No. 99 C 6561
November 22, 2000
MEMORANDUM OPINION AND ORDER
Plaintiffs, Ernest, Victoria, and Yvonne Martinez, commenced an action against defendant, Smithway Motor Xpress, Inc., arising from a motor vehicle accident. Before this Court is defendant's motion seeking the application of Colorado law to the issue of damages.
In December 1998, Ernest and Victoria Martinez were passengers in a motor vehicle driven by Ernest Martinez, Sr.. Plaintiffs were driving from Denver, Colorado to Idaho. While driving through Wyoming, plaintiffs were involved in an auto vehicle accident with a semi-truck owned by defendant. Following the accident, Ernest and Victoria Martinez received medical treatment in Cheyenne, Wyoming and subsequently returned to Colorado where Ernest continued to receive medical treatment.
At the time of accident, plaintiffs were, and still are, residents of Denver, Colorado. Defendant is an Iowa corporation headquartered in Fort Dodge, Iowa and does business in Illinois with a terminal in Chicago, Illinois. Plaintiffs brought suit in the Circuit Court of Cook County, and the case was removed to this court premised upon diversity jurisdiction. Counts I and II of plaintiffs' complaint allege Ernest and Victoria Martinez received injuries from defendant's negligence. Count III alleges loss of consortium by Ernest's wife, Yvonne Martinez.
In a diversity case, the district court determines what state law to apply in accordance with the choice-of-law principles of the state in which the court sits. Ruiz v. Blentech Corp., 89 F.3d 320, 323 (7th Cir. 1996). This Court is bound by the choice-of law method defined by the Restatement (Second) of Conflicts of Law, which Illinois has adopted. Ingersoll v. Klein, 46 Ill.2d 42, 262 N.E.2d 593, 595 (1970).
The Second Restatement states: "[t]he rights and liabilities of the parties with respect to an issue in tort are determined by the local law of the state which, with respect to that issue, has the most significant relationship to the occurrence and the parties under the principles stated in § 6." RESTATEMENT (SECOND) OF CONFLICT OF LAWS (SECOND RESTATEMENT) § 145(1).
The principles in Section 6 include:
"(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, and
(g) ease in the determination and application of the law to be applied." SECOND RESTATEMENT § 6.
The contacts taken into account in applying the principles of § 6 to determine the law applicable to an issue include: (a) the place the injury occurred; (b) the place 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 § 145.
Also of significance, the Second Restatement embraces the doctrine of depecage-whereby the contacts are evaluated according to their importance with respect to particular issues. Ruiz, 89 F.3d at 324; In re Air Crash Disaster Near Roselawn, 926 F. Supp. 736, 740 (N.D.Ill. 1996) ( Roselawn). Therefore, the court conducts a separate choice-of law analysis for each issue in a case, attempting to determine which state has the most significant contacts with that issue. Ruiz, 89 F.3d at 324.
The choice-of law issue before this Court is limited to the issue of damages. It is noted that an actual conflict regarding damages exists because the substantive laws of Colorado differ from that of Illinois, Iowa, and Wyoming. Under Colorado law, the amount of compensatory damages for non-economic or injury available to each plaintiff is statutorily limited "not to exceed the sum of $250,000, unless the court finds justification by clear and convincing evidence therefore. In no case shall the amount of damages exceed $500,000." COLO. REV. STAT. § 13-21-102.5(3)(a). In addition, no damages for derivative non-economic loss or injury may be awarded unless the court finds justification by clear and convincing evidence. In no case may the amount of such damages exceed $250,000. COLO. REV. STAT. § 13-21-102.5(3)(b). The Colorado laws also provide for adjustments of the above caps upon the prevailing inflation rate. COLO. REV. STAT. § 13-21-102.5 (3)(c).
In comparison, Illinois, Iowa, and Wyoming laws do not place a cap on the damages plaintiffs could be awarded. See, e.g., Wyo. Const. art. 10, § 4 ("No law shall be enacted limiting the amount of damages to be recovered for causing the injury or death of any person."); Best v. Taylor Machine Works, 179 Ill.2d 367, 689 N.E.2d 1057 (1997) (finding Illinois statute ( 735 ILCS 5/2-1115.1(a)) limiting amount of recovery for a negligent act unconstitutional).
A. Place where the injury occurred and place where the conduct causing the injury occurred.
It is undisputed that the plaintiffs' injuries occurred in Wyoming. Generally, the substantive law where the injury occurred will govern unless another state's relationship to the occurrence or the parties is more significant. Bircher v. Gehl Co., 88 F.3d 518, 520 (7th Cir. 1996); Erickson v. Baxter Healthcare, Inc., 94 F. Supp.2d 907, 911 (N.D.Ill. 2000). However, the courts have recognized that the place of injury may be largely fortuitous; and, in such cases, the location of the injury is not given its usual weight in the choice of law analysis. In re Air Crash Disaster Near Chicago, 644 F.2d 594, 615 (7th Cir. 1981); Roselawn, 926 F. Supp. at 742; Demyrick v. Guest Quarters Suite Hotel, 850 F. Supp. 724, 727 (N.D.Ill. 1994); Schulze v. Illinois Highway Transportation Co., 97 Ill. App.3d 508, 423 N.E.2d 278, 280 (1981).
