Conflicts - MEE Flashcards
Constitutional (due process) Test for Choice of Law Rules
A forum state may apply its OWN law to a particular case only if:
The case has a significant contact or significant aggregation of contacts with the state such that a choice of its law is neither arbitrary nor fundamentally unfair.
The 3 Choice of Law Approaches
(1) Vested Rights (First Restatement) (AKA Traditional);
(2) (Governmental) Interest Analysis;
(3) Most Significant Relationship (Second Restatment).
Vested Rights (First Restatement) (Traditional)
(Genral Rule)
Court looks to the jurisdiction where the parties’ rights are “vested.”
Vested = where the act or relationship that gives rise to the cause of action occurred or was created. (i.e., location where the last liable event took place).
If the issue is procedural, then the forum court will apply its own procedural rules.
If the issue is substantive, then the court must identify the substantive area of the law involved.
Interest Analysis
(General Rule)
Presumed that the forum state will apply its own law. [But the parties may request that another state’s law be applied].
Do the state’s have an interest in the case?
- Loss shifting law: interested when applying the law would benefit a state domiciliary
- Conduct regulating law: interested when wrongful conduct occurs within the territory or state domiciliary is injured
If one interested -> false conflict -> apply law of interested state
If both interested -> true conflict -> forum state
Most Significant Relationship (Second Restatement)
Apply the law of the state with the most
significant relationship to the issue in question.
Consider three guiding principles:
(1) Promoting relevant policies
(2) Systemic interests (certainty, uniformity, predictability, and simplicity - CUPS)
(3) Protecting justified interests (contracts)
What choice of law rules apply when a federal court sits in diversity?
When a federal court sits in diversity, apply the choice of law rules of the state in which the court sits.
They are treated as substantive.
What choice of law rules apply in transferred diversity cases?
The first state’s choice-of-law rules will be applied
First Restatement Rule: Torts
Apply the law of the state where the injury occurred.
Under the First Restatement and Second Restatment approaches, when will the place of injury generally not determine the governing law?
Under the First Restatement and Second Restatment approaches, the place of injury generally not determine the governing law when:
- The rule at issue is a loss distribution rule; and
- The parties share a common domicile.
The law of the domicile state will generally apply.
⇒ A loss distribution rule is a rule that distributes or limits losses rather than a rule that regulates conduct.
Conflict introductory statement
When a cause of action involves contacts with more than one state, the forum court must determine which state’s law is to be applied to decide the issues in the case
First Restatement Vesting Rules: Contracts
The First Restatement applies two vesting rules to contracts:
If the case concerns formation of the contract (validity, defenses, interpretation), then the law of the place of contracting applies.
If the case concerns performance, then the law of the place of performance applies
Second Restatement Considerations: Contracts
Factual Connections:
- Location of contracting; negotiations; performance;
- Place where the contract’s subject matter is located; and
- Place where the parties are at home.
Presumption, when the location of negotiation and performance are the same, the forum court will apply the law of that state
Land Contracts and Real Property
Situs
Personal property contracts
Law of the state where
the place of delivery is located.
Secured Transactions
(Transactions covered by the UCC)
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.
