By Rhonda Kay, Partner, Gair Gair Conason Steigman Mackauf Bloom & Rubinowitz;
In Edwards v. Erie Coach Lines Co. (17 N.Y.3d 306, 929 N.Y.S.2d 41 [2011]) The New York Court of Appeals clarified choice of law analysis in a multi-party case.
New York’s choice of law analysis, commonly referred to as an “interest analysis,” focuses on determining which jurisdiction, “because of its relationship or contact with the occurrence or the parties, has the greatest concern with the specific issue raised in the litigation” (Cooney v. Osgood Mach., 81 N.Y.2d 66, 595 N.Y.S.2d 919 [1993], quoting Babcock v. Jackson, 12 N.Y.2d 473, 240 N.Y.S.2d 743 [1963]). Assuming a conflict between the laws, a preliminary inquiry in the analysis is whether the substantive law at issue constitutes a “conduct-regulating” or a “loss-allocating” rule. Loss-allocating rules apply post-remedial, i.e., once there is admittedly tortious conduct, while conduct-regulating rules are those which people use as a guide to governing their primary conduct (see, Schultz v. Boy Scouts of America, Inc., 65 N.Y.2d 189, 491 N.Y.S.2d 90 [1985]).
The landmark case on this issue is Padula v. Lilarn Props. Corp. (84 N.Y.2d 519, 620 N.Y.S.2d 310 [1994]). The Court of Appeals there explained the distinction as follows:
“Conduct-regulating rules have the prophylactic effect of governing conduct to prevent injuries from occurring. ‘If conflicting conduct-regulating laws are at issue, the law of the jurisdiction where the tort occurred will generally apply because that jurisdiction has the greatest interest in regulating behavior within its borders'” (citation omitted).
Examples of conduct-regulating rules would be New York Labor Law sections 240 and 241, rules of the road, and statutes dictating a standard of care.
Loss allocating rules, on the other hand, are those which prohibit, assign, or limit liability after the tort occurs, such as charitable immunity statutes, guest statutes, no-fault statutes, wrongful death statutes, wrongful birth statutes, vicarious liability statutes, workers’ compensation statutes and contribution rules (see, Padula v. Lilarn Props. Corp. supra). Where the conflicting rules at issue are loss allocating, the outcome depends on the application of the rules set forth in Neumeier v. Kuehner (31 N.Y.2d 121, 335 N.Y.S.2d 64 [1972]).
The three Neumeier rules are as follows:
1. When the passenger [plaintiff] and the driver [defendant] are domiciled in the same state, and the vehicle is registered there, the law of that state controls;
2. This rule addresses the situation where the driver and the passenger are domiciled in different states, and the law of the place where the accident occurs favors its domiciliary. When the driver’s [defendant’s] conduct occurred in the state of his domicile and that state does not cast him in liability for that conduct, he should not be held liable by reason of the fact that liability would be imposed upon him under the tort law of the state of the victim’s domicile, and therefore driver’s state law applies. Conversely, if the law of the place where the accident occurred permits the injured passenger to recover, then the driver, “in the absence of special circumstances,” may not interpose a conflicting law of his state as a defense;
3. In other situations, when the passenger [plaintiff] and the driver [defendant] are domiciled in different states, the rule is necessarily less categorical. Normally, the applicable rule of decision will be that of the state where the accident occurred but not if it can be shown that displacing that normally applicable rule will advance the relevant substantive law purposes without impairing the smooth working of the multi-state system or producing great uncertainty for litigants.
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