By: Jake Strawn
In our ever-expanding, diverse society, we are all familiar with conflict. In fact, it is safe to say that most of us have been confronted with conflict at one point or another, whether at home, school, or work. Most of the time, we know how to handle that conflict. However, sometimes we are faced with a type of conflict we were not expecting: a conflict of laws. Today, it is no longer safe to assume, simply because you are present, operate a business, or provide insurance in Tennessee, that Tennessee law will apply to the conflict that you are facing. While most of us are familiar with the conflict between state law and federal law, the conflicting laws of different states tend to make things a little more complicated.
For instance, let’s say that a driver from Mississippi is involved in a motor vehicle accident with a driver from Tennessee while driving through Tennessee. The driver from Mississippi is injured in the collision. Fast forward two years: Tennessee has a one-year statute of limitations for personal injury causes of action. On the other hand, Mississippi has a three-year statute of limitations. For whatever reason, the Mississippi driver chooses not to file suit in Mississippi. Consequently, he brings his suit in Tennessee. Moreover, the Mississippi driver argues that, because he is a resident of Mississippi, the three-year statute of limitations should apply. Here is our conflict: Tennessee law would bar the Mississippi driver’s claim while Mississippi law would allow it. Clearly, both states have interests in the matter. What law will the Tennessee court apply?
As illustrated by the hypothetical above, cases are won and lost on conflicts of law issues. Fortunately, there is a body of law in place that enables Tennessee courts to determine the correct law to apply to these head-scratching situations. Though the process is arguably mechanical, there is plenty of room on each side for good-ole-fashioned lawyering. First, a Tennessee court will need to determine whether the conflicting laws are substantive or procedural. Tennessee, the forum court, will always apply its own procedural law. As you can imagine, the characterization of a law as “substantive” or “procedural,” in most cases, is no easy determination.
Upon a finding that the conflicting laws are substantive, a Tennessee court is then required to classify the conflicting laws. In my practice, there are three main areas of classification: tort, property, and contract. While property and contract have their own set of rules, this article focuses on the set of rules governing tort. With tort conflicts, Tennessee has adopted the approach of the Second Restatement. The Second Restatement calls a Tennessee court to apply the law of the state which, with respect to that issue, has the most significant relationship to the occurrence and the parties. The Second Restatement provides several factors that serve as a backdrop for the court to consider during this analysis:
a) the needs of the interstate and international systems
b) the relevant policies of the forum
c) the relevant policies of other interested states and the relative interests of those states in the determination of the particular issue
d) the protection of justified expectations
e) the basic policies underlying the particular field of law
f) certainty, predictability, and uniformity of result
g) ease in determination and application of the law to be applied. Restatement (Second) of Conflicts of Law § 6.
Though this is an expansive list, a court would generally interpret these factors under an “interest analysis” lens. In other words, “what state has the greater interest?”
Moreover, to assist the court in the analysis of which state has “the most significant relationship,” the Second Restatement provides the following contacts for the court to consider: a) the place where the injury occurred; b) the place where the conduct causing the injury occurred; c) the domicile, residence, nationality, place of incorporation and place of business of the parties; and d) the place where the relationship, if any, between the parties is centered. Restatement (Second) of Conflicts of Law § 145. However, victory is not found in “contact-counting.” These contacts are to be used as guideposts by the court.
More simply stated, if the conflicting laws are considered procedural, Tennessee will apply its own law. If substantive, a Tennessee court is called to evaluate several Second Restatement contacts in light of the Second Restatement’s “interest analysis” factors. In short, the law of the state with the most significant relationship will apply. Clearly, this is no simple analysis. However, given the nature of their potential impact, conflicts of law issues should be amply considered and evaluated by individuals and companies operating in the state of Tennessee. It is not as simple as arguing that the law of the place of injury should apply. We no longer live in a world where the borders of each state serve as the borders of the laws within. State law now reaches into other states and, in some instances, even conflicts with the law of other states. Consequently, at least in Tennessee, we need to be prepared to work with the fluidity of the Second Restatement.
Now that we know the analysis, it is time to put it into action. In the hypothetical above, it is likely that the Tennessee court would apply the Tennessee statute of limitations, thus barring the Mississippi driver’s cause of action. There is a strong chance that the Tennessee court would consider a statute of limitations as a procedural law. Thus, Tennessee, as the forum, would apply its own procedural law as a matter of fact. However, even if the Tennessee court considered a statute of limitations as substantive, the result would likely be the same. Under the “interest analysis” of §6 of the Second Restatement, Tennessee has a significant interest in directing the vehicles that enter its borders and the travel that occurs on its own roadways. Though Mississippi has an interest in protecting its own residents, the Mississippi driver had the ability the file in Mississippi. Instead, he chose Tennessee. Moreover, Tennessee’s interests work in tandem with the contacts of §145. Under these facts, the accident occurred in Tennessee and the drivers’ conduct, negligent or not, occurred in Tennessee. While the Mississippi driver was from Mississippi, he was involved in an accident with a Tennessee resident. Finally, other than this incident, these drivers had no preexisting relationship; their relationship was generated in Tennessee as a result of their motor vehicle collision, which occurred in Tennessee. In the end, it is likely that the Tennessee court would apply the Tennessee statute of limitations, whether or not it considered a statute of limitations as procedural or substantive.
Jake Strawn focuses on Insurance Defense Liability, Premises Liability, Products Liability and Workers’ Compensation in the Memphis, Tennessee office.
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