Characterization is the process of understanding what type of law will govern the case: tort, contract, property, etc. This characterization matters because the outcome may be different if a case is characterized as a tort instead of a contract.
Haumschild v. Continental Casualty Co.
95 N.W.2d 814 (Wis. 1959).
Under California law, a wife cannot sue her husband. Under Wisconsin law, she can.
When a tort occurs in another state, but the parties are spouses, it makes more sense to apply family law which uses the domicile to determine which law governs.
The parties are domiciled in Wisconsin. Thus, Wisconsin law governs and the district court is overturned.
Mrs. Haumschild is suing her husband for negligence in an accident that occurred in California. Both parties are domiciled in Wisconsin.
This is a tricky characterization. Should we characterize this case as a tort, or as family law (where domicile will determine the choice of law). If this case was characterized as a tort, California law would govern (and the wife will lose), because that is where the accident took place. However, if this case is characterized as a family law matter, the place of the marital domicile will govern (meaning Wisconsin law will apply and the wife will at least have the capacity to sue). Because this is a unique family matter, this court says that it makes more policy sense to apply family law, rather than tort law.
The court here makes the switch (from tort to domicile) for policy reasons. It makes more sense for a family based lawsuit to occur in the state where the parties are domiciled.
The doctrine of renvoi is the practice of selecting a foreign state’s laws, including their choice of laws rules. This could be problematic, resulting in circular reasoning. As a result, the First Restatement generally denounced the practice, except for in cases of title to land or the validity of a divorce.
Renvoi means “to send back” or “return unopened.”
Some additional terminology includes: “whole law” which is a combination of the conflicts rules + the internal laws. Most places use a partial version of renvoi (use the whole law of the first chosen state, but only the internal law of the second state); that way, the circle ends.
In re Estate of Damato
206 A.2d 171 (N.J. Sup. 1965).
In New Jersey, the Totten Trust is invalid. In Florida, the Totten Trust (Inter vivos trust) is valid. This is the conflict of the internal law. However, there is also a conflict of the Choice of Law rules. New Jersey would go where the property was located, while Florida would base it on the domicile of the decedent.
Apply New Jersey’s choice of laws rule (leading to Florida) then apply Florida’s internal law.
Damato was a resident of New Jersey and had two sons there (Philip and James: James was also the executor) and opened bank accounts in Florida. During his life, he opened a trust where the beneficiary would be James. This is called a Totten Trust. If the trust is valid, James would get the whole balance. However, if the trust is invalid, the brothers would split the balance.
This court wants to avoid the circular reasoning of the doctrine of renvoi. So, instead of applying Florida’s conflict of laws rules, which might be circular, they instead look to their inner law. Here, Florida’s inner laws would give the balance to the beneficiary. Thus, the trial court’s ruling is affirmed.
An example of the court refusing to use renvoi because of the circular reasoning.
University of Chicago v. Dater
270 N.W. 175 (Mich. 1936).
Internal Laws Conflict: In Michigan, a married woman does not have the ability to contract. In Illinois, a married woman does have the ability to contract.
Choice of Law Conflict: In Michigan, the place of contracting is where the note is delivered for value. In Illinois, the place of contracting is where the note was delivered (mailed from).
The Dater’s were working on a sale of property in Chicago, Illinois. The note was signed in Michigan by a married woman, then sent to Illinois. However, execution of the note was dependent on receiving good title.
So, was this contract made in Illinois or Michigan. The majority says that it will apply Michigan choice of law rules (or if it applies Illinois, the result would be the same), because the note was signed in Michigan. Consequently, the woman did not have the capacity to contract and the note is void.
However, the dissent argues that this was not a fully formed contract until delivery of the note for value (verification of good title) occurred in Illinois. Had that been the case, the result would be that the woman did have the capacity to contract.
Here, the court uses renvoi. Value was delivered in Illinois, so use Illinois choice of law rules, where it directs it back to Michigan’s internal law. Because Michigan’s internal law says that a married woman does not have the capacity to contract, the note was void.
Substance v. Procedure
First Restatement of Conflicts
§§ 584-85, 588, 591, 594-97, 599-601, 606
The law of the forum will determine whether the issue is procedural and the law of the forum will govern all procedure. The only exception is that determination of whether a contract has been integrated is based on the state where the contract was formed.
