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 is (1) uniformity in results in their determination / predictability, and (2) to prevent forum shopping.

TRADITIONAL APPROACHES TO CHOICE OF LAW

The below are all traditional substantive law approaches

The traditional system for choice of law in the United States was the system embodied in the 1 st 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 1 st 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 = 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 AL worker for AL railroad, injured working in Mississippi, contract in AL. The place of the injury
Southern R.R. Co. v. rule required that application of MS law, even when both parties were AL residents and negligence
Carroll, 97 Ala. 126 occurred in AL. Doesn’t matter that the K under which he was operating was in AL. Duties and
(1892) 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

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 values and preferences of the people most likely to be involved in accidents.

CONTRACTS = 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:
o §312 – Formal Contract: When a formal contract becomes effective upon delivery, the place of contracting is
where the delivery is made.
o §323 – Informal Unilateral Contract: The place of contracting is where the event takes place which makes the
promise binding.
o §325 – Informal Bilateral Contract: The place of contracting is where the second promise is made in
consideration of the first promise.
o §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, Contract signed in OR, but mailed to ME by a married MA woman. The Court held the K created in
125 Mass. 374 ME, where a woman could contract, so that law applies even though she couldn’t contract in MA.
(1878) 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 (IMMOVABLES) = APPLY THE LAW OF THE SITUS (WHERE THE LAND IS LOCATED)

Rationale:
1. 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
2. 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
3. Certainty and convenience

PERSONAL PROPERTY (MOVABLES) = APPLY THE LAW WHERE THE PLAINTIFF IS DOMICILED

Since 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  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, Deceased executed a will leaving land in Iowa to a church in Illinois but will marked “void”.
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 35 N.W.2d 658 Improper revocation in IL but ok in Iowa. Under the intestacy laws of IL, property in the state was
(1949) 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 Left home in WV intending to move to PA farm. Moved stuff into new house, got sick, died in WV
S.E. 598 (1888) 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

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 1 st Restatement.

Four main exceptions:

1. Characterization of the case
2. Substance v. Procedure
3. Renvoi
4. Public Policy

CHARACTERIZATION = THE PROCESS OF DETERMINING WHAT KIND OF ISSUES ARE PRESENTED IN A

CASE.

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:
1. Did the statute use SOL for K or for tort?
2. If the law where the parties act doesn’t give legal validity to their acts, no other law should validate.
3. Is there sufficient interest in case to apply X law?
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 4. 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- Agency rented to driver, accident, passenger sued rental company. The vested rights doctrine would
Drive Auto Renting refer to the law of the place of contracting (CT), where the agent would be liable to the 3rd party
Co., 108 Conn. 333 beneficiary for the lease K for the subsequent tort, BUT by using re-characterization as an “escape
(1928) 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. Wife sued husband for accident in CA. The Court held the wife could sue b/c this was a spousal
Continental Cas immunity case, not a tort case. Look to the law of the husband and wife’s domicile. Reasoning is
Co., 7 Wis.2d 130 historically, law governing the creation and extent of tort liability is that where the tort was
(1959) 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.

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, Procedural. Tort (AZ), both drivers from CA, estate in CA. In AZ, the suit dies with the person. In
41 Cal.2d 859 CA, the suit survives against the estate. The Court held that survival of a statutory cause of action is
(1953) 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 Substantive. Maritime employee, changed boat registration, SOL issue about when employee can
Maritime Co., Ltd., sue. The Court held SOL was procedural. The limitations section wasn’t so tied to the substantive
220 F.2d 152 (1955) 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.

Forum state looks at foreign law, but foreign law looks back at the forum state.

