Conflict of Laws Flashcards
Recognizing Jurisdiction
The placee where recognition is being sought
If the rendering jurisdiction is a sister state
(1) Are the requirements of full faith and credit satisfied?
(2) Are there any valid defenses?
If the answer is YES to (1) and NO to (2), a judgment MUST be **recognized. **
Requirements for Full Faith & Credit
The Full Faith & Credit requires states as well as state and federal courts to recognize each other’s judgments, provided that several conditions are satisfied.
(1) Requirement 1 - Jurisdiction: The rendering state must have had jurisdiction over the parties (“personal jx”) and over the subject matteer (“subject matter jx”).
- If the issue of jurisdiction has been fully and fairly litigated, the jurisdictional requirement is satisfied and entitled to recognition.
(2) Requirement 2 - On the Merits: The judgment entered by the rendering state must have been on the merits. (i.e., judgment was NOT based on lack of PJ, SMJ, Venue, or Failure to Join an Indispensable Party)
(3) Requirement 3 - Finality: The judgment entered by the rendering court must be a final judgment (i.e., the case must not be on appeal in the rendering jx).
Valid Defenses to Full Faith & Credit
Penal Judgments: Penal judgments are NOT entitled to full faith and credit (i.e., cases where the state leads the suit against the defendant).
Extrinsic Fraudd: A judgment obtained by extrinsic fraud is not entitled to full faith and credit. Extrinsic fraudd is fraud that could NOT be corrected during the regular course of proceedings leading to the judgment (e.g., judge was bribed).
ExamTip: Neither (1) public policy, nor (2) mistake are valid defenses (e.g., MI cannot refuse to recognize a gambling debt judgment on the policy ground that they do not support gambling).
Foreign Court Judgments & Comity
Under principles of comity, a recognizing court will exercise discretion to decide whether the foreign judgment should be recognized. The recognizing court may, in its discretion, ask whether the rendering jurisdiction had (1) jurisdiction; and (2) fairness of procedures.
When is a choice of law analysis necessary?
The lawsuit INVOLVES:
(1) Factual connections with multiple states;
(2) Multiple states will have different laws leading to different results.
Choice of Law In Federal Courts
Federal courts sitting in diversity apply the choice of law approach of the state in which it sits.
If proper venue, followed by transfer = Rules of transferor court apply
If improper venue, followed by transfer = Rules of transferee court apply
Restrictions on Choice of Law
Constitutional Limitation: The constitution imposes a limit on choice of law if a state’s law has no significant contact or legitimate interest in the litigation
Vested Rights Approach
(First Restatement)
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.
Torts: Location of the wrong or injury
Contract: If a formation dispute = location of formation. If a performance dispute = location of performance.
Real Property: Location of the situs
Most Significant Relationship Approach
(Second Restatement)
Under the Second Restatement approach, the laws of the state having the most significant relationship to the transaction and the parties will govern the action. To determine this, the court will consider connecting facts and policy principles.
Governmental Interest Approach
Under an interest analysis, the court must first consider whether the forum has any interest in the litigation. The forum court will apply its own law as long as it has a legitimate interest.
If not, there is a “false conflict” and the forum will apply the law of the second state.
A true conflict exists when two or more states have a legitimate interest.
ExamTip: The interest analysis is not dependent on the substantive area at issue.
Torts
Vested Rights: Where the wrong or injury occurred.
Most Significant Relationship: A court must consider (1) where the injury occurred; (2) where the conduct causing the injury occurred; (3) the domicile, residence, incorporation, andd place of business of the parties; and (4) where the relationship between the parties is centered.
EXCEPTIONS: If two conditions are present, the forum state will likely apply its own laws under Second Restatement and Interest Analysis: (1) The rule at issue is a loss distribution rule; and (2) the parties share a common domicile
Choice-of-Law Provisions
In contracts cases, courts will generally allow parties to select the law that will apply to their contract. A choice of law provision that is valid and express will be enforced.
A choice of law provision will be held invalid if (1) the law selected has NO reasonable relationship to the K; or (2) the provision was included without true mutual consent.
If enforced, the choice of law provision displaces the choice of law analysis of the forum.
Contracts
Vested Rights: (1) If the case is about formation, apply the law of the place of contracting; (2) If the case is about performance, apply the law of the place of performance.
Most Significant Relationship: Factual considerations include (1) place of K; (2) place of negotiation; (3) place of performance; (4) place where the parties are at home.
