Kenney v. Supreme Lodge
Citation and Court
252 U.S. 411 (1920), Supreme Court of the United States (Cardozo opinion below in New York Court of Appeals)
Facts
Mrs. Kenney’s husband was a member of a fraternal benefit organization incorporated in Illinois. The benefit certificate provided that any claim must be brought in the state of the organization’s incorporation (Illinois). Mr. Kenney died and his widow, Mrs. Kenney, attempted to sue on the benefit certificate in New York. The organization argued the New York action was barred by the contractual limitation to Illinois courts.
Issue
Whether New York courts must give full faith and credit to a contractual limitation requiring suit only in Illinois, and whether enforcing such a clause extinguishes the plaintiff’s cause of action.
Holding
New York must respect the contractual limitation; the right created under Illinois law was subject to the limitation that it could only be enforced in Illinois courts, and New York’s failure to enforce that limitation on its own terms would enlarge the right beyond what Illinois law created.
Rule / Doctrine
Under the vested rights approach (Beale / First Restatement), a right created by a foreign state’s law comes into existence with all the limitations imposed by that law. A forum state may not create a more expansive right than the state whose law governs the right’s creation. Full Faith and Credit also supports the obligation to respect the terms under which a right was vested.
Significance
Kenney v. Supreme Lodge is a Cardozo-authored vested rights case frequently taught alongside the broader critique of First Restatement territorialism. It illustrates how the vested rights approach can limit forum state power to expand foreign-law rights, and raises questions about access to courts when contractual clauses restrict where suits may be brought.