CONFLICT OF LAWS

CONFLICT OF LAWS

CONFLICT OF LAWS
TABLE OF CONTENTS

INTRODUCTORY POINTS  1

1 TESTING AREA ONE: RECOGNITION OF JUDGMENTS  1

1.1 THE BASICS  1
1.1.1 Terminology Tip  1
1.1.2 Core Question  1
1.1.3 Reasons for a Party to Seek Recognition  1
1.2 ANALYSIS OVERVIEW  2
1.3 SISTER STATE JUDGMENTS  3
1.3.1 Step #1: Are the Requirements for Full Faith and Credit Satisfied?  4
a. Requirement #1: Jurisdiction  4
b. Requirement #2: On the Merits  4
c. Requirement #3: Finality  5
d. Rendering State Law Used to Determine the Three Requirements  5
1.3.2 Step #2: Are There Any Defenses to Full Faith and Credit?  6
a. Penal Judgments  6
b. Extrinsic Fraud  6
c. Attractive But Invalid Defenses—Public Policy and Mistake  8
1.4 FOREIGN JUDGMENTS (COMITY)  8
1.4.1 Did the Foreign Court Have Jurisdiction?  8
1.4.2 Were the Procedures in the Foreign Court Fair?  9
2 TESTING AREA TWO: CHOICE OF LAW  10
2.1 THE BASICS  10
2.1.1 Exceptions  10
a. Diversity Cases Filed in Federal Court  10
b. Transferred Diversity Cases  10
2.1.2 Restrictions on Choice of Law  10
a. Constitutional  10
b. Statutory  10

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2.2 OVERVIEW OF THE ANALYTICAL APPROACHES  11

2.2.1 Vested Rights Approach of the First Restatement   11
2.2.2 Most Significant Relationship Approach of the Second
Restatement   11
2.2.3 Interest Analysis (Governmental Interest) Approach   11
2.3 BASIC STRUCTURE OF A CHOICE OF LAW ANSWER  11
2.4 APPROACH #1: VESTED RIGHTS (FIRST RESTATEMENT)  12
2.5 APPROACH #2: INTEREST ANALYSIS  12
2.6 APPROACH #3: MOST SIGNIFICANT RELATIONSHIP (SECOND
RESTATEMENT)  13
3 APPLICATIONS TO SPECIFIC SUBSTANTIVE AREAS  16
3.1 INTRODUCTORY NOTES  16
3.2 SUBSTANTIVE AREA #1: TORTS  16
3.2.1 First Restatement Vesting Rule  16
3.2.2 Second Restatement Considerations  16
a. Factual Connections  16
b. Policy Principles  16
3.2.3 Usual Outcomes with Exceptions  16
3.3 SUBSTANTIVE AREA #2: CONTRACTS  18
3.3.1 Choice of Law Provision  18
a. Impact of Choice of Law Provision  18
b. Applications of Validity  18
3.3.2 Choice of Law Analysis  18
a. First Restatement Vesting Rules  18
b. Second Restatement Considerations  19
3.4 SUBSTANTIVE AREA #3: PROPERTY  20
3.4.1 Immovable (Real) Property  20
3.4.2 Movable (Personal) Property  20
3.5 SUBSTANTIVE AREA #4: FAMILY LAW  21
3.5.1 Marriage Valid Where Performed Is Recognized  21
a. Exception: Temporary Relocation for Marriage  21

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3.5.2 Forum Applies Own Laws for Divorce  21

3.5.3 Child’s Status (Legitimacy Rules)  21
4 DEFENSES TO CHOICE OF LAW  23
4.1 DEFENSE #1: PUBLIC POLICY  23
4.2 DEFENSE #2: PROCEDURAL RULES  23
4.2.1 Frequently Tested Issue: Statutes of Limitations  23
5 DOMICILE  25
5.1 CONTEXT  25
5.2 DOMICILE BY CHOICE  25
5.3 DOMICILE BY OPERATION OF LAW  25
5.3.1 Category #1: Children  25
5.3.2 Category #2: Incompetents  26

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CONFLICT OF LAWS NOTES

INTRODUCTORY POINTS
On the exam, you should look for conflicts issues when the facts
include connections to multiple states. Additionally, conflicts issues
are usually combined with other subjects, especially family law,
federal procedure, or torts.

There are two important but distinct testing areas for conflicts:

• Recognition of judgments; and

• Choice of law.

Domicile, a legal concept that has applications in conflicts, also will

be covered.

1 TESTING AREA ONE: RECOGNITION OF

JUDGMENTS
1.1 THE BASICS
A recognition of judgments question may arise when two conditions
are satisfied:

• A judgment has been entered by a court in one jurisdiction; and

• A party is seeking to have that judgment recognized by a court in

a different jurisdiction.

1.1.1 Terminology Tip

The place where the judgment was originally entered is referred to as
the rendering jurisdiction and the place where recognition is being
sought is referred to as the recognizing jurisdiction.

