Spinozzi v. ITT Sheraton Corp.

• Decision Date: 01 April 1999
• Docket Number: No. 97-4076,97-4076
• Citation: 174 F.3d 842
• Parties: Thomas SPINOZZI and Linda Spinozzi, Plaintiffs-Appellants, v. ITT SHERATON CORPORATION, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 842

174 F.3d 842

Thomas SPINOZZI and Linda Spinozzi, Plaintiffs-Appellants, v. ITT SHERATON CORPORATION, et al., Defendants-Appellees.

No. 97-4076.

United States Court of Appeals,

Seventh Circuit.

Argued Jan. 15, 1999.

Decided April 1, 1999.

William J. Foote (argued), Dreyer, Foote, Streit, Furgason & Slocum, Aurora, IL, for Plaintiffs-Appellants.

Edmund J. Siegert (argued), Tressler, Soderstrom, Maloney & Priess, Wheaton, IL; William J. Cremer, Cremer, Kopon, Shaughnessy & Spina, Chicago, IL, for Defendants-Appellees.

Before POSNER, Chief Judge, and KANNE and EVANS, Circuit Judges.

POSNER, Chief Judge.

Dr. Thomas Spinozzi, a dentist who lives and works in Illinois, and his wife Linda went to Acapulco on vacation. They stayed at a Sheraton hotel. Dr. Spinozzi fell into a maintenance pit on the hotel grounds and was seriously injured. He and his wife (the wife claiming loss of consortium) brought suit in a federal district court in Illinois, under the diversity jurisdiction, against the Mexican corporation that owns the hotel, and three affiliates of that corporation. The suit alleges negligence. It was dismissed on summary judgment. The district judge held that under Illinois conflict of laws principles, which of course bind him in this diversity suit, Klaxon v. Stentor Electric Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941), Mexican law governs the substantive issues; and that law, he concluded, bars the plaintiff's claims, mainly because it makes contributory negligence a complete defense to negligence liability and the uncontested facts showed that Dr. Spinozzi had been contributorily negligent. The Spinozzis' appeal challenges both the conflicts ruling--they contend that Illinois rather than Mexican tort law applies--and the ruling that Dr. Spinozzi was contributorily negligent as a matter of law.

The ownership structure of the Sheraton Acapulco Resort is complex, but to simplify the opinion we shall assume, favorably to the plaintiffs, that it is owned and operated by ITT Sheraton Corporation ("Sheraton"), a Delaware corporation with its principal place of business in Massachusetts, and forget the other defendants. Sheraton advertises its hotels all over the world, including Illinois, and it was in response to an advertisement in Illinois that the Spinozzis decided to stay at the Sheraton Acapulco. In fact, because Mrs. Spinozzi is a travel agent, Sheraton granted the Spinozzis a special rate to induce them to stay at the hotel. The plaintiffs argue that by its promotional activities in Illinois directed particularly to the small group (travel agents and their spouses) to which the Spinozzis belong, Sheraton should be taken to have "caused" in Illinois the injury to Dr. Spinozzi. And this injury-causing activity in Illinois, when taken in conjunction with the fact that the plaintiffs are Illinois residents, establishes (the plaintiffs argue) that the preponderance of "contacts" between the plaintiffs and either Illinois or Mexico was with Illinois, and not, as one might suppose from the location of the accident, with Mexico.

Under the ancien regime of conflict of laws, this argument would have been a nonstarter. The rule was simple: the law applicable to a tort suit was the law of the place where the tort occurred, more precisely the place where the last act, namely the plaintiff's injury, necessary to make the defendant's careless or otherwise wrongful behavior actually tortious, occurred, Restatement of Conflicts §§ 377-378 (1934); 2 Joseph H. Beale, A Treatise on the Conflict of Laws § 377.2, pp. 1287-88 (1935), and here that place was Mexico. This and other simple rules of conflict of laws came to seem too rigid, mainly because of such anomalies as suits between citizens of the same state when it was not the state where the accident had occurred. See, e.g., Babcock v. Jackson, 12 N.Y.2d 473, 240 N.Y.S.2d 743, 191 N.E.2d 279 (1963). But the search for flexibility led, alas, to standards that were nebulous, such as the "most significant relationship" test of the Second Restatement that is orthodox in Illinois, Ingersoll v. Klein, 46 Ill.2d 42, 262 N.E.2d 593 (1970), and a number of other states. E.g., Amiot v. Ames, 166 Vt. 288, 693 A.2d 675 (1997); Hataway v. McKinley, 830 S.W.2d 53 (Tenn.1992); Travelers Indemnity Co. v. Lake, 594 A.2d 38 (Del.1991); Hubbard Mfg. Co. v. Greeson, 515 N.E.2d 1071 (Ind.1987); O'Connor v. O'Connor, 201 Conn. 632, 519 A.2d 13 (1986); see Restatement (Second) of Conflict of Laws § 145(1) (1971).

