Conflict OF LAWS Outline PDF

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CONFLICTS OF LAW I.

INTRODUCTION:

1. Conflict of laws entails jurisdiction, recognition of judgments and choice of law (or conflicts) 2. Legislative or proscriptive jurisdiction – outer limit of a state’s or country’s power to apply its own law whether statutory or judge made 3.Judicial Jurisdiction – the power or ability of a court to hear a dispute and render a valid judgment (recognized by other courts) requires: a. Personal jurisdiction, and b. Subject matter jurisdiction 4. Purpose of conflicts of law rules: a. Mitigate forum shopping b. Notions of fairness - Same law should govern no matter where suit is brought c. One correct law d. Expectations of the parties e. Facilitates interstate and international transactions 5. Choice of Law a. Choice of law ought to be undertaken in such a way that no matter which forum chosen, the applicable law should be the same – i.e. Erie b. So forums do not always apply their law i.e. Texas courts apply Alabama or Mexican law etc. c. Typically arise in two settings: a. Cases w/facts connected to different jurisdictions, and b. Cases involving enactments of different lawmakers w/in a single Jx. 6. American Perspective a. Federalist System with Dual Sovereignty [federal and state] so we have to be concerned with both federal and state law – but in international law the term state means an entity with sovereign powers i.e. Brazil, Texas, USA b. Article IV, § 1 – Full Faith and Credit Clause – Full Faith and Credit shall be given in each State to the public Acts, Records, and judicial Proceedings of every other State DOMICILE: 1. A person has one domicile at any one time and does not lose it until he actually acquires a new one a. Being without a domicile anywhere is a legal impossibility b. Restatement 2nd – a person can have different domiciles for different purposes at the same time c. Headquarters of the persons personal and professional life d. Domicile is determined by the law of the forum 2. Domicile of origin – a person is presumed to have the domicile of his parents 3. Domicile by operation of law – imputed by law regardless of party’s intentions (e.g. parent / child) a. An infant lacks the capacity to choose b. Spouses – under the common law a husband’s domicile was imputed to his wife but under modern law it is only a presumption c. Now, they look at spouse’s domicile but this isn’t dispositive 1

d.

Until emancipated [by age or marriage] a child’s domiciliary is that of the parent with whom the child lives

4.

Domicile of choice – establishment of a new domicile requires legal capacity, physical presence and state of mind - IOW where person elects to go – chooses for himself to displace previous domicile a. A person retains his old domicile until a new one is perfected b. A mere intention to relinquish the old domicile without being present in the new one is insufficient c. English rule – one who gives up their domicile of choice regains their domicile of origin until a new one is actually attained d. American rule – one retains his domicile until he acquires a new one 5. Physical presence: a. The person must actually be present, even if it is for a very brief period b. If you are physically present for an illegal purpose [living with another woman while married] it can still be considered your domiciliary 6. Intent a. Common law – must intend to remain indefinitely b. Restatement 2nd and modern cases require an intent to make the place home for the time at least (not indefinitely) c. Motive is irrelevant when determining establishment of a new domicile except that it may supply evidence of intent d. Declarations of intent are not dispositive – behavior may speak louder i.e. man who was pretending to live in Kansas City 7. A ∆ is always amenable to the general jurisdiction of a court of his domicile (nexus to government benefits – taxes, legal protection etc) 8. Residence is not synonymous with domicile – a person can have multiple residences but only one domicile 9. Hague Convention – “domicile” is defined in terms of a persons habitual residence a. Objective standard – it does not focus on the party’s intent b. Problematic since some people cannot fairly be said to have a habitual residence (e.g. college students) 10. § 17 Restatement of Conflicts 2nd “Presence Under Compulsion” – people compelled to reside in a location retain their domicile unless they intend to make the residence their domicile (e.g. prisoners, military personnel, etc) 11.Intestate succession to movable property is governed by the Law of the Decedent’s Domicile at the Time of Death [bright-line rule that allows for uniformity – no confusion – even if the result is peculiar at times] a. Decedent is most familiar with the laws of his domicile [strongest connection to that place] b. Attorney consultations would most likely be conducted in the domicile c. The domicile state bears the burden of intestate distribution d. Estate tax on intangibles - can be taxed by two or more states though A.In Re Estate of Jones Case 1921  Man is brought into bastardy proceedings in Wales and flees to America  Then he leaves to go back to Wales leaving most of his belongings there USA with an intent to return and live with sister  Dies on the way to Wales on a British ship