1.1.2 Core Question

The core question then becomes: “Will the recognizing court recog-
nize the judgment issued by the rendering court?” This will be
discussed in the next chapter.

1.1.3 Reasons for a Party to Seek Recognition

Plaintiffs will most often seek recognition in order to access enforce-
ment mechanisms in the rendering state.

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EXAMPLE
NOTES
Cindy sues Derek in an Ohio court. Derek fails to respond, and the
court enters a default judgment in the amount of $75,000. Derek
lives in Springfield, Illinois, and has no assets in Ohio. Cindy may
seek to have the Ohio judgment recognized and enforced by an
Illinois court so that she can reach Derek’s assets.

Defendants will most often seek recognition to prevent a plaintiff

from relitigating a claim or an issue.

EXAMPLE
Cindy sues Derek in an Ohio court. After two years of litigation, a
jury returns a verdict in Derek’s favor. The next week, Cindy files
an identical complaint against Derek in an Illinois court. Derek may
seek to have the Ohio judgment recognized by an Illinois court so
that he can bar Cindy from relitigating the same claim. In civil proce-
dure, this is known as res judicata or claim preclusion.

1.2 ANALYSIS OVERVIEW

As noted in I. in the chart below, the first question to ask is whether
the rendering jurisdiction is a sister state or a foreign country. The
answer to that question will lead you to the correct analysis, as noted
in II.A. and II.B. in the chart and in the forthcoming text.

On the exam, you obviously won’t have to do any analysis

CMR to answer the question “is the rendering jurisdiction a
Exam Tip
sister state or foreign country.” It will simply be provided
to you in the facts. Most of the time, the rendering jurisdiction will be
a sister state.

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TWO-PART ANALYSIS OVERVIEW

I. Is the rendering jurisdiction

a sister state or a foreign country?

II. A. If sister state II. B. If foreign country

1. Are the requirements of Is the foreign judgment

full faith and credit satisfied? entitled to comity?

2. Are there any

valid defenses?

Recognition is required
when the answer to
#1 is yes and the
answer to #2 is no

CMR Chart

1.3 SISTER STATE JUDGMENTS

If the rendering court is a court in a sister state, then the source of the NOTES
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. As noted in the chart, there are two
steps or questions to ask:

• Are the requirements for full faith and credit satisfied?; and

• Are there any valid defenses?

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1.3.1 Step #1: Are the Requirements for Full Faith and
NOTES Credit Satisfied?
There are three requirements that must be satisfied before the Full
Faith and Credit Clause kicks in.

a. Requirement #1: Jurisdiction

Rule: The rendering state must have had jurisdiction over the parties
(that is, personal jurisdiction) and jurisdiction over the subject matter.

HYPO
Yes, no PJ, Cindy sues Derek in state court in Ohio, even though Derek has
no contacts never been to Ohio and even though all of the facts relating to the
claim asserted took place in Illinois. Derek fails to respond, and
the court enters a default judgment. Cindy then sues in Illinois and
seeks recognition and enforcement of the Ohio judgment. May
Derek resist recognition on the grounds that the Ohio court lacked
personal jurisdiction?

Exception: When the issue of jurisdiction has been fully and fairly
litigated, the jurisdictional determination is itself entitled to full faith
and credit.

HYPO
No, J was litigated. Cindy sues Derek in state court in Ohio. Derek has never been
to Ohio but did send emails to Cindy in Ohio that form part of the
basis for the lawsuit. Derek appears in the Ohio court and files a
motion to dismiss for lack of personal jurisdiction, but his motion
is denied by the court. The case proceeds and eventually a jury
finds in Cindy’s favor. Cindy then files an action in Illinois court and
seeks to have the Ohio judgment recognized and enforced. May
Derek resist recognition on the grounds that the Ohio court lacked
personal jurisdiction?

b. Requirement #2: On the Merits

Rule: The judgment entered by the rendering state must have been
on the merits.
No. not on
the merits. HYPO
Roger sues Jesse in state court in Nevada. The court dismisses
the action after finding that the statute of limitations had run. Roger
then files a similar complaint against Jesse in a Missouri state
court. Can Jesse seek recognition of the Nevada judgment to bar
Roger’s claim in Missouri?

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Other examples of judgments not on the merits include dismissals

based on: NOTES
• Lack of jurisdiction (either personal or subject matter);

• Misjoinder;

• Improper venue; and

• Failure to state a claim (sometimes).

y Caution: Default and Consent Judgments

A default judgment treats all factual contentions as admitted
and is therefore on the merits for full faith and credit and recog-
nition of judgment purposes. (But since no actual issues were
determined, the judgment could not be used for issue preclu-
sion.) A consent judgment entered after settlement also is
considered on the merits for purposes of recognition.

HYPO
Roger sues Jesse in state court in Nevada based on a car accident no, deault
in Las Vegas. Jesse fails to appear and the court enters a default judgement treats all
judgment. Roger now sues in Jesse’s home state of Missouri and factual contentions
seeks recognition and enforcement of the Nevada judgment. Does as admitted, and
Jesse have an argument to resist recognition? because of that is
considered on the
c. Requirement #3: Finality merits
Rule: 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.

