Conflicts of Law Outline

Choice of law determines a rule of decision to abide by when more than one jurisdiction is “involved” or “interested” in a case. Every litigated case involves (at least implicitly) a choice of law problem, either chronological, territorial, or by issue characterization. In this situation we must choose between …

1. 
   The First Restatement
   
   1. 
      Rule/History: The First RST is based on a territorial test, and is concerned with the location of specific acts, or the lex loci. Justice Story championed the First RST, and emphasized that every state possessed an exclusive sovereignty and jurisdiction within its own territory. Justice Beale supported this notion, proposing that certain rights were “vested” in the territory in which they took place, and were later valid and enforceable everywhere. The First RST places a high value on uniformity of result, predictability, and the discouragement of forum shopping. However, it may be difficult to localize where the “key” event occurred, and its focus on specific facts makes the First RST rigid and mechanical and frequently creating unjust results.
      
      1. 
         In determining what law to apply, look to the law of the state where the right was acquired, as in a K, or where the last event necessary to make an actor liable for an alleged tort takes place.
         
   2. 
      First RST and Contracts: Validity or Performance?
      
      1. 
         Validity of a K is determined by law of the state in which it is made (Milliken)
         
         1. 
            Beale: Law of the place where the principal event necessary to make a K occurs is binding
            
      2. 
         Assumptions: Validity and performance could be distinguished, and only one place where they occurred
         
         1. 
            Encourages preemptive forum shopping for where to pick your place of contracting
            
         2. 
            System is only predictable if there are attorneys and judges who agree on the facts (unrealistic)
            
      3. 
         Validity: Law of place of K determines capacity to K, form of promise, mutual assent, consideration, requirements to make K binding, what makes a K void/voidable, time and place to be performed (§332)
         
         1. 
            The forum must look to the contract validity laws of the state in which the contract is made to determine, under their laws, its validity (Milliken, First RST §311)
            
         2. 
            Formal K Effective: If final on delivery, where delivery made (§312)
            
         3. 
            Informal Bilateral K: Where second promise is made in consideration of first promise (§325)
            
            1. 
               Place of contracting is where accepted: Where agent delivers or, if sent by mail, place where acceptance is sent from (§326).
               
            2. 
               Acceptance by mail, place of contracting is where acceptance mailed, (2) if telegraph, place where message of acceptance received by telegraph company for transmission, (3) if by phone, place where acceptor speaks his acceptance
               
         4. 
            Informal Unilateral K Effective: Where event takes place which makes promise binding (§323)
            
         5. 
            Milliken v. Pratt: Contract signed in OR, but mailed to Maine by a married Mass woman
            
            1. 
               Holding: K created in Maine, when women could K, so that law applies even though couldn’t K in Mass then - should recognize expansion of women’s rights (P WINS)
               
            2. 
               Vested Rights: Party rights vest at the moment the contract is “made,” not completed when signed, but when goods delivered in reliance on the guarantee (unilateral K)
               
            3. 
               Reasoning: K was complete when guaranty was received and acted on in Oregon- so treated contract as if made and performed in State of Maine
               
         6. 
            Notes: What about Mass’ change of law to allow women to K? Makes no difference, because rights invested when K was made, so no change in those rights after vestment OR Mass’ interests in applying its older law is low, so no reason to go back to older way (interest analysis argument)
            
      4. 
         Performance: Duty will be discharged by compliance with law of the place of performance of promise with respect to manner, time, locality, sufficiency, and excuse for non-performance (§332)
         
         1. 
            Law of place of performance controls if: applying law of contracting requires determination of minute details of manner, method and time and sufficiency of performance, and is unreasonable
            
         2. 
            Pritchard v Norton – K was invalid in place of agreement, but valid in place of performance.
            
            1. 
               Courts assumed they intended to make K valid and so used law of the place of performance
               

3. 
   First RST and Torts: Law where Tort Occurred Controls.
   
   1. 
      Under First RST §384, the substantive law of the state where the act giving rise to a claim occurred, determines tort liability. A crime is deemed to be committed and is punished in that jurisdiction in which the result is manifested, not where act is committed. (Carroll)
      
   2. 
      Alabama RR v. Carroll: AL worker for AL RR, injured working in Mississippi, contract in AL
      
      1. 
         The place of injury rule required that application of Mississippi law, even when both parties were AL residents, and negligence occurred in Alabama.
         
