveniens. Foreign Judgments Chapter V This chapter will deal with foreign judgments of sister states and other countries. There is no obligation under the full faith and credit clause to give credit to judgments of another country. When this is done it has more to do with comity or courtesy. The Constitution mandates full faith and credit as to sister states as well as between federal and state fora. But it is primarily directed to states. Not only judgments but legislative enactments as well. Policies Underlying the Recognition and Enforcement of Foreign Judgment. Public policy dictates that there be an end of litigation. This policy is embodied in the doctrine of res judicata. In cases which do not fall within the constitutional mandate of full faith and credit the American courts have often talked in terms of comity. In this country an express constitutional mandate calls for the extraterritorial recognition and enforcement of sister states and federal judgments in the full faith and credit clauses. Hilton v. Guyot: The defendant, an American citizen was sued in France upon a debt. The French plaintiff prevailed and brought the judgment to the US for execution. The American defendant argued that he did not owe the debt; that he was not permitted to cross-examine certain witnesses; that certain witnesses were allowed to testify though not under oath; that certain papers were used in evidence against him which would not have been admissible in an American court; and that the French courts examine the merits of American judgments before executing them. The trial court executed the French judgment w/o examining the merits of the judgment. The USSC noted that comity was not entirely a matter of discretion of courtesy, nor was it strictly a matter of international law. Countries routinely give force to transfers of title, marriage, divorce, and other determinations by foreign courts. Where a foreign court conducts itself according to a single rule of law (the same law for a foreigner as for its own citizens), where that law is likely to produce a fair an complete hearing of the merits, and there is no appearance of fraud, the judgment of that foreign court should be honored by our own courts. The fact that procedures of the foreign court differ from our own are not alone a proper basis to
34

reopen the merits of the case. However, the fact that the Republic of France re-examines the merits of other countries, except where they expressly have agreed not to do so by treaty, puts this case in a different category. Comity is predicated on reciprocity. When a citizen of a foreign country brings an action against a US citizen in a US court to enforce a foreign judgment rendered by a court with competent jurisdiction and which followed a form of due process, then that judgment is conclusive upon the merits unless there are grounds for impeaching the judgment, for fraud or prejudice, or unless there is a lack of reciprocity on the part of that foreign country as to the effect of US judgments. Or lack of opportunity to be heard. In that case, comity would not be extended. Prerequisites for comity: The court in the forum had jurisdiction of the cause The proceedings were regular in nature and followed procedure Due notice to the parties If we have these three, then the U.S. will generally grant comity but they are not required to do so. German courts have a reluctance to enforce American judgments involving punitive damages and damages for pain and suffering. US courts will ordinarily express judgments enforcing foreign judgments in US dollars but they are not precluded from giving judgment in the currency in which the obligation is denominated. Hyde v. Hyde Foreign divorce case. TSC Holding: Foreign judgments are subject to same protections and same avenues of attack as domestic. Note: if jurisdiction has already been litigated in rendering forum, it cannot be relitigated here Recognition and Enforcement in General In Personam Judgments In the state of rendition, an in personum judgment for a sum certain can normally be enforced by a levy of execution against any local property of the defendant. All in personum judgments also have one or more of the following effects: (1) Merger: by which the plaintiff's original claim (cause of action) is merged in a judgment for a sum certain, so that the original claim is extinguished and a claim on the judgment takes its place. Judgment is then merged into a debt. (2) Bar: by which a judgment for the defendant extinguishes the original claim. (3) Issue preclusion: by which issues of fact and perhaps of law actually litigated in the action are conclusively determined in subsequent proceedings in which the same issues arise, even though the claim may be different. If the subsequent proceedings are on the same claim, this is sometimes known as direct estoppel. If the question arises in connection with another claim, this has commonly been called collateral estoppel. Lynde v. Lynde: Wife (P) obtained a divorce fro husband (D) in NJ. She subsequently returned to court there to have a decree of alimony entered which had been inadvertently omitted from the original judgment. The NJ court granted a decree for $7840 past due alimony plus $1000 attorney fees and ordered future payments to be made at $80 per month. Husband appeared generally to contest the alimony action in NJ. He had no assets in NJ to execute upon, and wife brought the judgment to NY for enforcement there.
35

Holding: The decree for the lump-sum past due alimony and attorney fees being a final judgment is enforceable in the courts of NY. It could not be enforced directly since the NJ court lacks jurisdiction in NY. However, the decree for future alimony, being modifiable, is not a final judgment and is not entitled to full faith and credit in NY. The provisions of the decree requiring the husband to post a bond and to sequester his property and to enjoin disposal thereof are execution procedures not enforceable outside NJ. Enforcement of the NY decree must be by NY procedures. * A valid judgment rendered in another state cannot be relitigated when enforcement is sought in the courts of a sister state. The only defense the defendant can raise is lack of jurisdiction of the rendering court. However, once the judgment is enforced in the courts of another state, it becomes bound to the rules of enforcement and limitation of the second state since it is not a judgment of the second state. * When you have a determination of custody, it is res judicata as to the other issues merged in it. Emery v. Hovey: Emery was a New Hampshire attorney who rendered services for the defendant, a resident of Maine. The services were rendered partly in Maine and partly in new Hampshire. Emery brought suit in Maine to recover the fees owed. The defendant set up as a defense a Maine statute prohibiting the recovery of attorney fees in that state by an attorney not licensed there. Judgment was rendered in favor of defendant. Emery then brought suit in new Hampshire on the same claim, and the defendant set up as a defense the judgment rendered in the Maine suit. Issue: Will the judgment of a sister state's court, having valid jurisdiction, be entitled to full faith and credit enforcement in the forum, even when that judgment is based on errors of fact or law? Holding: Yes. Where a cause of action has been litigated in the courts of a state having jurisdiction over the parties and the cause, a judgment thus rendered is entitled to full faith and credit effect in every other state. If that judgment was based on errors of law or fact, such errors must be appealed in the state where judgment was rendered. The cause of action cannot be relitigated in the courts of another state. The judgment in favor of the defendant in Maine act as a bar to the action in New Hampshire. * The error apparently alleged was the failure of the Maine court to render judgment in favor of Emery on that portion of the fees claimed to have been earned in New Hampshire. Has Emery filed suit in New Hampshire and received judgment in the full amount, that judgment would have been given full faith and credit enforcement in Maine if Emery had sought to enforce it there. While not stated, it would appear the fees arose out of a single transaction which would preclude Emery from splitting his cause of action for the services rendered in the respective states. * The claim merges into the judgment and when that takes place, there is a bar to the relitigation of the claim. * To be a bar, it was to be dismissal on the merits. A rule 12 motion to dismiss is not on the merits. But a summary judgment dismissal is a bar. * The Uniform Enforcement of Foreign Judgments Act means any judgment decree or order of a court of the US or of any other court which is entitled to full faith and credit in this state. 28 USCA 1963: applies to judgments in an action for the recovery of money or property. A judgment registered in a second federal district becomes in effect a new F2 judgment subject to the rule of F2. So the judgment will be subject to the F2 statute of limitations rather than to that of F1.
36

Judgments Based on Jurisdiction Over Things or Over Status Judgments of this sort do not impose a personal obligation upon the defendant and hence, unlike in personum judgments, cannot be enforced by action in other states. Their basic effects in the state of rendition are set forth in the Restatement, Second, Judgments: Section 30: Judgments Based on Jurisdiction to Determine Interests in Things. A valid and final judgment in an action based only on jurisdiction to determine interests in a thing: (1) Is conclusive as to those interests with regard to all persons, if the judgment purports to have that effect (traditionally described as "in rem"), or with regard to the named parties, if the judgment purports to have that effect (traditionally described as "quasi in rem"); and (2) Does not bind anyone with respect to a personal liability; and (3) Is conclusive between parties, in accordance with the rules of issue preclusion, as to any issues actually litigated by them and determined in the action. Combs v. Combs: Combs (D), a resident of Kentucky, borrowed money from his brother (P), giving a lien on real property in Arkansas as security. The brother (P), a resident of neither KY or Arkansas, brought suit in KY to obtain a judgment of the loan. The defendant set up as a defense a judgment of an Arkansas court releasing the lien and determining the amount of the debt owed which was then paid to the Arkansas court. No personal service was had on the brother (P) in Arkansas. Issue: May a court validly adjudicate personal rights of an individual where it can validly exercise only "in rem," not personal, jurisdiction over property in which he has an interest? Holding: No. Full faith and credit and res judicata effect will be given to the judgment of a sister state only where the court rendering the judgment had competent jurisdiction over the subject matter and the parties. Arkansas had jurisdiction to release the lien on the land within its jurisdiction. Although it could make a determination of the amount owed by the defendant to his brother (plaintiff) incidental to the lien release, such determination would not be binding w/o personal jurisdiction over the plaintiff. Since no personal jurisdiction was had over the brother (P), this suit in KY is not barred by either full faith and credit or res judicata. * The Arkansas court attempted to exercise quasi in rem jurisdiction over the plaintiff by its determination of his rights in the debt. Quasi in rem judgments, as well as in rem, are not exportable to another state where no valid personal jurisdiction was had in the original proceeding. Modern long-arm statutes have substituted personal jurisdiction for quasi in rem jurisdiction in most instances. Harnischfeger Sales Corp. v. Sternberg Dredging Co.: Harnischfeger (P) brought suit in Louisiana to foreclose on a chattel mortgage and promissory note given by Sternberg (D) for the purchase of a dredge. Although the defendant asserted a breach of warranty defense, the action was adjudged in rem for lack of jurisdiction over the defendant. Harnischfeger (p) then brought suit in Mississippi w/ personal jurisdiction over the defendant to enforce the balance of the note not satisfied by the Louisiana foreclosure action. Defendant again asserted breach of warranty, but Harnischfeger (P) contended the Louisiana judgment was res judicata on that issue. Issue: May a defense asserted by one party in a previous in rem proceeding elsewhere be relitigated in a suit in the forum between the same parties over issues arising out of the same set of facts? Holding: No. Defendant contends he is not estopped from asserting the same defense in this action that was decided against him in Louisiana, since that was an in rem proceeding that did
37

not bind him personally. But it is clear that the previous Louisiana judgment would be res judicata if the present suit had been brought in Louisiana. Since Mississippi must afford such a judgment the same effect it would have in Louisiana, the res judicata estoppel must apply here as well. Judgment for the balance of the notes is awarded to Harnischfeger (p). * Subsequent to this decision, the defendant attempted to have the judgment reheard on the grounds of fraud, not breach of warranty. The Miss. Court refused the rehearing by saying that the same issues of fact and law applied although different labels were attached. One criticism leveled at this decision was that the defendant was forced to either submit to the jurisdiction of the Louisiana court or abandon his property w/o defense. Particular Effects Persons Affected Sovereign Camp v. Bolin: Sovereign Camp (D) was a fraternal benefit society organized under the laws of Nebraska. One of the membership benefits was the right to designate death benefit beneficiaries as long as the member paid a monthly assessment. The society (D) enacted a bylaw which permitted members over 43 years of age to cease payments after 20 years and still hold a death benefit certificate. Bolin joined the society (D) in Missouri and, after 20 years, ceased his assessment payments in reliance on the terms of the certificate issued to him. Upon his death, the society (D) refused payment to his beneficiaries (P), citing a Nebraska Supreme Court decision which had declared the issuance of such certificates to be ultra vires. The Missouri Court of Appeals held that Bolin's rights were to be determined by Missouri, not Nebraska law and entered judgment for the beneficiaries (P). Issue: Must a state give full faith and credit to another state's decision defining the rights of membership in a fraternal benefit society, even if the certificates of membership was issued in the forum state? Holding: Yes. Missouri cannot attach to membership rights which were refused by Nebraska, the place of the association's domicile. The Nebraska decision was based on a class suit in which the rights of all the association's (D) members were determined. The forum state must recognize the fundamental law concerning this special type of association and cannot turn the membership certificate into an old line insurance policy. Judgment reversed. * While in other cases the Supreme Court has taken a rather permissive view of the full faith and credit clause, it has repeatedly carved out an exception for suits involving fraternal benefit insurance associations. These cases have been limited to the peculiar nature of these associations and have not been extended to ordinary insurance carriers. * Notice something about this case. This plaintiff is not in litigation. He has no knowledge of the litigation that preceded him. However, that preceding litigation makes a determination of an important right, an issue, that affects him. There are certain types of issues that once determined have extra-territorial effects. In this case, it is somewhat of a novelty to have that issue resolved in such a way that citizens of one state had no opportunity to present their claim in another state. That will not happen, it will not be accepted by another state, unless the citizen in the 2nd state had no greater interest or right than that of the citizen who existed in the state of the original litigation. When you change it just a tad, when the rights are different just a tad, from one state to another, we would be allowing some other state to diminish the rights of the citizens of our state. So there must be mutuality of interests to have this extraterritorial effect. This fraternal organization treated all their members exactly alike. All the parties have to be in the same situation, in order for this Nebraska decision to preclude someone from Missouri from bringing a claim.
38

