Conflict of law/Choice of Law

Question 1

Choice of law question arises when….

Answer 1

A choice of law question may arise when two conditions are satisfied:
• The lawsuit involves factual connections with multiple states; and
• The multiple states will have different laws leading to different results.

Question 2

CHoice of law

Answer 2

The core question is: “Which state’s law will govern?”

The core answer is: The governing law is the law selected by the forum court according to its choice of law approach (assuming no applicable constitutional or statutory restrictions).
Three approaches:
Vested Rights (first Restateent)

Most Significant Relationship (second Restatement)

Interest analysis

But, when the case is in federal court based on diversity of citizenship jurisdiction, there are exceptions…

Question 3

Choice of law for case in federal court based on diversity of citizenship jurisdiction…

Answer 3

A federal court sitting in diversity applies the choice of law approach of the state in which it sits.

BUT, venue transfer:
When a diversity case is filed in a proper venue, and the case is transferred within the federal system, the federal court applies the choice of law approach of the original (transferor) court.

When the case is filed in an improper venue, or filed in a venue in defiance of a forum selection clause, the law of the transferee court (that is, the court to which the case is transferred) will apply.

Question 4

Constitutional Restrictions on Choice of Law

Answer 4

Rule: The Constitution imposes a limit only if a state’s law is chosen that has no significant contact with and/or legitimate interest in the litigation.

Question 5

Statutory Restrictions on Choice of Law

Answer 5

Rule: If the forum state has a statute that directs a choice of law, then the forum court should apply that statute instead of the usual choice of law approach.
EX: borrowing statute, which requires the court to apply the statute of limitation of another state regardless of the choice of law approach that the state uses.

Question 6

Three main analytical choice of law approaches

Answer 6

(1) the vested rights approach of the First Restatement,

(2) the most significant relationship approach of the Second Restatement, and

(3) the interest analysis (governmental interest) approach.

Question 7

Choice of Law answer structure for essay

Answer 7

Paragraph 1: state the issue and identify the choice of law approach.
“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 applicable choice of law approach) [vested rights, most significant relationship, interest analysis].”

Paragraph 2: describe the choice of law approach.
The three approaches are (1) the vested rights (First Restatement); (2) interest analysis; or (3) the most significant relationship (Second Restatement).

Paragraph 3: apply the choice of law approach.
Here, you will consider the facts presented, apply the approach, and provide a conclusion.

(Important: This conclusion should include both the governing law and the result.)

Question 8

Vested Rights Approach
(First Restatement approach)

Answer 8

In the vested rights approach (the traditional approach), the following three analytical steps are taken:
(1) characterize the area of substantive law,

Torts

Contracts

Worker’s Compensation

Property

Family Law

Corporations

(2) determine the particular choice of law rule,

Torts: Place of wrong (injury)

Contracts:

Place of making K if Validity problem,

Place of performance if performance problem.

Worker’s Compensation

Forum.

Property

Family Law

Corporations

(3) localize the rule to be applied.

Note: The forum will generally apply its own law in characterizing an issue, even if the state where the issue arose would apply a different characterization.

Note: Under the First Restatement approach, the same vesting rule is generally applied to the entire claim.

Question 9

Vested rights approach: torts

Answer 9

Place of wrong (injury)

Question 10

Vested rights approach: Contracts

Answer 10

Validity problem— place of making.

Performance problem— place of performance.

Question 11

Vested rights approach: Workers Compensation

Answer 11

Forum

Question 12

Vested Rights Approach: Essay Answer

Answer 12

P1:
““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 (Vesting Rights Approach).”

P2:
“Under this 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.”

P3:
In the first sentence of paragraph 3, you categorize the substantive area of law.

“This is a torts case.”

In the second sentence, you state the applicable vesting rule.

“Therefore, the vesting rule for torts cases applies the law of the place of injury.”

In the third sentence, you apply the vesting rule to determine the governing law.

