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ArtIV.S1.4.2 Modern Doctrine on State Law on Full Faith and Credit Clause

Article IV, Section 1:

Full Faith and Credit shall be given in each State to the public Acts, Records, and judicial Proceedings of every other State. And the Congress may by general Laws prescribe the Manner in which such Acts, Records and Proceedings shall be proved, and the Effect thereof.

The Court reinterpreted the Full Faith and Credit Clause in Pacific Employers Insurance Co. v. Industrial Accident Commission.1 In that case, a Massachusetts resident was injured while working for a Massachusetts company in California.2 The California Industrial Accident Commission awarded the employee compensation under California’s worker’s compensation law.3 The employer’s insurer challenged the award, claiming that California violated the Clause by applying its own law instead of Massachusetts'.4 The Pacific Employers Court opined that “the very nature of the federal union of states, to which are reserved some of the attributes of sovereignty, precludes resort to the full faith and credit clause as the means for compelling a state to substitute the statutes of other states for its own statutes dealing with a subject matter concerning which it is competent to legislate.” 5 Quoting Alaska Packers, the Court explained that rigidly requiring states to apply other states’ statutes in the event of a conflict would create “the absurd result” that a state’s laws would apply in other states’ courts, but not its own courts.6 However, unlike in Clapper and Alaska Packers, the Court did not balance the states’ competing interests to determine which law applied.7 Instead, the Court declared that the Full Faith and Credit Clause does not “enable one state to legislate for the other or to project its laws across state lines so as to preclude the other from prescribing for itself the legal consequences of acts within it.” 8 The Court thus upheld the California award.9

Since Pacific Employers, the Court has repeatedly reaffirmed that courts should no longer balance states’ interests when evaluating whether to apply another state’s laws.10 The Court has stated that it abandoned the interest-balancing approach because there are no clear standards for assessing which state’s interest is weightier in a particular case.11 Thus, subject to the exceptions discussed below, “a State need not ‘substitute the statutes of other states for its own statutes dealing with a subject matter concerning which it is competent to legislate.’” 12 For instance, the Court ruled in Sun Oil Co. v. Wortman that a state may apply its own statute of limitations to claims governed by another state’s laws, because states are “competent to legislate” procedural rules to govern suits in their own courts.13

Nonetheless, the Court has recognized limits on a state’s discretion to apply its own law. For example, in Franchise Tax Board v. Hyatt (Franchise Tax Board II), a Nevada court awarded damages against a California agency that exceeded the damages Nevada would award in a similar suit against its own agencies.14 The Court explained that the Full Faith and Credit Clause forbids states from applying “a special rule of law that evinces a ‘policy of hostility’” towards other states.15 Because the Nevada court did not “appl[y] the principles of Nevada law ordinarily applicable to suits against Nevada’s own agencies,” but instead “applied a special rule of law applicable only in lawsuits against its sister States, such as California,” the Supreme Court held that the Nevada court’s decision “reflect[ed] a constitutionally impermissible ‘policy of hostility’” toward other states and thus violated the Clause.16 While the Court suggested that policy considerations might “justify the application of a special rule of Nevada law that discriminate[d] against its sister States” in a different case, Nevada had not offered “sufficient policy considerations” in Franchise Tax Board II.17

Nor may states close their courts to claims based on other states’ laws. For instance, in Hughes v. Fetter, a Wisconsin resident died in an automobile collision with another Wisconsin resident that occurred in Illinois.18 The decedent’s administrator—who was also a Wisconsin resident—sued the other driver and his insurer in a Wisconsin state court, asserting claims based on Illinois’ wrongful death statute.19 The Wisconsin court ruled that Wisconsin’s wrongful death statute—which only provided a cause of action for deaths occurring in Wisconsin—established a public policy barring Wisconsin courts from hearing lawsuits based on other states’ wrongful death laws.20 Building on its earlier decision in Broderick v. Rosner,21 the Supreme Court reversed, holding that Wisconsin violated the Full Faith and Credit Clause by refusing to hear the administrator’s claim.22 The Court emphasized that Wisconsin had not merely opted to apply its own wrongful death statute to the plaintiff’s claims, which likely would be permissible.23 Rather, Wisconsin had wholly “close[d] the doors of its courts to the cause of action created by the Illinois wrongful death act.” 24 By doing so, Wisconsin contravened “the strong unifying principle embodied in the Full Faith and Credit Clause looking toward maximum enforcement in each state of the obligations or rights created or recognized by the statutes of sister states.” 25

