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Conflict of Laws - Choice of Law
Toledo Law - Professor Richman - Fall 2012
42
Law
Graduate
12/11/2012

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Term
Why not always apply F law?
Definition
  • Party Expectations
  • Comity/Sovereignty - Desire to do right by other countries or other states
  • Uniformity - Ex: for business entities, apply the law of the state of incorporation
  • Predictability - We want people to be able to predict the result
Term
WHy should the F desperiately not like to apply foreign law?
Definition
  • Public Policy Reason - Sovereignty 
    • State Z's law is so hideous to natural rights and natural laws that we won't apply the law of Z no matter what!
  • Procedure Reason - Too hard/too inconvenient
    • State courts have the greatest interest in protecting its own courts from stale lawsuits  (ex: by shorter statute of limitations)
Term
What is the traditional system of choice of law?
Definition
  • Tort: Lex loci delicti (law of the place of injury)
  • Contract: Lex loci contractus (law of the place of contracting)
  • Land: Lex situs (law of the situs of the property)
  • Procedure: Lex fori (forum law)
Term
What is the Vested Rights Theory?
Definition
  • Created by Joseph Beale
  • Defined: At the moment a CoA arises, rights VEST accoding to the place where the crucial event occurred
  • Ex: When an event occures in MI, MI law governs it. Because the event occurred in MI, a right was created (or vested) in MI. The contours of that right were controlled entirely by MI law, because tehre was no other law that could define the contours of that vested right because no otehr law could apply that right.
Term
Practice under the Vested Rights Theory: The 1st RS consists of...
Definition
  1. A few, broad, single-contact, jurisdiction-selecting (i.e., content-blind) rules
  2. Coupled with an array of escape devices
    • Characterization
    • Renvoi
    • Public Policy 
Term
Torts - What is the "place of injury"?
Definition
The place where the harmful force had an impact on ∏'s body.
Term
Exceptions to the "place of injury" rule:
Definition
  • Vicarious liability
    • If I lend my car to A and authorize him to drive into OH, but in fact he dives into MI and commits a tort, we won't apply the law of MI, because I had only authorized him to drive in OH.
  • Duty or privilege to act
  • Poison
    • apply the law of the place where the harmful force first had an impact on the victim - where she first fell ill / gross symptoms
Term
Contracts - What is the "law of the place of making"?
Definition
  • The place of contracting (or performance, see below)
  • Mailbox Rule 
    • The state where the acceptance was trasmitted
  • The Performance Exception to the "law of the place of making" rule
    • Provides that questions concerning issues of performance are to be governed by the law of the place of performance.
Term
What are the CONTRACT escape devices?
Definition
  • Manipulation of the place of making (Milliken)
  • Use of the making/performacnce distinction (Louis Dreyfus v. Paterson)
  • Can also use teh regular escape devices
    • Char
    • Renvoi
    • PP
Term
What is an escape device? What are they for?
Definition
Escape devices were developed in order to avoid the result of dismissals under the Vested Rights Theory. Their function is to get a better result.
Term
What is the device of Characterization to escape the lex loci rules? 
Definition
The jurisdiction-selecting rules of the 1st RS required that each case be labeled in order to determine which COL rule applied (either tort, property, or contract). Obviously the result could turn on which label the court chose. So, the court could avoid the lex loci rules by recharacterizing the case from one label to another.
Term
What is "equitable conversion"?
Definition
Permits a court to recharacterize real property as personal property, thereby changing the law from situs to law of decedent's domicile
Term
What is the device of  Renvoi to escape the lex loci rules? 
Definition
  • Renvoi is the doctrine under which a F court, in resorting to foreign law, adopts as well the foreign law's COL principles, which may in turn refer the F court back to the law of the forum.
