arguing that since the interests and contacts of Pennsylvania and Delaware were evenly balanced (he found the majority's counting process specious), the "better law," (see note 40 supra), should be chosen, which he deemed Pennsylvania's. Justice Roberts argued that the heavy territorial emphasis went counter to recent Pennsylvania choice of law decisions.
A year later In Re Danz was decided. 444 Pa. 411, 283 A.2d 282 (1971). Danz involved the validity of a gift contract executed in Germany with respect to funds held in Pennsylvania banks. The court, in one sentence, decided that German rather than Pennsylvania law applied in this situation "because that is the place where the contract was made and was to be performed." However, unlike Varas, Eastcoast Equipment and Crawford, no Restatement I provisions were mentioned. Nor was Restatement II relied upon. Griffith was not even cited. The only authority was a 1914 case, State Bank of Chicago v. King, 244 Pa. 29, 90 A. 453 (1914). No attempt was made to describe the respective interests of Germany and Pennsylvania, or to examine and weigh the "contacts" each jurisdiction had.
Danz is singularly lacking in facts which would permit an application of either interest analysis or Restatement II. No mention is made of where the donor-decedent died, though it appears to have been Germany, nor where he was domiciled at time of death, though this was probably Pennsylvania. Both facts would be crucial under interest analysis and also would have been important "contacts" under Restatement II. Similarly, no mention is made of whether donees were domiciliaries of Germany, Pennsylvania, or some other jurisdiction at the time of gift, nor of whether decedent had any beneficiaries or heirs at law domiciled in Pennsylvania who would benefit from an increased estate if the claimed gift to the donees were declared invalid. Without these facts, it is impossible to know whether either Pennsylvania or Germany had "interests" in this matter. Thus it is abundantly clear Danz is not an interest analysis case. By the same token the above omissions preclude a thorough-going Restatement II analysis. To be sure, "place of performance" and "place of contracting" are two contacts made relevant by § 188 of Restatement II, but these contacts may or may not have been sufficient to establish Germany as the "place with the most significant relationship." Unquestionably, the result in Danz is consistent with Restatement I, although under that theory "place of contracting" would have sufficed, and the mention of another factor (i.e. place of performance) was superfluous. Danz plainly rests on territorial assumptions, but exactly which theory it utilized is unclear.
Finally, in Gillan v. Gillan, 236 Pa.Super. 147, 345 A.2d 742 (1975), the Superior Court purported to expand considerably the reach of Griffith. Gillan announced that Griffith "overruled a substantial body of Pennsylvania case law and adopted the new Restatement's approach to conflicts problems." (emphasis supplied). 345 A.2d at 744. As this passage implies, Gillan considered Griffith's methodology applicable to all conflict of law subjects, not just torts; but it interpreted Griffith as being based solely on Restatement II. In Gillan, both parties, formerly husband and wife, resided in Pennsylvania at time of suit. The former husband had breached a separation agreement which by its terms survived but was not incorporated in a divorce decreed by a New York court. The issue was whether he could collaterally attack the agreement on the grounds of collusion. The Gillan court set out two sections of Restatement II as applicable to its choice of law determination: the general principles of § 6 and the contract provisions of § 188. Thus the court clearly felt that Griffith had made Restatement II applicable to contracts. In applying these sections, the court found New York to have the "greater interest" because "the state where the divorce is to be procured has a pre-eminent interest in the preservation or dissolution of a marriage," 345 A.2d at 745, which the rules against collusion were designed to protect. The court did not examine any other "contacts" made relevant by § 188, such as the current domicile of the parties. Thus the Gillan court in theory relied on Restatement II, but in application performed its own version of "interest analysis." Its interest analysis, of course, was at variance with Currie's interest analysis; under the latter theory, the fact of residence of both parties in Pennsylvania would have made that state the only concerned jurisdiction, and a "false conflict" would have been present.
The Gillan court did consult Pennsylvania law for the limited purpose of determining whether public policy allowed enforcement of the separation agreement by Pennsylvania's courts, but this determination was made, not on the basis of Restatement II, interest analysis, or even Restatement I, but rather the "jurisdictional" holding of Silvestri v. Slatowski, 423 Pa. 498, 224 A.2d 212 (1966), which we have analyzed at note 56 infra.