“Here, the injury occurred in Michigan and thus Michigan law applies.”

In the fourth and last sentence, you apply the governing law to determine the result.

“Under Michigan law, a non-paying passenger cannot recover against the driver, and so the claim is barred.”

Question 13

Most significant relationship approach
(Second Restatement approach)

Answer 13

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

To determine this, the court considers connecting facts and policy principles.

First: Consider the connecting facts in a given case [depending on substantive law]:
Torts: consider place of: injury, conduct causing the injury, residence/business of parties, center of parties relationship.

Contracts: consider place of: contracting, negotiation, performance, location of subject matter, and the domicile, residence, nationally, incorporation, and business of parties.

Second: Consider the policy-oriented principles:
(i) needs of interstate systems;

(ii) relevant policies of forum;

(iii) policies and interests of other jurisdictions;

(iv) expectations of parties;

(v) basic policies underlying substantive law;

(vi) predictability and uniformity of result;

(vii) ease of determination of foreign law.

*Note: Under the Second Restatement approach each issue may be analyzed separately.

Question 14

Policy-oriented principles for Most significant relationship approach

Answer 14

Consider the policy-oriented principles:
(i) needs of interstate systems;

(ii) relevant policies of forum;

(iii) policies and interests of other jurisdictions;

(iv) expectations of parties;

(v) basic policies underlying substantive law;

(vi) predictability and uniformity of result;

(vii) ease of determination of foreign law.

Question 15

Most Significant Relationship Approach: Torts

Answer 15

Consider the place of:
- Injury;
- Conduct causing the injury;
- Residence and/or business
of parties;
- Center of parties’ relationship

Question 16

MOST SIGNIFICANT RELATIONSHIP - ESSAY answer

Answer 16

P1: ““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 (Most significant relationship approach).”

P2: “Under this approach the court will apply the law of the state which is most significantly related to the outcome of the litigation. To determine this, the court will consider connecting facts and policy principles.”

P3:
Step #1: Discuss connecting facts. ask about where issue arrose, and what states have an interest.

““In this case, the factual connections are split. The accident oc- curred in Michigan, and the injury was sustained there. But both the plaintiff and the defendant are from Illinois.”

Step #2: Discuss policy principles.

“As a matter of policy, Illi-nois seems to have the greater interest because the law at issue is a loss distribution rule and both parties share an Illinois domicile.”

Step #3: Choose governing law based on most significant relationship. apply the law of the state which is most significantly related to outcome of the litigation.

“ As a result, Illinois appears to have the most significant relationship to the dispute and its law should apply.”

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

“Under Illinois law, the plaintiff may recover.”

Question 17

Interest Analysis (Governmental Interest) Approach

Answer 17

Note: Interest Approach does NOT differ According to Substantive Area of Law.
Note: Under the interest analysis approach, each issue may be analyzed separately.

Court considers which states have a legitimate interest in the outcome of the litigation.
In the interest analysis approach, you start from the assumption that the forum will apply its own law, unless requested to apply another.

If it is requested to apply another state’s law, you consider whether the forum has any interest in the litigation;
if forum does not have interest, it is a “false conflict” situation and the forum will apply the law of the second state (the law of the interested state).

false conflict (forum has no interest)

If forum does have interest - both the forum and the second state have interests - this is a “true conflict” situation. the forum reconsiders its policies.

Then… If the forum has no interest in applying its own law, it should dismiss the case if forum non conveniens is available;
if not, it may apply interested state’s law or law of the state that most closely resembles its own law.

If no interested state, most courts apply law of forum.

Question 18

Interest Analysis Approach - ESSAY answer

Answer 18

P1: ““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 (Interest Analysis Approach).”

P2: “Under this approach the court will consider which states have a legitimate interest 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.”

P3:
Step #1: Discuss which states have legitimate interests in the outcome.

Ex: “Illinois has a legitimate interest. It is interested in permitting recovery to compensate its injured resident (the plaintiff).”