HYPO
Laura sues George for divorce in Pennsylvania, and the court there the decree is not
enters a divorce decree that includes $1,000 in modifiable alimony recognized.
payments. George then moves to California, and Laura files a suit payments in future
there and seeks to have the Pennsylvania decree recognized and that have not
enforced. What is the result?
acrued are not final.
If they acrrued, CAli
d. Rendering State Law Used to Determine the Three can enforce.
Requirements
These three requirements are evaluated using the law of the
rendering state. (But note that the law of the enforcing state governs
the method of enforcement.)

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NOTES HYPO
Roger obtains a default judgment against Jesse in a Nevada state
Misoruri has to look court. He then attempts to enforce the judgment in Missouri.
at nevada long arm Personal jurisdiction is supported by Nevada’s long arm statute, but
statute. not by Missouri’s long arm statute. Can Jesse resist enforcement of
the Nevada judgment using requirement #1?

1.3.2 Step #2: Are There Any Defenses to Full Faith and
Credit?
The following are valid defenses to full faith and credit.

a. 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.
In practice, this means that the plaintiff in the suit that led to the
judgment was the state.

HYPO
Not a penal Roger sues Jesse in state court in Nevada. After a lengthy trial,
judgement. plaintif the jury awarded Roger $50,000 in compensatory damages and
was not a state. $250,000 in punitive damages. Roger then files a suit seeking
recognition and enforcement in Jesse’s home state of Missouri.
Necada judgemnet
What result?
is entitled to
recognition
b. 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 proceedings leading to the judgment.

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FULL FAITH AND CREDIT

Did the rendering court have jurisdiction No

over the parties and the subject matter?

Yes

Is the judgment on the merits (that is, it

involves the substance of the claim rather No
than procedural matters)?

Yes
The judgment is not entitled
to full faith and credit.
Is the judgment final (that is, it does not
require any further action by the No
rendering court)?

Yes

Are there any defenses to full faith and

credit?
– Judgment is penal. Yes
– Judgment was obtained through
extrinsic fraud.

No

The judgment is entitled to full faith

and credit.

CMR Chart

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c. Attractive But Invalid Defenses—Public Policy and

NOTES Mistake
Attractive but invalid defenses also are tested on the exam.

• Attractive but invalid defense #1: public policy.

HYPO
No. it would be Roger sues Jesse in state court in Nevada after Jesse fails
unconstitutional to to pay on a gambling contract. After a trial, the Nevada court
do so enters a judgment for Roger. Roger then seeks recognition and
enforcement of the judgment in Jesse’s home state of Missouri.
Under Missouri law, gambling contracts are unenforceable. Can
Jesse resist enforcement of the Nevada judgment?

• Attractive but invalid defense #2: mistake.

HYPO
No. unconstituional Roger sues Jesse in Nevada after Jesse fails to pay on a gambling
again. also, D had contract. The Nevada court decides to apply Missouri law, and
opportinity to enters a judgment for Roger – even though Missouri considers
appeal and didnt gambling contracts unenforceable. Roger then seeks recognition
and enforcement of the judgment in Jesse’s home state of
Missouri. Can Jesse resist enforcement of the Nevada judgment?

1.4 FOREIGN JUDGMENTS (COMITY)

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 discre-
tion 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 (for example, is the foreign judgment
final? Was the foreign judgment on the merits?). But there are two
additional questions that a recognizing court may ask follow.

1.4.1 Did the Foreign Court Have Jurisdiction?

The foreign court must have had jurisdiction. The court has greater
leeway to assess jurisdiction than in the full faith and credit context.

EXAMPLE
Alice is sued in a Venezuelan court, even though she has never
had any contact with that country. She hires a lawyer to argue that
the court lacks jurisdiction, but the court rejects that argument and
enters a judgment against her. Despite the fact that jurisdiction has
already been litigated, an American court may decline to recognize
the Venezuelan judgment.

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1.4.2 Were the Procedures in the Foreign Court Fair? NOTES

The American court also will assess whether the procedures in the
foreign court were fair.

EXAMPLE
Edgar is sued in an Iranian court based on some contract work he
performed there. He returns to Iran to defend the claim but is not
permitted to call witnesses or challenge the admissibility of the
plaintiff’s evidence. An American court may conclude that the for-
eign judgment was tainted by sham procedures and is therefore not
entitled to recognition.

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NOTES 2 TESTING AREA TWO: CHOICE OF LAW

2.1 THE BASICS
A choice of law question may arise when two conditions are satis-
fied:

• The lawsuit involves factual connections with multiple states;

and

• The multiple states will have different laws leading to different

results.

The core question is: “Which state’s law will govern?” The core
answer is: The governing law is the law selected by the forum
court according to its choice of law approach (assuming no appli-
cable constitutional or statutory restrictions).

