ILLINOIS CONFLICT OF LAWS PROFESSOR DAVID L. FRANKLIN DEPAUL UNIVERSITY COLLEGE OF LAW

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1 ILLINOIS CONFLICT OF LAWS PROFESSOR DAVID L. FRANKLIN DEPAUL UNIVERSITY COLLEGE OF LAW INTRODUCTION Three Cncepts: Dmicile, Chice f Law, and Recgnitin f Judgments Essay: Generally will be a Multistate Essay questin Never n its wn: Often included with a family law questin Nt Subtle r Hidden: Usually quite easy t recgnize, but there are ften n clear right r wrng answers. DOMICILE AND CHOICE OF LAW A. Dmicile Dmicile is the mst imprtant way in which the law cnnects a with a. Persn can have dmicile(s). Dmicile can be acquired in tw ways: 1) By. Requires that: A persn must his previus dmicile; Establish a in the chsen dmicile; and Shw an fr an indefinite time (shwn by a persn s actins and statements taken as a whle) Example 1: Rahm, a mayral candidate, wns a huse in Chicag and lives there with his family. He mves t Washingtn D.C. t serve as Chief f Staff. He and his family rent a huse in Washingtn, they mve in mst f their clthes and persnal belngings, and they stay there mst nights. Meanwhile, Rahm rents ut his Chicag huse t a tenant n a year-lng lease, later extended by six mnths. But Rahm leaves a bed, tw TVs, a stere, and a pian in place in the Chicag huse, as well as ver 100 bxes cntaining family heirlms, china, bks, and ther sentimental items. He cntinues t pay incme and prperty taxes t the State f Illinis, his driver s license and car registratin are bth issued frm Illinis, his bank accunt is in Illinis, and he vtes in Illinis. Where is Rahm dmiciled? 2) By

2 Law establishes dmicile fr Individuals wh lack capacity fr prper intent Children take the dmicile f. If the parents are separated, the child takes the dmicile f the custdial parent. An emancipated minr can chse her wn dmicile. Crpratins: Generally the state where it is, but ther facts may prve relevant. B. Chice f Law: General Appraches A chice-f-law issue exists whenever the law f mre than ne jurisdictin arguably applies t. 1. Terminlgy The state in which the lawsuit is brught:. The law f that state:. Nte 1: D nt cnfuse chice f law with jurisdictin! Jurisdictin is whether the curt can decide a case. Chice f law is which law is used. 2. Three General Appraches t Chice f Law 1) apprach (First Restatement) 2) Interest Analysis 3) Mst Significant (Secnd Restatement) 3. Traditinal Apprach Each state determines the legal effect f all events, but nly thse events that ccur within its territry. As sn as a legally significant event ccurs, a becmes under the laws f the state where it ccurred. A right vests when the takes place that is necessary t give the plaintiff a _. Where a legal right vested Apply the law f that place. Example 2: Harry and Wanda are a married cuple wh live in the state f Tinnsylvania. One day Wanda and Harry are driving in a minivan in the state f West Carlina. While checking himself ut in the mirrr, Harry negligently drives int a ditch, and Wanda is injured. She sues Harry fr negligence in Tinnsylvania state curt. West Carlina law cntains a rule f spusal immunity; wives cannt sue their husbands in trt. Tinnsylvania law cntains n such rule. Their curts have adpted the traditinal apprach t chice f law. Shuld Harry be able t assert the defense f spusal immunity? Themis Bar Review, LLC IL Cnflict f Laws

