Modern Theories in Determining Liability for Torts

1. State of the Most Significant Relationship As stated in the Second Reinstatement of 1969, the rights and obligations of the parties in case of tort is determined by the local law of the state which, with respect to the particular issue, has the most significant relationship to the occurrence and the parties.1 In Bates v. Superior Court, 156 Ariz. 46 (Ariz. 1988), the court held that the inquiry to determine which state has the significant relationship is qualitative and not quantitative. Thus, in a tort action, the local law of the state where the injury occurred determines the rights and liabilities of the parties, unless some other state has a more significant relationship with the occurrence and the parties as to the particular issue involved, in which event the local law of the latter state will govern. In order to determine the State which has the most significant relationship, the following contacts are to be taken into account and evaluated according to their relative importance with respect to the particular issue: (a) the place where the injury occurred; (b) the place where the conduct causing the injury occurred; (c) the domicile, residence, nationality, place of incorporation and place of business of the parties, and (d) the place where the relationship, if any, between the parties is centered.2 In determining the most-significant relationship under a choice of law issue, the mere counting of contacts should not be determinative of the law to be applied. 3 It is rather the relevancy of the contact in the terms of policy considerations important to the forum, vis-a-vis, other contact states. In Babcock vs. Jackson 12 N.Y. 2d 473; 191 N.E. 2d. 279, a case for the recovery of damages was filed in New York by Babcock against Mr. and Mrs. Jackson for the injuries the former suffered when Mr. Jackson lost control of the car he was driving while they were travelling in Ontario, Canada. The main issue in this case is whether or not the plaintiff can recover damages from Mr. Jackson under the New York law notwithstanding the fact that the injuries were sustained in Ontario, Canada. The U.S. Supreme Court held that except for the minimum contact with Ontario law as the accident happened in that place, all the dominant Sempio-Diy, Alicia, Handbook on Conflicts of Laws, Joer Printing Services, Quezon City, 2007. 2 Coquia and Pangalangan, Conflict of Laws, 1995. 3 Wilcox v. Wilcox, 26 Wis. 2d 617 (Wis. 1965).
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contacts and factors connected with the accident were in New York. The Court held that the State of New York had the most significant relationship to the case, hence, the New York laws should apply. In Saudi Arabian Airlines vs. Court of Appeals (297 SCRA 469), the Supreme Court held that the Philippine law should apply in this case because it was in the Philippines that private respondent deceived plaintiff-stewardess. The over-all injury occurred and lodged in the Philippines. It must be noted also that the plaintiff was working for respondent here in the Philippines. Furthermore, plaintiffs nationality and domicile is also the Philippines. On the other hand, the respondent is a resident foreign corporation engaged in the business of international air carriage. Hence, the locus delicti is the Philippines.

2. The Interest-Analysis Approach Another approach has been suggested by the late Professor Brainerd Currie. It builds upon the policy analysis of the "significant interest" test; but once a genuine conflict is discovered, the law of the forum is immediately applied. The rationale behind the application of forum law must be that any other choice would amount to an impossible admission, on the part of the court, that the rule of the forum is inferior to the rule applied. Since, by hypothesis, both policies are relevant to the matter in controversy, any other rule would require the court to choose a policy directly in opposition to its own.4 The Interest-Analysis Approach is made applicable in situations when a case poses a real conflict between the interests of two or more States. It requires application of the law of the state with the greatest interest in resolving the particular issue that is raised in the underlying litigation.5 When one of two states related to a case has a legitimate interest in the application of its law and policy and the other has none, the courts apply the law of the interested state. When two states have conflicting laws pertaining to an issue, interest analysis seeks to resolve the conflict by first classifying it. If both states are interested in applying their laws to the facts of a dispute, then there is a true conflict. If only one state is interested in applying its law, then there is a false conflict. Finally, if no state has an interest in applying its law, then there is an unprovided-for case. If a real conflict exists between the interests of two or more States, as when the interested forum finds that the other State has a greater claim in the application of its law to a given case, the forum should yield and apply the law of

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Currie. Conflict, Crisis, and Confusion in New York, 1963 DuKE L. J. 1. Myers v. Hayes International Corp., 701 F. Supp. 618 (M.D. Tenn. 1988).

