Conflicts of Law

Question 1

Government Interest Approach

Answer 1

Under the Government 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

Question 2

A court will enforce a contractual choice of law when…

VARP

Answer 2

VARP
Valid Applicable Related Public

Courts will enforce the contractual choice of law agreement if it is:

1) A valid agreement with an effective choice of law clause
2) Applicable to the lawsuit under the terms of the contract
3) Reasonably related to the lawsuit; AND
4) Does not violate the public policy of the forum state or another interested state

Question 3

Conflicts of Law: Vested Rights Approach

Answer 3

Under the Vested Rights Approach the court looks to the location where the last liable event took place to determine the choice-of-law

Question 4

Revoi

Answer 4

Renvoi is the practice of a forum court that is applying the law of another state to also apply that foreign state’s conflict-of-law rules. Renvoi is often rejected when applying the foreign state’s conflict-of-law rules would result in an endless feedback loop

Accepting the renvoi: applying the other state’s choice of law rules

Rejecting the renvoi: ignoring the other state’s choice-of-law rules

All three approaches to choice-of-law generally reject the renvoi, EXCEPT for issues involving property rights and interest in land

Question 5

Conflict of Law: Klaxon Doctrine

Answer 5

Under the Klaxon Doctrine, in a diversity case the federal court is generally required to apply the conflict-of-laws rules of the Forum State (state in which the federal court 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

Question 6

Dépeçage Approach

Answer 6

Under the Dépeçage Approach, the law of one state may govern one or more particular issues while other issues are controlled by the law of one or more states

Question 7

Conflict of Law / Civ Pro: Under the 14th Amendment’s Due Process Clause, what must a case have in order for a forum state to apply its own law to that particular case?

Answer 7

Under the 14th Amendment’s Due Process Clause, a forum state may apply its own law to a particular case when the case has SIGNIFICANT CONTACTS with the state such that a choice of its law is neither arbitrary nor fundamentally unfair

Question 8

In a divorce matter, which state’s laws provide the questions of law that relate to the grounds for the divorce and personal property?

Answer 8

The plaintiff’s domicile state provides the question of law that relate to the grounds for divorce and personal property in a divorce matter.

Question 9

Conflicts of Law: Under the most-significant-relationship approach, what are the four important contacts the court considers?

CRID

Answer 9

CRID
Conduct Relationship Injury Domicile

The court considers:
1. The place of injury
2. The place where conduct causing injury occurred
3. Domicile, residence, place of incorporation, or place of business of the parties; AND
4. The place where the relationship is centered

Question 10

What are the two requirements for a divorce decree from another state to be enforced in the forum state?

JV

Answer 10

JV
Jurisdiction Valid

Divorce Decrees from other states are entitled to full faith and credit as long as the original state had:
1. Jurisdiction to enter the decree AND
2. the decree is Valid in the original stae

Question 11

In possessory security interests, which state(s)’s laws determine security interest perfection, the effects of perfection/nonperfection, and priority?

Answer 11

The law of the state where the collateral is located determines:
1. Perfection
2. The Effect of Perfection/Nonperfection
AND
3. Priority

Question 12

When is the application of foreign law most likely to be argued against?

PPP

Answer 12

PPP
Procedural Public Penal

The three main arguments against application of foreign law are that the law applied is:
1. Procedural rather than substantive
2. Against public policy
OR
3. A penal law

Question 13

From where are substantive and procedural laws taken under the Erie Doctrine in a Diversity Case?

Answer 13

Under Erie, in diversity jurisdiction cases, the federal district court must apply the substantive law of the state in which the federal court sits, but the procedural law applied is that of the federal court

If no federal procedural rule applies to the matter at issue, then the district court must follow state law with regard to substance, but it can CHOOSE TO IGNORE state law with regard to procedure, under certain circumstances

Question 14

When the there is no stipulation under the UCC regarding the applicable governing law, which law applies to the transaction?

Answer 14

The FORUM STATE will apply its version of the UCC to transactions bearing an appropriate relation to the forum state

Question 15

Seven Policy Principles under the Most-Signficant Relationship (2d Restatement) Approach to Choice of Law?

SCUFF PIES

Answer 15

SCUFF PIES
System Certainty Uniformity Forum Future Predictability Interested Expectations Substantive

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

Question 16

Which state’s law governs matters of workers’ compensation?

