Conflict Of Laws Research Paper

1.2 Private International Law

The term ‘conflict of laws’ was coined in Europe by the Dutch jurist Ulricus Huber (1624–1694) and is the term primarily used in the United States, Canada, and more recently in England. In the rest of the world, the corresponding term is ‘private international law,’ which was coined in the United States by Justice Joseph Story (1779–1845). Neither term is fully descriptive of the subject matter.

The term ‘conflict of laws’ seems to assume that, in all cases that have contacts with more than one state, each involved state has an active or passive desire, claim, or ‘interest’ to apply its law, and that these claims ‘conflict’ in the sense of being of roughly equal validity and intensity. Both of these assumptions have been questioned throughout history. Indeed, even accepting the propriety of using anthropomorphic terms to describe state objectives, both the hypothesis that a state is ‘interested’ in the outcome of disputes between private persons and the concomitant assumptions that such an interest is implicated in each multistate case or that the application of a state’s law indeed effectuates that interest are subject to intense debate.

The term ‘private international law’ seems less loaded and more descriptive, but also more idealistic than the term ‘conflict of laws.’ The word ‘international’ describes an important aspect of the disputes that fall within the scope of this subject—they are international (or interstate) in that they have contacts with more than one state. The word ‘private’ echoes the civil-law division between private and public law and signifies that only private-law disputes fall within the scope of this subject, that is, disputes arising from relations between persons other than a state or its subdivisions acting in the exercise of governmental authority. In contrast, public-law disputes of an international character, such as those between sovereign countries or other international-law persons, fall within the scope of the public international law, also known as the law of nations.

1.3 The Source Of Conflicts Law

The term ‘private international law’ can be misleading to the extent it gives the impression that there exists a distinct body of law universally observed by most nations which provides solutions to multistate private law disputes. Reality is much different. Except for a few international conventions that avoid or resolve conflicts through substantive or conflicts rules, international law has little to say on the subject. Thus, for the most part, the task of resolving multistate private-law disputes is left to individual countries, subject to certain mild restraints imposed by international law. Accordingly, conflicts law is essentially national law. Similarly, within the United States, conflicts law is—de facto and for the most part—state law rather than federal law. Although the United States Constitution provides the power to federalize the law of interstate conflicts, this power has not been exercised in any appreciable degree. Thus, the initiative for resolving interstate and international conflicts remains with the states, albeit subject to some federal constitutional, treaty, and statutory constraints.

2. The Source Of Conflicts Of Laws

2.1 Legal Diversity

Conflicts of laws occur because each state has its own system of private law and because human Activity often is not confined to a single state. If either one of these conditions is missing, conflicts do not arise. One who lives in complete isolation and avoids contact with nonlocal residents and foreign products need not be concerned with conflicts of laws. Similarly, one whose contacts with nonlocals are confined to residents of states that have identical laws would not need to be concerned with problems caused by legal diversity. Needless to say, human Activity transcends national borders and countries do have different laws. For example the contracts law of France differs from that of England, which in turn differs in some respects from that of Scotland, and the torts law of the Mexican province of Sinaloa differs from that of the State of Arizona, which in turn differs from that of California. Indeed, differences exist not only between countries that belong to different legal traditions, such as France and England which belong to civil-law and commonlaw traditions, respectively, but also between countries that partake of the same legal tradition, such as France and Italy, or England and the United States, respectively. Moreover, such differences also exist as between or among the component units of a single country, such as the states of the United States, or the provinces of Mexico or Canada, or in the United Kingdom between England and Scotland.

2.2 Interpersonal Or Intertemporal Conflicts Law

This legal diversity is usually coextensive with a distinct territory that is administered by a governmental unit with authority over that territory. In some instances, however, the existence of a distinct body of law, such as family law or the law of personal status, is not attached to a particular territory but rather to a particular ethnic or religious group, regardless of territory. Conflicts among these laws are referred to as interpersonal or interreligious conflicts and are not discussed here. Also not discussed here are the so-called intertemporal conflicts of laws, namely conflicts that arise when a law purports to regulate or is sought to be applied to events or transactions that occurred before its enactment (retroactive application).

3. The Three Parts Of Conflicts Law

While many problems of conflict of laws are resolved through negotiation, mediation, or arbitration, most of them end up in litigation. In planning for this eventuality, or when forced to confront it, parties involved in multistate Activity must keep in mind three major questions: (a) Where can or should litigation be initiated? (b) Which law will the court apply? and (c) Where can the resulting judgment be enforced? These three questions correspond to the three consecutive phases that comprise the process of judicial resolution of most conflicts problems, namely: (a) jurisdiction; (b) choice of law; and (c) recognition and enforcement of judgments. In the United States and other commonlaw systems, these are also the three major divisions of the law of conflict of laws. In contrast, in civil-law systems, jurisdiction and judgment-recognition form part of ‘international procedural law’ rather than of private international law, which deals primarily with choice-of-law and secondarily with the law of nationality and citizenship and the condition of aliens.