Sampson v. Channell
110 F.2d 752 (1st Cir. 1940).
The defendant won at trial and the plaintiff appealed.
Massachusetts says that the defendant has the burden of proof to determine contributory negligence. Maine says that the plaintiff has the burden of proof to determine that no contributory negligence occurred.
Whether the issue is procedural will be determined by the forum state. If the issue is procedural, the forum state’s laws will apply regarding that issue.
This issue was procedural according to Massachusetts. Reversed and remanded.
This case is filed in Massachusetts in a diversity case. The accident had occurred in Maine. At trial, the defendant argued that the law of Maine should govern an instruction on the burden of proof while the plaintiff argued that the law of Massachusetts should govern the instruction on the burden of proof. The trial court applied Maine’s law resulting in the appeal.
The issue of the burden of proof in a contributory negligence claim is difficult to determine whether the issue is substantive or procedural in nature. This appears substantive because the answer may affect the outcome of the case. However, it is also procedural, because Massachusetts would characterize this issue as procedural. So, how do we determine whether this issue is procedural or not? Well, ask the court of the forum state. If the state would treat it as procedural, then the issue is procedural. Using Erie.
Here, Massachusetts would treat the burden of proof issue as procedural and say that the defendant has the burden of proof in contributory negligence claims. Because this rule was not applied at trial, the case must be reversed and remanded for further proceedings.
This case shows has an issue can be characterized as either substantive or procedural, depending on the jurisdiction. As such, there is a two part analysis: (1) Is this a federal or state law issue? (2) Is this a substantive or procedural issue?
O’Leary v. Illinois Terminal Railroad
299 S.W.2d 873 (Mo. 1957).
The plaintiff won at trial and on initial appeal.
In Missouri, the defendant has the burden of proof to show contributory negligence. However, in Illinois, the plaintiff has the burden of proof to show that no contributory negligence occurred.
The burden of proof is substantive law because it directly affects the plaintiff’s right to recover.
The plaintiff has the burden of proof under Illinois law, the law of the tort. Reversed and remanded.
An accident occurred in Illinois but the forum state is Missouri. Determining whether the issue is substantive or procedural in nature is vital. If the issue is procedural, then Missouri law will apply as the forum state. However, if the issue is substantive, then Illinois law will apply, being the place of the wrong.
The burden of proof in a contributory negligence claim is sticky in nature. On the outside, it appears procedural (who has to prove something at court). However, on the inside, the burden of proof becomes substantive because it affects the plaintiff’s right to recover. So, Missouri determines that the burden of proof is substantive and determines that Illinois substantive law should apply, being the place of the tort.
Burden of proof is one of the gray areas regarding procedural v. substantive conflict of laws. Other examples consider the statute of fraud, statute of limitations, joinder, survival of a cause of action, availability of equitable relief.
Grant v. McAuliffe
264 P.2d 944 (Cal. 1953).
A cause of action survives the death of a tortfeasor in California but not in Arizona.
An issue is procedural if it is not an essential part of the cause of action, but relates to the procedures to be applied in the case.
Administration of an estate is purely procedural and so survival claims are also procedural. This cause of action survives in accordance with California law.
All the plaintiffs are domiciled in California. The defendant decedent’s estate is also being administered in California. While traveling along a highway, an accident occurred in Arizona, resulting in several injuries to the plaintiff and the eventual death of Pullen. The defendant listed is the administrator of Pullen’s estate.
Here, the defendant is arguing that survival of a cause of action against a decedent is substantive in nature and thus the place of the wrong (Arizona) should apply. If Arizona applies, then the case is going to be dismissed.
This case is also difficult to ascertain whether the survival of a cause of action is procedural or substantive in nature. At first glance, it may appear substantive because success of a lawsuit depends on whether there is a cause of action. However, this case is merely procedural. There is not a new cause of action being granted (as is the case in a wrongful death action). Instead, this is simply the continuation of an ongoing cause of action with the local procedure of estate administration.
There are also policy implications to use California law. Specifically, the estate is located in California and it is easier and cleaner to adjudicate the estate in one place.
Statute of Limitations
First Restatement of Conflicts
A cause of action will be governed by the statute of limitations of the forum unless the condition for bringing the cause of action is based on the statute of limitations within the substantive part of the foreign state.
