Edited by Jürgen Basedow, Giesela Rühl, Franco Ferrari and Pedro de Miguel Asensio
Chapter A.10: (American) Conflict of laws revolution
I. Definition and concept
The term ‘conflict of laws revolution’ is a shorthand reference to describe the intellectual movement that ‘challenged and eventually demolished the foundations of the established American system of conflicts law’ (Symeon C Symeonides, The American Choice-of-Law Revolution: Past, Present, and Future (Martinus Nijhoff 2006)). As Professor Symeonides notes, however, the term ‘American conflicts law’ is itself a misnomer since there is no single American conflicts law. Conflict of laws is primarily the province of state law and thus each state has its own conflict-of-laws rules. Pursuant to Klaxon Co v Stentor Electric Mfg Co, 313 U.S. 487 (1941), federal courts exercising diversity of citizenship jurisdiction to hear state law claims must also apply the conflict-of-laws rules of the state in which the federal court sits. In a limited number of areas of federal concern, the federal courts are free to formulate an independent federal choice-of-law rule, but they nonetheless often adopt the methodology used by the forum state. Notwithstanding that multiple jurisdictions provide the source of choice-of-law rules in the USA, the approach to →choice of law in the USA for much of its history was relatively uniform, even if there were differences in the application of particular rules. However, during the 1960s, academic dissent from the philosophical premises of traditional choice-of-law theory and judicial decisions rejecting the prior system of choice-of-law rules inspired a variety of new approaches to choice of law. This transformation of choice-of-law theory and the resulting approaches to choice of law that developed became known in the USA as the ‘conflicts revolution’.
The earliest formulation of US conflicts principles can be traced to Joseph Story’s (→Story, Joseph) 19th-century treatise, Commentaries on the Conflict of Laws, Foreign and Domestic (CC Little and J Brown 1834). The 1934 First Restatement of Conflict of Laws (American Law Institute, Restatement of the Law, First: Conflict of Laws, St. Paul 1934; →Restatement (First and Second) of Conflict of Laws) under the auspices of the American Law Institute and its Reporter Joseph Beale built on Story’s foundation, although the theoretical conception underlying the Restatement rested on a principle of vested rights of territorial application of law (→Vested rights theory) rather than Story’s notions of →comity. That 1934 Restatement set forth an organized system of fixed, neutral and detailed choice-of-law rules based on a designated territorial contact. It offered jurisdiction-selected solutions for all types of cases, with only limited flexibility and with the objective of achieving uniformity, predictability and certainty.
This traditional approach to choice of law had come under attack by a number of academic theorists throughout the 1920s and 1930s, but it was not until the 1960s that the ‘conflicts revolution’ unfolded. The first shots were fired in the significant writings of Professors Brainerd Currie (→Currie, Brainerd) and David Cavers, and other important conflict-of-law scholars joined the cause: Professors William Baxter, Willis Reese, Robert Leflar, Arthur von Mehren and Russell Weintraub. The critics were united in their objections that fixed choice-of-law rules based on →territoriality were misconceived and could not resolve all cases; however, no single solution was offered in its place and the alternatives were varied. Both Currie and Cavers embraced ‘governmental interest analysis’ to resolve choice-of-law issues (→Interest and policy analysis in private international law). That approach urged courts to determine whether the purpose p. 67underlying a domestic rule was furthered when foreign elements were involved. When only one state’s policy was furthered, the case was classified as a ‘false conflict’ and that state’s law was to be applied. When both states had policies that would be furthered on the particular facts, the case was designated a ‘true conflict’. Currie’s solution to the ‘true conflict’ was to apply forum law; Cavers offered certain ‘principles of preference’ to resolve such conflicts in order to achieve the same result regardless of the forum in which the case was brought. Leflar preferred a multi-factored test of which ‘interest analysis’ was a piece, but he urged application of the ‘better law’ to resolve the case (→Better law approach). Arthur von Mehren and Russell Weintraub also accepted the distinction between ‘true’ and ‘false conflicts’ but in true conflict situations believed that a weighing of policies was the appropriate way to resolve a ‘true conflict’. William Baxter embraced ‘interest analysis’ as well, but offered a principle of ‘comparative impairment’ to resolve true conflicts. Under his approach, a court, in assessing each state’s interest, was to consider the impact on each of the respective states if its law were not used to decide the case.
