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.