OPINION OF THE COURT
Thе issue on this appeal is whether a Missouri statute barring contribution claims against an employer — which conflicts with New York law permitting such claims — should be given effect in a third-party action pending here. Applying relevant choice of law principles, we conclude that the Missouri workers’ compensation statute should be given effect, and therefore affirm the dismissal of the third-party complaint seeking contribution against a Missouri employer.
I.
The facts relevant to this appeal are essentially undisputed. In 1957 or 1958, Kling Brothers, Inc. (succeeded in interest by third-party defendant Hill Acme Co.) manufactured a 16-foot wide "Pyramid Form Bending Roll,” a machine to shape large pieces of metal. The device was sold in 1958 to a Buffalo company, American Standard Inc., through a New York sales agent, defendant Osgood Machinery, Inc., which assisted American in the setup and initial operation of the machine. American closed its Buffalo рlant around 1961, and the history of the bending roll is obscured until 1969, when Crouse Company — which obtained the equipment in some unknown
Mueller installed the bending roll in its Springfield, Missouri, plant and subsequently modified it by adding a foot switch. In October 1978, plaintiff Dennis J. Cooney, a Missouri resident working at the Missouri plant, was injured while cleaning the machine. The machine was running at the time —a piece of wood having been wedged in the foot switch — and Cooney was unable to reach the switch to stop the machine and avoid injury.
In Missouri, Cooney filed for and received workers’ compensation benefits. Because under Missouri law an employer providing such benefits "shall be released from all other liability * * * whatsoever, whether to the employee or any other person” (Mo Rev Stat § 287.120 [1]), he could not additionally sue his employer, Mueller, in tort. Cooney did, however, bring a products liability action against Osgood — the machine’s initiаl sales agent — in Supreme Court, Erie County. (Missouri apparently would not have had personal jurisdiction over Osgood.)
Seeking contribution from parties it deems more culpable in the event it is found liable to Cooney, Osgood brought a third-party action against Mueller, American Standard, and Hill Acme. Mueller invoked the Missouri statute shielding employers from both direct claims by employees and contribution claims by others, and moved for summary judgment dismissing Osgood’s third-party complaint. In light of the conflict between the Missouri statute and New York law permitting contribution claims against employers, Supreme Court undertook a choice of law analysis and concluded that New York law should apply. The Appellate Division unanimously reversed and dismissed the third-party complaint as well as all cross claims against Mueller. We now affirm.
II.
An inevitable consequence of a mobile society, where people and goods routinely cross State and national borders, is that disputes may implicate the interests of several jurisdictions having conflicting laws. Choice of law principles become relevant, however, only when a State can, consistent with the Full Faith and Credit and Due Process Clauses of the Constitution (US Const, art IV, § 1; 14th Amend, § 1), choose between the conflicting laws. A State may lack sufficient nexus with a case
In Hague, the Supreme Court upheld the Minnesota high court’s decision to interpret an automobile insurance policy under Minnesota law instead of under contrary Wisconsin precedent. The policy was issued to a Wisconsin domiciliary, who was a passenger on a motorcycle operated by a Wisconsin resident when he was struck and killed — in Wisconsin — by an automobile driven by another Wisconsin rеsident. Nevertheless, the Supreme Court plurality found that three contacts with Minnesota, in the aggregate, were sufficient to generate an adequate Minnesota interest in the case: the decedent was employed in Minnesota; his wife, the appointed representative of the estate, subsequently moved to Minnesota; and the insurance company was at all times present and doing business in Minnesota (
Similarly, New York’s contacts with the present case arе, in the aggregate, sufficient to satisfy the constitutional threshold. Osgood has alleged that Mueller has a substantial presence in this State, and there is indication in the record that Mueller does business in New York.
We conclude, therefore, that this State has sufficient interest in the litigation so that if we chose to apply New York law on the contribution issue, that decision would not run afoul of the Federal Constitution. Accordingly, we turn to a choice of law analysis.
III.