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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 U.S. citizen from Switzerland. Domiciled in NY, left property in Switzerland. Swiss law (property of
Estate, 198 Misc. a foreign national is split among heirs), and NY law (will decides) conflict. Swiss conflict law said
1017 (Sur.Ct.N.Y. foreign national issues are decided by domiciliary internal law.
Co. 1950)
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

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 Decedent was a resident of NY, accident in MA. MA had a tort damage limitation, and NY didn’t
Oil Co. of New have a cause of action or limitation. Statute was not penal and NY public policy doesn’t prohibit the
York, 224 N.Y. 99 MA cause of action being heard in a NY court, and no reason to refuse a cause of action just b/c the
(1918) 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 Wife sued husband for accident in CT (no immunity), domicile in NY (spousal immunity). Forum’s
N.Y. 466 (1936) public policy offered a reason to overrise the 1 st 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 German company fired Jewish/German employee. K claim. The Court held there was no breach of K
Reichsbahn- b/c the German government required the defendants to discharge the plaintiff. Not against public
Gesellschaft et al, policy to hold people to K’s they make in their country to be performed under that country’s laws.
277 N.Y. 474 (1938) 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.

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  Mere differences are not enough. The foreign law must contravene the forum’s strong public policy. (2 nd 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

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 Plaintiff is resident of Arkansas who was injured in Saudi Arabia when he was hit by a truck owned
American Oil Co., and operated by Arabian, a Delaware corp. The court held that a court may not decide a tort suit based
233 F.2d 541 (2d on the law of the forum, where neither party pleads or proves the applicable foreign law. NY law
Cir. 1956) 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

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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

Used the determine the validity of contracts.

Pritchard v. Appeal bond signed by Pritchard (LA) and Norton (NY) agreeing to indemnify Pritchard from loss.
Norton, 106 U.S. Under NY law, bond invalid b/c lacked consideration b/c appeal bond executed before promise for
124 (1882) 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. Substantial Connection: Party autonomy can be honored on a validity issue if (1) the COL is in good
Cunard White faith/bona fide, and (2) the law chosen must be that of the jurisdiction having some relation to the
Star Ltd., 221 agreement (either the place of making or of performance) [implicit), (3) no evidence of an attempt to
F.2d 189 (2d Cir. evade a certain jurisdiction’s policy, (4) existence of contrary statute, and (5) whether chosen law is
1955) 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”:
1. The place of contracting;
2. The place of negotiation of the contract;
3. The place of performance;

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 4. The location of the subject matter of the contract; and
5. 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:
1. Protection of the party in the inferior bargaining position
2. A difference in basic policy rather than minor detail
3. Foreseeability to the parties that the invalidating law would be applied
4. Noncommercial context of the contract

Wyatt v. Fulrath, Duke and Duchess of Arion – Spanish law would leave half of property to wife, but NY law would let all
16 N.Y.2d 169 husband’s property go to surviving spouse. The Court held that NY law should apply. The intention of
(1965) 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 2 nd 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 = 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. Civil rights statute vs. FRCP for attorney fee recovery. The Court held that legislation must be
Marek, 720 F.2d interpreted in light of its purpose (look at policy interests behind the statute to decide importance).
474 (7th Cir. Intended to encourage bringing legitimate civil rights actions. Public shouldn’t be deterred from bringing
1983) 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, Same facts as above but on appeal to SCOTUS. Rule = absent congressional expressions that state the
473 U.S. 1 opposite, the underlying statute defines costs to include attorneys’ fees, so such fees are to be included
(1985) 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:

1. Determine the Relevant Policies
2. 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)
3. Select Which Jurisdiction’s Law to Apply

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 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.

1. 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 False Conflict. Tooker (passenger) killed when Lopez (driver) lost control of the car. NY
N.Y.2d 569 (1969) 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 False Conflict. Plaintiff sued Boy Scouts for injuries from molestation by scout master. How
Scouts of America to determine the right of recovery in an action by a foreign domiciliary for torts that are wrong
Inc., 65 N.Y.2d under both jurisdictions’ laws.
189 (1985)
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.

2. 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.

3. 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:

a. 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.

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 b. 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.

c. Balancing Interests: Some states resolve true conflicts by assessing the respective jurisdictions’ interests
to decide which are more important.