The jurisdictional question and the choice-of-law question are analytically distinct questions although in many cases they are practically interrelated. Indeed, the two questions are oriented in different directions and seek to satisfy different ends. The jurisdictional question focuses on the relationship between the defendant and the state of litigation (‘forum state’) and asks whether that relationship is sufficiently close as to justify subjecting the defendant to litigation in that state and utilizing that state’s judicial resources to adjudicate the particular dispute. The choice-of-law question focuses on both parties and their dispute and seeks to identify that state, be it the forum state or another state, whose relationship to the dispute is such as to render most appropriate the application of its law to the merits of the dispute. In many cases, the same relationship that forms the basis of a state’s jurisdiction to adjudicate the case can also be the basis for applying that state’s law to the merits. This, however, is by no means true in all cases.

As said above, the law of conflict of laws does not deal with public-law disputes, namely, disputes involving a state in the exercise of governmental authority, such as in the enforcement of its criminal laws. Indeed, in such disputes, all three of the above questions are merged into one—the question of jurisdiction. When a state has jurisdiction to try a criminal case, that state applies its own law and enforces the resulting judgment. It does not apply the criminal laws nor enforce the criminal judgments of another state. Cases in which more than one state have concurrent jurisdiction, such as cases involving trans-border crimes, are addressed and resolved as jurisdictional conflicts—for example through extradition—rather than as choice-of-law conflicts.

4. Jurisdiction

In its broadest sense, jurisdiction is the power of a decision-maker to resolve a dispute in a binding manner. When, as in the context pertinent here, the decision-maker is a court or other tribunal, the dispute is resolved through adjudication and the power to do so is called judicial or adjudicatory jurisdiction. It can be contrasted with legislative or prescriptive jurisdiction, which is the power to enunciate norms governing the merits of the dispute. The source of judicial jurisdiction is the law that constitutes the particular court and thus it is a national or state law rather than a supranational or suprastate law. However, in some countries the exercise of jurisdiction is restricted by international treaties, such as the Brussels-Lugano conventions among several European countries, while in some federal systems like the United States, the exercise of jurisdiction by the constituent states must conform to certain outer limits imposed by federal law, primarily the due process clause of the federal constitution. Although these super-arching sources impose a certain degree of uniformity on the affected states, the jurisdictional laws of the various countries or states continue to differ widely in both nomenclature and substance.

Thus, each state delineates for itself the bases on which its courts are authorized to adjudicate cases with nonlocal elements ( jurisdiction in the international sense) and then allocates internally that authority among the various geographical subdivisions or judicial districts within that state (internal or local jurisdiction or venue) and among its various general or specialized courts, tribunals, or other adjudicating agencies in each locality (competence or subject-matter jurisdiction). To render a valid judgment, a court must, in the absence of acquiescence by the defendant, satisfy all three types of jurisdiction.

In the United States, for historical reasons, a state court’s interstate or international jurisdiction is divided into personal jurisdiction (in personam) and jurisdiction over things (in rem). Personal jurisdiction, which is the power to adjudicate claims against a defendant and to bind him or her personally, is further subdivided into general and specific jurisdiction. General jurisdiction exists when the defendant is domiciled, incorporated, has its principal place of business, or conducts ‘continuous and systematic’ business in the forum state. Historically, the service of process on the defendant within the territory of the court was also a basis of general jurisdiction but the constitutionality of this basis is now questionable, at least when it is not supported by other defendant contacts. When a court has general, jurisdiction, the court may adjudicate any claims against the defendant, even claims unrelated to the defendant’s contacts with, or Activity in, that state. In contrast, when a court has only specific jurisdiction, the court may only adjudicate claims against the defendant that arise from the defendant’s contacts with, or Activity in, the forum state.

Jurisdiction over things is based on the presence of a thing within the territory of the forum state and is subdivided into jurisdiction in rem and quasi in rem. When the lawsuit seeks to determine the parties’ rights in, or relating to, that thing, the court has jurisdiction in rem and may adjudicate those rights even if it does not have personal jurisdiction over the defendant. In contrast, when the lawsuit seeks to vindicate claims against the defendant that are unrelated to that thing, the court is said to have quasi in rem jurisdiction. Since 1977, this basis of jurisdiction is—in the absence of other defendant contacts—constitutionally insufficient unless the claim has been previously reduced to a judgment rendered by another court that had jurisdiction over the defendant.

