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HARDLY ABLE COAL, ETC. v. INTERNATIONAL HARV.

July 23, 1980

HARDLY ABLE COAL COMPANY, INC., PLAINTIFF,
v.
INTERNATIONAL HARVESTER COMPANY, DEFENDANT.



The opinion of the court was delivered by: Shadur, District Judge.

OPINION AND ORDER

Defendant has moved to strike the allegations of "economic loss" in plaintiff's complaint and to dismiss the case. For the reasons stated in this opinion and order, that motion is denied.

Two legal questions are posed by defendant's motion:

  1. What state's substantive law is applicable to
     plaintiff's cause of action in this diversity
     case?

Facts

Plaintiff's complaint charges that a bulldozer designed, manufactured and sold by defendant was either improperly or negligently designed and manufactured. In either case, the stated consequences were these:

  "[W]hen the hoist ram hydraulic crossover hose failed
  on the alleged bulldozer unit, hydraulic fluid
  escaped under pressure and sprayed upon the engine
  and turbocharger housing causing a subsequent fire
  and explosion which seriously, severely and
  substantially damaged and destroyed the entire
  aforesaid International Harvester Model TD-25C Pay
  Dozer, chassis number 4350064U006339; that as a
  result of the foregoing extensive damage, the
  plaintiff has been unable to repair said bulldozer
  and the same has been scrapped; that as a result of
  the foregoing damage to the bulldozer unit, the
  plaintiff has been caused to incur substantial costs
  in order to remove said damaged bulldozer unit from
  the job site for analysis, repair evaluation and
  ultimate demolition; that as a result of the
  foregoing damage to the bulldozer unit, the plaintiff
  has been caused to rent at great expense replacement
  equipment in order to continue with its operation all
  at its own costs; that as a result of the foregoing
  damage to the bulldozer unit, the plaintiff has been
  required to expend additional sums to obtain
  permanent replacement equipment and has lost earnings
  and profits thereby."

Choice of Law

Illinois choice of law doctrine of course applies under familiar Erie v. Tompkins principles, Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941). In turn, Ingersoll v. Klein, 46 Ill.2d 42, 45, 262 N.E.2d 593, 595 (1970) states the Illinois conflicts rule in tort cases:

  "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, in which case the law of Illinois should
  apply."

For that purpose Illinois courts follow the Restatement (Second) of Conflicts of Law, under Section 145 of which the following contacts are to be evaluated in accordance with their relative importance to the particular issues presented by the lawsuit:

(a) the place where the injury occurred;

    (b) the place where the conduct causing the injury
    ...

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