1. The terms, obligations and sanctions of a contract are
subject, in some measure, to the legislative control of the State
in which it is made, even though it is to be performed elsewhere.
P.
294 U. S.
540.
2. Where a contract of employment is made in a State, though for
work in another jurisdiction and though the parties expressly
stipulate to be bound by the workmen's compensation law of that
other jurisdiction, if the State where it is made has a legitimate
public interest of its own to insure that the workman shall be
compensated for injuries suffered in the course of his employment
beyond its borders, it is not prevented by the due process clause
of the Fourteenth Amendment from allowing him its own compensation
remedy for such injuries, and from declining to remit him to his
remedy in the other jurisdiction or to substitute that remedy in
its own forum.
Cf. Bradford Electric Light Co. v. Clapper,
286 U. S. 145. Pp.
294 U. S.
540-542.
The improbability that workers employed in California for
seasonal occupation in Alaska, 3,000 miles away, and not to be paid
until their return, would be able to apply for compensation when
injured in Alaska, or, once returned to California, would be able
to go back to Alaska and successfully prosecute their claims, and
the probability that, if without a remedy in California courts,
they
Page 294 U. S. 533
would be remediless and likely to become public charges on that
State, suggest that California has a legitimate public interest in
imposing liability for such injuries upon the employer, and in
providing a remedy for such employees available in California.
3. Legislation affecting the status of employer and employee,
within the scope of acknowledged state power and not unreasonable
in its exercise, cannot be condemned because it curtails the power
of the individual to contract. P.
294 U. S.
543.
4. The extent to which the statute of one State may qualify or
deny rights asserted under the statute of another presents a
question under the full faith and credit clause which this Court,
upon review of a judgment of a state court, must determine for
itself, equally whether the statute of the forum is set up as a
defense to a suit brought under the foreign statute or the foreign
statute is set up as a defense to a suit or proceedings under the
local statute. P.
294 U. S.
547.
5. A conflict thus arising is to be resolved not by
automatically compelling the courts of each State to subordinate
its own statutes to those of the other, but by appraising the
governmental interests of each jurisdiction and determining the
question accordingly. P.
294 U. S.
547.
6. Upon the facts of this case, which involves a conflict in the
California courts between the workmen's compensation laws of
California and Alaska, the interest of Alaska is not shown to be
superior to that of California, and therefore the Alaska statute
cannot be given the effect of denying to the courts of California
the right to apply the law of that State. Pp.
294 U. S. 544,
294 U. S. 550.
In so deciding, the Court assumes that, by R.S., §§ 905, 906,
the command of the full faith and credit clause is made applicable
to territorial statutes with the same force and effect as that of
the constitutional provision with respect to statutes of the
States.
1 Cal. 2d 250,
34 P.2d 716, affirmed.
Appeal from a judgment affirming an award made by the Industrial
Accident Commission of California under the workmen's compensation
law of that State.
Page 294 U. S. 537
MR. JUSTICE STONE delivered the opinion of the Court.
This is an appeal under § 237 of the Judicial Code from a
judgment of the Supreme Court of California, 34 P.2d 716, upholding
an award of compensation, by the state Industrial Accident
Commission to appellee Palma against appellant, his employer, and
holding that the award does not infringe prohibitions of the
federal Constitution. The award was made in conformity to the
statutes of California, where the contract of employment was
entered into, rather than those of Alaska, where the injury
occurred.
Page 294 U. S. 538
On May 13, 1932, Palma, a nonresident alien, and appellant,
doing business in California, executed at San Francisco a written
contract of employment. Palma agreed to work for appellant in
Alaska during the salmon canning season; the appellant agreed to
transport him to Alaska, and, at the end of the season, to return
him to San Francisco, where he was to be paid his stipulated wages,
less advances. The contract recited that appellant had elected to
be bound by the Alaska Workmen's Compensation Law, [
Footnote 1] and stipulated that the parties
should be subject to and bound by the provisions of that statute.
Section 58 of the California Workmen's Compensation Act [
Footnote 2] was then in force, which
provides:
"The commission shall have jurisdiction over all controversies
arising out of injuries suffered without the territorial limits of
this state in those cases where the injured employee is a resident
of this state at the time of the injury and the contract of hire
was made in this state. . . ."
