Pa Conflict Of Laws

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Two Varieties of Conflicts

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Conflicts between State and Federal Law: Governed by Erie Doctrine and Supremacy Clause
Conflicts between State Laws: Governed by Choice of Law Methodologies (First Restatement, Government Interest Analysis, and Second Restatement)

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Territorial Approach: Restatement (First) of Conflict of Laws

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Provides a set of rigid rules designed to pinpoint the jxn where the parties’ rights vest. Also called the territorial approach or vested rights approach.
Three step analysis
1. Characterize the area of substantive law of the conflicting laws (e.g. contract, tort or property)
2. Determine the particular choice of law rule that governs
3. Localize the rule that applies

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Lex Loci Delicti

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First restatement rule for torts – the law of the place of wrong determines whether a person ahs sustained a legal injury

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Contracts Under First Restatement

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There are a variety of them, although important general principle provides that the law of the place of contracting determines the validity and effect of a promise for most purposes

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Property Issues

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Situs rules: the law of the place where the property is located governs

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Governmental Interest Analysis

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1. Resolves conflicts issues by referring to policies under competing laws
2. Starts from the premise that a forum should apply its own law unless a party requests that another law should apply. If such a request is made, court must undertake the following analysis:
Identify policies and evaluate contacts
False conflict
Apparent and True Conflicts
Disinterested Forum
An unprovided for case

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Identify Policies and Evaluate Contacts

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Policies – upon request of a party the court should identify the policies expressed in competing laws through the ordinary processes of construction and interpretation
Contacts – The court should evaluate each state’s policies in light of the parties’ contracts with the state to determine if the policies are relevant to the particular dispute before the court. If a state’s policies are relevant to the dispute the court should conclude that the policies represent the interests of the state

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False Conflict

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If the court finds that one state has an interest and the other does not, court should apply the law of the interested state

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Apparent and true conflicts

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If the court finds an apparent conflict between interests, it should ascertain whether a “more moderate and restrained interpretation” of the policy or interest of one state or the other will avoid the conflict. If the court finds that the conflict of legitimate interests is unavoidable

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Disinterested forum

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If the forum court has no interest in applying its own law, but determines that two or more states have legitimate competing interests, the forum can dismiss the case pursuant to the doctrine of forum non coveniens. If forum non conveniens is not available, the forum, court may take one of two routes (i) make its own judgment as to which law is better or (ii) apply the law that most clearly resembles its own.

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An unprovided for case

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If the court finds that no state has an interest in the application of its law, the forum law should govern

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Restatement Second of Conflict of laws (generally)

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Seeks to incorporate the advances in modern approaches into a flexible approach that avoids the mechanical rigidity of the first restatement
Except for a few areas in which it provides bright-line rules, the Second Restatement approach interweaves two elements – policies of section 6 and connecting factors of particular significance for various types of lawsuits. Two elements are considered to pinpoint the “most significant relationship” to the dispute.

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Section 6

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Lists general policy considerations that may serve as guide post in any analysis under specific sections of the second restatement
Considerations include
1. The needs of the interstate and international systems
2. Relevant policies of the forum
3. Relevant policies of other interested states including their interests in having their law applied to the particular issue
4. Protection of party expectations
5. Basic policies underlying the particular field of law
6. Objectives of certainty, predictability and uniformity of result and
7. The ease of determining and applying the law previously identified as applicable

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Connecting Factors

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For particular areas of the law, the restatement lists “connecting factors” that provide specific guidance about the jxns that provide specific guidance about the jxns that have a claim to the application of their laws

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The Most Significant Relationship

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Absent a preexisting choice by the parties, the court is to apply the law of the jxn with the most significant relationship to the dispute. The court should arrive at the conclusion by reference to both the policy provisions of Section 6 and the connecting factors