2.1.1 Exceptions
There are exceptions to the core answer when the case is in federal
court based on diversity of citizenship jurisdiction. Where venue
is proper is covered in the Federal Civil Procedure lecture and
materials, along with the choice of law effects based on the transfer
of venue.

a. 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.

b. Transferred Diversity Cases

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. 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.

2.1.2 Restrictions on Choice of Law

There are restrictions that occasionally limit the forum court’s choice
of law.

a. Constitutional
Rule: The Constitution imposes a limit only if a state’s law is chosen
that has no significant contact with and/or legitimate interest in the
litigation.

b. Statutory
Rule: 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

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of law approach. A common example is a borrowing statute, which

requires the court to apply the statute of limitation of another state NOTES
regardless of the choice of law approach that the state uses. We’ll
cover those later.

2.2 OVERVIEW OF THE ANALYTICAL APPROACHES

There are three main analytical approaches: (1) the vested rights
approach of the First Restatement, (2) the most significant relation-
ship approach of the Second Restatement, and (3) the interest
analysis (governmental interest) approach.

2.2.1 Vested Rights Approach of the First Restatement

In the vested rights approach (the traditional approach), the following
three analytical steps are taken: (1) characterizing the area of substan-
tive law, (2) determining the particular choice of law rule, and (3) local-
izing 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.

2.2.2 Most Significant Relationship Approach of the

Second Restatement
The most significant relationship approach seeks to identify the state
having the most significant relationship with respect to the issue
at hand and then apply that state’s law on that issue. To do this,
you consider the connecting facts in a given case and whether the
policy-oriented principles should be considered as in the chart below.

2.2.3 Interest Analysis (Governmental Interest)

Approach
In the interest analysis approach, you start from the assumption that
the forum will apply its own law. Then, you consider whether the
forum has any interest in the litigation; if not, it is a “false conflict”
situation and the forum will apply the law of the second state. A
question arises when both the forum and the second state have inter-
ests; this is a “true conflict” situation. (See chart below.)

2.3 BASIC STRUCTURE OF A CHOICE OF LAW ANSWER

There are three basic paragraphs to a choice of law answer.

• In paragraph 1, you state the issue and identify the choice of law
approach.

EXAMPLE
“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 (fill in applicable choice of law approach).”

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This is the “I understand choice of law” paragraph, and it is al-

NOTES ways the same.

• In paragraph 2, you describe the choice of law approach.

Here, you will plug in a stock paragraph depending on which

of the three tested approaches is being applied. The three ap-
proaches are (1) the vested rights (First Restatement); (2) interest
analysis; or (3) the most significant relationship (Second Restate-
ment). All of these will be covered below in more detail.

• In paragraph 3, you apply the choice of law approach.

Here, you will consider the facts presented, apply the approach,
and provide a conclusion. (Important: This conclusion should
include both the governing law and the result.)

2.4 APPROACH #1: VESTED RIGHTS (FIRST RESTATEMENT)

• Stock Language for Paragraph 2

EXAMPLE
“Under this approach the court will apply the law of that state man-
dated by the applicable vesting rule. That rule is selected according
to the relevant substantive area of law.”

• Structure of Paragraph 3

In the first sentence of paragraph 3, you categorize the substan-

tive area of law. In the second sentence, you state the applicable
vesting rule. In the third sentence, you apply the vesting rule to
determine the governing law. In the fourth and last sentence, you
apply the governing law to determine the result.

EXAMPLE
“This is a torts case. Therefore, the applicable vesting rule is the
place of injury. Here, the injury occurred in Michigan and thus
Michigan law applies. Under Michigan law, a non-paying passenger
cannot recover against the driver, and so the claim is barred.”

2.5 APPROACH #2: INTEREST ANALYSIS

• Stock Language for Paragraph 2

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EXAMPLE
NOTES
“Under this approach the court will consider which states have a
legitimate interest in the outcome of the litigation. The forum court
will apply its own law as long as it has a legitimate interest. If the
forum state has no legitimate interest, it will apply the law of another
interested state.”

• Structure of Paragraph 3

Step #1: Discuss which states have legitimate interests.

Step #2: Characterize the type of conflict.

A false conflict arises when only one state has a legitimate inter-
est, and a true conflict arises when two or more states have a
legitimate interest.

Step #3: Choose the governing law based on the type of conflict.

If a false conflict has arisen, you apply the law of the interested
state. If a true conflict has arisen and the forum state is interest-
ed, you apply forum law.

Step #4: You apply the governing law to determine the result.

EXAMPLE
“In this case, only Illinois has a legitimate interest. It is interested in
permitting recovery to compensate its injured resident (the plaintiff).
Michigan is not interested in applying its restriction against recov-
ery simply because the accident occurred there. Rather, it would
be interested in applying its restriction only if the defendant were a
Michigan resident. But the defendant in this case is from Illinois, so
Michigan is not interested. This case is therefore a false conflict, and
Illinois law should apply. Under Illinois law, the plaintiff may recover.”