At that time, the California Supreme Court had held, in
Quong Ham Wah Co. v. Industrial Accident Commission, 184
Cal. 23, 36-44, 192 P. 1021 (writ of error dismissed,
255 U.
S. 445), that this section was applicable to
nonresidents of California, since the privileges and immunities
clause of the Federal Constitution prevented giving any effect to
the requirement that the employee be a resident. The California
Workmen's Compensation Act also provides, § 27(a):
"No contract, rule or regulation shall exempt the employer from
liability for the compensation fixed by this act. . . ."
In August, 1932, after his return from Alaska to California, the
employee applied for and later received an
Page 294 U. S. 539
award by the California Commission in compensation for injuries
received by him in the course of his employment in Alaska. On
petition for review by the state Supreme Court, appellant assailed
the California statute, as he does here, as invalid under the due
process and the full faith and credit clauses of the federal
Constitution. Insofar as the California statute denies validity to
the agreement that the parties should be bound by the Alaska
Workmen's Compensation Act, and attempts to give a remedy for
injuries suffered by a nonresident employee without the state, it
is challenged as a denial of due process. Petitioner also insists
that, as the Alaska statute affords, in Alaska, an exclusive remedy
for the injury which occurred there, the California courts denied
full faith and credit to the Alaska statute by refusing to
recognize it as a defense to the application for an award under the
California statute.
In refusing to set aside the award of the state commission, the
Supreme Court of California ruled, as in
Quong Ham Wah Co. v.
Industrial Accident Commission, supra, that § 58 of the
California compensation act was applicable to Palma, although a
nonresident alien; that, as the contract of employment was entered
into within the state, the stipulation that the Alaska Act should
govern was invalid under § 27(a). It concluded that the Alaska
statute afforded a remedy to the employee in Alaska, and held that,
by setting up the defense of the Alaska statute in California, the
two statutes were brought into conflict, and that, in the
circumstances, neither the due process clause nor the full faith
and credit clause denied to the state the power to apply its own
law, to the exclusion of the Alaska Act, in fixing and awarding
compensation for the injury.
1. The question first to be considered is whether a state, which
may constitutionally impose on employer and employee a system of
compensation for injuries to the employee in the course of his
employment within the state,
New York Central R. Co. v.
White, 243 U. S. 188;
Mountain
Page 294 U. S. 540
Timber Co. v. Washington, 243 U.
S. 219, is precluded by the due process clause, in the
special circumstances of this case, from imposing liability for
injuries to the employee occurring in Alaska.
The California statute does not purport to have any
extraterritorial effect, in the sense that it undertakes to impose
a rule for foreign tribunals, nor did the judgment of the state
supreme court give it any. The statute assumes only to provide a
remedy to be granted by the California Commission for injuries,
received in the course of employment entered into within the state,
wherever they may occur.
Compare Bradford Electric Light &
Power Co. v. Clapper, 286 U. S. 145,
286 U. S. 153.
We assume that, in Alaska, the employee, had he chosen to do so,
could have claimed the benefits of the Alaska statute, and that, if
any effect were there given to the California statute, it would be
only by comity or by virtue of the full faith and credit clause.
Bradford Electric Light & Power Co. v. Clapper,
supra.
The due process clause denies to a state any power to restrict
or control the obligation of contracts executed and to be performed
without the state as an attempt to exercise power over a subject
matter not within its constitutional jurisdiction.
New York
Life Insurance Co. v. Head, 234 U. S. 149,
234 U. S.
162-164;
New York Life Insurance Co. v. Dodge,
246 U. S. 357,
246 U. S. 377;
Home Insurance Co. v. Dick, 281 U.
S. 397,
281 U. S.
407-408;
compare National Union Fire Insurance Co.
v. Wanberg, 260 U. S. 71,
260 U. S. 75.
Similarly, a state may not penalize or tax a contract entered into
and to be performed outside the state, although one of the
contracting parties is within the state.
Allgeyer v.
Louisiana, 165 U. S. 578;
St. Louis Cotton Compress Co. v. Arkansas, 260 U.
