Conflicts of Laws
|Conflict of Laws|
Conflict of Laws: Cases and Materials (Aspen Casebook)
The principles of conflict of laws provide guidelines to determine whether a court of the forum jurisdiction will apply its law or the laws of another jurisdiction to a dispute.The purposes of these rules are (1) uniformity in results in their determination / predictability, and (2) to prevent forum shopping.
- 1 TRADITIONAL APPROACHES TO CHOICE OF LAW
- 2 ESCAPE DEVICES
- 2.1 CHARACTERIZATION = THE PROCESS OF DETERMINING WHAT KIND OF ISSUES ARE PRESENTED IN A CASE.
- 2.2 SUBSTANCE OR PROCEDURE = AN ISSUE IS SUBSTANTIVE IF BY RESOLVING IT, THE COURT DETERMINES THE PARTIES’ LEGAL RIGHTS AND RESPONSIBILITIES. AN ISSUE IS PROCEDURAL IF IT GOES TO THE JUDICIAL PROCESSES TO CONDUCT LITIGATION AND DETERMINE THE PARTIES’ RIGHTS AND RESPONSIBILITIES.
- 2.3 RENVOI = “TO SEND BACK” – A SET OF CHOICE OF LAW RULES THAT ARE USED WHEN A COURT IS DIRECTED TO CONSIDER THE LAW OF ANOTHER STATE/COUNTRY. THIS IS PROBLEMATIC BECAUSE FOREIGN CHOICE OF LAW MAY ALREADY BE THE LAW OF THE FORUM COURT, CAUSING AN ENDLESS CIRCULAR CYCLE.
- 2.4 PUBLIC POLICY, PENAL LAWS & TAX CLAIMS
- 3 PLEADING AND PROVING FOREIGN LAW
- 4 MODERN APPROACHES TO CHOICE OF LAW
- 5 CONSTITUTIONAL LIMITATIONS ON CHOICE OF LAW
- 6 JURSIDICTION OF COURTS
- 7 RECOGNITION OF JUDGMENTS
- 8 INTERNATIONAL CONFLICT OF LAWS
- 8.1 THE TERRITORIAL PRINCIPLE
- 8.2 THE NATIONALITY PRINCIPLE
- 8.3 THE EFFECTS PRINCIPLE
- 8.4 THE PROTECTIVE PRINCIPLE
- 8.5 THE UNIVERSALITY PRINCIPLE
- 8.6 THE PASSIVE PERSONALITY PRINCIPLE
- 8.7 RESOLVING CONFLICTS OF JURISDICTION
TRADITIONAL APPROACHES TO CHOICE OF LAW[edit | edit source]
The below are all traditional substantive law approachesThe traditional system for choice of law in the United States was the system embodied in the 1st Restatement. Based on the vested rights theory. Some states still follow the 1st Restatement.Vested Rights Theory (BEALE): Alternative to comity. Foreign law could never operate outside the territory of the foreign sovereign. Rather, the forum’s use of foreign law could be explained in terms of the creation and enforcement of vested rights. Basically, when an event occurred in a foreign territory, a right was created. Because the only law that could operate in the foreign territory was the law of the foreign sovereign, the existence and content of any such right was determined by the foreign law. The forum court simply enforced the right which had vested in the foreign territory according to the foreign law.
- Must know when and where a particular right vested b/c the law of the place where the right vested would control the content of the right
The 1st Restatement rules are jurisdiction-selecting rules. The court does not consider the scope, content or policy of the substantive rule of law until after the state is chosen. Thus, the 1st Restatement rules are not concerned w/ which substantive rule is “better” or which validates the parties’ intentions, or which is motivated by a policy that can be advanced by its application in this case. Rather, it is concerned only w/ identifying a particular event and the jurisdiction in which that event occurred.Territoriality Principle (HUBER): The laws of each state have force within the limits of that government and bind all subjects to it, but not beyond. In other words, we view a state or country’s law as applying only within that state/country’s boundaries. Otherwise, we apply the law of the state where the cause of action came into existence. Look for the last even that occurred in regard to the cause of action – that is the state whose law applies.
TORTS[edit | edit source]
APPLY THE PLACE OF THE WRONG (1st Restatement § 384)This is essentially where the injury occurred (lex loci delecti). The place of the wrong is in the state where the last event necessary to make an actor liable for an alleged tort takes place (§ 377). The rationale is that the plaintiff does not sue the defendant for the latter’s negligence, but because the negligence has caused the plaintiff harm. The tort is complete only when the harm takes place, for this is the last event necessary to make the actor liable for the tort.Exceptions:
- Vicarious liability (§378) of defendant for the acts of another is determined by the place of the wrong only if defendant authorized the person to act for him in that state.
- §382 shields from liability a person who acts in state X pursuant to a legal duty or privilege and causes injuries actionable in state Y
- §380(2) provides that one who acts in state X in reliance upon a very particular standard of care will not be liable if the act causes injury in state T where the relevant standard is higher
|Alabama Great Southern R.R. Co. v. Carroll, 97 Ala. 126 (1892)||AL worker for AL railroad, injured working in Mississippi, contract in AL. The place of the injury rule required that application of MS law, even when both parties were AL residents and negligence occurred in AL. Doesn’t matter that the K under which he was operating was in AL. Duties and liabilities are not imposed by the K between the parties.Exceptions: If the law of the place of wrong depends on the application of a standard of care, that standard should be taken from the law of the place of the actor’s conduct. Additionally, a person required or forbidden to act under the law of the place of acting should not be held liable for consequences in another state.Policy: If law can be assumed to be generally responsive to the values and preferences of the people who live in that community, then the law of the place of the accident can be expected to reflect the values and preferences of the people most likely to be involved in accidents.|
CONTRACTS[edit | edit source]
APPLY THE LAW OF THE PLACE WHERE THE CONTRACT WAS MADE (OR WAS TO BE PERFORMED)'
- Law Governing Validity of Contract (§ 332): The law of the place of contracting determines the validity and effect of a promise.
- Law Governing Performance (§ 358): The duty for the performance of which a party to a contract is bound will be discharged by compliance with the law of the place of performance of the promise.
To determine the “place of contracting” (§ 311) the forum should look at the place in which the principal event necessary to make a contract (according to the General Law of Contracts) occurs. The forum doesn’t need to ascertain whether there is a contract. Instead, it examines the facts of the transaction in question only so far as is necessary to determine the place of the principal event which would result in a contract. Once that is completely, then they look to whether there is a contract.
- Also look at:
- §312 – Formal Contract: When a formal contract becomes effective upon delivery, the place of contracting is where the delivery is made.
- §323 – Informal Unilateral Contract: The place of contracting is where the event takes place which makes the promise binding.
- §325 – Informal Bilateral Contract: The place of contracting is where the second promise is made in consideration of the first promise.
- §326 – Acceptance Sent From One State to Another: When an offer for a bilateral contract is made in one state and an acceptance is sent from another state to the first state in an authorized manner, the place of contracting is as follows:
- (a) If the acceptance is sent by an agent of the acceptor, the place of contracting is the state where the agent delivers it.
- (b) If the acceptance is sent by any other means, the place of contracting is the state from which the acceptance is sent.
|Milliken v. Pratt, 125 Mass. 374 (1878)||Contract signed in OR, but mailed to ME by a married MA woman. The Court held the K created in ME, where a woman could contract, so that law applies even though she couldn’t contract in MA. Should recognize the expansion of womens’ rights. Under the vested rights approach, party rights vest at the moment the K is “made,” not completed when signed, but when goods delivered in reliance on the guarantee (unilateral K). The reasoning being that the K was complete when guaranty was received and acted on in OR so the Court treated the K as if it was made and performed in ME.|
REAL PROPERTY[edit | edit source]
(IMMOVABLES) = APPLY THE LAW OF THE SITUS (WHERE THE LAND IS LOCATED)Rationale:
- Land and things attached to the land are within the exclusive control of the state in which they are situated, and the officials of that state are the only ones who can lawfully deal with them physically
- Immovables are of great concern to the state in which they are situated, and it is therefore proper than the law of the state should be applied to the them
- Certainty and convenience
PERSONAL PROPERTY[edit | edit source]
(MOVABLES) = APPLY THE LAW WHERE THE PLAINTIFF IS DOMICILEDSince personal property can be moved, we determine the location by the location of the plaintiff’s domicile. For most purposes, personal property should be governed by the law of the domicile of the owner, which law would change with a change of domicile.BASICALLY 'à' The traditional process for determining choice of law issues is that the law of the jurisdiction of domicile governs the disposition of personal property (movables), and the law of the situs governs the disposition of real property (immovables).''''
|In re Barrie’s Estate, 35 N.W.2d 658 (1949)||Deceased executed a will leaving land in Iowa to a church in Illinois but will marked “void”. Improper revocation in IL but ok in Iowa. Under the intestacy laws of IL, property in the state was distributed to heirs. But under Iowa law, it goes to the church. Iowa courts can interpret a non-resident’s will who dies owning real property in Iowa. But just b/c the will was revoked in IL, doesn’t mean it was revoked in Iowa. The rule then is (BEALE) the law of the place the immovable is located governs the revocation of the will, and the capacity of the testator and the effect of the will. FF&C does not apply to real property situated in a state other than the one in which the decree was rendered.|
''''Domicile (2nd Restatement § 11): Domicile consists of two elements that must exist concurrently: (1) physical presence in the jurisdiction, and (2) the intent to remain indefinitely.This differs from residence. Residence does not generally involve the requisite attitude of mind and requires only physical presence in a particular locality of an actual place of abode. A person can have several residences.Domicile usually gives the State personal jurisdiction over the Defendant. The law of one’s domicile will govern in certain cases.
