Court Opinion

ID: 9476442
Source: CourtListenerOpinion
Date Created: 2023-08-05 05:56:20.059156+00
Date Added: 2024-06-11T17:45:19.577105
License: Public Domain

EASTERBROOK, Circuit Judge,
concurring.
Illinois, the forum state, supplies the choice-of-law rules that tell us which state’s substantive law applies. Florida Risk Planning Consultants, Inc. v. Transport Life Insurance Co., 732 F.2d 593, 595 (7th Cir.1984), holds that Illinois applies the approach of the Restatement (Second) of Contracts § 188(1) (1971), under which the state at the center of gravity of a contractual transaction supplies the legal rules. That decision governs.
Whether Florida Risk accurately divines state law is another matter. When last the Supreme Court of Illinois addressed the subject, in 1944, it used the rule of the First Restatement. This rule is that the law of the state in which a contract is made determines its existence and meaning even if pérformance spans more than one state. Oakes v. Chicago Fire Brick Co., 388 Ill.474, 58 N.E.2d 460 (1944); Walker v. Lovitt, 250 Ill. 543, 95 N.E. 631 (1911). When the contract is made in more than one state, the law of the place of performance applies. Only when the contract is both made and performed in more than one state does the law of the state at the “center of gravity” of the contractual relation — the one with the “most significant contacts”— apply.
Recent decisions by intermediate courts of Illinois essentially decline to follow Oakes and Walker, in light of Ingersoll v. Klein, 46 Ill.2d 42, 262 N.E.2d 593 (1970), which applied the most-significant-contacts approach to tort litigation. The Supreme Court itself has yet to tell us whether it will follow this lead. Even if the intermediate courts of Illinois are engaged in civil disobedience in the interim, we should decide this case as it would be decided in Illinois. The day-to-day law of Illinois is the Second Restatement rather than the First. There are some dissenting voices. Listen to Boise Cascade Home & Land Corp. v. Utilities, Inc., 127 Ill.App.3d 4, 12, 82 Ill.Dec. 180, 186, 468 N.E.2d 442, 448 (1st Dist.1984) (citations omitted): “Under traditional Illinois conflict-of-laws principles, the law of the place where the con*1114tract is performed and executed is applicable in determining the validity, construction and obligations of the contract. Where performance and execution occur in different States, the law of the place of performance governs. Where a contract is to be performed in more than one State, the law of place of execution is controlling. Federal courts applying Illinois law have followed the traditional test, but have noted a trend in Illinois of adopting the most-significant-contacts test in conflict of laws cases. However, the courts in each of the aforementioned cases were required to resort to the most-significant-contacts test because the contracts in issue were performed and executed in more than one State.” This is a lone voice among recent decisions, however, and even Boise Cascade went on to use the center-of-gravity approach as well.
It is unfortunate that we must grope to resolve an issue so fundamental to diversity litigation. Perhaps the federal courts now hear such a large portion of cases arising out of multi-state commercial transactions that the Supreme Court of Illinois has not had an occasion since 1971 to decide whether Ingersoll applies to contracts. Perhaps, alternatively, that court thinks the answer so plain that it need not be given. ■ No matter the reason, it is regrettable that a federal court must decide whether to follow the appellate or the supreme court — and find it necessary to choose the appellate court.
I join the court’s opinion in all respects but one. My colleagues endorse the approach of the Second Restatement. I do not think that our approval or disapproval of the foundations of state law is appropriate. Thoughtful judges and scholars endorse the Second Restatement; others believe that the ALI had it right the first time and that the experiment with interest-balancing is a flop. I have private views on this subject but as a judge will do whatever Illinois wants. The rule of law does not depend on our endorsement.