Choice of Law in Alaska: a Survival Guide for Using the Second Restatement

• Citation: Vol. 16
• Publication year: 1999

§ 16 Alaska L. Rev. 1. CHOICE OF LAW IN ALASKA: A SURVIVAL GUIDE FOR USING THE SECOND RESTATEMENT

Alaska Law Review
Volume 16
Cited: 16 Alaska L. Rev. 1

CHOICE OF LAW IN ALASKA: A SURVIVAL GUIDE FOR USING THE SECOND RESTATEMENT

JAMES A. MESCHEWSKI ^[*]

I. INTRODUCTION

II. CHOICE OF LAW DETERMINATIONS

III. ALASKA'S PATH TO THE SECOND RESTATEMENT

A. Tort

B. Contract

IV. CHOICE OF LAW ANALYSIS UNDER THE SECOND RESTATEMENT

A. Background

B. The Three-Tier Structure

C. The Second Restatement as a Continued Source of Confusion

D. Alaska's Special Concerns

V. CONCLUSION

FOOTNOTES

This Article looks at Alaska's method of adjudicating choice of law issues that arise in tort claims and contract disputes, and highlights some of the pitfalls associated with application of Alaska's choice of law methodology, the Second Restatement. Specifically, the Article examines tort and contract case hypotheticals that may be resolved under more than one state's laws, where those laws conflict, and attempts to determine appropriate choice of law. Both the First Restatement and the Second Restatement address these issues, and the Article traces Alaska's shift from the territorial rules of the First Restatement to the more ambiguous "most significant relationship test" of the Second Restatement. Because of its ambiguity, the Second Restatement is difficult to apply, allowing courts to interpret its provisions differently. This Article sets out both Restatements, then determines the proper method for interpreting and using the Second Restatement. The Article analyzes Alaska courts' conflict of laws decisions, along with two federal cases interpreting Alaska law, in order to determine whether the appropriate methodology has been followed. The Article concludes that the Second Restatement has not been followed correctly or consistently in Alaska, and that the Alaska courts need to adopt a more specific method of analysis to provide courts and practitioners both with structural guidance as to how the provisions of the Second Restatement are to be applied.

[*pg 2]

Of course, the mere fact that a state supreme court cites the Second Restatement reveals little about how it will in fact decide conflicts problems. Opting for that eclectic authority may mean no more than that the judges cannot agree, or have not thought about, what exactly should replace the traditional choice of law rules. ^[1]

I. INTRODUCTION

In a 1985 decision, the Supreme Court of Alaska adopted the methodology advocated by the Restatement (Second) of Conflict of Laws ("Second Restatement") for adjudicating choice of law issues in tort -- the "most significant relationship" test. ^[2] Ten years later, the supreme court followed its own lead and also espoused the Second Restatement's most significant relationship test for making choice of law determinations in contract. ^[3] These cases revolutionized Alaska's method of adjudicating choice of law issues by abandoning the state's ties to the rigid territorial rules of the Restatement of Conflict of Laws ("First Restatement"). However, these cases on their own have failed to provide Alaska with a coherent approach for adjudicating choice of law issues in the future.

Disturbingly, the most noteworthy characteristic of the Second Restatement is its ambiguity, a characteristic that has left a multitude of courts confused over how its provisions are to be interpreted. As a result, the decision to adopt the Second Restatement as a methodology for resolving choice of law issues is only the first step for Alaskan courts. The ambiguity of the Second Restatement itself, combined with erratic application of its methodology by both the Alaska Supreme Court and the United States District Court for the Ninth Circuit sitting in Alaska, has muddied already unclear waters for Alaska courts and practitioners. As a necessary second step, Alaska courts now must sift through the complex and ambiguous provisions of the Second Restatement in order to establish a more coherent and analytically consistent method of choice of law. The purpose of this Article, therefore, is to familiarize Alaska courts and practitioners with some of the controversies and pitfalls surrounding the application of Alaska's [*pg 3] adopted choice of law methodology -- the Second Restatement's "most significant relationship" test.

