Court Opinion

ID: 3135381
Source: CourtListenerOpinion
Date Created: 2015-10-22 17:36:34.619975+00
Date Added: 2024-06-11T11:54:09.186999
License: Public Domain

Docket No. 103858.

                              IN THE
                      SUPREME COURT
                                  OF
                 THE STATE OF ILLINOIS

JACOB TOWNSEND et al., Appellees, v. SEARS, ROEBUCK AND
               COMPANY, Appellant.

                 Opinion filed November 29, 2007.

   JUSTICE FREEMAN delivered the judgment of the court, with
opinion.
   Chief Justice Thomas and Justices Freeman, Fitzgerald, Garman,
and Karmeier concurred in the judgment and opinion.
   Justices Kilbride and Burke took no part in the decision.

                              OPINION

    Plaintiffs, Michelle Townsend, individually and on behalf of her
minor son, Jacob, brought a personal injury action in the circuit court
of Cook County against defendant, Sears, Roebuck and Company
(Sears). A question arose as to whether Illinois or Michigan law
would govern the liability and damages issues presented in the case.
The circuit court ruled that Illinois law governs these substantive
issues, but certified the following question of law for interlocutory
appeal pursuant to Supreme Court Rule 308 (155 Ill. 2d R. 308):
        “Whether Illinois or Michigan law applies to a products
        liability and negligence action where the plaintiff is a resident
        of Michigan and the injury occurs in Michigan, the product
         was manufactured in South Carolina, the defendant is a New
         York corporation domiciled in Illinois, and the conduct
         complained of, including certain design decisions,
         investigations of prior similar occurrences, product testing and
         the decision to distribute nationally in its retail stores occurred
         in Illinois[.]”
In its answer, the appellate court reached the same conclusion as did
the circuit court. 368 Ill. App. 3d 902.
     We allowed Sears’ petition for leave to appeal (210 Ill. 2d R.
315). We disagree with the appellate and circuit courts, and hold that
Michigan law governs the liability and damages issues presented in
this case.

                          I. BACKGROUND
    Michelle and James Townsend, and their son, Jacob, reside on
North Begole Road in Alma, Michigan. 1 Sears is a New York
corporation with its principal place of business and corporate
headquarters in Cook County, Illinois. In the spring of 2000, James
purchased a Sears Craftsman brand riding lawn tractor from a Sears
store in Michigan. The lawn tractor was manufactured by Electrolux
Home Products, Inc. (EHP), in South Carolina. James bought the 20-
horsepower, 42-inch-wide lawn tractor for use around his home. This
particular lawn tractor developed a faulty engine. In early 2001, James
received an identical riding lawn tractor as a warranty replacement.
Through early May 2001, James had operated the tractor three or four
times to mow the Townsends’ 1.8-acre property.
    On the afternoon of May 11, 2001, James returned home from
work and began to mow his lawn. At this time, his four children,
including 3½-year-old Jacob, were inside their home. As James was
mowing, he encountered the 16- by 14-foot rectangular railroad-tie-
edged planting plot in his front yard. He attempted to mow around the
plot by positioning the left edge of the mower deck as close to the ties
as possible. However, the tractor became stuck against one of the ties.
James shifted the tractor into reverse, looked over his right shoulder,

   1
   Alma, Michigan, is located approximately 54 miles north of Lansing,
Michigan, and approximately 36 miles west of Saginaw, Michigan.

                                    -2-
and released the brake. The tractor struggled to move rearward,
taking approximately 20 seconds to move approximately six feet.
While backing up, he heard a noise, looked to his right, and saw
Jacob’s sandal on the lawn. He stopped the tractor, turned around,
and saw Jacob behind and under the tractor’s rear wheels. James
overturned the tractor, picked up Jacob, and rushed him to Gratiot
Community Hospital in Alma. Jacob was subsequently treated at
Sparrow Hospital in Lansing, Michigan. Jacob’s right foot was
amputated and his lower right leg was severely injured.
    Michelle, individually and on behalf of Jacob, filed a complaint
against Sears pleading strict product liability and negligence, premised
on defective design and failure to warn.2 Plaintiffs alleged that Sears
“designed, marketed, manufactured, inspected, tested, and sold a
Sears Craftsman Lawn Tractor”; that the tractor “was defectively
designed, defectively marketed and unreasonably dangerous”; and that
the design created such a risk of injury to small children that a
reasonably prudent designer and marketer of riding lawn tractors,
being fully aware of the risk, would not have put the lawn tractor on
the market. Plaintiffs specifically alleged that the tractor lacked a “no-
mow-in-reverse” (NMIR) safety feature to prevent back-over injuries.
Plaintiff further alleged that Sears had actual knowledge of this
specific unreasonably dangerous condition.
    Sears filed an answer and affirmative defenses. Discovery ensued.
Sears filed a motion to dismiss based on forum non conveniens. The
circuit court denied the motion and the appellate court denied Sears’
petition for leave to appeal pursuant to Supreme Court Rule 306(a)(2)
(210 Ill. 2d R. 306(a)(2)).
    Plaintiffs filed a motion to apply Illinois law to the issues of
liability and damages. Plaintiffs also filed a petition for leave to amend
the complaint to add a prayer for relief seeking punitive damages (see
735 ILCS 5/2–604.1 (West 2002)). The circuit court identified
conflicts between Illinois and Michigan law pertaining to liability and
damages. The court employed the choice-of-law analysis of the

      2
      In a third count, “Michelle and/or James Townsend” claimed
damages for health-care expenses pursuant to the Family Expense Act
(750 ILCS 65/15 (West 2002)).

