Choice of Law

Question 1

When does a choice of law issue arise?

Answer 1

When:

1. The lawsuit involves factual connections with multiple states, and
2. The multiple states will have different laws leading to different results.

Question 2

What is the core question when analyzing a choice of law problem?

Answer 2

Which states law will govern?

Question 3

What is the general answer to the core question?

Answer 3

The governing law is the law selected by the forum court according to its choice of law approach.

Question 4

What is the exception the general answer to the core question?

Answer 4

Case is in federal court based on diversity citizenship. There are two options:

1. Filed in Court: Federal Court will apply choice of law approach of the state in which it sits.
2. Transferred to Court:(a) If original venue was proper –> transferors choice of law(b) if original venue was not proper –> Law of transferee court.

Question 5

What is the constitutional limitation on Choice of Law?

Answer 5

If a state’s law is chosen and it has no significant contact with and/or legitimate interest in the litigation.

Question 6

What are statutory limitations on CHoice of Law?

Answer 6

If the forum state has a statute for choice of law, the forum court should apply the statute.

Question 7

What are the three statutory approaches for choice of law?

Answer 7

1. Vested rights approach (First Restatement)
2. The most significant relationship approach (Second Restatement), and
3. The interest analysis.

Question 8

What is the analysis for the Vested Rights Approach?

Answer 8

1. Characterize the area of substantive law,
2. Determine the particular choice of law rule, and
3. localizing the rule to be applied.

Question 9

What is the Most Significant Relationship Approach?

Answer 9

The courts will seek to identify the state having the most significant relationship with respect to the issue at hand and then apply that state’s law on the issue.

1. Consider the connecting facts, and
2. whether the policy-oriented principles should be considered.

Question 10

What is the interest analysis (governmental interest)

Answer 10

Step 1: Assume the forum state applies it own law

Step 2: Forum state will consider whether it has any interest in the litigation.

Step 3: If NO, then Forum state applies the other states law. (False Conflict)

The true problem arises when there is a “true conflict.”

Question 11

What is a true conflict?

Answer 11

When both the forum state and the second state have interests.

Question 12

What is the opening statement for analyzing a choice of law question?

Answer 12

The issue presented is which state’s law will govern the outcome of this litigation. The governing law will be selected by the forum court using the (fill in the applicable choice of law approach).

Question 13

What is your rule statement for vested rights?

Answer 13

Under the Vested Rights approach, the court will apply the law of that state mandated by the applicable vesting rule. That rule is selected according to the relevant substantive area of law.

Question 14

What is the structure of your analysis for vested rights?

Answer 14

Sentence 1: categorize the substantive area of law

Sentence 2: state the applicable vesting rule

Sentence 3: Apply the vesting rule to determine the governing law.

Sentence 4: Apply the governing law to determine the result.

Question 15

What is your rule statement for the Interest Analysis?

Answer 15

Under the Interest analysis, the court will consider which states have legitimate interests in the outcome of the litigation. The forum court will apply its own law as long as it has a legitimate interest. If the forum state has no legitimate interest, it will apply the law of another interested state.

Question 16

What is the structure of your analysis for Interested Analysis?

Answer 16

Step 1: Which states have a legitimate interest?

Step 2: Characterize the type of conflict (False conflict where only one state has an interest. True Conflict when TWO or MORE have a legitimate interest).

Step 3: Choose the governing law based on the type of conflict.

If False Conflict –> law of the interested state

If True Conflict –> If forum state is interested, apply forum state (because we assume they will in the beginning).

Step 4: Apply the governing law to determine the result.

Question 17

What is the rule statement for Most Significant Relationship?

Answer 17

The “most significant relationship” approach seeks to identify the state with the most significant relationship to the issue at hand and apply that law. The court will consider connecting facts and relevant policy principles

Question 18

What is the structure for analyzing most significant relationship test?

Answer 18

Step 1: Discuss the connecting facts

Step 2: Discuss policy principles

Step 3: choose the governing law based on most significant relationship

Step 4: Apply the governing law to determine result.

Question 19

How does the Vesting Rule apply to Torts?

Answer 19

Governing law is where the injury occurred.

Question 20

How does the most significant relationship approach apply to torts?

Answer 20

Factual Connection should consider:

1. Place of injury
2. Place of the conduct causing injury
3. Where the parties are at home (where domiciled, residence, etc), and
4. Where the relationship, if any, is centered.

Policy Principles:

1. The relevant policies of the forum state, and
2. the relevant policies of other connected states

NOTE: for a business, you may need to discuss where they are domiciled (incorporated) but also their place of business.

Question 21

What is the usual outcome for choice of law in torts, and what is the exception?

