---
title: Choice of Law in Multi-State Disputes
description: An overview of the legal principles and standards governing the selection of applicable law in disputes involving parties or events across multiple states.
keywords: [choice of law, conflicts of law, multi-state disputes, jurisdiction, forum selection]
category: law
---

## Introduction to Choice of Law Principles

The resolution of disputes involving parties or events spanning multiple states often requires the careful application of choice of law principles. These principles govern the selection of the substantive law that will govern the rights, obligations, and remedies of the parties. The choice of the applicable law can have a significant impact on the outcome of a case, as the laws of different states may vary substantially on issues such as standards of liability, available damages, statutes of limitation, and defenses. 

The foundational choice of law doctrine in the United States is the *Restatement (Second) of Conflict of Laws*, which has been widely adopted by state and federal courts.[^1] The Restatement sets forth a general framework for determining the applicable law, with a focus on identifying the state with the "most significant relationship" to the dispute.[^2] This inquiry considers factors such as the location of the parties, the place of the injury or wrong, and the interests of the states involved.[^3] The Restatement's approach represents a shift away from the rigid *lex loci* rules of the past, which mandated the automatic application of the law of the place where the injury occurred.[^4]

[^1]: See, e.g., Hammersmith v. TIG Ins. Co., 480 F.3d 220, 228 (3d Cir. 2007) (noting that the Restatement (Second) of Conflict of Laws has been widely adopted by state and federal courts).
[^2]: Restatement (Second) of Conflict of Laws § 6 (Am. Law Inst. 1971).
[^3]: Id. § 145.
[^4]: See Babcock v. Jackson, 12 N.Y.2d 473, 481-82 (1963) (rejecting the rigid *lex loci delicti* rule in favor of a more flexible "center of gravity" approach).

## Statutory Choice of Law Provisions

In addition to the common law principles established in the Restatement, many areas of substantive law are also subject to specific statutory choice of law rules. For example, the Uniform Commercial Code (UCC), which has been adopted in all 50 states, contains provisions governing the choice of law for transactions in goods.[^5] Under the UCC, the parties may generally select the governing law through a contractual choice of law clause, subject to certain limitations.[^6] In the absence of a valid choice of law clause, the UCC provides default rules for determining the applicable law based on factors such as the location of the seller, the place of delivery, and the residence of the parties.[^7]

Similarly, the Employee Retirement Income Security Act (ERISA) includes choice of law provisions that preempt state law in certain circumstances involving employee benefit plans.[^8] ERISA's preemption clause has been the subject of extensive litigation, with courts grappling with the scope of federal preemption and the interplay between state and federal law.[^9]

[^5]: U.C.C. § 1-301 (Am. Law Inst. & Unif. Law Comm'n 2001).
[^6]: Id. § 1-301(a).
[^7]: Id. § 1-301(b).
[^8]: 29 U.S.C. § 1144(a).
[^9]: See, e.g., Gobeille v. Liberty Mut. Ins. Co., 136 S. Ct. 936, 943 (2016) (discussing the scope of ERISA preemption).

## Conflicts of Law Analyses

In the absence of a statutory choice of law provision, courts must engage in a more comprehensive conflicts of law analysis to determine the applicable substantive law. This analysis typically involves a multi-step process, with the specific approach varying depending on the jurisdiction and the type of claim at issue.

One common framework is the *Restatement (Second) of Conflict of Laws* "most significant relationship" test, which considers a variety of factors to identify the state with the closest connection to the dispute.[^10] These factors include the place of injury, the location of the parties, the domicile of the parties, the place where the relationship between the parties was centered, and the policies of the interested states.[^11] The court must then weigh these factors to determine which state's law should govern.

Alternatively, some jurisdictions employ a "governmental interest analysis," which focuses on the policies and interests of the potentially applicable states.[^12] Under this approach, the court examines the competing state interests and seeks to apply the law of the state with the greatest interest in the outcome of the case.

[^10]: Restatement (Second) of Conflict of Laws § 145 (Am. Law Inst. 1971).
[^11]: Id.
[^12]: See, e.g., Offshore Rental Co. v. Cont'l Oil Co., 22 Cal. 3d 157, 161 (1978) (discussing the governmental interest analysis).

## Specific Choice of Law Rules

In addition to the general frameworks described above, certain types of claims are subject to more specific choice of law rules. For example, in tort actions, the Restatement (Second) of Conflict of Laws generally directs courts to apply the law of the state where the injury occurred, unless another state has a more significant relationship to the dispute.[^13] Similarly, in contract disputes, courts often look to the law of the state where the contract was formed or performed, or the law chosen by the parties in a valid choice of law clause.[^14]

The choice of law analysis can become particularly complex in cases involving multiple claims or causes of action. In such situations, courts may apply different states' laws to different aspects of the case, a process known as "depecage."[^15] For instance, a court might apply the law of one state to the issue of liability, while applying the law of another state to the question of damages.

[^13]: Restatement (Second) of Conflict of Laws § 146 (Am. Law Inst. 1971).
[^14]: Id. § 188.
[^15]: See Restatement (Second) of Conflict of Laws § 8 cmt. e (Am. Law Inst. 1971) (discussing the concept of "depecage").

## Enforceability of Choice of Law Provisions

Even where the parties have included a choice of law clause in their contract, courts will still scrutinize the enforceability and validity of such provisions. Choice of law clauses may be unenforceable if they conflict with the public policy of the forum state, if they were procured through fraud or duress, or if applying the chosen law would be unreasonable or unjust under the circumstances.[^16] Additionally, certain types of claims, such as those involving consumer protection or employment law, may be subject to mandatory choice of law rules that cannot be overridden by a contractual provision.[^17]

Ultimately, the enforceability of a choice of law clause will depend on the specific facts and circumstances of the case, as well as the applicable state and federal laws. Careful drafting and consideration of potential choice of law issues is essential when crafting contractual agreements.

[^16]: Restatement (Second) of Conflict of Laws § 187 (Am. Law Inst. 1971).
[^17]: See, e.g., Cal. Lab. Code § 925 (prohibiting choice of law and forum selection clauses in employment contracts).

## Conclusion

The selection of the applicable law in multi-state disputes is a complex and nuanced area of the law, with a variety of frameworks and specialized rules to consider. Attorneys must be well-versed in choice of law principles, statutory provisions, and the specific requirements of the relevant jurisdictions in order to effectively navigate these issues and achieve the best possible outcomes for their clients. Understanding the choice of law analysis is a critical skill for any practitioner involved in cross-border or multi-jurisdictional litigation.