Conflict of laws essay rules Flashcards
Domicile of an individual/corporations
A person is domiciled in particular state, and is subject to PJ in that state’s courts whether or not the person can be found and personally served process.
Domicile by choice: Where the person is present with the intent to remain
Domicile of a corporation is where it is incorporated.
Domicile continues until a new domicile is acquired by moving somewhere else with intent to stay there.
Choice of Law
Courts may choose between different laws when a cause of action involves more than one state.
Generally governed by specific statutes, contractual choice of law agreements, or general choice of law stemming from common law.
Constitutional limitations
Due Process: A court can use its own state law as long as there is a significant contact or aggregation of contacts to the case so that the choice is not arbitrary nor fundamentally unfair.
Full Faith and Credit: FFC requires a forum state to apply the law of another state when the forum state has no contacts with or interest in the controversy, but it does not prevent the forum state from applying its own law when the forum has contacts or interest in the controversy. A state does not have to apply another state’s law in violation of its own legitimate public policy.
Choice of law Clause
Most courts will enforce a contractual choice-of-law provision if it is:
- A valid agreement with an effective choice-of-law clause;
- Applicable to the lawsuit under the terms of the contract;
- Reasonably related to the lawsuit (i.e., the law to be applied is from a state with connections to
the parties or the contract); and - Not in violation of the public policy of the forum state or another interested state.
Approaches to Choice of Law In General
Courts generally approach choice-of-law questions using one of three different approaches:
* The vested-rights approach of the Restatement (First) of Conflict of Laws;
* The most-significant-relationship approach of the Restatement (Second) of Conflict of Laws and
* The governmental-interest approach.
Vested Rights Approach
This approach looks to the jurisdiction where the parties’ rights are vested, meaning where the act or relationship that gives rise to the cause of action occurred or was created. Generally, this approach looks for the location where the last liable event took place.
The Court will first characterize the issue
o If the issue is procedural, then the forum court will apply its own procedural rules.
o If the issue is substantive, then the court must identify the substantive area of the law
involved.
the forum court will then determine what
the forum state’s choice-of-law rules require with regard to the characterized issue. Ex: If it is a substantive tort issue the court could find the law of the place of the injury applies.
Most-Significant Relationship Approach (2nd Restatement)
The Second Restatement applies the law of the state with the most significant relationship to the issue in question.
When determining which state has the most significant relationship, the forum court generally considers the contacts that link each jurisdiction to the case, as well as the seven policy principles that are set forth in the Restatement (Second) of Conflict of Laws (see outline).
(1) The needs of the interstate or international system.
(2) The relevant policies of the forum.
(3) The policies of the interested states.
(4) The parties’ expectations.
(5) The policies underlying the substantive areas of law.
(6) Certainty, predictability, and uniformity.
(7) The ease of future application.
Governmental-Interest Approach
Under the governmental-interest approach, it is presumed that the forum state will apply its own law, but the parties may request that another state’s law be applied. If a party makes such a request, then that party must identify the policies of competing laws.
If there is a false conflict (i.e., the forum has no interest in the litigation), then the court applies the law of the state that does have an interest in the case. If there is a true conflict (i.e., the forum state and another state both have an interest in the litigation), then the forum state will review its own policies to determine which law should apply. If the conflict cannot be resolved, then the law of the forum state is applied.
Conflict-of-Laws Rules in Federal Diversity Cases
In federal diversity cases, the federal district court is generally required to apply the conflict-of-laws rules of the state in which it sits.
However, if a diversity case was transferred under federal venue law from a federal court in one state to a federal court in a different state, then the first state’s choice-of-law rules will be applied.
Torts Under Vested Rights Approach
Vested-rights approach
Under the vested-rights approach a tort case will be governed by the law of the place
where the wrong was committed (i.e., lex loci delicti). This means the place where the last event necessary to make the actor liable for the tort took place (generally the place where the person or thing that is injured is situated at the time of the wrong).
Torts Under Most-significant-relationship approach
Under the most-significant-relationship approach the court considers four important contacts: (i) the place of the injury, (ii) the place where conduct causing injury occurred, (iii) the domicile, residence, place of incorporation, or place of business of the parties, and (iv) the place where the relationship is centered.
Torts Under Governmental Interest Analysis
Under the governmental-interest approach, the forum state generally looks to its own law,
so long as that state has a legitimate interest in applying its own law.
Contracts when there is an express Choice of Law
If there is an express choice-of-law provision in the contract, then that law will govern
unless:
It is contrary to public policy;
There is no reasonable basis for the parties’ choice; or
There was fraud or mistake and true consent was not given.
Contracts under Vested-rights approach
The law of the place where the contract is executed will apply to the following issues:
Validity of the contract;
Defenses to formation of the contract; and
Interpretation of the contract.
The law of the location where the contract was to be performed will apply to:
Details of performance such as time and manner of performance;
The person who is obligated to perform and the person to whom performance is to be made;
Sufficiency of performance; and
Excuses for nonperformance.
