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MEE - Conflict of Laws

Terms in this set (31)

Introductory Points
Look for Conflicts issues when the facts include connections to multiple states.

Look for Conflicts issues to be combined with other subjects, especially family law, federal procedure, or torts.
There are two important but distinct testing areas for Conflicts:
1. Recognition of judgments
2. Choice of law

Domicile also has applications in Conflicts.
Recognition of Judgments Situations
A recognition of judgments question may arise when two conditions are satisfied:
1. A judgment has been entered by a court in one jurisdiction.
2. A party is seeking to have that judgment recognized by a court in a different jurisdiction.

Refer to the place where the judgment was originally
entered as the rendering jurisdiction, and the place where recognition is being sought as the recognizing jurisdiction.

Ask: will the recognizing court recognize the judgment issued by the rendering court?
Why Plaintiffs Seek Recognition
Plaintiffs will most often seek recognition in order to access enforcement mechanisms in the recognizing state.
Why Defendants Seek Recognition
Defendants will most often seek recognition to prevent a plaintiff from relitigating a claim or an issue.
Recognition of Judgment Analysis
I. Is the rendering jurisdiction a sister state or a foreign country? (will be provided in the facts)

II.A. Sister State Judgments
1. Are the requirements of full faith and credit satisfied?
2. Are there any valid defenses?

II.B. Foreign Country Judgments
1. Is the foreign judgment entitled to comity/
Sister State Judgments
If the rendering court is a court in a sister state, then the source of the obligation to
recognize the judgment is constitutional (full faith and credit).

Full faith and credit principles also apply to the recognition of judgments between
federal courts and state courts.
Sister State Judgments: Step 1
Are the requirements of full faith and credit satisfied?
1. Jurisdiction
Rule: the rendering state must have had jurisdiction over the parties and the subject matter.
Exception: when the issue of jurisdiction has been full and fairly litigated, then the jurisdictional determination is itself entitled to full faith and credit.
2. Merits
Rule: the judgment entered by the rendering state must have been on the merits.
Judgments not on the merits: dismissal based on lack of jurisdiction, SOLs, misjoinder, improper venue, failure to state a claim (sometimes)
On the merits: Default judgments (b/c treats all factual contentions as admitted); consent judgments entered after settlement
3. Finality
Rule: judgment entered by the rendering court must be a final judgment.
- Most common application here is a judgment on appeal in the rendering jurisdiction, which is not final.

Applicable law: three requirements are evaluated using the law of the rendering state.
Sister State Judgments: Step 2
Are there any valid defenses to full faith and credit?
1. Penal Judgments
Rule: a penal judgment is not entitled to FFC
Definition: a penal judgment is one that publishes an offense against the public.
Application: In practice, this means that the plaintiff in the suit that led to the judgment was the state.
2. Extrinsic Fraud
Rule: a judgment obtained by extrinsic fraud is not entitled to FFC.
Definition: extrinsic fraud is fraud that could not be corrected during the regular course of proceedings leading to the judgment.

Invalid defenses: public policy, mistake (b/c even if mistakes were made, they should have been challenged through an appeal in the rendering state)
Foreign Judgments
If the rendering court is a court in a foreign country, then the source of the obligation to recognize the judgment is comity or treaty.
Rule: Under principles of comity, a recognizing court will exercise discretion to decide whether the foreign judgment should be recognized.

Many of the same principles as full faith and credit will be considered to guide the court's discretion (e.g., is the foreign judgment final? Was the foreign judgment on the merits?). But there are two additional questions that a recognizing court may ask here:
1. Did the foreign court have jurisdiction?
2. Were the procedures in the foreign court fair?
Choice of Law: Basics
A choice of law question may arise when two conditions are satisfied:
1. The lawsuit involves factual connections with multiple states.
2. The multiple states will have different laws leading to different results.
Core Question: Which state's law will govern?
Core Answer: 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).
Choice of Law: Exceptions
1. Diversity cases in federal court.
Rule: A federal court sitting in diversity applies the choice of law
approach of the state in which it sits.
2. Transferred diversity cases.
Rule: When a diversity case is transferred within the federal system, the federal court applies the choice of law approach of the original (transferor court).
Choice of Law: Restrictions
Restrictions that occasionally limit the forum court's choice of law:
1. Constitutional: Due Process and Full Faith and Credit
Rule: 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.
2. 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.
Choice of Law Paragraph 1
Describe choice of law

""The issue presented is which state's law will govern the outcome of this litigation. The governing law will be selected by the forum court using the (fill in applicable choice of law approach)."
Choice of Law Paragraph 2
Describe choice of law approach.

Here, plug in stock paragraph depending on which of the three tested approaches is being applied.

Approach 1: Vested Rights (First Restatement)
Approach 2: Interest Analysis
Approach 3: Most Significant Relationship (Second Restatement)
Choice of Law Paragraph 3
Apply choice of law approach.

Consider the facts presented, apply the approach, and provide a conclusion.

Conclusion should include both governing law and result.
Vested Rights Approach
Paragraph 2: "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."

Paragraph 3:
Sentence #1: Categorize the substantive area of law.
Sentence #2: State the applicable vesting rule
Sentence #3: Apply the vesting rule to determine governing law.
Sentence #4: Apply the governing law to determine result
Interest Analysis Approach
Paragraph 2: "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."

Paragraph 3:
Step 1: Discuss which states have legitimate interests.
Step 2: Characterize the type of conflict.
False conflict: Only one state has a legitimate interest.
True conflict: Two (or more) states have a legitimate interest.
Step 3: Choose governing law based on type of conflict.
False conflict: Apply the law of the interested state.
True conflict: If the forum is interested, apply forum law.
Step 4: Apply the governing law to determine result
Most Significant Relationship Approach
Paragraph 2: "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."