3 TWO OTHER APPROACHES TO CHOICE OF LAW A. Gvernment Interest Analysis A law applies t a set f facts if its applicatin t thse facts wuld prmte the plicies and purpses underlying the law. If applicatin f law t the facts f the case is cnsistent with the purpse and plicy, the state is said t be. 1. Determine Which States are Interested If nly ne state is interested, there is a ; a curt shuld apply the law f the. If mre than ne are interested, there is a ; curt shuld apply the law f the. Nte 2: The curt is nt allwed t BALANCE the interests f different states. If neither is interested (un-prvided-fr case), a curt shuld apply the law f the. 2. The Key t the Interest Analysis Apprach Distinguish between laws and laws. Cnduct-regulatin laws: Laws designed t regulate cnduct (e.g., negligence, criminal laws, etc.) Lss-Shifting Laws: Immunize peple frm liability (e.g., immunity, vicarius liability, etc.) States have an interest in applying their cnduct-regulating laws when the wrngful cnduct ccurs, r when a state dmiciliary is injured (regardless f where). States have an interest in applying its lss-shifting laws when ding s wuld a state dmiciliary. Example 3: Harry and Wanda are a married cuple wh live in the state f Tinnsylvania. One day Wanda and Harry are driving in a minivan in the state f West Carlina. While checking himself ut in the mirrr, Harry negligently drives int a ditch, and Wanda is injured. She sues Harry fr negligence in Tinnsylvania state curt. West Carlina law cntains a rule f spusal immunity; wives cannt sue their husbands in trt. Tinnsylvania law cntains n such rule. Their curts have adpted the gvernmental interest analysis t chice f law. Shuld Harry be allwed t assert the defense f spusal immunity? IL Cnflict f Laws 2016 Themis Bar Review, LLC 3

4 B. The Secnd Restatement Mst Significant Relatinship Analysis Adpted in Illinis fr trt and cntract cases Apply the law f the state with t the particular issue in questin. T figure thse ut, the Secnd Restatement gives a list f seven principles. Three guiding principles clusters: 1) Prmting the relevant f the frum and ther interested states 2) interests: Certainty, unifrmity,, and simplicity 3) Prtecting the f the parties applies t planned transactins, nt unplanned transactins. Example f Intrductry Language fr Secnd Restatement Answers: The curt must determine which state has the mst significant relatinship t the issue in questin. In making this determinatin, the curt shuld strive t prmte the relevant plicies f the frum and ther interested states, advance systemic interests such as certainty, unifrmity, predictability, and simplicity, and prtect justified expectatins f the parties. Secnd Restatement lists a set f cntacts that shuld be taken int accunt fr specific types f cases (i.e., facts that cnnect an issue t a particular state). Secnd Restatement sets frth a rebuttable presumptin fr many specific types f cases. One mre tip: If n clear state has mre significant relatinship, curts will apply the as a tie-breaker. C. Recurring Issues 1. Depeçage Example 4: Harry and Wanda are a married cuple wh live in the state f Tinnsylvania. One day Wanda and Harry are driving in a minivan in the state f West Carlina. While checking himself ut in the mirrr, Harry negligently drives int a ditch, and Wanda is injured. She sues Harry fr negligence in Tinnsylvania state curt. West Carlina law cntains a rule f spusal immunity; wives cannt sue their husbands in trt. Tinnsylvania law cntains n such rule. Their curts have adpted the mst significant relatinship (Secnd Restatement) apprach t chice f law. Shuld Harry be allwed t assert the defense f spusal immunity? The applicatin f different states laws t. Under the apprach: usually prhibited Themis Bar Review, LLC IL Cnflict f Laws

5 Under the mst significant relatinship apprach and the interest analysis, curts will have t lk at each issue in questin and determine which state's laws apply. 2. Renvi When a curt applies the law f anther state, it applies f that state, including that state s. If the curt accepts the renvi and the ther state s chice-f-law rules pint back t the frum state culd result in an endless lp. In these cases, curts will generally reject the renvi. All appraches generally the renvi, unless the issues invlve prperty rights in land, in which case curts lk t the whle law f the place where the land is lcated including the chice-f-law rules. TORTS AND CONTRACTS A. Trts 1. Traditinal Apprach A trt case will be gverned by the law f the place where. The last event necessary t create a trt is the (i.e., apply the law f the place f ). Example 5: A car is defectively manufactured in Michigan. It is then negligently repaired in Gergia. Finally, it breaks dwn and crashes in Illinis, causing injury t the plaintiff. As a result f his injuries, the plaintiff misses ut n a lucrative business pprtunity in Califrnia. He sues the Michigan manufacturer and the Gergia repair shp in Illinis state curt. Illinis fllws the traditinal (First Restatement) apprach t chice f law. Which state s trt law shuld the curt apply? 2. Gvernmental Interest Analysis Apprach N special rules fr particular areas f law Curts must examine the purpse and plicies that underlie the cmpeting states laws t determine whether thse states are truly interested. Distinctins between tw types f laws: Cnduct-regulating vs. lss-shifting. Cnduct-regulatin laws: States have an interest when the wrngful cnduct (i) ccurs, (ii) causes there, r (iii) when f the state is injured. Lss shifting laws: States have an interest when a dmiciliary wuld. IL Cnflict f Laws 2016 Themis Bar Review, LLC 5