         1. 
            The fact which created right to sue (injury), occurred in Miss. – its law controls
            
      2. 
         Doesn’t matter that contract under which he was operating was in AL- duties and liabilities are not imposed by the contract between the parties
         
   3. 
      Exceptions: (1) 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 (§380), (2) 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 (§382).
      
   4. 
      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
      
      1. 
         Tort laws are about incentives for defendants to improve- so wouldn’t you want to address where the negligence occurred?
         
      2. 
         Encourage predictability- maybe Carroll took out insurance and expected to have to pay for that injury (benefited from it occurring a few miles over the boarder) can’t predict accidents
         

4. 
   First RST and Land: Based on the premise that no state can affect property out of its own territory. A state can prohibit operation of foreign laws within its territory, or allow some but not others
   
   1. 
      Lord Baron: If personal property is disposed of lawful under the law of the country where it is, that disposition is binding everywhere.
      
   2. 
      Land Taboo Rationale: (1) Power: Officials of State A are the only ones who can lawfully deal with land in that state, (2) Priority: How would you pick between the jurisdictions otherwise? What makes sense that would trump the home-state’s land? (3) Organization: Want to keep searches of land ownership within the law of the situs to apply to have uniformity in searches
      
      1. 
         Majority Rule: Leaseholds are considered immovable for COL
         
      2. 
         Issues: Location of property at the time of litigation? What about intangibles like insurance policies? Doesn’t further the Conflict goals of uniformity and predictability
         
   3. 
      In Re Barrie’s Estate: Deceased executed a will leaving land in Iowa to a church in Illinois, but will marked “void,” (improper revocation in Illinois, ok in Iowa), so under intestacy laws of Illinois, property in that state distributed to heirs, but under Iowa, it goes to the Church
      
      1. 
         Iowa courts can interpret a non-resident’s will who dies owning real property in Iowa. But just because the will was revoked in Illinois doesn’t mean it was revoked in Iowa
         
      2. 
         Rule: (Beale): Law of the place the immoveable is located governs the revocation of a will, and the capacity/ of the testator and the effect of the will
         
         1. 
            Statute proffered by heirs is inapplicable because deals with creation of will, not revocation
            
      3. 
         FF&C does not apply to real property situated in a state other than the one in which the decree was rendered (would have worked if it was Illinois property, but not Iowa property)
         
5. 
   First RST and Domicile: Dom is established by (1) physical presence in a location, and (2) intent to remain
   
   1. 
      To Show Intent: Home/car ownership, registration, voting, church or community organization membership (normally an issue of fact for the jury), intent to remain “for a time at least”
      
      1. 
         Temporary absence doesn’t destroy – change when new one established (only have one)
         
         1. 
            Courts consider evidence of change by subjective and objective standards (what they say their intent was, combined with their objective actions)
            
      2. 
         Look at “totality of the circumstances” – leeway in advocacy, but bad for bright line rules
         
         1. 
            If it’s within your private setting (like estate planning, contracting), declarations of intent are ok- but given less weight in cases involving governmental burdens like taxes (something with governmental burdens)
            
   2. 
      White v. Tenant: Left home in WV, intending to move to PA farm, moved stuff to new house, got sick, died in WV, no will so intestate where?
      
      1. 
         Holding: Deceased domiciled in PA at death. He left WV with the intention and purpose of making a home in PA– left his home without an intent of returning (PA LAW)
         
         1. 
            Doesn’t matter that he left next day to care for his sick wife in WV
            
      2. 
         Rule: Law of decedent’s domicile state at the time of death controls the distribution of his estate.
         

6. 
   Escape Devices:
   
   1. 
      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 First RST/Traditional approach jurisprudence, judges began employing certain escape devices to address the critiqued arbitrariness in applying the First RST. Three main exceptions arose:
      
      1. 
         All escape devices have equal application, judges have discretion to apply what they want
         
   2. 
      (1) Characterization of the Case: The First RST puts a premium on characterization of the issue
      
      1. 
         As a remedy to the seemingly overly-rigid results of territorial rule, judges used re-characterization of an issue as a rationalizing device to decide whose law applies.
         
         1. 
            Application: Weapon for counsel to use to get favorable law
            
         2. 
            Criticisms: Why bother with re-characterization? Why allow manipulating an intended bright line rule? Maybe more of a social science than legal?
            
