My new colleague James Stern—in a paper entitled “Property, Exclusivity, and Jurisdiction” that will be coming out in the Virginia Law Review (sorry, can’t find it online)—argues that choice of law is different concerning property, precisely because of the in rem character of property rights: the fact, as they say, that such rights are good against the world. This in rem character puts an informational burden on people that requires that property rights be highly standardized and identifiable at very low informational cost. And that carries over to choice of law. Complicated choice-of-law analysis, such as that required under modern approaches, may work for contract or tort, but not for property. We need the First Restatement’s law-of-the situs rule, even if, as interest analysts are fond of arguing, the situs state may not in fact be interested in its law applying.
I think this argument clearly has something to add to the debate over the proper choice-of-law approach to property, but I’m not sure how far it goes. Consider In re Barrie’s Estate. The question was the revocation of a will, executed and attempted to be revoked in Illinois by an Illinois domiciliary. The beneficiaries under the will and those who would inherit if the will were revoked were all Illinoisans. Under Illinois law, the revocation was effective. Under Iowa law, it was not. The Iowa Supreme Court—using the situs rule—applied Iowa law, even though with respect to this issue it was pretty clear that Illinois was the more interested state.
How, exactly, does the in rem character of property force upon the Iowa Supreme Court the situs rule? The result of the Iowa probate proceedings concerning the Iowa property will itself be a judgment in rem, binding upon the world. Respect for the judgment, whatever its merits, is the low-information-cost rule that is required and the judgment would have this virtue even if it had applied Illinois rather than Iowa law. (That said, I don't have James's paper in front of me, and so I may be missing something in his argument...)