                                   -3-
Restatement (Second) of Conflict of Laws. The circuit court ruled that
Illinois law should govern these substantive issues. The court also
granted plaintiffs’ petition for leave to plead punitive damages. The
circuit court subsequently found that its choice-of-law ruling involved
a question of law as to which there was substantial grounds for
difference of opinion and that an immediate appeal therefrom may
materially advance the ultimate termination of the litigation.
Consequently, the court certified the choice-of-law question for
interlocutory appeal. See 155 Ill. 2d R. 308.
     The appellate court allowed Sears’ application for leave to appeal.
368 Ill. App. 3d 902. After identifying the policies embraced in the
relevant law of Michigan and Illinois, and examining the contacts each
state has with the litigation, the appellate court concluded that Illinois
has a superior interest in having its policies applied. Therefore, as did
the circuit court, the appellate court concluded that Illinois law should
govern the issues of liability and damages presented in the case. 368
Ill. App. 3d at 914. This court allowed Sears’ petition for leave to
appeal. See 210 Ill. 2d R. 315. We will refer to additional pertinent
background in the context of our analysis of the issues.

                            II. ANALYSIS
                        A. Standard of Review
     The parties disagree on the standard of review. An interlocutory
appeal pursuant to Supreme Court Rule 308 is ordinarily limited to the
question certified by the circuit court, which, because it must be a
question of law, is reviewed de novo. Thompson v. Gordon, 221 Ill.
2d 414, 426 (2006); see, e.g., Vision Point of Sale, Inc. v. Haas, 226
Ill. 2d 334, 340 (2007) (declining to address issues that fall outside
proper scope of review of certified question pursuant to Rule 308).
However, the scope of this court’s review is not limited to
determining how the circuit court’s question should be answered.
“When this court accepts an appeal involving a question of law
identified under Rule 308, interests of judicial economy and the need
to reach an equitable result oblige us to go beyond the question of law
presented and consider the propriety of the order that gave rise to the
appeal.” Bright v. Dicke, 166 Ill. 2d 204, 208 (1995) (and cases cited

                                   -4-
therein); see, e.g., Vision Point, 226 Ill. 2d at 354 (reviewing the
circuit court’s orders that gave rise to the appeal).
    The circuit court ruled that Illinois law governs the liability and
damages issues presented in this case. It is generally held that a trial
court’s choice-of-law determination is reviewed de novo. Morris B.
Chapman & Associates, Ltd. v. Kitzman, 307 Ill. App. 3d 92, 99
(1999), aff’d, 193 Ill. 2d 560 (2000); see Gramercy Mills, Inc. v.
Wolens, 63 F.3d 569, 572 (7th Cir. 1995) (same); Dorman v.
Emerson Electric Co., 23 F.3d 1354, 1358 (8th Cir. 1994) (holding
that district court’s choice-of-law determination is a legal issue subject
to de novo review); Malena v. Marriott International, Inc., 264 Neb.
759, 762, 651 N.W.2d 850, 853 (2002) (same).
    Plaintiffs, however, in support of the appellate court’s judgment,
disagree with this generally accepted holding. According to plaintiffs,
cases holding that choice-of-law decisions are reviewed de novo
“assume a standard of review without discussing or addressing
situations where fact questions must be resolved as a predicate to
choosing a state’s law.” Plaintiffs contend that the circuit court “made
both findings of fact (what Sears did and where it did it) and findings
of law (which state’s law applies, based on those facts).” Plaintiffs
suggest that the manifest weight of the evidence standard for fact
finding is more appropriate for reviewing choice-of-law
determinations.
    We disagree. The circuit court did not hold an evidentiary hearing,
weigh the testimony or assess the credibility of witnesses; the record
consists solely of documents. Where the circuit court does not hear
testimony and bases its decision on documentary evidence, the
rationale underlying a deferential standard of review is inapplicable
and review is de novo. Dowling v. Chicago Options Associates, Inc.,
226 Ill. 2d 277, 285 (2007). In any event, while the methodology of
the Second Restatement of Conflict of Laws may raise factual issues,
the task of evaluating and balancing the choice-of-law principles
embodied in the Second Restatement, as they apply to the facts, is a
matter of law rather than fact and one that is more properly left to the
judge. Amiot v. Ames, 166 Vt. 288, 295, 693 A.2d 675, 679 (1997).
Because these issues “involve the selection, interpretation, and
application of legal precepts,” review is de novo. Dent v.

                                   -5-
Cunningham, 786 F.2d 173, 175 (3d Cir. 1986). We now turn to the
merits of this appeal.

                        B. Identifying the Conflict
    Subject to constitutional limitations, the forum court applies the
choice-of-law rules of its own state. Restatement (Second) of Conflict
of Laws §5, Comments a, b, at 9 (1971); accord Wells v. Simonds
Abrasive Co., 345 U.S. 514, 516, 97 L. Ed. 1211, 1215, 73 S. Ct.
856, 857 (1953). In 1970, this court adopted, for tort cases, the
choice-of-law methodology of what would become the Second
Restatement of Conflict of Laws. See Ingersoll v. Klein, 46 Ill. 2d 42
(1970) (citing preliminary draft of Restatement (Second) of Conflict
of Laws). During the subsequent 37 years, this court has had only a
relatively few occasions to address choice-of-law issues arising from
the Second Restatement. See Kaczmarek v. Allied Chemical Corp.,
836 F.2d 1055, 1058 (7th Cir. 1987) (applying Illinois law, observing
that “the Supreme Court of Illinois has not dealt with conflicts
questions for many years”).3 In the present case, the appellate court’s
analysis and the arguments of counsel before this court indicate that
a thorough discussion of choice-of-law principles and methodology is
necessary.
    For example, we take this opportunity to stress that a choice-of-
law analysis begins by isolating the issue and defining the conflict. A
choice-of-law determination is required only when a difference in law
will make a difference in the outcome. Morris B. Chapman, 307 Ill.
App. 3d at 101; Kramer v. Weedhopper of Utah, Inc., 204 Ill. App.
3d 469, 474 (1990) (and cases cited therein); see Barron v. Ford
Motor Co. of Canada, Ltd., 965 F.2d 195, 197 (7th Cir. 1992)
(applying Florida law) (cautioning that “before entangling itself in
messy issues of conflict of laws a court ought to satisfy itself that
there actually is a difference between the relevant laws of the different
states”). In the present case, the parties agree that three conflicts exist
between Illinois and Michigan law. The first conflict involves liability.