      2. 
         How to Characterize:
         
         1. 
            (1) How Characterized by Legislature: Did statute uses SOL for K or for tort?
            
         2. 
            (2) Look at Statute’s Purpose: If the law where the parties act doesn’t give legal validity to their acts – no other law should validate
            
         3. 
            (3) Look at Policy/Justice: Is there sufficient interest in case to apply x law?
            
         4. 
            (4) Judicial Activism/”Just” Result: Some judges are less willing to imply terms into a contract, so it’s a judicial deference decision? Or judges want the morally just thing to be done so they pick the law that best suits most rational decision?
            
      3. 
         Tort v. Contract: Even though Caroll is more predictable approach, we feel more just with the holding in Levy –escape devices used to reach decisions based on equities.
         
         1. 
            Levy v. Daniels: Agency rented to driver, accident, passenger sued rental comp
            
            1. 
               The vested rights doctrine would refer to the law of the place of contracting (CT), where the agent would be liable to the third-party beneficiary of 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 accident (Mass) to the place of the contract (CT).
               
            2. 
               Holding: CONTRACT claim, not tort. The CT statute making agencies liable for damage done during rental was implied into the contract under CT law
               
            3. 
               Reasoning: Purpose of CT statute was to give the injured person a right to recover from the rental agency – encourage people to rent to careful drivers to keep the roads safe for everyone
               
         2. 
            Hamschild v. Continental: W sued H for injuries sustained in accident in CA
            
            1. 
               Reasoning: Historically, law governing the creation and extent of tort liability is that where tort was committed – and inter-spousal immunity from liability is governed by the place of injury (Buckeye), but the ability to sue within a family is properly decided by the law of the family’s domicile – they have primary responsibility for regulating relationships
               
            2. 
               Holding: FAMILY LAW/CAPACITY case. W can sue because a spousal immunity case, not a tort case – so look to law of H/W’s domicile
               
      4. 
         Substance v. Procedure: 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 characterization process (Bournias)
         
         1. 
            First RST §584: Forum determines according to its own conflict of law rules whether a given question is one of substance or procedure
            
            1. 
               However, a party’s legal rights and duties shall not be substantially varied because of the forum in which an action is brought to settle the dispute
               
         2. 
            Barred by Forum SOL but NOT by SOL Where Cause of Action Arise: Barred (§603)
            
         3. 
            NOT Barred by Forum SOL, but Barred where Action Arose: Not Barred (§604)
            
            1. 
               BUT if a state’s law conditioned a right to expire after a certain SOL has elapsed, no action begun after that period can be maintained in any jurisdiction (§605).
               
            2. 
               The SoL is SUBSTANTIVE if bound up in the statute that created the cause of action and it is foreclosed everywhere
               
         4. 
            Test: Was the limitation directed to the newly created liability so specifically aimed as to warrant saying it qualified the right? (YES- subst., NO- procedural)
            
            1. 
               Labeling: How have courts in the past labeled it? Statutes (FRCP)?
               
            2. 
               Linked with COA: If it’s so intertwined with the COA, have to take the bitter with the sweet, and accept the SOL of that cause of action, but if not part of the cause of action, forum is free to apply its own SOL
               
            3. 
               Ease of Administration: Limit by what makes application of foreign law in a local tribunal impracticable or inconvenient
               
            4. 
               Application- If statute is procedural, can be applied retroactively, but if it’s substantive, can’t be applied retroactively
               
            5. 
               Right v. Remedy- Right (substantive), remedy (procedural)
               
            6. 
               Policy: Who has greater interests? Who would be hurt by one over other?
               
               1. 
                  Prof Beale: Decide if policies satisfy reasons for applying the law of forum – if practical convenience in local rule is great, and effect on parties is negligible, then the law of forum controls
                  
               2. 
                  Morgan: Law of locus is to be applied to all matters of substance except where its application will violate the public policy of the forum, and apply the procedural laws of the locus which have a material influence on the outcome of the litigation
                  
         5. 
            Substantive: Out-of court/primary behavior (like pre-filing, or merits of the case, elements of cause of action, outcome-determinative)
            
            1. 
               First RST §606: The Court should apply a limitation imposed by the state where a cause of action arose if that limitation is a qualification of the cause of action
               
               1. 
                  Limitations periods in wrongful death statutes are substantive
                  
            2. 
               Where foreign SOL is regarded as barring the foreign right sued upon, and not merely the remedy, it will be treated as conditioning the right and will be enforced by our courts as part of the foreign “substantive” law (Bournias)
               