“Michigan is not interested in applying its restriction against recov- ery simply because the accident occurred there.”

Step #2: Characterize the type of conflict.

A false conflict arises when only one state has a legitimate interest, and…

A true conflict arises when two or more states have a legitimate interest.

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

If a false conflict has arisen, you apply the law of the interested state.

If a true conflict has arisen and the forum state is interested, you apply forum law.

“The case is therefore a [true/false] conflict, and [X] law should apply.”

Step #4: You apply the governing law to determine the result.

“Under [X] law, the [P/D] will recover.”

Question 19

Substantive Areas of law

Answer 19

Recall: these only matter for Vested rights approach and Most significant relationship approach. Does NOT matter for Interest analysis approach.

Substantive Areas:
Torts

Contracts

These have the same rules under both vested rights or most significant relationship approach:

Worker’s Compensation

Property

Family Law

Corporations

Question 20

Substantive Area 1: TORTS

Answer 20

For all three approaches, governing law will almost always be the law of the place of injury.

Vesting Rule (1st restatement) - The governing law is the law where the injury occurred.

Most significant relationship approach (Second Restatement):
a. Factual Connections
Consider the place:
(1) of injury;
(2) of the conduct causing injury;
(3) where the parties are at home/business; and
(4) where the relationship, if any, is centered.
b. Policy Principles
Policy principles include
(1) the relevant policies of the forum state and
(2) the relevant policies of other connected states.

Question 21

Torts: Vesting approach - vesting rule

Answer 21

Vested rights approach: Place of wrong (injury). The governing law is the law where the injury occurred.

Question 22

Torts: Most sig relationship approach - considerations and principles

Answer 22

Most significant relationship approach:
Factual Considerations:
Consider the place of:
- Injury;
- Conduct causing the injury;
- Residence and/or business of parties;
- Center of parties’ relationship

Policy Principles: Policy principles include (1) the relevant policies of the forum state and (2) the relevant policies of other connected states.

Question 23

Torts - special exception

Answer 23

Governing law will almost always be the law of the place of injury…

Except, when two conditions are present:
• The rule at issue is a loss distribution rule (such as loss limita- tions, vicarious liability rules, and rules eliminating liability like immunity rules); and
• The parties share a common domicile.

So, when the issue involves the distribution of losses and both parties are from that state - apply that state of where they’re domiciled.

Especially for interest analysis and most significant relationship

Question 24

Contracts - choice of law provision

Answer 24

R: A Choice of law Provision in a contract will be enforced if it is valid and express.

CoL provision will be invalid if either:
• The law selected has no reasonable relationship to the contract.
• The provision was included without true mutual consent. (party materially misrepresenting other state’s law).

Otherwise… if no choice of law provision, or if the choice of law provision is rejected, the court should then conduct a choice of law analysis.

Question 25

Contract - choice of law approach

Answer 25

Vested rights approach - Vesting rules:
Validity/Formation problem— place of making.

Performance problem— place of performance.

Most significant relationship approach:
Consider the place of:
Contracting;

Negotiation;

Performance;

Location of subject matter;

Domicile, residence, nationality, incorporation and business of parties

Question 26

Contract - Vesting rules for vesting approach

Answer 26

Rule #1: If the case is about formation, you apply the law of the place of contracting.
Examples of formation issues include:
(1) capacity;
(2) contractual formalities; and
(3) consideration.

Rule #2: If the case is about performance, you apply the law of the place of performance.
Examples oif performance issues:
(1) the time, place, and manner of performance; and
(2) excuses for nonperformance.

Question 27

Contracts - most significant relationship approach

Answer 27

Factual considerations include:
(1) the place of contracting;
(2) the place of negotiation;
(3) the place of performance; and
(4) the place where the parties are at home.

Policy principles include:
(1) the relevant policies of the forum state;
(2) the relevant policies of other connected states; and
(3) the reasonable expectations of the parties.

