Oregon s Project to Codify Choice-of-Law Rules

Pages:1189-1225
Author:James A.R. Nafziger
Position::Thomas B. Stoel Professor of Law, Willamette University College of Law
SUMMARY

I. Background A. The Choice-Of-Law Project II. Oregon's Choice-Of-Law Approach A. Background B. The Case Law: 1964-85 C. The Case Law: 1986 To The Present III. Statutory Opportunities A. Choice-Of-Law Rulemaking B. The Alternatives For Oregon IV. Conclusion Annex Oregon Choice-Of-Law Cases: 1986-2000 (In Reverse Chronological Order) State Cases Annex Oregon Choice-Of-Law Cases: 1998-2000 (In... (see full summary)

 
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Thomas B. Stoel Professor of Law, Willamette University College of Law. The author expresses his appreciation to Juan Aguiar and Keliang Zhu for their excellent research assistance.

On the arid plateau of American choice-of-law legislation, one figure looms large: Symeon Symeonides. His work as Reporter of Louisiana's comprehensive codification of choice-of-law rules and as Co-Rapporteur of a similar project in Puerto Rico are exemplary. The unanimity of the Louisiana legislature's enactment of the conflicts law testifies also to the political savvy that Dean Symeonides must have exercised in a notoriously political state. Fortunately for us in Oregon, his pioneering scholarship and diplomatic skill are already assisting the state in its second-in-the-nation project to enact choice-of-law rules.

The first project of the new Oregon Law Commission1 to be initiated outside the state legislature is directed toward codification of choice-of-law rules.2 Oregon is thus the second state, after Louisiana,3 to undertake to do so. This report analyzes and summarizes Oregon's checkered conflicts jurisprudence and suggests alternatives for statutory reform.

I. Background

A. The Choice-Of-Law Project

In 1998 the Oregon Law Commission began to develop legislative initiatives and invited outside proposals for law reform projects, in response to which I submitted a proposal in May 1998 to draft choice-of-law rules. The Commission decided in September 1998 to undertake the project. On the Commission's request, I met in December 1998 with two of its members, Chief Justice Wallace Carson of the Oregon Supreme Court and Professor Dom Vetri of the University of Oregon School of Law, to begin planning the project. In January 2000, a newly organized study group4 decided to focus initially on choice-of-law rules for contract and tort cases.

Willis Reese, Hans Linde and Symeon Symeonides inspired my proposal Years ago, Professor Reese, the Reporter for the Restatement (Second) of Conflict of Laws, expressed to me his bewilderment with Oregon's choiceof-law process, purportedly based upon the Restatement (Second) but of derelict application. He suggested a need for further analysis of the rather complicated case law as a first step toward the formulation of clearer rules More recently, when the Commission began to look around for projects, one of its pioneer members, Professor Linde, suggested that I initiate a proposal for codifying choice-of-law rules. During the first meeting of our planning group, in December 1998, we decided to invite Dean Symeonides, then of the Louisiana State University faculty, to serve as an outside consultant. The logistics of involving him in the project were eased several months later when Willamette University appointed Professor Symeonides as Dean of the College of Law, commencing in July 1999.

II. Oregon's Choice-Of-Law Approach

A. Background

Until 1962, Oregon courts, like those in most states, applied territorialist, jurisdiction-selecting rules-such as the law of the place of wrong, the law of the place of executing a contract, and the law of the place of performing a contract-for choosing the applicable law in multi-jurisdictional disputes.5 These black-letter rules were based on a doctrine of vested rights, according to which rights become attached to persons, events and activities at prescribed points in time and space. The territorialist rules, as they became known, generally served, or were thought to serve, several important functions of the judicial process: simplicity, predictability, ease of judicial administration, and avoidance of forum shopping. As time went on, however, it became apparent that formulation of the rules did not take sufficient account of the functions and purposes of the rules themselves. The rules seemed more and more artificial. Moreover, interpretation of the rules over time and space produced conflicting results, and creditable application of the rules required a variety of legal fictions and techniques. Finally, the rather mechanical application of jurisdiction-selecting rules did not necessarily produce justice in the individual case.

