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

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class members reasonably could have expected that Illinois consumer fraud law would govern any disputes between them. After all, the claim of a typical member of this class involves a repair in, for example, Hawaii to a Hawaii resident’s car pursuant to an insurance policy that was approved by Hawaii’s insurance commissioner. The circuit court’s application of Illinois law to such a claim constitutes adjudication by ambush. There can be no serious doubt that, if an individual claim of this sort had been brought in Hawaii (or even in Illinois), the court would have applied Hawaii law. 55/ Under these circumstances, it can only be deemed “arbitrary and unfair” and a gross violation of due process for an Illinois court to apply Illinois law to the claims of non-resident class members merely because it would facilitate litigation of the case as a class action. The fact that State Farm is headquartered in Illinois changes nothing. Numerous courts have held that application of the law of the defendant’s domicile to transactions that occurred entirely in other states violates the Due Process and Full Faith and Credit Clauses. See, e.g., Poe v. Sears, Roebuck & Co., 1998 WL 113561, at *4 (N.D. Ga. 1998) (under Shutts, applying the law of the State in which the defendant is headquartered “would not pass constitutional muster”); Ford Bronco II Litig., 177 F.R.D. at 371 (under Shutts, Michigan law may not be applied in nationwide class action even though the defendant is 55/ See Okada v. MGIC Indem. Corp., 823 F.2d 276, 280 (9th Cir. 1986) (“Hawaii courts apply Hawaii state law when the acts covered by the policy occur in Hawaii, the insureds are Hawaii citizens, and the insurance company is not a Hawaii citizen.”); see also Eagle-Picher Indus. v. Liberty Mut. Ins. Co., 829 F.2d 227, 248 (1st Cir. 1987) (applying Ohio law where policy was issued in Ohio by Illinois-based insurer to Ohio-based company to cover risks arising in Ohio); Northwestern Mut. Life Ins. Co. v. Wender, 940 F. Supp. 62, 66-67 (S.D.N.Y. 1996) (New York law applies when policy is issued in New York notwithstanding fact that insurer is incorporated in Wisconsin). -122-
headquartered in Michigan); Endo, 1995 WL 170030, at *5 (fact that Illinois is defendant’s primary place of business is not adequate under Shutts to justify applying Illinois law to claims of out-of-state class members); Russo v. Massachusetts Mut. Life Ins. Co., 680 N.Y.S.2d 916, 919 (Sup. Ct. 1998) (“[p]rinciples of comity and federalism, as well as the implications of the Due Process Clause and the Full Faith and Credit Clause, militate against the plaintiffs’ proposal to impose Massachusetts law [the law of the defendant’s domicile] upon every claim of each class member”); see also Masonite Siding Litig., 170 F.R.D. at 423 (under applicable choice-of-law principles, the fact that defendant’s primary place of business is in Illinois does not justify applying Illinois law to the claims of all members of a 50-state class); Duvall v. TRW, Inc., 578 N.E.2d 556, 559 (Ohio App. 1991) (“the fact that TRW is incorporated and headquartered in Ohio” is “an insufficient basis for applying Ohio law to these potential out-of-state class members”). These cases are plainly correct. Under the Full Faith and Credit Clause, Illinois may not apply its law to claims or cases in which it has no legitimate interest, and Illinois cannot claim such an interest with respect to insurance transactions conducted outside Illinois under the regulatory authority of other states simply because the defendant happens to be domiciled in Illinois. See Shutts, 472 U.S. at 821-822. Nor could nationwide application of Illinois law be said to be within “the expectation of the parties,” which the Supreme Court has indicated is “an important element” of the due process analysis. Id. at 822. As explained above, any dispute between State Farm and an out-of-state policyholder regarding a claim adjusted in that policyholder’s state of residence has invariably been governed by the law of that state. That State Farm is headquartered in Illinois would not lead anyone to believe -123-
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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
Page 9 and 10:
Hansberry v. Lee, 311 U.S. 32 (1940
Page 11 and 12:
1. Plaintiffs’ Body Shop Witnesse
Page 13 and 14:
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
Page 25 and 26:
STATUTES INVOLVED Relevant portions
Page 27 and 28:
to its “pre-loss condition.” DX
Page 29 and 30:
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
Page 67 and 68:
have been the overwhelming predomin
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some class members and the issue of
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not sooner, that plaintiffs could n
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explained above, class members who
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Even if the court had been right in
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value” of “parts at the time of
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page 7, supra. All of these statute
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(7th Cir. 1995) (decertifying class
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As the circuit court itself recogni
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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 and 132: parts — was simply a made-for-lit
Page 133 and 134: In contrast, each of the 47 other s
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: state’s law when it is not within
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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