Functional choice-of-law theory, Local regulation of multistate disputes, Bernkrant v. Fowler
Conflict of Laws | Legal History
Recent literature and judicial opinions have recognized the need for control and consistency in choice of law. Although the formulation of choice-of-law theory in terms of the states' interests in the conflicting rules at issue has gained wide acceptance, the courts have been unable to agree upon criteria for determining when a state has a valid interest in dispute resolution. Moreover, courts frequently appear all too eager to use contemporary choice-of-law analysis to justify local regulation of multistate disputes despite insubstantial local relationships. The inconsistency and local bias both stem from the lack of a coherent theory for discerning the existence of a state interest.
Fundamental to developing a coherent theory of interests is the concept of the purpose or "function" of rules. Under existing "functional" choice-of-law theory, a court considers the functions of competing rules to determine whether their application in the particular case would advance these functions. Functions are equated with the reasons for a rule's enactment. To eliminate inconsistency and abuses under the functional theory, some commentators suggest that courts restrict the evaluation of a state's interest to those objectives actually articulated by the rule's makers.
This article begins with the idea, also advanced by others, that the authority to regulate multistate disputes is a resource that must be allocated among competing states in a rational manner. Rational allocation requires an assessment of the effect upon a state of denying the authority to regulate a dispute. If such denial would affect a state adversely, that state may be considered legitimately interested. In making this determination, courts should focus when possible upon the actual effects that rules produce or advance. Such effects, when known, should form the basis for state interests even when the effects cannot be linked exclusively to the articulated objectives of the rulemakers. Indeed, when the goals and effects of a rule do not coincide, effects should be determinative.
Alexander, Gregory S., "The Concept of Function and the Basis of Regulatory Interests under Functional Choice-of-Law Theory: The Significance of Benefit and the Insignificance of Intention" (1979). Cornell Law Faculty Publications. Paper 256.
Published in: Virginia Law Review, vol. 65, no. 6 (October 1979).