EVENTS

Date:	Thursday, January 29, 2009
Time:	5:00 PM -- 6:15 PM
Location:	Wohlstetter Conference Center, Twelfth Floor, AEI 1150 Seventeenth Street, N.W., Washington, D.C. 20036

WASHINGTON, FEBRUARY 4, 2009--Current choice-of-law rules, which determine what substantive law will be applied to a case with different legal jurisdictions, are insufficient to meet the legal challenges presented by increasing globalization and mobility, Larry Ribstein argued at an AEI book forum on January 29. Ribstein, a law professor at the University of Illinois, presented The Law Market (Oxford University Press, 2009), coauthored with Erin O'Hara of Vanderbilt University Law School. In the book, Ribstein and O'Hara contend that "widespread enforcement of choice-of-law clauses powerfully enhances [the] 'law market,' whose forces can in turn profoundly affect legal systems." When people can choose the laws by which they are governed or create contracts, they said, "a new set of political actors gains influence, and state lawmakers are thereby more effectively disciplined." The implications of such an approach include not only traditional business incorporation but also social issues, such as state recognition of same-sex marriages, living wills, and surrogacy contracts.

The Law Market calls for a federal statute to require that states adhere to contractual choice-of-law provisions, except in cases where states pass "explicit legislation" to designate which choice-of-law provisions they will refuse to enforce. Ribstein contended that this solution offers "predictability, which is one thing we're not getting from the chaos of state choice-of-law rules now," as well as more interest group and individual involvement in state legislative processes. Over time, he argued, the proposal will produce an "equilibrium" that protects contractual rights, allows states and local jurisdictions to enact "reasonable regulations," and offers contracting parties "a way out of the tangle" of existing federal, state, and local laws.

Max Stearns of the University of Maryland commended Ribstein for "an ambitious and broad project" that represents a significant addition to the scholarly debate over contractual choice-of-law. He acknowledged the value of Ribstein's proposal but questioned whether Congress would have the regulatory authority to enact such a statute under what the authors offer as potential grounds: the Full Faith and Credit Clause and the Commerce Clause. Existing constitutional law, Stearns argued, does not fully show whether such authority exists. He also questioned whether the book's proposal for choice-of-law rules, which would "[raise] the cost to interest groups of getting special interest legislation," would also be problematic for passing "what we do want, which is general-interest legislation."

AEI's Michael S. Greve called The Law Market "a major contribution" to clearing up the "very complicated and messy" choice-of-law doctrines. He expressed reservations about the proposed federal statute and asked whether "federal common law" could be "a tenable or attractive" alternative approach.

--LUCI HAGUE

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