S. 346,
260 U. S. 348;
Compania General de Tabacos de Filipinas v. Collector,
275 U. S. 87.
But where the contract is entered into within the state, even
though it is to be performed elsewhere, its terms, its obligation,
and its sanctions are subject, in some measure,
Page 294 U. S. 541
to the legislative control of the state. The fact that the
contract is to be performed elsewhere does not, of itself, put
these incidents beyond reach of the power which a state may
constitutionally exercise.
Selover, Bates & Co. v.
Walsh, 226 U. S. 112,
226 U. S. 123;
Mutual Life Insurance Co. v. Liebing, 259 U.
S. 209,
259 U. S. 214;
Manhattan Life Insurance Co. v. Cohen, 234 U.
S. 123,
234 U. S. 136;
compare Aetna Life Insurance Co. v. Dunken, 266 U.
S. 389,
266 U. S.
397-400.
While similar power to control the legal consequences of a
tortious act committed elsewhere has been denied,
Western Union
Telegraph Co. v. Brown, 234 U. S. 542,
234 U. S. 547;
Western Union Telegraph Co. v. Chiles, 214 U.
S. 274,
214 U. S. 278;
compare Western Union Telegraph Co. v. Commercial Milling
Co., 218 U. S. 406, the
liability under Workmen's Compensation Acts is not for a tort. It
is imposed as an incident of the employment relationship, as a cost
to be borne by the business enterprise, rather than as an attempt
to extend redress for the wrongful act of the employer.
See
Bradford Electric Light & Power Co. v. Clapper, supra,
286 U. S.
157-158. The California court has declared:
"The contract creates a relationship under the sanction of the
law, and the same law attaches as an incident thereto an obligation
to compensate for injuries sustained abroad, amounting to a sort of
compulsory insurance."
Quong Ham Wah Co. v. Industrial Accident Commission,
supra, p. 36. Obviously, the power of a state to effect legal
consequences is not limited to occurrences within the state if it
has control over the status which gives rise to those consequences.
That it has power, through its own tribunals, to grant compensation
to local employees, locally employed, for injuries received outside
its borders, and likewise has power to forbid its own courts to
give any other form of relief for such injury, was fully recognized
by this Court in
Bradford Electric Light & Power Co. v.
Clapper, supra, 286 U. S. 156.
Objections which are founded upon the Fourteenth Amendment must
therefore be directed not to
Page 294 U. S. 542
the existence of the power to impose liability for an injury
outside state borders, but to the manner of its exercise as being
so arbitrary or unreasonable as to amount to a denial of due
process.
We cannot say that the statutory requirement of California, that
the provisions for compensation shall extend to injuries without
the state when the contract for employment was entered into within
it, is given such an unreasonable application in the present case
as to transcend constitutional limitations. The employee, an alien
more than 2,000 miles from his home in Mexico, was, with
fifty-three others, employed by petitioner in California. The
contract called for their transportation to Alaska, some 3,000
miles distant, for seasonal employment of between two and three
months, at the conclusion of which they were to be returned to
California, and were there to receive their wages.
The meager facts disclosed by the record suggest a practice of
employing workers in California for seasonal occupation in Alaska
under such conditions as to make it improbable that the employees
injured in the course of their employment in Alaska would be able
to apply for compensation there. It was necessary for them to
return to California in order to receive their full wages. They
would be accompanied by their fellow workers, who would normally be
the witnesses required to establish the fact of the injury and its
nature. The probability is slight that injured workmen, once
returned to California, would be able to retrace their steps to
Alaska and there successfully prosecute their claims for
compensation. Without a remedy in California, they would be
remediless, and there was the danger that they might become public
charges -- both matters of grave public concern to the state.
California therefore had a legitimate public interest in
controlling and regulating this employer-employee relationship in
such fashion as to impose a liability upon the
Page 294 U. S. 543
employer for an injury suffered by the employee, and in
providing a remedy available to him in California. In the special
circumstances disclosed, the state had as great an interest in
affording adequate protection to this class of its population as to
employees injured within the state. Indulging the presumption of
constitutionality which attaches to every state statute, we cannot
say that this one, as applied, lacks a rational basis or involved
any arbitrary or unreasonable exercise of state power.
It is unnecessary to consider what effect should be given to the
California statute if the parties were domiciled in Alaska, or were
their relationship to California such as to give it a lesser
interest in protecting the employee by securing for him an adequate
and readily available remedy.