Lilienthal v. True Conflict. D under spendthrift provision protection in OR, no power to enter into Ks. D
Kaufman, 239 entered into K with P in CA (they didn’t know). K allowed in CA but not in OR. OR had an
Or. 1 (1964) 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. House sale, decedent orally promised to forgive debt, buyers sued estate. CA has an interest to
Fowler, 55 protect estates from false claims on alleged oral contracts. NV has an interest in protecting
Cal.2d 588 residents right who are parties to the contract and their policy that contracts be valid and
(1961) 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. Comparitive Impairment. Myers (domiciled in CA) drove to NV to go to a club

Harrah’s Club, (Defendant’s domicile). Myers was served too much and drove home. Had an accident in CA
16 Cal.3d 313 with Bernhard (CA resident). NV has an interest is protecting tavern-keepers from liability
(1976) 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. Bus crash in NY into truck. Bus passengers are from Ontario. Bus company domiciled in
Erie Coach Ontario. Truck driver is from PA. Plaintiffs wanted court to analyze all Defendants jointly.
Lines Ontario would have capped damages where NY law would not. The court held that when
Company, 17 conducting COL analysis, the court may not conduct a single, joint analysis of the defendants.
N.Y.3d 306 Must consider each plaintiff and each defendant separately. NY law applies.
(2011)

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 4. 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. Unprovided-For. Erwin (from WA) was injured by Thomas (from OR) in an accident in WA.
Thomas, 264 Erwin’s wife sued Thomas for loss of consortium in OR. WA has an interest b/c it believes that
Or. 454 wife’s rights to relationship aren’t strong enough to make negligent defendant pay wife. OR has
(1973) 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 1 st 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 1 st 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 = 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:
1. What the interstate and, if applicable, international systems need;
2. The forum’s relevant policies;
3. Other jurisdictions’ relevant policies and their respective interests in deciding the particular issue;
4. Protecting justified expectations;
5. The policies underlying the relevant legal field;
6. Assuring certain, predictable and uniform results; and
7. 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 (§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
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 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. Car bought in NC with NC address, then moved to MT. Driving from MT to NC, but got in an accident
General Motors in KS. Deceased were MT residents. Phillips was legal guardian of surviving son. Guardian lived in
Corp., 298 Mont. NC, probate was filed in MT (this case’s forum).
438 (2000)
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 (§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. CA resident contracted to do work for Delaware corp., with a principal place of business in CO.
Homes, Inc. v. Agreement was signed in CO. Work was to be performed in New Mexico. Work was shut down b/c
Walker Plaintiff did not have NM license. Plaintiff sued for breach of K. The court held that NM law applies.
Adjustment CO’s interest in validating contracts does not outweigh NM’s interest that contracts that violate its law
Bureau, 198 Colo. not be enforceable.
444 (1979)

REAL PROPERTY (§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 = ONLY USED WHEN RESOLVING TRUE CONFLICTS

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. (LEFLAR)

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 1. 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.

2. 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.

3. 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.

4. *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.

5. *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. Group domiciled in Ontario came into the United States. Car insured and registered in Ontario. Got into
Saari, 295 Minn. an accident, guest injured, hospitalized in Minnesota (forum). Ontario has a guest statute (need proof of
155 (1973) 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. Plaintiff (Minnesota) injured in AZ (where he later moved), insurance, work in ND. Stacking policies
General (combining insurance policies) allowed under MI but not ND law.
Casualty Co. of
Wisconsin, 513 The Court held that ND law applies. Neither ND nor the old or the new MI law is “better.” Looked at
N.W.2d 467 predictability of result, maintenance of interstate order, simplification of judicial task, advancement of
(Minn. 1994) forum’s governmental interests, and the better law.

CONSTITUTIONAL LIMITATIONS ON CHOICE OF LAW

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 = 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.”