We began our review of the case law to determine whether Pennsylvania as a result of Griffith, has abandoned its ancient rule of lex loci contractus, as represented by Varas. We conclude that there is no clear answer to that question. Justice Roberts' six opinions demonstrate a trend of expanding the range of interest analysis (and Restatement II) methodology beyond its pure tort-liability application in Griffith. For example, while McSwain involved interspousal immunity, and Elston involved contribution among joint tortfeasors, Hunter involved adoption. Similarly, the recent Superior Court case of Gillan applied the "modern" methodology to a separation agreement. On the other hand, while both Hunter and Gillan are more analogous to contract actions than to tort actions, neither purported to overrule lex loci contractus as Griffith had squarely overruled lex loci delicti. Moreover, in the three clear contract actions, Eastcoast Equipment, Crawford, and Danz, the Superior Court twice explicitly, and the Supreme Court once implicitly, reaffirmed the vitality of Restatement I. In sum, incompatible inferences can be drawn from the case law, i.e. that Restatement I still applies to contract cases, and that the hybrid interest/ Restatement II analysis applies.
It is also important to describe at this juncture our conclusion as to the meaning of the second inference above: that Griffith, instead of spawning a pure "interest" line of cases, has bred a "hybrid" system blending interest analysis and territoriality. Interest analysis is initially employed by the courts, and if under that analysis a "false" conflict is demonstrated (only one jurisdiction interested) that jurisdiction's law is applied. Territorial contacts of Restatement II are used to buttress the result. This is the method of Griffith, McSwain, Hunter, and Kuchinic. Similarly, if the initial application of interest analysis demonstrates a "true" conflict (both jurisdictions interested), territorial contacts are used to resolve the choice. In contrast to Professor Currie, who would have applied lex fori in a true conflict situation, Pennsylvania has twice encountered true conflicts (Elston and Cipolla) and each time has deferred to the law of the sister state. Each time deference was for territorial reasons: in Elston because the seller of the fork-lift had gone to New Jersey to transact business, and in Cipolla because the guest had been in Delaware on a motor trip.
2. The Court of Appeals (Third Circuit) Decisions
Because of our uncertainty about the question whether lex loci contractus has been abandoned by the Pennsylvania courts, we sought the guidance of the United States Court of Appeals for the Third Circuit. In view of the confusion in the Pennsylvania cases and the fact that a federal court's role in this area is predictive only, it is not surprising that we found the Court of Appeals opinions to reflect, hence exacerbate rather than solve, the confusion. Speaking generally, we discovered that the following cases provided at least some support for the view that Griffith left untouched the Restatement I tradition for contract cases: Jamison v. Miracle Mile Rambler, Inc., 536 F.2d 560, 562 (3d Cir. 1976); William B. Tanner Co., Inc. v. WIOO, Inc., 528 F.2d 262 (3d Cir. 1975); Craftmark Homes, Inc. v. Nanticoke Construction Co., 526 F.2d 790, 792 n.2 (3d Cir. 1975); Daburlos v. Commercial Insurance Co., 521 F.2d 18, 20 at n.2 (3d Cir. 1975); Pittsburgh Bridge and Iron Works v. Liberty Mutual Insurance Co., 444 F.2d 1286, 1288 n.2 (3d Cir. 1971); Boase v. Lee Rubber and Tire Corp., 437 F.2d 527, 529-530 (3d Cir. 1971); First Pennsylvania Banking and Trust Co. v. U.S. Life Insurance Co., 421 F.2d 959, 962 (3d Cir. 1969).
On the other hand, an equally impressive string of cases lends support to the view that Pennsylvania has adopted either interest analysis or Restatement II for contracts cases: Kademenos v. Equitable Life Assurance Society, 513 F.2d 1073 (3d Cir. 1975), Siata International U.S.A., Inc. v. Insurance Company of North America, 498 F.2d 817 (3d Cir. 1974); Travelers Insurance Co. v. Davis, 490 F.2d 536, 542-543 (3d Cir. 1974); Neville Chemical Co. v. Union Carbide Corp., 422 F.2d 1205, 1210-1211 (3d Cir.) cert. denied 400 U.S. 826, 27 L. Ed. 2d 55, 91 S. Ct. 51 (1970); Slaughter v. Philadelphia National Bank, 417 F.2d 21, 26 n.8 (3d Cir. 1969); Scott v. Eastern Air Lines, Inc., 399 F.2d 14 (3d Cir.) (en banc) cert. denied, 393 U.S. 979, 89 S. Ct. 446, 21 L. Ed. 2d 439 (1968); Mannke v. Benjamin Moore & Co., 375 F.2d 281, 283 (3d Cir. 1967).