Paragraph 3:
Step #1: Discuss connecting facts.
Step #2: Discuss policy principles.
Step #3: Choose governing law based on most significant relationship.
Step #4: Apply the governing law to determine result.
Substantive Areas: Introduction
Introductory Note #1: These specific areas will cover vesting rules under the First Restatement approach and connecting facts/policy principles under the Second Restatement approach. Interest analysis, however, is not sensitive to the substantive area at issue.

Introductory Note #2: Under the First Restatement, the same vesting rule is generally applied to the entire claim. Under the Second Restatement and interest analysis, however, each issue may be analyzed separately.
Substantive Areas: Tort
First Restatement Vesting Rule: Governing law is the law where the INJURY occurred.

Second Restatement Considerations:
Factual Connections:
1. Place of injury.
2. Place of conduct causing injury.
3. Place where the parties are at home.
4. Place where the relationship, if any, is centered.
Policy Principles:
1. Relevant policies of the forum state.
2. Relevant policies of other connected states.

For all three approaches, the governing law will almost always be the law of the place of injury. But exceptions arise occasionally, particularly under the two modern approaches (interest analysis and most significant relationship). These exceptions typically kick in when two conditions are present:
Condition #1: The rule at issue is a loss distribution rule.
Examples include:
1. Loss limitations
2. Vicarious liability rules
3. Rules eliminating liability (immunity)
Condition #2: The parties in the case share a common domicile.
Substantive Areas: Contracts COL Provisions
Rule: A choice of law provision will be enforced if it is valid
and express.
Impact: 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.
If in doubt on the bar exam, find the provision invalid.
Applications: Two reasons to find a choice of law provision invalid tend to be tested:
1. The law selected has no reasonable relationship to the contract.
2. The provision was included without true mutual assent.
Substantive Areas: Contract COL Analysis
Vesting Rules
Rule #1: If the case is about formation, apply the law of the place of contracting.
Examples of formation issues:
1. Capacity
2. Contractual formalities
3. Consideration
Rule #2: If the case is about performance, apply the law of the place of performance.
Examples of performance issues:
1. Time, place and manner of performance
2. Excuses for nonperformance

Second Restatement Considerations
Factual Connections:
1. Place of contracting.
2. Place of negotiations.
3. Place of performance.
4. Place where the parties are at home.
Policy Principles:
1. Relevant policies of the forum state.
2. Relevant policies of other connected states.
3. Reasonable expectations of the parties.
Substantive Area: Property
Property is one area where all approaches essentially continue to apply the same rules.
Immovable (Real) Property
Rule: Apply the law of the situs.

Movable (Personal) Property
Rule #1: If the case involves an inter vivos transaction, apply the law of the situs at time of transaction.
Rule #2: If the case involves a matter relating to inheritance, apply the law of the decedent's domicile at date of death.
Substantive Area: Family Law - Marriage
Rule: If a marriage is valid where performed, it will be recognized as valid everywhere.
Exception: When domiciliaries of one state temporarily relocate to
another state to perform a marriage that violates a prohibitory rule in their home state, the state of domicile will not recognize the marriage.
Definition: A prohibitory rule is a rule that expresses a strong public policy
regarding marriage (as opposed to directory rules,
which are administrative in nature).
Substantive Area: Family Law - Divorce
Rule: The forum will apply its own divorce laws.
Rationale: To acquire jurisdiction, at least one of the parties must be domiciled
in the state. Therefore, the state has an interest in applying its own law.
Substantive Area: Family Law - Legitimacy
Rule #1: Legitimacy of a child is governed by the law of the mother's domicile at the time of the child's birth.
Rule #2: The validity of subsequent acts of legitimation are governed by the law of the father's domicile.
Defenses to Choice of Law: Public Policy
Rule: A forum court will not apply a law that is against its own fundamental public policy.
This rule appears in both Restatements, but as a practical matter it is most applicable to
the First Restatement.
Caveat: As a reminder, this rule does not apply to recognition of judgments!
Defenses to Choice of Law: Procedural Rules
Rule: Regardless of the outcome of the choice of law analysis, the forum court will
always apply its own procedural rules.
Most Frequently Tested Issue: Statutes of Limitations
General Rule: Statutes of limitations have historically been viewed as procedural.

Exception #1: Borrowing Statutes
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 apply the shorter period.


Exception #2: Limitations that Condition a Substantive Right
If the normal choice of law analysis leads to the application of a foreign statute that creates a substantive right, then apply the entire statute.
Domicile
"Domicile" will never be a question on its own. Instead, it is an issue in a broader analysis. In other words, something else in your answer may depend on a domicile determination.
Domicile by Choice
Rule: An individual with domicile capacity acquires a domicile when two conditions are satisfied:
1. Physical presence
2. Intent to remain permanently (or indefinitely)

Notes:
- even fleeting presence is sufficient if combined with clear intent
- intent matters; motive does not
- you keep your old domicile until a new domicile is perfected
Domicile by Operation of Law
Rule: An individual who lacks domicile capacity is assigned one by law.

Category #1: Children
Rule #1: Newborns are assigned the domicile of their parents.
Rule #2: In cases of divorce, children are assigned the domicile of their custodial parent.

Category #2: Mental Incompetents
Rule #1: An individual who is mentally incompetent is assigned the domicile of their parents.
Rule #2: If an individual becomes incompetent after acquiring a domicile by choice, the individual retains the chosen domicile.
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