Conflicts of Laws

Question 1

What is a “rendering jurisdiction”?

Answer 1

The place where the judgment was originally entered

Question 2

What is a “recognizing jurisdiction”?

Answer 2

the place where recognition is being sought

Question 3

What is the analysis for recognition of judgments for a sister state?

Answer 3

1. Are the requirements of full faith and credit satisfied?
2. Are there any valid defenses?

Recognition is required when the answer to #1 is yes and the answer to #2 is no

Question 4

What is the analysis for recognition of judgments for a foreign country?

Answer 4

Is the foreign judgment entitled to comity?

Question 5

What are the requirements for Full Faith and Credit?

Answer 5

The rendering court must have had personal and subject-matter jurisdiction to render a final judgment on the merits.

Question 6

What are the exceptions to the jurisdiction prong of the Full Faith and Credit Analysis?

Answer 6

• Jurisdiction – The rendering state must have had personal jurisdiction and jurisdiction over the subject matter.
  
  • When the issue of jurisdiction has been fully and fairly litigated, the jurisdictional determination is itself entitled to full faith and credit.
  • If personal jurisdiction defenses are waived, the issue will be considered fully and fairly litigated.

Question 7

What types of decisions will be considered “on the merits” under the Full Faith and Credit analysis?

Answer 7

Examples of judgments not on the merits include dismissals based on:

• Lack of jurisdiction (either personal or subject matter);
• Misjoinder;
• Improper venue; and
• Failure to state a claim (sometimes).

Question 8

Are default and consent judgments considered “on the merits” under the Full Faith and Credit analysis?

Answer 8

A default judgment treats all factual contentions as admitted and is therefore on the merits for full faith and credit and recognition of judgment purposes. (But since no actual issues were determined, the judgment could not be used for issue preclusion.)

A consent judgment entered after settlement also is considered on the merits for purposes of recognition.

Question 9

What is required for finality under the Full Faith and Credit analysis?

Answer 9

The judgment entered by the rendering court must be a final judgment.

The most common application here is a judgment on appeal in the rendering jurisdiction, which is not final.

Question 10

Which state’s laws will be used to determine the result of the Full Faith and Credit analysis?

Answer 10

These three requirements are evaluated using the law of the rendering state.

Question 11

Which state’s laws will govern the method of enforcement of a recognized judgment?

Answer 11

the law of the enforcing state governs the method of enforcement

Question 12

What are the valid defenses to Full Faith and Credit?

Answer 12

Penal Judgments

A penal judgment is not entitled to full faith and credit. A penal judgment is one that punishes an offense against the public. In practice, this means that the plaintiff in the suit that led to the judgment was the state.

Extrinsic Fraud

A judgment obtained by extrinsic fraud is not entitled to full faith and credit. Extrinsic fraud is fraud that could not be corrected during the regular course of proceedings leading to the judgment.

Question 13

What are common, attractive, but invalid, defenses to Full Faith and Credit?

Answer 13

• Public policy
  
  • i.e. the public policy of the recognizing jurisdiction is different from that of the rendering jurisdiction, so the recognizing jurisdiction should not recognize the judgment
• Mistake
  
  • i.e. the rendering court mistakenly applies the wrong law or incorrectly applies the law, so the recognizing court should correct the mistake.

Question 14

What is the analysis for recognizing judgments of a foreign court?

Answer 14

Is the foreign judgment entitled to comity?

Factors to consider:

• Did the foreign court have jurisdiction?
  
  • Recognizing courts have greater leeway to asses jurisdiction than under the Full Faith and Credit Analysis.
• is the foreign judgment final?
• Was the foreign judgment on the merits?
• Were the procedures in the foreign court fair?

Question 15

What is the core question and core answer to a choice of law analysis?

Answer 15

The core question is: “Which state’s law will govern?”

The core answer is: The governing law is the law selected by the forum court according to its choice of law approach (assuming no applicable constitutional or statutory restrictions).

Question 16

What choice of law rules will a federal court apply in a diversity case?

Answer 16

A federal court sitting in diversity applies the choice of law approach of the state in which it sits.

Question 17

What choice of law rules apply to federal court diversity cases after transfer?

Answer 17

When a diversity case is filed in a proper venue, and the case is transferred within the federal system, the federal court applies the choice of law approach of the original (transferor) court.

When the case is filed in an improper venue, or filed in a venue in defiance of a forum selection clause, the law of the transferee court (that is, the court to which the case is transferred) will apply.

Question 18

What limits are imposed on a state’s ability to make choice of law determinations?

Answer 18

Constitutional

The Constitution imposes a limit only if a state’s law is chosen that has no significant contact with and/or legitimate interest in the litigation.

Statutory

Rule: If the forum state has a statute that directs a choice of law, then the forum court should apply that statute instead of the usual choice of law approach. A common example is a borrowing statute, which requires the court to apply the statute of limitation of another state regardless of the choice of law approach that the state uses. We’ll cover those later.

