Opinion ID: 1613313
Heading Depth: 1
Heading Rank: 1

Heading: choice of laws approach

Text: Until 1989 this Court has followed an unqualified rule of lex loci delicti to govern the choice of laws in multi-state tort actions. See Owen, 444 N.W.2d 710; Heidemann v. Rohl, 86 S.D. 250, 194 N.W.2d 164 (1972). Although we did not formally abandon lex loci delecti in Owen, the majority opinion, written by Morgan, J. and concurred in by Wuest, C.J., took the first step in that direction when it adopted a public policy exception to the rule to avoid applications that are repugnant to the public policy of our state. Owen, 444 N.W.2d at 713. Although the three remaining members of this Court concurred in the Owen result, they voted by special concurrence to [j]oin the vast majority of jurisdictions which [have] abolish[ed] the archaic and rigid rule of lex loci in favor of an approach which gives flexibility and addresses conflicts of laws issues in a responsible and equitable manner. Id. at 714-715 (Miller, J., concurring specially, joined by Henderson and Sabers, JJ.). Although the reasons for abandonment of the rule were well articulated by present Chief Justice Miller in Owen, 444 N.W.2d at 715, our adoption of lex loci delecti in Heidemann and stare decisis warrant a further limited discussion of reasons for abandonment of the traditional rule. Lex loci delecti is a judge made rule of law that is based on the doctrine of vested rights. In Babcock v. Jackson, 12 N.Y.2d 473, 240 N.Y.S.2d 743, 746, 191 N.E.2d 279, 281 (1963), the case that led many courts to abandon lex loci delecti, the New York Court of Appeals explained that: The traditional choice of law rule, embodied in the original Restatement of Conflict of Laws (§ 384), and until recently unquestioningly followed in this court..., has been that the substantive rights and liabilities arising out of a tortious occurrence are determinable by the law of the place of the tort.... It had its conceptual foundation in the vested rights doctrine, namely, that a right to recover for a foreign tort owes its creation to the law of the jurisdiction where the injury occurred and depends for its existence and extent solely on such law.... Although espoused by such great figures as Justice HOLMES ... and Professor Beale ... the vested rights doctrine has long since been discredited because it fails to take account of underlying policy considerations in evaluating the significance to be ascribed to the circumstance that an act had a foreign situs in determining the rights and liabilities which arise out of that act. `The vice of the vested rights theory', it has been aptly stated, `is that it affects to decide concrete cases upon generalities which do not state the practical considerations involved'.... More particularly, as applied to torts, the theory ignores the interest which jurisdictions other than that where the tort occurred may have in the resolution of particular issues. It is for this very reason that, despite the advantages of certainty, ease of application and predictability which it affords ..., there has in recent years been increasing criticism of the traditional rule by commentators and a judicial trend towards its abandonment or modification. (citations omitted). Twenty years ago we adopted lex loci delecti in Heidemann, 194 N.W.2d at 169. At that time we noted that lex loci delecti was the prevailing rule. Id. at 167. Although Babcock had been decided at that time, we declined to adopt a modern approach until a satisfactory substitute was developed because we noted considerable confusion and inconsistency in the application of modern rules. Id. at 169. We observed, however, that the condition was perhaps characteristic of any transitional period in a changing law era. Id. The transition to a new approach has continued since Heidemann. Today only fifteen states still retain the traditional rule, [2] and the majority of states which have chosen a new approach have adopted some version of the significant relationship approach. See generally Smith, Choice of Law in the United States, 38 Hastings L.J. 1041 (1987); Kay, Theory into Practice: Choice of Law in the Courts, 34 Mercer L.Rev. 521 (1983). Furthermore, courts have started to overcome the inconsistency we noted Heidemann, at least in cases such as this one which involves contributory/comparative negligence. [3] Because a discernible trend toward one modern approach has developed among states which have abandoned the traditional rule and because substantial precedent is developing under the modern approaches, we now join the clear majority and abandon lex loci delecti to govern choice of laws analysis in multi-state tort actions. Heidemann and other cases to the contrary are modified as hereinafter provided. Having abolished lex loci delecti as South Dakota's choice of law rule, we turn to the adoption of an appropriate modern approach. The selection