Duke v. Housen
589 P.2d 334 (Wyo. 1979).
Wyoming has a four-year statute of limitations. All other states in question (besides Nebraska) have a shorter statute of limitations period that would have barred the claim. These states include: New York, Pennsylvania, Iowa, Virginia, and Washington D.C.
The statute of limitations of the forum state will apply unless the forum state will apply the statute of limitations of another state.
Here, the forum state has a borrowing statute where the statute of limitations where the cause of action arises will determine whether the action is barred.
The plaintiff and the defendant engaged in intimate relations several times on a trip together from Washington D.C. to Colorado, and back again (with their relationship becoming more rocky as the trip went on). There is evidence in the record that the engaged in these activities within New York, Pennsylvania, Iowa, and Virginia. There is no evidence of engaging in these activities within Wyoming where the defendant was domiciled.
After engaging in these activities, the defendant informed the plaintiff that he had a disease, that he had probably given it to her, and she should see a doctor. As a result, the plaintiff saw a doctor in Washington D.C. which confirmed that she had contracted the disease, which resulted in surgery and other extensive injuries.
This lawsuit was filed shortly before four years had expired. The question before the court now is whose statute of limitations law will apply. For answering this question will determine whether the plaintiff has a right to recover.
Because Wyoming is the forum state, the statute of limitations will apply except for the borrowed statute. Thus, the statute of limitations will apply from a foreign state where the cause of action arises in accordance with the First Restatement § 377, the place of the wrong. Here, the majority determines that at the place of the wrong is New York, because it was the last state where the parties engaged and can therefore be the last possible state where the tort took place. Because New York has a two-year limitation period, the case is barred.
The concurrence agrees with the reasoning but says that Washington D.C. would be the place of the wrong because that is actually where the injury was discovered and felt. The last act.
However, the dissent argues that the forum state will govern and the borrowing statute does not apply. This reasoning is because either all the possible states need to have barred the action (and Nebraska hasn’t). If not, then there is no clear way of telling where the wrong actually occurred (no way of knowing when she actually contracted the disease). In this situation, the limitation period of the forum state would apply.
Wyoming (and many other states) had enacted these borrowing statutes (the forum will use the statute of limitations where the cause of action arose. But pay careful attention to the language of the statute). The main purpose of these statutes were to avoid forum shopping. Borrowing statutes are considered choice of law rules, rather than statute of limitations rules (that way renvoi doesn’t apply).
However, consider the Uniform Conflict of Laws – Limitations Act which determines that if the statute of limitations is substantive in nature, the forum will apply the another state’s statute of limitations.
Also consider the difference between statutes of repose v. the statute of limitations. A statute of repose bars a lawsuit after a set period of time, regardless of when the cause of action accrues. Most courts determine that the statutes of repose are going to be substantive.
A law will not be enforced in another state if it is a violation of their strong public policy. However, this rule only applies for when the parties are trying to establish a cause of action rather than when trying to establish a defense. First Restatement of Conflicts § 612.
Laboratory Corp. of America v. Hood
911 A.2d 841 (2006).
The Hoods are the plaintiffs.
In Maryland, there is a cause of action for “wrongful birth” while there is no cause of action in North Carolina.
If the lack of a cause of action is a violation of strong public policy, then the court will still allow the cause of action to occur.
Maryland substantive law will apply. However, if North Carolina substantive law did apply, the Court would still allow the cause of action to occur.
The Hoods previously had a child with CF, a genetic disorder that significantly impacts the child’s ability to function and decreases the child’s lifeline. When Ms. Hood became pregnant again, they ran a genetic test for CF. When CF was detected, the Hoods elected to terminate the pregnancy.
In the current case, Ms. Hood had become pregnant again, and again obtained a genetic test for CF. This time the test came back negative and Ms. Hood had the child. Three months later, the child was diagnosed with CF and another report was returned saying that there had been an error in the initial report. The Hoods are now suing for damages for expenses to care for the child.
The Hoods are domiciled in Maryland and the birth occurred in Maryland. LabCorp ran the genetic tests in North Carolina.
Using the first Restatement, the law of the place of the tort would be Maryland. This is the last location where the injury occurred. Namely, the child was born in Maryland with the genetic disorder. Thus, Maryland laws would apply and a cause of action may arise.