Pay close attention to this case. Riley v. New York Trust Co.: After the decedent's death, Riley (P) was named executor of her will and estate in GA. In probate proceedings in GA, the decedent's domicile was determined to be GA. P then requested delivery of reregistered shares of Coca-cola stock from the corporation. A second probate proceeding was opened in NY, with New York trust co. (D) named as administrator, for the purpose of satisfying creditor and estate tax claims in NY. The defendant asserting NY as the decedent's domicile, requested the reregistered shares be forwarded to it. Coca-cola filed a bill in interpleader in Delaware, its state of incorporation, to resolve the conflicting claims. The Delaware court relitigated the issue of domicile and determined that NY was the decedent's domicile at death. Issue: May an issue of domicile be litigated in one state where that issue has been determined by another state when the party to the second suit was not a party to the first determination? Holding: Yes. Since the defendant was not, and by GA law could not have been, party to the GA proceeding, the question becomes whether the Delaware court was obligated to give full faith and credit to the GA determination of domicile. The Full Faith and Credit Clause is designed to prevent endless litigation over the same issue by the same parties by the expedient of changing jurisdictions. But a party cannot be bound by a proceeding where the court did not have jurisdiction over the subject matter, particularly where the present litigant was not involved in the prior action. The GA probate was an in rem proceeding, and it cannot have extra territorial in personam effect. Delaware, having jurisdiction over the res and both parties, was competent to determine domicile de novo, and the judgment determining the decedent's domicile to be NY and awarding the stock to the defendant as administrator is affirmed. Since the defendant, as representative of creditors and the state taxing authorities, cannot be in privity with any of the parties to the GA proceeding, it was not bound by that decision. * Section 94 of the Conflicts Restatement 11 states that the local law of a jurisdiction will determine what parties are bound by a valid judgment rendered by that jurisdiction. * The concept of res judicata in TN is "all claims that were merged or could have been merged." Kremer v. Chemical Construction Corp.: Kremer (P) filed a complaint with the Equal Employment Opportunity Commission under Title VII of the Civil Rights Act of 1964, contending he was discharged from his job on the basis of illegal discrimination. The Commission referred the charges to the NY state division of human rights, the state agency charged with enforcing the NY law against discrimination, which rejected them as meritless. The NY appellate division affirmed, and the plaintiff filed a Title VII action in federal court. The district court dismissed the complaint on res judicata grounds. Plaintiff appealed, contending the NY state court judgment should not bar his federal action because the state court never decided the case on the merits and because Congress intended that federal courts were to be relieved of their usual obligation to grant finality to the state court judgments in cases involving Title VII. Issue: Are federal courts required to give state court judgments the same res judicata effect they would give in courts of the state in which they were entered? Holding: Yes. 28 USC 1738 requires federal courts to give the same preclusive res judicata effect to state court judgments that those judgments would be given in the courts of the state in which they were entered. In this case, the dismissal of the action as meritless by the NY court clearly would bar subsequent suits on the same cause of action in NY courts. The elements of
39

a successful employment discrimination claim are virtually identical under state and federal law. As a result, the federal court was correct in dismissing the suit. Affirmed. * In this case the Court based its holding on the statutory requirements found in 28 USC 1738. Because of this, a strong argument could be made that the requirement that federal courts give res judicata effect to state court judgments is not necessarily grounded in the Full Faith and Credit Clause. If it is not, it is not of constitutional proportions and Congress would be free to limit the preclusive effect through legislation. * This particular case recognizes that an adjudication in state court in most cases can be used as a bar, even to a federal claim in a federal district court. However, there is a caveat. In looking at the statute, Title VII, they ask if there was any part of that statute that preempted states from hearing these types of claims. Finding none, then that particular adjudication is entitled to full faith and credit, even though it comes from a state court. Marrese v. American Academy of Orthopedic Surgeons: Plaintiffs sued in IL claiming that D infringed their rights by denying them membership. State court denied relief due to a lack of anti-trust laws in the state and the suit was brought in federal court. Federal court dismissed on res judicata. Is this proper? Holding: Since the claim could not properly be litigated under IL law, it may be litigated in the federal court system. *Note*: You cannot have the preclusionary effect on an action where the state court did not have jurisdiction on the claim. But that is not the end result. The way to determine is to determine what the state law says the preclusionary effect of the state claim is. Even if the court does not have jurisdiction of the federal claim, look to what state law says regarding the preclusionary effect. It is possible that a state claim could preclude a federal claim even though the state did not have subject matter jurisdiction over it in the first place. Magnolia Petroleum Co. v. Hunt: Holding: A final worker's compensation award in one state is entitled to FF&C in another state and prohibits the second state from granting a recovery for the same injury. Statutes and decisions from a foreign state are not entitled to exactly the same time of full faith & credit. BUT SEE Industrial Commission of Wisconsin v. McCartin: Holding: An award on Workers Comp benefits in one state will not prevent the injured employee from seeking additional benefits elsewhere if the original award cannot be read to preclude recovery of any other benefits no matter where they are sought. Here, the settlement agreement between the parties specifically stated P would be able to seek additional benefits in the other state. AND SEE Thomas v. Washington Gas Light Co. Holding: The FF&C clause should not be construed to preclude successive worker's compensation awards. Explicitly Overrules Magnolia. Also makes a distinction between
40

the preclusive value of a decision by an administrative board (Magnolia) and a Court of general jurisdiction (McCartin). Preclusive value of court is much higher. Issues Affected: What issues are determined by a valid judgment is determined subject to constitutional limitations, by the local law of the staae where the judgment was rendered. Phillips v. GMC Automobile manufacturer could not successfully plead res judicata in action against it for breach of warranty by buyer of automobile who had previously brought unsuccessful action arising out of same transaction against automobile dealership for rescission and revocation of acceptance, as action for rescission and revocation of acceptance and one for breach of warranties are different causes of action. Collateral estoppel precludes relitigation of issues between parties or their privies in different causes of action provided resolution of issue was necessary to decision. Rule requiring that collateral estoppel apply only to issues necessary to resolve previous decision does not mean to preclude collateral estoppel upon findings of more than one set of facts each of which requires a decision in favor of a particular party. Beaty v. McGraw The purposes of collateral estoppel are to conserve judicial resources, to relieve litigants from the cost and vexation of multiple lawsuits, and to encourage reliance on judicial decisions by preventing inconsistent decisions. The "collateral estoppel" doctrine bars the same parties or their privies from relitigating in a second suit issues that were actually raised and determined in an earlier suit. The party seeking to rely on the doctrine of collateral estoppel has the burden of proof. To successfully invoke collateral estoppel, a party must demonstrate that: (1) the issue sought to be precluded is identical to the issue decided in the earlier suit; (2) the issue sought to be precluded was actually litigated and decided on its merits in the earlier suit; (3) the judgment in the earlier suit has become final; (4) the party against whom collateral estoppel is asserted was a party or is in privity with a party to the earlier suit; and (5) the party against whom collateral estoppel is asserted had a full and fair opportunity in the earlier suit to litigate the issue now sought to be precluded. For the collateral estoppel doctrine to apply, the issue sought to be precluded in the second proceeding must be identical, not merely similar, to the issue decided in the first proceeding. Harrington v. Boatright Former wife brought action to enforce property settlement agreement incorporated into final divorce decree. Appeals court held that the chancellor correctly enforced the property settlement provision as set out in the divorce decree of the Ohio court. Questions respecting proper beneficiaries under national service life insurance policies are governed by federal law rather than by state divorce law or by state divorce decrees. Seiller & Handmaker, LLP v. Finnel Enrollment in Tennessee of Kentucky lawyer's foreign malicious prosecution judgment against Tennessee client who had filed bar complaint against lawyer based on lawyer's pursuit of fees was not against Tennessee's public policy, even if state supreme court rule prohibited in Tennessee the malicious prosecution claim; relevant Tennessee rule was much broader in scope than the corresponding Kentucky rule which permitted the filing of a malicious prosecution lawsuit against one who files a bar complaint. Tennessee courts are not obligated to give full faith and credit to any judgment of a state held to be violative of Tennessee's public
41

policy or the Federal Constitution. A party who invokes the public policy exception to the full faith and credit rule must identify the public policy that is offended by the foreign judgment and has a stern and heavy burden. Although the determination of public policy is primarily a function of the legislature, the judiciary may determine public policy in the absence of any constitutional or statutory declaration. In re Estate of Davis In context of probate of husband's will, wife petitioned for elective share, homestead, exempt property and support allowance against husband's estate. Absent a contractual choice of law provision, Tennessee courts apply the lex loci rule to contract causes of action; accordingly, the substantive law of the state in which the contract was executed governs disputes arising from the contract. An exception to the lex loci rule that the substantive law of the state in which a contract was executed governs a dispute arising from the contract is made when the contract is to be performed in another state and the parties envision performance in accordance with that state's laws. The primary consideration to be made in determining whether a contract dispute is to be is governed by the law of the state where the parties envisioned performance rather than by the law of the state where the contract was executed is whether the contract was made in good faith with reference to the law of some other state, or with a view to the other state, and the intent of the parties in this regard is to be gathered from the terms of the instruments and all of the attending circumstances. Mutality of Estoppel A question of increasing importance is the impact of full faith and credit in situation where F-1 and F-2 have different rules with respect to the collateral estoppel effect of a judgment in a later action between a party to the judgment and a stranger seeking to rely on it (offensive collateral estoppel.) A case in point is Hart v American Airlines Inc. That case arose out of a crash in KY of an AA plane in which most of the passengers were killed. The first to go to judgment was an action brought in Texas. Thereafter in a NY action involving different passengers the plaintiffs contended that under principles of collateral estoppel AA was precluded by the Texas judgment from denying that its negligence had caused the accident. This was the NY rule of CE but not the Texas rule. The court continued that the defendants reliance on full faith and credit was misplaced since this was not an action to enforce the Texas judgment and that what was here was NYs policy determination that one who had his day in court should not be permitted to relitigate the question anew Limitations on Full Faith and Credit Fall v. Eastin: Washington divorce where the decree awarded Nebraska land and ordered D to convey title to the wife. Defendant deeded land to others and wife filed suit to quiet title to her land. May one state change title in land to another. Holding: The Court may hold the defendant in contempt for failing to convey the deed but may not directly effect title to real property in other states. Equity decrees are entitled to FFC. Fall v. Eastin: A court of equity may use contempt power to enforce decree where it does not have jurisdiction over land. Post divorce action to quiet title. Holding: A court of equity, having valid jurisdiction over the person, may order the owner of real property located elsewhere to convey that property by proper deed. This order can be enforced through contempt citation. The court in this case did not have valid jurisdiction over the property. Note: This case does NOT stand for proposition that equity judgment is not entitled to FF&C
42

