No. 5-99-0830 IN THE APPELLATE COURT OF ... - Appellate.net

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cannot be faked and cannot be ignored. Non-OEM parts simply cannot have been as universally inferior as plaintiffs claimed they were. Because the evidence overwhelmingly demonstrates that plaintiffs did not and cannot prove their breach of contract claim on a classwide basis, the judgment must be reversed and the class decertified. III. The ICFA Judgment Should Be Reversed. The $730 million judgment imposed on State Farm by the circuit court should also be vacated and the ICFA class decertified. In the alternative, judgment should be entered in favor of State Farm on the ICFA claim. The circuit court erred as a matter of law in applying ICFA on a nationwide basis to the claims of all class members. Furthermore, even under ICFA, the circuit court’s conclusions were contrary to the statutory language and the manifest weight of the evidence and do not support either its finding of liability or its imposition of $130 million in “disgorgement” damages. A. ICFA Cannot Be Applied To Out-of-State Insurance Transactions. 50/ The vast majority of class members have never set foot in Illinois. They have never met or talked to a State Farm employee who works in Illinois. Their contact with State Farm is through its local agent, its local claims representative, and its local adjuster. Their cars are garaged outside Illinois. Their accidents occurred outside Illinois. Their estimates were written outside Illinois. Disclosures were made outside Illinois. Non-OEM parts were installed (if at all) outside Illinois. Damages, if any, accrued outside Illinois. Most plaintiffs simply have no contact with Illinois, and Illinois has no contact with them. 50/ Review of the circuit court’s decision to apply Illinois law is de novo. See Lucas v. Lakin, 175 Ill.2d 166, 171 (1997); Morris B. Chapman & Assocs. v. Kitzman, 307 Ill.App.3d 92, 99 (5th Dist. 1999), appeal granted, 187 Ill.2d 571 (2000). -110-
In contrast, each of the 47 other states in the class has substantial contacts with resident class members, and with State Farm. Each state regulates local insurance transactions and disclosures. Each state has consumer protection laws. Each state regulates local repair practices, and most states regulate non-OEM parts. Each state has implemented these regulatory schemes pursuant to different policies with different emphases. Yet the circuit court ruled that Illinois’ consumer fraud law would decide what State Farm could do in every other state, no matter what the legislature and insurance commissioner in those states had to say. ICFA was applied nationwide because it was convenient, not because it was appropriate. Having conjured up a sprawling class action that would be untriable if governed by the laws of 48 states, plaintiffs resorted to the fiction that ICFA follows State Farm wherever it goes because State Farm is headquartered in Illinois. The circuit court’s acceptance of this fiction was an error of law that requires reversal of the ICFA judgment and decertification of the nationwide class. 1. ICFA Does Not Provide A Cause Of Action For Class Members With No Transactional Nexus To Illinois. The Illinois Supreme Court has recognized that the purpose of ICFA “is to protect Illinois consumers, borrowers, and businessmen.” Scott v. Association for Childbirth at Home, 88 Ill.2d 279, 288 (1981) (emphasis added). To that end, ICFA prohibits fraud only “in the conduct of trade or commerce,” which is defined as “trade or commerce directly or indirectly affecting the people of this State.” 815 ILCS 505/1(f) & 505/2 (emphasis added). Thus, on its face, ICFA does not supply a cause of action to out-of-state residents whose insurance claims were adjusted and whose cars were repaired outside of Illinois because -111-
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No. 5-99-0830 IN THE APPELLATE COUR
Page 3 and 4:
Charles Hester Enters. v. Illinois
Page 5 and 6:
In re Fibreboard Corp., 893 F.2d 70
Page 7 and 8:
State v. Piedmont Funding Corp., 38
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Hansberry v. Lee, 311 U.S. 32 (1940
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1. Plaintiffs’ Body Shop Witnesse
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People v. Clayton, 302 Ill.App.3d 2
Page 15 and 16:
VPHI, Inc. v. National Educ. Traini
Page 17 and 18:
Okada v. MGIC Indem. Corp., 823 F.2
Page 19 and 20:
Zekman v. Direct Am. Marketers, Inc
Page 21 and 22:
Malooley v. Alice, 251 Ill.App.3d 5
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NATURE OF THE CASE This is an appea
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STATUTES INVOLVED Relevant portions
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to its “pre-loss condition.” DX
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OEM parts. 5/ At least two states
Page 31 and 32:
paid the difference in cost out of
Page 33 and 34:
epair estimate specified only OEM p
Page 35 and 36:
potential class members whose names
Page 37 and 38:
member’s vehicle other than those
Page 39 and 40:
William Anderton, who had previousl
Page 41 and 42:
categorically inferior and, in fact
Page 43 and 44:
specified on their repair estimates
Page 45 and 46:
Second, plaintiffs sought “instal
Page 47 and 48:
parts] are inferior.” R. 12539 (
Page 49 and 50:
had an adequate remedy at law if St
Page 51 and 52:
loss condition. Instead of requirin
Page 53 and 54:
ARGUMENT I. Class Certification Vio
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members.” Slimack v. Country Life
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of evidence State Farm would be ent
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that are incongruous with the effic
Page 61 and 62:
fenders to its pre-loss condition.
