Tomorrow’s argument is expected to be heard by the Supreme Court Cassirer v. Thyssen Bornemisza Collection Foundation. This is a dramatic account of the looting by Nazis of a Pissarro oil painting, which now resides in a Spanish museum. Suzanna Sherry has provided a preview. However, the question is technical and can be answered by choosing law.If a federal court is authorized to hear state law claims Submitted under the [Foreign Sovereign Immunities Act]Must use the forum state’s Auswahl This is Law rules that determine which substantive law is applicable It may be applicable to claims in dispute. federal common law.”
It is a federal case of choice-of-law. Klaxon v. Stentor Electric ManufacturingIt’s something that I know a lot about so I decided to share a few thoughts.
Three points of background: In diversity cases, the Supreme Court generally applies state law, pursuant to the Rules of Decision Act which says that “The laws of the several states … shall be regarded as rules of decision in civil actions in the courts of the United States, in cases where they apply.”
They are not applicable everywhere. Answering this question is a field called “choice of law”. But, what’s the federal rule on these matters? Klaxon said the Supreme Court that the federal courts in diversity cases must adhere to the conflicts of laws rules in the state where they reside. The U.S. District Court for Central District of California must apply any California law. These might be California laws or they might apply to another country. A federal court in Nevada for District of Nevada could apply a different law, the one chosen by Nevada’s choice of law rules — even though they are both within the Ninth Circuit.
The Foreign Sovereign Immunities Law, which is under federal question jurisdiction says that foreign states (Spain here) are “same manner and in the same amount as private individuals under similar circumstances.”
Therefore, QP for Klaxon (the diversity case) extends to FSIA. Now, my thoughts.
1: The question I am asking is not clear. The question is asked to determine whether the forum state will choose between two law choices. But Klaxon, the source of the forum-state-choice-of-law doctrine, Is a federal common-law rule.. The Ninth Circuit used the Ninth Circuit version of “federal law”, which was the Second Restatement of Conflicts. It is not clear why the Second Restatement should have been the federal commonlaw rule, but it does make sense if you believe in federal common law rules.
The real question is: Since everyone seems to prefer federal common law for deciding choice of law issues under the FSIA to be decided, which federal common law should we choose — the Klaxon Rule or the Second Restatement to become federal common law?
2: I also argued that there were good reasons to not extend Klaxon’s rule to federal questions cases, as I did in my article. In particular, under Klaxon You cannot understand the law until you file a lawsuit. It is very dangerous for anyone who must apply the rule prior to litigation. For example, the executive branch administering federal statutes. Klaxon wasn’t used when the federal executive branch was required to develop a federal choice-of-law rule for federal statutes that dealt with marriage.
3.
3a. Although the executive branch does not complain about being required to apply Klaxon in accordance with FSIA, someone should question them.
3b. And perhaps more importantly, Klaxon can be supported in the FSIA’s text. Klaxon would have the same common-law choice rule of law that applies to federal parties, since they would be subject to diversity jurisdiction. Klaxon should be applied to FSIA defendants only if it is considered “like circumstances”.
3c. Assuming Klaxon is right, it could be appropriate for Klaxon to continue it here.
4. But, that does not mean Klaxon should be used in every federal question case — it could prove disastrous for federal law executive administration. Klaxon’s accuracy does not mean that he is right. In fact, Klaxon applied federal common law to an ipse tenit way, which is contrary historical practice. This is something you can criticize. It is difficult to determine whether Klaxon was correct and, if so, what to do about it. This question receives very little attention in briefs. Hopefully, the Court can at least do nothing to harm that cause.
Summarising, while it is possible that the Ninth Circuit should not be reversed in this case, I hope the Court won’t say anything about Klaxon and its application to federal statutory cases later that might be regrettable.