Exam Number _______________

HAMLINE UNIVERSITY SCHOOL OF LAW

Date of Examination: Thursday, May 11

Professor J. Pielemeier

Spring 2000

FINAL EXAMINATION--CONFLICT OF LAWS

CODE OF CONDUCT

Violations of the Code of Conduct include: (1) unauthorized conversation among students concerning the examination; (2) giving, receiving, or soliciting unauthorized aid; (3) using materials which are not specifically permitted by the written examination instructions; (4) exceeding the examination time limit; or (5) any other dishonest conduct in connection with the examination.

INSTRUCTIONS

1. This examination consists of five (5) pages in addition to this cover page. Please ensure that you are not missing any pages.

2. The time allowed for this examination is three (3) hours.

3. Outside material permitted: Casebook (may be annotated).

SPECIAL INSTRUCTIONS:

a. This examination consists of four questions. There are suggested amounts of time for each question, which total two hours and forty-five minutes, leaving you an extra fifteen minutes to allocate as you see fit.

b. Taking into account the amount of suggested times, unless otherwise directed, discuss all issues reasonably raised by each question, even though your resolution of one issue may seem to render the others moot.

QUESTION I (fifteen minutes)

In 1995, Adams, Inc., a New Jersey company, was sued for patent infringement in federal court in New Jersey. Adams hired the New York law firm of Baker and Cake to represent it. Two attorneys from Baker and Cake were admitted to practice pro hac vice (for purposes of the case) in the New Jersey federal court. In affidavits in support of their application, each attorney stated he would “abide by the New Jersey Court Rules.”

The patent infringement suit was eventually settled. A fee dispute between Adams and Baker and Cake arose. Baker and Cake claimed that Adams owed it $94,000, and filed suit in a New York state court to collect that amount. Adams filed no answer, and a default judgment for $94,000 was entered.

Baker and Cake then brought an action on the the New York judgment in a New Jersey state court, asserting it was entitled to full faith and credit there. Adams defended on the ground that in the New York action, Baker and Cake had not notified Adams of its right to arbitrate the dispute. This notice was required by New Jersey Court Rules in any suits to recover attorney fees for services rendered in New Jersey. No such notice was required under New York Law.

The New Jersey trial court declined to enforce the New York judgment, reasoning that by not giving the notice, the attorneys had violated their promise to abide by New Jersey Court Rules, and that such notice was a jurisdictional prerequisite to the recovery of attorney fees under New Jersey law. Discuss the propriety of the New Jersey court’s holding.

QUESTION II (3 rulings–total time 30 minutes)

A, a citizen of Pennsylvania, sued B, a citizen of New York, in federal district court in Colorado to recover 1.4 million dollars. The claim was based on a loan A had made to B in New York. B did not appear to defend the suit, and the court entered a default judgment.

A then brought an action on the Colorado judgment in a New York state court. B appeared and argued that the court should not recognize the judgment, because the Colorado court lacked personal jurisdiction over him. The New York court heard evidence regarding B’s contacts with Colorado, and the evidence presented showed that B only had occasionally taken vacation trips to Colorado. The New York court determined that these contacts were not sufficiently related to the claim for the Colorado court to assert personal jurisdiction over B, that the Colorado court therefore lacked personal jurisdiction over B, and entered judgment for B. A did not appeal.

Shortly thereafter, B filed a motion with the Colorado federal court to vacate the default judgment against him, citing the New York judgment. A appeared and opposed the motion, and over B’s objection, the court asked the parties to present evidence on the issue of whether it had had personal jurisdiction over B. The judge stated, “No New York state court judge is going to tell this court whether it had jurisdiction.” After considering evidence regarding B’s contacts with Colorado at the time of its judgment, which included additional evidence that A had not presented to the New York state court, the Colorado court expressly found that it had had personal jurisdiction, and denied the motion to vacate its judgment. (Consider this Ruling Number 1.) B did not appeal.

A then brought another action on the Colorado judgment in a New York state court. The New York Court again refused to recognize the Colorado judgment, citing two grounds: (1) that its earlier finding that the Colorado court lacked personal jurisdiction was binding under full faith and credit principles (Consider this Ruling Number 2.); and (2) that because this was the second time A had brought suit to enforce the same Colorado judgment, New York principles of claim preclusion (res judicata) barred the suit. (Consider this Ruling Number 3.)

Discuss the propriety of the three rulings noted above.

QUESTION III (60 minutes)

State X and State Y border each other. Janelle Eaves lives in State X. A friend, John Ford, lived in State Y, where he worked as a sales representative for the Gray Company. The Gray Company is a relatively large corporation, with its headquarters and manufacturing plant in State Y. It sells its products in several states, including X and Y. The Gray Company provided Ford with a company owned car, on the understanding that Ford would use it only while on company business.

One day, Eaves and Ford made plans that Ford would pick her up at her home and they would go out to a night club in state X. Because Ford’s own car was in the repair shop, he drove the company car instead. Ford had quite a bit to drink at the night club, and while driving Eaves home had a one car accident in State X, in which Ford was killed. Eaves was very seriously injured. She was in the hospital in intensive care for two weeks, required three more weeks of full time hospitalization, after which she needed several shorter hospital stays for additional surgeries. Her injuries included several broken ribs, spinal damage which permantly limited her use of her right arm, and required that both of her legs be amputated.

