Opinion
No. 01 C 9479
March 18, 2002
ORDER
This matter is before the court on the motion of Plaintiff Cook, Inc. to clarify our February 28 ruling regarding the contractual choice of law provision in a licensing agreement ("the Angiotech agreement") between Angiotech, Cook, and Defendant Boston Scientific Corporation ("Boston"). In that ruling, we upheld and applied the Angiotech agreement's choice of Washington law.
Cook now seeks to clarify the extent of that ruling and its impact on their impending summary judgment motion. Specifically, they ask that we explicitly consider both the public policy considerations of the choice of law as well as the relationship of the chosen state, Washington, to the parties and the transaction. They insist that this additional consideration that was not specifically addressed in our prior ruling will persuade us that the choice-of-law provision is in fact invalid as applied to the issues they will raise on summary judgment.
This case is based primarily on a breach of contract claim, and we sit in diversity. Accordingly, we apply the choice-of-law rules of Illinois.Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496-97 (1941). Illinois follows the analysis laid out in § 187 of the Restatement (Second) of Conflicts of Law when considering the validity of contractual choices of law. English Co. v. Northwest Envirocon, Inc., 663 N.E.2d 448, 452 (Ill.App. 1996); Maher Associates, Inc. v. Quality Cabinets, 640 N.E.2d 1000, 1006 (Ill.App. 1994). Section 187 states that if parties to a contract explicitly provide that their agreement will be governed by the law of a particular state, that law will be applied unless one of two exceptions apply. First, a contractual choice of law will not be honored if the chosen state does not have a substantial relationship to the parties or the transaction and the choice has no other reasonable basis. Second, the choice will not stand if the state whose law would be chosen in the absence of an express provision under the analysis set forth in Restatement (Second) of Conflicts of Law § 188 both has a materially greater interest than that of the chosen state in determining the issue and application of the chosen state's law would violate a fundamental public policy of the state that would be chosen under § 188.
Having considered both of these exceptions in light of the parties' submissions, we again conclude that the choice of Washington law is valid. First, the relationship to be considered is that of the chosen state to the transaction or the parties to that transaction. Cook focuses only on Washington's connections to the parties to this litigation, leaving Angiotech's connections out of the picture. However, not only is Angiotech a party to the agreement, as the licensor, it would have a substantial part in drafting the terms of the agreement. The choice of Washington law is not without a reasonable basis for a license granted by a company located in British Columbia represented by Washington lawyers. Second, although the Washington Supreme Court's decision in Berg v. Hudesman, 801 P.2d 222 (Wash. 1990), has caused some consternation, Washington's stance on the admission of extrinsic evidence does not differ significantly from that taken in other states, including Illinois. See Air Safety, Inc. v. Teachers Realty Corp., 706 N.E.2d 882, 884-86 (Ill. 1999); U.S. Life Credit Ins. Co. v. Williams, 919 P.2d 594 (Wash. 1996). Since neither of the exceptions apply, the law chosen by the parties, Washington, will apply to this dispute.