claims, the factors are: (1) the place of contracting; (2) the place of negotiation; (3) the place of performance; (4) location of the subject matter of the contract; and (5) and the domicile, place of incorporation, and place of business of the parties.
Domicile, etc., a factor common to both contract and tort claims, is evenly divided in this case between Australia and Wisconsin and thus drops out of the analysis. This leaves three factors under tort, two of which clearly lead to Australia law. The place where the allegedly tortious conduct occurred was Australia and the business relationship between Interpane and ANZ in this case is centered in Australia. (The reason Interpane contacted ANZ in the first place was because it was McDowell's bank in Australia.) Only the injury to Interpane occurred in Wisconsin and nothing at all occurred in Illinois. A similar result obtains with respect to the contract claim. Of the four remaining contract factors, three favor Australia. The place of contracting was Australia because it was there that ANZ accepted Interpane's offer to designate it the collecting bank. The place of performance was also Australia because it was there that ANZ was to turn over the bills of lading at the appropriate moment and collect the money from McDowell. Finally, the location of the subject matter of the contract -- the money -- was in Australia. However, there is nothing to indicate where the negotiations, if any, took place; this factor, therefore, could possibly point to Wisconsin. The contract factors favoring Wisconsin are, therefore, minimal at best and, as under the tort factors, nothing whatsoever favors the application of Illinois law. The result is clear: the most-significant-contacts test yields Australian law on both counts.
In response to this very straightforward application of Illinois choice of law rules, Interpane argues not that Wisconsin law should apply, which is at least colorable, but that Illinois law might actually apply. Its reasons are (1) that Swiss Bank is in Illinois and (2) that ANZ does business in Illinois.
These contacts, however, are completely irrelevant for choice of law purposes under any of the conflicts doctrines this court is aware of -- and there are many -- and certainly under the Second Restatement which does govern here. Swiss Bank's presence in Illinois as an entity is meaningless because it is not a party. Similarly, while the fact that ANZ "does business" in Illinois is certainly relevant to the issue of personal jurisdiction, it is not a "significant contact" under the Second Restatement.
In addition to the weight of the foreign law factor in and of itself, the application of Australian law to this action would require expert testimony to establish the relevant contract principles, as well as other testimony to establish the standard of reasonable conduct under the circumstances with reference to Australian business custom and practice. This added burden affects not only the public interest in avoiding wasted time, but also the private interest in avoiding excessive inconvenience and expense. While Rule 44.1 of the Federal Rules of Civil Procedure have relieved the onerous burden of establishing foreign law as a question of fact, testimony is still highly relevant. See Fed.R.Civ.P. 44.1. This is particularly so where the law involved is that of negligence, a legal doctrine hopelessly steeped in fact and community custom and practice. Thus, keeping the case here would likely require even more witnesses from Australia, adding both to the waste of judicial resources and the private expense.
Interpane attempts to counter the difficulties inherent in applying Australian law on the negligence issue by stating that it is governed by the Uniform Rules of Collection, pursuant to agreement by the parties. Specifically, it argues that the Uniform Rules address this precise situation in Article 20(iii)(c). Entitled " Advice of non-payment or non-acceptance," it states as follows:
The collecting bank must send without delay advice of non-payment or advice of non-acceptance to the bank from which the collection order was received.