Conflict Of Laws

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Personal Jurisdicition

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1. 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

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Due Process Clause of the 5th and 14th Amendments

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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)

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Due Process requires:

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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

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Privileges and Immunities clause

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citizens of each state are entitled to all the privileges and immunities afforded the citizens of the several states

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Full Faith and Credit Clause

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the judgement of one court will be honored by the courts of other states

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Traditional methods by which a courts establish personal jurisdiction

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1. defendant is personally served in the forum
2. defendant is domiciled in the forum
3. defendant consents to jurisdiction
4. Waiver

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Minimum Contacts

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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

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Fair Play and Substantial Justice

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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

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Domestic Corporations – a corporation is a resident of the forum if:

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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)

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Specific Jurisdiction

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1. 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)
2. 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)
3. 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)
4. 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

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General Jurisdiction

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1. defendant has extensive contacts with the forum but none related to the controversy
2. contacts must be continuous, systematic and substantial (higher than specific jursi. m.c.)
3. residents are subject to g.j. in their state of domicile

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Piercing the corporate veil and jurisdiction

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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

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In rem jurisdiciton

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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

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Jurisdiction over land

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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

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Jurisdiction over intangibles

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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)

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competence of the court

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skipped this section - look at the outline

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Limitations on the exercise of jurisdiction (5)

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1. limitations imposed by contract
2. fraud, force and privilege
3. forum non conveniens
4. race to judgment
5. federal transfer

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limitations on jurisdiction imposed by contract

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1. prima facie valid unless:
a. unreasonable
b. unjust
c. procured by fraud
d. seriously inconvenient
e. violative of public policy

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Bremen v. Zapata - factors considered when upholding forum selection clause

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1. international contract freely negotiated at arms length
2. sophisticated parties
3. forum selection was neutral

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Carnival Cruise Lines v. Shutes - factors considered when upholding a forum selection clause in an adhesion contract

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despite an unsophisticated party the court looked at:
1. cruise ships carry people to and from many destinations
2. save the courts and parties time and expense
3. savings incurred are passed on to consumers

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Brussels’ Convention

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forum selection clauses vest exclusive jurisdiction in a court of a member nation (one of the contracting parties must be from a member nation)

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Forum non conveniens

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permits a court to refuse to exercise jurisdiction if it is a seriously inconvenient forum for the action and another more convenient forum is available to the π
a. Procedurally – motion is only available to the ∆
b. Application depends upon the sound discretion of the trial judge who must consider the interests of the litigant and the public

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Race to judgment

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a ∆ may initiate parallel litigation as a preemptive strike in a competent forum to prevent full faith and credit from binding him
a. Most federal circuits follow the “first filed rule” to decide which judgment has effect
b. State court or federal court w/ diversity jurisdiction – state law determines if the second forum action will be dismissed or stayed
c. State injunction against parallel litigation – penalties available in the first state but recognition and enforcement is not required in the second state

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Federal Transfer

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for the convenience of the parties and witnesses, in the interests of justice a district court may transfer any civil action to any other district where it may have been brought
a. A district court may not dismiss under forum non conveniens when there is an available district to transfer to
b. The district court has broader discretion to transfer than under a forum non conveniens dismissal
c. Court where suit “may have been brought” refers to the suability of the ∆ and not the capacity of the π (transferee court must have personal and subject matter jurisdiction)
d. The transferee district court must apply the state law of the transferor court (Klaxon rule)

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Limitations imposed by the state of the transaction

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1. Each state determines the competency of its own courts and is not bound by any limitations on jurisdiction imposed by the law of a sister state
2. State statutes that localize a transitory cause of action and grant exclusive jurisdiction to its local courts do not prohibit a sister state court from asserting jurisdiction
a. The judgment from the sister state is then entitled to full faith and credit
b. Similarly, anti-suit injunctions based upon such a statute are not entitled to full faith and credit
3. A forum is not compelled to accept jurisdiction of a cause of action created under the laws of a sister state

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Full Faith and Credit (3)

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a. U.S. Constitution Article IV § 1 – Full faith and credit shall be given in each state to the public acts, records, and judicial proceedings of every other state.
b. 28 U.S.C. § 1738 – extends application to territories and possessions and requires federal courts to give full faith and credit to state court judgments
c. Supreme Court has consistently required state courts to grant full faith and credit to federal court judgments

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A judgment must be ? in order to receive full faith and credit in another forum (3)

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It must be
a. valid,
b. final, and
c. on the merits

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When is a judgment valid

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when the forum court satisfied all requirements of due process and personal jurisdiction

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When is a judgment final?

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when no further action by the rendering court is necessary to resolve the litigation
a. appeals
b. spousal and child support decrees
c. child custody decrees

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When is a judgment decided on the merits? (3)

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1) Judgment involves the substance of the π’s claim
2) Dismissal for lack of jurisdiction, improper venue, forum non-conveniens are not on the merits
3) Majority view – dismissals based upon laches and running of the SOL are likewise not on the merits

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Procedure for enforcing a foreign judgment

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Enforcement procedures are governed by the law of the forum
1. file a new lawsuit in F2
2. obtain service and summons etc.
3. when F2 judgment is obtained, levy execution against the D

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Res judicata - claim preclusion (2)

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1. original action is merged into the judgment - P can no longer sue on the original cause of action, only on the judgment
2. can't sue on the original action even on different grounds that might have been raised in the original suit

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Res judicata - issue preclusion (2)

