Also known as: choice of law analysis · choice-of-law analyses · choice of law · conflicts analysis
Written by attorneys — see sources below.
A judicial process by which a court identifies which jurisdiction's substantive rules govern a dispute that implicates the laws of more than one state or nation. The analysis begins with the forum's own choice-of-law rules and then weighs contacts, policies, and the parties' expectations to select the applicable local law. In federal diversity cases the forum state's choice-of-law rules are treated as substantive and must be followed.
Caleb Chang, a New York resident, sued Compass Logistics in federal court in New York over a shipping contract formed in New Jersey. The court first consulted New York's choice-of-law rules rather than federal rules to decide whether New York or New Jersey law governed the validity of the agreement. Because New York rules pointed to New Jersey law, the court applied New Jersey substantive standards to resolve the breach claim.
Catherine Carter granted a perpetual easement over land in State B to an Oregon nonprofit. When the current owner challenged the easement in an Oregon court, the court evaluated the contacts of the land, the parties, and the transaction under the most-significant-relationship factors. The analysis led the court to apply the law of State B as the situs of the immovable property.
Christine Castro executed a will before a Swiss notary while maintaining an apartment in Basel. After she moved to State B and died there, her sibling contested the will's formal validity. The probate court applied the choice-of-law statute and upheld the will because its execution satisfied the law of the place where the testator had a place of abode at the time of signing.
Connor Clark, a foreign seaman, was injured aboard a foreign vessel in a U.S. port. He sued the shipowner in federal court and sought to invoke U.S. maritime law. The court examined the vessel's flag, the place of the injury, and the parties' contacts to determine whether U.S. law or foreign law supplied the rule of decision.
In October 1953 Francisco Romero, a Spanish subject, signed on as a crew member of the S.S. Guadalupe, a vessel of Spanish registry owned by the Spanish corporation Compania Trasatlantica. Romero continued to serve on the Guadalupe after the initial voyage, so that under Spanish law the original contract of hire remained in force. The ship sailed from Bilbao, touched other Spanish ports, proceeded to New York and Hoboken, made a brief trip to Vera Cruz and Havana, and returned to Hoboken. On May 12, 1954, while the vessel lay in Hoboken, Romero was struck by a cable on deck and seriously injured. Romero filed suit on the law side of the United States District Court for the Southern District of New York against four corporate defendants. He asserted Jones Act and general maritime claims for unseaworthiness, maintenance and cure, and maritime tort against Compania Trasatlantica and its New York husbanding agent Garcia & Diaz, Inc. He asserted maritime-tort claims against stevedore International Terminal Operating Co. and carpenter Quin Lumber Co., both of which were performing work aboard the Guadalupe under oral contracts with Garcia & Diaz. Jurisdiction was invoked under the Jones Act and under 28 U.S.C. §§ 1331 and 1332. After a pre-trial hearing the district court dismissed the entire complaint. It held that the Jones Act supplied no right of action against the foreign shipowner, that § 1331 did not confer jurisdiction over general maritime claims, that Garcia & Diaz was not Romero's employer, and that complete diversity was lacking under Strawbridge v. Curtiss. The court also declined to exercise discretionary admiralty jurisdiction after examining Spanish law, which provided Romero a lifetime pension of 35 to 55 percent of his wages plus maintenance and cure enforceable through the Spanish consul. The Court of Appeals affirmed. The Supreme Court granted certiorari because of conflicts among the circuits concerning the construction of § 1331 and the applicability of Lauritzen v. Larsen to the facts presented.
Crown Pharmaceuticals sued several insurers in federal court alleging a conspiracy that affected policies sold in multiple states. The insurers argued that foreign law governed some claims. The court performed a choice-of-law analysis to decide whether U.S. antitrust rules or the law of another jurisdiction controlled the conduct at issue.