Restatement says that a valid foreign judgment that orders the doing of an act other than the payment of money or that enjoins the doing of an act will be given the same degree of recognition as any other judgment. This means that such a judgment will be given the same res judicata effect with respect to the persons the subject matter of the action and the issues involved that it has in the state of rendition. The great majority of cases dealing with the enforcement of equity decrees that order the doing of an act other than the payment of money have involved an order to convey land. Yarborough v. Yarborough: Yarboroughs daughter who lived in SC with her grandfather sued her father for support payments. He argued that in GA he had paid a lump sum and had complied. Do SC courts have to give FFC to the judgment of the GA court? Holding: The GA decree did release the father and it did comply with GA law. SC did not have jurisdiction over the Father in this situation. Yarborough v. Yarborough: Forum 2 may not alter terms of divorce decree by Forum 1. Child sued in SC court to increase support ordered by GA. Court. SCOTUS holding: Georgia judgment was entitled to full faith & credit. *Note*: The result in this case might be different today (Per McD) Courts have found that an earlier judgment was not meant to foreclose another state with a compelling interest from acting upon changes in circumstances at a future date, particularly in the area of support where the parties to the original judgment have changed domiciles. Restatement says that a judgment rendered in one state of the US need not be recognized or enforced in a 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. Baker v. General Motors Corp.: Case involving products liability concerning a GM vehicle. Ex-employee of GM testified on behalf of the plaintiff. He was discharged and filed a suit and it was settled including an injunction against the employee to prohibit him from testifying in any future trials. He was subpoenaed to testify in a Missouri case. Trial court ordered it but appeals court reversed. Supreme Court held that one court could not bind another in trying their cases. Kennedy pointed out that the home state court would not have enforced this anyway so a complicated analysis was not necessary. Not same parties. Not res judicata. Baker v. General Motors: Injunction which interferes with exclusive power of sister state cannot be enforced. Company settlement prohibited employee from testifying anywhere in US. He was subpoenaed to testify in MI. SCOTUS Holding: Expert may testify without offending FF&C. When an injunction interferes with the EXCLUSIVE PROVINCE of a sister state, it cannot be enforced. Pay close attention to the notes case, James v. Railroad, on page 287. We spent a lot of time on this case. Magnolia Petroleum Co. v. Hunt: Hunt lived in LA and was injured while working for Magnolia in Texas. He received a Texas WC award but later sued in LA because the benefits were better. The LA court made an award and deducted the Texas amount. Magnolia appealed. Holding: Once one state makes an award in a workers compensation case, a second state is precluded from making a subsequent award. Cant give Texas Commission full faith and
43

credit. In Tenn the remedy for WC is exclusive. Cant elect in another state and come to Tenn. Thomas v. Washington Gas Light Co.: Plaintiff lived in DC and worked for DC company but also worked in VA. He sustained a back injury in VA and entered into a settlement under the work comp law. He then notified the Dept. of Labor he intended to pursue a claim under DC law too. Company defended and district court granted a second award and Court of Appeals reversed. Holding: Supreme Court overruled Magnolia and held that Full Faith and Credit does not preclude successive workers compensation awards. Commissions that have authority to make full and complete determinations will follow Magnolia. Defenses The fact that a court made an error either of fact or of law is not an adequate reason for a failure to recognize the judgment either under full faith and credit or at common law. A judgment if not entitled to recognition or enforcement either at common law or under full faith and credit if the rendering court lack jurisdiction or if the defendant was not given reasonable notice and a reasonable opportunity to be heard. .The mere fact that something is termed a judgment by the state of rendition does not entitle it to full faith and credit as such. Thus the constitutional protection as denied to a commissioners report appraising the value of property for probate purposes even thought he state in which the report was filed denominated it as a judgment and treated it as binding unless appealed from and to a bond given in stay of execution which under the law had the effect of a judgment confessed if forfeited. Nature of the Original Proceedings Adam v. Saenger: Adam sued Saenger in CA and on a cross complaint (process served only on attorney) Saenger got a judgment. D then sued in Texas to enforce the judgment. Texas refused FFC based on its own standards for proper service. Holding: The CA judgment must be afforded Full Faith and Credit. Since the plaintiff began this in CA, he must be bound by its procedural rules including service on an attorney as service on the party.

Adam v. Saenger: Full Faith and Credit review limited to jurisdiction only, not to error or proper service Holder of a CA judgment came to Texas to enforce the judgment. The TX court refused enforcement on the ground that no valid service was had. Holding: In determining the enforceability of a sister state's judgment, the receiving forum must give that judgment the same force and effect it would have in the rendering state, not what it would have in the receiving forum. The only legitimate inquiry into the applicability of the judgment the forum may make is to determine if the rendering court had the jurisdiction, both subject matter and personal, to render the judgment. If the requisite jurisdiction was present, the forum cannot review errors of fact or law leading to the judgment. Four Seasons Gardening v. Crouch Ga. planter sues Tennessee growers under long arm statute & seeks to enforce judgment in Tennessee. Tennessee trial court applies Tennessee long arm statute & dismisses. Holding: Tennessee court should have applied Georgia long arm statute. Reversed.

44

First Tennessee Bank v. Smith Last valid judgment in time prevails Will case in two states. Both cases had gone to respective Supreme Courts & obtained final judgments. Holding: Last valid judgment determines rights of parties. LAST IN TIME APPLIES. Thompson v. Whitman: Notes. Baldwin Case: A decision of a state court in a proceeding begun by a motion to set aside a judgment for lack of jurisdiction over the parties is res judicata and is entitled to full faith and credit in a federal court where the defeated movant sought an injunction against enforcement of the judgment of the state court. Dufee Case. Quiet title case in Nebraska was res judicata on Missouri. Treinies v. Sunshine Mining Co.: Pelkes wife died, leaving the estate to him and his daughter. They divided the property by agreement ignoring the will. Part of the estate was shares of stock in Sunshine. Will was probated in Washington. Later the stock became valuable Daughter sued father in Idaho claiming one half the stock and opened the probate proceedings in Washington to replace Pelkes as administrator. In short the issue was litigated in two courts and the question ultimately becomes, which judgment is the effective one. Idaho determined that Washington did not have subject matter jurisdiction over the estate. The decisions were opposite in Idaho and Washington. Restatement of the Law: Inconsistent judgments. A judgment rendered in a state of the US will not be recognized or enforced in sister states if an inconsistent but valid judgment is subsequently rendered in another action between the parties and if the earlier judgment is superseded by the later judgment under the local law of the state where the later judgment was rendered. Colby Case: The divorce decree was not given full faith and credit in Maryland but was still valid in Nevada. Holding: In this case the latter judgment was held to be the one given full faith and credit in this case. Last in Time Applies. The earlier decisions were not appealed to the federal court therefore last in time wins. The denial of full faith and credit to the Washington court should have been appealed because it was a constitutional issue. As a result the Idaho judgment was the last final judgment. Restatement of the Law : Inconsistent Judgments. A judgment rendered in a state of the US will not be recognized or enforced in sister states if an inconsistent but valid judgment is subsequently rendered in another action between the parties and if the earlier judgment is superseded by the later judgment under the local law of the state where the later judgment was rendered. Restatement of the Law : Vacated Judgment, Usually in the US the rule is that if appellate proceedings do not by the local law of the state of rendition vacate the judgment, suit to enforce the judgment may be brought in another state. Usually the courts of the state in which enforcement of the judgment is sought will either stay their judgment or stay execution thereof pending the determination of the appeal. Lynde v. Lynde: Barber v. Barber: Wife sued husband in Tennessee on a North Carolina alimony decree. He stopped paying after 12 years and had not paid for 8. Tennessee court found that the North Carolina judgment was still modifiable and not a final judgment so Tennessee did not have to give Full Faith and Credit. Foreign created alimony and support obligations are enforceable in this state. In an action to enforce modifiable support obligation either party may tender and
45

litigate any plea for modification that could be presented to the courts of the state where the alimony or support decree was originally rendered. Light Case. Policy considerations argue strongly that such decrees for past and future installments of alimony be entitled to full faith and credit. Holding: The North Carolina judgment was entitled to Full Faith and Credit, even if it was not final in North Carolina. The finality ought not to be a requirement or relevant inquiry under Full Faith and Credit. If the decree is not made retroactively modifiable it must be given full faith and credit according to this case. UIFSA may apply to some alimony. Justice Jackson says these are entitled to full faith and credit regardless of how they are categorized. This is the law now. Worthley v. Worthley: Wife sued in California to recover on a New Jersey decree which was both prospectively and retroactively modifiable. Holding: The California Court held that it did not have to give FFC but that it chose to. Most states follow this approach with respect to foreign alimony decrees that are subject to modification in the state of rendition. The SCOTUS has never ruled on this issue of installments of alimony that have not yet accrued in the extremely rare situation where these installments are not subject to modification in the state of rendition. Past due accrued installments that are no longer modifiable under the law are final. Full Faith and credit is not constitutionally required for future installments. UIFSA applies in some cases.

Levin v. Gladstein: Gladstein tried to return merchandise purchased from Levin in Maryland. While there he was served process and Levin refused to accept the goods. Levin promised not to pursue if Gladstein would accept merchandise. Gladstein agreed and Levin continued anyway and got a default judgment. Gladstein alleged fraud when Levin tried to enforce in NC. Holding: Since a judgment obtained by fraud is subject to being set aside in one forum it should be impeachable in the second. Full Faith and Credit requires that it be given the same effect in the second as in the first. (Receiving state will use its procedural laws but sending states substantive laws). North Carolina can hear the case. The judgment is allowed the same credit it would receive in the rendering forum. In this case, the court determined that defendant would be able to enjoin enforcement of the judgment of the law court through the equity powers of the chancery court in Maryland on the basis of fraud, therefore so can North Carolina. FFC requires that judgment be given the same effect in F2 as F1. Law and equity merge. The defense of fraud is capable of being raised in enforcement. There is always the remedy of injunction against enforcement the remedy is available in the state. In Maryland it was a remedy. If they enjoined in Maryland then they could in NC. Nature of the Original Cause of Action Huntington v. Atrill: This was the case of the corporate officer who falsely certified that the company had received all its pledged capital. A NY statute held an officer liable on a claim if he falsely certified. Plaintiff loaned $100,000. After the NY corporation became insolvent got a New York judgment against . then transferred his security holdings in a Maryland corporation into trust for his wife and 3 daughters. Filed suit in Maryland to get at these assets. Alleges fraud in moving these funds. Alleges that the NY statute is penal, not civil, and should not be enforced outside the state.

46

Holding: This is not a penal statute but merely one to grant a private redress to corporate creditors. There is a body of law which holds that a state does not have to give Full Faith and Credit to a penal judgment. Since this statute was not this did not apply. Is the law to punish(penal) or address a private remedy? The US Supreme Court has never decided whether sister states money judgments on penal claims are entitled to full faith and credit. If there is a penalty(punishment), the other state will not enforce it under full faith and credit. Civil vs Criminal Contempt is an example of this. If contempt is to punish it is criminal. Fauntleroy v. Lum: The parties engaged in a gambling transaction in Mississippi and the plaintiff sued to collect his money. The court dismissed based on the fact that it was against public policy. Plaintiff sued then in Missouri and received a judgment and then took it back to Mississippi to enforce. Must Mississippi give FFC to something that is against public policy. Holding: Mississippi must give Full Faith and Credit. In this case the Missouri court no doubt supposed that the award was binding by the law of Mississippi. If it was mistaken it made a natural mistake. The validity of its judgment even in Mississippi is as we believe the result of the Constitution as it always has been understood and is not a matter to arouse the susceptibilities of the states, all of which are equally concerned in the question and equally on both sides. Public policy is not a defense to a suit on a sister states judgment. Even if your public policy is violated, the state still must give it full faith and credit. Union National Bank Case: In a suit in Missouri to enforce a Colorado judgment obtained in 1927 and revived in 1945 in accordance with the Colorado practice on personal service upon the defendant in Missouri. In this case the court says it is the 1945 Colorado judgment that claims full faith and credit in Missouri. No Missouri statute of limitations is tendered to cut off a cause of action based on judgments of that vintage. Reading and Bates construction Co. Case, held that although a Texas court would enforce a Canadian judgment under the UFMJRA it would not register a Louisiana judgment under the UEFJA. The Louisiana judgment had recognized the Canadian judgment. It need not give full faith and credit to a sister state judgment enforcing the judgement of a foreign country. McElmoyle held it consistent with full faith and credit for F-2 to refuse to enforce an F-1 judgment on the ground that suit was barred under the F-2 statute of limitations applicable to judgments even though the judgment would still have been enforceable in F-1.

