The Public-Private Distinction in the Conflict of Laws

INTRODUCTION Morton Horwitz dates the full emergence of the public-private distinction in law to the nineteenth century. "One of the central goals of nineteenth century legal thought was to create a clear separation between constitutional, criminal, and regulatory law--public law--and the law of private transactions--torts, contracts, property, and commercial law." (1) The purpose of the distinction was "to stake out distinctively private spheres free from the encroaching power of the state" (2) and to create "a neutral and apolitical system of legal doctrine and legal reasoning free from what was thought to be the dangerous and unstable redistributive tendencies of democratic politics." (3) In the early twentieth century, the public-private distinction came under attack, particularly from legal realists who argued that because private-law rights were enforced by the state they should be conceptualized as delegations of public power to private individuals. (4) "By 1940, it was a sign of legal sophistication to understand the arbitrariness of the division of law into public and private realms." (5) The purpose of this paper is to explore whether a public-private distinction exists in the conflict of laws, as well as the nature of that distinction and whether it ought to be maintained. At first glance, a public-private distinction would certainly seem to exist in the conflict of laws. For example, a court's approach to determining the applicable law in a suit touching multiple jurisdictions differs dramatically depending on whether the claim is one of tort or antitrust. In a torts case, the court looks to the particular forum's choice-of-law rules to determine which jurisdiction's substantive law should apply. If the answer is foreign law, the court applies that law and decides the case on the merits. (6) In an antitrust case, by contrast, the court does not look to the forum's choice-of-law rules to decide which antitrust law should govern. Instead, it construes its own antitrust law to decide whether that law reaches the case, and if it does not, the court simply dismisses the claim. Under no circumstances does the court decide the case by applying foreign antitrust law. (7) One may identify at least two basic differences in the approaches taken by courts. First, in the private law context, the court answers the question of applicable law by resorting to rules that are external to the substantive law, specifically by applying the forum's choice-of-law rules. In the context of public law, the court's method is internal--it looks for the answer to the applicability question in the substantive law itself. Second, in the private law context, a court will apply foreign law to decide a case if it determines that foreign law governs. In the public law context, the court will not apply foreign law but will dismiss the case if it finds the forum's law inapplicable. In other words, in private law cases the court asks which substantive law applies, while in public law cases it asks whether the forum's substantive law applies. A number of scholars have noted the similarity of the applicable-law question in the public-law and private-law realms and have urged that conflicts principles be used to define the extraterritorial reach of regulatory legislation. (8) For the most part, however, these scholars accept the external-internal and which-whether distinctions described above. In his seminal article on the subject, Donald Trautman conceded that a court construing a regulatory statute must ultimately ground its decision upon legislative intent: "Strictly the job of the judge is to apply the statute within the limits laid down by Congress." (9) Trautman further noted that "[a] court faced with the question whether to apply its regulatory statute does not have the alternative of applying some other statute as a substitute except where the foreign statute provides private remedies enforceable by the forum; the choice is simply whether or not to apply the statute of the forum. …