         6. 
            Procedural: In-court behavior (methods to bring that cause of action)
            
            1. 
               Not supposed to be outcome-determinate (just channel the dispute)
               
               1. 
                  Statute of Frauds; SOL; Burdens of Proof; Joinder; counterclaim, right to jury trial; survival or revival of a cause of action (Grant)
                  
            2. 
               Grant v. McAuliffe: Tort (AZ), both drivers from CA, estate in CA
               
               1. 
                  AZ law – suit dies with the person, CA – suit survives against estate
                  
               2. 
                  Holding: Survival of a statutory cause of action is PROCEDURAL, as it is more analogous to SOL law, because it doesn’t create a right of action, just dictates when you can bring it
                  
               3. 
                  Dissent: Effect of a survival statute is to create a right or cause of action rather than to continue an existing right
                  
               4. 
                  Notes: But this characterization is tough- survivability could be outcome determinative (substantive), easy to administer (procedural), didn’t affect out-of-court behavior (not substantive)
                  
            3. 
               Bournias v. Atlantic Maritime: Maritime employee, changed boat registration, Statute of Limitations issue about when employee can sue
               
               1. 
                  Holding: SOL was PROCEDURAL. The limitations section wasn’t so tied to the substantive cause of action section to consider them together
                  
               2. 
                  SOL are considered procedural, but an exception to the general rule that when SOL goes to the right itself an not to the remedy
                  

3. 
   (2) Renvoi: Forum state looks at foreign law, but foreign law looks back to forum state
   
   1. 
      Renvoi issues arise when distinguishing between the “internal” law (law applied in purely domestic cases without multi-state contact), and “whole” law (law including the jurisdiction’s choice of law rules). Renvoi is discouraged in every approach but arises in certain pockets, where the whole law and not just the internal law of a jurisdiction will be applied 
      
      1. 
         Option 1: Any references to foreign law means internal law only – not their COL
         
         1. 
            First RST §7: Directed courts to ignore foreign choice of law rules
            
         2. 
            EXCEPTIONS: Except for title of land and validity of divorce decree rules which are controlled by situs of land and domicile of parties, respectively
            

4. 
   (3) Public Policy: 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 create 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.
   
   1. 
      First RST §612: Precluded suits under a cause of action created in another state the enforcement of which is contrary to the strong public policy of a forum
      
      1. 
         (1) Forum Contacts Count. Public policy dismissal is a sign that the forum has some significant relationship with the litigation and by rights its laws should apply
         
         1. 
            Public policy is not determined by referring to the laws of the forum alone, look in the prevailing social and moral attitudes of the community
            
      2. 
         (2) Foreign Sovereigns Deserve Deference. Courts are incompetent to deal with issues arising between two states – that role should be left to the legislature (Learned Hand)
         
      3. 
         (3) Treat Parties Fairly. J. Brandeis: Either dismiss, or bend your public policy for forum to accommodate a “repugnant foreign law” (Holzer, dismissal was the uglier prospect- unfair to apply some but not all of German law denying a remedy)
         
      4. 
         (4) Penal Laws. Court in one state will not enforce the penal or tax laws of another state
         
         1. 
            Involve notions of state identity, so inappropriate for another state to decide them
            
         2. 
            Test: Is it a punishment of an offense against the public or compensation for the loss suffered by the injured party? (characterization by the forum state)
            
         3. 
            Milwaukee County: No state has a policy against payment of its neighbor’s taxes
            
      5. 
         Critiques: Goes against uniformity and protecting reasonable expectations
         
         1. 
            May refuse to impose damages limitation for other states’ wrongful death statutes
            
      6. 
         What is “Public Policy”? Look at Constitution or legislative acts, agency procedure, or membership in community organizations – but little guidance so gives judges discretion
         
   2. 
      Intercontinental Hotels: Foreign law must be inherently vicious, wicked or immoral and shocking to prevailing moral sense for the foreign claim to be denied local enforcement
      
      1. 
         Escape device is applicable only when enforcement of the foreign right would violate some “fundamental principle of justice, good morals, or deep-rooted tradition.
         
      2. 
         Cardozo: Must be an extreme difference to allow a court to refuse case
         
   3. 
      Loucks v. Standard Oil: Decedent was a resident of NY, accident in Mass.
      
      1. 
         
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