In the late 1970s, ISO, an association of approximately 1,400 domestic property and casualty insurers that serves as the almost exclusive source of support services for CGL insurance in the United States, began revising its 1973 standard CGL policy form. The 1973 form provided occurrence-based coverage for sudden and accidental pollution and did not cap defense costs. Primary insurers including Hartford Fire Insurance Company, Allstate Insurance Company, Aetna Casualty and Surety Company, and CIGNA Corporation sought four changes: a shift to claims-made coverage with a retroactive date, elimination of pollution coverage, and a legal defense cost cap. After ISO proposed 1984 forms that omitted some of these changes, Hartford persuaded General Reinsurance Corporation, the largest American reinsurer, to procure the modifications or derail the program. The Reinsurance Association of America agreed to boycott the 1984 forms unless the changes were added, and domestic and London reinsurers informed ISO they would withhold reinsurance until the forms were altered. ISO then withdrew the 1984 forms and adopted 1986 forms containing a retroactive date and pollution exclusion; it later withdrew support services for the 1973 form. Separate agreements among London reinsurers required primary insurers to switch to claims-made policies and excluded pollution coverage from reinsurance contracts covering North American risks. Nineteen states and many private plaintiffs filed 36 complaints alleging that these actions violated section 1 of the Sherman Act. The cases were consolidated in the Northern District of California. The District Court granted motions to dismiss in 1989, holding the conduct fell within McCarran-Ferguson immunity and applying international comity to the foreign defendants. The Ninth Circuit reversed in 1991. The Supreme Court granted certiorari in 1992.
Copperfield Mining defaulted on a loan secured by equipment located partly in two states that had identical redemption statutes. The lender sought to enforce its security interest in federal court. The court aggregated the contacts from both states and treated them as located in a single jurisdiction for purposes of selecting the governing redemption law.
In May 1930 the Van Sweringen Corporation issued $30,000,000 in notes under an indenture naming Guaranty Trust Co. of New York as trustee with power to enforce noteholders' rights. In October 1930 Guaranty and other banks advanced large sums to companies affiliated with the Corporation and controlled by the Van Sweringens. When the Corporation could not meet its obligations, Guaranty participated in an exchange plan under which noteholders could surrender their notes for cash equal to 50 percent of face value plus twenty shares of Van Sweringen stock per $1,000 note; the offer remained open until December 15, 1931. In 1934 respondent York received $6,000 of the notes as a gift from a donor who had not accepted the exchange offer. In April 1940 three accepting noteholders filed the Hackner suit in federal court charging Guaranty with fraud and misrepresentation in connection with the exchange. York's motion to intervene was denied, and summary judgment for Guaranty was affirmed on appeal. On January 22, 1942, after her exclusion from the Hackner litigation, York filed the present class action in the United States District Court for the Southern District of New York on behalf of non-accepting noteholders. The complaint, resting exclusively on diversity of citizenship, alleged that Guaranty had breached its trust by failing to protect noteholders' interests when it assented to the exchange offer and by failing to disclose its own self-interest. The district court granted Guaranty's motion for summary judgment on the authority of the Hackner decision. The Circuit Court of Appeals reversed, holding that a federal court sitting in equity is not required to apply the New York statute of limitations that would govern an identical suit in the New York state courts. The Supreme Court granted certiorari.
A federal court sitting in diversity must apply the choice-of-law rules of the state in which it sits. Those rules are treated as substantive under Erie and therefore bind the federal court when it selects the applicable state substantive law.
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…center of gravity' of the controversy, or the most convenient location for litigation. The issue is personal jurisdiction, not choice of law. It is resolved in this case by considering the acts of the [appellants]." Hanson v. Denckla , 357 U. S. 235, 254 (1958). Appellee suggests that by accepting positions as officers or…
…in the State of Florida and shall be governed and construed under and in accordance with the laws of the State of Florida. The choice of law designation does not require that all suits concerning this Agreement be filed in Florida." App. 72. See also n. 5, supra. The Court of Appeals reasoned that
…difference is in the bother and expense — not in the principle of the thing. The concept of domicile as a controlling factor in choice of law to govern many relations of the individual was well known to the framers of the Constitution. It was hardly contemplated that a person should be subject at once to two conflicting state…
…seamen only in accordance with the usual doctrine and practices of maritime law." 345 U. S., at 581. The broad principles of choice of law
The Restatement directs courts to apply the law of the state that has the most significant relationship to the thing and the parties. That determination rests on the policies of the interested states, protection of justified expectations, certainty and predictability, the policies underlying property law, and the needs of judicial administration.
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A written will is valid if its execution complies with the law of the place where the will was executed or with the law of the place where the testator was domiciled, had a place of abode, or was a national at the time of execution or death. The statute therefore supplies multiple alternative connecting factors that can uphold the will.
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When two or more states maintain identical local-law rules on an issue, the contacts in those states are treated for choice-of-law purposes as if they were grouped in a single state. This aggregation simplifies the analysis without changing the substantive outcome.
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