Before this court are briefs discussing the choice-of-law issues implicated by the United States' Motion for a Determination of Good Faith Settlement. The government's deceptively innocuous motion raises the complex issue of whether the government's settlement with the plaintiffs is subject to good faith review under Illinois law, Colorado law, or the law of some other state. Choice of law determinations in mass tort cases are always tedious. Our burden is increased unnecessarily when -- as in this case -- the parties fail to address directly the conflict fueling the controversy and fail to candidly discuss the substantive law of the relevant states.
The parties focused their briefs on the law of contribution, ie. which state's law should apply the defendants' contribution claims against the government. A review of Washington, Illinois and Colorado's contribution statutes shows that there is no real conflict pertaining to contribution; all three states' statutes protect settling defendants from contribution actions, if the settlement was made in good faith.
740 ILCS 100/2; RCWA 4.22.060; C.R.S. 13-50.5-105. If contribution were the real matter at issue, there would be no true conflict, and we could proceed with our determination of whether the government's settlements with the plaintiffs were in good faith.
However, the settlement agreements also raise the issue of whether the remaining defendants' share of liability will be reduced by the government's proportionate share of liability, or by the actual amount paid in settlement. On this issue, there is a true conflict between the substantive law of the three states with an interest in this litigation.
Colorado limits the damages paid by a defendant to the defendant's proportionate share of the total liability. C.R.S. 13-21-111.5(1). Any award received by a plaintiff must be reduced by the proportionate share of that award attributable to settling defendants. C.R.S. 13-50.5-105(1)(a).
Illinois holds joint tortfeasors jointly and severally liable, unless a tortfeasor is less than 25% responsible for the plaintiff's injuries. 735 ILCS 5/2-1117. Illinois law reduces a co-defendant's liability by the actual amount of any settlement the plaintiff has reached with another defendant. 740 ILCS 100/2; Tragarz v. Keene Corp., 980 F.2d 411, 431 (7th Cir. 1992); Henry by Henry v. St. John's Hosp., 138 Ill. 2d 533, 541, 150 Ill. Dec. 523, 563 N.E.2d 410 (Ill. 1990), cert. den. 499 U.S. 976, 111 S. Ct. 1623, 113 L. Ed. 2d 720 (1991).
Contrary to Boeing's representation, Washington's law is similar to that of Illinois. In Washington, a defendant is generally only severally liable for its joint torts. When, as here, the claimant is in no way responsible for his own injuries, Washington holds tortfeasors jointly and severally liable. RCWA 4.22.070(1)(b); Washburn v. Beatt Equipment Co., 120 Wash. 2d 246, 840 P.2d 860, 886 (Wash. 1992). Boeing shamefully failed to include in its discussion this exception to Washington's general rule, despite the exception's direct applicability to the facts in this case.
Rather than discuss Washington's statute, the plaintiff's gave an accurate litigant the defendants' procedural misdeeds. While we understand and share the plaintiffs' frustrations, we cannot excuse their failure to notice a significant statute.
Finally, as in Illinois, the plaintiff's award will be reduced by the actual amount paid by a settling defendant, not the settling defendant's proportionate share of fault. RCWA 4.22.060(2).
The Washington statute also differs from the Illinois statute in that Washington law applies joint and several liability only to tortfeasors against whom judgment has been entered; Illinois has no such restriction. Thus, there appears to be a conflict between the laws of these two states. A rational plaintiff in Washington, however, will agree not to enforce a judgment against a settling joint tortfeasor. This puts a rational plaintiff in Washington in the same position as a plaintiff in Illinois who releases a settling defendant from liability. In the end, the effect of settlement on the remaining defendants is the same under either state's regime: the non-settling defendant's liability to the plaintiff will be reduced by the actual amount paid in settlement. Washburn, 840 P.2d at 887; Berard v. Eagle Air Helicopter Inc., 257 Ill. App. 3d 778, 780, 629 N.E.2d 221, 223, 195 Ill. Dec. 913 (Ill. App. 1994). There is no true conflict between the law of Illinois and the law of Washington, as they apply in this case.
Which State's Law Applies
Since the issue of joint and several liability is not related to the claims arising from the Federal Tort Claims Liability Act, that statute's choice of law provision is of no interest here.
The effect of the government's settlement on the remaining defendants is based on plaintiffs claims against those defendants. See Boeing's Brief at p. 11. Since this court has supplemental jurisdiction over those claims, we will apply the choice of law rules of the forum state, Illinois. Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 496, 85 L. Ed. 1477, 61 S. Ct. 1020 (1941); Ashmore v. Northeast Petroleum Div. of Cargill, Inc., 843 F. Supp. 759, 772 (D. Me. 1994). As a practical matter, we found no significant difference in the choice-of-law rules of Colorado and Illinois. Both employ the Restatement (Second) approach. Indeed, Colorado choice-of-law cases cite to Illinois authority. See e.g. In Re Air Crash Disaster at Stapelton Intern. Airport Denver Colo. on Nov. 15, 1987, 720 F. Supp. 1445 (D. Colo. 1988).
Illinois' Choice of Law
Illinois has adopted the Restatement (Second) Choice of Law as its method of resolving conflicts of law issues. Ingersoll v. Klein, 46 Ill. 2d 42, 262 N.E.2d 593 (1970). Under the Restatement approach, we must apply the law of the state with the most significant relationship to the particular matter at issue. In re Air Crash Disaster Near Chicago, Illinois on May 25, 1979, 644 F.2d 594, 611 (7th Cir. 1981), cert. den., 454 U.S. 878 (1981).
The "most significant relationship" is measured by two sets of criteria. The first consists of the following general factors, listed in order of importance:
(a) the needs of the interstate system;