In the instant case, plaintiffs began their trip to Idaho in Colorado. Plaintiffs' injuries occurred while they drove through Wyoming. The accident causing plaintiffs' injuries could have easily happened in Colorado or Idaho because they were required to drive in both states to reach their destination. Therefore, the Court gives little weight to the "place of injury" contact in deciding which state has the more significant relationship to this case. See Schulze, 423 N.E.2d at 280; Miller v. Hayes, 233 Ill. App.3d 847, 600 N.E.2d 34, 38 (1992).
The alleged negligent driving that caused plaintiffs' injuries occurred in Wyoming, the place of the accident. The place where the negligent conduct occurred is also generally of little importance when deciding choice-of-law questions concerning damages because that contact is generally concerned with what constitutes negligence, not damages. See Roselawn, 926 F. Supp. at 743; Schulze, 423 N.E.2d at 280.
B. Place where the relationship, if any, between the parties is centered.
The parties' relationship, if any, is not centered in any particular state. Therefore, the Court attaches no significance to this factor. See In re Air Crash Disaster At Sioux City, Iowa, 781 F. Supp. 1307, 1310 (N.D.Ill. 1991).
C. The domicile, residence, nationality, place of incorporation, and place of business of the parties.
The place of domicile is considered of primary importance when addressing choice-of-law issues of damages because the domicile state is the state which will feel the social and economic impact of recovery or nonrecovery. Miller, 600 N.E.2d at 38; Schulze, 423 N.E.2d at 281; see also Jones v. State Farm Mutual Automobile Ins. Co., 289 Ill. App.3d 903, 682 N.E.2d 238, 249 (1997) ("domiciles of the parties are generally considered significant contacts . . . because a jurisdiction will normally formulate tort policies with reference to the competing interests of compensating its domiciliaries for injury and of limiting tort recoveries against its domiciliaries"). Here, the domicile of all the plaintiffs in the action is Colorado. Defendant is an Iowa corporation, headquartered in Iowa, and does business in Illinois.
II. Most Significant Relationship
Application of the foregoing contacts analysis to the policies set out in Section 6 of the Restatement requires the application of Colorado law to the issues of damages.
The Seventh Circuit characterized the interests of the domiciliary state when addressing the issue of punitive damages as follows:
"The legitimate interests of [the domiciliary states], after all, are limited to assuring that the plaintiffs are adequately compensated for their injuries and the proceeds of any award are distributed to the appropriate beneficiaries, . . . Those interests are fully served by applying the law of the plaintiffs' domiciles as to issues involving the measure of compensatory damages (insofar as that law would enhance the plaintiffs' recovery) and the distribution of any award. Once the plaintiffs are made whole by recovery of the full measure of compensatory damages to which they are entitled under the law of their domiciles, the interests of those states are satisfied." In re Air Crash Near Chicago, 644 F.2d 594, 613 (7th Cir. 1981).
While the Seventh Circuit was addressing punitive damages, the rational also supports a determination that the domiciliary state's interests would be fully satisfied by applying that state's laws concerning compensatory damages. See Roselawn, 926 F. Supp. at 745. The Roselawn court also acknowledged limiting liability exposure for businesses doing business in the plaintiffs' domicile state, in theory, also benefitted the residents of the domicile state because the residents should benefit from lower costs of goods and services resulting from a decrease in potential liability. Roselawn, 926 F. Supp. at 745. Furthermore, in an ever-increasing mobile society, most travelers could be seen to have a relationship with numerous states in their travels but their "most significant relationship" for purposes of compensatory damages will usually be their own state of domicile. Roselawn, 926 F. Supp. at 746.
This position is supported in a comment on the subject. The commentator observed:
"The choice of law of the plaintiffs domicile is the most sensible solution to conflicts concerning compensatory damages. * * * the plaintiffs state has the most significant interest in the compensation of its domiciliaries. It is inconceivable that a plaintiffs state's limits upon compensation can be said to constitute a desire to give its residents less than complete compensation. Rather, such limits embody the state's policy not to unduly burden defendants. . . . The defendant's state is clearly not as closely connected to compensation as the plaintiffs state. The defendant has no interest in benefitting a foreign plaintiff with a more generous recovery than the plaintiff's own state permits." John B. Austin, A General Framework for Analyzing Choice-of-Law Problems in Air Crash Litigation, 58 J.AIR L. COM. 909, 962-63 (Summer 1993).
Iowa, defendant's state of domicile, has little interest in plaintiffs compensation and would most likely have more interest in protecting businesses in its state from large damage awards. Illinois, the forum state, also has little, if any, interest in plaintiffs' recovery because none of the parties are domiciled in Illinois, and the accident did not happen within Illinois. Wyoming, as the site of the accident, certainly has an interest in defendant's conduct, safety on its roadways, and punitive damages. However, these interests bear more heavily on the issue of liability standards than the issue of compensatory damages. Wyoming's connections with this case relate most significantly to issues involving standards of conduct and deterrence of misconduct, not compensation of the victims.
The present cause of action involves Colorado domiciliaries who began their trip in Colorado and were injured while driving through Wyoming. In light of all the foregoing considerations, this Court concludes that Colorado has the most significant relationship to the issue of compensatory damages. While other states, principally Wyoming, have some connections to and interests in the applicable law, those connections and interests relate most significantly to issues not presently before this Court. Therefore, defendant's motion for a choice-of-law ruling applying Colorado law to the issue of damages is granted.