Conflict of Laws MEE Flashcards
Domicile
A. Domicile of individuals—individuals can only have one domicile at a time
1. Domicile by choice—where the person is present with the intent to remain for an unlimited time
* Physical presence—actual physical presence is required
* Intent—must demonstrate intent to remain in the location (e.g., ownership of real estate, voting, payment of taxes, having a bank account, or registration of an automobile)
2. Domicile by operation of law—occurs when an individual does not have legal capacity to choose a domicile
* Infants—domiciled where the custodial parents are domiciled; an emancipated infant may establish her own domicile
* Incompetents—a person lacking mental legal capacity to choose a domicile retains her parents’ domicile; if the person chose a domicile while competent, that domicile will continue after the person becomes incompetent
B. Domicile of corporations—always the state in which it is incorporated
C. Continuity of domicile—presumed to continue until a new domicile is acquired; the burden of showing a change in domicile is on the party that asserts it
D. Change of domicile—takes place when a person with capacity to change her domicile is physically present in a place and intends to make that place home
Limitations on Choice of Law
U.S. Constitution, state and federal statutes, and agreements of the parties can limit a court’s power to apply a particular COL rule
Constitutional Limitations
- Due process—under the Due Process Clause of the Fourteenth Amendment, a forum state may apply its own law to a particular case only if it has a significant contact or a significant aggregation of contacts with the state such that a choice of its law is neither arbitrary nor fundamentally unfair
- Full faith and credit—requires a forum state to apply the law of another state when the forum state has no contacts with or interest in the controversy
o Does not prevent the forum state from applying its own law when the forum has such contacts or interest in the controversy
o Does not require a state to apply another state’s law in violation of its own legitimate public policy
Statutory Limitations
- State statutes—a state may have a statute requiring certain COL rules to be applied in a particular case
- Federal statutes—certain federal statutes may preempt a state from claiming jurisdiction over certain cases (e.g., patent, antitrust, bankruptcy cases)
Party-controlled COL
—courts will enforce a contractual COL provision if it is:
- A valid agreement with effective COL clause;
- Applicable to the lawsuit under the terms of the contract;
- Reasonably related to the lawsuit; and
- Not in violation of the public policy of the forum state or another interested state
Vested rights approach
- The law that controls is the law of the jurisdiction where the parties’ rights were vested (i.e., where the act or relationship that gave rise to the cause of action occurred or was created)
- The forum court would first characterize the issues in the cause of action (e.g., procedure v. substance; tort, contract, property, domestic relations, etc.)
Most significant relationship approach
—applies the law of the state with the most significant relationship to the issue in question
- Forum court will: (i) isolate the precise legal issue that results in a conflict between competing states; (ii) identify the policy objectives that each state’s law seeks to achieve with respect to such issue; and (iii) determine each state’s interest in view of its policy objectives, concluding which state has a superior connection
Governmental interest approach
- It is presumed that the forum state will apply its own law, but parties may request that another state’s law be applied because that state has a greater interest in the outcome
- False conflict (i.e., the forum has no interest in the litigation)—the court applies the law of the state that does have an interest in the case
- True conflict (i.e., the forum and another state each have an interest in the litigation)
o The forum state reviews its own policies to determine which law should apply
o Conflict cannot be resolved—the law of the forum state is applied - Disinterested forum
o Forum non conveniens available—the forum state should dismiss the case
o Forum non conveniens not available—the forum state may either make its own determination as to which law is better to use, or apply the law that most closely matches its own state law
o No state has an interest—the law of the forum state generally prevails
COL rules in federal diversity cases
- Federal district courts are generally required to apply the COL rules of the state in which it sits (only to the extent that the state’s rules are valid under the Full Faith and Credit and Due Process Clauses of the U.S. Constitution)
- If a diversity case was transferred from a federal court in another state, the first state’s COL rules will be applied
Depecage
—an approach that allows the law of one state to govern one or more issues while other issues are controlled by the law of one or more other states
Renvoi
- Requires a forum court applying another state’s law to apply that foreign state’s COL rules
- Generally rejected today
- Federal Tort Claims Act—requires application of the whole law—including COL rules—of the place where the act or omission took place
Torts rules
- Vested-rights approach—the case is governed by the law of the place where the last event necessary to make the actor liable for the tort took place
- Most-significant-relationship approach
o Policy principles are applied to determine the applicable substantive law
o The court considers (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
o Default rule—the place of injury controls unless another state has a more significant relationship to the parties or the tort - Governmental-interest approach
o The forum state generally looks to its own law, so long as that state has a legitimate interest in applying its own law
o Another state’s law would be applied if a party requests such an application and the forum court determines that the other state’s law should apply in accordance with the forum state’s policies
Contracts rules
- Express COL provision—governs, unless:
o It is contrary to public policy
o There is no reasonable basis for the parties’ choice, or
o True consent was not given because of fraud or mistake - Vested-rights approach—the applicable law depends on either where the contract was executed or where it was to be performed
o Place of execution—validity, defenses to formation, interpretation
o Place of performance—time and manner of performance, person obligated to perform and person entitled to performance, sufficiency of performance, excuse for nonperformance - Most-significant-relationship approach
o Generally—policy factors are considered, as well as:
Location of contracting, negotiation, and performance
Place where contract’s subject matter is located, and
Location of the parties’ domiciles, residences, nationalities, places of incorporation, and places of business
o Default rules—generally apply unless another state is found to have a more significant relationship with regard to the issue:
Land contracts—controlled by the law of the state of the situs of the land
Personalty contracts—controlled by the law of the state where delivery occurs
Life-insurance contracts—controlled by the law of the state of the insured’s domicile
Casualty insurance contracts—controlled by the law of the state where the insured risk is located
Loans—controlled by the law of the state where repayment is required
Suretyship contracts—controlled by the law of the state governing the principal obligation
Transportation contracts (covering both persons and goods)—controlled by the law of the state of departure - Governmental-interest approach—does not change based on substantive areas of law
Property rules
- Tangible personal property—generally, the law of the state where it is physically located applies unless the UCC or governmental-interest approach applies
- Intangible property—generally, the law of the state in which the intangible was created or the transfer was made applies, unless the UCC or governmental-interest approach applies
- Real property—generally, the law of the state in which the real property is located applies, unless the governmental-interest approach applies
- Trust property
o Transfers of trust property—governed by the rules above based on the type of property involved
o Administration of a trust—usually governed by the law of the place where the trust is administered
Inheritance rules
—depends upon the type of property at issue, real or personal
- Personal property—intestate and testate succession is governed by the law of the deceased’s domicile at the time of death
- Real property—intestate and testate succession is governed by the law of the situs of the real property
- Validity of will—under the UPC, validity is determined under the law of the place where (i) the will was executed or (ii) the testator is domiciled, has a place of abode, or is a national at the time of death.
