Professor of Law, Marquette University Law School. B.A. 1976, Urbana College; M.A. 1980, J.D. 1983, University of Kentucky.
The arcane and complex world inhabited by choice of law scholars seems light years away from the world inhabited by those who must resolve real tort, contract, and property disputes. Practicing lawyers and judges must find real answers to problems such as these:
What is the measure of damages for an automobile accident in Canada between State X and Canadian residents when Canadian law precludes the recovery of non-economic damages?
Does State X or State Y contract law apply when a State X company supplies defective materials for building construction in State Y?
Does State X's safe place statute protect a State X resident who slips and falls in a State Y motel parking lot?
Is a State X hospital liable for shipping bone marrow in a defective container, thus forcing a State Y child to undergo a second bone marrow removal, when State X law would prohibit recovery?
Does State X's law apply to insurance issues when a State X resident is involved in an accident in State Y?
All of these questions involve choice of law issues, all have arisen in the courts of just one state in the past decade,1 and all states have wrestled with similar issues.
In one recent year, more than 1,600 choice of law cases were reported in American state and federal courts.2 All require efficient, practical, and just resolution. Those issues have become more difficult since the 1960s when states began to reject traditional methods of resolving them. For example, since 1965 when one state rejected traditional choice of law methodology, its courts were called upon to resolve choice of law issues in at least eighty-five cases.3 No doubt, many more attorneys have settled cases without fully litigating (or even being aware of) the choice of law issues.
While choice of law scholars discuss, debate, and even argue about the best way to resolve the issues, judges and attorneys go about their business. But that business is made more difficult by the myriad of modern choice of law methodologies that states apply today.
This article examines current choice of law methodologies and critiques proposals for new and improved methodologies. It rejects the call for a national approach and instead proposes that each state adopt its own statutory choice of law code. The author recommends that each state begin this process by conducting empirical research and analysis of its own choice of law jurisprudence to determine how judges have approached the issue since rejection of traditional methods. Such analysis would examine not only substantive results, but also the methodologies employed and the possible existence of various biases in choice of law analysis. A thorough analysis would also likely reveal clear patterns for those issues that reappear from time to time. Drafters of a state choice of law code, rather than creating a choice of law methodology from whole cloth, would base their recommendations on the state's own jurisprudence. Such a result engages the efforts of both the judicial and legislative branches of the state's government, thereby resulting in a credible written product that reflects the state's own policies and jurisprudence: a true "restatement" of the law.
Until the 1960s, an American court's choice of law methodology was fairly predictable. Courts applied a traditional approach incorporated in the First Restatement of Conflict of Laws:4 the law of the place where the particular right "vested." For tort cases, the right vested at the place of injury; for contract cases, the place ofPage 3 contracting; for property disputes, the property's location.5 The 1960s witnessed the beginnings of the choice of law revolution that led to the varied approaches seen today. Those who happily rejected the traditional approach could not anticipate that courts would be struggling with "modern" methodologies forty years later. As one court noted when it rejected the traditional approach in 1965:
[W]e do so in the belief that the rule contemplated by the [then proposed Restatement (Second) and two prior cases] will result in a common law of conflicts that will be administered with uniformity as jurisdictions generally adopt this rule. To arrive at such uniformity requires an analysis on a consistent basis so that a similar fact situation will result in a similar determination.6
That has not happened.
Currently, only ten states follow traditional methodology for tort and eleven for contract.7 Three states follow the "significant contacts" method for tort and five follow it for contract.8 Twenty-two states purport to follow the Restatement (Second)9 for tort and twenty-four for contract.10 For tort issues, three states apply "interest analysis" and three others apply forum law.11 Five states follow Leflar's "better law" methodology for torts and two of them apply it for contract disputes.12 Finally, six states apply a combination of modern methodologies for torts and ten of them for contracts.13
Even assuming that the list above accurately describes what courts actually donand in fact, it does not (courts routinely combine methods, apply only a portion of a particular method, arrive at a conclusion without describing their analysis at all) thePage 65 methodologies themselves allow wide areas of discretion. For example, in a simple torts case, the Restatement (Second), the most widely accepted choice of law methodology, requires courts to look first for a presumptive law to apply, then consult at least two other Restatement sections, both of which consist of multiple "relevant" factors including "the needs of the interstate and international systems," "the relevant policies of the forum" and "of other interested states and the relative interests of those states in the determination of the particular issue," "the protection of justified expectations," and so on.14 The methodology is not only complex, but it provides no underlying principle other than applying the law of the state that has the "most significant relationship" to the issue. Leflar's "better law" methodology limits the relevant factors to five (called "choice-influencing considerations"), but the fifth factor directs the court to determine which of the competing laws is "better,"15 again permitting broad discretion.
As a result, it has become difficult to predict what a court will do when faced with choice of law issues, and each case seems to demand an ad hoc determination. For attorneys, this lack of predictability may discourage settlement; it certainly inhibits an accurate case valuation. For judges, choice of law issues take an inordinate amount of time and require a fairly complex analysis.
The current situation has been described in a variety of ways, generally unfavorably. It is "a total disaster," "chaos," Agibberish," "a veritable playpen for judicial policymakers," "'a conflicts mine field in a maze constructed by professors drunk on theories.'"16
Resolving the current disarray involves two questions, one involving form, the other substance. The first question asks how changes might be achieved, i.e., through federal action, state-by-state legislation, changes in common law, or some other process. The second question asks what standards or rules might take the place of current choice of law methodologies.
Scholars have proposed a variety of solutions that address either form or substance or both. Most of them focus on the desirability of a national uniform choice of law methodology. Why is national uniformity so important? Most who advocate uniformity argue that it will lead to predictability and discourage forum shopping.17 Prior to the 1960s, all states followed the traditional First Restatement method. This method privileged predictability over other goals such as justice, rationality, and respect for state policies. It did not matter where a case was filed; the law of the place of injury would govern a tort case.18 This discouraged forum shopping and enabled parties to predict the applicable law.
Once states began to follow their own methodologies, however, it became imperative for attorneys to shop aroundafiling a case in a traditional state, for example, when the law of the place of injury favored the plaintiff.19 Choice of law thus became a key factor in forum shopping. Modern methodologies may favor important values like the implementation of state policy, rationality, and justice, but the variety and complexity of approaches have led to unpredictability. "[T]he parties cannot know what law governs their conduct until after they have acted. The resulting uncertainty is unfair, and it discourages desirable interstate activity."20 It is argued that a uniform choice of law regime would reinstate predictability, and its adherents hope that other values could be incorporated in the new methodology as well.
Scholars disagree, however, on the best way to implement a uniform approach. Some believe that the United States Congress should pass a federal choice of law statute.21 Even assuming that this is an area suitable for federal legislation, so far Congress has not expressed sufficient interest in such a project. This is not surprising, given the arcane...