Source: https://www.psblaw.com/news-panish-multiple-choice.html
Timestamp: 2019-04-24 17:04:32+00:00

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Separate choice of law analysis is required for each legal issue arising in a case.
Brian Panish and Kevin Boyle are plaintiffs’ trial lawyers with [a law firm] in Santa Monica. They specialize in catastrophic products liability and punitive damages claims as well as business torts. The authors thank Stuart Fraenkel for his comments and assistance.
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Lawyers conducting a choice of law analysis address a basic but extremely important question: “What law applies to my case?” In a world in which it is not uncommon for matters in litigation to have their tentacles in multiple jurisdictions, understanding the laws of the various forums is just the beginning. Mastering the elements required for an effective choice of law analysis (also referred to as a conflict of law analysis) is a true test for litigators.
Unlike most other areas of pretrial litigation, a choice of law analysis can be more dependent on art than science. Every case contains a unique set of circumstances that make it difficult to find binding precedent regarding choice of law. California’s conflict of law rules require that attorneys and courts examine these circumstances through a complicated analytical framework known as the governmental interest and comparative impairment tests. The creativity of attorneys in constructing arguments about why one jurisdiction’s law should apply over another is crucial and can carry the day, as courts want attorneys to provide reasons that courts can state for the record when they rule on which jurisdiction’s law should apply.
In other words, the statute “borrows” the statute of limitations of another jurisdiction that is pertinent to the case, and if the borrowed statute of limitations would prevent a suit in that jurisdiction, the suit cannot be brought in California-even if California’s statute of limitations would allow the suit.
Unlike statutes of limitation, statutes of repose are generally considered to be substantive in nature, most likely because the lapse of time at issue in a statute of repose has nothing to do with a potential plaintiff’s failure to timely file a suit after a cause of action arose. Statutes of repose are concerned with what happened before, not after, the emergence of the cause of action. Accordingly, the determination of whether a foreign jurisdiction’s statute of repose is applicable to a case should be determined through a choice of law analysis just like that of any other substantive law.
However, a survey of California law reveals one published case, Geist v. Sequoia Ventures, Inc., in which the borrowing statute was used to borrow a statute of repose.7 This case was most likely decided incorrectly. First, every other published California case that mentions the borrowing statute does so in the context of a statute of limitations. Second, the issue of whether a borrowing statute can borrow substantive law was not specifically addressed in Geist.8 Finally, case law and commentators generally take the position that the intent of the borrowing statute was to borrow procedural statutes of limitations, not substantive law, because a determination of which substantive law should be applied in a case is governed by a choice of law analysis. Indeed, the commentators in the Restatement (Second) of Conflict of Laws contend that borrowing statutes should be repealed in their entirety and that choice of law analysis should be used to determine the applicable statute of limitations.9 But for now, the Geist opinion remains on the books, and plaintiffs and defense counsel must be aware that a California court potentially could borrow another state’s statute of repose and bar an action.
California’s borrowing statute also must be considered when parties are in federal court on diversity grounds. A federal court that has jurisdiction as a result of diversity will apply 1) the statute of limitations of the forum in which the court sits,10 and 2) the choice of law rules of the state in which the court sits.11 Federal courts in California hearing diversity cases based on causes of action that arose outside of California may apply California’s borrowing statute and, following Geist, apply another jurisdiction’s statute of repose.
It cannot be stressed enough that a separate choice of law inquiry must be made with respect to each issue in a case.16 The term of art for this process is “depecage.”17 Attorneys should be careful to compare all the applicable laws of competing jurisdictions to determine if one of the jurisdictions has law that may be advantageous to any part of the client’s case. Moreover, if a court applies the law of a jurisdiction to one aspect of the case, that does not mean that the court will apply that jurisdiction’s law to all aspects of the case. For example, a court may conclude that the law of the plaintiff’s domicile applies to damages but that the law of the defendant’s domicile applies to liability.
In conducting a California choice of law analysis, the first question for counsel to consider–a seemingly obvious one–is whether the law of the foreign jurisdiction actually is in conflict with California law.18 Very little case law explores how different the laws must be from one another to result in what courts term a true conflict.19 A results-oriented analysis seems to be the basis for determining whether laws are in conflict; that is, a court will find that laws conflict if their applications could lead to differing results. In most cases in which a party seeks the application of a law of a particular jurisdiction, the existence of the conflict is seemingly obvious, because attorneys would not seek the application of a law that would not help their case. For example, if one jurisdiction has a damages cap and another does not, the laws of the two jurisdictions probably are in conflict, and a defendant would likely urge the court to apply the law of the jurisdiction supporting caps.