Question 19

What are the three analytical approaches to choice of law issues?

Answer 19

1. The vested rights approach of the First Restatement,
2. The most significant relationship approach of the Second Restatement, and
3. The interest analysis (governmental interest) approach.

Question 20

What is the analytical framework of the vested rights approach of the first restatement?

Answer 20

In the vested rights approach (the traditional approach), the following three analytical steps are taken:

• (1) characterizing the area of substantive law,
• (2) determining the particular choice of law rule, and
• (3) localizing the rule to be applied.

Note: The forum will generally apply its own law in characterizing an issue, even if the state where the issue arose would apply a different characterization.

“Under this 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.”

Question 21

What is the analytical framework of the interest analysis approach?

Answer 21

• Start from the assumption that the forum will apply its own law.
• Then, you consider whether the forum has any interest in the litigation;
  
  • if forum has no interest, it is a “false conflict” situation and the forum will apply the law of the state with an interest.
• When both the forum and the second state have interests; this is a “true conflict” situation, but you still apply forum law.

“Under this approach the court will consider which states have a legitimate interest in the outcome of the litigation. The forum court will apply its own law as long as it has a legitimate interest. If the forum state has no legitimate interest, it will apply the law of another interested state.”

Question 22

What is the analytical framework of the most significant relationship approach of the second restatement?

Answer 22

Seeks to identify the state having the most significant relationship with respect to the issue at hand and then apply that state’s law on that issue.

To do this, you consider the facts connecting the case to each relevant jurisdiction and whether the policy-oriented principles should be considered.

“Under this approach the court will apply the law of the state which is most significantly related to the outcome of the litigation. To determine this, the court will consider connecting facts and policy principles.”

Question 23

What policy-oriented principles should be considered under the most significant relationship approach of the second restatement?

Answer 23

• Needs of interstate systems;
• Relevant policies of forum;
• Policies and interests of other jurisdictions;
• Expectations of parties;
• Basic policies underlying substantive law;
• Predictability and uniformity of result;
• Ease of determination of foreign law.

Question 24

Under the vested rights approach of the first restatement, what are the vesting rules for each substantive area of law?

Answer 24

Torts

• The governing law is the law where the injury occurred.

Contracts

• If the case is about formation, you apply the law of the place of contracting.
• If the case is about performance, you apply the law of the place of performance.

Property

• If real property, apply the law of the situs.
• If personal property:
  
  • If the case involves an inter vivos transaction, you apply the law of the situs at the time of transaction.
  • If the case involves a matter relating to inheritance, you apply the law of the decedent’s domicile at the date of death.

Question 25

What effect does a valid choice of law provision have in a contract?

Answer 25

If the choice of law provision is enforced, the provision displaces the choice of law analysis that the court would otherwise perform. Conversely, if the choice of law provision is rejected, the court should then conduct a choice of law analysis.

Question 26

When is a choice of law provision in a contract valid?

Answer 26

A choice of law provision will be enforced if it is valid and express.

Exceptions:

• The law selected has no reasonable relationship to the contract.
• The provision was included without true mutual consent.

Question 27

In a torts case, what are the factual connections relevant to a choice of law analysis using the most significant relationship test of the second restatement?

Answer 27

• (1) of injury;
• (2) of the conduct causing injury;
• (3) where the parties are at home; and
• (4) where the relationship, if any, is centered.

Usually results in application of the law of the place of injury UNLESS

• The rule at issue is a loss distribution rule (such as loss limitations, vicarious liability rules, and rules eliminating liability like immunity rules); and
• The parties share a common domicile.

Question 28

In a contracts case, what are the factual connections relevant to a choice of law analysis using the most significant relationship test of the second restatement?

Answer 28

• (1) the place of contracting;
• (2) the place of negotiation;
• (3) the place of performance; and
• (4) the place where the parties are at home.

Question 29

What valid defenses can be raised in a choice of rule analysis?

Answer 29

Public Policy

• A forum court will not apply a law that is against its own fundamental public policy.

Procedural Rules

• Regardless of the outcome of the choice of law analysis, the forum court will always apply its own procedural rules.
• The general rule is that statutes of limitations have been viewed as procedural.
• Borrowing statutes direct a court to look at both the forum limitations period and the foreign limitations period (in cases where foreign law governs under a normal choice of law analysis) and then to typically apply the shorter period.

Question 30

What are the requirements for domicile?

Answer 30

(1) physical presence in the new domicile; and
(2) an intent to remain permanently (or indefinitely) in the new domicile.

Question 31

In what situations is domicile assigned by operation of law?

Answer 31

Children

• Newborns are assigned the domicile of their parents.
• In cases of divorce, children are assigned the domicile of their custodial parent.

Incompetents

• An individual who is mentally incompetent is assigned the domicile of their parents.
• If an individual becomes incompetent after acquiring a domicile by choice, they retain the chosen domicile.