of the proper modern approach has been the subject of much discussion by scholars and courts. See Owen, 444 N.W.2d at 714 n. 2. Although three members of this Court expressed a preference in Owen for the choice-influencing considerations approach refined by Professor Robert A. Leflar, [4] we left the matter for further analysis. Subsequent analysis by others has provided thoughtful insight into the adoption of an appropriate modern approach. See Thatcher, Choice of Law in Multi-State Tort Actions after Owen v. Owen: The Less Things Change ..., 35 S.D.L.Rev. 372 (1989-1990). No less than six approaches are in current use in one or more combinations. [5] This diversity has been caused in part by substantial disagreement among scholars about fundamental questions underlying each approach. Unfortunately, there is probably less consensus among the scholars today than ever before. Kramer, Rethinking Choice of Law, 90 Colum.L.Rev. 277, 279 (1990). Nevertheless, of the modern approaches, the three most generally accepted by courts are: (1) the most significant relationship approach which arose out of Babcock, 240 N.Y.S.2d 743, 191 N.E.2d 279, and has evolved into the Restatement (Second) of Conflict of Laws (1971); (2) the governmental interest approach originated by Professor Brainerd Currie and adopted in Reich v. Purcell, 67 Cal.2d 551, 63 Cal.Rptr. 31, 432 P.2d 727 (1967); and, (3) the choice-influencing considerations approach refined by Professor Leflar. The favoritism shown by courts for some form of the significant relationship approach appears to have occurred for general and specific reasons. Generally, the mere adoption of the Restatement (Second) has restricted development of the governmental interest and the choice-influencing consideration approaches. Smith, supra, at 1170. That trend has occurred because all but one of the modern considerations used in government interest and choice-influencing approaches are explicitly recognized in the Restatement (Second), and the omitted consideration, (the better law factor), can be considered under § 6 of the Restatement (Second). As a result, the government interest and choice-influencing consideration approaches have been relegated to a secondary role in conflicts jurisprudence. Id. The government interest and the choice-influencing consideration approaches have also been the subject of specific criticism. The pure governmental interest approach has been criticized because it rejects all jurisdiction-selection rules for all purposes. Posnak, Choice of LawRules vs. Analysis: A More Workable Marriage than the (Second) Restatement; A Very Well-Curried Leflar Over Reese Approach, 40 Mercer L.Rev. 869, 875 n. 37 (1989). It has also been criticized because its decidedly proforum preference has been rejected by most courts and commentators, including those committed to the approach. Kay, supra, at 551. Although the interest approach probably remains the dominant choice of law theory among academics, its hold is slipping among new scholars, Kramer, supra, at 278-279, and it has received little support from the courts. [6] The choice-influencing-considerations approach has also received comparatively little recognition by courts. [7] This has occurred in part because, except for its better law factor, there is not much difference between this approach and the Restatement (Second). Posnak, supra, at 887 n. 96. Furthermore, the better law factor has been the subject of much criticism. E. Scoles & P. Hay, Conflict Of Laws § 2.11 (1984); Korn, The Choice-of-Law Revolution: A Critique, 83 Colum.L.Rev. 722, 958 (1983). The Restatement (Second) is a compromise. It contains rules, which aid in certainty of application, as well as the generally recognized policy considerations which are to be considered with the rules. Although a principal criticism of the Restatement (Second) has been that it has not always led to consistent results, its authors believed that it was unwise to do more than adopt broad flexible rules, in the most significant relationship formulation, that would guide courts without impeding constructive progress. Reese, Conflict of Laws and the Restatement Second, 28 Law & Contemp. Probs. 679, 699, (1963); Kay, supra, at 553. Although this compromise has led to an approach which some have said is so general as to be useless, even those critics admit benefit will arise from the adoption of any rule that is also applied by other states. Kramer, supra, at 321-322. Most states, which have abandoned lex loci delecti, now apply some form of the significant relationship approach. [8] Because the Restatement (Second) contains most of the generally accepted modern policy considerations and rules, because it has become the prevailing approach among courts and because the most precedent will develop under that approach, we now adopt the most significant relationship approach to govern multi-state tort conflicts.