2.6 APPROACH #3: MOST SIGNIFICANT RELATIONSHIP

(SECOND RESTATEMENT)

• Stock Language for Paragraph 2

“Under this approach the court will apply the law of the state
which is most significantly related to the outcome of the litigation.
To determine this, the court will consider connecting facts and pol-
icy principles.”
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• Structure of Paragraph 3
NOTES
Step #1: Discuss connecting facts.

Step #2: Discuss policy principles.

Step #3: Choose governing law based on most significant rela-

tionship.

Step #4: Apply the governing law to determine result.

EXAMPLE
“In this case, the factual connections are split. The accident oc-
curred in Michigan, and the injury was sustained there. But both the
plaintiff and the defendant are from Illinois. As a matter of policy, Illi-
nois seems to have the greater interest because the law at issue is
a loss distribution rule and both parties share an Illinois domicile. As
a result, Illinois appears to have the most significant relationship to
the dispute and its law should apply. Under Illinois law, the plaintiff
may recover.”

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PRINCIPAL CHOICE OF LAW ANALYTICAL

APPROACHES

Vested Rights Most Significant Interest Analysis

Relationship
Analytical Steps 1. Characterize 1. Consider the 1. Assume the forum will
the area of connecting facts: apply its own law,
substantive law. the specific unless requested to
contacts with apply another.
each jurisdiction.

2. Determine 2. Consider the 2. If it is requested to

the particular policy-oriented apply another state’s
choice of law principles: law, check for false
rule. (i) needs of interstate conflict (forum has no
systems; interest).

3. Localize the (ii) relevant policies 3. If false conflict, apply

rule to be of forum; the law of interested
applied. state.
(iii) policies and interests
of other jurisdictions;
4. If true conflict, the forum
(iv) expectations of reconsiders its policies.
parties;
5. If the forum has no
(v) basic policies interest in applying its
underlying own law, it should
substantive law; dismiss the case if
(vi) predictability and forum non conveniens
uniformity of result; is available; if not, it
may apply interested
(vii) ease of state’s law or law of the
determination of state that most closely
foreign law. resembles its own law.

6. If no interested state,
most courts apply law
of forum.

Does Approach Yes Yes No

Differ According
to Substantive (See Choice-of-Law Rules for Specific Areas of
Area of Law? Substantive Law chart, infra.)

CMR Chart

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NOTES 3 APPLICATIONS TO SPECIFIC SUBSTANTIVE

AREAS

3.1 INTRODUCTORY NOTES

• Note #1: These specific areas will cover vesting rules under the
First Restatement approach and connecting facts/policy principles
under the Second Restatement approach. Interest analysis, how-
ever, is not sensitive to the substantive area at issue.

• Note #2: Under the First Restatement approach, the same vesting
rule is generally applied to the entire claim. Under the Second Re-
statement and interest analysis approaches, however, each issue
may be analyzed separately.

3.2 SUBSTANTIVE AREA #1: TORTS

3.2.1 First Restatement Vesting Rule

The governing law is the law where the injury occurred.

3.2.2 Second Restatement Considerations

a. Factual Connections
Second Restatement considerations include the place: (1) of injury; (2) of
the conduct causing injury; (3) where the parties are at home; and (4)
where the relationship, if any, is centered.

b. Policy Principles
Policy principles include (1) the relevant policies of the forum state
and (2) the relevant policies of other connected states.

3.2.3 Usual Outcomes with Exceptions

For all three approaches, the governing law will almost always be
the law of the place of injury. But exceptions arise occasionally,
particularly under the two modern approaches (interest analysis and
most significant relationship). These exceptions typically kick in when
two conditions are present:

• The rule at issue is a loss distribution rule (such as loss limita-

tions, vicarious liability rules, and rules eliminating liability like
immunity rules); and

• The parties share a common domicile.

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TORTS HYPO WITH MODEL ANSWERS NOTES

Martha and Joe are a married couple who live in Illinois. While on
a vacation in Las Vegas, they are involved in a one-car accident.
Martha is injured. When they return home from the vacation,
Martha files a suit against Joe in an Illinois court. Nevada permits
intra-family negligence suits, but Illinois does not.