the other state.6 When faced with the problem of choosing between the laws of two states as to which governs a tort action, the courts make an analysis of the respective interests of the states involved, the objective of which is to determine the law that most appropriately applies to the issue involved. The interest-analysis approach consists of three steps 7 : 1) the court examines the substantive law of each jurisdiction to determine whether the laws differ as applied to the relevant transaction; 2) if the laws do differ, the court determines whether a true conflict exists in that each of the relevant jurisdictions has an interest in having its law applied. If only one jurisdiction has a legitimate interest in the application of its rule of decision, there is a false conflict and the law of the interested jurisdiction is applied. On the other hand, if more than one jurisdiction has a legitimate interest, the courts move to the third stage of the analysis; 3) the third stage focuses on the comparative impairment of the interested jurisdictions. At this stage, the courts seek to identify and apply the law of the state whose interest would be the more impaired if its law were not applied. This approach finds application in the case of Gantes vs. Kason Corp., 145 N.J. 478 (1996), where a young woman, working in a chicken processing plant in Georgia, was killed when struck in the head by a moving part of a machine. The machine had been manufactured more than thirteen years before the fatal accident by a New Jersey corporation with its principal place of business in Linden, New Jersey. Representatives of the decedent, asserting that the machine was defective, brought this personal-injury action based on claims of survivorship and wrongfuldeath against the New Jersey manufacturer in the Law Division in Union County. The action was filed within New Jersey's two-year statute of limitations for personal-injury actions, but beyond Georgia's ten-year statute of repose applicable to products-liability claims against manufacturers. Because of the conflict between the two statutes, the case poses a fundamental choice-of-law issue over which statute applies and whether, depending on that choice, the action will be barred. The Court held that "the weight of authority clearly favors following the law of the state with the interest of compensating its residents, where such law conflicts with that of the state having solely a deterrence interest. Fair compensation of a tortiously injured party is the predominant concern of a personal injury claim for the state of domicile of the injured party, particularly where it is the locus of an industrial accident." New Jersey's interest in the tortious injury action of a non-domiciliary resident is nonexistent. Here the accident occurred in Georgia, the machine was being used in a Georgia factory, decedent Sempio-Diy, Alicia, Handbook on Conflicts of Laws, Joer Printing Services, Quezon City, 2007. 7 CRS Recovery, Inc. v. Laxton, 2010 U.S. App. LEXIS 7050 (9th Cir. Cal. Apr. 6, 2010)
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was a resident of Georgia who died in Georgia, and decedent's heirs also are residents of Georgia. Accordingly Georgia's contacts to this litigation and its interest in its residents and in accidents that occur in its state are substantially greater than New Jersey's interest.8 In Heavner vs. Uniroyal Inc. 63 N.J. 130 (1973), plaintiff, a resident of North Carolina, purchased a truck tire from Pullman, in North Carolina. The tire was manufactured by Uniroyal, a New Jersey corporation. Plaintiff sought recovery for personal injuries sustained by him and contemporaneous damages to his car, when a defect in the tire induced a blow out, causing plaintiff to crash. Plaintiff brought a personal injury action against Pullman and Uniroyal. No cause of action was ever commenced in North Carolina. By the time the action was commenced in New Jersey, the statute of limitations in North Carolina had expired, barring any claims. The Heavner court rejected the mechanical rule that the Statute of Limitations of the forum state must be applied in every action involving a foreign cause of action. The court further identified plaintiff's decision to bring the action in New Jersey as "forum shopping," explaining that the plaintiff's motivation was to seek a forum "more favorable than that of North Carolina." Holding that New Jersey law should not apply, the court observed: "[W]e do not believe that New Jersey has any sufficient interest in this action to call for the application of its substantive law in preference to that of North Carolina under the governmental interests choice-of-law principles." The only possible interest, the court noted, was that Uniroyal was incorporated in New Jersey. However, the court remarked "that is not enough."9 3. Qavers Principle of Preference Under this theory, a higher standard of conduct and financial protection given to the injured party by one state is applied by the State where the injury was sustained, if the latter State adopts a lower standard of conduct and financial protection to the injured.10 Under the Principle of Preference, the following guidelines on which rules on torts may be applied by States in the absence of statutory provision: a. Where the State of Injury provides for higher standard of conduct or financial protection against injury than the State where the tortious act was done, the law of the former shall govern.