Answer 21

Generally, the law of the place where the injury occurred will apply.

Except when there is

1. A loss of distribution (limitations on loss, vicarious liability rules, and rules eliminating liability like immunity rules, and
2. the parties share a common domicile.

Example: P and D were injured in State A, but are both residents of State B. State A limits the recovery… policy of State B will overtake.

Question 22

What is your go-to statement in discussing distribution of losses?

Answer 22

this case involves (or the policy considerations favor x state because) the distribution of losses and both parties share a common domicile. Therefore….

Question 23

Choice of Law Provision

Answer 23

A contractual provision selecting the law that will apply to their contract, which will be enforced if it is valid and express.

Question 24

What is the impact of a choice of law provision?

Answer 24

If enforced –> choice of law provision displaces the courts analysis.

If NOT enforced –> court should go through the analysis.

When in doubt, find the provision invalid.

Question 25

What are the two reasons to find a choice of law provision invalid?

Answer 25

1. The law selected has no reasonable relationship to the contract, or
2. The provision was included without true mutual consent.

Question 26

How do the vesting rules apply to contracts?

Answer 26

Rule 1 (Formation): Apply law of place of contracting.

• Capacity
• Contractual formalities
• Consideration

Rule 2 (performance): apply the place where performance is to take place.

• Time place and manner of Performance, and
• Excuses for nonperformance.

Question 27

How does the most significant relationship approach apply to contracts?

Answer 27

Factual Considerations:

1. place of contracting
2. the place of negotiation
3. place of performance, and
4. the place where the parties are home

Policy Principles:

1. Relevant policies of the forum state and other connected states, and
2. reasonable expectations of the parties.

Question 28

Choice of Law for Real Property?

Answer 28

Where the real property is located.

Question 29

Choice of Law for Moveable Property?

Answer 29

Rule 1: Inter Vivos: Law of state where property located at time of transaction

Rule 2: Inheritance: Apply law of decedent’s domicile at the date of the death.

Question 30

Where will a marriage be considered valid?

Answer 30

If it is considered valid where it was performed, it will be considered valid everywhere.

Question 31

What is the Temporary Relocation Exception?

Answer 31

When citizens of one state temporarily relocate to another state to enter into a marriage that violates a prohibitory rule in their home state, the state of domicile will not recognize the marriage.

Question 32

What are prohibitory rules for marriage?

Answer 32

Incest, polygamy, and underaged.

Question 33

What law will a forum apply in a divorce proceeding?

Answer 33

To have jurisdiction over a divorce, the court must have jurisdiction (one party must be domiciled). Therefore, the court will apply its own states law because the state has an interest.

Question 34

What law governs the legitimacy of a child?

Answer 34

Rule 1: Where the mother is domiciled at time of birth.

Rule 2: the validity of subsequent acts of legitimation concerning paternity are governed by the law of the fathers domicile…

Example: Take a DNA test to determine legitimacy of father, fathers domicile will govern?

Question 35

Public Policy Defense to Choice of Law

Answer 35

A court will not apply a law that is against its own fundamental public policy (primarily relevant to Vested Interests).

Note: Courts must apply FFC to judgments based on law in violation of the recognizing states public policy, BUT it will not apply law in a choice of law issue that is against public policy.

Question 36

Procedural Rules Defense to Choice of Law

Answer 36

Forum court will always apply its own procedural rules.

Question 37

Are statute of limitations procedural?

Answer 37

Generally, yes. However, there are two exceptions (1) borrowing statutes and (2) Limitations that Condition a Substantive Right.

Question 38

What is a Borrowing Statute?

Answer 38

If a borrowing statute exists, the court must examine the forum states SOL and the Foreign states SOL (assuming foreign law governs under normal choice of law) and choose the shorter period.

Example: IF Ohio’s choice of law statute requires them to apply Texas law, then even though SOL is generally procedural, if there is a Borrowing statute, the court will have to look at both. But if Ohio is applying Ohio law, no need.

Question 39

What is a Limitation that Conditions a Substantive Right?

Answer 39

If the normal choice of law analysis leads to the application of a foreign statute that creates a substantive right, then you apply the entire statute.

Question 40

Where are newborns considered domiciled?

Answer 40

The domicile of their parents, or if divorced, the domicile of the custodial parent.

Question 41

Where are mentally incompetent people domiciled?

Answer 41

Generally, the domicile of their parent. However, if they became incompetent after acquiring a domicile by choice, they retain that domcile.

Question 42

What are relevant policy principles to consider in Most Significant Relationship Approach?

Answer 42

1. Whether application of law further basic policy
2. whether application will aid certainty, predictability, and uniformity of results.