Choice of Law

Question 1

Choice of Law: BLL

Answer 1

Issue in diversity cases
BLL: in a Diversity case, federal court must apply the state substantive law and the federal procedural law. Twin policies of discouraging forum shopping and inequitable administration of laws.

Question 2

Choice of Law: Erie step 1

Answer 2

Erie Rule: state substantive and federal procedural–ask “is it clearly substantive (e.g. element of tort, contract, or defense) or is it clearly procedural?”
-if unsure, apply step 2 (outcome determinative test)

• Note:
• SL and tolling = substantive for Erie purposes
• FRCP/FRE directly on point that conflicts with state law; apply federal law

Question 3

Choice of Law: Erie step 2

Answer 3

Outcome Determinative: would applying the federal or state rule affect the outcome?

• if yes, then substantive–use state law
• if no, then procedural–use federal law

Question 4

Erie: Notes

Answer 4

Policy: avoid forum shopping–if state law does not apply, will litigants flock to federal court? if yes, apply state law.

General result: in diversity case, apply same rules as a judge in the state where the federal court is located.

Note: apply conflict principles of state in which court sits

Question 5

CA: Conflict of Law

Answer 5

Rule: CA law will be applied UNLESS CHALLENGED (proponent must show foreign law will further interest of foreign state), and then judge must choose between substantive law of CA and another state)

-Arises if facts mention CA and another state

Question 6

CA: Conflict of Law: Tort

Answer 6

GR: CA law will be applied unless foreign law conflicts and both states have significant interests in having their respective laws apply. If so, then apply law of state whose policies would suffer the most

Question 7

CA: Conflict of Law: Tort: test

Answer 7

1. Foreign law must conflict with CA law (do the laws differ?)
2. Both jurisdictions must have significant interests in having their law apply (“true conflict”)
   
   • known as “government interest test”
     
     • determine issue in case
     • analyze government interests
       
       • e.g. state objective/policy-differ?
       • see if outcome will differ
       • if so, “true conflict” exists
3. Comparative Impairment
   - balancing test
   - which has stronger interest?

Question 8

CA: Conflict of Law: Contract: No choice of law clause

Answer 8

• use CA law

- if challenged, analyze as in a tort

Question 9

CA: Conflict of Law: Contract: Choice of law clause

Answer 9

GR: state law chosen by parties governs, unless exception applies
Exception:
-ask
1. does chosen state law have any substantial relationship to the parties or their transactions?; AND
2. is there any reasonable basis for parties’ choice of law?
-if no to both, use CA law
-if yes to either, then:
-use CA if foreign law contrary to fundamental CA policy
-use choice provision is no policy is threatened

Note: if foreign law threatens CA, standard is whether CA policy is materially greater than chosen state law

• what is the fundamental policy in CA?–must be substantial
• does CA have a materially greater interest than does the chosen law?