Watkins v. Conway: Watkins gets a $25K judgment against Conway in a Florida court and sought to have it enforced in Georgia, but Georgia law precluded enforcement of judgment not rendered within five years. Waited five years and a day and Georgia court granted summary judgment. Does this violate Full Faith and Credit? Are domestic judgments treated differently than foreign? Holding: No. The date is based on the last date of revival in the initial states. Because the plaintiff may revive the judgment in Florida so long as the statute has not run then it does not discriminate against foreign judgments. Once revived in Florida the plaintiff would have 5 years to enforce in Georgia. Milwaukee County Case: A sister state judgment for taxes must be enforced under full faith and credit. Titus Case. The Ohio court must recognize the judgment creditor as the real party in interest, since he held the judgment, even though he might no have been the real party in interest if he had sued in Ohio on the original cause of action. Judgments have a life. Could go back to Florida and renew the judgment and then go to Georgia.

47

Francis v. Francis Attempt to enforce NC judgment for alienation of affection. TN no longer recognizes this tort as a cause of action. Holding: Although Tenn. does not recognize tort as such any more, it is not such a violation of public policy, as to be offensive to Tenn. public policy. Must give FFC. Lack of a Competent Court Kenney v. Supreme Lodge of the World, Loyal Order of Moose: Kenny obtained judgment in Alabama for wrongful death. When he went to Illinois they refused based on an IL statute which prohibited entertaining wrongful death suits occurring outside the state and the ILSC affirmed. Does IL have to enforce? Holding: Yes. Illinois must give Full Faith and Credit because it attempts to close Illinois court to enforcement of valid judgment rendered by sister states. Anglo American Provision Co Case: Suit by a foreign corporation on a foreign judgment against a foreign corporation. The judgment was obtained in NY and attempted to be enforced in Mass. The court stated that it had no jurisdiction to entertain the case in Mass since Mass law did not allow suit between spouses. Foreign Country Judgments As of 2000 the Uniform Foreign Money Judgments Recognition Act had been adopted in 29 states. A question that remains relatively unexplored by the courts is the extent to which a foreign country judgment will be given a lesser res judicata or collateral estoppel effect in this country than that to which a sister state judgment would be entitled under full faith and credit. Matters Subsequent to F-1 Judgment. Judgments effectiveness as an enforceable obligation can be affected or destroyed by events which take place thereafter. These are payment or other discharge, successive judgments and reversal of earlier judgments. Payment releases and accord and satisfaction are of course valid defenses to the enforcement of a judgment. And where a second judgment has been rendered upon the first, discharge of the obligation created by either of these judgments in one of the foregoing ways will also operate to extinguish that created by the other. A second judgment can be handed down in a suit brought to enforce the first judgment or on the underlying cause of action or where the first judgment was for the defendant and constituted a bar to the prosecution of he second action or where under the principles of collateral estoppel the first judgment has already determined one or more of the relevant issues involved. Assuming the second court had jurisdiction its judgment was a valid exercise of judicial power and remains res judicata of the issues involved despite the reversal of the other. Tennessee Cases: 1. Hyde v. Hyde: Couple got a divorce in the Dominican Republic. Two years later they file in Chancery Court in Shelby County. The referee in this case, appealed the divorce. Tennessee Courts do not have to give comity or effect to a foreign divorce but may choose to. Our Supreme Court held that this divorce did not violate Tennessee public policy and upheld the divorce.

48

Holding: Foreign judgments are subject to same protections and same avenues of attack as domestic. Note: if jurisdiction has already been litigated in rendering forum, it cannot be relitigated here.

2. First Tennessee Bank v. Smith: Last valid judgment in time prevails. Wills case in two separate states. First TN Bank was the executor of a will which had both Mississippi and Arkansas involved. The whole crux of the dispute was who was going to pay the taxes on the land. Under Mississippi law, the relatives who get the land get it free and clear of taxes since those are paid out of other proceeds. When the bank realized this, it asked Mississippi to transfer the case to Arkansas, but the court refused. Ultimately we have two actions by two courts in two states going on simultaneously. Both cases had gone to respective state Supreme Courts and obtained final judgments. Holding: Last valid judgment determines rights of parties. Last In Time Rule Applies. When conflicting judgments are entered in two states, each of which would otherwise be entitled to full faith and credit in the federal court, it is the second judgment which must control; this late in time rule is based not only upon principles of comity and the need for finality but upon the obligation of the litigants toe exercise due diligence in the full and forthright presentation of their controversy. As a result, the bank ultimately ends up paying out $200,000 because of not thinking the jurisdictional issues through. Sunshine Mining case is valid. Even a wrong decision receives full faith and credit. Failure to get this issue before the federal court gives rise to this. Harrington v Boatwright 7. Four Seasons Gardening v. Crouch: This is a default judgment obtained in Georgia against a citizen of Warren County over some trees sold to a Georgia resident from a Warren county nursery. The trees die and the Georgia resident wants a refund. The Georgia resident sued the Tennessee growers under the Georgia Long Arm Statute and then sent the judgment to Tennessee for collection. Trial judge holds that there was not a valid judgment based on the Tennessee long arm statute and dismisses the suit. Holding: The Tennessee court should have applied the Georgia Long Arm statute. The case was reversed. 8. Francis v. Francis: This was an attempt to enforce in Tennessee a judgment out of a North Carolina court for the tort of alienation of affection, which is no longer recognized in Tennessee. The issue of public policy comes up but the bottom line is that we still have to give the NC judgment Full Faith and Credit. Holding: Although Tennessee no longer recognizes the tort of alienation of affection, it is not such a violation of public policy as to be offensive to Tennessee public policy. Therefore, the judgment must be given Full Faith and Credit in Tennessee. 11. Home Insurance Co. v Leinart (Phillips): Collateral Estoppel. The issues must be identical to estop the second suit. False arrest case involving a school employee. She sued the county and the insurance company wanted out since the commissioners were not acting on behalf of the countys business. Section 1983 suit and a Tennessee declaratory judgment as to whether the commissioners were acting on the countys business as far as not paying on the policy. The
49

Commissioners WERE acting under color of law, but not necessarily on the business of the county. However the 1983 determination was not necessarily involving collateral estoppel. Holding: In order for collateral estoppel to apply in Tennessee, you must have: (1) the same parties; (2) identical issues; and (3) the resolution of the issue must have been necessary to the prior determination. 12. Dickerson v. Godfrey: Tennessees narrow interpretation of collateral estoppel. This case involved a Workers Compensation claim. A worker digging a ditch for a sewer line was killed, and his wife filed an action to recover in tort from landowners. Collateral Estoppel: (a) Determined in a prior suit between the same parties, and; (b) The issues determination was necessary to the judgment. Holding: Collateral Estoppel only applies when specific issues are identical from one case to the other. The previous determination must have been necessary to the decision in the first case. The asserting party has the burden of proof. THE IMPACT OF THE CONSTITUTION Chapter VI The bulk of the course is devoted to problems in choice of law. The constraints and compulsions that may literally override state court conflicts policies flow from the US constitution directly or indirectly. First is the supremacy clause compelling state law to give way to the US constitution. In addition there are controls exerted by the Full Faith and Credit Clause, the Privileges and Immunities Clause and the Due Process Clauses. . Hughes v Fetter. Decedent was killed in an automobile accident in Illinois. Decedent plaintiff administrator of decedents estate, defendant and defendants insurance company were all Wisconsin residents. Wisconsin has a statute that denies Wisconsin courts jurisdiction to sit on wrongful death cases occurred outside the state. Holding: These parties were entitled to bring the claim in Wisconsin. An Equal Protection argument probably would allow one to bring a claim in a sister state now. We do not have a judgment here, we have a claim. A claim based upon a different state law. We must give full faith and credit to a sister state statutory basis of a claim. The public policy argument Choice Of Law It is a violation of the 14th amendment due process clause for the forum to apply its own law when the only contact it has with the problem being litigated is that it is the forum. Therefore if all the other contacts are with another state or states the forum cannot constitutionally refuse to make reference to the appropriate foreign law. Due process requires fundamental fairness thus if there is no reasonable relationship between the forum and the parties or cause of action application of forum law would be fundamentally unfair. Home Insurance Co v Dick Dick a citizen of Texas residing in Mexico purchased a fire insurance policy from a Mexican insurance company to cover his tugboat operated in Mexican waters. Home Insurance Co a NY corporation reinsured by contract with the Mexican insurance company for part of the risk it had assumed on the tugboat. The reinsurance contract was executed in Mexico. P paid his premiums in Mexico and any loss sustained was payable in the city of Mexico in current funds of the US or Mexico or their equivalent elsewhere. At the time the policy was issued and until after the loss of the tugboat, P resided in Mexico although his permanent residence was in Texas. More than a year after the loss of the tugboat by fire P brought suit in a Texas court to
50

recover on the reinsurance agreement. Jurisdiction was asserted in rem through garnishment by ancillary writs issued against D. The insurance policy contained a clause that required that suit be brought within a year of the loss. Texas had a statue that required that such clause in a contract could not be shorter than two years. Texas applied its statute and found for P. Holding: Application of Texas law according to the court violated the 14 th amendment due process because there was not sufficient contacts between the forum and the subject matter of the case. A state may vary the terms of a contract made within its borders or to be performed there, or if the forum state has some other contact with the transaction but the only connection here is Ps citizenship in Texas. John Hancock Mutual Life insurance Co v Yates: Suit upon a life insurance policy, which had been applied for and issued in NY. The insured was NY domiciliary who was being treated for cancer at the time. In his insurance application the insured stated that he had not recently been under medical care. Under the law of NY this false statement constituted a material misrepresentation that voided the policy. Following the insureds death his widow moved to Georgia and brought suit on the policy. She recovered judgment by application of the Georgia rule that a false statement in an insurance policy is not material if the agent were aware. The Supreme Court held that the Georgia courts had denied full faith and credit to the laws of NY and there was no occurrence nothing done to which the law of Georgia could apply. Hartford Accident & Indemnity Co v Delta & Pine Land Co. An action was brought in Miss on a fidelity bond covering the insureds employees in any position and anywhere they worked of course including Miss. The bond was issued in TN. The defalcation which was the subject of the action occurred in Miss. The provision was valid under the law of TN. A Miss statute provided all contracts of insurance on property lives or interests shall be deemed to be made therein. The courts of Miss applied the Miss statutes and gave judgment for the plaintiff. The SC reversed. The Supreme Court stated that a state may limit or prohibit the making of certain contracts within its own territory but it cannot extend the effect of its laws beyond its borders so as to destroy or impair the rights of citizens of other states. Order of United Commercial Travelers v Wolfe Wolfe an Ohio citizen sued fraternal benefit society incorporation in Ohio to recover benefits claimed to have arisen under the constitution of that society as a result of he death of an insured member who had been issued a policy in South Dakota and who was a citizen of South Dakota during his membership. The SD statute of limitations was six years, an additional statute stated that any provision in a contract limiting the time for enforcing rights there under was void. The defendant constitution required that actions be brought within six months. The SD court recognized its own state contra to D's constitution and rendered judgment in favor of P. Full faith and credit required that S D recognized the law of the state where the fraternal benefit association was incorporated stated the court. Even though SD had many contacts with the transaction the SD court must apply the law of the state of incorporation cause this was a fraternal benefit association case and these cases required uniformity. Alaska Packers Association v Industrial Accident Commission of California. A nonresident alien executed in California a written contract of employment under which he agreed to work for his employer in Alaska during ht salmon canning season. The contract recited that the employee had elected to be bound by the Alaska WC law. The employee was injured in Alaska and on his return to California had sought an award under that state compensation act and was granted it. The employer attacked the award but the Supreme Court upheld. Holding: Justice Stone said the probability is slight that injured workmen once returned to California would be able to retrace their steps to Alaska. California had legitimate public
51