  • If the foreign law's COL principles refer the F court back to the law of the forum, the court may either 
    • Accept the renvoi 
    • Reject the renvoi
Term
What is a "remission"?
Definition
Foreign State’s “whole law” directs the “internal law” of the Forum State 
Term
What is a transmission?
Definition
Foreign State’s “whole law” directs the application of a third jurisdiction’s “internal law.” 
Term
What is a total renvoi?
Definition
If the F court finds that foreign law referred to the F's "whole law" --> apply the whole law
Term
What is partial renvoi?
Definition
When the F court finds that the foreign law referred to the F's "internal law"
Term
What is the device of Public Policy to escape the lex loci rules? 
Definition
  • In order to refuse to apply the foreign law on PP grounds, the court would need to find that law "vicious, wicked, or immoral, and shocking to the prevailing moral sense."
  • By invoking PP, a court could magisterially sweep away the results called for by the 1st RS and, usually without any explanation, apply its own law to achieve the desired result.
  • 2 things the forum can do if it finds trouble w/ law on PP grounds:
    • Dismiss on the merits 
    • Refuse to exercise jurisd (this is more respectful to forum law)
Term
What are the main tests of the COL revolution?
Definition
  1. Center of Gravity Test
  2. Interest Analysis
  3. Leflar's Better Law
  4. New Territorialism
  5. Second RS's Most Significant Relationship Test
Term
What is the Center of Gravity test?
Definition
Looks not to the place of making or performance, but rather, emphasizes the law of the place that has the most significant contacts with the matter in dispute.
Term
What is "interest analysis"?
Definition
  • Determining what the best policy behind the decision is
  • Decide: What is the relationship between the policies that motivate the competing states' laws and the contacts the case has with each state
  • We care about how the reasons relate to the contact
  • By doing this, you'll see if it's a true conflict, false conflict, or unprovided-for case
Term
What is a true conflict?
Definition
Both state's policies would be advaned by the application of its law.
Term
How do you resolve a true conflict?
Definition
  1. More Moderate & Restrained Analysis
  2. Comparative Impairment
  3. Relative Commitment
  4. Apply forum law (Currie's solution)
  5. Manipulating Interest Analysis
Term
What is a false conflict?
Definition
Only one state's policy would be advanced by the application of its law.
Term
How do you resolve a false conflict?
Definition
Apply the law of the only interested state 
Term
What is a unprovided-for case?
Definition
Neither state's policy would be advanced by the application of its law.
Term
How do you resolve an unprovided-for case?
Definition
The forum should apply its own law
Term
Who is Leflar? And what are his considerations?
Definition
  • Leflar led a movement in the U.S. in the 1920s called "legal realism"
  • Leflar argued that a series of considerations embodied the factors which actually motivate courts to make decisions -- 5 choice-influencing considerations that Leflar perceived as providing a working basis for judicial decision-making:
    • Predictability of Result
    • Maintenance of Interstate & International Order
    • Simplify the Judicial Task
    • Advance the Forum's Own Policy Interests
    • Apply the BETTER Rule of Law
Term
What is Leflar's "Better Law"?
Definition
A law is "better" if it is superior to another law when considered in the light of socioeconomic jurisprudential standards. Law is designed, and should be employed, to achieve societal goals. Leflar was careful to say that he did not mean the better result.  
Term
What is "new territorialism"?
Definition
Called for a combination of policy, party expectations, and territorialism. COL decisions should be influenced substantially by territorial considerations. "It seems only fair to permit a D to rely on his home state's law when he is acting within that state." (Cipolla)
Term
What is the "most significant relationship" test from § 6 of the 2nd RS?
Definition