Vested Rights Interest Analysis Most Significant Relationship

(First Restatement
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
vested rights approach.
Under the vested rights
approach, the court will apply
the law of that state mandat-
ed by the applicable vesting
rule. That rule is selected
according to the relevant
substantive area of law.
This is a torts case. The vest-
ing rule for torts cases applies
the law of the place of injury.
Here, the injury occurred in
Nevada and thus Nevada law
applies. Under Nevada law,
spouses can sue one another
for negligence and Martha’s
suit is therefore not barred.
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 interest analysis
approach.
Under this approach the court
will consider which states
have a legitimate interest in
the outcome of the litigation.
The forum court will apply
its own law as long as it has
a legitimate interest. If the
forum state has no legitimate
interest, it will apply the law of
another interested state.
In this case, only Illinois has
a legitimate interest. Illinois
certainly does because the
issue involves the distribution
of losses and both parties are
from that state. Nevada has
no legitimate interest in how
the losses from the accident
are distributed between
two Illinois domiciliaries.
Therefore, the case is a false
conflict and the Illinois court
will apply its own law. Under
Illinois law, Martha cannot
recover because her claim is
barred.
(Second Restatement)
The issue presented is which
state’s law will govern the
outcome of this litigation. The
governing law will be select-
ed by the forum court using
the most significant relation-
ship approach.
Under this approach the
court will apply the law of the
state which is most signifi-
cantly related to the outcome
of the litigation. To determine
this, the court will consider
connecting facts and policy
principles.
In this case, the factual con-
nections are split. The injury
and the conduct leading to
the injury occurred in Nevada,
but the parties are both Illinois
domiciliaries and their rela-
tionship is centered there. The
policy considerations favor
Illinois because the relevant
issue involves the distri-
bution of losses and both
parties share a common do-
micile. Therefore, Illinois has
the most significant relation-
ship and its law will govern.
Under Illinois law, Martha
cannot recover because her
claim is barred.

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3.3 SUBSTANTIVE AREA #2: CONTRACTS

NOTES
3.3.1 Choice of Law Provision
A choice of law provision allows the parties to select the law that
will apply to their contract. Rule: A choice of law provision will be
enforced if it is valid and express.

a. Impact of Choice of Law Provision

If the choice of law provision is enforced, the provision displaces
the choice of law analysis that the court would otherwise perform.
Conversely, if the choice of law provision is rejected, the court should
then conduct a choice of law analysis. If in doubt on the bar exam,
find the provision invalid.

b. Applications of Validity
Two reasons to find a choice of law invalid are:

• The law selected has no reasonable relationship to the contract.

HYPO
No Cheryl (from Ohio) and John (from Indiana) enter into a contract to
add an extension to Cheryl’s home in Ohio. The contract expressly
specifies Pennsylvania law in its choice of law provision. Will the
court enforce the provision?

• The provision was included without true mutual consent.

HYPO
Cheryl (from Ohio) and John (from Indiana) enter into a contract to
No add an extension to Cheryl’s home in Ohio. After John materially
misrepresents Indiana law, Cheryl agrees to a choice of law
provision that expressly specifies Indiana law. Will the court
enforce the provision?

3.3.2 Choice of Law Analysis

a. First Restatement Vesting Rules

• Rule #1: If the case is about formation, you apply the law of the
place of contracting. Examples of formation issues include: (1)
capacity; (2) contractual formalities; and (3) consideration.

• Rule #2: If the case is about performance, you apply the law
of the place of performance. Examples of performance issues

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 CONFLICT OF LAWS

include (1) the time, place, and manner of performance; and (2)
excuses for nonperformance. NOTES

b. Second Restatement Considerations

• Factual considerations include: (1) the place of contracting; (2)

the place of negotiation; (3) the place of performance; and (4) the
place where the parties are at home.

• Policy principles include: (1) the relevant policies of the forum

state; (2) the relevant policies of other connected states; and (3)
the reasonable expectations of the parties.

CONTRACTS HYPO WITH MODEL ANSWERS

Simon, an Illinois resident, went to Minnesota and entered into
a contract there with Louise, a Minnesota resident. Simon was
supposed to perform in Minnesota, but instead went back to Illinois
and did nothing. Louise files suit in Illinois. Simon now seeks to
void the contract because he is considered a minor in Illinois and
Illinois law does not recognize the capacity of minors to enter into
contracts. Under Minnesota law, minors receive no such protection
and the contract would be deemed valid and enforceable.

Vested Rights Interest Analysis Most Significant Relationship

(First Restatement)
The issue presented is which
state’s law will govern the
outcome of this litigation. The
governing law will be select-
ed by the forum court using
the vested rights approach.
Under the vested rights
approach, the court will apply
the law of that state mandat-
ed by the applicable vesting
rule. That rule is selected
according to the relevant
substantive area of law.
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 interest analysis
approach.
Under this approach the court
will consider which states
have a legitimate interest in
the outcome of the litigation.
The forum court will apply
its own law as long as it has
a legitimate interest. If the
forum state has no legitimate
interest, it will apply the law of
another interested state.
(Second Restatement)
The issue presented is which
state’s law will govern the
outcome of this litigation. The
governing law will be select-
ed by the forum court using
the most significant relation-
ship approach.
Under this approach the
court will apply the law of the
state which is most signifi-
cantly related to the outcome
of the litigation. To determine
this, the court will consider
connecting facts and policy
principles.