interests in controlling and regulating their employer employee relationship. The conflict is resolved by appraising the governmental interests of each jurisdiction and turning the scale of decision according tot heir weight. Only in the interest of Alaska is superior to that of California is there rational basis for denying to the courts of California the right to apply the laws of their own state. If you have a due process claim you must: Look to see if there is a protected interest. Look to see if you have got action that deprives the party of the protected interest. If must be state action. You have to have a procedure in which those rights are protected or there is an opportunity to litigate that. Pacific Employers Insurance Co v Industrial The issue is whether the full faith and credit which the constitution requires to be given to a Mass workmens compensation statute precludes California from applying its own workmens compensation act in the case of an injury suffered by a Mass employee of a mass employer while in California in the course of his employment. The California court found that it would be obnoxious to the policy of the California act to deny persons who had been injured in their state the right to apply for compensation. Holding: Justice Stone said that full faith and credit does not require the forum state to apply another states laws if it finds them obnoxious to the forum laws policy. Carroll v Lanza Carroll, P, an employee of Lanzas subcontractor was injured while working in Arkansas. P and his employer were residents of Missouri, the state where the employment contract was entered into. Unaware of any cause of action available in Arkansas, P received workers compensation under Missouri law, which also stated that workers compensation is the exclusive remedy available under employment contracts formed in Missouri. P later recovered damages from federal court in Arkansas, but the court of appeals reversed on the basis of full faith and credit. The court stated that the state where a personal injury occurs has sufficient interest in the case so that full faith and credit will not be violated if that state chooses not to enforce the foreign exclusive remedy statute. Arkansas does not have to limit Ps remedies to those arising under Missouri law. Clay v Sun Insurance Office Clay P while a resident of Ill purchased a contract of insurance from a British company giving worldwide coverage of all risks of loss to plaintiffs personal property and requiring that a suit for loss be brought within one year after discovery. P moved to Florida where some of his property was destroyed. Florida made contractual statutes of limitation void if shorter than the states own five year limit. Three members of the Supreme Court went on record as willing to let Florida apply its own law but the case was remanded to the court of appeals pending resolution of local law questions by the Florida Supreme Court. The court eventually found that Florida had sufficient contacts with the case to allow application of its law even though the case involved the validity of a contract provision entered in a foreign state. Florida law could constitutionally be applied despite the contracts original contacts with Ill. The presence of the insureds residence there at the time of loss along with the insurers knowledge provided Florida with ample contacts permitting application of its law. Allstate Insurance Co v Hague Hagues husband was killed in a motorcycle accident in Wisconsin. P her husband and the operators of both vehicles were all Wisconsin residents at the time of the accident. Ps
52

husband had been employed in Minn for fifteen years and after the accident P moved to Minn where the Minn registrar of probate appointed P personal representative of her husbands estate. P brought this action in a Minn court seeking a declaration that the decedents three insurance policies should be stacked to provide for $45,000 worth of coverage instead of $15,000. Allstate argued that Wisconsin law which prohibited stacking applied because the policy was delivered in Wisconsin, the accident occurred in Wisconsin and all parties were Wisconsin residents. Minn was found by the court to have sufficient contacts to apply its own law. A state in order to constitutionally apply its own law when there is a choice of law must have a significant contact or a significant aggregation of contacts creating state interests. Phillips Petroleum Co v Shutts P is a Delaware corporation with its principal place of business in Oklahoma. During the 1970s P produced or purchased natural gas from land leased in 11 states and sold its product throughout the country. Respondents 28,000 royalty owners who reside throughout the US and foreign countries, brought a class action against P in Kansas state court to recover interest on delayed royalty payments. Rs recovered in both the trial court and the state supreme court. P petitioned the Supreme Court for certiorari regarding both jurisdictional and choice of law claims. The court found that the due process clause of the 14th amendment did not prevent Kansas from adjudicating claims of all the respondents. They also found that the full faith and credit clause of Article IV of the constitution did prohibit the application of Kansas law to all of the transactions between P and the Rs. Due process requires that class plaintiffs be given notice of the action, an opportunity to appear in person or by counsel, adequate representation and an opportunity to opt into the class. Rs here were notified by mail invited to attend in person or through counsel and had the opportunity to opt out of the action by returning a request for exclusions. Rs interests were protected. Kansas law differs in material aspects from the laws of other states. Kansas lack of interest in claims unrelated to that state and the substantive conflict with jurisdictions such as Texas caused the court to conclude that Kansas did not have significant contact or aggregation of contacts to Rs claims creating state interests in order to ensure that choice of Kansas law was not arbitrary or unfair. Franchise Tax Board of California v. Hyatt Whether the Nevada Supreme Courts refusal to extend full faith and credit to Californias statute immunizing its tax collection agency from suits violates Article IV, 1 of the Constitution. The court affirms the judgment of the Nevada Supreme Court, the Court held that Nevadas interest in protecting its citizens from injurious intentional torts and bad faith acts committed by sister states government employees should be accorded greater weight than Californias policy favoring complete immunity for its taxation agency.

State Farm Mutual Automobile Insurance Co. v. Campbell Held that punitive damages award was excessive and in violation of the Due Process Clause of the 14th Amendment to the Constitution of the United States. The court basically sets standard that any punitive damage award that is greater than a single digit ratio to the compensatory award will not be upheld. Unreasonable Discrimination Privileges and Immunities
53

Supreme Court of New Hampshire v Piper Petitioner Piper applied to take the NH bar examination and indicated her intention to become a NH resident since the state had a residency requirement for admission to the bar. P took and passed the exam and requested a dispensation from the residency requirement. P was denied. The court found that the rules of NH violated the privileges and immunities clause of the constitution. This clause was intended to create a national economic union that has as a benefit the opportunity for the citizens of one state to do business in another state on terms of substantial equity. Government seizure Threshold Problems of the Forum in Choice of Law CHAPTER VII This chapter focus on four problems: When choice of law analysis selects foreign law, under what circumstances should the court or other adjudicating agency reject that law? If the forum rejects the applicable law should it dismiss the case without deciding the merits? When and how should the forum take notice of foreign law? When is choice of alw analysis unnecessary because the issue is procedural? When should the forum refer to the choice of law rules of another jurisdiction? Public Policy General rule: The first restatement provided that the forum state was not required to entertain actions in its courts that were founded on foreign causes of actions that were contrary to its strong public policy. Courts today are not free to refuse to enforce a foreign right unless to enforce it would violate some fundamental principle of justice, good morals or deep rooted tradition of the local jurisdiction. Thus forum courts generally permit recovery on debts arising from gambling activities that were legal where performed even though had such activities taken place in the forum they would have been criminal acts. Some courts have refused on grounds that they violate local public policy. The second restatement continues the prohibition against the forums enforcement of foreign law contrary to its own strong public policy. The rule has a narrow application and should not be used unless it violates a fundamental principle of justice. Dissimilarity of laws is immaterial. Penal laws Traditional approach is the forum refused to enforce claims arising under the penal laws of another state. A penal law is one in which a penalty is awarded to the state as compensation for some public wrong as distinguished from redress for private wrongs. The restatement continues the prohibition against the enforcement of foreign penal laws and the distinction between punishment for public wrongs and compensation for private injuries. Revenue laws These were traditionally treated the same as those arising under penal laws. But a number of state courts today are willing to entertain an action brought by another state to collect taxes stressing reciprocity. Admitting or Rejecting the Action or Defense Loucks v Standard Oil Co
54

P is the administrator of a New York domiciliary who was killed while in Massachusetts due to the negligence of Ds agent a NY corporation. P brings an action in NY for wrongful death. The Massachusetts statute provided for recovery the amount to be determined in accordance with Ds culpability. D argues that the Mass statute was penal and the universal rule is that the courts of one jurisdiction do not enforce the penal laws of another dissimilar forum such as NY law and that the court should dismiss on grounds of public policy. The court found that the statute is not penal in the relevant international sense. The forums choice of law rule requires reference to some foreign law. The court adopted a liberal view towards public policy as a defense. The courts of a state are not free to refuse to enforce a foreign right at the pleasure of the judges. The public policy defense to the application of foreign law may be applied differently in the various jurisdictions. However the fact that the law of the forum is dissimilar to those of the foreign state does not necessarily mean that the public policy defense is available.

Merz v Mertz Wife was inured in Connecticut while a passenger in an auto owned and driven by her husband. Wife and husband were NY residents. Conn allowed interspousal suits for tort damages while NY did not. Wife appealed from dismissal of her suit in the NY court. The court found: the law of the state of NY attaches to marital status a reciprocal disability that precludes a suit by one spouse against the other for personal injuries. It recognizes the wrong but denies a remedy and the disability to sue cannot be removed by the law of another state. The court held that the local public policy against spouses suing each other in tort barred the suit by the wife against her husband. Intercontinental Hotels Corps v Golden P sued in NY on a check and several IOUs which D a NY resident had given in Puerto Rico in return for money. The gambling debts were valid under Puerto Rican law but the contracts involved would not have been valid under NY law. Public policy will not preclude local enforcement of foreign gambling debts. Puerto Rican law would be applied and plaintiff may recover. Public policy is not to be discovered by past precedent but by currently prevailing community attitudes. Courts generally permit recovery on debts arising from gambling activities that were legal where performed. Holzer v Dutsche An employment contract was entered into in Germany by a German plaintiff and the defendant German Corporation to be performed in Germany and other locations outside the Forum State. Defendant did not perform because plaintiff was a Jew He also did not pay him a lump sum as the contract said because he was imprisoned by the Germans. A defense available under German law can be used in the New York court even though the result may violate New York public policy. Public policy grounds are important in two different situations: If the forum asserts this as a basis for dismissal of the suit without prejudice and if the forum asserts this as a basis for application of its own law and thereby decides the case on the merits. American courts are empowered by statute to take judicial notice of the law of sister states or that of the US. When considering ht laws of a foreign nation some states will require pleading and proof of the foreign law as if it were a factual issue, others permit their courts to determine

55

the foreign law on their own. The law of the forum determines the consequences of the failure to prove foreign law. Notice and Proof of Foreign Law Notice and proof of foreign law raises two issues: Must one of the parties inform the court that another jurisdiction has law different from that of the forum and persuade the court that forum law should be displaced with that foreign law? Whether the burden is on a party or whether the court will on its own motion notice and apply foreign law, does the forum have an efficient procedure for determining the content of foreign law? The answer to the first question may depend on the forums tradition concerning the role of a judge. The common law view that it is the parties responsibility to raise and brief issues, contrasts with the civil law maxim that the court knows the law. The answer to the second question is yes in most states. A desirable procedure for determining foreign law has two elements: first the determination of foreign law should be a task for the judge not jury and should be reviewable de novo as a question of law. Second the method for determining foreign law should minimize expenditures of time and money. Walton v Arabian American Oil Co. Walton sued AA on a tort committed by Ds agents in SA. When neither party pleaded or proved Arabian tort law, the trial court refused to take judicial notice of the law of Arabia. Under NYs conflict principles, the substantive law of the place of the tort must be applied. Since P refused to establish foreign law the court dismissed Ps complaint. Directed verdict for D. The law of the forum determines the consequences stemming from failure to prove foreign law. In an international case such as this the forum may dismiss the suit, apply the presumption that both states are similar or apply the law of the forum Tennessee and judicial notice: Optional notice for all duly adopted federal and state rules of court, all duly published regulations of the fed and state agencies all duly enacted ordinance o municipalities and any matter of law which would fall within the state of this subdivision and finally all treaties conventions and laws of foreign countries, international law and maritime law. Mandatory notice for common law, constitution of US, rules adopted by US supreme court or TSC and any rules or regulations of which a statute of the US or TN mandates. Leary v Gledhill Leary sued Gledhill in NJ to force repayment of a loan allegedly made in France. Neither party pleaded or proved French law. The court applied New Jersey law. Certain common law presumptions may be applied to cases where foreign law is not proved: that the foreign law is the same as the forums law, that the common law applies in foreign jurisdictions and that parties who fail to plead or prove foreign law acquiesce to the application of the forums law. The consequences of failure to prove foreign law varies. Rule 202. Judicial notice of law. (a) Mandatory Judicial Notice of Law. The court shall take judicial notice of (1) the common law, (2) the constitutions and statutes of the United States and of every state, territory, and other jurisdiction of the United States, (3) all rules adopted by the United States Supreme Court or by the Tennessee Supreme Court, and (4)
56