6 Example 6: Thelma and Luise are dmiciled in Califrnia. They drive tgether t Texas, where Thelma negligently drives ff the rad, injuring Luise. Luise sues Thelma in Califrnia. Thelma raises the defense that Texas has enacted a s-called guest statute, which immunizes drivers against lawsuits by passengers. The purpse f the statute is t prtect drivers insurance cmpanies frm fraudulent claims. Thelma s car is licensed in Califrnia, and that is where she bught her aut liability insurance. Califrnia has n guest statute and fllws interest analysis. Will the Califrnia curt apply Texas s guest statute? Lss shifting laws f the cmmn dmicile f the parties will always apply. Frum will apply its wn cnduct regulating law t cnduct within the frum. 3. The Secnd Restatement Curts in Secnd Restatement jurisdictins ften apply interest analysis principles. Curts must apply the law f the state with the t the issue in questin, including the applicatin f seven guiding principles. Cntains a list f cntacts t be balanced in trt cases: The place where ccurred The place where the cnduct tk place The, residence, place f, etc. f the parties The place where the was centered Presumptin: The law f the place f injury will usually be applied, but can be vercme if anther state has a mre significant relatinship. B. Cntracts 1. Chice f Law Clause General rule: Parties are free t chse the law that will gvern their - generally enfrceable (i.e., party autnmy ) Example 7: A mvie prducer and a mvie directr are n lcatin in Utah, discussing their upcming Western mvie. They decide t make the mvie tgether and they execute a cntract in Utah. The cntract states that the directr shall d all shting in persn n request. Because bth parties (and their lawyers) are familiar with the ways f Hllywd, the cntract states that it shall be interpreted accrding t the rules f Califrnia cntract law. During the filming f the climactic shtut, the prducer insists that the directr fire the gun himself. The directr refuses and strms ff the set, arguing that the phrase all shting in the cntract was limited t shting with the camera Themis Bar Review, LLC IL Cnflict f Laws

7 The prducer sues the directr in Utah state curt fr breach f cntract. Utah fllws the Secnd Restatement. Which state s law will the Utah curt apply? Exceptin: The f a cntract cannt be reslved slely by the parties chice f law. Secnd Restatement: Parties can chse the law that will apply t cntract validity if the state that they chse has a relatinship t the parties r transactin, r if there is sme ther fr the chice. But, the chice will still be ignred if applicatin f their chsen law wuld be cntrary t a fundamental plicy f the state with the mst significant relatinship t the issue. Example 8: Derrick and Jaquin are bth citizens f Illinis. They want t bet $10,000 n the Super Bwl. Gambling cntracts are unenfrceable in Illinis, s they specify in the cntract that the law f Nevada will gvern the agreement. Gambling cntracts are enfrceable in Nevada. They place the bet in Illinis. Derrick picks the Bears t win the game. Hwever, the Bears are nt in the Super Bwl, s Derrick lses. But Derrick refuses t pay. Jaquin sues him fr breach f cntract in Illinis curt. Illinis fllws the Secnd Restatement apprach t cnflicts f law. What law shuld the curt apply? 2. Traditinal Apprach If there is n effective chice-f-law clause in the cntract, traditinal apprach calls fr curts t apply the law f the place where the legally significant event ccurs. Generally, the place f will gvern issues f cntract frmatin, interpretatin, and validity, because that is the last act necessary t create a cntractual right. Example 9: A and B enter int a cntract ver the telephne. A is in Gergia, and B is in New Yrk. B makes an ffer t A, and A accepts. Then A breaches. Which law shuld apply? Issues related t the perfrmance f the cntract are gverned by the place f. 3. The Secnd Restatement Beynd the mst significant relatinship analysis, the Secnd Restatement lists three cntacts t be taken int accunt: 1) The place f cntracting,, and perfrmance; IL Cnflict f Laws 2016 Themis Bar Review, LLC 7