Courts in many states were also persuaded by the criticisms of the traditional approach to →choice of law and began to move away from application of the rigid territorially-based rules of the First Restatement. However, there was little agreement as to what approach should be adopted in its place. The American Law Institute undertook the task of producing a Second Restatement of Conflict of Laws that was begun in the 1950s, went through multiple drafts throughout the 1960s, and was eventually published in 1971 (American Law Institute, Restatement of the Law, Second: Conflict of Laws 2d, St. Paul 1971). Over the course of the next 50 years, a majority of, but not all, states followed the Restatement (Second). However, even those states that followed the Restatement (Second) differed as to whether its central concept – the state with the ‘most significant relationship’ – looked to identify the state with the strongest ‘territorial’ connection or invited an analysis of competing interests as embraced in the approach of Professors Cavers and Currie. Other states adopted their own approaches to choice of law, some adopting one of the various brands of interest analysis, some looking to the state with the ‘most significant contacts’ and others retaining the traditional Restatement (First) system of hard and fast rules. The result was that no single choice-of-law regime emerged from the ‘conflicts revolution’. Rather, the effect of the choice-of-law revolution was by and large a rejection of the prior dominant regime of fixed rules but without a consensus of what should replace it. The ‘revolution’ occurred primarily in the fields of tort and contract, but its influence pervaded other areas of law as well, including wills and →trusts, inter vivos transfers of property, marriage and statutes of limitations.
The ‘conflicts revolution’, like many revolutions, did not come without costs. For example, the ‘revolution’ has been described by Judge Richard Posner of the Court of Appeals for the Seventh Circuit as a ‘legal reform that miscarried’. The late Supreme Court Justice Antonin Scalia observed that the revolution had made the entire subject of conflict of laws ‘incomprehensible’.
II. Historical context
Although →choice of law in the USA is generally the province of state (and not federal) law, up until the mid-20th century almost all the state courts followed the set of choice-of-law rules enunciated in the First Restatement of Conflict of Laws of 1934. The Restatement (First) had adopted a rigid set of territorial principles, such as the place of injury for tort cases and the place of contract for contract cases. Matters of procedure were governed by the law of the forum. A limited escape on grounds of →public policy was also included. Techniques of characterization and →renvoi, along with the ‘public policy’ exception, offered limited ‘escapes’ from the rigid rules.
The regime of formal rules had come under attack as early as the 1930s from numerous scholars such as Walter Wheeler Cook in his seminal work, The Logical and Legal Bases of the Conflict of Laws (Harvard University Press 1942). However, the major assault on the traditional conflicts theory came somewhat later in the writings of Brainerd Currie (Selected Essay on the Conflict of Laws (Duke University Press 1963)) and David Cavers (The Choice of Law Process (William S Hein 1965)). The ‘revolutionaries’ argued that a system of abstract rules could not do justice and that an appropriate conflict-of-laws system should take account of the content and purposes of competing rules. In 1953, the American Law Institute, with Professor Willis Reese as Reporter, began p. 68drafting a Second Restatement of Conflict of Laws, which resulted in several tentative drafts with multiple revisions before its publication in 1971. The Second Restatement was a transition document, more in keeping with an ‘evolution’ rather than a ‘revolution’. In the absence of a statutory directive on choice of law, the Restatement (Second) provides in § 6 a non-exclusive list of factors to be considered in choosing the applicable rule of law, including the relevant policies of the different states and the forum, the protection of justified expectations, certainty, predictability and uniformity, and the needs of the interstate and international systems. The key concept throughout the Second Restatement is application of the law of the state with the ‘most significant relationship’; various other sections of the Restatement (Second) offer presumptive rules for specific types of cases as well as particular issues unless some other state has a more ‘significant relationship’ under the principles stated in § 6 to the transaction and the parties. Although a majority of states have adopted the Second Restatement as the approach to choice of law, courts diverge dramatically in their interpretation of it. In some jurisdictions, ‘most significant relationship’ is understood as an application of interest analysis, with some type of balancing used to resolve ‘true conflict’ cases. In other jurisdictions, a more mechanical ‘counting’ of contacts is used to measure the state with the ‘most significant relationship’.
