CONFLICT OF LAWS — ANNOTATED MODEL ESSAY
This essay models a high-scoring response covering choice of law for a tort (vesting vs. most-significant-relationship), a contractual choice-of-law clause, and recognition and enforcement of a sister-state judgment. Read the black text as your timed answer; the gold boxes explain what each move earns.
Paula, a domiciliary of State X, was injured when a charter bus operated by Coach Co. crashed in State Y. Coach Co. is incorporated and headquartered in State Y. Paula bought her ticket online while at home in State X. State X law allows recovery for negligent infliction of emotional distress without physical impact; State Y requires physical impact. Paula sues Coach Co. in State X court.
Paula's ticket contained a clause stating that "all claims shall be governed by the law of State Y," and a separate clause selecting State Z courts for any dispute. State Z has no relationship to the parties or the accident.
Separately, before this suit Paula obtained a default money judgment against Coach Co. in State W (where she had also been treated) for related medical-billing claims; Coach Co. never appeared. Paula now seeks to enforce that State W judgment in State Y.
(1) Which state's tort law governs Paula's emotional-distress claim under (a) the vested-rights approach and (b) the most-significant-relationship approach? (2) Is the contractual choice-of-law clause enforceable? (3) Must State Y recognize and enforce the State W default judgment?
Model Answer — with annotations
Black text is the answer you could realistically write under timed conditions. The gold boxes explain why each move earns points.
I. Choice of Law for the Tort Claim
A forum applies its own choice-of-law methodology. The two principal approaches are the traditional vested-rights approach (First Restatement) and the most-significant-relationship approach (Second Restatement).
Under the vested-rights approach, tort claims are governed by the law of the place of the wrong — the place where the last event necessary to make the actor liable occurred, i.e., where the injury was sustained (lex loci delicti). Paula was injured in the State Y crash, so under the First Restatement, State Y law governs. State Y requires physical impact, which would bar her impact-free emotional-distress claim unless she suffered physical injury in the crash.
Under the most-significant-relationship approach, the court applies the law of the state with the most significant relationship to the occurrence and the parties, considering contacts such as where the injury occurred, where the conduct causing the injury occurred, the parties' domicile and place of business, and where the relationship is centered, all evaluated in light of the Second Restatement's general principles (the policies of the forum and other interested states, certainty, and the protection of justified expectations). Here, the injury and Coach Co.'s conduct, incorporation, and headquarters are all in State Y; only Paula's domicile and ticket purchase are in State X. State Y has the most significant relationship, so its law — including the impact requirement — likely governs under the Second Restatement as well.
I would also note interest analysis as an alternative: State X has an interest in compensating its injured domiciliary, while State Y has an interest in limiting the liability of its resident businesses. Because both states have a genuine interest, this is a true conflict; a court applying governmental-interest analysis would often apply forum (State X) law, but the Second Restatement's contacts still point to State Y here.
II. Enforceability of the Choice-of-Law Clause
Parties may by contract choose the governing law, and courts generally enforce a choice-of-law clause if the chosen state has a substantial relationship to the parties or transaction (or there is another reasonable basis) and applying the chosen law does not violate a fundamental policy of a state with a materially greater interest whose law would otherwise govern. The clause selects State Y law. State Y has a substantial relationship: it is the place of the accident and Coach Co.'s home. Applying State Y law is therefore proper, and the clause is enforceable as to the law governing the claim.
The separate forum-selection clause naming State Z courts is a distinct question. Although State Z has no relationship to the parties, forum-selection clauses are generally enforceable unless unreasonable or the product of fraud or overreaching. A clause selecting a wholly unrelated, inconvenient forum may be challenged as unreasonable, but here the issue is the choice of governing law, not where suit is brought; Paula sued in State X, and the State Y choice-of-law clause is independently enforceable regardless of the forum-selection clause.
III. Recognition of the State W Default Judgment
Under the Full Faith and Credit Clause, a state must recognize and enforce a sister-state judgment that is final, on the merits, and rendered by a court with proper jurisdiction. A default judgment is entitled to full faith and credit; that the defendant did not appear does not by itself bar recognition. The enforcing court may not review the merits.
The one defense Coach Co. may raise is lack of personal or subject-matter jurisdiction in the rendering court (State W). Because Coach Co. never appeared, it did not litigate jurisdiction and may collaterally attack the State W judgment on the ground that State W lacked personal jurisdiction over it. If State W had a constitutional basis for jurisdiction — for example, Coach Co. purposefully availed itself of State W (where Paula was treated and the billing claims arose) — the judgment is valid and State Y must enforce it. If State W lacked minimum contacts with Coach Co., the judgment is void and need not be recognized.
Defenses such as that State W law differs from State Y law, or that the judgment is merely erroneous, are not grounds to deny full faith and credit; only lack of jurisdiction, lack of finality, or (narrowly) penal judgments or extrinsic fraud excuse recognition. Assuming State W had jurisdiction, State Y must recognize and enforce the judgment.
- Answers the comparative call directly, applying both the vested-rights (lex loci delicti) and most-significant-relationship approaches and carrying each to a merits outcome.
- Adds governmental-interest analysis and correctly labels the situation a true conflict.
- Applies the substantial-relationship and fundamental-policy limits to uphold the choice-of-law clause.
- Separates the choice-of-law clause from the forum-selection clause and analyzes each under its own standard.
- States Full Faith and Credit elements and correctly holds that a default judgment is enforceable.
- Identifies collateral attack on jurisdiction as the defaulting defendant's only defense and rejects the non-defenses (differing law, mere error).
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