As time went on, courts began to find ways to avoid unjust or simply undesirable results. Use of a public policy exception, manipulation of the substance-procedural characterization of an issue, and recourse to renvoi, for example, eased the judicial conscience.6 Gradually, courts began to shift their focus away from the choice of the appropriate jurisdiction, whose law was to be applied mechanically to govern an entire case, to the choice of the appropriate law to resolve a specific issue. This represented a shift from multilateralism, which seeks uniform choice-of-law results wherever a case is brought, to unilateralism, which seeks to define the intended or otherwise appropriate spatial reach of conflicting rules, and substantivism, which instructs courts to apply the best available substantive law regardless of the goal of multijurisdictional uniformity or the reach of a particular rule.7 The new learning encouraged the shift toward unilateralism and substantivism by analyzing, variously, such factors as the intended scope of a particular rule of law, its purpose and function(s), its salience for the governing authority, and its relative value in modern society.

Under the new learning, courts began to experiment with more or less prescribed new approaches for resolving conflicts, particularly in contractand tort-related disputes Most of these approaches share two characteristics. First, after confirming that a conflict of laws may exist, the modern approaches typically undertake an evaluation of the significance of particular contacts between critical events or persons and the jurisdictions whose laws are ostensibly in conflict, or of the respective interests of those jurisdictions in having their ostensibly conflicting laws applied to govern the issues in a case, or a combination of these two modes of evaluation. Second, the modern approaches encourage an issue-by-issue analysis, engaging, if need be, in dépeçage of a case into discrete, conflict-relevant issues. The main approaches, more or less in order of their progression from jurisdiction- selecting rules to law-selecting criteria, include gravity of contacts; forum preference in the absence of a compelling foreign interest to the contrary; the most significant relationship test of the Restatement (Second) of Conflict of Laws; governmental interest analysis; comparative impairment analysis; and choice-influencing considerations, including the "better rule" factor.8Alternative approaches that have largely remained academic include principles of preference in contract cases; functional analysis; special substantive rules and compromises for resolving conflicts, including the "best rule" approach; and expectations theory.9

B. The Case Law: 1964-85

Oregon case law during the formative period of the new choice-of-law learning has been examined elsewhere.10 Three early decisions, however, merit specific attention.

In Lilienthal v. Kaufman,11 the Oregon Supreme Court joined the vanguard of the conflicts revolution by adopting a form of governmental interest analysis, at least to govern contract-related conflicts.12 In Lilienthal, the plaintiff, a California resident, sued an Oregon spendthrift for contracted repayment of a loan that the defendant had obtained in California. Although California common law would have upheld the contract, the Oregon Supreme Court ruled that Oregon's spendthrift statute voided it so as to protect the Oregon spendthrift. Having found a true conflict between California and Oregon law, the court, noting that it was an instrument of state policy, broke the tie by applying the Oregon spendthrift law.

Three years later, in Casey v. Manson Construction & Engineering Co.,13 the Oregon Supreme Court extended the new learning to a torts case for the first time. In Casey, an Oregon resident brought an action for loss of consortium, alleging that her husband's injury had been caused by the Washington defendant's negligence during the husband's employment on a project in Washington. An Oregon statute conferred a right of consortium, whereas Washington common law denied a spouse the right to sue for loss of consortium. The court, citing Lilienthal, undertook a form of interest analysis, concluding that although the dispute implicated substantial interests of both states, Washington had a more significant relationship with the occurrence and the parties. The court therefore applied Washington law to bar recovery. In weighing the respective state interests in this way to resolve what would otherwise be a true conflict, the court appeared to adopt the approach taken in the new Restatement (Second).

In Erwin v. Thomas,14 another Washington-related action for loss of consortium, a Washington plaintiff brought an action against an Oregon defendant to recover for loss of consortium related to her husband's injury in Washington. The court concluded that Washington had no material interest in the matter because no Washington defendant had been required to respond to the plaintiff's claim. (The court did not explain why the potential extension of insurance proceeds to the Washington plaintiff, even if Washington would not have so provided for them in a wholly local case, might not be of interest to that state. The inclination of courts applying the modern approaches is to define governmental interests in terms of benefiting their residents and domiciliaries in the context of resolving a conflict of laws.)15 The court then determined that Oregon had no material interest because the Oregon legislature likely was unconcerned about the rights of non-resident wives whose husbands were injured outside the state. Thus, the court was faced with the "unprovided for" case where neither state could claim an interest in having its law applied. The court decided to do "what comes...

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