- Domicile by Operation of Law (child takes parent’s domicile) – If a natural person lacks capacity to acquire a domicile of choice, the law will assign the person a domicile.
- Domicile of Choice (presence plus intent)
- Domicile of Origin (child take domicile of father then mother)'
|White v. Tennant, 8 S.E. 598 (1888)||Left home in WV intending to move to PA farm. Moved stuff into new house, got sick, died in WV with no will. The Court held that the deceased was domiciled in PA at death b/c he left WV with the intent and purpose of making a home in PA. The rule then is that the law of the decedent’s domicile state at the time of death controls the distribution of his estate.|
ESCAPE DEVICES[edit | edit source]
'An escape device is one that allows judges to use the law of the forum if the foreign law was contrary to the public policy of the forum state.Although bright line rules can be favorable in certain circumstances, they frequently lead to exceptions to reduce their severity. Because the “interest” argument wasn’t available during the 1st Restatement/traditional approach jurisprudence, judges began employing certain escape devices to address the critiqued arbitrariness in applying the 1st Restatement.Four main exceptions:
- Characterization of the case
- Substance v. Procedure
- Public Policy
CHARACTERIZATION = THE PROCESS OF DETERMINING WHAT KIND OF ISSUES ARE PRESENTED IN A CASE.[edit | edit source]
Requires courts to distinguish (1) among different areas of substantive law and (2) between issues of substance and issues of procedure. There is no clear way to characterize every case. Courts generally try to adopt the characterization that most neatly aligns with the case’s peculiar facts and the cause of injury, often looking to analogous precedent for guidance.Different choice of law rules apply to different areas of substantive law. Thus, characterization determines the specific choice of law analysis, and the choice of law analysis determine which jurisdiction’s law the court will apply.How to Characterize:
- Did the statute use SOL for K or for tort?
- If the law where the parties act doesn’t give legal validity to their acts, no other law should validate.
- Is there sufficient interest in case to apply X law?
- Some judges are less willing to imply terms into a K, so it’s a judicial defense decision? Or judges want the morally just thing to be done so they pick the law that best suits most rational decision?
|Levy v. Daniels’ U-Drive Auto Renting Co., 108 Conn. 333 (1928)||Agency rented to driver, accident, passenger sued rental company. The vested rights doctrine would refer to the law of the place of contracting (CT), where the agent would be liable to the 3rd party beneficiary for the lease K for the subsequent tort, BUT by using re-characterization as an “escape device” the situs of the applicable law is shifted from the place of the tort of the tort accident (MA) to the place of the contract (CT).The Court held this was a contract claim, not tort. The CT statute making agencies liable for damage done during rental was implied into the contract under CT law. The purpose of the CT statute was to give the injured person a right to recover from the rental agency which encourages people to rent to careful drivers to keep the roads safe for everyone.|
|Haumschild v. Continental Cas Co., 7 Wis.2d 130 (1959)||Wife sued husband for accident in CA. The Court held the wife could sue b/c this was a spousal immunity case, not a tort case. Look to the law of the husband and wife’s domicile. Reasoning is historically, law governing the creation and extent of tort liability is that where the tort was committed, and inter-spousal immunity from liability is governed by the place of the injury, but the ability to sue within a family is properly decided by the law of the family’s domicile b/c they have primary responsibility for regulating relationships.|
SUBSTANCE OR PROCEDURE = AN ISSUE IS SUBSTANTIVE IF BY RESOLVING IT, THE COURT DETERMINES THE PARTIES’ LEGAL RIGHTS AND RESPONSIBILITIES. AN ISSUE IS PROCEDURAL IF IT GOES TO THE JUDICIAL PROCESSES TO CONDUCT LITIGATION AND DETERMINE THE PARTIES’ RIGHTS AND RESPONSIBILITIES.[edit | edit source]
The general rule, under any approach to choice of law, is that the forum state will apply its own procedural rules, even if its choice of law rules lead to the substantive law of another jurisdiction.When foreign law is applicable, it governs matters of substance, but the law of the forum always governs matters of procedure. Portraying a law, such as a SOL, as procedural or substantive is part of the characterization process.Test: Was the limitation directed to the newly created liability so specifically aimed as to warrant saying it qualified the right? If yes, it is substantive. If no, procedural.Statute of Limitations: Courts generally characterize SOL as procedural and apply the law of the forum.
|Grant v. McAuliffe, 41 Cal.2d 859 (1953)||Procedural. Tort (AZ), both drivers from CA, estate in CA. In AZ, the suit dies with the person. In CA, the suit survives against the estate. The Court held that survival of a statutory cause of action is procedural as it is more analogous to SOL law b/c it doesn’t create a right of action, just dictates when you can bring it.|
|Bournias v. Atlantic Maritime Co., Ltd., 220 F.2d 152 (1955)||'Substantive. Maritime employee, changed boat registration, SOL issue about when employee can sue. The Court held SOL was procedural. The limitations section wasn’t so tied to the substantive cause of action section to consider them together. SOL are considered procedural but an exception to the general rule that when SOL Goes to the right itself and not to the remedy.'|
RENVOI = “TO SEND BACK” – A SET OF CHOICE OF LAW RULES THAT ARE USED WHEN A COURT IS DIRECTED TO CONSIDER THE LAW OF ANOTHER STATE/COUNTRY. THIS IS PROBLEMATIC BECAUSE FOREIGN CHOICE OF LAW MAY ALREADY BE THE LAW OF THE FORUM COURT, CAUSING AN ENDLESS CIRCULAR CYCLE.[edit | edit source]
Forum state looks at foreign law, but foreign law looks back at the forum state.Option 1: Any references to foreign law means internal law only (not their COL). The 1st Restatement directed courts to ignore foreign COL rules except for title of land and validity of divorce decrees, which are controlled by situs of land and domicile of parties, respectively.
|In re Schneider’s Estate, 198 Misc. 1017 (Sur.Ct.N.Y. Co. 1950)||U.S. citizen from Switzerland. Domiciled in NY, left property in Switzerland. Swiss law (property of a foreign national is split among heirs), and NY law (will decides) conflict. Swiss conflict law said foreign national issues are decided by domiciliary internal law.The Court held that NY law applies. Actions concerning real property are properly decided only before the courts of the situs BUT under NY law, the forum has to look to the whole law of Switzerland. Under Swiss law, courts look to NY law (domicile), NY law says it’s valid, so the transaction surrounding the Swiss property under the will are valid.Following the whole Swiss law ensured uniformity of result, and still gives them the sovereign rights to decide how land in their jurisdiction is disposed.This is an example where renvoi is recognized as an option, in which the local court chose to apply the foreign country’s laws to decide the dispute in the local court.|
Renvoi is an attempt to apply the same law to achieve the same result no matter where the case is litigated (§8(2) of the 2nd Restatement). If a forum court Is directed to consult a foreign law, the first question is must address is whether the matter is solely relevant to substantive provisions, or to the state’s procedural system of law as a whole. If the second state actually has choice of law rules requiring it to apply the forum law, a difference in outcome might arise depending on where the plaintiff invokes jurisdiction.In the U.S., most courts try to solve conflict of laws questions without invoking renvoi.
PUBLIC POLICY, PENAL LAWS & TAX CLAIMS[edit | edit source]
The traditional approach does not require the forum to apply a law that violates its public policy. This exception arises as an escape device to justify using the law that gets the morally right result. Yet this may cause an exception that swallows the rule as your rights would never be fully vested if a court could always refuse to enforce rights on public policy grounds.
|Loucks v. Standard Oil Co. of New York, 224 N.Y. 99 (1918)||Decedent was a resident of NY, accident in MA. MA had a tort damage limitation, and NY didn’t have a cause of action or limitation. Statute was not penal and NY public policy doesn’t prohibit the MA cause of action being heard in a NY court, and no reason to refuse a cause of action just b/c the legislature hasn’t acted on issue in NY yet. The Court held that it can hear the case in NY. Foreign based rights will be protected unless there is some profound public policy against it. The mere difference in laws is not enough.|
|Mertz v. Mertz, 271 N.Y. 466 (1936)||Wife sued husband for accident in CT (no immunity), domicile in NY (spousal immunity). Forum’s public policy offered a reason to overrise the 1st Restatement choice of CT law. State judges can only refuse to give reciprocity to another jurisdiction’s laws if their enforcement violates some in-state public policy. Here, there is more than a “mere difference in law,” and the application of the foreign law offends NY sense of justice and is a menace to the public b/c it encourages spousal disharmony.|
|Holzer v. Deutsche Reichsbahn-Gesellschaft et al, 277 N.Y. 474 (1938)||German company fired Jewish/German employee. K claim. The Court held there was no breach of K b/c the German government required the defendants to discharge the plaintiff. Not against public policy to hold people to K’s they make in their country to be performed under that country’s laws. Every sovereign is required to respect the independence of every other sovereign state. The forum state cannot judge the acts done under a foreign jurisdiction’s law.|
Public Policy: Sometimes a choice of law analysis will direct a court to apply foreign law, but the foreign law would violate the public policy of the forum state. In this event, the forum court may decide not to apply the foreign law.