2

 Issue: Was he domiciled in Britain – where property would NOT pass to girl or domicile of Iowa where property WOULD pass to girl  Domicile of choice was Iowa  Domicile of Origin was Wales  Court believes that once you leave your domicile of choice to go to domicile of origin it supercedes the domicile of origin you are going to – because money was still in Iowa bank so in Iowa court – and they don’t want to adopt English Rule [of reverting back to domicile of origin when leaving you domicile of choice]. They say your domicile continues until you make physical presence on your next domicile. Decedent’s child gets all his property [from USA] B.White v. Tennant 1888  P is life long domiciliary of West Virginia [domicile of origin]  Intends to move Pennsylvania [domicile of choice] with no intention to return to WV  He drops by there to drop some stuff off – then returns to WV b/c wife is ill to stay the night  He gets sick as well and dies intestate – never living in the Pennsylvania house  Under WV everything would go to Wife  Under Penn half would go to wife, half to siblings  To change domicile you need intent and presence.  Ct decides that because his intention was to live in Penn that is his domiciliary of choice and thus Penn law is applicable [everything goes to his wife] 12.Intestate succession to real property is determined by the law of the situs - where the property is located 13. Validity of a Will A.In Re Estate of Clark 1968 Property in both New York and Virginia [domicile] He says in his will that he wants New York law to govern his will proceedings – Ct says they aren’t going to allow NY to run things Wife wants to take against the will [not take what is in the will so she can get more through statutory] Under VA law the spouse has a right to renounce her husband’s will and take her intestate share Under NY law § 47 the give effect to the decedent’s wishes not to give her more Virginia law controls here because that was where they were domiciled – and that § 47 does not apply because her inheritance despite the will is not a “testamentary disposition” After this there is an amendment that produces the opposite result of Clark – it allows the decedent to choose other laws in order to be able to disinherent their spouse [in European countries their children too] See Estate of Renard p. 19. - Argument for surviving spouse here is Full Faith and Credit 14. Conflicting determinations of domicile – the states apply their own standards for determining domicile and may separately rule that a party was domiciled in their respective state (a legal impossibility) a.Dorrence cases – two states imposed estate taxes after each decided that the decedent was domiciled in their respective state

b. c.

15.

16.

II.

Imposition of multiple state estate taxes violates the due process clause only if the taxes exceed the value of the estate To avoid the problem an intent to change domiciles should be done completely and quickly

Diversity actions – the parties must have different domiciles at the time the action is filed a. A change in domicile may not be recognized by the courts if it was done so to create diversity, gain a tax advantage, etc (only an artificial change; no real intent) b. Aim of diversity jurisdiction is to protect non-resident ∆s from forum prejudice (a person who has artificially changed domiciles is not prejudiced) Judicial jurisdiction: a. The definition of domicile may depend upon the purpose for which it is used in a particular case (In a statute, etc) b. Consider if the results achieved under traditional rules of domicile are equitable and in accord with the intent of the statute or other action c. Illegal immigrants acquire a new domicile for the purpose of government benefits but not necessarily for family law matters (e.g. divorce)

JURISDICTION OF COURTS:

PERSONAL JURISDICTION: A ∆’s contacts with the forum are such that the court may render a personal judgment against the ∆ creating a judgment debt that may be enforced by other states under full faith and credit a. Lack of personal jurisdiction is the classic form of collateral attack 2. The “Due Process” clause (5th and 14th Amendments) mandates that the exercise of personal jurisdiction meet the requirements of due process (Pennoyer v. Neff – service by publication was ineffective since the action was to determine the personal rights and obligations of the parties) 3. Due Process requires: a. Substantive due process (jurisdiction)– power over the person or property in order to subject to liability, and b. Procedural due process (notice)– notice and an opportunity to be heard 4.Privileges and Immunities clause – citizens of each state are entitled to all the privileges and immunities afforded the citizens of the several states 5.Full Faith and Credit – the judgement of one court will be honored by the courts of other states 6. Absent Congressional creation of nationwide jurisdiction (very limited, admiralty, etc), a federal court will be limited to the jurisdictional reach of the state court where it sits 7. Each court has the power to decide if it has jurisdiction over the parties & subject matter 1.