If there is no COL statute directing the court to follow its state law on COL, then §6(2) counsels a choice based on a series of factors:

  1. the needs of the interstate & international system;
  2. the relevant policies of the forum;
  3. the relevant policies of other  interested states & the relative interests of those states in the determination of the particular issue;
  4. the protection of justified expectations;
  5. the basic policies underlying the particular field of law;
  6. certainty, predictability, and uniformity of result;
  7. ease in determination and application of the law to be applied.
Term
What are the important 2nd RS sections for torts?
Definition

 

    1. Specific (several-don't need to know them by heart)
    2. §145 - General Tort Statute
      • §145(1) calls for application of the law of the state with the most significant relationship, referring to §6
      • §145(2) lists a group of contacts that will typically be relevant in tort cases:
        • place where injury occurred;
        • place where conduct causing injury occurred;
        • domicil, res, nationality, place of incorp, and POB of the parties
        • place where relationship, if any, b/t parties is centered
Term
What are the important 2nd RS sections for contracts?
Definition
  • If no COL clause: §188
    • controlling law is "local law of the state which, w/ respect to that issue, has the MSR...under the principles stated in §6"
    • lists several factors peculiar to contract law that will help inform the §6 choice: place of contracting; place of neg of the K; place of perf; location of the subkect matter in the K; domicil, res, nationality, place of incorp, and POB of the parties
    • presumptions
  • If COL clause: §187
    • COL clause will be applied if the particular issue is one which the parties could have resolved by an explicit provision in their agreement.
    • COL clause will be applied even if the issue is one which the parties couldnt have resolved by an explicit provision in their agreement, unless
      • chosen state has no substantial rel to the parties or the transaction AND there is no other reas basis for the parties' choice OR
      • chosen law would violate PP of the MSR state
Term
What are the important 2nd RS points for property?
Definition
  • Land: Apply the law of the situs of the property
  • Movables: 
    • Transfers during life (Inter Vivos): Apply the law of the place where the property is located
    • Transfers @ Death: Apply the law of the state where the decedent died domiciled
    • Marital Property: Apply the law of the state where the spouses were domiciled at the time the movable was acquired
Term
What are the important 2nd RS points for procedure?
Definition

Generally, the F usually will apply its own rules concerning the conduct of litigation (its own rules of procedure), even when it applies the law of another state (substantive law) to resolve other issues in the case.

 

Term
What 3 rules did Judge Fuld come up with when determining rules to increase predictability in COL?
Definition
  1. The COG in an auto-guest case is the domicile of the 2 parties, if common, and if the auto is registered there.
  2. Favors domiciliary party, whether P or D, if the accident occurs in their domicile and the local rule is favorable to them. Thus, if the P-guest is injured in his domicile and that law grants recovery, it applies; if the D-driver causes an accident in his domicile, but there is no liability, then that rule applies.
  3. Where P & D have different domiciles, and the accident occurs in neither domicile, or the local law is unfavorable to the domicilary, then ordinarily the law of the place of injury will be chosen, unless some other jurisd has a greater interest in the outcome of the case. 
Term
Allstate Insurance Co. v. Hague - Constitutional Limit on COL
Definition
The DP Clause and the FF&C Clause require the state to "have a significant contact or significant aggregation of contacts, creating state interests, such that choice of law is neither arbitrary nor fundamentally unfair." This may be established by very minimal contacts, for example, employment, doing business, change of residence, and aggregation.
Term
Erie - COL in Federal Courts
Definition
  • Federal courts must apply federal procedural law (FRCP)
  • Federal courts sitting in diversity (i.e., if the parties are citizens of different states or non-US citizens) must apply the substantive law (statute and case law) of the state where it sits.
Term
York's Outcome Determinative Rule - COL in Federal Courts
Definition
A rule was substantive for Erie purposes if it could affect the outcome of the case. 
Term
Byrd's Counterveiling Considerations Balancing Test - COL in Federal Courts
Definition
Balance Erie (policy against forum shopping) against the other federal policy (such as the federal preference for jury trials of disputed facts).
Term
Hanna - COL in Federal Courts
Definition
A valid Federal Rule controls over an inconsistent state rule or policy, even if it results in a diferent outcome. Insulated the FRCP from any Erie-based attack (removed the FRCP from the impact of the Erie decision).
Term
Klaxon 
Definition
A federal court sitting in diversity must apply the COL rules of the state where it sits.
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