8 2) The place where the f the cntract is lcated; and 3) The lcatin f the. Sets ut a presumptin: If lcatin f and are the same, the law f that state presumptively applies. PROPERTY, CORPORATION, AND FAMILY LAW A. Prperty 1. Tw Types f Prperty 1) 2) a. Immvable Includes: and in land Under all three appraches, issues cncerning immvable prperties are gverned by the whle law f the place where (i.e., the situs ). Includes rules f the situs (renvi generally accepted) b. Mvables Divided int prperty and prperty 1) Tangibles The UCC allws parties t chse which law gverns and fills the gaps if they d nt. First and Secnd Restatements: Apply the law f the state where the were/was lcated at the time f the transactin. 2) Intangibles First Restatement: Apply the law f the state in which the intangible prperty was. Secnd Restatement: Lk t the seven guiding factrs 2. Issues Cncerning Successin f Prperty at Death Under bth First and Secnd Restatements, issues cncerning immvable prperty at death are gverned by: The law f the. Under bth First and Secnd Restatements, issues cncerning mveable prperty at death are gverned by: The law f the. Except: Many states will enfrce a clause in a will r trust Themis Bar Review, LLC IL Cnflict f Laws

9 If a will r trust is under the law f the place where it was made, curts will generally enfrce it. B. Crpratins Crprate law can be divided int: issues and issues. Internal Affairs: Cncern the rights f the varius actrs within the venture itself. Gverned by the law f. External Affairs: Invlve transactins with third parties wh are utsiders t the crprate venture. Under bth Restatements, the crpratin is treated like. Bth the place f incrpratin and principle place f business are ptentially relevant cntacts under the Secnd Restatement. Exam Tip 1: Wrkers' cmpensatin situatins d nt generally present chice f law issues. C. Family Law 1. Marriage Traditinal Apprach: The validity f a marriage is gverned by the law f the place where. Example 10: Cmmn-law marriage that is valid in Califrnia is deemed valid in ther states. Exceptin: If the marriage vilates a particularly strng f the dmicile f either party, the curts may refuse t recgnize it (e.g., incestuus marriage, plygamy, etc.). First Restatement makes a distinctin between the validity f marriage and the incidents f marriage. Incidents f marriage issues are determined by the law f the place where. Secnd Restatement: A marriage that was valid where it was celebrated will be valid, unless it vilates public plicy f the state with the with the parties at the time f marriage. 2. Marital Prperty Any interest in prperty that ne spuse acquires in the prperty f the ther spuse by virtue f marriage ther than an expectatin f inheritance. Immvable prperties are gverned by the whle law f the state where. IL Cnflict f Laws 2016 Themis Bar Review, LLC 9