- Mere differences are not enough. The foreign law must contravene the forum’s strong public policy. (2nd Restatement § 90). To violate a strong public policy, the foreign law must “violate some fundamental principle of justice, some prevalent conceptions of morals, some deep-seated tradition” of the forum. (Loucks)
- If the law violated public policy, the court may refuse to hear the case at all, or may refuse to apply the rejected foreign law and instead apply the law of either the forum or another interested jurisdiction.
The 1st Restatement precluded suits under a cause of action created in another state, the enforcement of which would be contrary to the strong public policy of the forum.The 2nd Restatement instructs the forum court to consider the forum’s relevant policies in determining which jurisdiction has the most significant relationship to the parties and the case. Therefore, it permits courts to consider a public policy objection to specific rules of foreign law as part of the choice of law analysis.''''Penal Laws: The 1st Restatement § 611 provides that the forum will not entertain a cause of action to enforce another jurisdiction’s penal laws. The 2nd Restatement § 89 states that the forum will not entertain an action based on foreign penal law and will entertain a criminal prosecution only under its own laws.
- A law is penal if it exacts a penalty in favor of the government, a public officer on behalf of the government, or even a member of the public suing in the public’s interest to redress a public wrong. These include criminal statutes, and regulatory laws imposing penalties payable to the state.
Tax Claims/Revenue Laws: Traditionally, a court will not hear a case in which another state seeks to enforce its tax or revenue laws. Now, most states will now entertain causes of action to enforce other state’s revenue laws. Another state will always enforce the tax or revenue judgments of another state’s courts, pursuant to FF&C Cl.However, the U.S. will not enforce the revenue laws of other countries unless a federal statute of treaty requires enforcement.
PLEADING AND PROVING FOREIGN LAW[edit | edit source]
In determining another country’s law, the federal courts follow the Federal Rules of Civil Procedure, and state courts generally apply their respective civil procedure rules. (2nd Restatement §136; F.R.C.P. §44.1).
|Walton v. Arabian American Oil Co., 233 F.2d 541 (2d Cir. 1956)||Plaintiff is resident of Arkansas who was injured in Saudi Arabia when he was hit by a truck owned and operated by Arabian, a Delaware corp. The court held that a court may not decide a tort suit based on the law of the forum, where neither party pleads or proves the applicable foreign law. NY law applies. The recognition of foreign law is an issue for the judge.|
Traditionally, the content of foreign law presented an issue of fact. The party seeking to apply foreign law had the burden to prove its contents. This is not how it is anymore. Courts now treat the content of foreign law as an issue of law.There is no burden of proof. However, the party seeking to rely on a foreign country’s law must provide notice to the other parties and the court. If that party does not do so, then the court may apply the law of the forum and need not consider whether or to what extent any foreign country’s law may apply.
- If the court cannot determine the content of foreign law, it can/will either (1) dismiss the claim; (2) decide to apply foreign law, but it will presume that foreign law is the same as forum law; (3) the forum court will simply decide to apply forum law.
To determine the content of another U.S. state’s law, look at relevant materials which are easily available and are in the same language. Most states have also enacted statutes authorizing their courts to take judicial notice of another state’s law.
MODERN APPROACHES TO CHOICE OF LAW[edit | edit source]
After the 1st Restatement, several additional approaches were developed in response to the critiques surrounding the rigidity of the traditional approaches. Some statutes were passed mandating specific approaches to conflict of laws questions. Statutory directives are normally more consistent and easier to apply, and they explicitly dictate what happens in multi-state disputes.'Always look to see if there is a statute that addresses the COL issues.Modern approaches to choice of law look to contacts generated by the sequence of events giving rise to the case, as well as the jurisdictions’ contacts with the parties (like domicile). These approaches assume that states may apply their own law to events that took place elsewhere, so long as the state applying its own law has an interest in the events giving rise to the case.If multiple states have meaningful connections to the litigation, then a court will consider the nature and strength of each state’s interests in having its law apply. The state with the strongest interest will generally be the state whose law the court will select to govern the case.'
PARTY AUTONOMY AND THE RULE OF VALIDATION[edit | edit source]
''''Used the determine the validity of contracts.
|Pritchard v. Norton, 106 U.S. 124 (1882)||Appeal bond signed by Pritchard (LA) and Norton (NY) agreeing to indemnify Pritchard from loss. Under NY law, bond invalid b/c lacked consideration b/c appeal bond executed before promise for indemnity (but valid under LA law b/c no consideration is needed). The Court held LA law controls. Even though this was a validity issue, a K is governed by the law that the parties had in mind when the K was made, and the bond was made with a view that LA was the place of fulfillment (focus on place of performance). The rule then is when a person enters into a K to be performed in a certain place, the parties voluntarily submitted themselves to that local law.|
|Siegelman v. Cunard White Star Ltd., 221 F.2d 189 (2d Cir. 1955)||Substantial Connection: Party autonomy can be honored on a validity issue if (1) the COL is in good faith/bona fide, and (2) the law chosen must be that of the jurisdiction having some relation to the agreement (either the place of making or of performance) [implicit), (3) no evidence of an attempt to evade a certain jurisdiction’s policy, (4) existence of contrary statute, and (5) whether chosen law is oppressive to one party.]Interpretation v. Validity: P sued for injuries wife suffered on boat. Under ticket contract, there was a one year SOL but under forum court there is a 2 year SOL. No attempt by the parties to choose a random beneficial law or where their K is legal, and no statute contrary to England’s that prohibits party autonomy in these types of cases, no reason to think that English law is oppressive to passengers.|
Basic rule is to let the express or implied intent of the parties control the choice of law where the chosen state has some reasonable relationship to the transaction or the parties and where a fundamental policy of the forum is not violated.2nd Restatement § 187(2): The law of the state chosen by the parties to govern their contractual rights and duties will be applied even if the particular issue is one which the parties could not have resolved by an explicit provision in their agreement directed to that issue unless:
- (a) The chosen state has no substantial relationship to the parties or the transaction and there is no other reasonable basis for the parties’ choice; or
- (b) Application of the law of the chosen state would be contrary to a fundamental policy of a state which has a materially greater interest than the chosen state in the determination of a particular issue and would be the state of the applicable law in the absence of an effective choice of law by the parties.
If the parties fail to choose an applicable law, §188 determines the applicable law by applying local law of the state which has the most significant relationship to the transaction and the parties under the principles stated in §6.Section 6 sets forth the following criteria upon which to base the determination of which state has the “most significant relationship”:
- The place of contracting;
- The place of negotiation of the contract;
- The place of performance;
- The location of the subject matter of the contract; and
- The domicile, residence, nationality, place of incorporation and place of business of the parties.
These contacts are to be evaluated according to their relative importance with respect to the particular issue.The Rule of Validation: A contract is upheld that is valid under the domestic law of any state having a contact with the parties or with the transaction sufficient to make that state’s validating policies relevant, unless some other state would advance its own policies by invalidating the contract and one or more of the following factors suggest that the conflict should be resolved in favor of invalidity:
- Protection of the party in the inferior bargaining position
- A difference in basic policy rather than minor detail
- Foreseeability to the parties that the invalidating law would be applied
- Noncommercial context of the contract
|Wyatt v. Fulrath, 16 N.Y.2d 169 (1965)||Duke and Duchess of Arion – Spanish law would leave half of property to wife, but NY law would let all husband’s property go to surviving spouse. The Court held that NY law should apply. The intention of the parties to protect assets under laws where property sits should govern. Situs selected by the spouses for the safekeeping of their property governs the disposition of the property.|
The courts have enforced forum-selection clauses in contracts because they help to achieve predictability in international business transactions and other desirable ends.If the parties choose a place, first look at whether it’s sufficient under 2nd Restatement Sec. 187. (1) Is it a choice of law issue for which they could have resolved with an explicit provision? If so, then respect party autonomy and apply their chosen law. (2) Apply the law of the state the parties chose to apply unless the law of the chosen state has no substantial relationship to the parties or the transaction, or the law of the chosen state is contrary to fundamental policies of a state which has a greater material interest. (3) Absent a contrary indiciation of intent, refer to local law of state of chosen law.
INTEREST ANALYSIS[edit | edit source]
FOCUSES ON THE POLICIES BEHIND THE LAWS OF THE FORUM AND OTHER INTERESTED STATES, ALONG WITH THE CIRCUMSTANCES GIVING ANY STATE A REASONABLE INTEREST IN APPLYING ITS POLICIES TO A DISPUTE.This approach is used when either the parties didn’t choose which law would apply, or the legislature either intentionally or unintentionally didn’t address the conflict of laws issue.
|Chesney v. Marek, 720 F.2d 474 (7th Cir. 1983)||Civil rights statute vs. FRCP for attorney fee recovery. The Court held that legislation must be interpreted in light of its purpose (look at policy interests behind the statute to decide importance). Intended to encourage bringing legitimate civil rights actions. Public shouldn’t be deterred from bringing good faith actions to vindicate the fundamental rights involved by the prospects of having to pay their opponent’s counsel if they lose.|
|Marek v. Chesny, 473 U.S. 1 (1985)||Same facts as above but on appeal to SCOTUS. Rule = absent congressional expressions that state the opposite, the underlying statute defines costs to include attorneys’ fees, so such fees are to be included for purposes of Rule 68.|
Interest analysis distinguishes between a state’s policies and its interests. Policies provide the rationale for a state’s decision to adopt specific rules of law. By contrast, a state has an interest in applying its law to a case only if the facts (1) create a connection between that state and the dispute, and (2) bring the dispute within the policies that the state’s rules of law are meant to advance.Three Step Process:
- Determine the Relevant Policies
- Determine Which Jurisdictions Have an Interest in Applying Their Policies (figure out if it’s a true or false conflict, or an un-provided for case)
- Select Which Jurisdiction’s Law to Apply
Determining Policies: Look beneath a rule of law to discern the underlying problem or issue that the rule was meant to address.Determining Interests: Does the jurisdiction have enough of a connection with the parties and the underlying facts to trigger that state’s policy? A sufficient connection would give a jurisdiction an interest in applying its law.Once a court has evaluated each state’s interest in applying its law to the case, the court must decide which state’s law to apply. The answer depends largely on whether the court’s evaluation of the interests reveal a false conflict, apparent conflict, true conflict or an unprovided-for case.