any rule or regulation of which a statute of the United States or Tennessee mandates judicial notice. (b) Optional Judicial Notice of Law. Upon reasonable notice to adverse parties, a party may request that the court take, and the court may take, judicial notice of (1) all other duly adopted federal and state rules of court, (2) all duly published regulations of federal and state agencies and proclamations of the Tennessee Wildlife Resources Agency, (3) all duly enacted ordinances of municipalities or other governmental subdivisions, (4) any matter of law which would fall within the scope of this subsection or subsection (a) of this rule but for the fact that it has been replaced, superseded, or otherwise rendered no longer in force, and (5) treaties, conventions, the laws of foreign countries, international law, and maritime law. (c) Determination by Court. All determinations of law made pursuant to this rule shall be made by the court and not by the jury. In making its determination the court is not bound by the rules of evidence except those with respect to privileges. [As amended by order entered January 25, 1991, effective July 1, 1991.] Advisory Commission Comments. Note that judicial notice of ordinances is discretionary and requires notice to adverse parties. 24-6-207. Appellate courts; foreign law It is not necessary, in a case carried from an inferior to an appellate court, to have the statutes of a state read as evidence in the inferior court, transcribed into the record, except where it is directed to be done by the inferior court; but the appellate court may take judicial notice of such laws and statutes. James v Powell James was granted a libel judgment against Powell. Shortly before the decision was rendered Ds wife transferred to relatives real property located in Puerto Rico that otherwise would have been available to secure the judgment. P alleged that D attempted to defraud her of her award. Whether a conveyance of land is fraudulent will be decided according to the law of the situs which is Puerto Rico. The issue of punitive damages will be governed by the law of the jurisdiction with the strongest interest. One of the objectives of conflict rules is uniformity of result wherever a lawsuit is brought. When foreign law is referred to the reference should be to that law for everything that might influence the outcome of the case. The traditional test says the substantive law is that law that speaks to the parties, telling them at the time they act what their obligations are. Procedural law is that law which speaks to lawyers, judges and juries at the time of litigation directing them in the effectuation of the substantive law. The outcome test says that the forum should apply its procedural rules unless they affect the outcome of the litigation. Notice and proof of foreign law per the restatement says the local law of the forum determines the need to give notice of reliance on foreign law, the form of notice and the effect of a failure to give such notice. The local law of the forum determines how the content of foreign law is to be shown and the effect of a failure to show such content.

57

The Uniform Interstate and International Procedure Act says any party who intends to raise an issue concerning the law of any jurisdiction or governmental unit thereof outside this state shall give notice in his pleadings or other reasonable written notice. Rule 44 of the Fed Rules of Civ Proc says a party who intends to raise an issue concerning the law of a foreign country shall give notice by pleadings or other reasonable written notice. Use of the Forums Procedural Rules Noe v US P sued D insurance company in Miss under a LA statute giving a right of direct action by a person injured in Louisiana against a liability insurer for damages sustained. P said the law was substantive. D stated it was procedural. The forum decides whether a foreign law is substantive or procedural but in making the decision give s consideration to the interpretation of foreign law by the courts of that state. Presumptions and Burden of Proof: The burden of proof may require one party to either raise the issue and go forward with the evidence or present certain elements of evidence as to a particular issue or lose thereon. If the burden of proof means the burden to raise the issue and go forward with the evidence the failure to meet the burden generally does not have any profound effect on the case. Shaps v. Provident Life & Accident Insurance Co. While living in New York, Ms. Sharps successfully applied for disability insurance, in July of 1989 she requested disability benefits due to pain in her jaw. The insurer paid benefits and then discontinued payments citing that Ms. Sharp was no longer disabled. Ms. Sharp filed suit in Florida, her new residence for five years, the insurer remanded the case to federal court. The sole issue is which law applies, under NY law, Ms. Shaps had the burden to prove she was still disabled, under FL. Law, the burden was on the insurance company. The Supreme Ct. of Florida ruled that in Fl the burden of proof issue for conflict of laws purposes. It commented that substantive law prescribes duties and rights and procedural law concerns the means and methods to apply and enforce those duties and rights. Rules of Evidence Article V Rule 501 says that in civil actions and proceedings with respect to an element of a claim or defense to which state law supplies the rule of decision, the privilege of a witness, person, government, state or political subdivision thereof shall be determined in accordance with state law. Samuleson v Susen Samuelson a neurosurgeon and resident of Ohio, brought this defamation and interference with business relationship action against Ds two doctors alleging that Ds published defamatory statement s to other doctors in Ohio and WV. Pennsylvania has adopted the interests analysis approach to conflict of law questions. Under this approach the law of the predominantly concerned jurisdiction is applied. Here the review committee proceedings were held in Ohio. The district court was justified in concluding that Ohio had the more significant relationship tot he dispute and that Ohio law should apply. Privileged Communications according to the restatement: Evidence that is not privileged under the local law of the state which has the most significant relationship with the communication will be admitted even though it would be privileged under the local law of the forum unless the admission of such evidence would be contrary to the strong public policy of
58

the forum. Evidence that is privileged under the local law of he state which has the most significant relationship with the communication but which is not privileged under the local law of the forum will be admitted unless there is some special reason. Time Limitation Time limitations: the traditional approach. Courts apply their own statute of limitations. Statute of Limitations: If cut off right and remedy, forum state law will apply. Restatement on statute of limitations: Whether a claim will be maintained against the defense of the statute of limitations is determined under the principles stated. In general unless the exceptional circumstances of the case make such a result unreasonable: the forum will apply its own statute of limitations barring the claim, the forum will apply its own statute of limitations permitting the claim unless maintenance of the claim would serve no substantial interest of the forum and the claim would e barred under the state of limitations of a state having a more significant relationship to the parties and the occurrence. Bournais v Atlantic Maritime Co. Bournais brought suit under Panamanian law for back wages earned as a seamen. Suit was brought in a US federal court after Panamanian statute of limitations had run. The general statue of limitations goes to the remedy rather than the right and as such is a foreign procedural rule that can be ignored by the forum. When an action is based on a claim created by a foreign state that contains its own specific limitations rule, the forum may treat the foreign limitations period as substantive. Cropp v Interstate Distributor The Crops an Oregon couple are self employed truck drivers. Ps sustained injuries when a truck owned by Interstate Distributor Co collided with their parked truck in California. The statute of limitations of California will govern the action.

Trzecki v Gruenewald Plaintiff was injured when defendants car was overturned near Illinois. Plaintiff was riding in defendants car as a guest passenger. The injury occurred in 1970. Plaintiff filed suit on Nov 1972. All the parties were Missouri residents. Defendant argued at trial that the Illinois twoyear statute of limitations applied and therefore the claim was barred. The Supreme Court of Mo noted that the borrowing statue of Mo provided that if a cause of action was barred in the state under whose law it arose it was barred in Mo. The trial court was affirmed. This is an aberration of the borrowing statute. The court does not look at dominant interests of the parties. Under Renvoi, Illinois conflict law could send it back to the home state. TCA 28-1-112. Borrowing statute of Tenn. It would not apply here because both were living in Miss. New England Telephone & Telegraph Co. v Gourdeau Construction Co. NET sued Gordeau for breach of contract alleging that Gordeau damaged Nets equipment in NH. At the time of contracting both states had six-year statutes of limitations but before the damage. NH changed it statute to three years. The law of Mass is applied and breaks tradition. The court uses a relationship test to determine which state has the most significant relationship and in this case it was Mass.

59

Sun Oil Co v Wortman Plaintiffs filed an action in Kansas to recover interest on royalties from properties that were located in Texas, Oklahoma and Louisiana. They filed in Kansas because the statute of limitations had run in the other states. The forum state today will often apply the statute of limitations of the foreign state. However, Kansas was free to apply its own statute of limitations. There is no remedy if the court uses the wrong law. As long as it is in good faith. SOL of forum will apply even if longer than law choice would give you. Under the traditional approach the statute of limitations is procedural and governed by the forum state. Here the court relied on the traditional characterization of statues of limitation as procedural I holding that a forums tae court does not violate either the full faith and credit or due process clause by applying its own statute of limitations to cases governed by another states substantive law Reference to the Choice of Law Rules of Another Jurisdiction In Re Annesley The decedent was an English citizen who had lived most of her adult life in France. She had married an Army officer in England. They moved to France and he died. In England the testator can dispose of their entire estate. In France the testator can dispose of only one third of their estate. According to English law by living in France indefinitely and not maintaining a residence in England, it could be said that the testatrix had died domiciled in France. But the law in France requires a formal process of establishing domicile which testatrix never did. The English court determined that the French court applied. Renvoi. The law of decision allows French law to be applied. However, if applying the entire law of France she would not qualify because she was not a citizen so it would go back to original domicile. The bounce back approach The forum approached a choice of law problem as the foreign court would. If the foreign court refers back to the forum law including its choice of law rules which would then refer it back to the foreign court, the forum should accept the final bounce back but only to the extent of the foreign states internal law. This is the same e result as if it had rejected the renvoi. The Problem of Choosing the Rule of Decision Chapter VIII Territorality and the Jurisdiction The traditional mode of analysis of conflict questions was based on the vested rights theory. This theory held that the law of the state where a right was created should apply. Thus in tort cases the law of the place of the wrong applied. In contract cases the law of the state where the contract was made applied to questions of validity of the contract. The first restatement supported the vested rights theory. Vested Rights dealt with where the injury occurred. 39/50 states no longer use common law rule of where the injury occurred. They use contacts or most significant relationships. ( torts.) The most significant relationship recognizes that the forum is directed to consider the contacts and interests of each state involved and to apply the law of the state having the most significant relation with the parties and the transaction in light of the particular issue before the court. Significant contacts included, the place of injury, place of conduct, place of each partys residence and /or business and place where the relationship between he parties is centered. With contracts, common law rule for contract law in dealing with validity of contract is where contract was executed. Common law rule was if issue dealt with how construed was to look at law of performance. Examples of the System in Operation
60

Unilateral vs multilateral. Most often a court resolves choice o f law problems with a multilateral analysis. Under this approach, the court selects the law it views as appropriate in the light of the contacts of the parties and the transaction with the state whose law the court chooses. The law chosen may be that of the state in which the court sits or that of some other state. On some issues however, the court either applies the law of its own state or dismisses the case. On these matters the court conducts a unilateral analysis of its own law. Typical this unilateral analysis asks whether applying forum law is fair to the parties and consistent with the policies underling the law. US courts conduct a unilateral choice of law analysis in divorce cases. Criminal laws are unilateral. See People v Olah. Workers compensation is another example of unilateral application. Issues may be split. COA in one state, damages in another state. Punitives are remedies and probably should be procedural. Traditional Rules The traditional or vested rights approach to choice of law directs the forum in every case to apply the law of the state in which the rights of the parties vest. It is a two step analysis: Characterize the area of substantive law as contact or tort and then localize the significant event or thing in a particular state and finally apply the law of that state. Tort Alabama v Carroll Plaintiff was a brakemen working for defendant railroad. Other employees of the defendant railroad failed to properly inspect car links in Alabama. As a result, plaintiff sustained injuries in Miss. Under Miss fellow servant rule, defendant railroad is not liable for injuries sustained by plaintiff as a result of plaintiffs fellow servants negligence. Plaintiff made out a case under Alabamas employers Liability Act. Defendant moved the trial court to instruct the jury to find the defendant if they believed the evidence but trial court refused. TheAlabama Supreme Court discussed the general rule that there can be no recover in the forum unless there could also be a recovery in the foreign jurisdiction where the injury took place. There could be no recovery in Miss as a result of Miss fellow servant rule. No injury occurred in Alabama. The court found the crime is punishable under the law where the result occurs. Victor v Sperry Plaintiff was injured when the car in which he was riding as a passenger was struck by a car driven by defendant. Plaintiff and drivers are all California residents. Plaintiff suffered both total and partial paralysis to his extremities as a result of spinal cord injury. Total damages were $40,000. Mexican law permitted recovery of $2/day or $6000. The recovery is determined by the law of the place of injury and therefore trial court properly limited recovery to $6000. Trial court was also correct in applying the Mexican liability without fault provisions to its computation of damages. Gordon v Parker Plaintiff and plaintiffs wife were Pennsylvania residents. While plaintiff was away on military service in India defendant enticed plaintiffs wife to come to Mass. Mass had alienation of affection law but Penn did not. District court applies law of state, in which it sits and applies the Mass rules. Best argument is marital relationship or center of gravity test.