10 Mvable prperties are gverned by the law f the state where at the time the prperty was. Cmmunity prperty remains cmmunity prperty, even if the prperty is mved t a nncmmunity prperty state. If marital funds r prperty are used by ne spuse t acquire prperty in anther state, the prperty that is acquired has the same character as:. DEFENSES AGAINST APPLICATION OF FOREIGN LAW A. Pleading Traditinal apprach: The laws f anther state r cuntry were nt cnsidered law at all, but as t be prven in curt. Mdern apprach: Mst states, including Illinis, allw their curts t take f the laws f ther states. Federal curts must take judicial ntice f the laws f, but they require pleading and prf f law. B. Defenses 1. Penal Law Exceptin Under all three general appraches, a curt enfrce the laws f anther state. Laws that prvide fr recvery are nt cnsidered t be penal laws. 2. Public Plicy Exceptin A curt may refuse t apply freign law if that law vilates a and public plicy f the frum state. If successful, the result is. Can be used t reject a freign cause f actin, but nt a freign. Example 11: During the Nazi era, a German-Jewish emplyee brught a wrngful discharge claim in New Yrk curt against his German emplyer. The emplyer defended against the claim by pinting ut that Nazi law required him t fire all f his Jewish emplyees. The New Yrk curt fund this defense t be against public plicy, but allwed the defense. Exam Tip 2: Gvernment Interest Analysis des nt cntain a public plicy exceptin. 3. Substance-Prcedure Distinctin Prcedural issues are always gverned by Themis Bar Review, LLC IL Cnflict f Laws

11 Example 12: The plaintiff is suing n a Mississippi cntract in an Alabama state curt. Alabama requires briefs t be stapled, but Mississippi allws paper clips. Alabama fllws the First Restatement f cnflicts. Must the briefs be stapled? General principle: substantive laws regulate peple s behavir curt, and prcedural laws regulate peple s behavir curt. Parl Evidence Rule This is a rule. The purpse is t make sure that peple in the real wrld reduce their cntracts t writing. Privilege First Restatement: The existence and validity f a privilege is cnsidered t be a issue gverned by frum law. Secnd Restatement: The law f the state with the mst significant relatinship with the cmmunicatin shuld apply. But, the Secnd Restatement has a strng presumptin in favr f the law that wuld admissin f the evidence. Damages First Restatement: Treats as substantive issues, but statutry damage caps are cnsidered. Secnd Restatement: Gverned by the law f the state with the mst t the issue Hwever, a damage cap is a rule t prtect defendants. Thus, under interest analysis, a state will generally apply its wn damage caps nly t prtect a defendant frm that state. Statute f Limitatins First Restatement: Cnsidered prcedural unless the statute f limitatins is inextricably bund up with a, in which case they are cnsidered substantive. Secnd Restatement: Generally, frum applies its wn statute f limitatins if it wuld the claim. If it wuld permit the claim, it shuld apply unless: Maintenance f the claim wuld serve f the frum; and The claim wuld be barred under the statute f limitatins f a state having a with the issue. IL Cnflict f Laws 2016 Themis Bar Review, LLC 11

12 4. Brrwing Statutes Bar suits n freign causes f actin that are precluded under either the statute f limitatins r the statute f limitatins f the place where the cause f actin arse, whichever is. CONSTITUTIONAL LIMITATIONS A. Cnstitutinal Limitatins n Chice f Law A state may apply its wn substantive law t an issue nly if the state has a significant cntact r a significant with the issue such that applicatin f its wn law is neither nr. This rule enfrces bth the Due Prcess Clause and the Full Faith and Credit Clause. The frum state is entitled t apply its wn law t any issue that is traditinally viewed as. Example 13: Willie is married t Minnie. They live in Wiscnsin. Willie cmmutes t wrk in Minnesta. Willie is killed in an aut accident in Wiscnsin. The driver f the ther car was als a Wiscnsin resident. After his death, his widw Minnie mves t Minnesta and sues Willie s insurance cmpany seeking damages frm the accident. The insurance cmpany des business in all 50 states. Can the Minnesta curt cnstitutinally apply its wn substantive law t the case? Example 14: A class actin is brught in Kansas state curt n behalf f 28,000 class members alleging that they are entitled t delayed ryalty payments frm natural gas leases. Fewer than 1000 f the class members are Kansas residents, and less than ne percent f the leases are lcated in Kansas. Can the Kansas curt cnstitutinally apply the substantive law f Kansas t all the claims? Example 15: Can the Kansas curt apply its wn statute f limitatins t all 28,000 claims? Under the Full Faith and Credit Clause, a state may nt refuse t entertain claims under anther state s law simply because that law. The Cnstitutin des nt require state curts t respect the f sister states Themis Bar Review, LLC IL Cnflict f Laws