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CONFLICT OF LAWS

Vested Rights Interest Analysis Most Significant Relationship

(First Restatement)
This is a contracts case involv-
ing a question about validity
or formation. The applicable
vesting rule is that the law of
the place of execution gov-
erns. Here, the contract was
executed in Minnesota. Under
Minnesota law, contracts
are enforceable and there is
no defense available for the
incapacity of minors. Therefore,
Louise may recover.
In this case, both Illinois and
Minnesota appear to have a
legitimate interest. Minnesota
has an interest because it
promotes freedom of con-
tract and wants to enforce
contracts entered into there.
But Illinois is also interested
because its law seeks to pro-
tect minors, and the defen-
dant here is an Illinois minor.
Therefore, the case is a true
conflict. Since Illinois has a
legitimate interest, it will apply
its own law. Under Illinois law,
the contract is voidable and
Louise may not recover.
(Second Restatement)
In this case, the factual con-
nections slightly favor Min-
nesota. The contract was en-
tered into there, performance
was contemplated there, and
one of the parties to the con-
tract was from there. Illinois’s
only factual connection to
the dispute is that the other
party is an Illinois resident.
The policy considerations
are split. Illinois would like to
protect its resident, but Min-
nesota would like to provide
recovery to promote freedom
of contract and to protect the
reasonable expectations of
its resident. Minnesota has
the most significant relation-
ship and its law will govern.
Under Minnesota law, con-
tracts are enforceable and
Louise may recover.

3.4 SUBSTANTIVE AREA #3: PROPERTY

NOTES Property is one area where all approaches essentially continue to
apply the same rules.

3.4.1 Immovable (Real) Property

Rule: Apply the law of the situs.

3.4.2 Movable (Personal) Property

• Rule #1: If the case involves an inter vivos transaction, you apply
the law of the situs at the time of transaction.

• Rule #2: If the case involves a matter relating to inheritance, you

apply the law of the decedent’s domicile at the date of death.

HYPOS
Yes
1. Edna Merman lived in Arizona. She signed a will conveying her
farm in Illinois to a church (also in Illinois). Later, she destroyed the
will in a manner that would be considered valid in Arizona but not
in Illinois. Will the farm go to the church?

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 CONFLICT OF LAWS

2. Would the result be the same or different if the property at issue

were a car (located in Illinois)? NOTES
3. Would the result be the same or or different if the issue were the domicile at time of
validity of a transfer of ownership of the car to the church made death, so Arizona
while Edna is still alive? (Still assume that the transfer would be law. different result
valid in Arizona but not Illinois.)
intervivos
3.5 SUBSTANTIVE AREA #4: FAMILY LAW transaction. where
was the car when it
3.5.1 Marriage Valid Where Performed Is Recognized was transacted?
Rule: If a marriage is valid where performed, it will be recognized as illinios
valid everywhere.

a. Exception: Temporary Relocation for Marriage

When domiciliaries of one state temporarily relocate to another
state to enter into a marriage that violates a prohibitory rule in their
home state, the state of domicile will not recognize the marriage.
Prohibitory rules are rules that express a strong public policy
regarding marriage, such as rules against incest, polygamy, and
marriage under a minimum age. By contrast, directory rules are
administrative in nature, such as rules requiring a marriage license,
parental consent, and a certificate of a blood test.

HYPO
Susan and Andrew live in Vermont. They would like to get married no. prohibit rule
but cannot do so in Vermont due to a state law that does not
permit second cousins to marry. One weekend, they travel to
Massachusetts and get married there. They then return to Vermont.
Will Vermont recognize the marriage?

3.5.2 Forum Applies Own Laws for Divorce

Rule: The forum will apply its own divorce laws. The rationale is that
to acquire jurisdiction, at least one of the parties must be domiciled in
the state. Therefore, a state has an interest in applying its own law.

3.5.3 Child’s Status (Legitimacy Rules)

• Rule #1: Legitimacy of a child is governed by the law of the moth-
er’s domicile at the time of the child’s birth.

• Rule #2: The validity of subsequent acts of legitimation concern-

ing paternity are governed by the law of the father’s domicile.

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CONFLICT OF LAWS

CHOICE-OF-LAW RULES FOR SPECIFIC

AREAS OF SUBSTANTIVE LAW

Substantive “Vested Rights” “Most Significant

Area of Law Approach Relationship” Approach

Torts Place of wrong (injury) Consider the place of:

- Injury;
- Conduct causing the injury;
- Residence and/or business
of parties;
- Center of parties’ relationship

Contracts Validity problem— Consider the place of:

place of making - Contracting;
- Negotiation;
Performance problem— - Performance;
place of performance - Location of subject matter;
- Domicile, residence,
nationality, incorporation
and business of parties
Workers’ Compensation Forum

Property Real property—situs

Personal property—
• Testamentary and intestate transfer—domicile of owner
at time of death
• Inter vivos transactions—situs of property at the time of
the relevant transaction

Family Law Marriage—place of celebration

(if marriage can be upheld under that law)
Legitimation after birth—father’s domicile
Adoption—forum

Corporations Place of incorporation

Note: The “interest analysis” approach does not vary according to the substantive
area of law.

CMR Chart

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 CONFLICT OF LAWS

4 DEFENSES TO CHOICE OF LAW NOTES

4.1 DEFENSE #1: PUBLIC POLICY
Rule: A forum court will not apply a law that is against its own funda-
mental public policy. This rule appears in both Restatements, but as a
practical matter it is most applicable to the First Restatement. Caveat:
As a reminder, this rule does not apply to recognition of judgments!