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. Ingersoll v. Klein, supra, 262 N.E.2d at 595; Ferguson v. Kasbohm, 131 Ill.App.3d 424, 86 Ill.Dec. 605, 475 N.E.2d 984, 987 (1985); Kuehn v. Childrens Hospital, 119 F.3d 1296, 1301 (7th Cir.1997); In re Air Crash Disaster Near Chicago, 644 F.2d 594, 611, 628-29 (7th Cir.1981); Travelers Indemnity Co. v Lake, supra, 594 A.2d at 47; Pevoski v. Pevoski, 371 Mass. 358, 358 N.E.2d 416, 417 (1976); Restatement (Second) of Conflict of Laws, supra, § 145 comment e, § 146. 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.

Only a tiny fraction of hotel guests in Mexico are from Illinois. Illinois residents may want a higher standard of care than the average hotel guest in Mexico, but to supplant Mexican by Illinois tort law would disserve the general welfare because it would mean that Mexican safety standards (insofar as they are influenced by tort suits) were being set by people having little stake in those standards. Of course the plaintiffs do not argue that Illinois tort law should govern all accidents in Mexican hotels. They argue for something that is even worse--that each guest be permitted to carry with him the tort law of his state or country, provided that he is staying in a hotel that had advertised there. The domicile of the hotel's owner would be irrelevant. If a French citizen were injured in a hotel in Mexico owned by a German corporation that had advertised in France, the law applicable to his suit against the German corporation would be French law. If in the course of a year citizens of a hundred different countries and U.S. states stayed at the Sheraton Acapulco Resort, Sheraton would be subject to a hundred different bodies of tort law. Inconsistent duties of care might be imposed. Kuehn v. Childrens Hospital, supra, 119 F.3d at 1302. A resort might have a system of firewalls that under the law of some states or nations might be considered essential to safety and in others might be considered a safety hazard. Suppose the resort burned down and dozens of injured guests sued: according to the plaintiffs' notion of conflict of laws, each claim would be governed by a different tort regime if each plaintiff was from a different state or country. If the regimes were incompatible, it might be impossible for Sheraton to escape liability to some of the plaintiffs no matter how careful it had been. Negligence would be strict liability.

Uniformity of tort law and consequent avoidance of anomalies cannot, we recognize, be achieved by an interpretation just of Illinois' conflict of law rules. Guests of the Sheraton Acapulco Resort who come from somewhere else and sue in their home court will be governed by the conflict of laws rules applied by that court, which may differ from Illinois'. But there might be general agreement that the law of the place of the injury is presumptively the right law to apply to issues of duty of care, for the reasons that we have suggested. "[A] state may not exercise jurisdiction to prescribe law with respect to a person or activity having connections with another state when the exercise of such jurisdiction is unreasonable." Restatement (Third) of the Foreign Relations Law of the United States § 403(1) (1987). It is unreasonable that the Illinois courts should be setting safety standards for hotels in Mexico.

Sheraton could, it is true, include in all its contracts with its guests a forum-selection clause that would require the guest to sue in a jurisdiction in which lex loci delicti (the law of the place of the accident) was the default rule. Id., § 421 comment h; Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585, 593, 111 S.Ct. 1522, 113 L.Ed.2d 622 (1991). It might, for that matter, specify the jurisdiction whose tort law would govern in the event of an accident; contractual choice of tort law provisions are generally enforceable. Chan v. Society Expeditions, Inc., 123 F.3d 1287, 1296-98 (9th Cir.1997); Kuehn v. Childrens Hospital, supra, 119 F.3d at 1301-02. Sheraton has followed neither course, and this undermines its claim to be concerned with being subjected to the different and even conflicting tort laws of dozens or hundreds of different jurisdictions. Id. at 1302. But that cannot be the end of the analysis. There is no rule that there shall be no conflict of laws analysis--that the law of the jurisdiction where the suit is brought (lex fori) shall apply--unless the parties...