Question 28

Workers Compensation

Answer 28

Vested rights approach: Forum.

Question 29

Property (real or personal)

Answer 29

all approaches essentially continue to apply the same rules.

Real property—apply the law of the situs

Personal (moveable) property—
• Testamentary and intestate transfer - law of the decedent’s domicile of property owner at time of death.
• Inter vivos transactions—law of the situs of property at the time of the relevant transaction.

Applies to Vested rights approach AND Most siginficiant relationship approach.

Question 30

Family Law

Answer 30

Rules applies to Vested rights approach AND Most siginficiant relationship approach.

Marriage -
Divorce

Legitimation of child

Adoption—forum

Question 31

Family law - Marriage

Answer 31

Marriage—place of celebration
(if marriage can be upheld under that law)

Rule: If a marriage is valid where performed, it will be recognized as valid everywhere…
unless the couple move temporarily to violate a prohibitory rule in home state.
when domiciliaries 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.

Prohibitory rules: express a strong public policy regarding marriage, such as rules against incest, polygamy, and marriage under a minimum age. does not include parental consent, blood test, rules requireing marriage license.

Question 32

Family law - divorce

Answer 32

Rule: The forum will apply its own divorce laws.

To acquire jurisdiction, at least one of the parties must be domiciled in the state - so automatic interest by state.

Question 33

Family law - Legitimation of child

Answer 33

Legitimation of child:

Rule #1: Legitimacy of a child is governed by the law of the mother’s domicile at the time of the child’s birth.

Rule #2: The validity of subsequent acts of legitimation concerning paternity are governed by the law of the father’s domicile.

Question 34

Corporations law

Answer 34

Place of incorporation

Applies to Vested rights approach AND Most siginficiant relationship approach.

Question 35

Domicile Rule

Answer 35

Rule: An individual with domicile capacity acquires a domicile when two conditions are satisfied: (1) physical presence in the new domicile; and (2) an intent to remain permanently (or indefinitely) in the new domicile.

Question 36

Domicile of CHILDREN

Answer 36

Rule: An individual who lacks domicile capacity is assigned one by law.
• Rule #1: Newborns are assigned the domicile of their parents.
• Rule #2: In cases of divorce, children are assigned the domicile of their custodial parent.

Question 37

Domicile of INCOMPETENTS

Answer 37

• Rule #1: An individual who is mentally incompetent is assigned the domicile of their parents.
• Rule #2: If an individual becomes incompetent after acquiring a domicile by choice, they retain the chosen domicile.

Question 38

Defenses to Choice of Law

Answer 38

Public Policy

Procedural Rules

Question 39

Defense to Choice of Law - Public Policy

Answer 39

Rule: A forum court will not apply a law that is against its own funda- mental public policy.

This rule does not apply to recognition of judgments!

Question 40

Defenses to Choice of Law - Procedural Rules

Answer 40

Rule: Regardless of the outcome of the choice of law analysis, the forum court will always apply its own procedural rules.

Statute of Limitations are generally procedural, with some exceptions:
Borrowing Statutes - Statute forces court to look at the limitations period in both forum and the other state (in cases where foreign law governs under a normal choice of law analysis) and then to apply the shorter period.

Limitations that Condition a Substantive Right: 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.

Meaning if you are going to apply foreign statute- then the limitation is treated as substantive and also applied.

Ex: you need to apply the other state’s law fully, since it’s connected

Question 41

Note on SOL

Answer 41

Recall: for Civ Pro purposes (different issue than choice of law), SOL is “substantive” for Erie so the federal court in the state is required to apply whatever statute of limitations the state court would, rather than any federal statute, because this issue is “substantive” for erie. but this issue here is between two states, (choice of law) where it’s procedural, so apply forum court SOL unless exceptions.

So,
Fed vs State law - substantive.
State vs State law - procedural unless exceptions apply.