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Conflicts of Law Outline

I. CHOICE OF LAW

  • A. INTRODUCTION
    • 1. Choice of Law issues arise when the laws of more than one jurisdiction arguably apply to a dispute.
    • 2. Terminology
      • Forum: The state in which the lawsuit is filed.
      • Forum Law: The law of the state where the lawsuit is filed.
      • Foreign Law: The law of a jurisdiction other than the forum state.
    • 3. Choice of Law in Federal Court: In a federal case, apply the choice of law rules of the state where the court sits.
      • This is known as the Klaxon Rule.
      • Exception: If the case was transferred from a federal court in another state, apply the choice of law rules of the original court.
  • B. GENERAL APPROACHES TO CHOICE OF LAW
    • 1. Traditional Approach (First Restatement)
      • Focus: Where the legally significant event that created the right occurred.
      • Process:
        • Identify the legally significant event.
        • Determine where that event occurred.
        • Apply the law of that place.
      • Example: A car accident occurs in State A. A lawsuit is filed in State B. The traditional approach would apply the law of State A because that is where the accident occurred.
    • 2. Governmental Interest Analysis
      • Focus: Which state has the greatest interest in applying its law to the dispute.
      • Process:
        • Identify the policies behind the competing state laws.
        • Determine which states have a legitimate interest in applying their laws.
        • If only one state has an interest, apply that state's law. This is a "false conflict."
        • If more than one state has an interest, this is a "true conflict." The court will usually apply the law of the forum state.
        • If no state has an interest, apply the law of the forum state.
      • Types of Laws:
        • Conduct-Regulating Laws: Laws designed to regulate conduct.
        • Loss-Shifting Laws: Laws that determine who can or cannot be liable.
    • 3. Most Significant Relationship Test (Second Restatement)
      • Focus: Which state has the most significant relationship to the issue.
      • Process:
        • Consider seven guiding principles to determine the state with the most significant relationship.
        • Consider the connecting factors related to the specific legal issue.
        • Apply the law of the state with the most significant relationship.
      • Guiding Principles:
        • Promoting the relevant policies of the forum and other interested states.
        • Protecting justified expectations.
        • Advancing certainty, uniformity, predictability, and simplicity.
      • Tie Breaker: If no state has a more significant relationship, courts apply forum law.
  • C. SPECIAL ISSUES
    • 1. Depecage: The application of different states' laws to different issues in the same case.
    • 2. Renvoi: When the court applies the whole law of another state, including that state's choice of law rules.
      • Accepting the Renvoi: Applying the other state's choice of law rules.
      • Rejecting the Renvoi: Ignoring the other state's choice of law rules and applying the other state's substantive law directly.
      • Generally Rejected: Except for issues involving property rights in land, courts generally reject renvoi.
  • D. DEFENSES AGAINST APPLICATION OF FOREIGN LAW
    • 1. Procedural vs. Substantive: Forum law always governs procedural issues.
      • Substantive Laws: Regulate behavior outside of court.
      • Procedural Laws: Regulate behavior inside court.
    • 2. Public Policy Exception: Courts may refuse to apply foreign law that violates the forum's strong public policy.
      • Narrow Defense: Applies only to egregious violations.
      • Not Applicable to Defenses: Can only be used to reject a foreign cause of action, not a foreign defense.
    • 3. Penal Law Exception: Courts will not enforce the penal laws of another state.
      • Penal Laws: Laws that punish an offense against the public.
      • Tax Laws: Not considered penal laws.
  • E. CONSTITUTIONAL LIMITATIONS
    • 1. Due Process: Choice of law must not be arbitrary or fundamentally unfair.
      • Requirement: The state must have significant contacts with the dispute to apply its law.
    • 2. Full Faith and Credit: A state must recognize and enforce the judgments of other states.
      • Limitations:
        • Must be a final judgment.
        • Must be on the merits.
        • Rendering court must have had proper jurisdiction.
      • No Public Policy Exception: States cannot refuse to enforce other states' judgments based on public policy.
      • Last in Time Rule: If there are conflicting judgments, the most recent judgment prevails.
    • 3. Privileges and Immunities Clause: Prevents states from discriminating against citizens of other states.