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Section 145

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A great example – the general section for tort issues. Provides
a. The rights and liabilities of the parties with respect to an issue in tort are determined by the local law of the state which, with respect to that issue, has the most significant relationship to the occurrence and the parties under the principles stated in Section 6
b. Contacts to be taken into account in applying the principles of Section 6 to determine the law applicable to an issue include:
a. The place where the injury occurred
b. The place where the conduct causing the injury occurred
c. The domicile, residence, nationality, place of incorporation and place of business of the parties and
d. The place where the relationship, if any, between the parties is centered.
These contacts are to be evaluated according to their relative importance to the particular issue

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PA Approach

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PA has announced a hybrid – combining the governmental interest analysis with the Restatement (Second)’s most significant relationship approach
a. PA courts apply the law with the greatest interest in the legal issue. The court finds that interest by evaluating the contacts each state has with the transaction
b. Only those contacts that relate to the policies and interests underlying the particular issue before the court are relevant. The state’s contacts are measured on a quantitative scale to determine which state has a stronger interest.

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Strategy of Bar Examiners

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Describe PA’s hybrid approach
Perform the first steps of governmental interest analysis: identify policies behind competing laws and compare each jxn’s policies with the relevant contacts in the jxn to determine whether the polices are implicated in this case
For false conflicts, apply the law of the interested state
For true conflicts, resolve the conflict by applying the law of the state with the greatest interest. Case law suggests that the state with the greatest interest will be the state that has the most significant relationship with the dispute. Evaluae the contacts qualitatively, not just by counting them. So
1. List the connecting factors (contacts between each state, the parties, and the subject matter)
2. Evaluate the connecting factors by reference to the policy oriented principles listed in Sec. 6
Although not true to PA case law, past examiner’s analysis have sometimes listed only one or more of the three main approaches. Thus if one has time, you should add short description of each and venture how the conflict of laws would be resolved under each approach individually

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Special PA Rules for Specific Legal Questions or Specific Areas of Substantive Law

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Next Cards

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Property

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For all choices of law approaches, the situs of the property will generally provide the governing law for issues respecting the property. For tangible property, the analysis focuses on the situs of the property at the time of the transaction

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Contracts (Choice of Law Clauses)

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PA honors the law’s basic policy of carrying out the contracting parties’ intent to choose expressly a governing law for their dispute. Some qualifications exist:
UCC – for contract of sale of goods general rule is that parties choice should be honored so long as chosen jxn bears a reasonable relation to the transaction
Restatement second – Section 187 instructs courts to disallow the parties choice where the chosen state has no substantial relationship to the parties or the transaction and there is no other easonable bases for parties choice
Section 187 authorizes courts to refuse to apply a law that is contrary to a fundamental policy of a state that has a materially greater interest in the dispute than the chosen state
Adhesion contracts – PA courts will not honor a choice of alw clause if parties did not truly consent to it.

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Contracts (Choice of Forum Clauses)

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The parties to a contract designate the court where their disputes must be resolved
Modern View: Now adopted in PA, the modern view acknowledges that while private parties may not contract to prevent a court form asserting its jxn, a court of proper venue and jxn should nonetheless decline to proceed with a case where the parties have freely agreed that the litigation should be conducted in another forum
The rule prevails so long as the agreement is not unreasonable at the time of the litigation – mere inconvenience does not establish unreasonableness, instead, recogniction of the choice of foru clause must subvert the interests of justice before a court should decline to enforce it

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Marriage Contracts

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PA follows the general “place of celebration rule” – the validity of marriage is governed by the place where marriage was solemnized

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Corporations

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The law of the state of incorporation is usually applied to determine the duties and liability of an officer or director as well as issues related to creation and dissolution

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Escape Valves – The Substance Procedure Dichotomy

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Forum law governs questions of procedure. A court can escape the application of a foreign state’s aw by characterizing a particular legal issue as procedural. Rules that concern the conduct of litigation are generally procedural and rules that govern out of court conduct are generally substantive

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Escape Valves

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- Characterization Substance and procedure are only one set of labels for manipulating the result in particular cases. Other legal categories may also provide courts with opportunities to use labels to affect a case’s outcome. For example a dispute over a contract for the sale of land may be governed by one set of laws if characterized as a property dispute and a totally different set of laws if characterized as a contract dispute.
The examiners have shown a preference for characterizing disputes involving property and other issues as property disputes only.