- 'FALSE CONFLICTS arise if an interest analysis demonstrate that only one state has an interest in applying its policy to the case. In this instance, courts will generally apply the law of the one state with an interest.
|Tooker v. Lopez, 24 N.Y.2d 569 (1969)||False Conflict. Tooker (passenger) killed when Lopez (driver) lost control of the car. NY allows wrongful death recovery for passenger, but MI guest statute bars recovery. Both were residents of NY, car was registered and insured in NY, forum in NY but MI accident. NY has an interest in making sure that passengers injured in accidents are compensated. MI has an interest in not allowing passengers and drivers to collude against insurance companies.The Court held that NY has the only real interest in whether recovery should be granted, and applying MI law would defeat a legitimate interest of the forum state without serving a legitimate interest of any other state.|
|Schultz v. Boy Scouts of America Inc., 65 N.Y.2d 189 (1985)||False Conflict. Plaintiff sued Boy Scouts for injuries from molestation by scout master. How to determine the right of recovery in an action by a foreign domiciliary for torts that are wrong under both jurisdictions’ laws.Boy Scouts in headquartered in NJ/TAX (no charity immunity), Defendant’s school in headquartered in Ohio (qualified charitable immunity). NY forum. Plaintiff is domiciled in NJ. NY has a policy which compensates people injured within their borders. NJ had a policy to not punish charities.The Court held that NJ law applies. NY had no significant interest in applying its own law to the dispute, as it can’t deter people who don’t live there. Applying NJ law reduces forum shopping and provides certainty for litigants about how to act where they are domiciled.If a tort, look at rules involving appropriate standards of conduct so place of accident usually have higher interest in protecting expectation of parties BUT when case is about allocating loss, state cautionary interest and party reliance are less important.|
- 'APPARENT CONFLICTS' arise if an interest analysis shows that multiple jurisdiction might have an interest in applying their laws to a case, and substantively, their relevant laws or policies differ. In this case, many courts will reconsider each jurisdiction’s policies or laws to see whether a more moderate or restrained interpretation might sidestep the conflict. If a more moderate, restrained interpretation shows that only one jurisdiction has an interest, then the court should apply the law of that jurisdiction.'
- 'TRUE CONFLICTS' arise only if a conflict between the laws of multiple jurisdictions with an interest is unavoidable, even after the court applies a more moderate, restrained interpretation of each one’s policies or laws. Courts differ on how these should be resolved. Currie believed that the forum court should apply the law of the forum if there is a true conflict, even if the conflict was between the laws of two other jurisdictions. Some courts appear to resolve true conflicts between their own law and foreign law by applying forum law. But many states take a different approach:'
- 'Comparative Impairment: (CA) The goal of this approach is to minimize the harm that a choice of law decision inflicts on each jurisdiction’s policies. A CA court carefully assesses and compares each jurisdiction’s interest in applying its own law, asking which one’s interest would be more impaired if the other’s law were to apply. Then the court applies the law of that state.'
- 'Better Law: A court should consider five factors in deciding which jurisdiction’s law to apply: (1) predictability of results, (2) maintenance of interstate and international order, (3) simplification of the judicial task, (4) advancement of the forum’s governmental interests, and (5) application of the better law.'
- 'Balancing Interests: Some states resolve true conflicts by assessing the respective jurisdictions’ interests to decide which are more important.'
|Lilienthal v. Kaufman, 239 Or. 1 (1964)||True Conflict. D under spendthrift provision protection in OR, no power to enter into Ks. D entered into K with P in CA (they didn’t know). K allowed in CA but not in OR. OR had an interest in protecting spendthrift/their family so they won’t become wards of the state. CA interest was that they want their citizens repaid, ensure K validity, and avoid fraud.The Court held that OR spendthrift law applies and P can’t recover. There is a true conflict and the forum law (OR) should therefore apply. Even though CA had more contacts w/ the transaction, the forum’s public policy is stronger so it should prevail.Concurrence agreed b/c OR legislature didn’t intend to protect CA creditors more than OR citizens.|
|Bernkrant v. Fowler, 55 Cal.2d 588 (1961)||House sale, decedent orally promised to forgive debt, buyers sued estate. CA has an interest to protect estates from false claims on alleged oral contracts. NV has an interest in protecting residents right who are parties to the contract and their policy that contracts be valid and enforceable.The Court held that NV law applies. At first, looks like a true conflict b/c contract is invalid under CA, but valid under NV. BUT the Court applies a “moderate and restrained interpretation” of the policies behind the laws in conflict and finds that both laws are trying to protect the reasonable expectation of the parties when they entered into the K.Policy of enforcing Ks valid under the only law applicable when the K was made, and since the K was entered into in NV, apply that law. No reason for the parties to expect that the decedent would later move to CA and ther would be a writing requirement.|
|Bernhard v. Harrah’s Club, 16 Cal.3d 313 (1976)||Comparitive Impairment. Myers (domiciled in CA) drove to NV to go to a club (Defendant’s domicile). Myers was served too much and drove home. Had an accident in CA with Bernhard (CA resident). NV has an interest is protecting tavern-keepers from liability which legislature doesn’t impose. CA’s interest is to protect public from injuries from intoxicated people.The Court held that CA law applies. CA can’t effectively effectuate its policy without extending its regulation to include out of state tavern keepers who sell to CA residents with reasonable certainty that they will drive back to CA drunk, and applying CA law doesn’t hurt NV, it just creates greater liability exposure for them.Impairs CA’s interest because this tavern is advertising in CA so puts itself at the heart of CA’s economy so puts more weight on CA regulatory interest. Similar to “purposeful availment” from International Shoe. Deliberately bringing people into CA.|
|Edwards v. Erie Coach Lines Company, 17 N.Y.3d 306 (2011)||Bus crash in NY into truck. Bus passengers are from Ontario. Bus company domiciled in Ontario. Truck driver is from PA. Plaintiffs wanted court to analyze all Defendants jointly. Ontario would have capped damages where NY law would not. The court held that when conducting COL analysis, the court may not conduct a single, joint analysis of the defendants. Must consider each plaintiff and each defendant separately. NY law applies.|
- 'UNPROVIDED-FOR CASE' arises if no jurisdiction has a legitimate interest in applying its law to the specific circumstances of the courts. Courts usually apply forum law in an unprovided-for case.'
|Erwin v. Thomas, 264 Or. 454 (1973)||Unprovided-For. Erwin (from WA) was injured by Thomas (from OR) in an accident in WA. Erwin’s wife sued Thomas for loss of consortium in OR. WA has an interest b/c it believes that wife’s rights to relationship aren’t strong enough to make negligent defendant pay wife. OR has an interest in protecting rights of married women, but not concerned of rights of non-resident married woman injured outside or OR.The Court held that neither state had a valid interest, so forum law should apply (OR). WA doesn’t care if others require non-WA residents to respond to claims.|
'''''''''''''The 2nd Restatement arose out of a desire for a return to a unified method of addressing conflicts after the fragmentation resulting from interest analysis. The 2nd Restatement developed its MSR test to determine COL issues, and to avoid the confrontation of a true conflict. Unlike the 1st Restatement, the 2nd Restatement looks at rebuttable presumptions that identify what state most likely has the most significant contacts evaluated according to their relative importance to the particular issue thus creating more judicial flexibility.This approach gives judges more discretion than the 1st Restatement, but more clearly articulated guidelines than under interest analysis. Elements used to consider “contacts” aren’t listed in order of importance and non-existence of any one contact is not dispositive. The MSR test if a fact-dependent and also has characterization issues.'
MOST SIGNIFICANT RELATIONSHIP[edit | edit source]
APPLY THE LAW OF THE STATE WITH THE MOST SIGNIFICANT RELATIONSHIP TO THE ISSUE BEING DECIDED (THE STATE WITH THE CLOSEST CONNECTION TO THE PARTIES AND THE FACTS)In applying the MSR test, a court has to decide whether the purposes sought to be achieved should be furthered at the expense of the other COL factors.
- Step 1: Characterize the case to find relevant provision of 2nd Restatement that apply
- Step 2: Use the factual contact to identify other maybe relevant jurisdictions
- Step 3: Assess each of these jurisdictions’ relationship to the present event and the parties using Section 6, including states’ policy interests
- Step 4: Decide if relationship is significant enough to override a presumption
2nd Restatement §6 sets forth general factors to determine which jurisdiction has the most significant relationship in any case:
- What the interstate and, if applicable, international systems need;
- The forum’s relevant policies;
- Other jurisdictions’ relevant policies and their respective interests in deciding the particular issue;
- Protecting justified expectations;
- The policies underlying the relevant legal field;
- Assuring certain, predictable and uniform results; and
- Ease in determining and applying the governing law.