After the accident, Ford’s automobile liability insurer paid Eaves $100,000, which was the full amount of Ford’s policy limits. Because this amount does not even cover the full amount of her medical bills, Eaves has come to your office to see whether there might be other sources of recovery.

After learning that Ford had been driving a company car, you did some research into whether the Gray Company might have potential liability.

Your research has disclosed that under the law of State X, an employer is vicarously liable for its employee’s negligent use of a company vehicle, so long as the use is in the course of employment. Liability will not attach, however, if the employer/employee understanding is that the vehicle will be used only on company business, and if the use of the vehicle resulting in the injury was not for company business. You have found a decision from the Supreme Court of State X, holding that this rule will not permit employer liability on facts very similar to Eaves’ case.

Under the law of State Y, however, employer liability exists once the employee is given initial permission to operate the vehicle, even if the employee’s use exceeds the scope of the permission given. You believe that Eaves has a good chance of recovery against the Gray Company under this rule.

Your research has also disclosed that, as part of a “tort reform” effort, State Y recently enacted legislation that limits damages for pain and suffering to a maximum of $300,000. State X law has no such limit, and you believe that a jury, not restricted by a statutory maximum, may award Eaves damages for pain and suffering that are much greater than $300,000.

State X uses the traditional territorialist approach in resolving conflict of laws issues, and you have decided not to sue there because you believe its courts would find no liability on the part of Gray Company. State Y’s courts, however, have recently adopted Interest Analysis. State Y’s Supreme Court has stated that it would consider arguments based on principles applied and precedent from other states that have adopted interest analysis, including New York. It also stated, however, that it was not inclined to include Comparative Impairment in its methodology, so you need not go into that in your analysis of this question.

Taking into account and noting arguments you think the Gray Company’s attorneys might reasonably make to the contrary, discuss how you would try to persuade state Y’s courts to apply state Y law on the issue of employer liability, and state X law on the issue of damages for pain and suffering. After discussing each of these issues, give a brief evaluation of your likelihood of success.

QUESTION IV (60 minutes)

Robert Flack was born in 1960 in Minnesota, where he lived until the age of 22, when he moved to Colorado. In March of 1999, while working within the scope of his employment for Garden, Inc. in Colorado, he severly injured his arm while cleaning out a seed mixer manufactured by the Hutchins Corporation. The mixer had been manufactured at Hutchins’ main plant in Des Moines, Iowa in 1990 and had been sent to Garden directly when it ordered it in 1990. Flack received and continues to receive workers’ compensation benefits from Garden.

A few months after the accident, Flack, who was no longer able to do physical labor, moved back to the Minnesota town where he was born and where some relatives still lived. He has come to your office inquiring about the possibility of filing a suit against Hutchins. After reviewing his workers’ compensation file and other records of the accident, you have concluded that Flack may have a viable products liability claim against Hutchins. You have also learned that Hutchins has a branch manufacturing plant in Minnesota, where it manufactures about 20 per cent of Hutchins’ total products. (Hutchins does not manufacture any seed mixers, however, at the Minnesota plant.)

Upon researching the law of Minnesota, Iowa, and Colorado, you have found only one major difference among them. Colorado has a statute of repose that bars a suit for personal injuries against a manufacturer if seven years have passed since the machinery was first used. If applicable, this statute would bar any suit by Flack, since the seed mixer was first used in 1990. Statutes of repose, similar to Colorado’s, are relatively recent developments in the American legal landscape. Over the past 20 years, 15 states have enacted them, while a few others have declined to do so.

The Colorado Supreme Court has characterized its statue of repose as “substantive” rather than “procedural.” In the opinion so holding, it stated,

Rather than prescribe a method for enforcing a right or redressing a violation of a right, our statute of repose creates in the potential products liability defendant a right to immunity from suit under the circumstances set out in the statute. It does not dictate a method for enforcing a right, but rather, its effect is that a certain number of years after a product is sold there are no rights to enforce, regardless of any subsequent injury related to the product’s use. Unlike a tort statute of limitations that does not begin to run until the injury occurs, the statute of repose prevents the cause of action from accruing in the first place.

Neither Minnesota nor Iowa has a similar statute.

You have determined that, if Flack brought his claim in Iowa, the Iowa courts, applying their conflict of laws rules, would probably apply the Colorado statute, and you are convinced that a Colorado court would do the same. You are therefore considering whether bring suit against Hutchins in Minnesota, where the statute of limitations on Flack’s personal injury claim has not yet run. You would premise general personal jurisdiction on the existence Hutchins’ branch manufacturing plant in Minnesota.

Assume it would be constitutionally permissible for Minnesota to assert personal jurisdiction on this basis. Discuss (1) whether the Minnesota courts, applying Minnesota’s Better Rule approach, would apply the Colorado statute of repose and (2) whether it would be permissible under the U.S. Constitution for Minnesota to refuse to apply the Colorado statute.