II. SPECIFIC AREAS OF LAW

  • A. TORTS
    • 1. Traditional Approach: Apply the law of the place where the injury occurred.
    • 2. Governmental Interest Analysis: Apply the law of the state with the most significant interest in the outcome.
    • 3. Second Restatement: Apply the law of the state with the most significant relationship to the occurrence and the parties.
      • Consider these contacts:
        • Place of injury.
        • Place where the conduct causing injury occurred.
        • Domicile, residence, or place of business of the parties.
        • Place where the relationship between the parties is centered.
      • Presumption: The law of the place of injury will usually be applied, but can be overcome.
      • Multiple States: If the injury occurs in multiple states, apply the law of the plaintiff's domicile if the injury also occurred there.
  • B. CONTRACTS
    • 1. Choice of Law Clause: If the contract contains a valid and enforceable choice of law clause, that clause will govern.
      • Exception: Validity of a contract cannot be resolved solely by the choice of law provision.
    • 2. Validity of a Contract:
      • Second Restatement: Parties can choose the law governing validity if:
        • The chosen state has a substantial relationship to the parties or the transaction; or
        • There is some other reasonable basis for the choice.
      • Public Policy Exception: Courts may ignore the choice of law provision if it would violate a fundamental policy of the state with the most significant relationship to the issue.
    • 3. Traditional Approach: The law of the place of contracting governs issues of contract formation, interpretation, and validity.
      • Place of Contracting: Where the last act necessary to make the contract binding occurred.
      • Performance Issues: Governed by the law of the place of performance.
    • 4. Second Restatement: Determine the state with the most significant relationship to the contract.
      • Consider these contacts:
        • Place of contracting, negotiation, and performance.
        • Location of the subject matter of the contract.
        • Domicile, residence, place of incorporation, or place of business of the parties.
      • Presumption: If the location of negotiation and performance are the same, the law of that state applies.
  • C. PROPERTY
    • 1. Types of Property
      • Real Property (Immovables): Land and interests in land.
      • Personal Property (Movables): All property other than land.
        • Tangible: Property that can be touched (e.g., cars, furniture).
        • Intangible: Property that cannot be touched (e.g., stocks, patents).
    • 2. Real Property: All three approaches generally apply the law of the situs (where the property is located).
      • Second Restatement: Still considers seven guiding principles, with a strong presumption in favor of the law of the situs.
      • Land Incidental to a Contract: If the land is merely incidental to the contract, apply the contracts approach.
    • 3. Personal Property:
      • Tangible Property:
        • UCC: Apply the UCC, which allows parties to choose the applicable law.
        • No UCC: First and Second Restatement apply the law of the situs at the time of the transaction.
      • Intangible Property:
        • First Restatement: Law of the state where the property was created.
        • Second Restatement: Considers the seven guiding factors.
    • 4. Succession of Property at Death:
      • Immovable Property: Law of the situs.
      • Movable Property: Law of the decedent's domicile at the time of death.
      • Choice of Law Clause: Many states will enforce a choice of law clause in a will or trust.
      • Validity: If a will or trust is valid under the law where it was made, courts generally enforce it.
  • D. CORPORATIONS
    • 1. Internal Affairs: Governed by the law of the state of incorporation.
    • 2. External Relations: Governed by the choice of law rules of the area of law involved.
      • Second Restatement Contacts: Place of incorporation and principal place of business.
  • E. FAMILY LAW
    • 1. Marriage
      • Traditional Approach: Valid where celebrated, unless it violates a strong public policy of the domicile of either party.
      • First Restatement: Distinguishes between validity and incidents of marriage.
        • Validity: Governed by the law of the place of celebration.
        • Incidents: Determined by the law of the place where they are sought to be exercised.
      • Second Restatement: Valid where celebrated, unless it violates the public policy of the state with the most significant relationship to the parties at the time of marriage.
    • 2. Marital Property
      • Immovable Property: Law of the situs.
      • Movable Property: Law of the state where the couple was domiciled at the time of acquisition.
    • 3. Divorce
      • Jurisdiction Requirement: At least one spouse must be domiciled in the state granting the divorce.
      • Bilateral Divorce: Personal jurisdiction over both spouses.
        • Entitled to full faith and credit.
      • Ex Parte Divorce: Personal jurisdiction over only one spouse.
        • Entitled to full faith and credit for the divorce decree itself.
        • Other orders (property, alimony, etc.) are valid only if the court had personal jurisdiction over both spouses.
      • Estoppel: An interested party may challenge the validity of a divorce, except for parties, privies, those remarrying in reliance, or strangers with no standing.
    • 4. Child Custody and Support
      • UCCJEA: Governs jurisdiction and enforcement of child custody and support orders.
        • Exclusive Jurisdiction: One state has exclusive jurisdiction to make initial custody decisions.
        • Modification: Only possible if the original state no longer has jurisdiction or the new state meets the requirements for exclusive jurisdiction.
    • 5. Foreign Country Judgments
      • Not Subject to Full Faith and Credit: Enforced under comity.
      • Comity: Recognition based on mutual respect among nations.
      • Uniform Foreign Money Judgment Recognition Act:
        • Enforces foreign money judgments in the same way as sister state judgments.
        • Does not cover non-money judgments, but they may be enforced under comity.

