impinge on the right to free speech and no heightened showing is constitutionally required for their application. Plaintiff's claims that the First Amendment is relevant to the issues raised is interesting, but completely irrelevant.
It is well established that government may impose content neutral limitations on the right to free expression. See e.g. Jimmy Swaggart Ministries v. California Board of Equalization, 493 U.S. 378, 107 L. Ed. 2d 796, 110 S. Ct. 688 (1990) (sales and use taxes on religious articles, in common with other merchandise, do not offend the First Amendment); Common Cause v. Bolger, 574 F. Supp. 672, 681 (D.D.C. 1982). Such is the situation presented by regulations prohibiting certain transfers made to defraud creditors. These regulations apply to all entities, charitable, political, or private and any effect these regulations might have on expressive activity is incidental. Ward v. Rock Against Racism, 491 U.S. 781, 791, 105 L. Ed. 2d 661, 109 S. Ct. 2746 (1989). To hold otherwise would improperly provide political organizations with fundraising avenues otherwise proscribed. There to Care, Inc. v. Commission of Indiana Dept. of Revenue, 19 F.3d 1165, 1168 (7th Cir. 1994); c.f. In re Young, 152 Bankr. 939, 953 (D.Minn. 1993) (fraudulent transfer statute is content neutral).
B. Choice of Law Principles
Federal courts apply the choice of law principles of the jurisdiction in which they sit. GEICO v. Fetisoff, 294 U.S. App. D.C. 279, 958 F.2d 1137, 1141 (D.C. Cir. 1992). The law of the forum is presumed to apply unless it is demonstrated that a foreign jurisdiction has a greater interest in the controversy than does the District. Kaiser-Georgetown Community Health Plan v. Stutsman, 491 A.2d 502 (D.C. 1985). In determining which jurisdiction has the greater interest in the litigation, District of Columbia courts follow "a modified 'governmental interests analysis'." Moore v. Ronald Hsu Construction Co., 576 A.2d 734, 737 (D.C. 1990) (quoting Hercules & Co. v. Shama Restaurant, 566 A.2d 31, 40-41 (D.C. 1989)). This analysis should be based on factors set forth in the Restatement (Second) of Conflicts of Law ("Restatement"), § 145.
See Rymer v. Pool, 574 A.2d 283, 286 (D.C. 1990).
The parties have suggested three possible jurisdictions with an interest in this litigation. The first two are California and the District of Columbia. Defendants argue that California has a superior interest in the litigation because all of the defendants reside in California. In addition, because Mr. Kojima also lives in California, the 1992 Committee actively solicited him there and the funds were transferred to plaintiff from a California bank account. Plaintiff counters that District of Columbia law should apply because the 1992 Committee is headquartered here, and because the April 28th dinner took place in Washington.
In the alternative, defendants argue that the Court should apply federal common law to the case at bar because the 1992 Committee is regulated by the Federal Election Commission and is organized under federal law. See F.D.I.C. v. British-American Corporation, 755 F. Supp. 1314 (E.D.N.C. 1991) (federal common law applied to question of fraudulent conveyance when government agency was party to the action).
Defendants contend that under a federal common law rule, a court should now apply the Uniform Fraudulent Transfer Act ("UFTA") because it has been adopted by a majority of states.
The Court declines to apply federal common law to the case at bar. In contrast to British-American, no government entity is a party to this action and any federal interest in the litigation is at best limited. The Court sees no conflict between the federal interest in free and fair elections and the State's interest in protecting creditor's rights. O'Melveny & Myers v. Federal Deposit Insurance Corporation, U.S. , , 114 S. Ct. 2048, 2055 (1994) (federal common law rules are warranted only in the limited situations where there is a significant conflict between some federal policy or interest and the use of state law). The Supreme Court in O'Melveny & Myers stated:
if there were a federal common law on such a generalized issue (which there is not), we see no reason why it would necessarily conform to that "independently . . . adopted by most jurisdictions."
Id. at 2053 (quotation marks in original). Therefore, the mere fact that a majority of states have adopted the UFTA, does not create a federal common law rule, and this Court will apply state law.
In determining which State's law should apply, the court must first decide whether there is a conflict between the laws of the relevant jurisdictions. Eli Lilly & Co. v. Home Ins. Co., 246 U.S. App. D.C. 243, 764 F.2d 876, 882 (D.C. Cir. 1985), cert. denied, 479 U.S. 1060, 93 L. Ed. 2d 991, 107 S. Ct. 940 (1987). Such a conflict exists between the laws of California and the District of Columbia. California adopted the UFTA in 1986. California Civil Code § 3439 et seq. No intent to defraud is necessary under California law for the transfer to be fraudulent as to a preexisting creditor if
the debtor made the transfer or incurred the obligation without receiving a reasonably equivalent value in exchange for the transfer or obligation and the debtor was insolvent at that time or the debtor became insolvent as a result of the transfer.