Of course, the academic dissent against the established conflict-of-laws system was only one piece of the conflict-of-laws revolution. For any revolution to succeed, the ideas behind the revolution must be implemented. In this context it fell to the courts to bring about the revolution in →choice of law (Symeon C Symeonides, ‘The Choice-of-Law Revolution, Fifty Years after Currie: An End and a Beginning’  U.Ill.L.Rev. 1847 (2015)). The New York case of Babcock v Jackson, 12 N.Y.2d 473, 191 N.E.2d 279 (N.Y. 1963), is generally credited as the seminal decision in the choice-of-law revolution. The case involved a lawsuit by a New York guest-passenger against the New York host-driver resulting from an accident that took place in Ontario, Canada. At the time, Ontario had a host–guest statute that prohibited such suits by automobile-guest passengers against their host-drivers. The New York Court of Appeals (the highest court in New York) rejected the place of injury rule that required application of Ontario law and instead held that New York law should govern the claim. The opinion is eclectic, emphasizing that the law to be applied was that which had the ‘most significant contacts’ to the occurrence and the parties, citing the version of the Restatement (Second) then in draft. The Court also pointed out that only New York had any legitimate policy in the application of its law, identifying the object of Ontario’s guest statute to ‘prevent the fraudulent assertion of claims by passengers, in collusion with the drivers, against insurance companies’. Because only a New York driver (and its insurance carrier) was involved in the case, Ontario had no valid legislative concern. On the other hand, New York’s policy of requiring a tort-feasor to compensate a guest for injuries caused by his negligence was said to be furthered regardless of where the accident happened. As Professor Peter Herzog pointed out, Babcock was the subject of numerous symposia in the USA and is probably the one decision in the USA best known outside the USA (Peter E Herzog, ‘“The Conflict of Laws Revolution” in New York – And Where Did It Leave Us’ (2000) 50 Syracuse L.Rev. 1279). However, subsequent guest statute and other tort cases decided by the New York Court of Appeals presented more varied patterns with different outcomes, leaving ‘it largely a matter of guesswork what that court conceives of as constituting the body of legal doctrine currently governing choice of law in New York’ (Harold Korn, ‘The Choice-of-Law Revolution: A Critique’ (1983) 83 Colum.L.Rev. 722, 956).
The California Supreme Court also played an important role in the new choice-of-law movement. Four years after Babcock, that court decided Reich v Purcell, 67 Cal.2d 551, 432 P.2d 727 (Cal. 1967), refusing to apply a damage limitation on recovery imposed by the state of injury where no such limitation was imposed by either the state where the victim was domiciled (Ohio) or the state where the driver was domiciled (California). The court, in an opinion by Chief Justice Traynor, concluded that the only state with an interest in the application of its law was Ohio. Subsequent decisions by the California Supreme Court continued to make California a leader in the conflicts revolution.
A number of common themes can be said to characterize the choice-of-law revolution. First, the choice of the applicable law no longer depends on a single event, but rather considers the various affiliations the parties have with p. 69different states. Second, courts look to the content of the competing laws and their underlying policies, such that the content of the law is a relevant consideration in the choice-of-law process. Third, the inquiry into the applicable law is directed to particular issues, rather than the case as a whole; and different laws may apply to different issues, often referred to as →dépeçage.
III. Contemporary significance
The conflicts revolution in the USA has led to what some would describe as an unruly mess in →choice of law. Rather than having a set of clear rules that create a modicum of predictability and uniformity, the breakdown of ‘conflicts order’ has led to a multitude of approaches to choice of law with different results in various fora and an incentive to forum shop for favourable choice of law. Even within a particular jurisdiction, such ad hoc approaches to choice of law offer few guide posts and often appear to result in inconsistent decisions. Neither litigants nor judges are in a good position to predict the final outcome of a particular case. Such disenchantment with the chaos created by the ‘conflicts revolution’ of the 1960s and its ensuing results has led Professor Patrick Borchers to observe that the ‘American conflicts revolution is entering a more mature phase’ (see ‘The Emergence of Rules in U.S. Conflicts Law’ in (2010) 12 YbPIL 93). In his view, contemporary developments in choice of law in the USA reflect the desire for a return to rules or ‘quasi-rules’. There is evidence that his assessment is correct. Although interpretations of the Restatement (Second) vary dramatically, recent decisions by several state supreme courts appear to give greater weight to its presumptive rules than to the open-textured factors in § 6. (See, eg, Townsend v Sears, Roebuck & Co, 879 N.E.2d 893 (Ill. 2007); PV v Camp Jaycee, 962 A.2d 453 (N.J. 2008).) The New York Court of Appeals at one point in the revolution attempted to develop rules for host–guest statute cases (Neumeier v Kuehner, 286 N.E.2d 454 (N.Y. 1972)) and later extended those rules to other issues of loss-distribution (Schultz v Boy Scouts of America, 65 N.Y.2d 189, 480 N.E.2d 679 (N.Y.1985)). A few states, such as Oregon and Louisiana, have codified choice-of-law rules in particular areas, but the rules may be unnecessarily complex and import much of the ‘interest analysis’ that occupied much of the ‘revolution’.
The dramatic changes in choice of law in the USA did not go unnoticed in Europe. Professor Erik Jayme, writing about the impact in Europe of the American ‘conflicts revolution’, observed that European judges were able to draw selectively from the US experience without repeating its mistakes. Accordingly, in Europe various rules or statutory codifications were tweaked with certain exceptions to traditional rules being permitted; however, a ‘rule’ approach continued to predominate with small doses of flexibility added. That approach is now reflected in the Rome I (Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations (Rome I),  OJ L 177/6) and Rome II Regulations (Regulation (EC) No 864/2007 of the European Parliament and of the Council of 11 July 2007 on the law applicable to non-contractual obligations (Rome II),  OJ L 199/40), by which Europe evidenced a different type of revolution in federalizing →choice of law in the EU (Ralf Michaels, ‘The New European Choice-of-Law Revolution’ (2008) 82 Tul.L.Rev. 1607).
