Conflict of Laws Flashcards
Two Conditions for Recognition of Judgments Questions
(1) Judgment has been entered by a court in one jurisdiction (this is called the “rendering jurisdiction”); and
(2) A party is seeking to have that judgment recognized by a court in a different jurisdiction (this is called the “recognizing jurisdiction”).
Two-Part Analysis for Recognition of Law Questions
Step #1: Is the rendering jurisdiction a sister state or a foreign country?
Step #2A (Sister States): If the rendering court is a court in a sister state, then the source of the obligation to recognize the judgment is constitutional (in other words, the Full Faith and Credit Clause applies). By statute, full faith and credit principles also apply to the recognition of judgments between federal courts and state courts.
—There are two questions to ask:
- -(i) Are the requirements for full faith and credit satisfied? If yes, then recognition is required.
(a) Did the rendering court have jurisdiction over the parties and the subject matter?
(b) Is the judgment on the merits (that is, it involves the substance of the claim rather than procedural matters)?
(c) Is the judgment final (that is, it does not require any further action by the rendering court)?
- -(ii) Are there any valid defenses? If no, then recognition is required.
(a) Judgment is penal.
(b) Judgment was obtained through extrinsic fraud.
Step #2B (Foreign Countries): Under principles of comity, a recognizing court will exercise jurisdiction to decide whether the foreign judgment should be recognized.
- –Is the foreign judgment entitled to comity? Consider:
- –(i) Did the foreign court have jurisdiction?
- –(ii) Were the procedures in the foreign court fair?
Requirements for Full Faith and Credit
There are three steps that must be satisfied before the Full Faith and Credit Clause kicks in:
(1) JURISDICTION - The rendering state must have had jurisdiction over the parties (that is, personal jurisdiction) and jurisdiction over the subject matter. (look for default judgment on the exam, where D didn’t even raise PJ)
- —Exception: BUT when the issue of jurisdiction has been fully and fairly litigated, the jurisdictional determination is itself entitled to full faith and credit.
(2) JUDGMENT ON THE MERITS - The judgment entered by the rendering state must have been on the merits.
- —Examples of Judgments on the Merits = A default judgment (treats all factual contentions as admitted and is therefore on the merits for full faith and credit and recognition of judgment purposes; but note that since no actual issues were determined, the judgment could not be used for issue preclusion). A consent judgment (entered after settlement is also considered on the merits for purposes of recognition).
—-Examples of Judgments NOT on the Merits = Dismissals based on Statutes of Limitations; Lack of Jurisdiction (either PJ or SMJ); Misjoinder; Improper Venue; and Failure to State a Claim w/ Prejudice (but w/o prejudice is not on the merits) (note that these are all threshold issues prompting the court dismissal).
(3) FINALITY - The judgment entered by the rendering court must be a final judgment.
- —The most common application here is a judgment on appeal in the rendering jurisdiction, which is NOT FINAL.
- —Divorce Decrees: Past due payments are FINAL; Future (or modifiable) payments are NOT FINAL.
Note: For these three requirements above, the recognizing jurisdiction must look back to the law of the rendering state (its long-arm statute) as the source of the rules to apply in determining whether these rules have been satisfied. (But note that the law of the enforcing state governs the method of enforcement).
Defenses to Full Faith and Credit
The following are valid defenses to full faith and credit:
(1) PENAL JUDGMENTS - A penal judgment is NOT entitled to full faith and credit. A penal judgment is one that punishes an offense against the public. (e.g., the plaintiff = the state)
- —Exception: Final tax judgments enforced by the state are entitled to recognition.
(2) EXTRINSIC FRAUD - A judgment obtained by extrinsic fraud is NOT entitled to full faith and credit. Extrinsic fraud is fraud that could not be corrected during the regular course of the proceedings leading to the judgment.
- –Example: If the judge in the first proceeding was subject to bribery, then there’s extrinsic fraud, and there’s nothing that the litigants could do to overcome that, thus the courts in another state don’t need to enforce the faulty judgment.
Requirements for Foreign Judgments To Be Recognized
If the rendering court is a court in a foreign country, then the source of the obligation to recognize the judgment is comity or treaty.
Rule: Under principles of comity, a recognizing court will exercise jurisdiction to decide whether the foreign judgment should be recognized.
—-Many of the same principles as full faith and credit will be considered to guide the court’s discretion (e.g., is the foreign judgment final? Was the foreign judgment on the merits?)
—-But there are two additional questions that a recognizing court may ask:
(1) DID THE FOREIGN COURT HAVE JURISDICTION?
- -The foreign court must have had jurisdiction. The court has greater leeway to assess jurisdiction in the foreign context than in the full faith and credit context. (e.g., even despite the fact that judgment in the foreign court has already been litigated, an American court may decline to recognize that judgment, like if you're sued in Cuba but you've never had any contact w/ that country + the Cuban court rejects your lack of jurisdiction argument)
(2) WERE THE PROCEDURES IN THE FOREIGN COURT FAIR?