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1. direct estoppel - whatever was fully litigated in the first proceeding will be conclusive in subsequent proceedings between the same parties on the same cause of action
2. collateral estoppel - any issue actually litigated and essential to the judgment is binding on the parties if that issue is raised in a subsequent suit

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Enforcing a federal judgment in a different federal court

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you can register the F1 judgment and it will have the same force at it would in F1

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Federal common law considerations weighing heavily in favor of enforcing a foreign nation judgment (Hilton v. Guyot)

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a. π & ∆ are citizens of the foreign state
b. ∆ is a citizen of the foreign state
c. π is a citizen of the foreign state and judgment is for ∆
d. Reciprocity

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Reciprocity

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federal courts should recognize and enforce judgments of a foreign country if that country would subject an American judgment to similar treatment (Hilton v. Guyot)

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Comity (2)

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a. the recognition one nation allows to the legislative, executive or judicial acts of another nation based upon mutual respect and cooperation among sovereign nations
b. The recognizing state determines whether the foreign nation court had jurisdiction and employed fair procedures

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Defenses against a foreign nation judgment include: (4)

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a. Lack of jurisdiction
b. Violative of due process
c. Legal system is not compatible with the U.S. legal system (no impartial tribunals, etc.)
d. Public policy – broader application than in domestic matters (aspects of foreign law that an American court cannot recognize e.g. slavery, de jure racism, etc.)

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Restatement 2nd of Conflicts § 103 Limitations on Full Faith and Credit:

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A judgment rendered in one state need not be recognized and enforced in a sister state if … it would involve an improper interference with important state interests….

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Types of cases where full faith and credit is limited

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domestic relations, criminal and workman’s comp

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McCartin workers comp rule (ff&c issue)

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Awards that are “not intended” to preclude any other rights of the worker will not prevent a second, even higher, award

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Thomas v. Washington Gas Light Co.

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The Court upheld a supplemental award in F-2 after considering:
1) F-1’s interest in placing limits on the liability of employers and insurers
2) The interests of both jurisdictions in compensating injured workers
3) F-1’s interest in the integrity of its administrative proceedings (claim preclusion effect is not the same as a judicial proceeding)

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Land taboo (def. and 2)

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a judgment rendered by F-1 that directly affects title to land located in F-2 need not be respected by F-2
a. A divorce decree issued in F-1 that vests title to property located in F-2 does not have to be recognized in F-2 in a quiet title action
b. However, if the wife brought an action to enforce the F-1 judgment in F-2 the outcome would likely be different since there is no reason not to enforce an equity decree

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Baker v. General Motors (Supreme Court 1998) (ff&c)

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exceptions to full faith and credit:
a. F-1 judgments that purport to accomplish an official act within the exclusive province of F-2 (possibly the deeding of land in F-2)
b. Injunctions interfering with litigation over which the ordering state has no authority

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Under the Constitution, why must a court entertain a transitory cause of action that arose in another forum?

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a. Refusal to hear a case because it arose under the law of a different state threatens interstate harmony (goal of full faith and credit)
b. The interests of the law-giving state should be regarded unless the forum has substantive law to the contrary

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Due process and conflict of laws (2)

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1. It is a violation of the due process clause for a forum to apply its own law to a controversy when the only contact it has with the problem is that it is the forum
2. Home Insurance Co v. Dick – the action involved an insurance contract on a tugboat where all of the contacts were in Mexico yet the Texas court applied its contract law (Sup. Ct. reversed)

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A forum must have sufficient contact with, and interest in, the dispute so the application of its laws is neither arbitrary nor patently unfair (3)

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a. De minimus contacts are not sufficient (Phillips Petroleum v. Shutts – small percentage of πs and gas leaseholds in the forum were insufficient for a nationwide class action)
b. Multi-state transactions – the forum will not be prevented from applying its own law even though it conflicts with the other involved states provided it has a relation ship to the action (e.g. injury to a domiciliary in the forum)
c. Foreseeability that an insured may end up in another state justified application of F-2 law to the contract

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Notice and proof of foreign law

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1. parties must give timely notice of their reliance on foreign law
2. courts will generally take judicial notice of sister state's law
3. many states require that foreign law be pled and proved

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Consequences of failing to prove foreign law

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4. Consequences of failing to prove foreign nation law:
a. Dismissal of the suit, or
b. Assume that the foreign law is similar to forum law with regard to rudimentary principles of justice, or
c. Apply forum law on the theory that the parties have acquiesced by failing to prove foreign law

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Traditional Choice of law rules

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Vested rights - the forum is to apply the law of the state in which the rights of the parties vest (where they are created)

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Traditional rules for the for Torts (3)

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lex loci delicti;
a. Lex loci applies even though all of the significant contacts including the negligent act occurred in another state
b. Vicarious liability is determined by the place of the wrong only if the ∆ authorized the tortfeasor to act for him in the state
c. Lex loci also determines the character & measure of the damages, standard of care, causation, contributory negligence, fellow servant rule, defenses and survival of actions

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Traditional rules for Contracts (2)

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1. law of the place of the making controls
2. place of the making is determined by the forum according to modern contract principles

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What law applies to the validity of a contract according to the traditional approach

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where the offer was accepted

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what issues are considered validity issues under the traditional approach to contracts (4)

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formalities of the contract; sufficiency of consideration; parties capacity; fraud, illegality or other defenses making the contract voidable; nature and extent of duty; etc.