III. IMPORTANT CONCEPTS TO KNOW FOR THE UBE

  • Domicile
    • Definition: The place where a person has their true, fixed, and permanent home, and to which they intend to return whenever absent.
    • Importance: Determines which state's laws apply to certain issues, such as divorce and probate.
    • Types:
      • Domicile by Choice: Acquired by physical presence in a state and the intent to remain indefinitely.
        • Proof of Intent: Owning real estate, voting, paying taxes, banking, vehicle registration.
      • Domicile by Operation of Law: Applies to those lacking legal capacity (minors, incompetents).
        • Minors: Domicile of custodial parent(s).
        • Incompetents: Retain domicile from before incompetency.
    • Corporations: Domiciled in the state of incorporation.
    • Continuity: Presumed to continue until a new one is acquired.
    • Change: Requires physical presence in a new place and intent to make it home.
  • Substance vs. Procedure
    • General Rule: Forum law governs procedural rules, foreign law governs substantive rules.
    • Statute of Limitations: Generally procedural.
      • Exception: If part of the right, not just the remedy, it's substantive.
    • Rules of Evidence: Generally procedural.
      • Exception: If outcome determinative, it's substantive.
    • Burden of Proof: Generally procedural.
    • Presumptions:
      • Rebuttable: Procedural.
      • Conclusive: Substantive.
    • Parol Evidence Rule: Substantive.
    • Statute of Frauds: Substantive.
    • Damages:
      • First Restatement: Procedural.
      • Second Restatement: Governed by the law of the state with the most significant relationship.
  • Full Faith and Credit
    • Definition: Constitutional requirement that states must enforce the final judgments of other states.
    • Requirements for Enforcement:
      • Final judgment.
      • On the merits.
      • Rendering court had proper jurisdiction.
    • Defenses:
      • Lack of jurisdiction in rendering court.
      • Judgment procured by fraud.
      • Judgment not final.
      • Judgment not on the merits.
  • Comity
    • Definition: The principle of recognizing and enforcing the laws and judicial decisions of other countries, based on mutual respect.

Application: Used to enforce judgments from foreign countries that are not subject to the Full Faith and Credit Clause.

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