In examining whether laws conflict, foreign law may be pleaded and proved, but it need not be. The California Evidence Code provides that trial courts may take judicial notice of the decisional, statutory, and constitutional law of any state or foreign nation.20 The code also provides for compulsory judicial notice on the request of a party, provided that the requesting party gives each adverse party sufficient time to oppose the request and furnishes the court with sufficient information to enable it to understand the foreign law.21 As a practical matter, attorneys seeking the application of foreign law should brief that law thoroughly when requesting its application and should request judicial notice of that law. Attorneys opposing the application of foreign law should make sure that they are given sufficient time to brief their opposition to the application of the foreign law by using a conflict of law analysis and to contradict the other side’s characterization of the foreign law, if necessary. To accomplish these tasks, attorneys generally seek expert assistance in the foreign law at issue.
Lawyers should have a solid understanding of their cases and how the competing laws would affect each aspect of a case. Although articulating governmental interests is usually possible on both sides of an issue, it is not an easy process-but it is generally worthwhile. Indeed, a court could rule for a party’s choice of law on the grounds that the other side did not present a reason why their desired jurisdiction had an interest in its law being the applicable law. Attorneys need to do all they can to make the court’s job in this area an effortless one by fully setting forth the analysis for the court to use in reaching its decision.
The case of Hurtado v. Superior Court is an excellent example of applying the true conflict and governmental interest analyses in concert.26 Hurtado involved a wrongful death action brought in California by the Mexican heirs of a Mexican national who died in California as the result of the negligence of a California driver. Defendant Hurtado argued that Mexico’s strict damages limitation should apply to the case because the decedent and the plaintiffs were Mexican residents. The court disagreed and ruled that California damages law applied to the case. The court reasoned that Mexico’s interest in limiting damages is to protect its residents from excessive financial burdens. Since the defendants were not Mexican residents, Mexico had no interest in denying full recovery to its plaintiff residents injured by non-Mexican defendants.27 California has a decided interest in furthering its deterrent policy of full compensation by applying its own laws to California defendants.28 Accordingly, there was a false conflict, and the court applied California law.
Because there was a true conflict, the court proceeded to apply the comparative impairment test to the case. The court found that California’s interest in protecting its residents would be significantly impaired if state policy regarding the excessive selling of alcoholic beverages were not extended to out-of-state taverns that sell alcoholic beverages to California residents who can be reasonably expected to return to California after consuming those beverages.32 The court also found that Nevada’s interest in protecting tavern owners from civil liability would not be significantly impaired, because Nevada already had a policy of establishing criminal liability for tavern owners who continued to serve alcohol to intoxicated guests, and the extension of the California policy to out-of-state taverns only applied to those taverns that actively sought the business of California residents.33 Accordingly, the court ruled that California’s dram shop rule applied.
The California Supreme Court further expounded on the comparative impairment test in Offshore Rental Company v. Continental Oil Company.34 In that case, a California corporation brought a negligence action in California against a Louisiana corporation for damages resulting from an injury sustained by the California corporation’s vice president while he was on business at the Louisiana premises of the Louisiana corporation. Louisiana law did not allow a corporate plaintiff to state a cause of action for the injury of its employees. An old California master-servant statute, however, appeared to grant a cause of action against a third party for loss caused by an injury to a key employee.
After determining that both states had an interest in applying their laws and that, accordingly, a true conflict existed, the court turned to the comparative impairment analysis. The court stated the comparative interest test succinctly: “In sum, the comparative impairment approach to the resolution of true conflicts attempts to determine the relative commitment of the respective states to the laws involved.”35 The court articulated other, more specific factors to consider, such as 1) the history and current status of the laws at issue, and 2) the function and purpose of the laws.
Regarding the first factor, the court noted that if one of the competing laws was “archaic and isolated” in comparison to the laws of the rest of the states, it may need to yield to a more “prevalent and progressive” law.36 Similarly, the law may be considered archaic and isolated when compared to the other laws of the state in which it was enacted. Indeed, the decisional law of the state may indicate that the law is out of favor, even though it is still in force. The court noted that the majority of common law states that had addressed the issue in the case do not sanction actions by corporations for harm to business employees, noting the radical changes in the master-servant relationship since medieval times. Also, the court noted that despite the existence of the California master-servant statute, no California court had squarely held that the cause of action stemming from the statute still exists, and in recent years no California court had even considered the issue.
As for the second factor, the court noted that the purpose of Louisiana’s law was to promote freedom of enterprise within Louisiana’s borders, and not applying the more modern Louisiana law for an accident that occurred in Louisiana would undercut that purpose. The court also observed that a law may be less comparatively pertinent if the purpose and policy of the law is no longer of “grave concern” to the state, or if the policy underlying the law may easily be served by more modern means other than enforcement of the law itself.