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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. Due Process. TX citizens sued a Mexican corporation to recover on a fire insurance policy. 2 year SOL in
v. Dick, 281 TX, 1 year SOL in Mexico.
U.S. 397 (1930)
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 = 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 Full Faith & Credit. Clapper (VT) employed by Bradford (VT corporation, principal place of business in
Electric Light VT), but injured while working in NH (forum). NH allowed workers’ compensation or tort action, but VT
Co. v. Clapper, limited to workers’ compensation.
286 U.S. 145
(1932) 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 Due Process. Non-resident employee sued employer’s insurance in CA for injuries in AK. Applied for
Assoc. v. workers’ compensation in CA for an injury he sustained in AK.
Industrial Acc.
Comm’n, 294 The Court held that CA law applies. CA’s interest is sufficient to justify its legislation, and Alaska doesn’t
U.S. 532 (1935) 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 policies

This 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 Full Faith & Credit. Mass employee injured in CA while working for MA employer (common domicile).
Employers Ins. CA workers’ compensation applies to all injured within the state. MA workers’ compensation waives
Co. v. Industrial employees common law right of action or any other forum’s law to recover for injuries unless they give
Acc. Comm’n, written notice to the employer that they intend to do so.
306 U.S. 493
(1939) 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

14
 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 = (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. Due Process. Accident in WI, both drivers were WI domicile. Plaintiff worked in Minnesota where
v. Hague, 449 insurance covered his cars, after accident before case, wife moved to MI. Under MI law, you can “stack”
U.S. 302 (1981) 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 Leased mineral rights from 30,000 people. Set royalty %. DE company with principal place of business in
Petroleum Co. OK, royalty owners in all 50 states, land in 11. Phillip’s didn’t pay lessors interest on the increase in
v. Shutts, 472 royalty payments owed.
U.S. 797 (1985)
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

Hughes v. Fetter, Where an injury occurs outside of the forum state, but the forum state has personal jurisdiction over the
341 U.S. 609 parties and provides a cause of action similar to the foreign action sued upon, the forum may not prohibit
(1951) its courts from exercising PJ over the foreign cause of action on public policy grounds.

PRIVILEGES AND IMMUNITIES CLAUSE = ENTITLES EACH CITIZEN OF EACH STATE TO THE PRIVILEGES
AND IMMUNITIES THAT CITIZENS OF OTHER STATES ENJOY

Prohibits 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:
1. Confer benefits on state residents that are denied to out-of-staters; or

15
 2. 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 NH limits bar admission to state residents. Plaintiff passed NH bar but was not yet a resident. Denied bar
of N.H. v. Piper, application b/c she wasn’t a resident. Court held that a state may not enact restrictions on bar admissions
470 U.S. 274 b/c of the privileges and immunities clause. State can discriminate against rights of out-of-state residents
(1985) as long as there is a substantial reason for the difference in treatment and it further’s a state objective.

EQUAL PROTECTIONS CLAUSE = PREVENTS A STATE FROM DENYING TO ANY PERSON THE EQUAL
PROTECTION OF ITS LAWS

A 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 Plaintiff injured in AL. Sued railroad company in GA. AL statute made RR company liable as employer.
Coal, Iron & 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
R.R. Co. v. not restrict the venue of a transitory cause of action to local courts of that state. AL statute cannot be
George, 233 restricted to being heard only in AL courts. FF&C only extends to the substantial provisions of such
U.S. 354 statutes and venue is not one of them.
(1914)

JURSIDICTION OF COURTS

What contacts or connections must a state have with a particular dispute to apply its law?

PERSONAL JURISDICTION = A COURT’S POWER OVER THE PARTIES TO A DISPUTE OR OVER SPECIFIC
ITEMS OF PROPERTY

Adjudicatory 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:

1. 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.
2. 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.
3. 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).

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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  Does the Defendant has sufficient minimum contacts with the forum state?
 Relatedness  Does the claim arise from contract or is it related to the activities in the forum states?
 Reasonableness  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 AZ residents injured in car accident in OK on their way to NY. Sued manufacturer (World Wide) which is
Volkswagen a NY company. Brought suit in OK. WW said no PJ in OK. The court held that OK did not have PJ.
Corp. v. Foreseeability alone is not sufficient to authorize a state court’s assertion of PJ over a non-resident
Woodson, 444 defendant that has no contacts, ties or relations with the forum state.
U.S. 286
(1980)

J. McIntyre NJ resident injured by McIntyre equipment. Machine manufactured in England. Court held there was not
Machinery v. PJ in NJ b/c the company did not purposefully avail itself of the privilege of conducting activities within
Nicastro, 564 the forum state, thus invoking the protections and benefits of its laws. No personal jurisdiction.
U.S. 873
(2011)