These factors are not exclusive and not limited in the order of their relative importance. The weight to be given a particular factor will vary depending on the context.
TORT[edit | edit source]
(§145) = THE LOCAL LAW OF THE STATE WITH THE MOST SIGNIFICANT RELATIONSHIP TO THE OCCURRENCE AND THE PARTIES UNDER SECTION 6 CONCERNING ANY TORT ISSUE DETERMINES THE PARTIES’ RIGHTS AND LIABILITIES ON THAT ISSUE.
- Must consider the following contacts:
- o The place of injury
- o The place of the conduct causing the injury
- o The parties’ domiciles
- o The parties’ residences
- o The parties’ nationalities
- o The parties’ place of incorporation or principal place of business, if any, and
- o The place where any relationship between the parties is centered
If both the tortious conduct and the injury took place in the same state, that state will almost always have the most significant relationship to the parties and the occurrence. If the injury took place in the state where the plaintiff is domiciled, a court following the 2nd Restatement will usually apply the law of the place of the injury.
|Phillips v. General Motors Corp., 298 Mont. 438 (2000)||Car bought in NC with NC address, then moved to MT. Driving from MT to NC, but got in an accident in KS. Deceased were MT residents. Phillips was legal guardian of surviving son. Guardian lived in NC, probate was filed in MT (this case’s forum).The Court held that the purpose of MT and NC product liability laws are furthered (based on where brought and domicile) but because NC wouldn’t apply its own law, choose MT law. Purpose of state’s liability law is to regulate purchases made within its borders and to protect and compensate its residents.|
Note: For a personal-injury case, the law determining the parties’ rights and liabilities in most cases is the internal law of the state where the injury took place, unless another state has a more significant relationship under §6 to the parties and the occurrence. (See 2nd Restatement §146)
CONTRACT[edit | edit source]
(§186) = OUTCOME DEPENDS IF THE CONTRACT HAS A CHOICE OF LAW CLAUSE OR NOT.If the contract contains a choice of law clause, the 2nd Restatement generally respects the autonomy of the contracting parties by directing courts to apply the law the parties selected. (The exception to this is, if the chosen law would determine issues the parties could not have resolved by express agreement, a court will still apply the chosen law unless (1) there is no reasonable basis for the choice; or (2) the choice is inconsistent with the public policy of a state that has a materially greater interest in applying its law than the chosen state, provided the former’s law would otherwise govern the issue.)(§188) If the contract does not have a choice of law clause, the parties’ rights and duties are governed by the local law of the state with the most significant relationship to the transaction and the parties under §6. Relevant contacts to consider include:
- o The places of contracting, negotiation and performance
- o Where the contract’s subject matter is located; and
- o The parties’ domiciles, residence, nationalities, and any place of incorporate or place of business
|Wood Bros. Homes, Inc. v. Walker Adjustment Bureau, 198 Colo. 444 (1979)||CA resident contracted to do work for Delaware corp., with a principal place of business in CO. Agreement was signed in CO. Work was to be performed in New Mexico. Work was shut down b/c Plaintiff did not have NM license. Plaintiff sued for breach of K. The court held that NM law applies. CO’s interest in validating contracts does not outweigh NM’s interest that contracts that violate its law not be enforceable.|
REAL PROPERTY[edit | edit source]
(§223-24) = APPLY THE WHOLE LAW OF THE JURISDICTION WHERE THE PROPERTY IS LOCATED, INCLUDING THAT JURISDICTION’S CHOICE OF LAW RULES.
- Movable Property – The court should apply the internal law of the state with the most significant relationship to the parties, the movable property, and the conveyance under the principles of §6. If the parties have not effectively chosen the applicable law themselves, usually by a choice of law clause, the location of the movable property at the time of the conveyance receives greater wight than any other contact.
BETTER LAW[edit | edit source]
ONLY USED WHEN RESOLVING TRUE CONFLICTSA court should consider five factors in deciding which jurisdiction’s law to apply: (1) predictability of results, (2) maintenance of interstate and international order, (3) simplification of the judicial task, (4) advancement of the forum’s governmental interests, and (5) application of the better law. (LEFLAR)
- 'Predictability of Results:' Uniformity of results allows parties entering into a consensual transaction to plan it with reference to a body of law that would give them the results they desired. Their transactions would normally be validated, and their justified expectations thus protected. Furthers social policies of sustaining legal arrangement in which parties have in good faith engaged themselves. Discourages forum shopping.
- 'Maintenance of Interstate and International Order:' The orderly legal control of transactions that cross boundary lines. There must be a minimum of mutual interference with claims or aspirations to sovereignty. No forum whose concern with a set of facts is negligible should claim priority for its law over the law of a state which has a clearly superior concern with the facts.
- 'Simplification of the Judicial Task:' Courts don’t like to do things the hard way if an easier way served the ends of justice substantially as well. Courts therefore use their own procedural rules. However, some outcome-determinative rules are so simply that one state’s rule can be used as easily as another’s so that the substance-procedure dichotomy is not sensibly applicable to them.
- '*Advancement of the Forum’s Governmental Interests:' If a forum state has a genuine concern with the facts in a given case, it is reasonable to expect the state’s courts to act in accordance with that concern. This is only legitimate concerns. A state’s governmental interests in a case is to be discovered from all the considerations that properly motivate the state in its law-making and law-administering tasks, viewed as the time when the question is presented.
- '*Application of the Better Rule of Law:' Objective, not a subjective standard. The inclination of any reasonable court will be to prefer rules of law which make good socio-economic sense for the time when the court speaks, whether they be in its own or another state’s rules. The law’s legitimate concerns with “justice in the individual case,” and with that “protection of justified expectations of the parties” are furthered by deliberate preference for the better rule of law.
|Milkovich v. Saari, 295 Minn. 155 (1973)||Group domiciled in Ontario came into the United States. Car insured and registered in Ontario. Got into an accident, guest injured, hospitalized in Minnesota (forum). Ontario has a guest statute (need proof of gross negligence to recover) and Minnesota doesn’t.The Court held that Minnesota should use its better law (no foreign guest statute allowed). Looked at predictability of result, maintenance of interstate order, simplification of judicial task, advancement of forum’s governmental interests, and the better law.|
|Jepson v. General Casualty Co. of Wisconsin, 513 N.W.2d 467 (Minn. 1994)||Plaintiff (Minnesota) injured in AZ (where he later moved), insurance, work in ND. Stacking policies (combining insurance policies) allowed under MI but not ND law.The Court held that ND law applies. Neither ND nor the old or the new MI law is “better.” Looked at predictability of result, maintenance of interstate order, simplification of judicial task, advancement of forum’s governmental interests, and the better law.|
CONSTITUTIONAL LIMITATIONS ON CHOICE OF LAW[edit | edit source]
Within the U.S., choice of law doctrine is a matter of state law. Each state is free to select its own approach to choice of law. Nonetheless, as with all matters of state law, a state’s choice of law decisions must comply with federal constitutional standards.Constitutional challenges usually arise if the forum state applies its own law to a dispute which it has little or no connection. In this case, applying forum law may disadvantage and out-of-state party or ignore the connections that another state has to the litigation.
DUE PROCESS[edit | edit source]
REQUIRES ALL STATE-COURT PROCEEDINGS TO BE FUNDAMENTALLY FAIR “No state shall deprive any person of life, liberty, or property, without due process of law.”In early cases, the Supreme Court held that for a state court to apply forum law, the forum state must have a significant enough connection to the parties and the dispute. The connection must be such that the decision to apply forum law is neither arbitrary nor fundamentally unfair.
|Home Ins. Co. v. Dick, 281 U.S. 397 (1930)||Due Process. TX citizens sued a Mexican corporation to recover on a fire insurance policy. 2 year SOL in TX, 1 year SOL in Mexico.The Court held that the forum (TX) cannot constitutionally apply its own law. Insufficient contacts between the forum and the parties/transaction to apply forum law. It’s a DP violation if the TX courts impose an additional burden on the Mex transaction that the parties didn’t contract for. TX courts do not have the power to invalidate contracts made and performed in MX.|
FULL FAITH & CREDIT[edit | edit source]
REQUIRES EACH STATE TO GIVE FULL FAITH AND CREDIT TO EVERY OTHER STATE’S PUBLIC ACTS, PUBLIC RECORDS, AND JUDICIAL PROCEEDINGS.In early cases, the Supreme Court held that for the forum state to apply its own law to a dispute, it must have a legitimate or cognizable interest in applying its law. To determine whether the forum state had a legitimate interest, courts had to look to the state’s connections with the parties and the dispute.