    3
     Coincidentally this term, we filed another opinion that presented a
choice-of-law issue. See Barbara’s Sales, Inc. v. Intel Corp., No 103287
(November 29, 2007).

                                   -6-
Illinois has adopted a rule of strict liability in tort for product design
defects. See, e.g., Lamkin v. Towner, 138 Ill. 2d 510, 528-29 (1990)
(and cases cited therein). In contrast, Michigan has refused to adopt
the doctrine of strict liability, instead imposing a pure negligence
standard for product liability actions based on defective design.
Prentis v. Yale Manufacturing Co., 421 Mich. 670, 690-91, 365
N.W.2d 176, 185-86 (1984). The difference between the two theories
lies in the concept of fault. A real conflict exists because, in a strict
liability action, the inability of the defendant to know or prevent the
risk is not a defense. However, such a finding would preclude a
finding of negligence because the standard of care is established by
other manufacturers in the industry. Blue v. Environmental
Engineering, Inc., 215 Ill. 2d 78, 97 (2005).
     The second conflict concerns compensatory damages. Illinois
currently does not have a statutory cap on compensatory damages for
noneconomic injuries. See Best v. Taylor Machine Works, 179 Ill. 2d
367, 384-416 (1997) (declaring statutory cap unconstitutional). In
contrast, Michigan currently imposes caps on noneconomic damages
in product liability actions. See Mich. Comp. Laws Ann. §600.2946a
(West 2000); Kenkel v. Stanley Works, 256 Mich. App. 548, 665
N.W.2d 490 (2003) (upholding constitutionality of statute). The third
conflict concerns punitive damages. Illinois does not prohibit the
recovery of punitive damages in product liability cases when
appropriate. See Kelsay v. Motorola, Inc., 74 Ill. 2d 172, 186 (1978)
(discussing when punitive damages may be awarded). Subject to
specific statutory exceptions, “it is well established that generally only
compensatory damages are available in Michigan and that punitive
damages may not be imposed.” McAuley v. General Motors Corp.,
457 Mich. 513, 519-20, 578 N.W.2d 282, 285 (1998) (collecting
cases).

     C. Overview: The Second Restatement of Conflict of Laws
    A full understanding of current choice-of-law methodology,
including its development, is necessary to properly apply it to the
above-identified conflicts.
            “Traditionally, questions of choice of law have been solved
        by applying the law of the place of the wrong (lex loci delicti),

                                   -7-
         resulting in the rights and liabilities of the parties being
         determined by the local law of the State where the injury
         occurred. The doctrine was relatively easy to apply, provided
         predictability of outcome, and discouraged forum shopping.”
         Mitchell v. United Asbestos Corp., 100 Ill. App. 3d 485, 491
         (1981).
As another court described the prior rule: “The conflict of laws rule
in tort cases used to be simple. It was lex loci delicti–the law of the
place where the tort occurred was the law applicable to the case.”
Kaczmarek, 836 F.2d at 1057. Summarizing the prior rule, the First
Restatement of Conflict of Laws directed a court to apply the lex loci
delicti to a choice-of-law issue in a tort case, regardless of the nature
of the contacts the parties may have possessed with other states.
Restatement (First) of Conflict of Laws §§377, 378 (1934); see
Spinozzi v. ITT Sheraton Corp., 174 F.3d 842, 844 (7th Cir. 1999)
(applying Illinois law; discussing lex loci delicti); Restatement
(Second) of Conflict of Laws, ch. 7, Topic 1, Introductory Note 1, at
412-13 (1971) (discussing history of prior rule).
     “This approach [lex loci delicti] was criticized, and eventually in
most states abandoned, because it sometimes resulted in the
application of the law of a state that had little connection with the
events giving rise to the suit.” Kaczmarek, 836 F.2d at 1057.
             “ ‘The basic theme running through the attacks on the
         place of the injury rule is that wooden application of a few
         overly simple rules, based on the outmoded “vested rights
         theory,” cannot solve the complex problems which arise in
         modern litigation and may often yield harsh, unnecessary and
         unjust results.’ ” Ingersoll, 46 Ill. 2d at 47, quoting Griffith v.
         United Air Lines, Inc., 416 Pa. 1, 13, 203 A.2d 796, 801
         (1964).
By the early 1950s, increasing dissatisfaction with the vested-rights-
based approach led the American Law Institute to draft a second
restatement of conflict of laws. The field was evolving so rapidly that
achieving consensus was difficult, and the project required 17 years,
from 1953 to 1971, to complete. What began as an update, based on
criticisms of the traditional rules as too broad and inflexible,
transformed into “a radically different approach to choice of law.” R.
Crampton, D. Currie & H. Kay, Conflict of Laws:

                                    -8-
Cases–Comments–Questions 117 (5th ed. 1993). Agreeing with
criticism of the lex loci delicti doctrine, the Ingersoll court adopted
the principles outlined in the proposed draft of the Second
Restatement of Conflict of Laws. Ingersoll, 46 Ill. 2d at 47-48.
     One scholar has described the Second Restatement as “a
document that could not–and cannot–be fairly called a ‘restatement’
of anything. Instead, it is an amalgamation of different conflict
approaches, producing a document of a distinctly normative
character.” P. Borchers, Courts and the Second Conflicts
Restatement: Some Observations and an Empirical Note, 56 Md. L.
Rev. 1232, 1237 (1997). Indeed, “the Second Restatement is by far
the most popular among the modern methodologies, being followed
[as of 2004] in 22 states in tort conflicts.” E. Scoles, P. Hay, P.
Borchers & S. Symeonides, Conflict of Laws §2.23, at 98 (4th ed.
2004). Except with respect to the relatively few areas for which it
provides clear rules, the Second Restatement’s methodology has three
principal features: (1) the policies of section 6; (2) the concept of the
“most significant relationship”; and (3) the lists of particularized
connecting factors.
     “Section 6 is the cornerstone of the entire Restatement.” Scoles,
Conflict of Laws §2.14, at 59. Section 6 provides as follows:
            “(1) A court, subject to constitutional restrictions, will
        follow a statutory directive of its own state on choice of law.
            (2) When there is no such directive, the factors relevant to
        the choice of the applicable rule of law 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 relevant 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