Gantes v. Kason Corp., 145 N.J. 478 (N.J. 1996). Heavner vs. Uniroyal Inc. 63 N.J. 130 (1973). 10 Sempio-Diy, Alicia, Handbook on Conflicts of Laws, Joer Printing Services, Quezon City, 2007.
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b. Where the State of injury and conduct provides for lower standard of conduct and financial protection than the home State of the person suffering the injury, the law of the State of conduct and injury shall govern. c. Where the State in which the defendant has acted has established special controls over conduct of the kind in which defendant was engaged, the special controls and benefits must be applied although the State has no relationship to the defendant. d. Where the law in which the relationship has its seat imposed higher standard of conductor financial protection than the law of the State of the injury, the former law shall govern. In the case of Scmidt vs. Driscoll Hotel, 249 Minn, 376, N.W. 2nd 365 (1947), a complaint alleged that defendant illegally sold intoxicating liquors to John Sorrenson to the extent of causing him to become intoxicated in defendant's establishment in South St. Paul so that shortly thereafter, as a proximate result thereof, plaintiff sustained injuries when an automobile driven by Sorrenson, in which plaintiff was a passenger, was caused to turn over near Prescott, Wisconsin. Sued for Tort by the minor plaintiff, instituted this action by his mother and natural guardian, defendant hotel moved to dismiss the case on the ground that the accident happened in Wisconsin, the law of which required That the wrongful act and injury should happen in the same State before recovery can be had. Applying the Minnesota law to the case would be more in conformity with the principles of equity and justice since the defendant Hotels wrongful conduct was completed within Minnesota where Sorrenson was intoxicated before leaving said State and before going to Wisconsin with the minor. The Court further held that the parties were both residents of Minnesota whose law demanded a higher standard of conduct than that of Wisconsin where the accident happened.11 In Gordon v. Parker, (D. Mass.) 83 F. Supp. 40, an action for alienation of affections was instituted in Massachusetts by plaintiff, who, with his wife, was domiciled in Pennsylvania. Therein it appeared that defendant's wrongful acts had taken place in Massachusetts, and accordingly plaintiff sought the application of a Massachusetts statute relating to alienation of affections. Defendant contended that, since the matrimonial domicile of the parties was in Pennsylvania, which accordingly was the place where the ultimate wrong was done to plaintiff, only Pennsylvania law could be applied. In denying this contention and applying the Massachusetts statute, the court stated that as the place of matrimonial domicile, Pennsylvania has an interest in whether conduct in any part of the world is held to affect adversely the marriage relationship between its domiciliaries. But, as the place where the alleged wrongdoer lives, Massachusetts also has an interest. She is concerned with conduct within her borders which in her view lowers the
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Scmidt vs. Driscoll Hotel, 249 Minn, 376, N.W. 2nd 365 (1947).

standards of the community where they occur. She also is concerned when her citizens intermeddle with other people's marriages.12 Kilberg Doctrine This is a rule applied in suits involving conflicts of law that provides that the forum is not bound by the law of the place of injury or death as to the limitation on damages for wrongful death action. The rationale behind the doctrine is that laws that set limitations on damages are procedural. Hence the law of the forum should govern the issue. On August 15, 1958, a passenger for hire, traveling in the defendant's plane from New York to Nantucket, Massachusetts, was killed when the plane crashed on Nantucket Island. The cause of action under consideration, predicated upon the breach of a contract made in New York, seeks to recover for loss of accumulation on behalf of the estate, pursuant to the New York Decedent Estate Law. The plaintiff alleges substantially that the defendant breached its implied contract of safe carriage by the negligent operation of its plane, culminating in its destruction and the death of the passenger. The plaintiff does not question the general rule that the right to recover in a death action is governed by the law of the place where the wrong occurred. However, he contends that the cause of action is not one for wrongful death, or for damages for loss suffered by the decedent's survivors by reason of his death, but that "It merely asserts a statutory codification of a common law cause of action for breach of contract, and seeks on behalf of the decedent's Estate to recover for such Estate the amount the deceased would have accumulated had he lived out his normal life expectancy." The short answer is that the cause of action alleges a breach of duty through negligence. The fact that it has been seductively clothed in form ex contractu does not control. Relief, if any, may be obtained only upon proof of the defendant's negligence. It follows, therefore, that the laws of Massachusetts, where the injuries were inflicted, govern the extent of the damages which may be recovered.13

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Gordon v. Parker, (D. Mass.) 83 F. Supp. 40. Kilberg v. Northeast Airlines, Inc., 9 N.Y.2d 34, 211 N.Y.S.2d, 133, 172 N.E.2d 526.