TRADITIONAL METHODS BY WHICH THE COURTS ESTABLISH PERSONAL JURISDICTION: 1.

The defendant is personally served in the forum state a. Defendant is voluntarily present in the state (purposely availing himself of the benefits of the forum)

b.

No minimum contacts with the forum are required (transient jurisdiction – Burnham v. Superior Court) c. “Tag Jurisdiction” encourages forum shopping and could result in unfairness 2. The defendant is domiciled in the forum state a. Rationale for jurisdiction - defendant avails himself of the benefits of the forum state 3. The defendant consents to the court’s exercise of personal jurisdiction a. A plaintiff consents to counterclaims by filing an action b. Forum selection clauses bind the parties to litigate in a particular forum (must be reasonable) c. Consent to jurisdiction clause – vests a court with jurisdiction 4.Waiver – the defendant fails to challenge jurisdiction a.∆ appears specially but then argues the merits – waives any jurisdictional challenge MODERN REQUIREMENTS FOR PERSONAL JURISDICTION: 1.Minimum Contacts – the defendant must have minimum contacts with the forum state – International Shoe: a.Foreseeability – the defendant should foresee being haled into court in the forum b.Purposeful Contacts or actions directed toward the forum 1) Initiation – the defendant initiated the contact with the forum 2) The greater the ∆’s forum activities the lower the need for relatedness of the claim to the forum c. The defendant adjusted his primary conduct in light of the forum’s laws (usually applies to insurance cases) d. The defendant derived benefits from the forum 2.Fair Play and Substantial Justice – subjecting the defendant to jurisdiction within the forum must meet with traditional notions of fair play and substantial justice: a. Interest of the forum state in hearing the case (involving its’ citizens, etc.) 1) Contrast Asahi Metals where the controversy was an indemnification action between two Japanese companies b. Overall fairness and reasonableness of exercising jurisdiction in the forum (defendant’s burden of defending in forum, etc.) c. The plaintiff’s interest in having the litigation in the forum (difficulty in bring suit elsewhere, availability of evidence, witnesses etc.) d. Interest of the interstate judicial system in obtaining the most efficient resolution to controversies and public policy 3. Domestic Corporations – a corporation is a resident of the forum if: a. It is incorporated in the forum, or b. It has its’ principal place of business in the forum c. Foreign corporations are subject to the jurisdictional requirements above d. The legal fiction that corporate stock is present in the state of incorporation is an insufficient basis for asserting jurisdiction over officers of the corporation (Shaffer v. Heitner) 4. Due process and federalism – the only restriction on personal jurisdiction is the due process clause and its protection of individuals

a.

5. 6.

The sovereignty and rights of states outside the forum do not place limits on personal jurisdiction b. If federalism were an independent restriction, then a ∆ could never waive jurisdiction since individuals can not waive the rights of states c. Failure to comply with discovery orders aimed at a jurisdictional issue may be a waiver of jurisdiction Defamation – publication meets minimum contacts if the publisher avails itself of the market in a state (includes writers and editors) Minimum contacts are evaluated in terms of specific or general jurisdiction

SPECIFIC JURISDICTION: 1.

2.

3. 4.

The non-resident defendant has sufficient contacts with the forum and those contacts are substantially related to the controversy (the cause of action arises out of the defendant’s contact with the forum) Injury within the forum alone is insufficient to establish jurisdiction over a non-resident defendant unless the defendant directed acts toward the forum and could reasonably expect to be haled into court there (World-Wide Volkswagen v. Woodson) All of the defendant’s contacts with the controversy do not have to be with the forum state so long as a sufficient number of contacts are with the forum (Burger King Corp. v. Rudzewicz) Merely placing a product into the stream of commerce may be insufficient unless the defendant has purposefully availed himself of the market (Asahi Metal Co. v. Sup. Ct. of CA – the court was fractured 4/4 on this issue and the unfairness of requiring the ∆ to defend in California was determinative) a. Brussels Convention – tort jurisdiction is at the place of acting or the place of injury

GENERAL JURISDICTION: 1.