See also Exchange National Bank v. Insurance Company of North America, 341 F.2d 673, 675 (2d Cir. 1965) (applying Pennsylvania conflict law in a case transferred under 28 U.S.C. § 1404(a)).
When the Third Circuit cases are subjected to individual scrutiny, they may be brought into more unified focus than our rough classification suggests; for example, some of the dichotomy may result from the evolution in the Pennsylvania state court cases, discussed above, the result depending upon when the Court of Appeals wrote. Moreover, as we have already noted, faced with conflicting strains in Pennsylvania law, the task of predicting what the Pennsylvania Supreme Court would do was extremely difficult, and it is understandable that one group of judges might predict differently than another, given the "signs" from the most recent state case. Finally, in many of the Court of Appeals opinions, the choice of law issue was not critical; indeed, the discussion in most of the cited cases is quite brief. However, since the choice of law question is critical to this case, we cannot content ourselves with less than an exhaustive analysis. We note, of course, that our function is predictive too, albeit in a compounded sense since we must also take cognizance of the (predictive) views of our Court of Appeals. We shall commence the necessary analysis by first considering the circuit decisions (which, of course, bind us) in several groups, organized by the temporal order of the Pennsylvania precedents which must be regarded as the exclusive source of law on this issue under Erie.
Seven of the Pennsylvania cases discussed above, Griffith, McSwain, Elston, Eastcoast Equipment, Hunter, Crawford, and Kuchinic preceded the first group of circuit cases which we shall consider. Earlier, we concluded that in Eastcoast Equipment and Crawford the Superior Court had denied the relevance of Griffith to contract cases and that in Hunter the Supreme Court had obliquely disagreed. We now consider seriatim the Circuit's reaction to those cases.
Mannke, Scott, and Slaughter relied on Restatement II or on Griffith as establishing the contemporary choice of law methodology. Thus in Mannke the court found Pennsylvania to be the "center of gravity." 375 F.2d at 283. And in Slaughter the court demonstrated an implicit awareness of the "hybrid" system by announcing that "Pennsylvania's approach . . . is to analyze the policies and interests underlying the particular issue before the court and then apply the law of the state having the greatest interest and most direct contacts with the problem." 417 F.2d at 26 n.8 (emphasis supplied). In Scott, the Third Circuit en banc considered a wrongful death and survival action which was grounded in contract, not tort. The court declared: "[as] the contractual claim against Eastern is rooted in Pennsylvania Law, it is governed directly by . . . Griffith." 399 F.2d at 22. The court undertook an interest analysis, deciding the situation was a "false conflict," and citing McSwain and Kuchinic. The "place of injury" in Massachusetts was held to "not necessarily" create an interest in Massachusetts. Id. Neither Mannke, Slaughter, or Scott mentioned, or distinguished, Crawford or Eastcoast Equipment.
In First Pennsylvania a panel of the Third Circuit ignored Griffith in deciding that Pennsylvania would refer to the law of the place of contracting in insurance contract cases. However, it relied neither on Eastcoast Equipment nor on Crawford, but instead reverted to Franklin Life Insurance Co. v. Bieniek, 312 F.2d 365, 367-368 (3d Cir. 1962), which in turn emanated from New York Life Insurance Co. v. Levine, 138 F.2d 286, 288 (3d Cir. 1943), which had used an explicit Restatement I methodology.
In Neville, the Circuit ascribed to Pennsylvania the "interest" approach in contract cases. Again it cited Griffith, but none of the post- Griffith state cases; it cited Slaughter, but not First Pennsylvania. Finally, in its actual application of Griffith, the court did not in fact analyze any "interests," but rather located "the place of negotiation . . . the principal place of business," and similar territorial contacts to determine Pennsylvania to be the "center of gravity" of the contract in a manner consistent with Restatement II. 422 F.2d at 1211.