The traditional approach to choice of law problems arising in tort was simply to apply lex loci delicti, the law of the place
Although the vested rights doctrine did have the salutary characteristics of predictability and ease of application, it failed to accord any significance to the policies underlying the conflicting laws of other jurisdictions (see, Babcock,
Of the various, sometimes competing, schools of thought on choice of law, the one that emerged as most satisfactory was "interest analysis,” which sought to effect the law of the jurisdiction having the greatest interest in resolving the particular issue (see, Schultz v Boys Scouts,
Babcock itself involved a loss distribution rule — an Ontario guest statute limiting an automobile passenger’s ability to recover from the driver — as did subsequent cases (Dym v Gordon,
The Neumeier Rules
Under the first Neumeier rule, when the driver-host and passenger-guest share a common domicile, that law should control. Indeed, when both parties are from the same jurisdiction, there is often little reason to apply another jurisdiction’s loss allocation rules. The domiciliary jurisdiction, which has weighed the competing considerations underlying the loss allocation rule at issue, has the greater "interest in enforcing the decisions of both parties to accept both the benefits and the burdens of identifying with that jurisdiction and to submit themselves to its authority” (Schultz,
The second Neumeier rule addresses "true” conflicts, where the parties are domiciled in different States and the local lаw favors the respective domiciliary. When plaintiff’s State, for example, would allocate the loss to defendant but defendant’s State would force plaintiff to bear the loss, a true conflict arises. The rule provides that when the driver’s (defendant’s) conduct occurred in the State of domicile and that State would not impose liability, the driver should not be exposed to liability under the law of the victim’s domicile. Conversely, when the plaintiff-passenger is injured in the plaсe of domicile and would be entitled to recover, the out-of-State driver should generally be unable to interpose the law of his or her domicile to defeat recovery (
Finally, the third Neumeier rule, applicable to other split-
Assuming that the interest of each State in enforcement of its law is roughly equal — a judgment that, insofar as guest statutes are concerned, is implicit in the second and third Neumeier rules — the situs of the tort is appropriate as a "tie breaker” because that is the only State with which both parties have purposefully associated themselves in a significant way (see, Korn, The Choice-of-Law Revolution: A Critique, 83 Colum L Rev 772, 801 [1983]). Moreover, locus is a neutral factor, rebutting an inference that the forum State is merely protecting its own domiciliary or favoring its own law (see, Schultz,
Schultz applied both the first and third Neumeier rules. The plaintiffs in that case, residents of New Jersey, sued New Jersey and Ohio domiciliaries in New York for injuries occurring here. Defendants urged that New Jersey charitable immunity law was cоntrolling; plaintiffs argued for New York law, which does not recognize charitable immunity. As between plaintiffs and the New Jersey defendant — codomiciliaries — the Court looked to the first Neumeier rule and, after analysis, applied the law of the shared domicile, New Jersey. The third Neumeier rule, however, applied to the plaintiffs’ claim against the Ohio domiciliary, because the parties had different domiciles and the injuries occurred in a separate jurisdiction. Although the third rule generally invokеs the locus jurisdiction’s law, the Court applied the proviso permitting resort to other law when it would advance substantive law purposes without impairing the multistate system or producing great uncertainty. We thus applied New Jersey law to that claim as well (Schultz,
Contribution rules — as involved in the present case — are loss allocating, not conduct regulating. Had conduct regulating been at issue here, our analysis would be greatly simplified, for the traditional rule of lex loci delicti almost invariably obtains. Similarly, if the parties shared the same domi
Interest Analysis
The general scheme of workers’ compensation acts is that an employer regardless of culpability is required to make specified payments to an injured employee and in exchange, the law immunizes the employer from further liability. Immunity "is part of the quid pro quo in which the sacrifices and gains of employees and employers are to some extent put in balance, for, while the employer assumes a new liability without fault, [it] is relieved of the prospect of large damage verdicts” (2A Larsen, Workmen’s Compensation Law § 65.11 [1993]).
Some States immunize employers only from direct actions by injured workers; others extend protection from third-party contribution actions as well. The Missouri Supreme Court, in rejecting State and Federal constitutional challenges to the Missouri statute at issue here, noted that immunity " 'is the heart and soul of this legislation which has, over the years been of highly significant social and economic benefit to the working [person], the employer and the State.’ ” (State ex rel. Maryland Hgts. Concrete Contrs. v Ferriss,
Missouri’s decision to shield employers from contribution claims is thus a policy choice implicating significant State interests: "to deny a person the immunity granted * * * by a work[er]’s compensation statute of a given state would frustrate the efforts of that state to restrict the cost of industrial accidents and to afford a fair basis for predicting what these costs will be.” (Restatement [Second] of Conflict of Laws § 184, comment b, at 547.) Indeed, as the Restatement concluded in a related context, for another State "to subject a person who has been held liable in work[er]’s compensation to further unlimited liability in tort or wrongful death would frustrate
Arrayed against Missouri’s interest in maintaining the integrity of its workers’ compensation scheme is New York’s interest in basic fairness to litigants. Under traditional joint and several liability rules, when more than one tortfeasor was responsible for plaintiffs injury, each was potentially liable for the entire judgment, irrespective of relative culpability. Indeed, plaintiff was not even required to sue all the wrongdoers, but could recover the entire judgment from the "deep pocket,” who then had no recourse (Sommer v Federal Signal Corp.,
In Dole v Dow Chem. Co. (
Manifestly, the interests of Missouri and New York are irreconcilable in this case. To the extеnt we allow contribution against Mueller, the policy underlying the Missouri workers’ compensation scheme will be offended. Conversely, to the extent Osgood is required to pay more than its equitable share of a judgment, the policy underlying New York’s contribution law is affronted. It is evident that one State’s interest cannot be accommodated without sacrificing the other’s, and thus an appropriate method for choosing between the two must be found.
