Choice of Law as Extraterritoriality
Resolving Conflicts in the Law: Essays in Honour of Lea Brilmayer 42 (Chiara Giorgetti & Natalie Klein eds., Boston: Brill Nijhoff 2019)
37 Pages Posted: 11 Mar 2020
Date Written: January 24, 2020
This contribution to RESOLVING CONFLICTS ON THE LAW: ESSAYS IN HONOUR OF LEA BRILMAYER (published under the title Choice of Law as Geographic Scope Limitation) argues that the choice-of-law question commonly addressed by state and foreign courts is conceptually identical to the question addressed by federal courts in determining whether a federal statute applies to a dispute having foreign elements. The latter question is clearly understood today to relate to the statute’s territorial scope. State courts have long conceptualized the choice-of-law question in the same way. Faced with a state statute addressing the issue before it and phrased in all-encompassing terms, the courts assume that the legislature did not intend to legislate for the whole world. They assume that the legislature enacted the statute with the purely domestic case in mind, with the understanding that cases with foreign elements will be addressed through the application of prevailing choice-of-law rules. A state’s choice-of-law rules thus operate as background principles of interpretation to determine the territorial reach of state law, just as federal extraterritoriality doctrine operates as a background principle of interpretation for federal statutes.
Although this understanding of choice-of-law rules has a long pedigree, it has not been universally embraced. In particular, influential scholars have developed a two-step theory of choice of law, under which only the principles that courts apply at the first step address the law’s territorial scope. If these first-step rules yield the conclusion that more than one state’s laws extend to the case at hand, the courts resolve this conflict at the second step by applying “rules of priority.” The latter rules, according to the two-step theorists, do not address the law’s reach; rather, they empower the courts under specified circumstances to decline to apply the forum’s concededly applicable law in favor of another state’s law. The distinction is important for two-step theorists, as they maintain that other states are required to give effect to step-one rules that render the state’s law inapplicable to the case at hand, but are under no obligation to give effect to a state’s step-two rules, even if they would lead the courts of that state not to apply the state’s law to the case at hand.
This essay questions the claim that step-one rules operate as limitations on a law’s territorial but step-two rules do not. Either both operate as territorial scope limitations or neither does. The essay goes on to agree with the two-step theorists that step-two rules are not binding on the courts of other states, while disagreeing with their contention that step-one rules are binding on other states. The final section considers whether the conclusion that neither category of choice-of-law rules is binding on other states means that choice-of-law rules do not in fact operate as limitations on a law’s territorial scope, and offers two alternative conceptualizations of choice-of-law rules that would explain the freedom of sister states to disregard them.
Keywords: civil procedure, litigation, comparative law
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