Most-significant-relationship approach
Under the most-significant-relationship approach, the following factors are considered, in addition to the seven policy factors (in the outline):
The location of the contracting, negotiation, and performance;
The place where the contract’s subject matter is located; and
The location of the parties’ domiciles, residences, nationalities, places of incorporation, and places of business.
Generally, when the location of negotiation and performance are the same, the forum court will apply the law of that state.
Default Rules for Land Contracts and Personal Property
i) Land contracts are controlled by the law of the state of the situs of the land;
ii) Personalty contracts are controlled by the law of the state where the place of delivery is located;
Tangible personal property
The UCC generally governs most issues involving the sale of (or security interests in) tangible personal property. Under the UCC, the parties may stipulate to the applicable law that will govern the transaction or, in the absence of such stipulation, the forum state will apply its version of the UCC “to transactions bearing an appropriate relation to” the forum state.
Secured Transactions: Under the UCC, the law governing the perfection, nonperfection,
and priority of security interests in tangible and intangible collateral is generally the law
of the state in which the debtor is located. In general, this means the principal residence of an individual, the place of business of an organization, and the chief executive office of an organization with more than one place of business.
Vested Rights approach of personal property if UCC doesn’t apply.
The creation and transfer of interests in tangible personal property are governed by the law of the state in which the property was located at the time of the transaction at
issue. This rule controls even when the property at issue may have been taken to
another state without the permission of the owner.
Most-significant-relationship approach to personal property when UCC doesn’t apply.
Under the most-significant-relationship approach, the law of the situs (location) of the tangible personal property at the time that the relevant transaction took place
generally determines the choice of law. However, if it is determined that another state has a more significant relationship to the transaction, then that state’s law will apply.
Real Property
The law of the situs of the real property governs under a vested rights approach (even for deciding Choice of Law rules; Renvoi accepted)
Under the most-significant-relationship approach, the law of the situs of the real
property is generally presumed to be most significant.
Inheritance of Personal Property
Questions regarding the validity of a decedent’s will regarding personal property and the transfer of personal property from someone who dies intestate or who has a will are governed by the law of the deceased’s domicile at the time of death.
Inheritance of Real Property
Questions regarding the validity of a decedent’s will regarding real property and the transfer of real property from someone who dies intestate or who has a will are governed by the law of the situs
Family Law Marriages
Marriages are valid where they took place and are recognized in all other states. If a
marriage violates a particularly strong public policy of the domicile of either party, however, it will be invalid. Such policies can include bigamy and incest.
Divorce and Marital Property
Questions of law relating to the grounds for divorce are controlled by the law of the
plaintiff’s (the one seeking divorce) )domicile in a divorce matter.
In determining the enforceability of a premarital agreement:
Most states apply the law of the state with the most significant relationship to the
matter at hand.
Some states apply the law of the state in which the premarital agreement was
executed.
What are three defenses to using a law from another state
It is procedural rather than substantive;
It is against public policy;
It is a penal law
Substance/Procedure Distinction
If the foreign law sought to be applied is procedural, then the forum state’s law will always govern.
The forum state’s law is applied to determine whether a law is substantive or procedural, so long as the result is not arbitrary or so unreasonable as to constitute a denial of due process or full faith and credit.
Matters considered Procedural
i) The proper court in which to bring an action;
ii) The form of the action to be brought;
iii) The sufficiency of the pleadings;
iv) The effect of splitting a cause of action;
v) The proper or necessary parties to an action;
vi) Whether a counterclaim may be brought;
vii) Venue;
viii) The rules of discovery;
ix) The right to a jury trial;
x) Service of process;
xi) The burden of proof;
xii) Trial procedure; and
xiii) The methods of enforcing a judgment.
**A states choice of law rules of substantive and a federal court must use the choice of law of the state in which they sit.
Statute of limitations procedural or substantive?
Statutes of limitations are usually considered procedural, with the law of the forum state controlling. The theory for such treatment is that the statute of limitations bars the remedy but does not extinguish the underlying substantive right.
However, if the statute of limitations limits a statutory right, as opposed to simply limiting a remedy, it will be substantive rather than procedural. Generally, a limitation period in a statute that creates a right, such as a wrongful-death act, will be treated as substantive.
Ex parte divorce
If one P is domiciled in a state but doesn’t have PJ over the other spouse the court in that state can grant P the divorce but cannot issue orders related to support and property.
Recognition of Foreign Judgments In Bilateral Divorce
Divorce decrees from other states are entitled to full faith and credit as long as the original state had jurisdiction to issue the decree and the decree is valid in the original state. Decrees have proper jurisdiction if at least one person resides where the decree was issued.
If the court has personal jurisdiction over both spouses and at least one spouse is domiciled in the state, then the divorce judgment will be a valid bilateral divorce and will be entitled to full faith and credit.