One year later, in Boase, Judge Aldisert presented a more extensive consideration of the Pennsylvania cases, though he did not cite the year old circuit decision in Neville. He acknowledged that Griffith itself strongly suggested that interest analysis would be utilized in contract cases by its approval of a leading New York contract choice case, Auten v. Auten, 308 N.Y. 155, 124 N.E. 2d 99 (1954). But he also noted the reassertion of traditional rules in Crawford. Finally, he argued that Hunter's oblique suggestion that "interest analysis" applied to contracts could be explained away as "only tangentially [presenting] a conflicts of laws problem . . . ." 437 F.2d at 529, n.6 (and see note 45 supra). Judge Aldisert concluded that:
Pennsylvania's highest court has not so clearly embraced the grouping-of-contacts theory as to set aside a choice of law provision explicitly set forth in the written agreement which is the subject matter of the dispute.
437 F.2d at 530. Judge Aldisert, however, did not have to determine exactly what Pennsylvania's methodology was nor apply that methodology since in Boase the parties had explicitly chosen a law to govern the transaction; his inquiry was limited to the question whether Griffith and its progeny would require not giving effect to the parties private choice. He concluded Griffith would permit giving it effect. Boase was followed shortly by Pittsburgh Bridge, where the court opined tangentially that Pennsylvania retained the traditional reference to the law of the state where an insurance contract is made ("issued and delivered"), citing only Varas and Eastcoast Equipment.
The Pennsylvania Supreme Court decision in Danz, applying lex loci contractus to a contracts case, followed. As we mentioned, Danz cited neither Griffith nor its progeny. The questions naturally arose whether Pennsylvania was reviving the "vested rights" approach generally, whether it was doing so but only in the area of contracts, whether Pennsylvania intended to apply different choice of law methods for inter-state and international cases, or whether Danz was merely an aberration. Given the potential significance of Danz to the evolution of Pennsylvania choice of law, it is surprising that it has received so little notice in the Circuit.
Travelers, which followed Danz by several years, suggested that Pennsylvania would use interest analysis in contracts choice of law. It did not cite Danz, but rather relied solely on Griffith in holding that Pennsylvania would apply interest analysis to a case concerning arbitrability of the meaning of an insurance contract; Massachusetts was found to be "interested" because "the contract was made there," but Pennsylvania's interest was greater because "decedent and his executors are citizens of that state." 490 F.2d at 543. In Siata International, an action on a bond covering a contract, the court relied on Neville in finding that the district judge had employed the correct test of "most significant relationship," but remanded for a determination, inter alia, of whether an express choice by the parties should be considered as an additional factor in the calculus, noting that in the process "additional state interests and contacts may become manifest." 498 F.2d at 820.
Kademenos, a case of tortious interference with contractual relations, hence straddling between tort and contract, was the next Circuit case in the wake of Danz. It cited Griffith and Neville and spoke of Pennsylvania's "greater interest," but in analyzing that interest utilized Restatement II territorial contacts exactly as Neville had: the place of the policy's delivery, the place of the policy's cancellation, etc. 513 F.2d at 1073. Daburlos, however, which also followed shortly thereafter returned to Restatement I language in saying that:
[initially], there can be no question that under the doctrine of conflict of laws, the Pennsylvania substantive law applies for the insurance policies in this case were issued and delivered in Pennsylvania.
521 F.2d at 20. The Court's footnote somewhat cryptically cited Griffith, Pittsburgh Bridge and Neville.
We now turn to the Circuit cases which followed the most recent development in the Pennsylvania state cases, Gillan, in which the Superior Court for the first time read Griffith expansively (while ignoring Danz), and in which that court seemed to prescribe Restatement II analysis for contract cases. Gillan, of course, left a question whether it was to be read as limited to contracts arising out of marital dissolutions. Three Third Circuit cases have followed Gillan. The first two cases, Craftmark Homes and William B. Tanner, came down only two months after Gillan, doubtless before it was generally reported, and did not discuss it. Craftmark cited only Danz's "place where the contract was made and was to be performed" language as dispositive of the facts in the case. 526 F.2d at 792 note 2. William B. Tanner, an action for anticipatory breach of contract, found no threshold conflict between Pennsylvania and Tennessee law, hence no need to apply choice of law principles, but found that
[furthermore] Pennsylvania is the place of performance under the contracts. Although the point is not free from doubt, we interpret Pennsylvania law as providing that 'matters connected with the performance of a contract are governed by the law prevailing at the place of performance.' Musser v. Stauffer, 192 Pa. 398, 43 A. 1018 (1899).