|Bradford Electric Light Co. v. Clapper, 286 U.S. 145 (1932)||Full Faith & Credit. Clapper (VT) employed by Bradford (VT corporation, principal place of business in VT), but injured while working in NH (forum). NH allowed workers’ compensation or tort action, but VT limited to workers’ compensation.The Court held that VT law applies. The constitution prevents an employee from asserting in NH rights which would be denied him in the state of his residence. Rights created by VT statute are entitled to protection even when they’re brought in a NH court, without this, the VT law would be impaired. No sufficient public policy reason for NH not to enforce VT law.Just because VT legislation doesn’t conform to NH law doesn’t mean that it’s obnoxious to NH public policy to give effect to the VT statute.|
|Alaska Packer Assoc. v. Industrial Acc. Comm’n, 294 U.S. 532 (1935)||Due Process. Non-resident employee sued employer’s insurance in CA for injuries in AK. Applied for workers’ compensation in CA for an injury he sustained in AK.The Court held that CA law applies. CA’s interest is sufficient to justify its legislation, and Alaska doesn’t have a strong enough interest for its law to be used in place of CA’s. No due process violation b/c the state of CA had a rational basis and wasn’t an arbitrary or unreasonable exercise of state power.Rule: Every state is entitled to enforce in its own courts its own statutes, BUT the person alleging that the foreign state’s law should be applied has the burden to show that the foreign state has a superior interest in the conflict.- Balances FF&C by looking at the interest of the state’s in the result of conflicting policiesThis case differs from Clapper where the VT statute explicitly applied to injuries out of state, but CA didn’t have a provision like that.|
|Pacific Employers Ins. Co. v. Industrial Acc. Comm’n, 306 U.S. 493 (1939)||Full Faith & Credit. Mass employee injured in CA while working for MA employer (common domicile). CA workers’ compensation applies to all injured within the state. MA workers’ compensation waives employees common law right of action or any other forum’s law to recover for injuries unless they give written notice to the employer that they intend to do so.The Court held that CA can apply its law. The interest of MA in safeguarding the compensation of out of state employees isn’t great enough to overcome CA’s interest in regulating safety and economic protection of people within its borders.The FF&C Clause doesn’t require one state to substitute its own statute for the conflicting statute of another state. CA had a rational basis for promulgating worker protective legislation, and for CA to apply the MA statute it would need a reason for the CA courts to decline to apply their own statute.An interested state can always apply law, notwithstanding the interest of the other state as long as there are any interests. Don’t need superior interest, just sufficient interests.|
CONVERGENCE[edit | edit source]
(NEW TEST FOR DUE PROCESS & FULL FAITH AND CREDIT) FOR A STATE TO APPLY FORUM LAW, THE FORUM MUST HAVE SIGNIFICANT CONTACT OR SIGNIFICANT AGGREGATION OF CONTACTS WITH THE PARTIES AND THE DISPUTE.These contacts must give the forum state a sufficiently great interest in applying its law that doing so is not arbitrary or fundamentally unfair.
|Allstate Ins. Co. v. Hague, 449 U.S. 302 (1981)||Due Process. Accident in WI, both drivers were WI domicile. Plaintiff worked in Minnesota where insurance covered his cars, after accident before case, wife moved to MI. Under MI law, you can “stack” insurance policies but not in WI.MI has an interest in allowing stacking b/c it allows for broder distribution of accident costs through premiums than the non-stacking rule. WI has an interest in no stacking so potentially improves uniformity.The Court held that MI had sufficient aggregation of contacts for the application of its law t othe insurance dispute to be constitutional. Court abandons the balancing-of-sovereign-state-interests approach to conflicts of law under the FF&C Cl.|
|Phillips Petroleum Co. v. Shutts, 472 U.S. 797 (1985)||Leased mineral rights from 30,000 people. Set royalty %. DE company with principal place of business in OK, royalty owners in all 50 states, land in 11. Phillip’s didn’t pay lessors interest on the increase in royalty payments owed.The Court held KS lack of interest in the out of state claims makes application of its substantive law to the non-forum state claims arbitrary and unfair and therefore unconstitutional. No sufficient contacts with most parties and subjects in case. No “common fund” located in KS would require or allow the application of KS law to all claims (but doesn’t say which law applies).|
In summary, under principles of due process and full faith and credit, a state may constitutionally apply its own substantive law if it has a significant connection to the case. The threshold for having a significant connection is not very high, though it does require some meaningful contact with the parties and the underlying events.A state may constitutionally apply its own procedural law to litigation there, regardless of other connections to the parties and the dispute. If a state has historically classified an issue as procedural, then it may do so in a given case.
THE OBLIGATION TO PROVIDE A FORUM[edit | edit source]
|Hughes v. Fetter, 341 U.S. 609 (1951)||Where an injury occurs outside of the forum state, but the forum state has personal jurisdiction over the parties and provides a cause of action similar to the foreign action sued upon, the forum may not prohibit its courts from exercising PJ over the foreign cause of action on public policy grounds.|
PRIVILEGES AND IMMUNITIES CLAUSE[edit | edit source]
ENTITLES EACH CITIZEN OF EACH STATE TO THE PRIVILEGES AND IMMUNITIES THAT CITIZENS OF OTHER STATES ENJOYProhibits a state from discriminating against out-of-state residents. This protection is limited to natural persons and does not apply to corporations.It applies when a state discriminates against non-residents by treating them differently from its own citizens with respect to certain fundamental rights bearing upon the viability of the U.S. as on entity. States may not:
- Confer benefits on state residents that are denied to out-of-staters; or
- Impose burdens on out-of-staters that are not imposed on state residents
A state may discriminate against non-residents if the discrimination is closely related to advancing a substantial state interest.The Privileges & Immunities Clause prevents a state from using a choice of law analysis that treats non-residents different from residents. (Therefore, choice of law methods that use domicile as a factor could be vulnerable to constitutional challenge – but the use of domicile is usually closely related to advancing a legitimate state interest in choosing the appropriate law to govern a case. Thus, unless a state court engages in blatant discrimination, it is difficult to imagine a situation in which the Clause would invalidate a state court’s choice of law decision.)
|Supreme Court of N.H. v. Piper, 470 U.S. 274 (1985)||NH limits bar admission to state residents. Plaintiff passed NH bar but was not yet a resident. Denied bar application b/c she wasn’t a resident. Court held that a state may not enact restrictions on bar admissions b/c of the privileges and immunities clause. State can discriminate against rights of out-of-state residents as long as there is a substantial reason for the difference in treatment and it further’s a state objective.|
EQUAL PROTECTIONS CLAUSE[edit | edit source]
PREVENTS A STATE FROM DENYING TO ANY PERSON THE EQUAL PROTECTION OF ITS LAWSA state choice of law decision that discriminates on the basis of race, sex, national origin, or other protected classifications would almost certainly violate the EPC. Most choice of law decisions, however, will pass muster unless the challenger shows that they are not a rational means to advance a legitimate state interest.
|Tennessee Coal, Iron & R.R. Co. v. George, 233 U.S. 354 (1914)||Plaintiff injured in AL. Sued railroad company in GA. AL statute made RR company liable as employer. RR wanted suit in AL b/c it was an AL statute at issue under the FF&C Cl. The court held that a state may not restrict the venue of a transitory cause of action to local courts of that state. AL statute cannot be restricted to being heard only in AL courts. FF&C only extends to the substantial provisions of such statutes and venue is not one of them.|
JURSIDICTION OF COURTS[edit | edit source]
What contacts or connections must a state have with a particular dispute to apply its law?
PERSONAL JURISDICTION[edit | edit source]
A COURT’S POWER OVER THE PARTIES TO A DISPUTE OR OVER SPECIFIC ITEMS OF PROPERTYAdjudicatory Jurisdiction:
- A forum always has PJ over its citizens. A citizen can always sue a Defendant in his state of residence. This includes corporations, but there are two possible states of residence (1) state of incorporation, and (2) where HQ is located.
PJ is limited by the DPCl. of the 14th Amendment, which protects personal liberty. A person can waive the PJ challenge, consent to PJ through general appearances, and consent beforehand through contradt.Three types of PJ:
- In Personam – A court’s jurisdiction over any party to a case before that court, whether that party is a natural person or an artificial entity. If a court has in personam jurisdiction, then it may issue a judgment imposing personal liability on that party.
- In Rem - Courts jurisdiction over specific items of real or personal property. A court exercise in rem jurisdiction determines all interests that anyone on Earth might have in a particular piece of property. The property must be located in the forum.
- Quasi In Rem – Courts jurisdiction over specific items of real or personal property. Quasi in rem determines the rights that certain people, not all people, have in a particular piece of property. (Quasi in Rem jurisdiction can also be attachment jurisdiction).
Minimum Contacts: See International Show v. Washington. Before International Show, the law of PJ was governed by Pennoyer v. Neff, which read the DPCl. as only permitting a state court to exercise PJ if process could be served within the territorial limits of the state. In International Shoe, the Court did away with the requirement that process had to be served and completed within the forum state.
- Under the DPCl., a court only has PJ over a Defendant not located within the forum where the Defendant has certain minimum contacts with the forum state such that exercising jurisdiction would not offend traditional notions of fair play and substantial justice.
To determine PJ, look at (1) minimum contacts, (2) relatedness, and (3) reasonableness.
- Minimum Contacts à Does the Defendant has sufficient minimum contacts with the forum state?
- Relatedness à Does the claim arise from contract or is it related to the activities in the forum states?