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a result of Allstate’s specificat
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insurance regulators and consumer a
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have been the overwhelming predomin
Page 69 and 70:
some class members and the issue of
Page 71 and 72:
not sooner, that plaintiffs could n
Page 73 and 74:
explained above, class members who
Page 75 and 76:
Even if the court had been right in
Page 77 and 78:
value” of “parts at the time of
Page 79 and 80:
page 7, supra. All of these statute
Page 81 and 82: (7th Cir. 1995) (decertifying class
Page 83 and 84: As the circuit court itself recogni
Page 85 and 86: the same shortcut, arguing — just
Page 87 and 88: epresentatives who appeared at tria
Page 89 and 90: — was injured by the alleged dece
Page 91 and 92: Litig., 182 F.R.D. at 225. Basic fa
Page 93 and 94: Meineke’s continued financial via
Page 95 and 96: this decision, plaintiffs were excu
Page 97 and 98: corresponding OEM part. R. 7169. In
Page 99 and 100: Mathur’s testimony was particular
Page 101 and 102: end of the day, Mathur conceded tha
Page 103 and 104: Zimny, 256 Ill.App.3d 386, 390-91 (
Page 105 and 106: the jury was focused on the wrong i
Page 107 and 108: to its pre-loss condition.” R. 12
Page 109 and 110: quality of non-OEM parts. See Baltu
Page 111 and 112: which is not surprising because the
Page 113 and 114: In this case, plaintiffs’ experts
Page 115 and 116: Bender could not swear that the non
Page 117 and 118: OEM part construction “had some d
Page 119 and 120: theory, even non-OEM parts that are
Page 121 and 122: of his training or expertise”). P
Page 123 and 124: eflected a policy of “discriminat
Page 125 and 126: “speak up for justice.” R. 1301
Page 127 and 128: 12984-85. The perversion of ostensi
Page 129 and 130: Polywheels company makes both the O
Page 131: parts — was simply a made-for-lit
Page 135 and 136: occurred outside Illinois. 51/ In t
Page 137 and 138: laws of the State where the policy
Page 139 and 140: This Court should follow the weight
Page 141 and 142: other states, Illinois cannot apply
Page 143 and 144: state’s law when it is not within
Page 145 and 146: headquartered in Michigan); Endo, 1
Page 147 and 148: for this Court to alter that author
Page 149 and 150: y using parts of like kind and qual
Page 151 and 152: plaintiffs’ failure to identify a
Page 153 and 154: percentage of the class (New York a
Page 155 and 156: committing fraud: if all non-OEM pa
Page 157 and 158: specification damages they had soug
Page 159 and 160: A. It Is Unconstitutional To Punish
Page 161 and 162: that will subject him to punishment
Page 163 and 164: fact benefitted from access to non-
Page 165 and 166: deterrence and therefore must be va
Page 167 and 168: 517 U.S. at 576. This case is not i
Page 169 and 170: either higher premiums or the incre
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No. 5-99-0830 IN THE APPELLATE COURT OF ... - Appellate.net

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