Opinion ID: 3029577
Heading Depth: 2
Heading Rank: 1

Heading: Abandonment of Lex Locus Contractus in

Text: Pennsylvania Choice-of-Law Jurisprudence Prior to 1964, Pennsylvania courts uniformly applied the law of the place of contract (“lex loci contractus”) or injury (“lex loci delicti”) in contract and tort actions, respectively. In Griffith v. United Air Lines Inc., 203 A.2d 796 (Pa. 1964), the Pennsylvania Supreme Court expressly abandoned the “lexi loci delicti” rule “in favor of a more flexible rule which permits analysis of the policies and interests underlying the particular issue before the court.” Id. at 805. Under this new approach, Pennsylvania courts are to apply the law of the forum with the “most interest in the problem,” rather than the law of the place of injury. Id. at 806. In the wake of Griffith, it was unclear whether this new approach to tort choice-of-law questions would displace Pennsylvania’s traditional “lex loci contractus” rule.3 Several 3 Compare Neville Chemical Co. v. Union Carbide Corp., 422 F.2d 1205, 1210-11 (3d Cir. 1970) (citing Griffith in a breach of contract action for the proposition that the “Pennsylvania Supreme Court follows the modern approach and looks to the law of the place with the most significant relationship to the parties and transaction, on each issue, or the ‘center of gravity’ of the contract”), with Boase v. Lee Rubber & Tire Corp., 437 F.2d 527, 529-30 (3d Cir. 1970) (“In the six years since Griffith was decided, the Pennsylvania Supreme Court has not applied its rule in a contract case.”). 10 years later, in Melville v. American Home Assurance Co., 584 F.2d 1306 (3d Cir. 1978), we predicted that, when the occasion arises, “Pennsylvania [will] extend its Griffith conflicts methodology to contract actions.” Id. at 1313. In reaching this conclusion, we examined several Pennsylvania conflicts decisions, including In re Hunter, 218 A.2d 764, 767 (Pa. 1966) (choosing Pennsylvania law to govern the validity of childrelinquishment forms because Pennsylvania had an “overriding and continuing interest” in the issue); Crawford v. Manhattan Life Ins. Co. of N.Y., 221 A.2d 877, 881 (Pa. Super. Ct. 1966) (choosing West Virginia law to govern a life insurance policy because the contract was delivered there, but also observing the “result would be the same even if the standards enunciated in Griffith applied” because West Virginia had the “most significant relationship with and interest in the occurrence and the parties”); and Gillan v. Gillan, 345 A.2d 742, 744 (Pa. Super. Ct. 1975) (“[I]t would be error for us to apply the old, single reference rule that . . . the place where the contract became binding, or the place where it was to be performed, controls the choice of law.”). In the years following Melville, the Pennsylvania Superior Court, federal district courts, and this Court have continued to apply Griffith’s “interests/contacts” approach to contract choice-of-law questions. See, e.g., Am. Contract Bridge League v. Nationwide Mut. Fire Ins. Co., 752 F.2d 71 (3d Cir. 1985) (finding under Griffith that Pennsylvania law should govern an insurance policy even though the policy was negotiated, issued and delivered in Tennessee); McCabe v. Prudential Prop. & Cas. Ins. Co., 514 A.2d 582 (Pa. Super. Ct. 1986) (applying Griffith in a case involving the interpretation of 11 an insurance contract); Compagnie des Bauxites de Guinee v. Argonaut-Midwest Ins. Co., 880 F.2d 685 (3d Cir. 1989) (applying Griffith to determine if insured’s notice to excess carrier was timely); Gen. Star Nat’l Ins. Co. v. Liberty Mut. Ins. Co., 960 F.2d 377 (3d Cir. 1992) (performing a “significant contacts” analysis to determine which state’s law should govern an insurance contract dispute); Wilson v. Transport Ins. Co., 889 A.2d 563, 571 (Pa. Super. Ct. 2005) (“Under the flexible conflicts methodology approach to insurance contract cases, which was set forth by our Supreme Court in Griffith, the court must apply the law of the state having the most significant contacts or relationships with the contract and not the underlying tort.”) (internal citations omitted) (quoting Nationwide Mut. Ins. Co. v. West, 807 A.2d 916, 921 (Pa. Super. Ct. 2002)). The Pennsylvania Superior Court recently revisited the issue in Budtel Associates v. Continental Casualty Co., 915 A.2d 640 (Pa. Super. Ct. 2006), and concluded “[a]fter careful reflection” that the “spirit and weight of this Commonwealth’s precedents mandate we follow the Griffith rule in the contract law context.” Id. at . Although the Pennsylvania Supreme Court has yet to apply Griffith to a contract dispute, “[t]o apply the Crawford rule would be to blindly adhere to [the] ... principle ... [that] the laws of the place where a contract is delivered control simply because the contract was delivered there.” Id. Furthermore, the court noted, “the Crawford rule can be fairly subsumed by the more comprehensive Griffith rule because the Crawford rule examines a single contact (where the contract was delivered) while the Griffith rule ... examines all of the contacts that occurred within a contractual relationship.” Id. 12 We agree with the Superior Court and expressly reaffirm our prediction in Melville that the Pennsylvania Supreme Court would apply Griffith to contract disputes. Although on several occasions panels of this Court have observed that Pennsylvania continues to follow the lex locus contractus rule,4 we recognize 4 See Harry L. Sheinman & Sons v. Scranton Life Ins. Co., 125 F.3d 442, 444 (3d Cir. 1941); New York Life Ins. Co. v. Levine, 138 F.2d 286, 288 (3d Cir. 1943); Faron v. Penn Mutual Life Ins. Co., 176 F.2d 290, 292 (3d Cir. 1949); Roth v. Maryland Cas. Co., 209 F.2d 371, 373 (3d Cir. 1954); Woods v. Nat’l Life & Accident Ins. Co., 347 F.2d 760, 763 n.2 (3d Cir. 1965); Pittsburgh Bridge & Iron Works v. Liberty Mut. Ins. Co., 444 F.2d 1286, 1290 n.2 (3d Cir. 1971); Jamison v. Miracle Mile Rambler, Inc., 536 F.2d 560, 563 n.1 (3d Cir. 1976); McMillan v. State Mut. Life Assurance Co. of America, 922 F.2d 1073, 1074-75 (3d Cir. 1990); Frog, Switch & Mfg. Co., Inc. v. Travelers Ins. Co., 193 F.3d 742, 745-46 (3d Cir. 1999); CAT Internet Serv. Inc. v. Providence Washington Ins. Co., 333 F.3d 138, 141 (3d Cir. 2003); J.C. Penney Life Ins. Co. v. Pilosi, 393 F.3d 356, 360-61 (3d Cir. 2004); Canal Ins. Co. v. Underwriters at Lloyd’s London, 435 F.3d 431, 434 (3d Cir. 2006) (no dispute as to choice of law); Regents of Mercersburg Coll. v. Republic Franklin Ins. Co., 458 F.3d 159, 163 n.4 (3d Cir. 2006) (noting another line of Pennsylvania cases looking to law of the state with most significant relationship). In some of these cases, the parties did not challenge the applicable law, and thus the Court’s choice of law discussion was dictum. See, e.g., Frog, Switch, 193 F.3d at 745-46 (“The parties agree that the insurance contracts are governed by Pennsylvania law.”). More significantly, all of the decisions 13 that the overwhelming weight of authority is to the contrary.