Court Gets the Diversity Case Choice of Law Analysis Right: Part II

McGuireWoods LLP

Last week's Privilege Point described a wise Connecticut court's recognition that federal courts sitting in diversity should not automatically apply their host jurisdiction's privilege law — but instead apply their host jurisdiction's choice of law principles when determining applicable privilege law. Parimal v. Manitex Int'l, Inc., Civ. No. 3:19CV01910 (MPS), 2021 U.S. Dist. LEXIS 20429 (D. Conn. Feb. 3, 2021).

Applying Connecticut's Second Restatement's "most significant relationship" standard, the court first rejected plaintiff's focus on the pertinent contract's relationship with Connecticut — explaining that "the Court is not tasked to decide the breach of contract claim," but instead deal with privilege. Id. at *17. The court then settled on defendant's "focus[] not on the state's relationship with the contract, but instead, on the state's relationship with the communications." Id. at *16. After noting that most of the communications involved Illinois residents, the court concluded that "it would be wholly unreasonable for a corporation located in Illinois discussing legal matters with attorneys located in, and barred by, other states, to anticipate that those communications would be subject to Connecticut law." Id. at *18. So the Connecticut court applied Illinois privilege law (including its "stricter approach" to "communications that implicate both legal and business advice"). Id. at *15.

Although federal courts sitting in diversity apply varying factors in their choice of law analyses, the most logical factor would seem to be the communicating persons' location — which presumably governed their confidentiality (and thus implicitly their privilege) expectations when they communicated.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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