- Reasonableness à Look at (1) the burden on the Defendant, (2) forum state’s interest in adjudicating the dispute, (3) plaintiff’s interests in obtaining convenient and effective relief, (4) interstate judicial system’s interest in the most efficient resolution of controversies, and (5) interest of other states in furthering their substantive policies.
|World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980)||AZ residents injured in car accident in OK on their way to NY. Sued manufacturer (World Wide) which is a NY company. Brought suit in OK. WW said no PJ in OK. The court held that OK did not have PJ. Foreseeability alone is not sufficient to authorize a state court’s assertion of PJ over a non-resident defendant that has no contacts, ties or relations with the forum state.|
|J. McIntyre Machinery v. Nicastro, 564 U.S. 873 (2011)||NJ resident injured by McIntyre equipment. Machine manufactured in England. Court held there was not PJ in NJ b/c the company did not purposefully avail itself of the privilege of conducting activities within the forum state, thus invoking the protections and benefits of its laws. No personal jurisdiction.|
Long-Arm Statutes: Every state has a long-arm statute prescribing its courts’ jurisdiction over out-of-state defendants. To exercise PJ over a defendant, a court must first determine whether it has jurisdiction under the state’s long-arm statute. Then, the court must determine whether jurisdiction would be consistent with the constitutional standards governing in personam jurisdiction.
|Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985)||Franchise started in Michigan by Plaintiffs who are Michigan residents. Burger King headquartered in FL and contacts with Plaintiffs stated all disputes are resolved in FL courts. Franchise fell through. BK sued in FL. Defendant challenged based on lack of PJ. The court held that FL was right venue b/c defendant purposefully availed themselves by executing the contract in FL and b/c the defendants knew the contract was executed in FL. Minimum contacts includes purposefully directed activities of the defendant toward the forum state.|
Consent by Forum-Selection Clause: A forum-selection clause is a contractual provision by which the parties agree to litigate disputes arising out of the contract in a specified forum. The Supreme Court has held that agreeing to a forum-selection clause is generally a valid form of consent to personal jurisdiction.Note: The forum-selection clause cannot confer subject-matter jurisdiction on a court that would otherwise lack it. Parties cannot create SMJ by agreement.
RECOGNITION OF JUDGMENTS[edit | edit source]
Valid judgments in one state must be given full effect in another state. The main doctrines governing the enforcement of judgments rendered by another court in a different jurisdiction or court system are:
- Full faith and credit
- Claim preclusion
- Issue preclusion
FULL FAITH & CREDIT[edit | edit source]
COMPELS STATE AND FEDERAL COURTS TO RECOGNIZE THE VALID, FINAL JUDGMENTS OF OTHER STATE AND FEDERAL COURTS
|Fauntleroy v. Lum, 210 U.S. 230 (1908)||Two Mississippi citizens had gambling contract, one brought dispute to arbitration, enforced in Missouri courts, over Defendant’s argument that K was illegal in Mississippi. Tried to have Missouri judgment enforced against Defendant in Mississippi (where K made, but where K illegal).The Court held that although Missouri was in error upholding the K, Mississippi has to give FF&C to the Missouri judgment. F1’s error on the merits (even if it’s a misapplication of F2’s law) is not a ground for refusing FF&C to F1 in F2.|
A court gives full faith and credit to a judgment if it gives that judgment the same effect that the judgment would receive in its court of origin. A court must give full faith and credit to a judgment even if the judgment contravenes the forum’s strong public policy, or if the court believes that the first judgment was incorrect.
|Yarborough v. Yarborough, 290 U.S. 202 (1933)||Divorce decree in GA for daughter’s maintenance (F1), then daughter moved to SC (F2) and sued there for more money.The Court held that the 5th Cir. must give FF&C to a GA decree, and can’t enter an additional amount for father to pay b/c his rights have been pre-established. GA’s decree was intended to absolve father of future liability, and was final and non-modifiable. SC can’t re-litigate his duties that are already fulfilled.|
|Thomas v. Washington Gas Light Co., 448 U.S. 261 (1980)||DC resident injured in VA working for DC company. Got workers’ comp agreement with VA agency. Later tried under DC workers’ comp Act too.The Court held that F2 can reopen an F1 judgment in the area of workers’ compensation. F2 award is not barred b/c the DC court is not bound by a VA workers’ comp award b/c the VA agency had no authority to decide rights under DC’s law, so no constitutional objection to hearing those rights in a new proceeding.|
For federal court judgments in federal-question cases, federal common law requires state courts to give the judgment the same preclusive effect that the judgment would have in federal court.For federal court judgment in diversity cases, state courts must give the judgment the same preclusive effect that the courts of the state in which the federal court sits would give to their own judgments, so long as the governing state-law rule does not conflict with federal interests.
CLAIM & ISSUE PRECLUSION (GENERALLY)[edit | edit source]
RES JUDICIATA & COLLATERAL ESTOPPEL
|Durfee v. Duke, 375 U.S. 106 (1963)||Land near Missouri river, Nebraska court decided, enforced in Missouri.The Court held the issue of forum 1’s jurisdiction over the case cannot be re-litigated in forum 2. There is no reason to collaterally attack the issue of SMJ because that gives parties two chances to have their day in court, and a second court’s decision is no more likely to be correct than the first one.A judgment is entitled to FF&C even to a question of jurisdiction when F2’s inquiry shows that F1 fairly and fully litigated and decided those issues.|
Claim and issue preclusion apply only if a court has issued a valid and final judgment.
- For a judgment to be valid, the parties must have received reasonable notice of the action. In addition, the court must have personal jurisdiction over the parties and subject-matter jurisdiction over the dispute.
- For a judgment to be final, it must end the litigation by determining all issues necessary to decide the controversy on the merits and leaving nothing (or very little) for the court to do apart from enforcing its decision.
Land Taboo: F2 has an interest in land within its own boundaries, and in keeping land records clear.
|Clarke v. Clarke, 178 U.S. 186 (1900)||Wife died (domiciled in SC) leaving property (CT) to her husband and surviving daughters, but one died (CT law land to sister, SC passes it to the dad).The Court held the court of decedent’s domicile could construe her will as to property within that court’s state, but the land in CT was beyond the SC court’s jurisdiction. Law of the state where land is controls its transmission by will or by intestacy, but here there is no FF&C violation for ignoring F1’s decision when F1 didn’t have SMJ over the land in question.|
|Fall v. Eastin, 215 U.S. 1 (1909)||Married in IN, moved to NB, bought land. Husband files for divorce in WA, wife claimed that they had already divorced in another state where she got the land, and husband fraudulently recorded a deed which clouded her title.The Court held FF&C requires a Nebraska court to recognize a WA court’s decree in a divorce action in WA. F2 is not obligated to enforce the decree of F1. F1 judgment can be recognized without being enforced. F1 doesn’t transfer title but recognized because precludes re-litigation of merits of the F1 judgment about ownership. When a court uses its equity powers (contempt) to force a result, it’s allowed to indirectly do what it otherwise can’t do directly. F1 can’t make a decree to operate as such conveyance.A state cannot directly affect title to land in another state as only situs state has jurisdiction over its own property (land taboo) BUT F2 can indirectly affect title to the land by forcing a conveyance by parties under its jurisdiction.|
CLAIM PRECLUSION[edit | edit source]
PREVENTS A PARTY FROM RELITIGATING CLAIMS THAT WERE OR SHOULD HAVE BEEN LITIGATED IN A PRIOR ACTION THAT ENDED IN A VALID AND FINAL JUDGMENTA party asserting claim preclusion must show:
- A final, valid judgment on the merits in the first action
- Identity of claims between the first and second actions; and
- Identity of parties between the first and second actions
A judgment is made on the merits if it addresses the substance of a claim or defense. A judgment on the merits disposes of the case by deciding the parties’ legal rights and responsibilities.Identity of claims means that the claim raised in the second action must be the same as one raised in the first action. Two different tests to make this determination:
- 'Same-Transaction Test
- 'Primary-Rights Test
Identify of parties means that claim preclusion usually applies only among parties to the initial action. The parties to the second action must also have been parties to the first.
|Worthley v. Worthley, 44 Cal.2d 465 (1955)||Divorced in NJ, wife got $ judgment, then he moved to CA. The Court held that F2 does not need to give FF&C to a modifiable judgment. Since NJ decree is prospectively and retroactively modifiable, they’re not constitutionally bound to enforce Defendant’s obligations under it b/c it wasn’t a final judgment.A decree does not have to be modified exclusively in the courts of the state where the support decree was originally rendered. CA can change just as well as a NJ court. No need to require parties to litigate issues in NJ.|
|Baker v. General Motors Corp., 522 U.S. 222 (1998)||GM employee, bad retirement, settled a deal in Michigan, claim that he wouldn’t testify against them again but testified in a case in Missouri. GM asked for an injunction to stop his testimony.The Court held that other states have to give FF&C to a final judgment in one state, if rendered by a court with SMJ and PJ authority under the judgment BUT Michigan has no authority to command obedience elsewhere on a matter the Michigan court has no authority to resolve.|
ISSUE PRECLUSION[edit | edit source]
PREVENTS RELITIGATION OF SPECIFICAL LEGAL OR FACTUAL ISSUES THAT WERE LITIGATED AND DECIDED IN A PRIOR ACTION THAT ENDED IN A VALID AND FINAL JUDGMENT.A party asserting issue preclusion must show the issue in the second action:
- Is identical to one raised in the first action
- Was actually litigated and decided in the first action; and
- Was necessary to the first judgment
Actually litigated and decided means the issue is (1) properly raised by a party, (2) submitted for determination by the court, and (3) actually determined after adversarial presentation.Necessary to the first judgment means the court had to resolve it to decide an element of a party’s claim or defense.
|Allen v. McCurry, 449 U.S. 90 (1980)||Collateral estoppel does not apply where the party against whom an earlier court decision is asserted did not have a full and fair opportunity to litigate the claim or issue decided by the first court.The United States Supreme Court, in the present case, rejected the notion that one has the unencumbered right to have a federal court hear a federal claim regardless of whether the claim has already been litigated in state court. Hence, since McCurry’s Fourth Amendment claim was already fully and fairly litigated, yet unsuccessfully asserted, in the state court proceedings, his claim was barred from assertion in the federal courts.|
INTERNATIONAL CONFLICT OF LAWS[edit | edit source]
International conflict of laws or private international law concerns relations across different legal jurisdictions between people, companies, corporations and other legal entities, legal obligations and the appropriate forum and procedure for resolving disputes between them.THE PRINCIPLES OF JURISDICTIONProblems of jurisdiction usually involve both describing and justifying permissible forms of national legal authority, and explicating the means of reconciling conflicts among such municipal assertions of legal competence.