II. CHOICE OF LAW DETERMINATIONS

Prior to the adoption of the Second Restatement, choice of law issues largely were governed by the territorial "rules" ^[4] of the First Restatement. ^[5] These rules, like the Second Restatement, taxonomized choice of law issues into rigid categories based upon the specific type of claim presented. For each "category" of issue, the American Law Institute ("ALI"), which authored the First Restatement, determined that there would be one specific contact that would be jurisdiction selecting, regardless of the number and nature of contacts that the issue or parties may have possessed with other jurisdictions. ^[6]

While the First Restatement's rules offered ease of administration, their "plug-and-chug" method of application proved to be analytically constraining. According to some, it left courts with little ability to administer justice when the nature of the events overwhelmingly pointed to the application of the law of a jurisdiction different from where the First Restatement's predetermined controlling event took place. For example, note 2 of Section 377 provided that when one person caused another to voluntarily take a deleterious substance, the place of the wrong was where the substance took effect. ^[7] By way of illustration, the Restatement then provided the following hypothetical:

A, in state X, mails to B, in state Y, a package containing poisoned candy. B eats the candy in state Y and gets on a train to go to state W. After the train has passed into state Z, he becomes ill as a result of the poison and eventually dies from the poison in state W. The place of the wrong is state Z. ^[8]

In other words, the ALI arguably determined that although (1) neither party resided in state Z, (2) the poison was neither sent to [*pg 4] nor ingested in state Z, (3) neither A nor B ever intended on stopping in state Z, and (4) the fact that B became sick in state Z was completely fortuitous, the decision of the railroad to travel through state Z on the way to state W was the most important factor in the case. The route of the railway therefore trumped the law of the place where B presumably resided, where A knowingly and deliberately sent the poison (which presumably was also the place where A planned on the harm occurring), and where the poison was actually ingested. Equally as illogical is the fact that, under this rule, B's ability to collect from A could change each and every time B crossed a state line. ^[9]

Because of these types of intellectual constraints, and their potential to lead to unpredictable results, the First Restatement was criticized severely for its attempt to handle complex aspects of choice of law with a strict set of rules derived from over-simplified principles of territoriality. ^[10] In response, courts revolted. Many courts either rejected the First Restatement outright as the jurisdiction's governing choice of law authority, or utilized "escape devices." "Escape devices" allowed courts to avoid the seemingly applicable rules of the First Restatement by characterizing the nature of a claim to avoid the undesirable sections, or by making certain procedural or policy determinations that allowed courts to dismiss a claim or apply the law of the forum of some other non-offending jurisdiction instead of applying the law of the jurisdiction called for by the First Restatement. ^[11]

[*pg 5]

By 1952, the American legal profession had come to realize that the First Restatement was beyond salvage. ^[12] Recognizing that the theoretical basis underlying the First Restatement's territorial rules had become untenable, the ALI commenced work on a new and more flexible version of the Restatement that took into consideration the quality of the contacts that contending jurisdictions possessed with the parties and each disputed issue. ^[13]

III. ALASKA'S PATH TO THE SECOND RESTATEMENT

A. Tort

Prior to 1968, Alaska courts had suggested that tort liability would be governed by the laws of the place of the wrong in a manner consistent with the territorial rules approach of the First Restatement. ^[14] However, in 1968, in Armstrong v. Armstrong, ^[15] the Alaska Supreme Court was faced with a factual situation in which the strict application of the First Restatement's rules would have led to an unacceptable result. It was at this stage that the court took account of previous criticism directed at the First Restatement and redefined its approach towards making choice of law determinations. ^[16]

[*pg 6]

In Armstrong, the supreme court was called upon to resolve an interspousal dispute arising from an automobile accident that occurred while husband and wife, both long-time Alaska domiciliaries, were traveling from Washington through the Yukon Territory of Canada. ^[17] Following the accident, the husband instituted a personal injury claim against the estate of his late wife, who was driving the car at the time of the fatal crash. ^[18] While Alaskan law recognized interspousal actions based upon negligently inflicted harms, the law of the Yukon Territory provided defendant...