61

In general problems involving construction and enforcement of contracts are among the most frequently litigated in the choice of laws area. Although numerous theories and rules have been formulated the courts have generally attempted to evolve principles that will give effect to the expectation of the contracting parties except when clearly outweighed by the interest or public policies of a state having a direct and immediate relationship to the transaction. The effect of the parties express designation as to applicable law: often contracting parties will expressly stipulate that the law of a particular state will govern all rights and obligations arising under the contract. The early decisions stressed the vested rights rationale. This is clearly not the law today. Many modern courts allow the parties to incorporate foreign law into the contract as a shorthand alternative to including other provisions or interpreting those provisions already in their contract as long as the foreign law is not against public policy. The restatement; allows the parties to choose any law to govern construction but limits their freedom to choose law for validity. The restatement asserts that party choice will be upheld only if there is a substantial relationship with the law chosen or some other reasonable basis for selecting that law. Adhesion contracts are an exception. The modern rule will not be applied when the parties were not in equal bargaining positions in choosing such law. If the designation is incorporated as a fine print provision of an adhesion contract the courts are reluctant to uphold the designation. According to the restatement, the validity of a contract will be sustained against the charge of usury if it provides for a rate of interest that is permissible in a state to which the contract has a substantial relationship and is not greatly in excess of the rate permitted by the general usury law of the state of the otherwise applicable law. Contract choice of law issues arise in two contexts validity and construction. If the issue is one of validity then no matter how clearly the parties have expressed their intention one state whose law might be applicable would refuse to give effect to that intention. If the issue is solely one of construction then any state that has a contact with the parties or the transaction would give effect to the parties intention if clearly expressed. In the absence of express designation by the parties as to which law is to govern their contract, the courts must make the determination. Traditionally courts applied a separate choice of law to validity problems. All problems relating to the validity of a contract were to be determined by reference to the law of the place where the contract was made. Performance problems as distinguished from validity problems were traditionally governed by the law of the place at which performance is called for in the contract. Having abandoned the validity vs. performance characterization as unworkable, many have adopted more policy oriented approaches such as Grouping contacts/ center of gravity approach (contacts) or the most significant relationship approach. Contract Milliken v Pratt Plaintiffs were wholesalers in Portland, Maine who extended credit to the husband of the defendant who with his wife was a Mass resident. Defendant executed a guaranty for $500 credit, extended to her husband by plaintiffs. The guaranty was drafted in Maine but executed by defendant in Mass. Defendants husband received the merchandise from plaintiffs relying on the guaranty for payment. Plaintiffs brought suit. The Maine law provided that a married woman might bind herself by contact and the law of Mass held that a married woman might not bind herself by contract. The court discussed the law of contracts holding that a contract is governed by the law in the place where it is completed. Since the transaction is centered in Maine the principle would require application of Maine law. According to the traditional

62

approach here all problems related to validity of the contract were to be determined by reference to the law of the place where the contract was made. Louis Dreyfus v Paterson Steamships Suit is over the performance of the wheat. Canadian law because that is where the performance occurs. US and Canadian law are the same here. No conflict. Pritchard v Norton Pritchard became surety on an appeal bond in Louisiana for a railroad against whom a judgment had been rendered in that state. McComb and Norton executed an indemnity bond in NY to indemnify him for any losses arising out of the appeal bond. The judgment against the railroad was affirmed and Pritchard was required to pay on the appeal bond. His executrix sued McComb and Norton in Louisiana. Parties can choose law that applies but the law chosen invalidated the contract. The presumption is that they chose a contract law that was valid. The parties clearly intended that McComb and Norton should indemnify Pritchard against the appeal bond. They could only do that in Louisiana according to the laws of Louisiana. It is clear that the parties contracted with a view toward the laws of Louisiana not those of New York. Courts tend to apply whichever law would uphold the sufficiency of consideration provided the parties could reasonably be assumed to have contracted with reference to that law. The rationale is that the parties cannot be presumed to have contemplated a law that would defeat their promises. Kinney Loan v Sumner Defendant entered a loan agreement with plaintiff in Colorado in accordance with the laws of Colorado. Defendant also executed a chattel mortgage on a trailer truck, then in Nebraska. The mortgage was duty filed in Nebraska and noted on the title to the truck. Defendant paid nothing and plaintiff sued. Nebraskas small loan statutes proved that loans for interest rates in excess of those permissible under Nebraska law are unenforceable in Nebraska even if entered into elsewhere unless such loan was made in accordance with some foreign small loan regulation substantially similar to Nebraska. The Colorado legislation is substantially similar. The loan is enforceable in Nebraska. The rules comported with both Nebraska and Colorado law and was not usurious. Relationship between transaction of states. The court is looking at each states statutes and what the purpose was. They are very similar. There is effort to construe meaning and intention of statute. Reasonable to see if statutes in question are in harmony with your state. Siegleman v Cunard White Star Plaintiffs wife was injured on defendants ship on the high seas on a rip from New York to Cherbourg. Numerous terms and conditions were printed on the ticket plaintiff and his wife had bought providing in part that suit for injuries must be brought within one year of the injury. The ticket itself provided that English law ould apply to all questions. The suit was eventually brought in New York. Wifes attorney asked an agent for the ship company if he should commence suit in light of the one year limitation. Agent said that would not be necessary. Wife died. Defendant withdrew their settlement offer. Admiralty federal law applies. The federal court decided that provisions meant English substantive law only not conflicts laws since the ship owner no doubt intended that provision to guarantee a uniform result no matter where any claim was brought. Neither party offered proof of English law but was unnecessary since the district judge sitting as a state court judge exercised his option to judicially take notice of English law as he understood it. On selection of law there must be some reasonable
63

contact to forum chosen. This is in Tenn. too. This was an adhesion contract. This is an exclusive federal action. This case raises contract rather than tort issues and therefore the court will attempt to enforce the contractual intent of the parties. Parties can always make reference to particular bodies of law relative to issues of interpretation since parties are free to contact and as such reference amounts to define of contract terms. However questions of validity of the contract cannot be governed by the designated body of law unless that body of law I reasonably related to the contract. Real property : for issues involving interest in real property once again a monolithic choice of law rule emerges: apply the law of the situs. Sinclair v Sinclair Epps S died domiciled in Vermont leaving no surviving issue. He was survived by his widow and brother. His widow was appointed adminstratrix of his estate in Vermont. The brother was appointed administrator in New Hampshire. Wife filed in NH regarding property in NH. Brother appealed. A question of law was certified to the appellate court whether the law of Vermont or that of New Hampshire would determine widows distributive share in the NH real property. Deadlines for claiming dower or other interest in the estate are determined by the law of the situs. The value of the real property for purposes of calculating distributive share does not take into account the value of other property in other states. The descent of real property is governed by the law of the state where the property is located. The domicile of the intestate was irrelevant. Toledo Society for Crippled Children v Hickok Testator was an Ohio domiciliary with real property in Texas most of which was owned in partnership. His will made less than year before his death established a trust income payable to his widow and children for 20 years, the corpus then to be divided among 20 charities. The will incorporated a preexisting contract for incorporating the partnership. The partnership property was to pass directly to the corporation in return for stock. An Ohio statute provided that a testator with surviving issue, under these circumstances could not devise property to organizations of this kind. Texas had no such statute. Texas law was found to govern the validity of the gifts to the extent of all of the lands and mineral interests in Texas. The fiction of equitable conversion from realty to personalty or vice versa had no place in conflict of laws per the court. A contingent interest in land was an interest in land. At death the land had not been converted. There will not be an equitable conversion in the state. The equitable conversion would not defeat the situs rule in Texas. You have to look at the particular states laws. Escape Devices: To escape harsh and unjust results, courts operating under the traditional approach often reach decision based on the equities presented and justify the result though various escape devices. Substance vs Procedure: Since the forum is required to apply only the substantive law of the jurisdiction chose, it is free to apply its own procedural law. The forum may choose to regard the issue as procedural to escape applying another jurisdictions law. Grant v McAuliffe Plaintiff and decedent were both California residents. Both were involved in an auto accident in Arizona. Plaintiff brought suit against decedents estate in California. Under Arizona law, tort claims do not survive the tortfeasors death. Under California law they do. California law applied. The court found that the survivability issues was procedural not substantive. This is a
64

contorted way to get out of the rule of tort law Lex loci delicti. This tort occurred between two California citizens in Arizona. Here we have a California judge who ultimately goes on to make a determination to avoid this harsh rule. Many states will recharacterize the issue of survivability to avoid the harsh traditional rule of place of injury. Nature of the action Harmschild v Continental Casualty Co Ms Haumschild sued her husband in Wisconsin for negligence arising out of a California car accident. The couple was domiciled in Wisconsin. Under California law plaintiff had no cause of action against her husband but Wisconsins law would allow the suit. The court found that Wisconsin law applied. This was a family law problem not a torts case. The purpose of Californias immunity state was to preserve marriage and prevent collusion suits. California had no legitimate interest in protecting the marital harmony of Wisconsin domiciliaries or preventing collusive suits in Wisconsin courts. To avoid unfavorable law at the place of injury courts might recharacterize the basic problem as something other than a tort. The question of interspousal immunity was characterized her as a family law problem rather than a tort so as to justify reference to the law of the spouses domicile rather than to the law of the place of injury Garcia v Greyhound Garza a resident of Texas brought this action against Greyhound a Texas corporation for personal injuries sustained by him while he was a passenger on a bus in Mexico on a trip arranged by D. Plaintiffs basis of recovery was negligence or alternatively breach of an implied contact. The laws of the place of the tort must be looked at to determine the rights of the parties. Here however no proper proof of foreign substantive law as made. The law of Texas the place of contract governs plaintiffs action based on Ds breach of its implied contractual duty to carry its passengers safely. Escape Devices Recharacterization; tort vs contract. Alabama v Carroll Classification; foreign as substantive vs procedural Grant v McAuliffe Issue splitting; split cause of action and then apply a separate body of law to each Harmschild v Continental Renvoi ( to return unopened); One rule of law and sends it back. Usually returns it back to the internal law of the state. Appears to be giving credibility to foreign law. In Re Schneiders Estate Public Policy Override; refuses to apply the foreign law because it is obnoxious. Three approaches: Most significant relationships=center of gravity or contacts theories: Looks at all of the contacts that the parties have with various states and gives them quantitative and qualitative weight. Auten v Auten. Schmidt v Driscoll Automobile Guest Statutes are examples: Babcock v Jackson Center of gravity in tort: Look at domicile of plaintiff and defendant, place of tortious act and accident and the place of the relationship.(quanititative + qualitative issues must be weighed). Dym v Gordon Governmental Interest Approach=Public Policy
65