- -The American court also will assess whether the procedures in the foreign court were fair. (the foreign judgment will not be recognized if it was tainted by sham procedures, e.g., if you're not permitted to call witnesses or challenge the admissibility of P's evidence = unfair)
Identifying a Choice of Law Question
A choice of law question may arise when two conditions are satisfied:
(1) The lawsuit involves factual connections w/ multiple states; and
(2) The multiple states will have different laws leading to different results.
In a Choice of Law question, which state’s law governs?
The governing law is the law selected by the forum court according to its choice of law approach. (assuming no applicable constitutional or statutory restrictions)
–Constitutional Restrictions: The Constitution imposes a limit only if a state’s law is chosen that has no significant contact w/ and/or legitimate interest in the litigation.
–Statutory Restrictions: If the forum state has a statute that directs a choice of law, then the forum court should apply that statute instead of the usual choice of law approach. (e.g., a borrowing statute)
Exceptions in considering which state’s law governs for Diversity Cases
There are exceptions to the core answer when the case is in federal court based on diversity of citizenship jurisdiction:
(1) Diversity Cases Filed in Federal Court - A federal court sitting in diversity applies the choice of law approach of the state in which it sits.
(2) Transferred Diversity Cases -
- –(a) When a diversity case is filed in a proper venue, and the case is transferred within the federal system, the federal court applies the choice of law approach of the original (transferor) court.
- –(b) When the case is filed in an improper venue, or filed in a venue in defiance of a forum selection clause, the law of the transferee court (that is, the court to which the case is transferred) will apply.
Choice of Law Approach #1: Vested Rights Approach of the First Restatement (Overview)
In the vested rights approach (the traditional approach), the following three analytical steps are taken:
–(1) Characterize the area of substantive law;
–(2) Determine the particular choice of law rule; and
–(3) Localize the rule to be applied.
Note: The forum will generally apply its own law in characterizing an issue, even if the state where the issue arose would apply a different characterization.
Note: This approach differs according to the substantive area of law.
Choice of Law Approach #2: Most Significant Relationship Approach of the Second Restatement (Overview)
The most significant relationship approach seeks to identify the state having the most significant relationship w/ respect to the issue at hand and then apply that state’s law on that issue.
To do this, you consider the connecting facts (the specific contacts w/ each jurisdiction) in a given case and consider the following policy-oriented principles:
–(1) Needs of interstate systems;
–(2) Relevant policies of forum;
–(3) Policies and interests of other jurisdictions;
–(4) Expectations of parties;
–(5) Basic policies underlying substantive law;
–(6) Predictability and uniformity of result;
–(7) Ease of determination of foreign law.
Note: This approach differs according to the substantive area of law.
Choice of Law Approach #3: Interest Analysis (Government Interest) Approach (Overview)
In the interest analysis approach, take the following steps:
(1) Start from the assumption that the forum will apply its own law, unless requested to apply another.
(2) If it is requested to apply another state’s law, check for “false conflict” (where the forum has no interest).
(3) If false conflict, apply the law of the interested state.
(4) If true conflict, the forum reconsiders its policies.
(5) If the forum has no interest in applying its own law, it should dismiss the case if forum non conveniens is available; if not, it may apply the interested state’s law or law of the state that most closely resembles its own law.
(6) If there is no interested state, most courts apply the law of the forum.
Note: This approach does NOT differ according to the substantive area of law.
Basic Structure of a Choice of Law Answer
There are three basic paragraphs to a choice of law answer:
(1) In the first paragraph, state the issue and identify the choice of law approach. (this is the “I understand choice of law” paragraph, and it is always the same)
(2) In the second paragraph, describe the choice of law approach. (here, plug in a stock paragraph depending on the test)
(3) In the third paragraph, apply the choice of law approach. (consider the facts presented, apply the approach, and provide a conclusion)
Paragraph 1 for Conflict of Law Questions
“The issue presented is which state’s law will govern the outcome of this litigation. The governing law will be selected by the forum court using the (insert the applicable choice of law approach).”
Three approaches:
(1) Vested Rights (First Restatement) Approach (“VR1”)
(2) Most Significant Relationship (Second Restatement) Approach (“MSR2”)
(3) Interest Analysis (Governmental Interest) Approach (“IAGI”)
Vested Rights (First Restatement) Approach - Stock Language for Paragraph 2
“Under this approach the court will apply the law of that state mandated by the applicable vesting rule. That rule is selected according to the relevant substantive area of law.”
Vested Rights (First Restatement) Approach - Structure of Paragraph 3
Sentence #1: Categorize the substantive area of law. (e.g., “This is a torts case.”)
Sentence #2: State the applicable vesting statute. (e.g., “Therefore, the applicable vesting rule is the place of injury”)
Sentence #3: Apply the vesting rule to determine the governing law. (e.g., “Here, the injury occurred in Michigan and thus Michigan law applies.”)
Sentence #4: Apply the governing law to determine the result. (e.g., “Under Michigan law, a non-paying passenger cannot recover against the driver, and so the claim is barred.”)