In other countries, jurisdictional bases are in some respects broader and in other respects narrower than those described above. For example, some European countries theoretically allow the exercise of what might be called quasi in rem general jurisdiction, namely, the adjudication of claims against a defendant who owns property within the forum state, even if the claims are unrelated to the property or vastly exceed its value. On the other hand, while most countries agree that the defendant’s domicile, incorporation, seat, or principal place of business in the forum state is a basis for general jurisdiction, they reject general jurisdiction based on either service of process alone or ‘doing business’ within the forum state.

Beyond this, most countries and states agree that the defendant’s actual or imputed consent is a sufficient basis of jurisdiction even when jurisdiction is otherwise lacking, that contractual claims can be adjudicated in the place where the contract was to be performed, and that claims arising from torts can be adjudicated in the place where the wrong was committed or the injury foreseeably occurred.

Because of the differences between the jurisdictional bases recognized by the various states, but also because, even when they do not disagree, these states may authorize more than one jurisdictional basis for certain categories of cases, a given case may often be subject to the concurrent jurisdiction of more than one state. In such a case, the plaintiff, who always has the choice of where to file the lawsuit, may shop for the most advantageous forum, a phenomenon known as forum shopping. One of the mechanisms devised by common-law systems to discourage this phenomenon is the doctrine of forum non conveniens which allows a court to decline to adjudicate the lawsuit if, despite the existence of jurisdiction, litigation in that state would be seriously inconvenient and another more convenient forum is available to the plaintiff, Another mechanism which is sanctioned in varying degrees by most systems but which is available only when the disputants are parties to a pre-existing contractual relationship, is a choice-of-forum clause, namely a clause by which the parties agree that disputes arising from that relationship will be litigated in the courts of the agreed upon state.

5. Choice Of Law

When a court exercises its jurisdiction to adjudicate a case with foreign elements, the court applies its own procedural law to the conduct of the proceedings before it. With regard to the merits of the case, however, the court may or may not apply its own substantive law. This is the choice-of-law question and it is answered by the forum’s choice-of-law rules, which may be established legislatively as in most civillaw systems or through judicial precedent as in most common-law systems including those of the United States. These rules may point to the law of either the forum state or to another state, depending, inter alia, on each state’s pertinent contacts with the case. For example, in tort cases, these rules may point to the state where the tort was committed or the injury occurred (lex loci delicti), in contract cases to the state where the contract was made (lex loci contractus), and, in cases involving immovable property, to the state where the property is situated (lex rei sitae).

The above three rules are typical of what is usually referred to as a traditional choice-of-law system. For much of the twentieth century, these rules and others like them were more or less uniformly followed in most countries. These rules place a high premium on providing certainty and predictability in the choice of the governing law, leaving little room for judicial discretion. As the above examples illustrate, these rules give no preference to the forum state and indeed they aspire to produce international or interstate uniformity, that is, make it more likely that each multistate case will be governed by the same law regardless of where the case is litigated. The choice of the governing law is based not on the content of the laws of the involved states but rather on the territorial or other contacts of those states to the case at hand. Once a state is found to have the predesignated contact, e.g., the place of the injury, that state’s law is applied almost automatically and—save for some limited exceptions—regardless of its content, its underlying policy, or the substantive quality of the result that such application produces. Indeed, the objective of the traditional choice-of-law process is not supposed to be to ensure a substantively ‘just’ result (material justice), but rather to ensure the application of the spatially appropriate law (conflicts justice).

Traditional choice-of-law rules like the ones described above continue to be followed in many countries, including some parts of the United States. However, in the 1960s, a movement emerged in the United States which has been characterized as a conflicts revolution, and which appeared to reject both the rules and the goals of the traditional choice-of-law process. At least in tort and contract conflicts which are the most numerous, preconceived choice-of-law rules were abandoned in favor of various ‘approaches’ which, although different in many respects, reject the notion of pre-selecting the applicable law on the basis of a single territorial contact and instead leave the selection to be made by the court on a case-by-case basis. The choice is to be based on multiple contacts and factors, such as the content of the conflicting substantive laws and their underlying policies, the presumed ‘interests’ or claims of the involved states to apply their respective laws, and the substantive quality of the result that the chosen law will produce in the individual case.

Parallel movements have also appeared in other countries, though nowhere with the same intensity. For example, European systems now appear more willing than in the past to entrust courts with a certain degree of flexibility in choosing the applicable law. Although most of these systems still rely on statutory choice-of-law rules, the rules enacted in the last quarter of the twentieth century are ‘softer’ than those of the preceding era. For example, some of these rules base the choice of the applicable law not on a single territorial contact but rather on multiple contacts, usually described by the phrase ‘strongest’ or ‘closest connection,’ while other rules contain clauses that authorize courts to deviate from the predesignated law in appropriate circumstances, depending on the needs of the particular case.

As a result of the above movements, the choice-of-law process at the beginning of the twenty-first century is more flexible, less predictable, and more ethnocentric than it was only one generation earlier. The possibility that the forum state will apply its own law to most multistate cases adjudicated by its courts is now greater than in much of the previous century, especially in the United States. In turn, this increases the possibility that a given case will be governed by a different law depending on where it is litigated, and this in turn reinforces the incentive for forum shopping described earlier.

