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.