The Choice-of-Law Conundrum for Torts in Iraq

by Roger Alford

Last week the Fifth Circuit rendered a fascinating decision in McGee v. Arkel Int’l about choice-of-law rules as applied to torts in Iraq. I’ve never seen anything quite like the Iraqi law in question, so I thought it is worth sharing for the private international law aficionados among our readers.

The Iraqi law in question, passed by the Coalition Provisional Authority, tries to avoid the application of Iraqi tort and contract law to contractors working in Iraq for the U.S. Defense Department. With respect to contracts, Section 4 of CPA Order 17 provides that:

Contractors shall not be subject to Iraqi laws or regulations in matters relating to the terms and conditions of their Contracts….

Contractors shall be immune from Iraqi legal process with respect to acts performed by them pursuant to the terms and conditions of a Contract….

With respect to torts, Section 18 of CPA 17 provides that:

[T]hird-party claims including those … for personal injury, illness or death … arising from or attributed to acts or omissions of … Contractors or any persons employed by them for activities relating to performance of their Contracts, … shall be submitted and dealt with by the Sending State whose personnel … are alleged to have caused the claimed damage, in a manner consistent with the Sending State’s laws, regulations, and procedures.

So what substantive law governs when a National Guardsman is electrocuted in Iraq while cleaning a Humvee due to faulty wiring of an electric generator maintained by a Defense Department contractor? That was the question the Fifth Circuit had to decide in McGee.

Applying Louisiana choice-of-law principles, the Fifth Circuit concluded that Iraqi substantive law applied. The wrongful conduct and resulting injury occurred in Iraq, therefore Iraqi law should apply under Louisiana choice-of-law rules. As for CPA 17, the Fifth Circuit concluded that it required application of Louisiania law, which includes Louisiana choice-of-law.

Section 18 requires claims to be ‘submitted and dealt with … in a manner consistent with the Sending State’s laws, regulations and procedures.’ Included in that law is the state’s choice-of-law principles. Consequently, if the plaintiff’s claim is ‘submitted and dealt with … in a manner consistent’ with Louisiana law, that law uses Iraqi law for the standards of conduct and safety. Section 18 restates what the law of the forum state for the current suit, Louisiana, already required. It is superfluous here.

Judge Edith Jones dissented, finding that CPA 17 was trying to guarantee the application of the Sending State’s substantive law, not its choice-of-law rules.

In my view the whole point of Section 18 is to substitute the Sending State’s substantive laws for those of Iraq. Read in the majority’s fashion, the courts and ‘processes’ of Iraqi law are excluded from handling these cases under Iraqi law, but American courts are not…. This reading of Section 18 is unnecessary. To say that the tort claims shall be handled ‘consistent with the Sending State’s laws’ need not include the Sending State’s conflict of laws reference back to Iraq. Such an interpretation preserves the evident intent to apply the domestic law of Sending States to their contractors operating in Iraq.

Anyone familiar with choice-of-law rules knows the doctrine of renvoi. Thus, when drafting a governing law clause in a contract one must be very careful to draft it in such a way that choosing the law means choosing the internal law, not choice of law which may send you right back to another jurisdiction’s substantive law.

It would seem that the Coalition Provisional Authority did not anticipate this fairly standard problem when it adopted CPA 17, with the result that Iraqi substantive law will govern the merits of tort claims involving Contractors, even though Iraqi law stipulates that such torts will be dealt with in a manner consistent with the laws, regulations, and procedures of the Sending State.

http://opiniojuris.org/2012/02/23/the-choice-of-law-conundrum-for-torts-in-iraq/

5 Responses

  1. BRILLIANT Roger!  Simply Brilliant!  Thanks for sharing this.
    Best,
    Ben

  2. What if Louisiana was a state that had passed the law or had the referendum barring reference to foreign law in Louisiana courts?  I guess that law or referendum could trump the choice of law renvoi (a superior norm in Louisiana?) getting us back to Louisiana substantive law.  I wonder if such a barring of reference to foreign law in a state court would end up mucking up renvois to any non-US law other than English law (believe there is a carve out for English law).  Funny stuff.
    Best,
    Ben

  3. I am not very familiar with renvoi rules in Louisiana (or the US for that matter) but at least compared to how we understand renvoi from were I come from, there is something not quite right with this decision. Let me elaborate:

    First I have a doubt as to whether renvoi actually exists in Lousianna. In Page 5, the Court clearly states that it has to apply “the choice of law rules of the forum state to identify the substantive law that applies”. That is a rejection of renvoi. In renvoi, once Lousiana choice of law rules say Iraqi Law applies, you still have to look at Iraq’s choice of law rules and see the outcome. So saying that you have to only look at your choice of law rules and then applying renvoi is an oxymoron (unless of course there is a choice of law rule that specifically orders application of renvoi, but the court doesn’t mention that).

    But even if renvoi applied, which I am not sure, it’s application in this case seems wrong. First, there is a first renvoi that you have not mentioned: when the Court looks at Section 18 CPA 17. If, as the court says, this section is a choice of law rules, the minute the Court looked at it, it applied renvoi, because it decided to determine the applicable law not just by looking at its own choice of law rules but by looking ALSO at Iraq’s choice of law rule. That is the definition of renvoi.

    But this renvoi “re-sends” the applicable law back to Louisiana. If this is the case, that’s a first degree renvoi, and that ends the whole thing. The Court doesn’t need to make a “second renvoi” and look into Louisiana choice of law (again) and state that Iraqi law applies. That would be a contradiction, because if both Lousiana and Iraq have renvoi, and if you had to use renvoi each time you get “re-sent” to either Lousiana or Iraq, then you would by definition end up in a never-ending loop of renvoi-ing. At least how I understand renvoi (in the “latin american” approach), once you are re-sent to your own law, your renvoi analysis must end. I cannot understand why the Louisiana court did what it did.

    What the Court did is a werid type of “circular renvoi”. But circular renvoi only applies when State A renvois to State B, State B renvois to STate C and State C renvois back to State A. The whole purpose of renvoi after all is to find renvois to your own law. Why on Earth would a court want to “de-renvoi” itself simply escapes me.

    But of course, once again, maybe I am missing something from the “American approach”. So I would welcome any clarifications.

    Thank you for posting such an interesting case!

  4. It is important to note that Louisiana is one of the few U.S. states which still follow the traditional method of choice of law in tort matters. Most other states take into account, to varying degrees, governmental interests. When similar disputes will come before such courts, Iraqi law will be taken as a sign of the interest (or lack thereof) of Iraq to apply its law to the issue. For an example, see Harris v. Kellogg, Brown & Root Services, Inc.,  where a a Pennsylvania District Court applied last summer governmental interest analysis to a wrongful death action brought by the estate of another US soldier electrocuted in Iraq while showering.

  5. Oups, wrote too quickly on Louisiana, which has also moved on.

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