In providing a remedy for a liability which the state was
authorized to impose, California was not required by the Fourteenth
Amendment to prescribe the Alaska remedy, rather than its own. Only
the full faith and credit clause imposes on the courts of one state
the duty so to enforce the laws of another.
Nor did the State of California exceed its constitutional power
by prohibiting any stipulation exempting the employer from
liability for the compensation prescribed by the California
statute. Legislation otherwise within the scope of acknowledged
state power, not unreasonably or arbitrarily exercised, cannot be
condemned because it curtails the power of the individual to
contract.
Hardware Dealers Mutual Fire Insurance Co. v. Glidden
Co., 284 U. S. 151,
284 U. S.
157-158. As the state had the power to impose the
liability in pursuance of state policy, it was a rational, and
therefore a permissible, exercise of state power to prohibit any
contract in evasion of it.
Chicago, Burlington & Quincy R.
Co. v. McGuire, 219 U. S. 549,
219 U. S. 571;
see Second Employers' Liability Cases, 223 U. S.
1,
223 U. S. 52;
Philadelphia, Baltimore & Washington R. Co. v.
Schubert, 224 U. S. 603,
224 U. S.
609.
Page 294 U. S. 544
2. Even though the compensation acts of either jurisdiction may,
consistently with due process, be applied in either, the question
remains whether the California court has failed to accord full
faith and credit to the Alaska statute in refusing to allow it as a
defense to the award of the California Commission. Appellant
contends that, as the provisions of the Alaska statute conflict
with those of the California statutes, the full faith and credit
clause and R.S. §§ 905, 906, U.S.C. Title 28, §§ 687, 688,
requiring that full faith and credit be accorded to territorial
statutes,
see Atchison, T. & S.F. Ry. Co. v. Sowers,
213 U. S. 55,
213 U. S. 64-65,
compel recognition of the Alaska statute as a defense to the
proceedings before the California Commission; that the award of the
Commission should accordingly be set aside, leaving the employee to
his remedy under the Alaska statute in California, if California
provides the remedy, or remitting the parties to their proceeding
in Alaska under the territorial statute.
Both statutes are compensation acts, substituting for the common
law recovery for negligence a right to recover compensation at
specified rates for injuries to employees in the course of their
employment. The California Act is compulsory, § 6(a); the Alaska
act is similarly effective, unless the employer or employee elects
not to be bound by it, §§ 1, 31, 35, which, in this case, they have
not done. The California Act is administered by a Commission; the
Alaska Act provides for recovery by suit in the courts of the
Territory, brought in the Judicial division where the injury occurs
(§§ 24, 25). Each act provides that the liability imposed and the
remedy given by it are in lieu of all others for the injury
suffered. Sections 6(a), 27(a) of the California Act; §§ 1, 10, 28
of the Alaska Act. While § 58 of the California statute authorizes
the Commission to make an award for injuries suffered without the
state when the contract of employment is entered into within, it
does not purport to provide, by regulation of the contract
Page 294 U. S. 545
of employment or otherwise, that the parties may not resort,
without the state, to other remedies given by the statutes in force
at the place of injury.
Compare Bradford Electric Light &
Power Co. v. Clapper, supra, 286 U. S. 153.
The Alaska Act, § 25, provides that no action shall be brought
under the statute in any court outside the territory, except in the
case where it is not possible to obtain service of process on the
defendant within the territory; it is conceded that appellant may
there be served.
Petitioner, in relying on the Alaska statute as a defense in
California, points out that it makes no distinction between
residents and nonresidents, but gives a remedy to every employee
injured in the course of his employment in Alaska, and invokes the
rule, often followed in this Court, that suits to recover for
personal injury are transitory, and that the jurisdiction creating
the right may not, by restricting the venue, preclude recovery in
any court outside the state having jurisdiction.
See Atchison,
T. & S.F. Ry. Co. v. Sowers, supra, 213 U. S. 70;
Tennessee Coal, Iron & R. Co. v. George, 233 U.
S. 354. The Supreme Court of California, accepting this
view, nevertheless refused to give effect to the Alaska statute
because of its conflict with the California compensation act. Since
each statute provides a different remedy, the court recognized
that, by setting up the Alaska statute as a defense to the award of
the Commission, the two statutes were brought into direct conflict.
