Conflict of law/Choice of Law Flashcards
Choice of law question arises when….
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.
CHoice of law
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…
Choice of law for case in federal court based on diversity of citizenship jurisdiction…
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.
Constitutional Restrictions on Choice of Law
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.
Statutory Restrictions on Choice of Law
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.
Three main analytical choice of law approaches
(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.
Choice of Law answer structure for essay
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.)
Vested Rights Approach
(First Restatement approach)
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.
Vested rights approach: torts
Place of wrong (injury)
Vested rights approach: Contracts
Validity problem— place of making.
Performance problem— place of performance.
Vested rights approach: Workers Compensation
Forum
Vested Rights Approach: Essay Answer
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.”
Most significant relationship approach
(Second Restatement approach)
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.
Policy-oriented principles for Most significant relationship approach
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.
Most Significant Relationship Approach: Torts
Consider the place of:
- Injury;
- Conduct causing the injury;
- Residence and/or business
of parties;
- Center of parties’ relationship
MOST SIGNIFICANT RELATIONSHIP - ESSAY answer
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.”