In the end, the court essentially determined that Louisiana had a stronger commitment to its more modern law than California had demonstrated to its more archaic law. Accordingly, the court held that Louisiana law should apply.
Choice of law issues are complex and very important to the outcome of a case. The key is to recognize potential choice of law issues early in the litigation process and to develop a strategy for determining the best time in the process to raise the issues and marshalling convincing arguments to win judicial support for the most favorable law to apply.
1 Zellmer v. Acme Brewing Co., 184 F. 2d 940, 942 (9th Cir. 1950).
2 Code Civ. Proc. §361.
3 Delfosse v. C.A.C.I., Inc.-Federal, 218 Cal. App. 3d 683, 691-92 (1990).
4 Code Civ. Proc. §361.
5 Grant v. McAulliffe, 41 Cal. 2d 859, 865 (1953).
6 An example of a statute of repose is a bar on a products liability suit when the product at issue was purchased a specified number of years before the suit was filed. See, e.g., Ga. Code Ann. §51-1-11.
7 Giest v. Sequoia Ventures, Inc., 83 Cal. App. 4th 300 (2000).
8 See People v. Banks, 6 Cal. 4th 926, 945 (1993) (“[A]n opinion is not authority for a proposition not there considered.”).
9 Restatement (Second) of Conflict of Laws §142, cmt. b (2002).
10 Forsyth v. Cessna Aircraft, 520 F. 2d 608, 613 (9th Cir. 1975); Restatement (Second) of Conflict of Laws §142.
11 Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941).
12 Id. If a case is in federal court in California as a result of federal question jurisdiction, federal common law choice of law rules apply. Chan v. Society Expeditions, 123 F. 3d 1287, 1297 (9th Cir. 1997). Federal common law applies the conflict of laws principles that are set forth in the Restatement (Second) of Conflict of Laws. Chan, 123 F. 3d 1287.
13 Hurtado v. Superior Court, 11 Cal. 3d 574, 581 (1974).
14 Sommer v. Graber, 40 Cal. App. 4th 1455 (1995).
15 Offshore Rental Co. v. Continental Oil Co., 22 Cal. 3d 157 (1978) (en banc).
16 See S.A. Empresa v. Boeing Co., 641 F. 2d 746, 749-50 (9th Cir. 1981) and Application Group, Inc. v. Hunter Group, Inc., 61 Cal. App. 4th 881, 896-97 (1998). These two cases provide a cohesive analysis of California choice of law principles and procedures.
Law (3d ed. 1977); Reese, Depecage: A Common Phenomenon in Choice of Law, 73 Colum. L. Rev. 58 (1973). Depecage can lead to different law being applied to the same aspects of nearly identical cases arising out of the same incident. See In re Aircrash Disaster Near Roselawn, Ind. on Oct. 31, 1994, 948 F. Supp. 747 (N.D. Ill. 1996).
18Sommer v. Graber, 40 Cal. App. 4th 1455 (1995).
19 See Hurtado v. Superior Court, 11 Cal. 3d 574 (1974).
22 Sommer, 40 Cal. App. 4th 1455.
23 American Bank of Commerce v. Corondoni, 169 Cal. App. 3d 368 (1985).
25 Havlicek v. Coast-to-Coast Analytical Servs., 39 Cal. App. 4th 1844 (1995).
26 Hurtado v. Superior Court, 11 Cal. 3d 574 (1974).
29 Offshore Rental Co. v. Continental Oil Co., 22 Cal. 3d 157, 165 (1978) (en banc).
30 Bernhard v. Harrah’s Club, 16 Cal. 3d 313 (1976) (superceded by statute). The legislature significantly altered California’s dram shop rule so that tavern owners are no longer strictly liable for injuries caused by their intoxicated customers. Thus the liability aspect of the Bernhard case is no longer good law, but Bernhard remains instructive on the application of California choice of law analysis.
31 Bernhard, 16 Cal. 3d at 318-19.
34 Offshore Rental Co. v. Continental Oil Co., 22 Cal. 3d 157, 165-67 (1978) (en banc).
37 Nedlloyd Lines B.V. v. Superior Court, 3 Cal. 4th 459, 465 (1992).
38 Restatement (Second) of Conflict of Laws §187(2).
39 Nedlloyd Lines, 3 Cal. 4th at 466.
42 McManus v. Red Salmon Canning Co., 37 Cal. App. 133 (1918).
43 Fritz v. Metropolitan Life Ins. Co., 50 Cal. App. 2d 570 (1942).
45 Evid. Code §§311, 106.

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