Choice of Law

Question 1

What bodies of law can limit a court’s power to apply a particular choice of law (COL) rule?

Answer 1

-> U.S. Constitution
-> State and federal statutes
-> Agreements of the parties

Question 2

What are two constitutional limitations on a court’s power to apply a particular COL rule?

Answer 2

Due process Clause of the 14th Amendment

Full Faith and Credit Clause

Question 3

What does the Due Process Clause state regarding a court’s power to apply a particular COL rule?

Answer 3

Under the Due Process Clause of the 14th Amendment, a forum state MAY apply its own law to a particular case ONLY IF it has a significant contact OR a significant aggregation of contacts with the state such that a choice of its law is NEITHER arbitrary nor fundamentally unfair.

Question 4

What does the Full Faith and Credit Clause state regarding a court’s power to apply a particular COL rule?

Answer 4

The Full Faith and Credit Clause requires a forum state to apply the law of another state when the forum state has NO contacts with or interest in the controversy
-> does not prevent the forum state from applying its own law when the forum has such contacts or interest in the controversy.
-> does not require a state to apply another state’s law in violation of its own legitimate public policy

Question 5

Can a state statute require certain COL rules to be applied in a particular case?

Answer 5

Yes.

Question 6

Can certain federal statutes preempt a state from claiming jurisdiction over certain cases?

Answer 6

Yes.

Such as in
-> patent
-> antitrust
AND
-> bankruptcy cases

Question 7

When will a court enforce a contractual COL provision?

Answer 7

A court will enforce a contractual COL provision if it is:
-> A valid agreement with effective COL clause
-> Applicable to the lawsuit under the terms of the contract
-> reasonably related to the lawsuit
AND
-> not in violation of the public policy of the forum state or another interested state.

Question 8

What are the seven different approaches to COL in general?

Answer 8

They are
-> vested rights approach
-> “Most significant relationship” approach
-> Governmental interest approach
-> COL rules in federal diversity cases
-> Depecage
-> Renvoi
-> Federal Tort Claims Act

Question 9

How does the vested rights approach work?

Answer 9

The law that controls is the law of the jurisdiction where the parties’ rights were vested (i.e., where the act or relationship that gave rise to the cause of action occurred or was created).

Question 10

How will the forum court determine under vested rights approach where the parties’ rights were vested?

Answer 10

The forum court could first characterize the issues in the cause of action (e.g. procedure v. substance; tort, contract, property, domestic relations, etc.).

Question 11

How does the “most significant relationship” approach work?

Answer 11

Applies the law of the state with the most significant relationship to the issue in question.

Question 12

How will the forum court determine under the “most significant relationship” approach which state has superior significant relationship to the issue?

Answer 12

Forum court will
-> isolate the precise legal issue that results in a conflict between competing states
-> identify the policy objectives that each state’s law seeks to achieve with respect to such issue
AND
-> determine each state’s interest in view of its policy objectives, concluding which state has a superior connection

Question 13

How does the governmental interest approach work?

Answer 13

It is presumed that the forum state will apply its own law, but parties may request that another state’s law be applied because that state has a greater interest in the outcome.

Question 14

Under the governmental interest approach, what is a “false conflict”? What happens in this situation?

What is a “true conflict”? What happens in this situation?

Answer 14

The forum has no interest in the litigation, so then the court applies the law of the state that does have an interest in the case.

The forum and another state each have an interest in the litigation.
-> the forum state reviews its own policies to determine which law should apply to the case
-> IF the conflict cannot be resolved after the previous step THEN the law of the forum state is applied.

Question 15

If under the governmental interest approach, the forum is a disinterested forum, what can it do and under which situations?

Which state laws apply if no state has an interest.

Answer 15

Forum non conveniens available
-> the forum state should dismiss the case, even if personal jurisdiction and venue are otherwise proper, if it finds that the forum would be too inconvenient for parties and witnesses and that a more convenient venue is available.

Forum of non conveniens is NOT available
-> then the forum state may either make its own determination as to which law is better to use OR apply the law that most closely matches its own state law.

If no state has an interest, then the forum law generally prevails.

