Like the Erie doctrine, the choice of law rules (sometimes referred to as "conflicts of laws") focus on the
selection of one jurisdiction’s laws over those of another jurisdiction in a particular lawsuit. As with the
Erie doctrine, the court must determine which jurisdictions’ laws to apply in a particular case.
First, it is important to note that a choice of law scenario can arise in state court while the application of the
Erie doctrine is limited to disputes in the federal courts.
In a conflicts scenario, the laws of two or more states are evoked, and there must be a significant difference
in the outcome of the case based on which law is applied. Several factors are considered before selecting
one jurisdiction’s law over another jurisdiction’s law that will be outlined and explored below.
Also in a scenario where a conflicts issue comes up in federal court, the court's jurisdiction need not be
based on diversity. As a matter of fact, the plaintiff and defendant may be from the same state. (The
conflicts issue can arise because the legal controversy may have occurred in another state.) All of these
scenarios will be explored in greater depth later in the subchapter. But before examining these distinctions
in more detail, it is important to understand the context in which these choice of law rules are triggered and
the reasons why the courts regulate them.
EXAMPLE: George, a resident of California, is a store clerk in San Diego, California. Matt, an Arizona
resident, falls asleep at the wheel and drives his car into George’s store, damaging 90% of the store's
inventory and landing George in the hospital for 2 weeks with severe injuries. George sues Matt in
California state court for negligence and destruction of property. California law allows George to recover
up to $60,000 for both of his claims. Arizona law, however, prevents George from recovering more than
$45,000. George argues that California law should apply, while Matt argues that Arizona law should apply.
What should the court rule?
The example described above is a typical example of a choice of law scenario. Two parties argue that a
state court should apply the law of their jurisdiction. There is no federal diversity jurisdiction because the
amount in controversy is less than $75,000. Nevertheless, there is a choice of law problem. George, the
plaintiff, clearly would want to recover the largest monetary relief available under the California law. On
the other hand, Matt, the defendant, would want to limit his liability and implement the Arizona law. The
outcome of the lawsuit will be determined, in large part, by which law the court applies. On which law