294 U.S. 532 (1935), 465, Alaska Packers Association v. Industrial Accident Commission of California

Docket Nº:No. 465
Citation:294 U.S. 532, 55 S.Ct. 518, 79 L.Ed. 1044
Party Name:Alaska Packers Association v. Industrial Accident Commission of California
Case Date:March 11, 1935
Court:United States Supreme Court
 
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Page 532

294 U.S. 532 (1935)

55 S.Ct. 518, 79 L.Ed. 1044

Alaska Packers Association

v.

Industrial Accident Commission of California

No. 465

United States Supreme Court

March 11, 1935

Argued February 8, 11, 1935

APPEAL FROM THE SUPREME COURT OF CALIFORNIA

Syllabus

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. 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.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

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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. 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. 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. 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. 544, 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.

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STONE, J., lead opinion

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.

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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,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 Act2 was then in force, which provides:

[55 S.Ct. 520]

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

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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

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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, 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, 162-164; New York Life Insurance Co. v. Dodge, 246 U.S. 357, 377; Home Insurance Co. v. Dick, 281 U.S. 397, 407-408; [55 S.Ct. 521] compare National Union Fire Insurance Co. v. Wanberg, 260 U.S. 71, 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...

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