IF OR

Answer 16

IF OR
Injury Formed Occurred Reside

Any state with a legitimate interest in an injury and its consequences may apply its workeres’ compensation act.

In general, a state will have a legitimate interest if it is the state where:
1. The employment relationship was formed by the worker and employer
2. The injury to the employee occurred
3. The employment relationship principally occurred (even if the injury did not occur there),
OR
4. The employee or the employee’s dependents reside

Question 17

Under the UCC, for issues involving corporate securities, the law of which state generally controls?

Answer 17

The ISSUER’S STATE OF INCORPORATION provides the law that controls issues involving corporate securities.

Question 18

Under the Vested-Rights Approach to contract disputes, what is determined by the laws of the 1) state where the contract was executed and what is governed by the laws of 2) the state where the contract was to be performed?

VFI P

Answer 18

VFI P
Validity Formation Interpretation
Performance

1) The state where the contract was executed determines
a) VALIDITY
b) DEFENSES TO FORMATION
and
c) INTERPRETATION OF K

2) The state where the contract was to be performed determines
a) DETAILS OF PERFORMANCE

Question 19

Which state’s law governs the transfer of an intestate’s transfer of personal property, and which state’s law governs the transfer of a decedent’s (whether intestate or with a will) real property?

Answer 19

The law of the decedent’s domicile at the time of death governs the transfer of personal property.

The law of the situs of the real property govers the transfer of a decedent’s real property, whether by will or intestacy.

Question 20

For matters of perfection, the effect of perfection or nonperfection, and the priority of security interests in TANGIBLE COLLATERAL, which law governs?

Answer 20

The law of the state of the debtor’s location

Question 21

What three requirements must be met in order for a judgment to meet the full faith and credit requirements?

JFM

Answer 21

JFM
Jurisdiction Final Merits

The judgment must:
1. Have been brought in the proper jurisdiction,
2. Be final (no outstanding appeals),
AND
3. Be on the merits

Question 22

Under the Full Faith and Credit Clause, must state courts honor both state AND federal court decisions of other states?

Answer 22

YES.

State courts are required to honor the judgments of the courts of other states, both of those other states’ federal and state courts.

Question 23

When can the subject matter jurisdiction of a rendering court be collaterally challenged in an enforcement court?

Answer 23

A party against whom enforcement of a judgment is sought may collaterally challenge that judgment based on lack of subject matter jurisdiction only if subject matter jurisdiction was not fully and fairly litigated in the original action.

Question 24

Which state’s conflict-of-law rule is used to determine which state’s laws should be applied in a real property issue?

Answer 24

The state that is the situs - the state that is where the property is located.

Question 25

Which state’s laws should be applied in a dispute that relate to a foreclosure but do NOT affect an interest in land?

Answer 25

Such disputes are determined by the law that governs the debt for which the mortgage was given, and the law of the state that has the most significant relationship to the transaction and the parties governs the debt for which the mortgage was given.

Question 26

How is domicile determined under a conflict of law analysis?

Answer 26

A person can have only one domicile.

Domicile is acquired by:
EITHER
1. Choice - a person must
a) Abandon her previous domicile
b) Establish a physical presence in the chosen domicile
AND
c) Have an intent to remain there for an indefinite time (shown by person’s actions and statements)
OR
2. By law - for people who do not have the legal capacity to choose their domicile
a) A child takes the domicile of her parents (custodial parent if parents are in different states; an emancipated child can choose her own domicile)

Corporations are domiciled generally where they are incorporated unless other contacts prove the more appropriate domicile

Question 27

What is the Traditional Approach (1st Restatement) to choice of law?

Answer 27

The Traditional Approach
-Territorial: each state determines the legal effect of events that occur within its territory
-As soon as a legally significant event occurs, a RIGHT becomes VESTED under the laws of the state where it occurred
-A RIGHT VESTS when the LAST ACT takes place that is necessary to give the plaintiff a cause of action

Question 28

What is the Governmental Interest Approach to choice of law?

Answer 28

A law applies to a set of fats if its application to those facts would promote the underlying purposes of the law
-If the law of a state applies, the state is said to be “interested” in the case
-Determining which states are interested:
1. If only one state is truly interested, there is a “false conflict” and the court should apply the law of the only interested state
2. If more than one state is interested, there is a “true conflict” and the court should apply the law of the forum state
3. If neither state is interested (“unprovided-for case”), a court should apply the law of the Forum State

In the governmental interest approach, the court is NOT supposed to balance the interests of different states

Question 29

How do courts weigh the different factors in the Interest Analysis of the Governmental Interest Approach to Choice of Law?

