“The most significant relationship.”
Restatement (Second) of Conflicts
The Second Restatement of Conflicts focuses on the location where the parties have the most significant relationships. For torts, this relationship can be determined based on where the accident occurred, where the parties are from, etc. For contracts, this can be where the contract was negotiated, signed, or meant to be performed. These appear as blind rules, but the Second Restatement also considers policy factors which could cause confusion to the courts. Consequently, many states have used combined versions of other modern approaches to Conflicts that appear consistent with the Second Restatement.
In summary, there are three main considerations made by the Restatement:
- Grouping of Contacts (see §§ 145 and 188)
- Policy considerations (based on § 6)
- Specific rebutting rules (for specific kinds of cases)
According to § 6, the court will follow the statutory directives of its own state, but if there is no directive, the court will consider the following considerations:
- Needs of the interstate and international system.
- The policies of the forum interested states.
- Justified expectations.
- Basic policies underlying particular field of law.
- Certainty, predictability, uniformity, and ease.
§ 145 addresses the contacts within torts while 188 focuses on the contacts within contracts. Procedural, property, and intestate based issues remain similar to the First Restatement approach.
Phillips v. General Motors Corp.
995 P.2d 1002 (Mont. 2000).
Phillips is the plaintiff suing on behalf of an estate and survivor of the estate. This case was brought originally in federal court where the following questions were certified to the state.
Questions
Whether the court will adopt the Second Restatement of Conflicts.
Which laws apply (Montana, Kansas, Michigan, or North Carolina)?
Whether there is a public policy exception if a law other than Montana’s would apply.
Conflict: Montana and Kansas have strict liability for products liability issues while North Carolina does not (Michigan laws are not addressed but we assume they are pro-manufacturing). However, Montana has very few defenses to strict liability (with lots of recovery options) while Kansas has several defenses (with limited recovery options).
Holding
Apply Second Restatement of Conflicts to use Montana law.
Facts
The Byrds had purchased a vehicle from General Motors in North Carolina and listed a North Carolina address at the time of the sale. They subsequently moved to Montana and were residing there at the time of the accident. As the Byrds were going on a family trip to North Carolina, they were involved in a deadly accident in Kansas. The plaintiff of this case is the surviving son, suing by means of his guardian and executor of the decedent’s estate (Phillip).
Analysis
First, the court determines that using the Restatement (Second) approach is adopted by Montana for torts (partially because it had already adopted that approach for contracts).
Using the Second Restatement approach, the court then conducts a most significant relationship analysis (because there is no statutory directive). They consider the contacts in § 145 to determine that Montana law makes more sense. However, they do want to work through the factors of § 6:
- Needs of the interstate and international system. The present facts indicate the state with the most significant relationship will best influence the interstate system.
- The policies of the forum interested states. This factor is the most significant in the analysis. When the court considers: the place of injury, place of conduct, residence of the parties, and any centered relationships, the court determines that Montana is the best state to use. This is because (1) Montana’s policy interest of protecting residents and holding manufactures liable would be furthered, (2) Kansas has limited interest because those injured were not residents (and the law is designed to protect Kansas products and residents), (3) Michigan has minimal interest as only being the designer, (4) North Carolina has limited interest because it would only apply the place of the wrong anyways (not North Carolina law).
- Justified expectations. None here because this is a negligence claim. Also, vehicles are inherently mobile.
- Basic policies underlying particular field of law. This factor comes into play if the differences in law is minor. However, the differences here are major, so this factor has a minimal role.
- Certainty, predictability, uniformity, and ease. Using the place of injury will result in arbitrary results, so it makes sense to use Montana’s because it will be just as easy.
Finally, the court will not conduct any “public policy exceptions” if the law to be applied was one other than the forum. This is because the analysis already considers public policy and to consider it again would be redundant.
America Online, Inc. v. National Health Care Discount, Inc.
121 F. Supp. 2d 1255 (D. Iowa 2000).
America Online, Inc. is the plaintiff, filed in a federal district court.
Question
Which state’s law will apply? The battle is generally between Iowa, Kansas, Delaware, or Virginia.
Holding
Apply Virginia law.
Facts
America Online, Inc (AOL) ran an email service for its subscribers. The servers for the service was located in Virginia. National Health Care Discount, Inc (NHCD) is a corporation headquartered in Iowa, but ran most of its business elsewhere. NHCD had engaged in bulk marketing using AOL’s servers. In other words, NHCD was engaging in spamming AOL subscribers at the cost to AOL server capacity and subscriber count. When NHCD refused to stop engaging in the spam, AOL sued.
Analysis
Looking at the parties, there is no clear relationship with any one state. Consequently, the place of the wrong, where the damage was most concentrated, should be the law applied. Here, that is Virginia, the place where the servers were damaged by the overuse.
Disclaimer
The content contained in this article may contain inaccuracies and is not intended to reflect the opinions, views, beliefs, or practices of any academic professor or publication. Instead, this content is a reflection on the author’s understanding of the law and legal practices.