It resolved the conflict by holding that the courts of California
were not bound by the full faith and credit clause to apply the
Alaska statute, instead of its own.
To the extent that California is required to give full faith and
credit to the conflicting Alaska statute, it must be denied the
right to apply in its own courts a statute of the state, lawfully
enacted in pursuance of its domestic policy. We assume, as did the
state court, that the remedy provided in the Alaska statute is one
which could also be applied by the California courts except for the
conflict.
Page 294 U. S. 546
We also assume, as the parties concede, that, by R.S., §§ 905,
906, the command of the full faith and credit clause is made
applicable to territorial statutes with the same force and effect
as that of the constitutional provision with respect to statutes of
the states,
see Embry v. Palmer, 107 U. S.
3,
107 U. S. 8-10;
Atchison, T. & S.F. Ry. v. Sowers, supra, 213 U. S. 64-65.
[
Footnote 3] The subject of our
inquiry is therefore whether the full faith and credit clause
requires the state of California to give effect to the Alaska
statute, rather than its own.
It has often been recognized by this Court that there are some
limitations upon the extent to which a state will be required by
the full faith and credit clause to enforce even the judgment of
another state, in contravention of its own statutes or policy.
See Wisconsin v. Pelican Insurance Co., 127 U.
S. 265;
Huntington v. Attrill, 146 U.
S. 657;
Finney v. Guy, 189 U.
S. 335;
see also Clarke v. Clarke, 178 U.
S. 186;
Hood v. McGehee, 237 U.
S. 611;
compare Gasquet v. Fenner, 247 U. S.
16.
Page 294 U. S. 547
In the case of statutes, the extra-state effect of which
Congress has not prescribed, where the policy of one state statute
comes into conflict with that of another, the necessity of some
accommodation of the conflicting interests of the two states is
still more apparent. A rigid and literal enforcement of the full
faith and credit clause, without regard to the statute of the
forum, would lead to the absurd result that, wherever the conflict
arises, the statute of each state must be enforced in the courts of
the other, but cannot be in its own. Unless, by force of that
clause, a greater effect is thus to be given to a state statute
abroad than the clause permits it to have at home, it is
unavoidable that this Court determine for itself the extent to
which the statute of one state may qualify or deny rights asserted
under the statute of another.
See Olmsted v. Olmsted,
216 U. S. 386;
Aetna Life Insurance Co. v. Dunken, supra, 266 U. S.
393.
The necessity is not any the less whether the statute and policy
of the forum is set up as a defense to a suit brought under the
foreign statute or the foreign statute is set up as a defense to a
suit or proceedings under the local statute. In either case, the
conflict is the same. In each, rights claimed under one statute
prevail only by denying effect to the other. In both, the conflict
is to be resolved not by giving automatic effect to the full faith
and credit clause, compelling the courts of each state to
subordinate its own statutes to those of the other, but by
appraising the governmental interests of each jurisdiction and
turning the scale of decision according to their weight.
The enactment of the present statute of California was within
state power, and infringes no constitutional provision.
Prima
facie, every state is entitled to enforce in its own courts
its own statutes, lawfully enacted. One who challenges that right
because of the force given to a conflicting statute of another
state by the full faith and credit clause assumes the burden of
showing, upon some rational
Page 294 U. S. 548
basis, that, of the conflicting interests involved, those of the
foreign state are superior to those of the forum. It follows that
not every statute of another state will override a conflicting
statute of the forum by virtue of the full faith and credit clause;
that the statute of a state may sometimes override the conflicting
statute of another, both at home and abroad; and, again, that the
two conflicting statutes may each prevail over the other at home,
although given no extraterritorial effect in the state of the
other.
This was fully recognized by this Court in
Bradford Electric
Light & Power Co. v. Clapper, supra, 286 U. S.