4.2 DEFENSE #2: PROCEDURAL RULES

Rule: Regardless of the outcome of the choice of law analysis, the
forum court will always apply its own procedural rules.

4.2.1 Frequently Tested Issue: Statutes of Limitations

The general rule is that statutes of limitations have been viewed as
procedural. There are some exceptions that follow.

Now, don’t get tripped up by labels here! You will hear or

CMR likely have already heard in the federal civil procedure
Exam Tip
lecture that statutes of limitations (“SOLs”) are “substan-
tive.” That’s absolutely true. A federal court sitting in say, Illinois, is
required to apply whatever SOL for a claim that a state court in
Illinois would. But what if Illinois considers SOLs to be “procedural,”
and the case is filed in federal court and has a choice of law issue
between Illinois and Texas? For the exam, it’s a step-by-step process.
The federal court in Illinois is required to apply whatever statute of
limitations an Illinois court would, rather than any federal statute,
because this issue is “substantive.” And since Illinois considers the
SOLs to be “procedural,” an Illinois state court would apply its own
SOL rather than Texas’s SOL, so the federal court has to do likewise.
Those are some mental gymnastics you have to use to get to the cor-
rect answer!

• Exception #1: Borrowing Statutes: Borrowing statutes direct a

court to look at both the forum limitations period and the foreign
limitations period (in cases where foreign law governs under a
normal choice of law analysis) and then to typically apply the
shorter period.

HYPO the shorter one is

montanas, so
Shawna sues Denny in Illinois based on an automobile accident in
montana. claim is
Montana. Montana has a one-year statute of limitations. Illinois has
barred
a two-year statute of limitations, and a borrowing statute. If Shawna
sues 18 months after the accident, what result?

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CONFLICT OF LAWS

• Exception #2: Limitations that Condition a Substantive Right:

NOTES If the normal choice of law analysis leads to the application of a
foreign statute that creates a substantive right, then you apply the
entire statute.

HYPO
Barred claim. use Shawna files a wrongful death action against Denny in Illinois
montanas law, all of based on an automobile accident in Montana. After conducting a
it choice of law analysis, the Illinois court decides to apply Montana
law. Montana’s wrongful death statute includes a one-year statute
of limitations. Illinois has a two-year statute of limitations. If Shawna
sues 18 months after the accident, what result?

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 CONFLICT OF LAWS

5 DOMICILE NOTES
5.1 CONTEXT
“Domicile” in the conflicts context will never be a question on its own.
Instead, it is an issue in a broader analysis. In other words, something
else in your answer may depend on a domicile determination.

EXAMPLE
Rhonda and Amy enter into a contract in North Carolina, and then
Amy moves to Illinois. Shortly thereafter, Rhonda sues Amy in an
Illinois court. The Illinois court determines that it has an interest (and
will therefore apply its own law) if Amy is an Illinois domiciliary.

5.2 DOMICILE BY CHOICE

Rule: An individual with domicile capacity acquires a domicile when
two conditions are satisfied: (1) physical presence in the new domicile;
and (2) an intent to remain permanently (or indefinitely) in the new
domicile.

HYPOS
1. Randy was born in Los Angeles and lived there for 25 years. Last
week he moved to Chicago for a new job, rented an apartment, Chicago, Illinois.
got a driver’s license, and opened a bank account. If there is a
question about Randy’s domicile, what should the answer be?

2. Randy was born in Los Angeles and lived there for 25 years.
No. domicile is still
A few months ago, he moved to Chicago, where he rented an
illinois. intent
apartment and opened a bank account. The reason that he moved
was to avoid child support and to evade criminal charges that
matter, not motive.
he thought might be filed against him. Do these facts affect our
domicile analysis?

3. Erica lived in Chicago but got fed up with the long and frigid She still in Chicago
winters. She decided to move to Miami, and so she sold her
apartment and quit her job. As she was driving through Kentucky
she was hit by a drunk driver and killed.

5.3 DOMICILE BY OPERATION OF LAW

Rule: An individual who lacks domicile capacity is assigned one by
law.

5.3.1 Category #1: Children

• Rule #1: Newborns are assigned the domicile of their parents.

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CONFLICT OF LAWS

• Rule #2: In cases of divorce, children are assigned the domicile of

NOTES their custodial parent.

5.3.2 Category #2: Incompetents

• Rule #1: An individual who is mentally incompetent is assigned
the domicile of their parents.

• Rule #2: If an individual becomes incompetent after acquiring a

domicile by choice, they retain the chosen domicile.

APPROACH TO DETERMINING DOMICILE

Is the person a minor? Yes Domicile of origin (of parents)

applies
No

Does person lack capacity to choose Yes Domicile by operation of law

his domicile? (Very little mental (of parents) or former domicile
capacity required.) applies

No

Is person present in the location

with the intent to remain there Yes
permanently or for an indefinite period? Domicile by choice established

No

Domicile of origin or former

domicile applies

CMR Chart

26