Yet, while national conflicts systems have been gradually diverging in most respects, they have also been converging in at least one important respect. Most of them now recognize the principle of party autonomy, namely the notion that parties to a contractual relationship should have the power to agree in advance on the law that will govern disputes arising from that relationship. Although this is an ancient principle whose origin can be traced as far back as ancient Greece, it has had a checkered history through the centuries. By the second half of the twentieth century, however, this party autonomy acquired the status of a universal principle and is now sanctioned in one form or another by most countries in the world. In fact, some of these countries have extended this principle beyond ordinary contracts and have made it available to matrimonial agreements, other family-law agreements, and even unilateral juridical acts such as testaments.

The use of a choice-of-law clause, especially when combined with a choice-of-forum clause or an arbitration clause, can provide parties with a modicum of predictability. This is a good antidote to the uncertainty generated by the movements described above. This antidote, however, can only work in some cases. For example, the principle of party autonomy is not available in cases such as torts in which the disputants are not parties to a pre-existing relationship. Second, while this principle is recognized in most countries, it is also subject to several limitations and exceptions that differ from country to country. Thus, the possibility that choice-of-law clauses can be enforced in some countries but not in others remains, and with it the possibility of a different outcome depending on where the case is litigated.

6. Recognition And Enforcement Of Foreign Judgments

One of the many differences between local and multistate cases is the increased possibility that in multistate cases a judgment may have to be enforced in a state other than the one in which it was rendered. This will be the case if the defeated litigant ( judgment debtor) does not voluntarily comply with the judgment and does not have sufficient assets in the forum state against which the successful litigant ( judgment creditor) can execute the judgment. In such a case, the creditor will seek to have the judgment recognized and enforced in another state that has jurisdiction over the debtor and in which the debtor has sufficient assets. This section discusses the requirements under which the second state will recognize such a judgment.

As between states of the United States, these requirements are prescribed by federal law, primarily the Full Faith and Credit Clause of the Constitution. As interpreted by the Supreme Court, this clause requires each state to give to a judgment of a sister state the same effect that the judgment had in the state of rendition, provided that the judgment is ‘final,’ it is ‘on the merits,’ and it was rendered by a court that had jurisdiction under its own law which must conform with federal due process standards. Once these requirements are met, the judgment must be recognized and may not be reviewed on the merits, even if it applied the wrong law or reached a result that contravenes the public policy of the second state. The reason for this strict regime is the national policy of finality embodied in the doctrine of res judicata, which seeks to conserve judicial resources and protect party expectations by prohibiting re-litigation of disputes that have been finally decided.

The Full Faith and Credit Clause does not apply to the judgments of foreign countries and thus American courts are not constitutionally compelled to enforce such judgments. Nevertheless, as a matter of comity, American courts recognize foreign-country judgments that meet the requirements for recognizing a sisterstate judgment, but also reserve the right to refuse recognition on certain grounds that are not available with regard to sister-state judgments. For example, recognition may be refused if the judgment does not satisfy American jurisdictional standards, even if it does satisfy the foreign-law standards; if the judgment is one for taxes or penalties; or if it was rendered in a system that does not provide impartial tribunals or does not satisfy certain minimum standards of procedural fairness, or contravenes the public policy of the recognizing court.

In many other countries foreign judgments are recognized under similar but somewhat less hospitable standards. For example, in some countries recognition depends on whether the rendering court had applied the law that would have been chosen under the choice-of-law rules of the recognizing court or had reached a substantially equivalent result. In other countries, recognition is usually denied on public policy grounds to judgments awarding ‘excessive’ sums of money, especially American judgments imposing punitive damages. Finally, some countries condition recognition on reciprocity, that is, on whether the country of rendition would recognize similar judgments from the second country, while other countries refuse recognition outright in the absence of a treaty requiring such recognition.

One such treaty of increasingly growing importance is the Brussels Lugano Convention on Jurisdiction and the Recognition and Enforcement of Judgments among the member states of the European Union and the European Free Trade Association. This Convention establishes a comprehensive regime for jurisdiction and judgment-recognition that approximates in important respects the regime that exists within the United States. With regard to defendants domiciled in a member state, the Convention defines the permissible bases of jurisdiction and then provides that a judgment rendered by a court that satisfies those bases must be recognized in the other member states without review of the merits and subject to only limited exceptions such as public policy, lack of proper and timely notice, or conflict with a prior judgment entitled to recognition under the Convention or a judgment of the recognizing state. As of the time of this writing, an international convention on jurisdiction and judgment recognition is being negotiated under the auspices of the Hague Conference of Private International Law which includes countries from all continents.

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