Even if North Carolina law would apply, the court would still find that there is a cause of action in Maryland because to deny such a cause would be to violate Maryland public policy. The development of wrongful birth is a recent one in Maryland, encouraged by the development of science. As such, Maryland has a desire to protect its citizens from acts against them within the state of Maryland.
Public policy is defined as “some fundamental principle of justice, some prevalent conception of good morals, some deep-rooted tradition of the common weal.”
Holzer v. Deutsch Reichsbahn-Gesellschaft
14 N.E.2d 798 (N.Y. 1938).
Do we apply German law or New York law? German law would not allow the claims to go forward while New York would.
Apply German law.
The plaintiff had an employment contract with the defendant Corporation. Within the contract was a clause that stated the plaintiff would be entitled to money if he were unable to provide services for a reason other than his own fault. When the plaintiff was detained in a German concentration camp, his job was terminated (the corporation was forced to terminate the job by German law). As such, he sought recovery under the contract but was denied.
The contract was formed in Germany so German law will apply. German law did not allow a cause of action to arise so there can be no remedy for wrongful termination. However, there may be a cause of action for breach of contract (if the facts lead to that discovery during discovery).
So, what makes Holzer different from LabCorp where the public policy exception would not apply? There are two main distinctions. First, in LabCorp, the parties were all domiciled in Maryland where most of the actions took place. Second, in Holzer, this is a foreign country, and the States within the United States has even more respect for foreign law.
First Restatement of Conflicts §§ 610-11, no action can be maintained to recover a penalty enforced in another state.
Paper Products Co. v. Doggrell
261 S.W.2d 127 (Tenn. 1953).
Arkansas allows recovery from Stockholders when a corporation fails to file papers with the clerk within the county. Tennessee says the corporation is formed when the articles of incorporation are filed within the Secretary of State (meaning no recovery from Stockholders).
If a law is penal in nature (instituting a penalty), then it will not be upheld in another state.
This law is penal, enforcement will not be entertained.
Doggrell is a stockholder domiciled in Tennessee. He started a company in Arkansas and left the management of it with another stockholder. The other stockholder had filed the articles of incorporation with the state but failed to file them with the county clerk (a requirement in Arkansas). Failure to do so would hold stockholders liable. After this failure, the other stockholder opened an account with Paper Products Co. and took out a considerable loan. However, the corporation soon fell into bankruptcy, leaving a large balance unaccounted for with Paper Products. So, Paper Products is suing the stockholders to hold them liable under the Arkansas statute.
Doggrell did not know that the process had not been complete. Nor did he know about the account with Paper Products.
The entire purpose of the Arkansas statute is to punish individuals who fail to fully complete the incorporation process (a penalty to enforce compliance). For this reason alone, Tennessee is unwilling to enforce the law, being penal in nature. Additionally, the court argues that the incorporation process is complete at the time when the articles of incorporation are filed with the Secretary of State office. At that point, stockholders obtain their liability shield, thus barring recovery.
At the same time Paper Products Co. was pending, another case was heard under the same issue and determined that the statute was not penal. So, The plaintiffs filed a petition to rehear. However, the court upheld that the judgment stands for public policy reasons in addition to the penal aspect.
Huntington defines penal as “a punishment of an offense against the public.”
Proof of Foreign Law
Tidewater Oil Co. v. Waller
302 F.2d 638 (10th Cir. 1962).
Waller was employed in Oklahoma but sent oversees to Turkey to repair mobile homes in Tidewater’s oil field. Tidewater provided a plane for Waller, which crashed upon landing and caused injuries for which this lawsuit is filed.
There is no doubt that the law governing would be Turkish law. However, there is no knowledge of what that law is or how it would be enforced.
Thus, the court assumes that Turkey would also say that a person who does a wrong to another would be liable for those damages. Using this assumption, it is reasonable for a jury to find that there was negligence in maintaining the landing strip that caused the injury.
When we do not know what the foreign law is, there are three options: (1) dismiss the claim, (2) apply the law of the forum, or (3) assume what the foreign law is.
There are two issues with this wrinkle. First, how do you prove what the foreign law is? This is resolved by providing a copy of the law, affidavits, etc. Second, what are the consequences of incorporating that law? This may be answered by presuming the foreign law is the same as the forum, presume common law, presume fundamental principles are applied the same everywhere, etc.
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.