Although some academic commentators have argued that the case-law in the USA has emerged from the conflicts revolution with uniform and sensible results (Symeon C Symeonides, ‘The Choice-of-Law Revolution, Fifty Years after Currie: An End and a Beginning’ (2015) 5 U. ll.L.Rev. 1847), others characterize the case-law across state borders as ‘incoherent’ (Russell J Weintraub, ‘The Restatement Third of Conflict of Laws: An Idea Whose Time Has Not Come’ (2000) 75 Indiana L.J. 679), and as ‘confused and misguided’ (Larry Kramer, ‘On the Need for a Uniform Choice of Law Code’ (1991) 89 Mich.L.Rev. 2134). Under any view, the flexibility and uncertainty of the modern approaches have encouraged forum shopping (→Forum (and law) shopping) and brought increased litigation costs. In November 2014 the American Law Institute announced that it would proceed with a Third Restatement on Conflict of Laws in an attempt to shape the future direction of choice of law in the USA. Professor Symeonides has characterized this effort as a good way to close the revolutionary cycle, by marking the end of the ‘conflicts revolution’ and by beginning a new era in choice of law.
William F Baxter, ‘Choice of Law and the Federal System’ (1963) 16 Stan.L.Rev. 1;
Patrick J Borchers, ‘The Choice-of-Law Revolution: An Empirical Study’ (1992) 49 Wash. & Lee L.Rev. 357;
Patrick J Borchers, ‘The Emergence of Quasi Rules in U.S. Conflicts Law’ (2010) 12 YbPIL 93;
David Cavers, ‘A Critique of the Choice-of-Law Problem’ (1933) 47 Harv.L.Rev. 173;
David F Cavers, The Choice of Law Process (University of Michigan Press 1965);
Walter Wheeler Cook, The Logical and Legal Bases of the Conflict of Laws (Harvard University Press 1942);
Brainerd Currie, ‘Notes on Methods and Objectives in the Conflict of Laws’  Duke L.J. 171;
Brainerd Currie, Selected Essays on the Conflict of Laws (Duke University Press 1963);
Albert A Ehrenzweig, ‘A Counter-Revolution in Conflicts Law? From Beale to Cavers’ (1966) 80 Harv.L.Rev. 377;
Peter Hay, Patrick J Borchers and Symeon Symeonides, Conflict of Laws (5th edn, West 2010);
Peter Hay, ‘European Conflicts Law after the American “Revolution” – Comparative Notes’ (2015) 15 EuLF 1;
Peter E Herzog, ‘The Conflict of Laws Revolution in New York – And Where Did It Leave Us’ (2000) 50 Syracuse L.Rev. 1279;
Erik Jayme, ‘The American Conflicts Revolution and its Impact on European Private International Law’ in Centrum voor Buitenlands Recht en International Privaatrecht (University of Amsterdam) (ed), Forty Years on: The Evolution of Postwar Private International Law in Europe (Kluwer 1989) 15–27;
Friedrich K Juenger, Choice of Law and Multistate Justice (Martinus Nijhoff 1993);
Harold L Korn, ‘The Choice of Law Revolution: A Critique’ (1983) 83 Colum.L.Rev. 772;
Robert A Leflar, ‘Choice-Influencing Consideration in Conflicts Law’ (1966) 41 N.Y.U. L.Rev. 267;
Ralf Michaels, ‘The New European Choice-of-Law Revolution’ (2008) 82 Tul.L.Rev. 1607;
Richard Posner, The Problems of Jurisprudence (Harvard University Press 1993);
Willis Reese, ‘Conflict of Laws and the Restatement Second’ (1963) 28 LCP 679; Kermit Roosevelt, Conflict of Laws (Foundation Press 2009);
GJ Simson, ‘Choice of Law after the Currie Revolution: What Role for the Needs of the Interstate and International Systems?’ (2011–12) 63 Mercer L.Rev. 715;
Joseph Story, Commentaries on the Conflict of Laws, Foreign and Domestic (CC Little and J Brown 1834);
Symeon C Symeonides, The American Choice-of-Law Revolution: Past, Present and Future (Martinus Nijhoff 2006);
Symeon C Symeonides, ‘The Choice-of-Law Revolution, Fifty Years after Currie: An End and a Beginning’ (2015) 5 U.Ill.L.Rev. 1847.;
Arthur von Mehren, ‘Choice of Law and the Problem of Justice’ (1977) 41 LCP 27;
Russell J Weintraub, Commentary on the Conflict of Laws (6th edn, Foundation Press 2010).