Comparative Impairment
Rule / Approach
Comparative impairment, developed by Professor William Baxter and adopted by California, resolves true conflicts by applying the law of the state whose governmental interest (policy) would be more seriously impaired if its law were not applied to the case. It does not weigh which state’s interest is more important in the abstract; it measures the degree of impairment to each state’s objectives from being displaced.
Elements / Steps
- Confirm a true conflict: Both states have genuine interests and their laws differ. (Comparative impairment applies only to true conflicts.)
- Assess each state’s policy: Identify the specific goal the state’s law is designed to achieve and the class of persons or transactions it covers.
- Measure impairment:
- How significantly would State A’s policy be undermined if State B’s law were applied instead?
- How significantly would State B’s policy be undermined if State A’s law were applied instead?
- Apply the law of the state with greater impairment: The state whose internal objectives would be most set back by non-application gets its law applied.
- Reciprocal comity: Each state sacrifices its external (multistate) policy in cases where the impairment to its interests is less severe, trusting that other states will reciprocate — a variable-sum rather than zero-sum approach (Kramer’s refinement).
Exceptions / Critiques
- Baxter’s refinement (Kramer): Choice of law is not zero-sum. Rule-based comparative impairment better advances each state’s policies because predictable rules allow states to apply their substantive law in the cases they care about most, while sacrificing procedural preferences to other states’ substantive preferences.
- Difficulty of measurement: Impairment is hard to quantify; courts still exercise significant discretion.
- Does not resolve cases where impairment is equal.
- California application: California courts sometimes slide from comparative impairment into general interest analysis, making the methodology less crisp than Baxter intended.
Policy
Comparative impairment refines governmental interest analysis by giving courts a principled way to resolve true conflicts without simply defaulting to forum law (Currie) or to the “better” rule (Leflar). It respects state sovereignty by trying to minimize the total disruption to multistate policy goals, and it promotes a form of interstate reciprocity: each state restrains its own extraterritorial ambitions in exchange for other states’ restraint.
Key Cases
- Bernhard v. Harrah’s Club — California applied its dram-shop liability law against a Nevada tavern keeper because California’s interest in compensating injured California domiciliaries would be greatly impaired if its law were not applied; Nevada’s interest in exempting tavern keepers from civil liability would not be greatly impaired.
- People v. One 1953 Ford Victoria — Texas’s interest in protecting an innocent mortgagee would be more impaired by non-application than California’s drug-forfeiture interest.