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.
 Constitutional
 Statutory

Burger King Franchise started in Michigan by Plaintiffs who are Michigan residents. Burger King headquartered in FL
Corp. v. and contacts with Plaintiffs stated all disputes are resolved in FL courts. Franchise fell through. BK sued in
Rudzewicz, 471 FL. Defendant challenged based on lack of PJ. The court held that FL was right venue b/c defendant
U.S. 462 purposefully availed themselves by executing the contract in FL and b/c the defendants knew the contract
(1985) 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

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:
1. Full faith and credit
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 2. Claim preclusion
3. Issue preclusion

FULL FAITH & CREDIT = COMPELS STATE AND FEDERAL COURTS TO RECOGNIZE THE VALID, FINAL
JUDGMENTS OF OTHER STATE AND FEDERAL COURTS

Fauntleroy v. Two Mississippi citizens had gambling contract, one brought dispute to arbitration, enforced in Missouri
Lum, 210 U.S. courts, over Defendant’s argument that K was illegal in Mississippi. Tried to have Missouri judgment
230 (1908) 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. Divorce decree in GA for daughter’s maintenance (F1), then daughter moved to SC (F2) and sued there for
Yarborough, more money.
290 U.S. 202
(1933) 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. DC resident injured in VA working for DC company. Got workers’ comp agreement with VA agency.
Washington Later tried under DC workers’ comp Act too.
Gas Light Co.,
448 U.S. 261 The Court held that F2 can reopen an F1 judgment in the area of workers’ compensation. F2 award is not
(1980) 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) / RES JUDICIATA & COLLATERAL ESTOPPEL

Durfee v. Duke, Land near Missouri river, Nebraska court decided, enforced in Missouri.
375 U.S. 106
(1963) 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.

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Land Taboo: F2 has an interest in land within its own boundaries, and in keeping land records clear.

Clarke v. Wife died (domiciled in SC) leaving property (CT) to her husband and surviving daughters, but one died
Clarke, 178 (CT law land to sister, SC passes it to the dad).
U.S. 186 (1900)
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, Married in IN, moved to NB, bought land. Husband files for divorce in WA, wife claimed that they had
215 U.S. 1 already divorced in another state where she got the land, and husband fraudulently recorded a deed which
(1909) 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 = PREVENTS A PARTY FROM RELITIGATING CLAIMS THAT WERE OR SHOULD HAVE
BEEN LITIGATED IN A PRIOR ACTION THAT ENDED IN A VALID AND FINAL JUDGMENT

A party asserting claim preclusion must show:

1. A final, valid judgment on the merits in the first action
2. Identity of claims between the first and second actions; and
3. 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:
1. Same-Transaction Test
2. 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. Divorced in NJ, wife got $ judgment, then he moved to CA. The Court held that F2 does not need to give
Worthley, 44 FF&C to a modifiable judgment. Since NJ decree is prospectively and retroactively modifiable, they’re
Cal.2d 465 not constitutionally bound to enforce Defendant’s obligations under it b/c it wasn’t a final judgment.
(1955)
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 GM employee, bad retirement, settled a deal in Michigan, claim that he wouldn’t testify against them
Motors Corp., again but testified in a case in Missouri. GM asked for an injunction to stop his testimony.
522 U.S. 222
(1998) 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

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 obedience elsewhere on a matter the Michigan court has no authority to resolve.

ISSUE PRECLUSION = 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:
1. Is identical to one raised in the first action
2. Was actually litigated and decided in the first action; and
3. 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. Collateral estoppel does not apply where the party against whom an earlier court decision is asserted did
McCurry, 449 not have a full and fair opportunity to litigate the claim or issue decided by the first court.
U.S. 90 (1980)
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

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 JURISDICTION

Problems 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 = 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 Court said that a conspiracy in the United States to do acts in another jurisdiction did not draw to itself
Banana Co. v. those acts and make them unlawful, if they were permitted by the local law. Although the acts were
United Fruit Co., illegal in the United States, they were permitted by the local law in the foreign jurisdiction at issue.
213 U.S. 347
(1909)
* 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.