306 U.S. 493 (1939). back
Id. at 497–98. back
Id. back
Id. at 497. back
Id. at 501. back
Id. ( “A rigid and literal enforcement of the full faith and credit clause, without regard to the statute of the forum, would lead to the absurd result that, wherever the conflict arises, the statute of each state must be enforced in the courts of the other, but cannot be in its own.” ) (quoting Alaska Packers Ass’n v. Indus. Accident Comm’n, 294 U.S. 532, 547 (1935)). See also id. at 501–02 ( “[I]n cases like the present[, a rigid interpretation of the Full Faith and Credit Clause] would create an impasse which would often leave the employee remediless. Full faith and credit would deny to California the right to apply its own remedy, and its administrative machinery may well not be adapted to giving the remedy afforded by Massachusetts. Similarly, the full faith and credit demanded for the California Act would deny to Massachusetts the right to apply its own remedy, and its Department of Industrial Accidents may well be without statutory authority to afford the remedy provided by the California statute.” ). back
See id. at 497–505. See also Crider v. Zurich Ins. Co., 380 U.S. 39 (1965) (describing Pacific Employers as “mark[ing] a break with the Clapper philosophy” ); Carroll v. Lanza, 349 U.S. 408, 412 (1955) (stating that Pacific Employers “departed . . . from the Clapper decision” ); J. Stephen Clark, Conflicts Originalism: The “Original Content” of the Full Faith and Credit Clause and the Compulsory Choice of Marriage Law, 118 W. Va. L. Rev. 547, 553 (2015) (observing that “in Pacific Employers . . . the Court abandoned the balancing method altogether” ). back
306 U.S. at 504–05. back
See id. at 497, 505. back
See, e.g., Franchise Tax Bd. v. Hyatt, 538 U.S. 488, 496 (2003) [hereinafter Franchise Tax Bd. I] (explaining that the Court has “abandoned the balancing-of-interests approach to conflicts of law under the Full Faith and Credit Clause” ); Franchise Tax Bd. v. Hyatt, No. 14-1175, slip op. at 7–8 (U.S. Apr. 19, 2016) [hereinafter Franchise Tax Bd. II] (similar). back
See, e.g., Franchise Tax Bd. I, 538 U.S. at 498 ( “[T]he question of which sovereign interest should be deemed more weighty is not one that can be easily answered.” ); id. at 496 ( “As Justice Robert H. Jackson . . . aptly observed, ‘it [is] difficult to point to any field in which the Court has more completely demonstrated or more candidly confessed the lack of guiding standards of a legal character than in trying to determine what choice of law is required by the Constitution.’” ) (quoting Justice Robert H. Jackson, Full Faith and Credit—The Lawyer’s Clause of the Constitution, 45 Colum. L. Rev. 1, 16 (1945)); Franchise Tax Bd. II, slip op. at 8 (conceding that the interest-balancing approach “led to results that seemed to differ depending, for example, upon whether the case involved commercial law, a shareholders’ action, insurance claims, or workman’s compensation statutes” ). back
Franchise Tax Bd. I, 538 U.S. at 496 (quoting Pac. Emp’rs Ins., 306 U.S. at 501). See also, e.g., Pink v. A.A.A. Highway Express, Inc., 314 U.S. 201, 210 (1941) (holding that the Full Faith and Credit Clause “is not an inexorable and unqualified command,” but rather “leaves some scope for state control within its borders of affairs which are peculiarly its own” ); Nevada v. Hall, 440 U.S. 410, 422 (1979) ( “[T]he Full Faith and Credit Clause does not require a State to apply another State’s law in violation of its own legitimate public policy.” ), overruled on other grounds by Franchise Tax Bd. v. Hyatt, No. 17-1299, slip op. at 1–18 (U.S. May 13, 2019). back
See 486 U.S. 717, 722 (1988). back
Franchise Tax Bd. II, slip op. at 3–4. back
Id. at 4 (quoting Franchise Tax Bd. I, 538 U.S. at 499). back
Id. at 6–7. back
See id. at 7 (quoting Carroll, 349 U.S. at 413). back
341 U.S. 609, 610, 613 (1951). back
See id. back
See id. at 610 & n.2. back
294 U.S. 629 (1935). See also supra ArtIV.S1.4.1 Early Doctrine on State Law on Full Faith and Credit Clause (discussing Broderick). back
See 341 U.S. at 613–14. back
See id. at 612 n.10 ( “The present case is not one where Wisconsin, having entertained appellant’s lawsuit, chose to apply its own instead of Illinois’ statute to measure the substantive rights involved. This distinguishes the present case from those where we have said that ‘Prima facie every state is entitled to enforce in its own courts its own statutes, lawfully enacted.’” ) (quoting Alaska Packers Ass’n v. Indus. Accident Comm’n, 294 U.S. 532, 547 (1935)). back
Id. at 611. back
Id. at 612. See also Carroll, 349 U.S. at 413 (explaining that Hughes “held that Wisconsin could not refuse to entertain a wrongful death action under an Illinois statute for an injury occurring in Illinois, since [the Court] found no sufficient policy considerations to warrant such refusal” ); Wells v. Simonds Abrasive Co., 345 U.S. 514, 518 (1953) (stating that “[t]he crucial factor” in Hughes “was that the forum laid an uneven hand on causes of action arising within and without the forum state” ); Howlett ex rel. Howlett v. Rose, 496 U.S. 356, 381 (1990) (citing Hughes for the proposition “that a court of otherwise competent jurisdiction may not avoid its parallel obligation under the Full Faith and Credit Clause to entertain another State’s cause of action by invocation of the term ‘jurisdiction’” ). back