157-162. There, upon an appraisal of the governmental
interests of the two states, Vermont and New Hampshire, it was held
that the compensation act of Vermont, where the status of employer
and employee was established, should prevail over the conflicting
statute of New Hampshire, where the injury occurred and the suit
was brought. In reaching that conclusion, weight was given to the
following circumstances: that liability under the Vermont Act was
an incident of the status of employer and employee created within
Vermont, and, as such, continued in New Hampshire, where the injury
occurred; that it was a substitute for a tort action, which was
permitted by the statute of New Hampshire; that the Vermont statute
expressly provided that it should extend to injuries occurring
without the state, and was interpreted to preclude recovery by
proceedings brought in any other state, and that there was no
adequate basis for saying that the compulsory recognition of the
Vermont statute by the courts of New Hampshire would be obnoxious
to the public policy of that state. [
Footnote 4]
If, for the reasons given, the Vermont statute was held to
override the New Hampshire statute in the courts of
Page 294 U. S. 549
New Hampshire, it is hardly to be supposed that the Constitution
would require it to be given any less effect in Vermont, even
though the New Hampshire statute were set up as a defense to
proceedings there. Similarly, in the present case, only if it
appears that, in the conflict of interests which have found
expression in the conflicting statutes, the interest of Alaska is
superior to that of California, is there rational basis for denying
the the courts of California the right to apply the laws of their
own state. While, in
Bradford Electric Light & Power Co. v.
Clapper, supra, it did not appear that the subordination of
the New Hampshire statute to that of Vermont, by compulsion of the
full faith and credit clause, would be obnoxious to the policy of
New Hampshire, the Supreme Court of California has declared it to
be contrary to the policy of the state to give effect to the
provisions of the Alaska statute, and that they conflict with its
own statutes.
There are only two differences, material for present purposes,
between the facts of the
Clapper case and those presented
in this case: the employee here is not a resident of the place in
which the employment was begun, and the employment was wholly to be
performed in the jurisdiction in which the injury arose. Whether
these differences, with a third -- that the Vermont statute was
intended to preclude resort to any other remedy even without the
state -- are, when taken with the differences between the New
Hampshire and Alaska compensation laws, sufficient ground for
withholding or denying any effect to the California statute in
Alaska we need not now inquire. But it is clear that they do not
lessen the interest of California in enforcing its compensation act
within the state, or give any added weight to the interest of
Alaska in having its statute enforced in California. We need not
repeat what we have already said of the peculiar concern of
California in providing a remedy for those in the situation of the
present employee. Its interest is sufficient to justify its
Page 294 U. S. 550
legislation and is greater than that of Alaska, of which the
employee was never a resident and to which he may never return. Nor
should the fact that the employment was wholly to be performed in
Alaska, although temporary in character, lead to any different
result. It neither diminishes the interest of California in giving
a remedy to the employee, who is a member of a class in the
protection of which the state has an especial interest, nor does it
enlarge the interest of Alaska, whose temporary relationship with
the employee has been severed.
The interest of Alaska is not shown to be superior to that of
California. No persuasive reason is shown for denying to California
the right to enforce its own laws in its own courts, and, in the
circumstances, the full faith and credit clause does not require
that the statutes of Alaska be given that effect.
Affirmed.
[
Footnote 1]
L. 1929, c. 25; Comp.Laws 1933, c. XXXII, art. IV.
[
Footnote 2]
L. 1913, c. 176; L. 1917, c. 586; L. 1919, c. 471; L. 1923, cc.
161, 379; L. 1929, c. 227; L. 1931, c. 944.
[
Footnote 3]
Section 1, article IV, of the Constitution provides:
"Full Faith and Credit shall be given in each State to the
public Acts, Records, and judicial Proceedings of every other
State. And the Congress may be general Laws prescribe the Manner in
which such Acts, Records and Proceedings shall be proved, and the
Effect thereof."
The Act of May 26, 1790, c. 11, 1 Stat. 122, provided for the
proper authentication of the acts, records, and judicial
proceedings, and declared:
"And the said records and judicial proceedings, authenticated as
aforesaid, shall have such faith and credit given to them in every
court within the United States as they have by law or usage in the
courts of the state from whence the said records are or shall be
taken."
That of March 27, 1804, c. 56, 2 Stat. 298, extended the
provisions of this statute to the public acts, records, and
judicial proceedings of the territories of the United States. These
enactments subsequently became §§ 905, 906 of the Revised Statutes,
U.S.C. Tit. 28, §§ 687, 688.
[
Footnote 4]
The case arose in the federal District Court for New Hampshire.
The state court had not spoken on the subject.