Vested Rights/Traditional = Territorial American Motorists Insurance Co. v. ARTRA renvoi Paint manufacturer in Maryland involved with Illinois parties. Suit filed in Maryland. Each state would apply the others conflicts laws. Holding: this is a limited application of renvoi, applying Maryland law and dismissing. Kilberg v. Northeast Airlines public policy escape Man bought ticket in NY; plane crashed in Massachusetts. Suit filed in NY. NY court applied Mass. law including damage cap. Appellate holding: There is a strong public policy against damage caps. Therefore, damages are procedural, & NY law should have been applied. Schmidt v. Driscoll Hotel approaching a contacts theory of choice of law Defendant sold intoxicants in one state; wreck happened in another. Issue: which law to apply. Holding: Leans toward a contacts analysis actually hold that tort was complete on sale of intoxicants. Auten v. Auten center of gravity or grouping of contacts theory English wife contracts in NY with NY husband. After support payments stopped, wife sued in England, then in NY. Issue: judge by where contract made or where to be performed? Holding: Court used center of gravity/contacts theory and applied English law. Restatement 6 Choice of Law Principles 1. When there are constitutional restrictions, court will follow own state law 2. If not, factors include: a. Needs of interstate/international systems b. Relevant policies of forum c. Relevant policies of other interested states & relative weight of same d. Protection of justified expectations e. Basic underlying policies in field of law f. Predictability, uniformity of result g. Ease in determination Restatement 145 The General Principle 1. Rights of parties are determined by state which has MOST SIGNIFICANT RELATIONSHIP. 2. Contacts include: a. Place where injury occurred b. Place where conduct causing injury occurred c. Domicile, residence, etc. of parties d. Place where relationship of parties is centered. Babcock v. Jackson center of gravity NY residents injured in wreck in Canada. Plaintiff sued driver in NY. Holding: lex loci delicti discredited. Center of Gravity theory adopted. See 145 2(d) above. Dym v. Gordon

66

NY residents collide in Colorado. Suit filed in NY. Colorado law forbade passenger from suing driver. Holding: since parties were living in Colorado at time of accident, contacts there were greater. NY public policy is not implicated. Colo. Law should be applied. Neumeier v. Kuehner most significant relationship Canadian passenger riding in NY car which collided w/train in Canada. Suit filed in NY. Canadian statute isolated driver from liability. Holding: NY has no legitimate interest in ignoring Canadian statute. GENERALLY When P. and D are from same state, no matter where accident happens When accident is in domicile state of EITHER P or D, who are from different states When P. and D. are from different states and accident is in third place That state law applies

That state law applies Apply law of site of accident UNLESS that would impair the working of the system

Duncan v. Cessna most significant relationship in CONTRACT cases Texas victim killed in NM crash. Holding: Most significant relationship replaces lex loci contractus. In this case, Texas had stronger interest in applying its laws. Note: does NOT apply to contracts with proper choice of forum clause Restatement 187 When Parties have Chosen a State 1. Choice of parties will stand if issue could have been subject of contract provision 2. Choice will stand anyway, unless a. Chosen state has no substantial relationship to parties b. Application of law would be contrary to law of state with greater interest Restatement 188 When Parties Have NOT Chosen a State 1. Laws of state with most significant relationship control 2. Contacts to be considered are: a. Place of contracting b. Place of negotiation c. Place of performance d. Location of subject matter e. Domicile, residence of parties Financial Bancorp v. Pingree & Dahle s.o.l.s and contracts Holding: Statutes of limitations are USUALLY procedural. To defeat this presumption, SOL must be explicit part of contract Rudow v. Fogel RARE case of court rejecting situs in land dispute Holding: Court rejected situs rule in land dispute. THIS IS VERY RARE. Schultz v. Boy Scouts of America common domicile rule

67

NJ Plaintiff children were abused in NY, then in NJ, by NJ scoutmaster. Suit filed in NY. Holding: Per Neumeier, above, since parties had common domicile, NJ law should have applied.

Cooney v. Osgood Machinery Missouri worker injured by machine. Suit filed in NY. Holding: Where other interests are equal between competing states, court used Neumeier rule 3 and applied law of site of injury. Trailways v. Clark most significant relationship depends on quality, not quantity Texas citizens bought tickets in Texas, were killed in Mexico due to drivers negligence. Holding: most significant relationship depends of quality of contacts, not quantity. REQUIREMENT OF WRITING Bernkrant v. Fowler Dispute centered on Nevada and California requirements for writing in forgiving a debt. Contract made in Nevada, was to be performed in Nevada. Holding: Nevada has stronger interest in enforcing its laws. Restatement 199 Requirement of Writing 1. Requirement of formalities is determined by 187-188 2. Formalities required by place of execution usually acceptable Peugeot v. Eastern Auto Delaware & NJ corporations contracted to apply NY law. Suit was filed in Virginia. There was no other NY contact. Holding: court assumes parties meant to apply common law, which would give effect to contract, rather than statute, which would have voided it. PREDICTABILITY DeSantis v. Wackenhut California/Oregon dispute over enforcement of Oregon spendthrift law. Ca. had no such law. Suit filed in Oregon. Holding: since there is a risk spendthrift would become a public charge in Oregon, Oregon law should be applied. NOTE: McDaniel says the default position is generally to apply the forum law. Casey v. Manson Construction Oregon woman sued Washington plaintiff for injury to husband sustained in Washington. Holding: Oregon court applied Washington law to the detriment of its citizens. Bernhard v. Harrahs Club comparative impairment theory California residents enticed by casino ads, come to Nevada, get drunk, and have wreck. Holding: Defendant solicited business in California. Court abandons law of place and analyzes which states policies would be most impaired by applying foreign law.

68

Offshore Rental v. Continental Oil Better Rule analysis Holding: California court applied Louisiana law as the better rule. RARE Reich v. Purcell available remedy analysis Wrongful death action with California defendant, Ohio plaintiffs and Missouri accident. Suit filed in California. Mo. had damage limitation, other two states did not. Holding: Court analyzed available remedies rather than conduct being regulated. It applied Ohio law. Miller v. Miller NY resident killed in Maine while passenger in car driven by brother. Brother then moved to NY. Decedents wife sued in NY. Holding: Defendant would not have relied on Maine wrongful death statute to regulate his conduct. It is appropriate to apply NY law. Note: it is logical to evaluate state interest at time of TRIAL, NOT time of INCIDENT Rosenthal v. Warren NY citizen gets treatment in Mass. Sues in NY. Difference is in damage limitations. Holding: Massachusetts policy is absurd and unjust. Court refused on public policy basis to apply Mass. law. Gantes v. Kason Corp. Georgia/NJ dispute filed in NJ. Issue: whether to apply Georgia s.o.r. Holding: Suit in NJ court does not burden Georgia courts. No need to apply Georgia s.o.r. Lauritzen v. Larson Danish seaman signed contract agreeing to apply Danish law. Injured in Havana, sued in New York. Holding: Apply Danish law per contract. SUMMARY OF INTEREST ANALYSIS Torts Interest of forums, center of gravity,comparative impairment, better rule Restatement 175 187 Autonomy generally accepted 188 most significant relationship

Death Claims Contracts

TENNESSEE CASES Hattaway v. McKinley Tenn. adopts most significant relationship Diving accident case. TSC adopts most significant relationship test. Holding: Factors to be considered in determining the most significant relationship are: (a) the place where the injury occurred (b) the place where the conduct causing the injury occurred, (c) the domicile, residence, etc. of the parties, and (d) the place where the relationship, if any, between the parties is centered.
69

McDonald v. GM Kansas debate team killed in Tenn. Federal Court holding: Court will use Tennessee substantive law to determine which state law to apply. It was simply fortuitous that accident occurred here. Domicile of decedent is extremely important factor. Coffee v. Peterbilt NOTE: THIS CASE IS PRE-HATTAWAY Holding: lex loci delicti was applied State v. Cauley criminal conflicts law Tennessee/Kentucky warrant case. Kentucky requires totality test. Tennessee requires Aguillar-Spinelli two pronged test. Holding: if sister state law officers are acting as agents of Tennessee, then Tennessee test must be applied. If they uncover evidence acting alone, that evidence will be admissible here. Standard Fire Ins. v. ODonley lex loci contractus in insurance contracts Tennessee Holding: Absent a choice of law clause, Tennessee courts have applied law of state where policy was purchased (contract was made) lex loci contractus. Note: Tennessee maintains most significant relationship test for TORTS Carefree Vacations v. Brunner substantial relationship required to validate choice of law Illinois plaintiff sold plane to Tennessee Defendant. Contract had Texas choice-of-law clause. Tenn. Holding: there must be a substantial relationship with chosen forum for a choice of forum clause to be valid. Otherwise it is NOT enforceable. Solomon v. Flo-Warr Management using center of gravity when two states involved in contracts Employment contract was signed in Tennessee. On termination, the parties negotiated an second exit contract in Alabama. Holding: this case decided on a center of gravity theory. Goodwin Bros. V. H&B substantial relationship required Holding: Tennessee will enforce a choice of law clause with a substantial relationship. Bradshaw v. Old Republic request for workers comp in another state bars Tenn. recovery Workers Comp dispute. Tennessee Holding: the knowing submission to, or request for compensation in, another state IS an election of remedies, and bars recovery in Tennessee. BUT Gray v. Holloway Construction Co. TN/TX workers comp dispute. Plaintiff had not filed claim, but had accepted voluntary payments. Tennessee Holding: Since Plaintiff had not filed claim or won a judgment, he was not barred by Bradshaw from filing here. First Christian v. Moneypenny situs controls disposition of land Couple had wills drafted in Florida. Surviving wife later wrote holographic will in Tennessee with conflicting disposition of land. Florida does not recognize holographic wills. Holding: since land is located in Tennessee, Tennessee law controls disposition of land.
70

Delamotte v. Strout domicile of decedent controls inheritance TN/MO. Adoption case. Dispute over collateral inheritance. Tennessee holding: Law of domicile of decedent controls which state law applies to inheritance. CONFLICTS IN FEDERAL SETTINGS Erie v. Thompkins federal courts apply state substantive law Landmark holding: In federal diversity cases, federal courts apply the substantive law of the state in which they sit. TWIN AIMS OF ERIE 1. IMPARTIALITY 2. ELIMINATION OF FORUM SHOPPING Guaranty Trust v. York federal courts apply state outcome determinative rules Holding: Outcome determinative rules such as s.o.l.s should be applied. Result in federal diversity case should be same as if it were tried in state court. Byrd v. Blue Ridge federal courts do NOT apply rules which conflict with constitution Diversity case on injured workman. State rule conflicted with constitution on role of judge, jury. Holding: state rules may not disrupt judge-jury relationship in federal court. Based on Seventh Amendment. Hanna v. Plumer Federal rules prevail Ohio Plaintiff did not comply with delivery in hand service on Massachusetts defendant. Holding: rules on service are procedural, not substantive. Federal rules on service prescribed by Congress prevail. Note: if there is no substantive law to cover an issue federal court may certify, but may not INVENT rule or law Note: Court of Appeals reviews DE NOVO district court determinations of state law. BUT Gasperini v. Center for Humanities Seventh Amendment reexamination in diversity cases Lost photo case. District court found much larger damages than proof showed. Holding: in reviewing judgments, district court should have applied the deviates materially from what is necessary to compensate standard. However, once district court make determination, Court of appeals may NOT do de novo review violates Seventh Amendment provision against reexamination of fact tried to a jury. Klaxon v. Stentor Electric district court must apply forum states conflicts law Issue: must federal court in diversity case apply conflicts law of state in which it sits? Holding: district court must apply ALL substantive laws, including conflicts law. Ferens v. John Deere forum shopping & transfers are proper under the rules Injured Plaintiff forum-shopped to state with longer s.o.l., then moved to transfer back to his home state. SCOTUS holding: was proper to allow plaintiff to have choice of where to
71

file, and proper to apply transferor law from that state to transferee state under RULE 1404. Note: s.o.l.s are substantive in federal diversity cases procedural in state courts

Note: when federal question case is transferred, apply rules of receiving court Samuelson v. Susen (revisited) Holding: if applying state conflicts law takes federal court to another states privilege law, so be it. DOench, Duhme & Co. v. Federal Deposit Insurance Corp. federal common law in federal question cases Federal Question suit filed in Missouri. Holding: Federal common law controls in federal question cases NOT state substantive law. Atherton v. FDIC when no federal statute exists, apply state law Bank in receivership sued FDIC. SCOTUS holding: there is no federal common law standard of care as to bank officer. State law should be applied.

72