THE TERRITORIAL PRINCIPLE[edit | edit source]
DETERMINING WHETHER THE CHARACTER OF AN ACT AS LAWFUL OR UNLAWFUL MUST BE DETERMINED WHOLLY BY THE LAW OF THE COUNTRY WHERE THE ACT IS DONE.'
|American Banana Co. v. United Fruit Co., 213 U.S. 347 (1909)||Court said that a conspiracy in the United States to do acts in another jurisdiction did not draw to itself those acts and make them unlawful, if they were permitted by the local law. Although the acts were illegal in the United States, they were permitted by the local law in the foreign jurisdiction at issue.|
* American Banana is no longer good law. Extraterritorial jurisdiction is now recognized BUT courts should still give statutes a faithful reading.''''''Extraterritorial Jurisdiction: The legal ability of a government to exercise authority beyond its normal boundaries. Generally, the U.S. founding fathers believed that American laws could not have jurisdiction over sovereign countries.
- - There is a presumption against extraterritoriality. This presumption makes explicit this judicial preference that U.S. laws not be applied to other countries.
- - See EEOC v. Arabian American Oil Co., 499 U.S. 244 (1991) where Rehnquist refused to extend U.S. anti-discrimination legislation to protect a U.S. citizens employed by a U.S. oil company in Saudi Arabia.
- - “It is a longstanding principle of American law that legislation of Congress, unless a contrary intent appears, is meant to apply only within the territorial jurisdiction of the United States.
- - See also Morrison v. National Australian Bank Ltd., 130 S.Ct. 2869 (2010) where Scalia wrote that a judicial speculation about what Congress would have wanted if it had thought of the situation before the Court demonstrates the presumption against territoriality.
THE NATIONALITY PRINCIPLE[edit | edit source]
PERMITS A COUNTRY TO EXERCISE JURISDICTION OVER ANY OF ITS NATIONALS ACCUSED OF CRIMINAL OFFENSES IN ANOTHER STATE.This principle has the effect of allowing a sovereign to adopt laws that make it a crime for its nationals to engage in conduct that is not illegal in the place where the conduct is performed.
|Blackmer v. United States, 284 U.S. 421 (1932)||There must be due process for the exercise of judicial jurisdiction in personam. The court may adjudge the witness guity of contempt if the witness fails to comply with the court order. Congress acted pursuant to its authority in enacting the statute and it could prescribe a penalty to enforce it.|
* Don’t use nationality jurisdiction for crimes committed by U.S. citizens overseas.
THE EFFECTS PRINCIPLE[edit | edit source]
ASSERTS JURISDICTION OVER ACTS OF FOREIGN NATIONALS COMMITTED ABROAD BUT HAVING EFFECTS IN THE AMERICAN MARKETPLACE.
|United States v. Aluminum Co. of America, 148 F.2d 416 (2d Cir. 1945)||Any state may impose liabilities even upon persons not within its allegiance, for conduct outside its borders that has consequences within its borders that the state reprehends. Under the Sherman Antitrust Act, the agreements of the Alliance in 1931 and 1936 would clearly have been unlawful had they been made within the United States (P) and though made abroad, both are unlawful if they were intended to affect imports and did affect them. Evidence showed that the shareholders of Alliance intended to restrict imports thus shifting the burden of proof of whether they in fact restricted imports into the United States to Limited (D). Hence, this court must conclude that the 1936 agreement violated the Act since the underlying doctrine of the Sherman Act was that all factors that contribute to determining prices must be kept free to operate unhampered by agreements.|
THE PROTECTIVE PRINCIPLE[edit | edit source]
GUARDING THE SECURITY OR THE CENTRAL INTERESTS OF THE STATE
- Allows a sovereign state to assert jurisdiction over a person whose conduct outside its boundaries threatens the states security or interferes with the operation of its government functions.
THE UNIVERSALITY PRINCIPLE[edit | edit source]
GIVING ANY STATE THE RIGHT TO EXTEND ITS JURISDICTION TO CERTAIN SORTS OF OFFENDERS
- Recognizes that a sovereign can adopt criminal laws that apply to conduct performed by any person anywhere in the world when the conduct is recognized by nations as being of universal concern.
THE PASSIVE PERSONALITY PRINCIPLE[edit | edit source]
PROTECTING NATIONALS EVEN WHEN ABROAD
- Recognizes that a sovereign can adopt laws that apply to conduct of foreign nationals who commit crimes against the sovereign’s nationals while the sovereign’s nationals are outside of the sovereign’s territory.
RESOLVING CONFLICTS OF JURISDICTION[edit | edit source]
'Four modern approaches:
- Party choice
- Balancing test
- International comity
- Forum non conveniens
PARTY CHOICE[edit | edit source]
PARTIES AGREE WHERE DISPUTES WILL BE SETTLED AND WHAT LAW WILL BE APPLIED
|The Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972)||The forum selection clause was enforceable unless the party seeking to avoid it could meet the high burden of showing it to be unreasonable or unjust.|
|Scherk v. Alberto-Culver Co., 417 U.S. 506 (1974)||Alberto signed contract w/ an arbitration clause that said disputes will be arbitrated in France, and that the laws of Illinois apply. Court held to respect parties choice to arbitrate in France.|
BALANCING TEST[edit | edit source]
|Lauritzen v. Larsen, 345 U.S. 571 (1952)||Under the Jones act, a federal court may not assert jurisdiction over a tort claim that accrued in foreign waters, is governed by foreign law, and between foreign parties.|
|Timberlane Lumber Co. v. Bank of America, 549 F.2d 597 (9th Cir. 1976)||Plaintiff located in OR. Wanted to acquire lumber mill in Honduras. Creditors owned mill, including BOA. BOA refused to sell their interest. Plaintiff sued alleging conspiracy to eliminate competition. The court held that a conspiracy that involves cooperation by a foreign government is not immune from U.S. antitrust regulation. Under comity, U.S. wouldn’t normally step into foreign countries. Here the U.S. has extraterritorial jurisdiction but court remands to decide whether comity precludes it.|
Comity consideration are weighed using the following factors:
- Potential for international conflict
- Nationality of the parties
- Competing jurisdictions’ relative interest in adjudicating
- Intentionally and foreseeability of anticompetitive harm to American interests
Factors to consider when there’s competing national interests:
- Place of the wrongful act
- Law of the flag
- Allegiance or domicile of the Plaintiff
- Allegiance of the Defendant
- Place of contract
- Inaccessibility of the foreign forum
- The law of the forum
- The Defendant’s base of operations
Considerations when deciding to apply U.S. law extraterritorially:
- The legislative intent of Congress
- The presumptive reach of the statute
- The limits imposed by international law
- Judicial doctrines of discretion (like comity)
INTERNATIONAL COMITY[edit | edit source]
THE DEGREE OF DEFERENCE THAT A DOMESTIC FORUM MUST PAY TO THE ACT OF A FOREIGN GOVERNMENT NOT OTHERWISE BINDING ON THE FORUM
|Hilton v. Guyot, 159 U.S. 113 (1895)||Recognition and enforceability of a foreign judgment rests on the “comity of nations,” namely whethere there would be any reciprocity and mutual recognition by the foreign jurisdiction from which the judgment was issued.|
|Hartford Fire Insurance Co. v. California, 509 U.S. 764 (1993)||Foreign companies acting in foreign countries could be held liable for violations of the Sherman Act if they conspired to restrain trade within the United States and succeeded in doing so.|
Rationale: When possible, the decisions of foreign tribunals should be given effect in domestic courts, since recognition fosters international cooperation and encourages reciprocity, thereby promoting predictability and stability through satisfaction of mutual expectations.
- Comity compels national courts to act at all times to increase the international legal ties that advance the rule of law within and among nations.
FORUM NON CONVENIENS[edit | edit source]
COURTS MAY REFUSE TO TAKE JURISDICTION OVER MATTERS WHERE THERE IS A MORE APPROPRIATE FORUM AVAILABLE TO THE PARTIES.
|Piper Aircraft Co. v. Reyno, 454 U.S. 235 (1981)||Plaintiff’s cannot defeat a motion to dismiss on the ground of FNC merely by showing that the substantive law that would be applied in the alternative forum is less favorable to the Plaintiffs than that of the present forum.|
Applies between courts in different countries and between courts in different jurisdictions in the same country. It is not applicable between counties or federal districts within a state.The defendant may move to dismiss an action on the ground of FNC. Invoking this doctrine usually means that the plaintiff properly invoked the jurisdiction of the court, but it is inconvenient for the court and the defendant to have a trial in the original jurisdiction. The court must balance convenience against the plaintiff’s choice of forum. In other words, if the plaintiff’s choice of forum was reasonable, the defendant must show a compelling reason to change jurisdiction. If a transfer would simply shift the inconvenience from one party to the other, the plaintiff’s choice of forum should not be disturbed.