Answer 29

Conduct-Regulating Laws: designed to regulate conduct (declare certain conduct as wrongful)

Loss Shifting Laws: designed to deetermine who can or cannot be liable (immunity, various liability, etc.)

States have an interest in applying a CONDUCT-REGULATING law when the wrongful conduct occurs in their territory, or when a state domiciliary is injured (regardless of where)

States have an interest in applying LOSS-SHIFTING law when doing so would benefit a state domiciliary

Question 30

What is the Most Significant Relationship Analysis approach (2d Restatement) to Choice of Law?

Answer 30

Apply the law of the state with the most significant relationship to a particular issue in question

If no state has a more significant relationship, courts will apply Forum Law as a tie-breaker.

This is based on seven guiding principles:
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

Question 31

What is the exact language that describes the Most Significant Relationship Analysis (2d Restatement) application of the 7 guiding principles?

Answer 31

The court must determine which state has the most significant relationship to the issue in question. In making this determination, the court should should strive to promote the relevant policies of the forum and other interested states, advance systemic interests such as certainty, uniformity, predictability, and simplicity, and protect justified expectations of the parties.

Question 32

In a torts dispute, what will each of the three choice of law approaches apply as the governing law?

Answer 32

Traditional Approach: governed by the law of the place where the tort occurred; in other words, the location of the injury, which is the last event necessary to create the tort

Governmental Interest Analysis Approach: No special torts (or contracts) rules. Courts examine the purpose and policies of the competing states’s laws, and look at conduct-regulating laws and loss-shifting laws

Most Significant Relationship Approach: courts apply the seven guiding principles, and add these factors when there is a tort at issue:
1. The place where the injury occurred
2. The place where the conduct causing the injury took place
3. The domicile, residence, or place of business of the parties
4. The place where the relationship between the parties is centered
*Presumption: the law of the place of injury will usually be applied, but can be overcome if another state has a more significant relationship

Question 33

Can choice of law clauses be used to use a particular state’s law to effect the validity of a contract?

Answer 33

NO. The exception to the enforceability of a choice of law clause is that the validity of the contract itself cannot be resolved solely by the parties’ choice of law.

However, under the 2d Restatement, parties can choose the law that will apply to contract validity if:
1. The chosen state has a substantial relationship to the parties or transaction;
OR
2. There is some other reasonable basis for the choice
*A choice of law clause will be ignored if application of the chosen law would be contrary to a fundamental policy of the state with the most significant relationship to the issue

If the choice of law provision is deemed ineffective, apply the general approaches for choice of law

Question 34

What is the Traditional Approach and Second Restatement Approach to choice of law analysis when there is a Contracts dispute?

Answer 34

Traditional Approach
-The place of the “Place of Contracting” will govern issues of contract formation, interpretation, and validity
-Place of Contracting: where the last act necessary to create a contractual right occurred (generally acceptance)
-Issues related to performance will be governed by the laws of the place of performance

Most Significant Relationship (2d Rest) Approach
-Apply the seven guiding principles to determine which state’s laws to apply
-These factors specific to Contracts are also added:
1. The place of contracting, negotiation, and performance
2. The place where the subject matter of the contract is located
AND
3. The location of the parties’ domiciles, residences, places of incorporation, or places of business
*If the location of negotiation and performance are the same, that state’s law is usually applied

Question 35

Under the Most Significant Relationship (2d Restatement) Approach, which state’s laws are presumed to apply in each of the following types of contracts:

1. Land Contracts
2. Personalty Contracts
3. Life-insurance Contracts
4. Casualty Insurance Contracts
5. Loans
6. Suretyship Contracts
7. Transportation Contracts

Answer 35

1. Land Contracts - situs of the land
2. Personalty Contracts - location of delivery
3. Life-insurance Contracts - where insured is domiciled
4. Casualty Insurance Contracts - where insured risk is located
5. Loans - where repayment is required
6. Suretyship Contracts - state governing the principal obligation
7. Transportation Contracts - where transport departed

