Choice of Law Flashcards
What are the constitutional limitations regarding choice of law? What is the test to see if each is satisfied?
Two Constitutional provisions: due process and full faith and credit; one test to see if each is satisfied
The state chosen must have a significant contact or contacts with the parties or the subject matter of the litigation which give it a legitimate interest in seeing its law applied.
Five words to remember: significant contact giving legitimate interest.
When determining the choice of law, do you weigh the interests of the states?
No, no weighing of the interests of the states is needed; as long as a state meets the test (significant contacts - legitimate interests) then its law can be applied, even though another state might have more of an interest.
What two situations do not meet the constitutional test for determining choice of law?
(1) If, after the event in question, someone moves to a new state, and that move creates the only contact with that state, then it would be unconstitutional to apply that state’s law.
(2) If the only contact with the parties or the litigation is that the suit is brought in a state then it would be unconstitutional to apply that state’s law.
What are three separate choice of law approaches?
- The vested rights approach (First Restatement and Virginia)
- The most significant relationship approach (Second Restatement)
- The governmental interest analysis approach
What is the Virginia vested rights approach for choice of law? What’s an example? What are the four steps to choose the law under this approach?
The traditional system; also called the territorial approach; set out in the First Restatement of Conflicts and followed today in Virginia.
Under the vested rights approach, the law to be applied is the law where the rights of the plaintiff vested, and each area of the law had a rule or rules to answer this.
Example: Plaintiff’s right to sue on the validity of a contract vest at the moment the contract is made – the place of the making of the contract.
(1) List the different laws that you have in the problem; (2) Characterize the issue of law involved in the problem (e.g. torts, contracts, property, family law, etc); (3) Find the conflict rule for that area of law; (4) See if there are any defenses to application of the law chosen by the rule.
When determining the choice of law in a torts action, what are the steps?
Step One: Does the legal issue in question involve a loss distribution rule or a rule regulating conduct?
Rules Regulating Conduct - For all rules regulating conduct under all three approaches, apply the law of the place of the conduct (rule of the road).
Loss Distribution Rules - All tort rules that are not rules regulating conduct are loss distribution rules, those that determine which party will bear the loss.
Step Two: If the rule is a loss distribution rule and the alleged tort is one of defamation, apply the law of the place of publication.
Step Three: If the rule is a loss distribution rule the choice of law is made by applying the vested rights approach, that is, the law of the place of the
wrong.
When determining the choice of law in a contracts cause of action, what are the steps? What happens if none of the steps apply?
Step One: Did the parties validly choose the law to be applied in the event of litigation on the contract? Parties can always choose the law in the contract for matters of contract construction. Any law can be chosen for construction matters. Parties can also choose the law to govern matters of contract validity provided three things exist: (1) the choice can’t be contrary to the public policy of the state whose law would otherwise be chosen; (2) There must be a reasonable relationship to the parties or the transaction; (3) the choice must be free of duress; that is, not a contract of adhesion or obtained by unfair means.
Step Two: Does a special U.C.C. rule apply? Cases with facts falling under control of the UCC are governed by the law of the place of the forum so long as the forum has a substantial relationship to the transaction.
Step Three: Does the rule of validation apply? This comes up in usury cases and is very narrow. Courts in usury cases will apply the law of the state that would uphold the validity of the transaction so long as the state has some relation to the transaction. Note that this does not require a substantial relationship, just some relation.
If none of these three situations apply, then apply the law of the place of making of the contract. The place of making is just the place where the last act took place that creates a contract, which is usually the place of acceptance.
Place of making determines all issues relating to the validity of a contract, such as (a) formalities, (b) offer, acceptance and consideration (c) capacity of the parities (d) misrepresentation and fraud (e) interpretation of the contract.
BUT if the issue is not one of contract validity, but one of contract performance, you choose the law of the place of performance
When determining the choice of law in a real property action, what are the steps?
For issues about the land sale contract, just use the contract rules.
For the deed and every other issue relating to the conveyance of real property choose the law of the sities of the property, that is, the law of the place where the property is located.
What is the rule for determining the choice of law in a personal property cause of action?
For every situation but one, use the same sities rule as for real property, and for personal property this means the location of the property at the time of the relevant transaction.
BUT, if the issue is the passing of personal property by intestate succession, the state chosen is the state of the deceased’s domicile at death.
AND, if the personal property issue comes under the UCC and its rules on secured transactions, the law chosen is the state of the debtor’s residence or place of business.
What is the rule for determining the choice of law in a family law proceeding? Any exceptions?
General Rule: if a marriage is valid where performed, it is valid everywhere.
Exception: if a marriage would violate the strong public policy of a state then it may not be recognized even though it was valid where performed.
Marriages void where performed are void everywhere, BUT if a marriage is void because it failed to comply with some technical requirement of the state where performed it can still be recognized IF it would have complied with the forum rule.
Divorces are governed by the law of the P’s domicile.
What are the defenses to choice of law? Are there any exceptions?
(1) That the law chosen is procedural, not substantive.
Procedural = burden of proof and statutes of limitation. Exception: Borrowing statute, which will borrow, and apply, the shorter limitation statute of the state where a cause of action arose. BUT: Embedded (incorporated) statutes of limitations, which are a part of the state substantive law giving a cause of action are considered substantive. Substantive = contributory or comparative negligence, statutes of frauds, parol evidence rule.
(2) that the law is against the public policy of the forum state. The law must be really offensive for this to apply.
(3) That the law is a penal law. Applies only to offenses against the public: a criminal judgment or civil fine.
What law must a federal court use in a diversity case?
A federal court sitting in a diversity case must use the choice of law rules of the state in which it sits.
If a case is transferred by one federal district to another district under the rule allowing such transfer for convenience of the parties, the court to which the case is transferred must apply the law of the state in which the transferor court sits.
What is the rule regarding notice and proof of foreign law?
Courts will take judicial notice of sister-state and federal law, but the law of a foreign country traditionally is a fact which must be pleaded and
proved.
If the foreign country law cannot be determined the forum court will apply the forum law.
