Opinion ID: 620819
Heading Depth: 1
Heading Rank: 2

Heading: Interests of Foreign Jurisdictions

Text: It is a principle of federalism that each State may make its own reasoned judgment about what conduct is permitted or proscribed within its borders. State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 422, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003). [E]very state has an interest in having its law applied to its resident claimants. Zinser, 253 F.3d at 1187. California law also acknowledges that a jurisdiction ordinarily has the predominant interest in regulating conduct that occurs within its borders. . . . McCann, 48 Cal.4th at 97, 105 Cal.Rptr.3d 378, 225 P.3d 516 (citations omitted). The automobile sales at issue in this case took place within 44 different jurisdictions, and each state has a strong interest in applying its own consumer protection laws to those transactions. In our federal system, states may permissibly differ on the extent to which they will tolerate a degree of lessened protection for consumers to create a more favorable business climate for the companies that the state seeks to attract to do business in the state. In concluding that no foreign state has an interest in denying its citizens recovery under California's potentially more comprehensive consumer protection laws, the district court erred by discounting or not recognizing each state's valid interest in shielding out-of-state businesses from what the state may consider to be excessive litigation. As the California's Supreme Court recently re-iterated, each state has an interest in setting the appropriate level of liability for companies conducting business within its territory. McCann, 48 Cal.4th at 91, 105 Cal.Rptr.3d 378, 225 P.3d 516. Maximizing consumer and business welfare, and achieving the correct balance for society, does not inexorably favor greater consumer protection; instead, setting a baseline of corporate liability for consumer harm requires balancing the competing interests. Cf. Holloway v. Bristol-Myers Corp., 485 F.2d 986, 997 (D.C.Cir.1973) (holding, in consumer false advertising class action, that there is no private right of action under the Federal Trade Commission Act, and rejecting protests that private enforcement was needed to achieve meaningful consumer protection because the Act is the product of a legislative balance which took into account not only consumer protection but also interests of the businesses affected). Getting the optimal balance between protecting consumers and attracting foreign businesses, with resulting increase in commerce and jobs, is not so much a policy decision committed to our federal appellate court, or to particular district courts within our circuit, as it is a decision properly to be made by the legislatures and courts of each state. More expansive consumer protection measures may mean more or greater commercial liability, which in turn may result in higher prices for consumers or a decrease in product availability. See White v. Ford Motor Co., 312 F.3d 998, 1017-18 (9th Cir.2002) (A national company sometimes limits its sales according to variations in risk); Amy J. Schmitz, Embracing Unconscionability's Safety Net Function, 58 Ala. L.Rev. 73, 109 (2006) (arguing that broad consumer protection statutes may increase prices and decrease overall consumer welfare). As it is the various states of our union that may feel the impact of such effects, it is the policy makers within those states, within their legislatures and, at least in exceptional or occasional cases where there are gaps in legislation, within their state supreme courts, who are entitled to set the proper balance and boundaries between maintaining consumer protection, on the one hand, and encouraging an attractive business climate, on the other hand. Each of our states has an interest in balancing the range of products and prices offered to consumers with the legal protections afforded to them. Each of our states also has an interest in being able to assure individuals and commercial entities operating within its territory that applicable limitations on liability set forth in the jurisdiction's law will be available to those individuals and businesses in the event they are faced with litigation in the future. McCann, 48 Cal.4th at 97-98, 105 Cal.Rptr.3d 378, 225 P.3d 516. These interests are squarely implicated in this case.