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 - 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 = 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. There must be due process for the exercise of judicial jurisdiction in personam. The court may adjudge
United States, 284 the witness guity of contempt if the witness fails to comply with the court order. Congress acted
U.S. 421 (1932) 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 = ASSERTS JURISDICTION OVER ACTS OF FOREIGN NATIONALS COMMITTED
ABROAD BUT HAVING EFFECTS IN THE AMERICAN MARKETPLACE.

United States v. Any state may impose liabilities even upon persons not within its allegiance, for conduct outside its
Aluminum Co. of borders that has consequences within its borders that the state reprehends. Under the Sherman Antitrust
America, 148 F.2d Act, the agreements of the Alliance in 1931 and 1936 would clearly have been unlawful had they been
416 (2d Cir. 1945) 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 = 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 = 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 = 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

Four modern approaches:

1. Party choice
2. Balancing test
3. International comity
4. Forum non conveniens

PARTY CHOICE = PARTIES AGREE WHERE DISPUTES WILL BE SETTLED AND WHAT LAW WILL BE APPLIED

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 The Bremen v. The forum selection clause was enforceable unless the party seeking to avoid it could meet the high
Zapata Off- burden of showing it to be unreasonable or unjust.
Shore Co., 407
U.S. 1 (1972)

Scherk v. Alberto signed contract w/ an arbitration clause that said disputes will be arbitrated in France, and that
Alberto-Culver the laws of Illinois apply. Court held to respect parties choice to arbitrate in France.
Co., 417 U.S.
506 (1974)

BALANCING TEST =

Lauritzen v. Under the Jones act, a federal court may not assert jurisdiction over a tort claim that accrued in foreign
Larsen, 345 U.S. waters, is governed by foreign law, and between foreign parties.
571 (1952)

Timberlane Plaintiff located in OR. Wanted to acquire lumber mill in Honduras. Creditors owned mill, including
Lumber Co. v. BOA. BOA refused to sell their interest. Plaintiff sued alleging conspiracy to eliminate competition. The
Bank of America, court held that a conspiracy that involves cooperation by a foreign government is not immune from U.S.
549 F.2d 597 (9th antitrust regulation. Under comity, U.S. wouldn’t normally step into foreign countries. Here the U.S. has
Cir. 1976) extraterritorial jurisdiction but court remands to decide whether comity precludes it.

Comity consideration are weighed using the following factors:

1. Potential for international conflict
2. Nationality of the parties
3. Competing jurisdictions’ relative interest in adjudicating
4. Intentionally and foreseeability of anticompetitive harm to American interests

Factors to consider when there’s competing national interests:

1. Place of the wrongful act
2. Law of the flag
3. Allegiance or domicile of the Plaintiff
4. Allegiance of the Defendant
5. Place of contract
6. Inaccessibility of the foreign forum
7. The law of the forum
8. The Defendant’s base of operations

Considerations when deciding to apply U.S. law extraterritorially:

1. The legislative intent of Congress
2. The presumptive reach of the statute
3. The limits imposed by international law
4. Judicial doctrines of discretion (like comity)

INTERNATIONAL COMITY = 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, Recognition and enforceability of a foreign judgment rests on the “comity of nations,” namely whethere
159 U.S. 113 there would be any reciprocity and mutual recognition by the foreign jurisdiction from which the
(1895) judgment was issued.

Hartford Fire Foreign companies acting in foreign countries could be held liable for violations of the Sherman Act if
Insurance Co. they conspired to restrain trade within the United States and succeeded in doing so.
v. California,
509 U.S. 764

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 (1993)

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 = COURTS MAY REFUSE TO TAKE JURISDICTION OVER MATTERS WHERE
THERE IS A MORE APPROPRIATE FORUM AVAILABLE TO THE PARTIES.

Piper Aircraft Plaintiff’s cannot defeat a motion to dismiss on the ground of FNC merely by showing that the substantive
Co. v. Reyno, law that would be applied in the alternative forum is less favorable to the Plaintiffs than that of the present
454 U.S. 235 forum.
(1981)

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.

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