Question 36

Under the Traditional, Governmental Interest, and Most Signficant Relationship Approaches, which state’s law is applied in each of the following types of disputes:

1. Immovable Property
2. Movable Tangible Property
3. Intangible Property
4. Succession of Property at Death
5. Corporations
6. Marriage
7. Marital Property

Answer 36

1. Immovable Property - all three apply law of situs, but 2d Restatement still applies 7 principles
2. Movable Tangible Property - UCC permits parties to choose law; if not a UCC issue, apply law of state where property was at transaction; 2d Restatement still applies 7 principles
3. Intangible Property
   -Traditional: where property was created
   -2d Restatement: apply 7 principles
4. Succession of Property at Death
   -Traditional & 2d Rest.: immovables by situs; movables by decedent’s domicile
   -Presence of a choice of law clause will usually govern, though
   -There is a preference in favor of will or trust validity, and courts will usually enforce a law of the state of creation that renders document valid
5. Corporations
   -Internal affairs: state of incorporation
   -External affairs: treats corporation like a natural person in applying choice of law analysis
   -2d Rest. also considers place of incorporation and principal place of business in analysis
6. Marriage
   -Traditional: validity where marriage was celebrated unless strong bad faith public policy issue; incidents/benefits of marriage/marital rights where rights are sought to be exercised
   2d Restatement: a marriage that was valid where celebrated is valid everywhere, unless it violates public policy of state with most significant relationship with parties at time of marriage
7. Marital Property
   -Immovables: state where located
   -Movables: state where couple domiciled at time of acquisition
   -Community property: remains community property
   -Property purchased in another state by marital funds has the same character as the funds or property used to acquire it

Question 37

Choice of law applied in the pleading of a case

Answer 37

Traditional Approach: laws of another state not considered to be laws at all. Only considered facts. If the party failed to plead and prove foreign law, court would apply forum law or dismiss the case

Modern Approach: most states allow courts to take judicial notice of the laws of other states

Federal Courts: take judicial notice of the laws of all 50 states, but require pleading and proof of foreign law

Question 38

Choice of law approaches used as a legal defense: penal law exception

Answer 38

-Under all three conflict of law approaches, the court will NOT enforce the penal laws of another state
-Laws that provide for civil recovery are not considered penal laws
-Tax laws are not penal laws

Question 39

Choice of law approaches used as a legal defense: Public Policy Exception

Answer 39

Traditional Approach & 2d Restatement: court may refuse to apply foreign law if that law violates a fundamental and strongly held public policy of the forum state

If this defense is successul, the case will be dismissed without prejudice
Can be used to reject a foreign cause of action, but not a foreign defense

Question 40

Choice of law approaches used as a legal defense: Substantive v. Procedural Distinction in Conflict of Law

Answer 40

Forum Law always governs procedural law

Question 41

Are Parol Evidence Rules procedural or substantive, for the purposes of conflict of law?

Answer 41

Substantive!

Governed by the law of the state that governs the issue of contract validity

Question 42

Choice of law approaches used as a legal defense: Evidentiary Privileges

Answer 42

Traditional: the existence and validity of a privilege are considered procedural, thus governed by Forum Law

2d Restatement: the law of the state with the most significant relationship with the communication should apply. Strong presumption in favor of the law that would ALLOW admission of the evidence

Question 43

Choice of law approaches used as a legal defense: Damages

Answer 43

Traditional: treats the measure and type of damages as a substantive issue

2d Restatement: governed by the law of the state with the most significant relationship to the issue. A damages cap is a loss-shifting rule to protect defendants. A state will generally apply its own damage caps only to protect a defendant domiciled in that state

Governmental Interest: A state will generally apply its own damage caps only to protect a defendant domiciled in that state

Question 44

Choice of law approaches used as a legal defense: Statute of Limitations

Answer 44

Traditional: considered procedural, so forum law applies. Exception: if the statute of limitations is inextricably bound up with a statutory right, it will be considered substantive

2d Restatement: forum applies its own statute of limitations if it would BAR the claim. If the statute of limitations would permit the claim, the court will ask:
1. Would maintenance of the claim serve a substantial interest of the forum; AND
2. Would the claim be barred under the statute of limitations of a state having a more significant relationship with the issue

Question 45

Choice of law approaches used as a legal defense: Borrowing Statutes

Answer 45

There is a bar on foreign causes of action that are precluded under the shorter of:
1. The forum state’s statute of limitations;
OR
2. The statute of limitations of the place where the cause of action arose