Question 16

How do the COL rules in federal diversity cases work?
-> federal court
-> diversity case transferred to a different federal court

Answer 16

Federal district courts are generally required to apply the OCL of the state in which it sits
-> only to the extent that the state’s rules are valid under the Full Faith and Credit and Due Process Clauses of the U.S. Constitution

If a diversity case was transferred from a federal court in another state, the first state’s OCL rules will. be applied.

Question 17

How does the depecage approach?

Answer 17

An approach that allows the law of one state to govern one or more issues while other issues are controlled by the law of one or more other states.

Question 18

How does renvoi work?

Is it used often?

Answer 18

Requires a forum court applying another state’s law to apply that foreign state’s COL rules.

Generally rejected today.

Question 19

How does the Federal Tort Claims Act work with regard to COL rules?

Answer 19

The act requires application of the whole law - including COL rules - of the place where the act or omission took place.

Question 20

What specific areas of substantive law have their own rules?

Answer 20

The areas are
-> torts
-> contracts
-> property
-> inheritance
-> corporations
-> family law
-> workers’ compensation

Question 21

Under torts law, how does the vested-rights approach work?

Answer 21

The case is governed by the law of the place where the last event necessary to make the actor liable for the tort place.

Question 22

Under torts law. how does the most-significant-relationship approach work?
-> what are policy principles used for?
-> what does the court consider?
-> what is the default rule?

Answer 22

Policy principles are applied to determine the applicable substantive law.

The court considers
-> the place of the injury
-> the place where conduct causing injury occurred
-> the domicile, residence, place of incorporation, or place of business of the parties,
AND
-> the place where the relationship is centered

Default rule
-> the place of injury controls unless another state has a more significant relationship to the parties or the tort

Question 23

Under torts law. how does the governmental-interest approach work?

Answer 23

The forum state generally looks to its own law, so long as that state has a legitimate interest in applying its own law.

Another state’s law would be applied if a party requests such an application and the forum court determines that the other state’s law should apply in accordance with the forum state’s policies.

Question 24

Under contracts law, when doesn’t an express COL provision not govern?

Answer 24

Normally express COL provisions govern, unless
-> it is contrary to public policy
-> there is no reasonable basis for the parties’ choice
OR
-> true consent was not given because of fraud or mistake.

Question 25

Under contracts law, how does the vested-rights approach work?

Answer 25

Vested-rights approach
-> the applicable law depends on either where the contract was executed or where it was to be performed.

Question 26

Under contracts law and more specifically the vested-rights approach, what issues do the laws of the place of execution govern?

Under contracts law and more specifically the vested-rights approach, what issues do the laws of the place the K was performed govern?

Answer 26

Location where the contract is executed
-> the laws of the place of execution governs issues regarding the validity of the contract, including capacity to K, the formalities of the K, and the consideration for the K.
-> the laws of the place of execution govern the defenses to the formation of the K
-> the laws of the place of execution govern the interpretation of the K

Location where the K was performed - the details of performance are governed by the law of the place of performance. Such details can include
-> the time and manner of performance
-> the person who is obligated to perform and the person to whom performance is to be made
-> the sufficient of performance
AND
-> any excuse for nonperformance

Question 27

Under contracts law, how does the most-significant-relationship approach work?
-> what is considered

Answer 27

Generally - policy factors are considered, as well as
-> location of contracting, negotiation, and performance
-> place where contract’s subject matter is located
AND
-> location of the parties’ domiciles, residences, nationalities, places of incorporation, and places of business

Question 28

Under contracts law, how does the most-significant-relationship approach work?
-> what are the default rules generally applied?
-> land contracts
-> personalty contracts
-> life-insurance contracts
-> casualty insurance contracts
-> loans
-> suretyship contracts
-> transportation contracts

Answer 28

Default rules - generally apply unless another state is found to have a more significant relationship with regard to the issue

Land contracts
-> controlled by the law of the state of the situs of the land

Personalty contracts
-> controlled by the law of the state where delivery occurs

Life-insurance contracts
-> controlled by the law of the state of the insured’s domicile

Casualty insurance contracts
-> controlled by the law of the state where the insured risk is located

Loans
-> controlled by the law of the state where repayment is required

Suretyship contracts
-> controlled by the law of the state governing the principal obligation

Transportation contracts
-> covering both persons and goods
-> controlled by the law of the state of departure

Question 29

Under contracts law, how does the governmental-interest approach work?