                                  -9-
                 (g) ease in the determination and application of the law
             to be applied.” Restatement (Second) of Conflict of Laws
             §6, at 10 (1971).
These multiple and diverse principles are not listed in any order of
priority, and some of them point in different directions. Thus, in tort
cases, for example, these principles, by themselves, do not enable
courts to formulate precise choice-of-law rules. Restatement (Second)
of Conflict of Laws §6, Comment c, at 12-13 (1971); accord Scoles,
Conflict of Laws §2.14, at 60. “In some ways, §6 was a logical
response to the perceived flaws of the traditional rules. Critics had
identified a variety of concerns that these rules failed to take into
account, and §6 offers a kind of ‘laundry list’ response that enables
the court to consider all of them when appropriate.” Crampton,
Conflict of Laws: Cases–Comments–Questions, at 117.
    Another fundamental concept of the Second Restatement’s
methodology is the concept of the “most significant relationship.”
“While section 6 enunciates the guiding principles of the choice-of-law
process, the most-significant-relationship formula describes the
objective of that process: to apply the law of the state that, with
regard to the particular issue, has the most significant relationship with
the parties and the dispute.” (Emphasis in original.) Scoles, Conflict
of Laws §2.14, at 61. For example, in a tort case, the general principle
that a court applies is: “The 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 §145(1), at 414 (1971).
One scholar has described section 145 as “nearly as amorphous as
section 6.” 56 Md. L. Rev. at 1238-39.
    Lastly, the Second Restatement provides a list of the factual
contacts or connecting factors that the forum court should consider in
choosing the applicable law. In a tort case, for example, section
145(2) provides as follows:
             “(2) Contacts to be taken into account in applying the
         principles of §6 to determine the law applicable to an issue
         include:
                 (a) the place where the injury occurred,

                                  -10-
                 (b) the place where the conduct causing the injury
             occurred,
                 (c) the domicil, 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.
        These contacts are to be evaluated according to their relative
        importance with respect to the particular issue.” Restatement
        (Second) of Conflict of Laws §145(2), at 414 (1971).
In applying the principles of section 6 to these contacts to determine
the state with the most significant relationship, the forum court should
consider the relevant policies of all potentially interested states and the
relevant interests of those states in the decision of the particular issue.
Restatement (Second) of Conflict of Laws §145, Comment e, at 419
(1971). “Thus, section 145 is no more definite than section 6, and
perhaps even less so. On top of the ‘factors’ listed in section 6, section
145 adds a generous dollop of territorial and personal contacts.” 56
Md. L. Rev. at 1239.
    Also, section 145 explicitly refers to a selective, issue-oriented
approach to determining choice-of-law for a particular issue presented
in a tort case. “Each issue is to receive separate consideration if it is
one which would be resolved differently under the local law rule of
two or more of the potentially interested states.” Restatement
(Second) of Conflict of Laws §145, Comment d, at 417 (1971). By
prescribing this analytical approach, the Second Restatement
authorizes the process of depecage, which refers to the process of
cutting up a case into individual issues, each subject to a separate
choice-of-law analysis. Ruiz v. Blentech Corp., 89 F.3d 320, 324 (7th
Cir. 1996) (applying Illinois law); accord Scoles, Conflict of Laws
§2.14, at 61 (explaining “depecage”). Thus, the choice-of-law
principles outlined in section 6 are effectively applied only to the facts
of an individual case. Mitchell, 100 Ill. App. 3d at 494; Pittway Corp.
v. Lockheed Aircraft Corp., 641 F.2d 524, 526-27 (7th Cir. 1981)
(applying Illinois law) (“The relative importance of all the alleged
contacts, including the place of injury, must be independently
evaluated on a case-by-case basis with respect to the particular issue
involved, the character of the tort, and the relevant policies of the

                                   -11-
interested states”); accord Phillips v. General Motors Corp., 298
Mont. 438, 446, 995 P.2d 1002, 1007 (2000) (“Any analysis under the
Restatement approach is necessarily driven by the unique facts, issues,
applicable law, and jurisdictions implicated in a particular case”).

 D. Presumption: The Law of the State Where the Injury Occurred
    The parties disagree as to the nature and effect of a choice-of-law
presumptive rule applicable in this case. The Second Restatement of
Conflict of Laws does not abandon rules entirely. “Separate rules are
stated for different torts and for different issues in tort. In other
words, the identity of the state of the most significant relationship is
said to depend upon the nature of the tort and upon the particular
issue.” Restatement (Second) of Conflict of Laws, ch. 7, Topic 1,
Introductory Note 2, at 413 (1971); see Scoles, Conflict of Laws
§2.14, at 62-63 (discussing presumptive rules). The Second
Restatement’s introduction is an understatement.
         “Once one ventures past section 145, however, the chapter
         dramatically changes character. Instead of infinitely open-
         ended sections, the Second Restatement, for the most part,
         articulates reasonably definite rules. To be sure, these
         succeeding sections contain escape valves that refer to section
         6. Many of the rules echo the First Restatement’s preference
         for choosing the law of the injury state. Others do not refer to
         the injury state directly, but choose connecting factors very
         likely, if not certain, to lead to the application of the law of the
         injury state. *** Only a relatively few sections refer solely to
         the general formula of section 145 without providing some
         presumptive choice.” 56 Md. L. Rev. at 1239-40.
Thus, the Second Restatement of Conflict of Laws has been described
as “schizophrenic,” in that one portion of its split personality consists
of general sections such as sections 6 and 145, while the other portion
is a set of reasonably definite rules and a preference for territorial
solutions, including the injury-state rule for tort cases, endorsed by its
predecessor. The general sections embody a free-form approach to
choice of law, while the specific sections are quite close to the
territorial system embodied by the First Restatement. 56 Md. L. Rev.
at 1240.