Question 46

Fundamental Consitutional Rule on Conflict of Law Analysis

Answer 46

A state may apply its own substantive law to an issue only if the state has a significant contact or aggregation of contacts with the issue such that the application of its own law is neither arbitrary nor fundamentally unfair

This rule comes from the due process clause and the full faith and credit clause

The forum state is entitled to apply its own procedural law to any issue that is traditionally viewed as procedural

Under the full faith and credit clause, a state may not refuse to entertain claims under another state’s law simply because that law comes from another state

Question 47

Outcome Determinative Test

Answer 47

A state statute is substantive under Erie if it is outcome determinative (in a direct and certain enough way that it encourages forum shopping between state and federal court)

Caveat 1: regarding a state law that is ARGUABLY substantive, the court may apply judge-made federal common law after a balancing test

Caveat 2: If a codified (FRE or FRCP) federal common law applies directly to the issue in question, the federal rule MUST be applied in federal court

Question 48

What is the Last in Time Rule (Conflict of Law)

Answer 48

When a valid, final judgment is inconsistent with another valid, final judgment, the most recent judgment is entitled to full faith and credit

Question 49

What types of foreign cases are not subject to full faith and credit clause?

Answer 49

1. A judgment by a court without jurisdiction, when the issue of jurisdiction WAS NOT LITIGATED in the original action
2. Extrinsic fraud, i.e. bribing a judge - judgments that are the result of extrinsic fraud are not entitled to full faith and credit. This does not include issues like perjury or judicial errors.
3. Penal Judgments: penal judgments from another state do not have to be enforced, but SCOTUS determines which types of judgments are excluded from the full faith and credit clause and have not ruled on this in some time

Question 50

What types of foreign judgments ARE enforceable in the forum state under the full faith and credit clause?

Answer 50

Final Judgments without any outstanding appeals, thus where the judgment is not modifiable under the law of the rendering state

Must be on the merits - substantive issues were decided by the court
-Includes: judgment after trial, summary judgment, dismissal on the merits, default judgment
-Excludes: dismissals for lack of jurisdiction, dismissals without prejudice

Question 51

Foreign Workers Compensation Judgments

Answer 51

If an employee gets an award in State A, he can still get a supplemental award in State B, unless the law in State A bars additional recovery using unmistakable language

Question 52

Divorce Decree over other states’ marriages

Answer 52

A divorce is a judgment, and as long as one spouse is domiciled in the forum state, the court has jurisdiction to issue a divorce

If the court has PJ over both spouses, the divorce judgment is called a “bilateral divorce decree” and is entitled to full faith and credit clause

If court has PJ over only one spouse, it is called an “ex parte” divorce. Spouse seeking divorce must establish domicile in the state and there is often a waiting period. Full faith and credit will be given to the divorce, but not necessarily other divorce-related matters like child custody, child support, alimony, and property

Question 53

Foreign Country Judgments

Answer 53

NOT subject to full faith and credit
Usually a matter of comity (mutual respect among sovereigns)
American courts have refused to enforce foreign judgments that are contrary to forum public policy

Uniform Foreign Money Judgment Recognition Act (adopted in most states): Foreign money judgments are enforceable in the same manner as sister state judgments; foreign non-money judgments are not covered by the statute but are usually enforced under comity

Question 54

For purposes of marriage, what is the traditional approach to conflicts of law under the 1st restatement?

Answer 54

The validity of marriage is governed by the law of the state where the marriage is celebrated. If the marriage is valid where it was celebrated, it is recognized in all other states unless it violates a particularly strong public policy of the domicile of either party.

Question 55

For purposes of marriage, what is the Most Significant Relationship / 2d Restatement approach to conflicts of law?

Answer 55

A marriage will be valid everywhere unless the marriage violates the public policy of the state with most signfiicant relationship with the parties at the time of marriage.

Question 56

Which state’s laws govern the validity of a will?

Answer 56

The property affected by the will determines which state’s laws apply to each property, based on the type of property that it is. These same laws will also determine the validity of the will, as to those items.

Thus, the laws of a state where real property is located will determine the validity of the will as to the real property, while the laws of the state where the decedent was domiciled will determine if the will is valid as to the personal property in the will.