PENNSYLVANIA – CONFLICT OF LAWS I. GENERALLY a. There are 3 kinds of Conflict of Laws problems: i. Jurisdiction ii. Choice of Law iii. Recognition of Judgment b. If a party wants to fight a judgment using Conflicts analysis, use all 3 approaches. II. CONFLICTS BETWEEN THE LAWS OF TWO (OR MORE) STATES a. There are three major methodologies: i. The Restatement First of Conflicts ii. The Government Interest Analysis iii. The Restatement Second of Conflicts b. Pennsylvania uses a hybrid methodology that falls between the General Interest Approach and the Restatement Second of Conflicts. III. THE RESTATEMENT FIRST OF CONFLICTS a. The Restatement first employs a three-step process: i. Determine the area of substantive law at issue. ii. The Restatement First ―pulls‖ law from different states depending on the substantive area of law. Find the ―Choice of Law‖ rule that governs. iii. Apply the facts to the situation at hand. b. Major R1 Choice of Law rules: i. Torts Where the accident / injury took place ii. Contracts Where the contract was formed iii. Property Situs IV. THE GOVERNMENT INTEREST ANALYSIS a. Start from the premise that the forum applies its own law unless one of the parties asks the court to apply another state’s law. b. If one of the parties requests that the court apply another state’s law, engage in the following analysis i. Determine what state interests may be at play. ii. Apply the interests to the facts relevant to the immediate controversy to determine whether any, one, or both of the states have a Governmental Interest in applying its laws. iii. If only one state is ―interested,‖ that is a FALSE CONFLICT. In false conflict situations, apply the law of the interested state. iv. If both states are ―interested,‖ that is a TRUE CONFLICT. 1. First, ascertain whether a ―more moderate and restrained interpretation‖ would eliminate either of the state interests at play. If so, you are back to a False Conflict where only the law of the remaining ―interested‖ state applies. 2. If not, you remain with a True Conflict—and the law of the Forum State applies. v. If the forum state is disinterested but it determines that two or more other states have an interest in applying their law to this case: 1. First, the Forum should try to dismiss the case pursuant to the Doctrine of Forum Non Conveniens. 2. If Forum Non Conveniens doesn’t apply, the Forum should either: a. In its own judgment, determine which law is better; or b. Apply the law that most closely resembles the law of the forum state. vi. If no State is interested, the Forum should apply its own laws. V. THE RESTATEMENT SECOND OF CONFLICTS: a. Restatement Second applies two-steps: the “most significant relationship approach.” b. The two steps are: i. First, it applies the policy considerations found in §6. 1. The needs of the interstate and international system 2. The relevant forum policies 3. The relevant policies of other interested states, including their interests in having their law applied to the particular issue 4. The protection of party expectations 5. The basic policies underlying the particular field of law 6. The objectives of certainty, predictability, and uniformity of result; and 7. The ease of determining and applying the law previously identified as applicable. ii. Then, it applies specific ―connecting factors‖ found throughout the Restatement Second. These ―connecting factors‖ provide specific guidance about particular areas of law. 1. EX: §145 dictates that the Forum should consider the following ―connecting factors‖ when determining what law to apply in a Torts case: a. Place where the injury occurred; b. Place where conduct causing the injury occurred; c. Domicile / Nationality of the parties; d. The place where the parties’ relationship was formed e. … VI. THE PENNSYLVANIA APPROACH a. Blends the Governmental Interest Approach and the Restatement Second of Conflicts. b. Steps: i. Describe the approach: 1. First, determine state interests. 2. Apply those state interests to the relevant facts to determine whether either state is ―Interested‖ in applying its laws to this dispute. 3. If there’s a false conflict, apply the law of the Interested state. 4. If there’s a true conflict, turn to the Restatement Second: a. List the policy factors in §6. b. List the ―connecting factors‖ as established by the facts. c. The court should apply the laws of the state with the greatest QUALITATIVE relationship to the conflict. c. Other PA-Specific rules: i. PROPERTY: determined solely by situs. ii. CONTRACT CLAUSES: PA generally honors choice-of-law clauses: 1. The PA Commercial Code provides that the parties’ choice should be honored so long as the chosen jurisdiction bears a reasonable relation to the transaction. 2. For other transactions (for transactions not involving the sale of goods), PA has adopted §187 of the Restatement Second of Conflicts: a. There must be a reasonable relation or a reasonable basis for the parties’ choice of law. The choice of law may stem from a connection to the state or because a particular state has a well-developed body of law in some substantive area (e.g., NY has a really well developed body of law around Article 9 Secured Transactions). 3. BUT: PA Courts will not honor a choice of law clause if one of the parties didn’t really choose it – PA Courts do not apply choice of law clauses from contracts of adhesion. iii. MARRIAGE: determined by the place of celebration – where the marriage was solemnized. iv. CORPORATIONS: the law of the state of incorporation applies to determine the duties and liabilities of corporate officers and directors. VII. ―ESCAPE VALVES‖ a. Even when applying another state’s substantive law, the forum state should apply its own procedural law. i. Thus, to avoid applying another state’s law, the forum state may seek to characterize it as ―procedural‖ rather than ―substantive.‖ ii. Pennsylvania has a specific rule for Statutes of Limitations: A PA Statute provides that PA courts should apply the shorter of the two competing Statutes of Limitations periods. b. Courts may also attempt to change the relevant law by categorizing transactions in different ways. Although property law is determined by situs, contracts law is determined either by choice-of-law clauses or by application of the PA test. Thus, to reach a different outcome, the court may frame the issue under different ―headings‖ of substantive law. VIII. CONFLICTS BETWEENS STATE AND FEDERAL LAW a. What is the nature of the conflict? i. Statutes: Federal law controls. Reference the Supremacy Clause. ii. FRCP: the federal procedural rules govern so long as the federal rule is valid under the Rules Enabling Act and the Constitution. b. Diversity Cases: i. When a Federal Court sits in Diversity and must choose between the law of the parties’ respective states, the court should apply the choice of law methodology used by the Forum State. IX. RECOGNITION OF JUDGMENTS a. Two step approach: i. Determine whether the first judgment is entitled to full faith & credit: 1. Was it a final judgment? 2. Determined based on the merits of the action? 3. Did the rendering court have jurisdiction to hear the action? ii. Determine whether res judicata or collateral estoppel apply: 1. Res Judicata applies when: a. The first judgment was final. b. The first judgment involved the same cause of action as this second lawsuit. c. The second lawsuit involves the same parties or their privies in interest. 2. Collateral Estoppel applies when: a. The issues must have been actually litigated and decided in the first proceeding. b. The issue must have been necessary to support the judgment of the first proceeding. c. The party against whom collateral estoppel is asserted must have been a party (in privity with a party) in the first action, and he must have had a full and fair opportunity to litigate the issue in the prior action. X. DIVORCE JUDGMENTS a. If the rendering state had proper jurisdiction, divorce judgments are entitled to full faith and credit. Jurisdiction is established if at least one of the parties was domiciled in the forum state. i. In PA, one of the parties must be a resident of the state for at least 6 months. b. However, collateral judgments are entitled to full faith and credit only if the rendering court had jurisdiction over both parties.
"Conflicts of Law (DOC)"