2. 3.

4. 5.

The non-resident defendant has extensive contacts with the forum justifying jurisdiction and there are no contacts related to the controversy between the defendant and the forum a. The cause of action does not arise out of contacts with the forum state b. Exercise of state court jurisdiction is discretionary and based upon local court rules or statutes The minimum contacts threshold is significantly higher than specific jurisdiction Contacts must be continuous, systematic and substantial a.Helicopteros Nationales de Columbia v. Hall – purchasing equipment, using a bank account for those purchases and training pilots were insufficient forum activities to maintain a cause of action arising out of an accident in Columbia (court did not consider specific jurisdiction) b. Brussels Convention – general jurisdiction exists only where a ∆ is domiciled, incorporated or has its corporate HQ Individuals are subject to general jurisdiction in their domicile jurisdiction Piercing the corporate veil – asserting jurisdiction over a parent corporation requires a very close relationship with the subsidiary, e.g. agency (board of directors overlap, direct involvement, etc) a. Alternatively – requires misuse of the corporate identity b. Service of process is complete when served upon the subsidiary

c.

Partnerships – service on one partner, officer, etc does not impute jurisdiction over property outside the state

JURISDICTION OVER THINGS: 1.

2.

3.

4.

“In Rem”: The subject of an action is some item of property (“res”) located in the forum and the action determines one’s interests in the res against all the world a. Adjudicate questions concerning the ownership and control of the property (value of the judgment is limited to the “res”) b. Acts upon the thing itself rather than the rights of the individual (artificial distinction) c. Minimum contacts established by presence in the forum and notice “Quasi In Rem”:  asserts a preexisting interest in a particular thing against certain named individuals only and the judgment affects only those parties a. Value of the judgment cannot exceed the value of the “res” Land – a forum has jurisdiction over land located within the situs and in rem judgments rendered will be subject to full faith and credit a. However, if a court only has in rem jurisdiction and issues a personal judgment (personal obligations, etc) the judgment will be invalid b.Combs v. Combs – Debtor gets a judgment in F-2 discharging a lien on a parcel of land and then defends an action on the debt by the creditor in F-1 on the grounds of claim preclusion. The debt was not discharged by the F-2 action since the F-2 court lacked personal jurisdiction over the creditor Intangibles – the situs of an intangible determines jurisdiction a. The obligation of a debtor accompanies him wherever he goes and is subject to attachment provided there are minimum contacts b. Minimum contacts must be established to assert personal jurisdiction based upon attachment and the mere presence of unrelated property alone will not provide jurisdiction over persons (Shaffer v. Heitner - shareholder derivative action failed to meet minimum contacts)

COMPETENCE OF THE COURT: 1. 2.

3. 4.

5.

Subject matter jurisdiction refers to a court’s competence to hear and decide a particular issue Subject matter jurisdiction cannot be waived by the parties a. Lack of competence must be addressed by the court on its own motion (even if a challenge is not raised by the parties) b. Parties cannot confer subject matter jurisdiction upon a court by agreement Full faith and credit does not apply to judgments rendered by courts that lack competence § 105 Restatement 2nd, Conflict of Laws – Lack of competence in F-1 is grounds for a collateral attack in F-2 a. Thompson v. Whitman – a NJ court lacked jurisdiction lacked jurisdiction over a boat seized in NY waters, therefore its judgment was invalid More faith and credit than entitled to – F-2 should not be obligated to give a judgment more credit than F-1 would give it

6.

Continuing jurisdiction – once a court has jurisdiction over a ∆ or his property, it retains that jurisdiction for all proceedings which arise out of the original cause of action a.  may not add new claims without a jurisdictional basis b. Irrelevant if the original basis for jurisdiction no longer exists c. Domestic relations cases – court may refuse to hear case if the parties have moved elsewhere and a convenient forum has jurisdiction over the ∆

III.

LIMITATIONS ON THE EXERCISE OF JURISDICTION:

1.

Limitations imposed by contract – forum selection and consent to jurisdiction clauses a. Prima facie valid and should be enforced unless unreasonable or unjust, procured by fraud, volatile of public policy or seriousl...