13 RECOGNITION OF FOREIGN JUDGMENTS A. Full Faith and Credit General Rule: A judgment frm anther state be given the same effect in the enfrcing state as it wuld have been given in the rendering state. All kinds f judgments are prtected by the Full Faith and Credit Clause 1. Preclusin Claim Preclusin, r Issue Preclusin, r Fr a judgment t have preclusive effect, the judgment must be,, and. There is n public plicy defense t enfrcing the judgment f a sister state. Example 16: Imagine Mississippi law makes it a crime t enter int gambling cntracts and makes such cntracts vid. Tw Mississippi residents nnetheless enter int such a cntract in Mississippi. The winner f the bet then sues the lser n the cntract in Missuri, having smehw btained persnal jurisdictin ver the defendant. The Missuri curt purprts t apply Mississippi law, but it cmpletely ignres the fact that Mississippi law makes the cntract illegal and vid. The Missuri curt awards a judgment t the plaintiff. The plaintiff brings the judgment back t Mississippi fr enfrcement. Must it be enfrced? 2. Last in Time Rule If a valid, final judgment is incnsistent with anther valid, final judgment, the judgment is entitled t full faith and credit. Example 17: The winner f the bet sues the lser first in Mississippi. Naturally, he lses, since the cntract is vid under Mississippi law. Nw he ges t Missuri and sues again. The Missuri curt ignres the cntrary judgment and awards a judgment t the plaintiff. The plaintiff brings the Missuri judgment back t Mississippi fr enfrcement. Must it be enfrced? Valid Judgment: One rendered by a curt with prper Even errneus judgments may be cnsidered valid. Judgments invlving fraud are nt valid and nt entitled t full faith and credit. Final Judgment: N utstanding appeals; the judgment is nt. IL Cnflict f Laws 2016 Themis Bar Review, LLC 13

14 On the Merits: Substantive issues were decided by a curt (excludes dismissals fr lack f jurisdictin and dismissals withut prejudice). B. Special Categries f Judgments 1. Wrkers' Cmpensatin If an emplyee gets an award in State A, he can still get a supplemental award in State B, unless the language f State A bars additinal recvery using. 2. Divrce Decrees A divrce is a judgment. Fr a state t grant a divrce, at least ne spuse must be in that state. If curt has ver bth spuses, the divrce judgment is called a divrce decree. All f the curt's decrees related t the divrce will be entitled t full faith and credit. If the curt has persnal jurisdictin nly ver ne party and nt the ther, that is called an divrce. The party seeking ex parte divrce must establish dmicile. Ex parte divrces are entitled t full faith and credit, even thugh there was n persnal jurisdictin ver the absent spuse. The enfrcing state des nt have t give full faith and credit t the divrcing state s determinatin f. The rule nly applies t the divrce decree itself Divisible Divrce Dctrine. 3. Child Custdy and Supprt Decrees Child supprt rders are mdifiable. They are nt final. Unifrm Child Custdy Jurisdictin and Enfrcement Act ( UCCJEA ): One state gets exclusive jurisdictin t make an (usually the child s hme state ). All ther states must give full faith and credit t that decisin. The decisin can be mdified in a different state nly if (i) the riginal state n lnger has a t the child r parent, and (ii) the curt satisfies the initial requirements fr exclusive jurisdictin. 4. Freign Cuntry Judgments Nt subject t full faith and credit Usually enfrced as a matter f. In sme cases, American curts have refused t enfrce freign cuntry judgments where the underlying law was t the state's public plicy Themis Bar Review, LLC IL Cnflict f Laws

15 Mst states, including Illinis, have adpted the Unifrm Freign Mney Judgment Recgnitin Act nn-mney judgments are nt cvered by the statute but are usually enfrced by states. [END OF HANDOUT] IL Cnflict f Laws 2016 Themis Bar Review, LLC 15

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