286 U.S. 145, 156, et seq.
In 1932 Jennie M. Clapper, a New Hampshire citizen serving as administratrix, filed suit in a New Hampshire court against Bradford Electric Light Co., Inc., a Vermont corporation.1 She sought damages for the death of Leon J. Clapper under the employers’ liability provisions of the New Hampshire Employers’ Liability and Workmen’s Compensation Act.2
The Company maintained its principal place of business in Vermont and operated lines extending into New Hampshire.3 Leon Clapper, a Vermont resident, was hired by the Company in Vermont as a lineman for emergency service in either state.4 While performing his duties in New Hampshire by restoring burned-out fuses at a substation, he was killed.5
The case was removed to federal district court on diversity of citizenship.6 The Company raised a special defense that the Vermont Workmen’s Compensation Act barred the action because the employment contract had been made in Vermont, both parties resided there, and both had accepted the Vermont Act as a term of the contract.7
The district court rejected the special defense and denied a motion to dismiss.8 After three jury trials the third resulted in a $4,000 verdict for the plaintiff.9 The Circuit Court of Appeals first reversed the judgment but on rehearing affirmed it, one judge dissenting.10
The Company sought review in the Supreme Court by appeal and petition for certiorari.11 The appeal was denied and certiorari was granted.12 The Vermont Act provided that every contract of employment made in the state was presumed subject to its provisions unless expressly declined in writing.13 Acceptance made its remedies exclusive for injuries inside or outside the state.14 The New Hampshire Act required an employer to file a declaration to become subject to its compensation provisions yet still permitted an employee to elect after injury to sue at common law.15 The Company had filed the required declaration in New Hampshire.16
Whether the full faith and credit clause requires New Hampshire courts to recognize the Vermont Workmen’s Compensation Act as barring a damages action for an injury that occurred in New Hampshire?17
The full faith and credit clause requires each state to give effect to the public acts of every other state.18 A workmen’s compensation statute is a public act that creates a statutory relation between employer and employee.19 That relation must be recognized as a defense when the relation was created in the enacting state.20
Yes. The employment contract was made in Vermont between Vermont residents.21 The Company’s principal place of business was in Vermont.22 Both parties accepted the Vermont Act without filing any written declination.23 Therefore the Vermont statute created an exclusive remedy that bars any common-law tort action wherever the injury occurred.24
Because the employee’s duties took him into New Hampshire only temporarily in response to orders from the Vermont office, the relation created under Vermont law persisted and its incidents remained subject to regulation by Vermont.25 Recognition of the Vermont Act in New Hampshire therefore does not constitute an extraterritorial application of Vermont law but merely gives effect to the rights and obligations the parties assumed under the law of their common residence.26
The full faith and credit clause requires New Hampshire courts to recognize the Vermont Act as barring the damages action.27
Related opinions on this issue
Justice Stone agreed that New Hampshire courts could apply the Vermont statute by comity but declined to hold that the full faith and credit clause compelled that result against New Hampshire’s will.28 He reasoned that the clause had not previously been understood to project the authority of one state’s statute across state lines so as to control the legal consequences of a tortious act committed within the forum state.29 In his view the status of employer and employee created in Vermont must be recognized elsewhere when material.30 Yet New Hampshire retained authority to regulate that status once the parties voluntarily continued it within New Hampshire’s borders and the tort occurred there.31
Justice Stone concluded that the clause leaves New Hampshire courts free to apply or refuse Vermont law according to their own interpretation of New Hampshire policy.32
Whether the Vermont Workmen’s Compensation Act may validly be given effect in New Hampshire when the employment contract was made in Vermont between Vermont residents?33
Yes. Vermont had power to provide that every contract of employment made within the state is presumed subject to its compensation provisions.36 Acceptance renders the statutory remedies exclusive for injuries inside or outside the state.37 Because both the employer and employee were Vermont residents at the time the contract was formed and at all times thereafter, the statutory relation between them was properly created under Vermont law.38 Its incidents remained subject to Vermont regulation.39
New Hampshire’s courts therefore must give effect to that relation when the Vermont Act is invoked as a defense rather than treating the injury as giving rise to an independent tort under New Hampshire law.40
The Vermont Act may validly be given effect in New Hampshire under the full faith and credit clause.41
Whether recognition of the Vermont Act as a defense would be contrary to New Hampshire public policy?42
A forum may refuse to enforce a foreign cause of action that is obnoxious to its public policy.43 Different considerations apply when a party seeks recognition of a substantive defense arising under the law of another state.44 Refusal to recognize such a defense would subject the defendant to irremediable liability that the forum may not impose.45
No. Although New Hampshire permits an employee to elect after injury to sue at common law, that difference alone does not render the Vermont Act obnoxious to New Hampshire policy when the only parties affected are Vermont residents whose employment relation was created in Vermont.46 New Hampshire’s interest in the matter was merely casual because the employee was not a resident, was not continuously employed there, and left no dependents there.47
Accordingly, recognition of the Vermont defense does not offend New Hampshire public policy and must be afforded under the full faith and credit clause.48
Recognition of the Vermont Act as a defense is not contrary to New Hampshire public policy.49
Whether the Company’s filing of a declaration under the New Hampshire Act constituted acceptance that permitted the administratrix to elect a common-law action?50
No. The Company filed the New Hampshire declaration solely to avoid common-law liability without the defenses of assumption of risk and fellow-servant negligence for New Hampshire residents hired to work on its lines within that state.53 The circumstances surrounding the filing demonstrate that the acceptance was intended to apply only to such local New Hampshire employees and not to employees such as Leon Clapper whose contract was made and performed under Vermont law.54
Therefore the filing did not constitute an election to subject the Vermont employment relation to the New Hampshire Act’s post-injury election provision.55
The Company’s filing of the New Hampshire declaration did not permit the administratrix to elect a common-law action.56