This is a true conflict in the mold of Neumeier’s second rule, where the local law of each litigant’s domicile favors that party, and the action is pending in one of those jurisdictions. Under that rule, the place of injury governs, which in this case means that contribution is barred. This holding is consistent with the result reached historically, and reflects application of a neutral factor that favors neither the forum’s law nor its domiciliaries. Moreover, forum shopping by defendants —who might attempt to invoke CPLR 1403 and bring a separate action for contributiоn in New York if sued else
A primary reason that locus tips the balance, of course, is that ordinarily it is the place with which both parties have voluntarily associated themselves. In this case, there is some validity to Osgood’s argument that it did nothing to affiliate itself with Missouri. Indeed, a decade after Osgood’s last contact with the bending roll, the machine wound up in Missouri through no effort, or even knowledge, of Osgood. Moreover, the record establishes that Osgood was not in the business of distributing goods nationwide, but limited its activities to New York and parts of Pennsylvania, and thus Osgood may not have reasonably anticipated becoming embroiled in litigation with a Missouri employer.
For this reason, our decision to apply Missouri law rests as well on another factor that should, at times, play a role in choice of law: the protection of reasonable expectations (see, Restatement [Second] of Conflict of Laws § 6 [2] [d]; Allstate Ins. Co. v Hague,
In sum, we conclude that Missouri law should apply because, although the interests of the respective jurisdictions are irreconcilable, the accident occurred in Missouri, and unavailability of contribution would more closely comport with the reasonable expectations of both parties in conducting their business affairs.
IV.
Finally, we turn to Osgood’s contention that New York’s public policy precludes application of the Missouri statute in this case. Under the public policy exception, when otherwise applicable foreign law would "violate some fundamental principle of justice, some prevalent conception of good morals, some deep-rooted tradition of the common weal” (Loucks v Standard Oil Co.,
As Judge Simons noted in Schultz, the public policy exception should be considered only after the court has first determined, under choice of law principles, that the applicable substantive law is not the forum’s law (Schultz,
Although we have noted that public policy may be found in the State Constitution, statutes and judicial decisions (Shannon v Irving Trust Co.,
The refusal of cоurts to enforce foreign law as repugnant to public policy reached its zenith prior to the advent of modern choice of law doctrine. In fact, commentators have opined that in earlier times the public policy rationale really substituted as a choice of law mechanism when the prevailing rigid choice of law rules permitted no flexibility (see, Paulsen and Sovern, "Public Policy ” in the Conflict of Laws, 56 Colum L Rev 969, 981 [1956]; see also, Feldman v Acapulco Princess Hotel,
In Mertz v Mertz (
The thrust of Osgood’s argument is that New York’s law permitting contribution is so strong that any encroachment upon the right violates fundamental public policy. In our choice of law analysis, of course, we explicitly considered New York’s interest in allowing contribution and concluded that it is significant. Osgoоd’s view, however, is that no abrogation of the right may be tolerated. We disagree.
Certainly, contribution is not a deeply rooted tradition of the common weal (Loucks,
Accordingly, the order of the Appellate Division should be affirmed, with costs.
Judges Simons, Titone, Hancock, Jr., Bellacosa and Smith concur.
Order affirmed, with costs.
Notes
. Were Mueller not subject to jurisdiction in New York, it could of course successfully move to dismiss for lack of personal jurisdiction.
. New York law permitting contribution against an emplоyer is clearly a minority view (see generally, Annotation, Modern Status of Effect of State Workmen’s Compensation Act on Right of Third-Person Tortfeasor to Contribution or Indemnity From Employer of Injured or Killed Workman, 100 ALRSd 350). A result that might impose New York law on the carefully structured workers’ compensation schemes of other States — especially when the accident occurred there — is undesirable.
. We have eschewed reliance on the fictional expectation of the parties based on mere contact with the locus of an accident (Miller v Miller,