Choice of Law

Question 1

When does a choice-of-law issue exist?

Answer 1

Whenever the law of more than one jurisdiction arguably applies to the same set of facts

Question 2

What are the three general approaches for choice of law?

Answer 2

• Traditional/vested rights (First Restatement)
• Governmental interest analysis
• Most significant relationship (Second Restatement)

Question 3

Under the First Restatement, when does a legal right vest?

Answer 3

When the last act necessary for the cause of action takes place

Question 4

Under the First Restatement, where does a legal right vest?

Answer 4

Under the laws of the state where the legally significant event occurred

Question 5

What is the traditional approach?

Answer 5

Each state determines the legal effect of events that occur within its territory

Question 6

What is the first step for governmental interest analysis?

Answer 6

Determine which states are interested

Question 7

Under interest analysis, what is a false conflict?

Answer 7

Only one state is truly interested

Question 8

Under interest analysis, what law applies in a false conflict?

Answer 8

The law of the only interested state

Question 9

Under interest analysis, what is a true conflict?

Answer 9

More than one state is interested

Question 10

Under interest analysis, what law applies in a true conflict?

Answer 10

Forum law

Question 11

Under interest analysis, what law applies if no state is interested?

Answer 11

Forum law

Question 12

What is the difference between conduct-regulating and loss-shifting laws?

Answer 12

Conduct-regulating laws: designed to regulate conduct (i.e. declare some conduct as wrongful)

** Loss-shifting laws**: determine who can or cannot be liable

Question 13

Under interest analysis, when do states have an interest in applying conduct-regulating laws?

Answer 13

When the wrongful conduct occurs within their territory or when a state domiciliary is injured

Question 14

Under interest analysis, when do states have an interest in applying loss-shifting laws?

Answer 14

When it would benefit a state domiciliary

Question 15

What is the approach of the Second Restatements?

Answer 15

Apply the law of the state with the most significant relationship to the particular issue in question

Question 16

Under the Second Restatements, what are the three clusters of guiding principles?

Answer 16

• Promoting the relevant policies of the forum and other interested states;
• Protecting systemic interests such as certainty, uniformity, predictability, and simplicity; and
• Protecting justified expectations of the parties

Question 17

What is dépeçage?

Answer 17

Applying different states’ laws to different issues within the same case

Question 18

What is renvoi?

Answer 18

Applying the whole law of another state, including the state’s choice-of-law rules

Question 19

When do courts generally accept the renvoi?

Answer 19

For issues involving property rights in land

Question 20

What was the traditional approach for introducing law of another state or a foreign country?

Answer 20

Had to be plead and proven as facts

Question 21

What is the modern approach for introducing law of another state?

Answer 21

Judicial notice

Question 22

What is the modern approach for introducing law of a foreign country?

Answer 22

Pleading and proof

Question 23

What are the defenses against application of foreign law?

Answer 23

• Penal law exception
• Public policy exception
• Substance vs. procedure distinction

Question 24

What is the penal law exception?

Answer 24

A court will not enforce the penal laws of another state

Question 25

Are laws that provide for civil recovery considered penal laws?

Answer 25

No

Question 26

Are tax laws considered penal laws?

Answer 26

No

Question 27

Which approaches recognize the penal law exception?

Answer 27

All of them

Question 28

What is the public policy exception?

Answer 28

A court may refuse to apply foreign law if it violates a fundamental and strongly held public policy of the forum state

Note: this is a narrow defense!

Question 29

Which approaches recognize the public policy exception?

Answer 29

• Traditional approach (First Restatement)
• Second Restatement

Question 30

What happens if the public policy exception is successful?

Answer 30

Dismissal without prejudice

Question 31

Can the public policy exception be used to reject a foreign defense?

Answer 31

No

Question 32

What law governs procedural rules?

Answer 32

Forum law

Question 33

Is the parol evidence rule substantive or procedural? Which state’s law governs?

Answer 33

Substantive

Governed by the law of the state that governs the issue of contract validity

Question 34

Under the First Restatement, are evidentiary privileges substantive or procedural? Which state’s law governs?

Answer 34

Procedural

Governed by forum law

Question 35

Under the Second Restatement, which state’s law governs evidentiary privileges?

Answer 35

The law of the state with the most significant relationship with the communication

Note: Strong presumption in favor of admitting the evidence

Question 36

Under the First Restatement, are damages substantive or procedural?

Answer 36

Substantive

But statutory limits on damages are procedural

Question 37

Under the Second Restatement, what law governs damages?

Answer 37

The law of the state with the most significant relationship to the issue

Question 38

Under the Second Restatement, when do damage caps generally apply?

Answer 38

When they protect a defendant domiciled in the forum state

Question 39

Under interest analysis, when do damage caps generally apply?

Answer 39

When they protect a defendant domiciled in the forum state (loss shifting)

Question 40

Under the traditional approach, are statutes of limitations substantive or procedural?

Answer 40

Procedural

Question 41

Under Erie, when is a state statute substantive?

Answer 41

When it is outcome determinative

Question 42

Under Erie, are statutes of limitations substantive or procedural?

Answer 42

Substantive

Question 43

Under Erie, what happens if a state law is arguably substantive (i.e. outcome determinative without defining rights or obligations of the parties)?

Answer 43

Apply a balancing test

Note: Federal common law might apply if the federal interest supersedes the state rule

Question 44

Under Erie, when must a codified federal rule be applied?

Answer 44

When it applies directly to the issue in question

Question 45

What is the Klaxon rule?

Answer 45

A federal district court sitting in diversity must apply the choice-of-law rules of the state in which it sits

Question 46

If a diversity case was properly filed in federal court in one state, but then transferred to another state’s federal court, which state’s choice-of-law rules apply?

Answer 46

The first state’s