                                    -12-
    We agree with the concern that the bench and bar have
overemphasized the general sections of the Second Restatement of
Conflict of Laws and have undervalued the specific presumptive rules.
              “The opponents of mechanical rules of conflict of laws
          may have given too little weight to the virtues of simplicity.
          The new, flexible standards, such as ‘interest analysis,’ have
          caused pervasive uncertainty, higher cost of litigation, more
          forum shopping (a court has a natural inclination to apply the
          law it is most familiar with–the forum’s law–and will find it
          easier to go with this inclination if the conflict of law rules are
          uncertain), and an uncritical drift in favor of plaintiffs”
          Kaczmarek, 836 F.2d at 1057 (dictum).
Accord 56 Md. L. Rev. at 1246 (observing that, in a tort case,
“following” the Second Restatement of Conflict of Laws means more
than relying on sections 6 and 145).
    For example, plaintiffs, in support of the appellate court’s
judgment, actually contend that this court has never expressly
authorized use of legal presumptions in choice-of-law determinations
in personal injury actions, observing “that the word ‘presumed’ is not
found in Ingersoll.” Alternatively, according to plaintiffs: “Even if this
court meant to utilize a legal presumption in favor of the state of
injury, presumptions in Illinois are governed by the ‘bursting bubble
hypothesis.’ ” Therefore, according to plaintiffs, if the presumption
exists, it is “evanescent” and “easily overcome” by any contact with
another state.
    We emphatically reject this contention. In Ingersoll, adopting the
proposed draft of what would become section 145 of the Second
Restatement of Conflict of Laws, this court held that “the local law of
the State where the injury occurred should determine the rights and
liabilities of the parties, unless Illinois has a more significant
relationship with the occurrence and with the parties.” (Emphasis
added.) Ingersoll, 46 Ill. 2d at 45. Thus, a presumption exists, which
may be overcome only by showing a more or greater significant
relationship to another state. Further, subsequent to Ingersoll, this
court has repeatedly declared that we have adopted the choice-of-law
analysis of the Second Restatement of Conflict of Laws. Morris B.
Chapman, 193 Ill. 2d at 568; Esser v. McIntyre, 169 Ill. 2d 292, 297-

                                    -13-
98 (1996); Nelson v. Hix, 122 Ill. 2d 343, 349 (1988). As we have
explained, this analysis includes the application of presumptive rules.
     “Generally speaking, then, the Second Restatement contemplates
a two-step process in which the court (1) chooses a presumptively
applicable law under the appropriate jurisidiction-selecting rule, and
(2) tests this choice against the principles of §6 in light of relevant
contacts identified by general provisions like §145 (torts) and §188
( c o n t r a c t s ) . ” C r a m p t o n , C o n fl ic t o f L a w s :
Cases–Comments–Questions, at 120. “[M]aking a serious effort to
consider the entire Second Restatement would improve the quality of
judicial decisionmaking. Courts that are willing to follow the narrow
rules of the Second Restatement would derive vastly more guidance
than that which can be gleaned from sections 6, 145 [torts], and 188
[contracts].” 56 Md. L. Rev. at 1247.4
     In this personal injury action, the appellate court was correct to
cite section 146 of the Second Restatement of Conflict of Laws in
holding that, “under Illinois choice-of-law rules, the law of the place
of injury controls unless another state has a more significant
relationship with the occurrence and with the parties with respect to
the particular issue.” 368 Ill. App. 3d at 907. “Section 146 is the
starting point for any choice-of-law analysis in personal injury claims.”
Malena, 264 Neb. at 766, 651 N.W.2d at 856; accord McKinnon v.
F.H. Morgan & Co., 170 Vt. 422, 424, 750 A.2d 1026, 1028 (2000)
(declaring that, before court applies general tort principle of section
145, court must first ascertain whether specific presumptive rule
applies to disputed action or issue); Morgan v. Biro Manufacturing
Co., 15 Ohio St. 3d 339, 342, 474 N.E.2d 286, 289 (1984) (declaring
that when confronted with a choice-of-law issue in a tort action,
“analysis must begin with Section 146”). Section 146 received
insufficient consideration in the appellate court.
     Section 146 provides:
          “In an action for a personal injury, the local law of the state
          where the injury occurred determines the rights and liabilities

  4
    See, e.g., Barbara’s Sales, slip op. at 16 (concluding that section 148
of Second Restatement of Conflict of Laws applies more specifically to
fraudulent misrepresentation cases than general sections 6 and 145).

                                   -14-
         of the parties, unless, with respect to the particular issue, some
         other state has a more significant relationship under the
         principles stated in section 6 to the occurrence and the parties,
         in which event the local law of the other state will be applied.”
         Restatement (Second) of Conflict of Laws §146, at 430
         (1971).
One court has explained this presumption as follows:
              “Often, however, the simple old rules can be glimpsed
         through modernity’s fog, though spectrally thinned to
         presumptions–in the latest lingo, “default rules.” For in the
         absence of unusual circumstances, the highest scorer on the
         “most significant relationship” test is–the place where the tort
         occurred. [Citations.] For that is the place that has the greatest
         interest in striking a reasonable balance among safety, cost,
         and other factors pertinent to the design and administration of
         a system of tort law. Most people affected whether as victims
         or as injurers by accidents and other injury-causing events are
         residents of the jurisdiction in which the event takes place. So
         if law can be assumed to be generally responsive to the values
         and preferences of the people who live in the community that
         formulated the law, the law of the place of the accident can be
         expected to reflect the values and preferences of the people
         most likely to be involved in accidents–can be expected, in
         other words, to be responsive and responsible law, law that
         internalizes the costs and benefits of the people affected by it.”
         Spinozzi, 174 F.3d at 844-45.
We now apply section 146 to the record before us.
     Plaintiffs are domiciled and reside in Michigan, and James works
in Michigan. Plaintiffs allege that Sears’ tortious conduct occurred in
Illinois. Comment e of section 146, entitled “When conduct and injury
occur in different states,” addresses this specific situation. “The local
law of the state where the personal injury occurred is most likely to be
applied when the injured person has a settled relationship to that state,
either because he is domiciled or resides there or because he does
business there.” Restatement (Second) of Conflict of Laws §146,
Comment e, at 432 (1971). In contrast:

                                   -15-
             “The state where the conduct occurred is even more likely
         to be the state of most significant relationship *** when, in
         addition to the injured person’s being domiciled or residing or
         doing business in the state, the injury occurred in the course of
         an activity or of a relationship which was centered there.”
         (Emphasis added.) Restatement (Second) of Conflict of Laws
         §146, Comment e, at 432 (1971).
If this guidance were not enough, the comments to section 146 further
advise: “The likelihood that some state other than that where the
injury occurred is the state of most significant relationship is greater
in those relatively rare situations where, with respect to the particular
issue, the state of injury bears little relation to the occurrence and the
parties.”(Emphasis added.) Restatement (Second) of Conflict of Laws
§146, Comment c, at 430-31 (1971).
     In this case, Jacob was injured while James was operating the
tractor mower in the front yard of their home in Michigan. This
activity was centered in plaintiffs’ Michigan community. Based on the
record before us, a strong presumption exists that the law of the place
of injury, Michigan, governs the substantive issues herein, unless
plaintiffs can demonstrate that Michigan bears little relation to the
occurrence and the parties, or put another way, that Illinois has a
more significant relationship to the occurrence and the parties with
respect to a particular issue.

        E. Another State With a More Significant Relationship
    We now test this presumptive choice against the principles of
section 6 in light of the contacts identified in section 145(2). At the
outset, we observe that courts describe this analysis differently. This
court has essentially first identified the four contacts listed in section
145(2) and then applied the general principles of section 6 to those
contacts. See, e.g., Esser v. McIntyre, 169 Ill. 2d 292, 298-99 (1996);
Nelson v. Hix, 122 Ill. 2d 343, 349-51 (1988). Other courts have
similarly described this analysis. See, e.g., Morgan, 15 Ohio St. 3d at
342, 474 N.E.2d at 289 (describing test as evaluating four contacts
and “any factors under Section 6 which the court may deem relevant
to the litigation”); Malena, 264 Neb. at 767-68, 651 N.W.2d at 856-
57 (describing test as first identifying contacts; next: “These contacts

                                  -16-
must be balanced in accordance with their significance to the general
principles under §6(2)”).
    However, beginning in 1981, our appellate court has construed
sections 6 and 145 of the Second Restatement of Conflict of Laws
together to describe a three-step process for determining whether a
particular contact is significant for choice-of-law purposes: (1) isolate
the issue and define the conflict; (2) identify the policies embraced in
the conflicting laws; and (3) examine the contacts of the respective
states to determine which has a superior connection with the
occurrence and thus would have a superior interest in having its policy
or law applied. Morris B. Chapman, 307 Ill. App. 3d at 100-01
(collecting cases); Vickrey v. Caterpillar Tractor Co., 146 Ill. App. 3d
1023, 1026 (1986); Mitchell, 100 Ill. App. 3d at 494, relying on
Miller v. Miller, 22 N.Y.2d 12, 16, 237 N.E.2d 877, 879, 290
N.Y.S.2d 734, 737 (1968) (and cases quoted therein). This
description, essentially first identifying the relevant section 6 general
principles and then applying the four section 145(2) contacts to the
general principles, likewise accords with decisions from other courts.
See, e.g., Dorman, 23 F.3d at 1359 (applying Missouri law);
McKinnon, 170 Vt. at 424-25, 750 A.2d at 1028-29; Phillips, 298
Mont. at 447, 995 P.2d at 1008 (addressing section 6 principles,
“taking into account, when appropriate, the contacts of §145(2)”).
    We need not–and do not–resolve this descriptive discrepancy, if
such it is, today. Our section 145 analysis confirms our presumptive
choice of Michigan law as governing the substantive issues in the
present case. In any event, we agree with Sears that, from a practical
standpoint in most cases, it should not make a difference whether a
court first looks to the section 145(2) contacts or to the section 6
general principles. In either case the Second Restatement’s goal is the
same–to ensure that a court is not merely “counting contacts,” and
that each contact is meaningful in light of the policies sought to be
vindicated by the conflicting laws.
    We now consider the section 145 contacts presented in this case.
First, the injury occurred in Michigan. As previously discussed, in a
personal injury action, this raises a presumption in favor of Michigan
law. Restatement (Second) of Conflict of Laws §146 (1971). In the
context of a most-significant-relationship analysis, section 145
cautions that situations exist where the place of the injury will not be