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Escape Valves – SOL

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Traditionally characterized as procedural laws, SOL’s are now governed in PA by statute. Known as a borrowing statute, this provision provides that a court should apply the shorter of two competing limitations periods.

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Escape Valves – Public Policy

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Traditionally, courts have refused to apply a foreign law if it is contrary to a strong public policy of the forum. The second restatement validates such a refusal, if the court carefully considers its decision. The public policy exception can be quite versatile.

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Escape Valves - Domicile

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The law governing the domicile of individuals with the legal capacity and the domicile of corporations has gained increased significance because of the role that domicile plays in governmental interest analysis and the Second Restatement
1. Individuals – for individuals, physical presence and intent to be domiciled in a particular place are both requirements for establishing domicile
2. Corporations – corporations are domiciled in their state of incorporation

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Erie Doctrine

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Clashes Between State and Federal Law
Federal Statutes – for federal statutes, the Supremacy Clause requires that federal law govern in the face of conflicting state laws (so long as the federal statute is a constitutionally valid exercise of congressional power)
Federal Rules of Civ Pro- Should govern in face of conflicting state rule so long as FR is valid under rules enabling Act
Federal Court made law – Should govern as long as applying it it doesn’t violate twin aims of Erie
1. Discouraging forum shopping and
2. Avoiding inequitable administration of laws

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Klaxon

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A federal court exercising diversity jxn should apply conflict of laws rules of the forum state. Thus, where Erie analysis points to state law, one must choose the appropriate state law using the forum state’s choice of law methodology

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Recognition of Judgments

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Should a judgment in one forum (F1) be honored in the courts of another jxn (F2)?
Two step analysis
FFC
1. Jxn – court that rendered the judgment must have possessed subject matter jxn over the case and personal jxn over the D or at least must have allowed a full and fair opportunity to challenge its jxn
2. On te merits – the rendering court’s judgment must be on the merits
3. Final – the rendering court’s judgment must be final
If FFC principle attaches, the court that is asked to honor the judgment must then ascertain whether the rendering court would give the judgment res judicata or collateral estoppel effect

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Res Judicata

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Doctrine of res judicata or claim preclusion prevents a party from relitigating an entire suit. For res judicata to apply under PA law – three requirements must be satisfied
1. The F1 judgment must be final
2. The F1 judgment must involve the same cause of action as the F2 lawsuit: either the second suit must involve the same subject matter and the same ultimate issue or the second suit must seek relief for the same harm
3. The F2 suit must involve the same parties or their privies as the F1 suit. Privies include such individuals as successors in interest, holders of future interests, and beneficiaries of actual parties to the F1 suit.

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Collateral Estoppel

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The Doctrine of collateral estoppel or issue preclusion prevents a party from relitigating issues in a subsequent law suit. Collateral estoppel applies even where the cause of action is different in the second suit than in the first suit. To apply under PA law – the following requirements must be satisfied
1. The issue must have actually been litigated and decided in the first proceeding
2. The issue must have been necessary to support the judgment of the first proceeding
3. Although the party trying to benefit form collateral estoppel need not have been a party to the first proceeding, the party against whom collateral estoppel is asserted must have been a party or in privity with a party to the prior action. In addition, the party against whom collateral estoppel is asserted must have had a full and fair opportunity to litigate the issue in the prior action.

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Recognition of Divorce Judgments

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General rule – divorce decrees deserve full faith and credit in one state if the rendering state had proper jxn and the decree is valid in the rendering state. Jxn is established if one of the parties is domiciled in the rendering state.
PA Requirement – PA law provides that a spouse is not entitled to commence an action for divorce in the commonwealth unless at least one of the parties has been a bona fide resident for at least six months immediately prior to the commencement