Answer 29

Governmental-interest approach does not change based on substantive areas of law.

Question 30

Under property law, which state’s law apply regarding tangible personal property?

Under property law, which state’s law apply regarding intangible property?

Under property law, which state’s law apply regarding real property?

Answer 30

Generally, the law of the state where it is physically located applies unless the UCC or governmental-interest approach applies.

Generally, the law of the state in which the intangible was created or the transfer was made applies, unless the UCC or governmental-interest approach applies.

Generally, the law of the state in which the real property is located applies, unless the governmental-interest approach applies.

Question 31

Under property law, which state’s laws apply regarding trust property?
-> transfers of trust property
-> administration of a trust

Answer 31

Transfers of trust property
-> governed by the rules above based on the type of property involved

Administration of a trust
-> usually governed by the law of the place where the trust is administered

Question 32

Under inheritance law, the application of which state’s laws depends on what?

Answer 32

Depends upon the type of property at issue, real or personal.

Question 33

Under inheritance law, the application of which state’s laws apply when dealing with
-> personal property
-> real property
-> validity of will

Answer 33

Personal property
-> intestate and testate succession is governed by the law of the deceased’s domicile at the time of death

Real property
-> intestate and testate succession is governed by the law of the situs of the real property.

Validity of will
-> under the UPC, validity is determined under the law of the place where
—-> the will was executed
OR
—-> the testator is domiciled, has a place of abode, or is a national at the time of death.

Question 34

Under corporate law, which state’s law are applied?

Answer 34

Generally governed by the law of the state of incorporation.

Question 35

Under family law, where is a marriage valid and recognized under the law?

What is an exception to this?

Answer 35

In general, valid where ti took place and recognized in all other states
-> UNLESS the marriage violates public policy of the state with the most significant relationship, then it is not valid nor recognized anywhere (2nd restatement)

Exception - a marriage that is valid in the state where it took place, but violates a prohibitory rule of the domicile of one of the parties will be void in the state where the marriage would have been prohibited if the parties immediately return to the state and become domiciled there.

Question 36

Under family law, the laws of which state apply in a divorce in regards to a question of law relating to the grounds for divorce?

Answer 36

Questions of law relating to the grounds for divorce are controlled by the law of the plaintiff’s domicile.

Question 37

Under family law, the laws of which state apply in a legitimacy of child dispute?

Answer 37

Governed by the law of the domicile of the parent whose relationship to the child is inquisition.

Question 38

Under family law, the laws of which state apply in an adoption?

Answer 38

The forum court applies its own state law.

Question 39

Under workers’ compensation law, the laws of which state apply?

Answer 39

In general, any state with a legitimate interest in an injury and its consequences may apply its workers’ compensation act;
-> the employer and employee may contractually agree to apply a particular state’s law unless doing so would violate the public policy of another state with a legitimate interest.

Question 40

Under workers’ compensation law, what should a worker do if recovery is possible in more than one state?

When is a subsequent workers’ compensation award in another state barred?

Answer 40

When more than one state has a legitimate interest, a worker should review the workers’ compensation statutes of each state before deicing where to file his claim.

A subsequent workers’ compensation award in another state is barred ONLY IF there is “unmistakable language by a state legislature or judiciary” barring such recovery;
-> double recovery is not permitted.

Question 41

Under workers’ compensation law, who tends to receive immunity?

Answer 41

Generally, only given to employers BUT not manufacturers of defective equipment.

Question 42

What are the three arguments against the application of foreign law?

How does each work?

Answer 42

That the law to be applied is
-> procedural, rather than substantive
-> against public policy
OR
-> a penal law

Procedural, rather than substantive
-> the forum’s laws of procedure, as determined by the forum state’s law, always govern

Laws against public policy
-> if a foreign law violates the public policy of the forum state, the forum court may refuse to apply that law

Penal laws
-> a forum state will not enforce another state’s penal laws

Question 43

How is proof of foreign law treated by courts?

Answer 43

Generally, most states allow their courts to take judicial notice of other states’ laws and federal laws, and treat them as law rather than fact;
-> federal courts must take judicial notice of the laws of all states.