                                  -17-
an important contact, for example, where the place of the injury is
fortuitous. Restatement (Second) of Conflict of Laws §145, Comment
e, at 419 (1971). In this case, however, Michigan has a strong
relationship to the occurrence and the parties. Michigan is the place
where James purchased the lawn tractor, the place where he used the
lawn tractor, and the place where he and the named plaintiffs, his wife
Michelle and his son Jacob, are domiciled and reside. See, e.g.,
Dorman, 23 F.3d at 1360.
    The second contact in section 145 is the place where the conduct
causing the injury occurred. According to plaintiffs’ theories of the
case, Sears committed the allegedly culpable acts in Illinois. The
appellate court excluded from its analysis James’ alleged conduct
contributing to the injury, reasoning that he was not a party. 368 Ill.
App. 3d at 909-10. However, Sears pled affirmative defenses alleging
contributory negligence on the part of James and Michelle. A court’s
consideration of injury-causing conduct in a section 145 analysis
includes all conduct from any source contributing to the injury. See
Walters v. Maren Engineering Corp., 246 Ill. App. 3d 1084, 1090-91
(1993) (considering place of contributory negligence). We view this
contact as a wash.
    The third contact is the domicile, residence, place of
incorporation, and place of business of the parties. Here, plaintiffs
reside in Michigan and Sears is headquartered in Illinois. We view this
contact as a wash. The fourth contact is the place where the
relationship, if any, between the parties is centered. In this case, the
relationship between plaintiffs and Sears arose from James’ purchase
of the lawn tractor at a local Sears store doing business in Michigan.
See, e.g., Nichols v. G.D. Searle & Co., 282 Ill. App. 3d 781, 784
(1996) (concluding that, where plaintiffs pled claims including
negligence and strict liability, relationship was centered in each state
where a plaintiff used product).
    In sum, the first contact favors Michigan; we consider the second
and third contacts each a wash; and the fourth contact favors
Michigan. Considered alone, these contacts certainly do not override
our presumption that Michigan law governs the substantive issues
presented in this case. However, we must not merely “count contacts”
but, rather, consider them in light of the general principles embodied
in section 6.

                                 -18-
    A detailed analysis of all seven of the section 6 general principles
is unnecessary. The commentary to section 145 explains that, in a
personal injury action, section 6(2)(d), the protection of justified
expectations, and section 6(2)(f), certainty, predictability, and
uniformity of result, are implicated only minimally in a personal injury
action arising from an accident. Restatement (Second) of Conflict of
Laws §145, Comment b, at 415-16 (1971). Similarly, section 6(2)(a),
the needs of the interstate system, is only minimally implicated in
personal injury actions. It cannot be said that harmonious relations
between states will be advanced by applying either Michigan or Illinois
law. See, e.g., Phillips, 298 Mont. at 447-48, 995 P.2d at 1008-09;
Dorman, 23 F.3d at 1359. Further, section 6(2)(g), the ease in the
determination and application of the law to be applied, yields no
discernible advantage to Illinois law over Michigan law in this case.
    Thus, we are left to consider the following general principles
embodied in section 6(2) with respect to each of the three identified
conflicts: (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; and (e) the basic
policies underlying the particular field of law. In our analysis, we are
mindful:
        “States do refuse to enforce foreign law that is particularly
        obnoxious to them. [Citations.] But obviously the mere fact
        that foreign and domestic law differ on some point is not
        enough to invoke the exception. Otherwise in every case of an
        actual conflict the court of the forum state would choose its
        own law; there would be no law of conflict of laws.” Spinozzi,
174 F.3d at 846-47.
Considering the policies and interests of Michigan and Illinois, and of
the field of tort law, we are unable to conclude that Illinois’
relationship to this case is so pivotal as to overcome the presumption
that Michigan, as the state where the injury occurred, is the state with
the most significant relationship.

                             1. Liability
   The first conflict is between Illinois’ strict liability standard and
Michigan’s negligence standard for product liability actions based on

                                 -19-
defective design. The appellate court characterized the underlying
policy of Illinois’ law as essentially pro-consumer and pro-corporate
regulation, and characterized the underlying policy of Michigan’s law
as essentially producer protective. 368 Ill. App. 3d at 908-09. The
appellate court concluded: “Illinois has a strong interest in applying its
products liability law to regulate culpable conduct occurring within its
borders, induce the design of safer products, and deter future
misconduct.” 368 Ill. App. 3d at 910. Reasonable minds may disagree
as to the accuracy of the appellate court’s characterization of the
underlying policy of Michigan’s negligence standard–the Supreme
Court of Michigan might. In adopting a negligence standard for
product liability actions based on defective design, that court viewed
a negligence standard as being pro-consumer. First, a negligence
standard would reward the careful manufacturer and punish the
careless manufacturer. A fault system would produce a greater
incentive to design safer products, where the careful and safe design
will be rewarded with fewer claims and lower insurance premiums.
Second, a verdict for a plaintiff in a design defect case is the
equivalent of a determination that an entire product line is defective.
Prentis, 421 Mich. at 689-90, 365 N.W.2d at 185. Of course, this
court long ago expressed disagreement with this view (Suvada v.
White Motor Co., 32 Ill. 2d 612, 618-22 (1965)), but that is not the
point. “Every state has an interest in compensating its domiciliaries for
their injuries. But tort rules which limit liability are entitled to the
same consideration when determining choice-of-law issues as rules
that impose liability.” Malena, 264 Neb. at 769, 651 N.W.2d at 858.
We trust that characterizations such as “pro-consumer” or “pro-
business” will not often appear in future choice-of-law cases.

         2. Compensatory Damages for Noneconomic Injuries
     The next conflict is between the absence of a statutory cap on
compensatory damages for noneconomic injuries in Illinois, and the
existence of such a cap in Michigan. The appellate court, observing
that this court declared a statutory cap unconstitutional in Best, 179
Ill. 2d at 384-416, reasoned as follows:
         “We recognize that plaintiffs, as Michigan residents, are not
         subject to Illinois’s constitutional protections and, therefore,
         Illinois would have little or no interest in protecting plaintiffs

                                   -20-
         from caps on noneconomic damages. Nevertheless, we must
         also consider that Illinois, as the forum state where the case
         will be tried, has a very strong interest in its constitutional
         protection of separation of powers within its borders and,
         therefore, has a strong interest in protecting against another
         state’s legislative encroachment on the inherent power of its
         judiciary to determine whether a jury verdict is excessive.
         Thus, Illinois has a compelling public policy interest in
         applying Illinois law with respect to caps on noneconomic
         damages.” 368 Ill. App. 3d at 912.
We cannot accept this reasoning. We agree with Sears that
enforcement by an Illinois court of the Michigan cap on noneconomic
damages does not constitute an encroachment of separation of powers
in Illinois. Rather, such enforcement simply applies a Michigan statute
against a Michigan resident that has been upheld as constitutional in
Michigan.

                          3. Punitive Damages
    The last conflict is between the availability of punitive damages in
product liability cases when appropriate, in Illinois, and the general
unavailability of punitive damages in Michigan. The appellate court
observed that the purposes of punitive damages are to punish the
defendant and deter future wrongdoing. Based on this unremarkable
premise (see Kelsay, 74 Ill. 2d at 186), the appellate court again
posited that punitive damages reflect “a corporate regulatory policy,”
while the disallowance of punitive damages “reflects a corporate
protection policy.” 368 Ill. App. 3d at 911, The appellate court then
determined that “Illinois, where the alleged design defects and
corporate knowledge of previous accidents occurred, has a definite
interest in punishment, deterrence of future wrongdoing, and
corporate accountability.” 368 Ill. App. 3d at 911, citing Restatement
(Second) of Conflict of Laws §146, Comments c, e, at 430, 432
(1971). The appellate court concluded:
            “Michigan, the place of plaintiffs’ residence and the place
        of injury, has an interest in assuring that plaintiffs are
        compensated for their injuries. Nevertheless, where the
        purpose of disallowing punitive damages is not related to

                                 -21-
        redressing the plaintiffs’ injury, once the plaintiffs are made
        whole by recovery of the compensatory damages to which
        they are entitled, the interests of Michigan law are satisfied.
        [Citation.] Accordingly, Illinois, as Sears’ principal place of
        business and the place where the alleged corporate misconduct
        occurred, has the most significant relationship to the issue of
        punitive damages.” 368 Ill. App. 3d at 911.
We disagree.
    Again, the purpose of the section 145 analysis is to test our strong
presumption that the law of Michigan, where plaintiffs reside and the
place of injury, should govern the substantive issues in this case.
Restatement (Second) of Conflict of Laws §146, Comment e, at 432
(1971). The appellate court characterization that Michigan “has an
interest” in this conflict is an understatement that fails to recognize the
strong presumption in favor of applying Michigan law.
    Also, although the appellate court cited to comments c and e of
section 146, the court misapprehended their full meaning. Certainly,
comment c instructs: “The extent of the interest of each of the
potentially interested states should be determined on the basis, among
other things, of the purpose sought to be achieved by their relevant
local law rules and of the particular issue.” Restatement (Second) of
Conflict of Laws §146, Comment c, at 430 (1971). However, the
comment continues on the same page to advise: “The likelihood that
some state other than that where the injury occurred is the state of
most significant relationship is greater in those relatively rare
situations where, with respect to the particular issue, the state of
injury bears little relation to the occurrence and the parties.”(Emphasis
added.) Restatement (Second) of Conflict of Laws §146, Comment c,
at 430-31 (1971).
    Likewise, the passage in comment e, to which the appellate court
cited, actually states in full:
        “[A]n important factor in determining which is the state of
        most significant relationship is the purpose sought to be
        achieved by the rule of tort law involved. If this purpose is to
        punish the tortfeasor and thus to deter others from following
        his example, there is better reason to say that the state where
        the conduct occurred is the state of dominant interest and that

                                   -22-
          its local law should control than if the tort rule is designed
          primarily to compensate the victim for his injuries *** . In the
          latter situation, the state where the injury occurred would
          seem to have a greater interest than the state of conduct. This
          factor must not be over-emphasized. To some extent, at least,
          every tort rule is designed both to deter other wrongdoers and
          to compensate the injured person. Undoubtedly, the relative
          weight of these two objectives varies somewhat from rule to
          rule, but in the case of a given rule it will frequently be
          difficult to determine which of these objectives is the more
          important.” (Emphases added.) Restatement (Second) of
          Conflict of Laws §146, Comment e, at 432-33 (1971).
Despite this explicit caution, the appellate court not only undervalued
the strong presumption in favor of Michigan law, but overemphasized
its perception of the interests Illinois and Michigan have in their
different concepts of tort damages.
     Illinois certainly has a legitimate interest in the liability to be
imposed on Illinois-based defendants under strict liability or
negligence principles. However, Michigan has an equally legitimate
interest in the remedies to be afforded its residents who suffer such
tort injuries. And if the substantive law of these two states looks in
different directions, each state would seem to have an equal interest
in having its tort rule applied in the determination of the conflicting
issues presented in this case. See Hardly Able Coal Co. v.
International Harvester Co., 494 F. Supp. 249, 251 (N.D. Ill. 1980)
(applying Illinois law, concluding that law of Kentucky, where injury
occurred, governs). We conclude that a section 145 analysis does not
override our strong presumption that the law of Michigan, as the state
where plaintiffs reside and where the injury occurred, governs the
conflicting issues presented in this case.
     In sum, a court begins a choice-of-law analysis in a tort case by
ascertaining whether a specific presumptive rule, such as section 146
in a personal injury action, applies to the disputed conflict. Next, if the
presumptive rule points to a specific jurisdiction, then the court must
test this presumptive choice against the principles embodied in section
6 in light of the relevant contacts identified by the general tort
principle in section 145. The presumptive choice controls unless
overridden by the section 145 analysis.

                                   -23-
                         III. CONCLUSION
    For the foregoing reasons, the judgment of the appellate court and
the order of the circuit court of Cook County are vacated, and this
cause is remanded to the circuit court for further proceedings
consistent with this opinion.

                                  Appellate court judgment vacated;
                                        circuit court order vacated;
                                                    cause remanded.

   JUSTICES KILBRIDE and BURKE took no part in the
consideration or decision of this case.

                                -24-