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

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anned the parts, deemed specification of such parts to be fraudulent, or required disclosure of “possible safety concerns” or part “inferiority.” Instead, the vast majority of states allow specification subject to consent or disclosure, and two states — Massachusetts and Hawaii — affirmatively favor the use of non-OEM parts. See page 7, supra. The circuit court decided that it knew better than all the state legislatures in America. It implicitly assumed that all non-OEM parts are inferior; that consent pursuant to state statutes is never valid; that state-mandated disclosures are always deceptive; and that the express preferences of Massachusetts and Hawaii for non-OEM parts have no practical effect. ICFA has never before been used to arrogate power in this way, and this Court should not permit it now. Plaintiffs undoubtedly will respond, as they have before, that no state would tolerate specification of non-OEM parts that are not of “like kind and quality,” making the circuit court’s factual finding of inferiority consistent with the various states’ laws. C. 30964. But this twisted reasoning ignores the legislative record. Every state that authorizes use of non- OEM parts has concluded — often based on extensive hearings — that at least some significant number of non-OEM parts are of like kind and quality; otherwise, the numerous statutes authorizing (or affirmatively requiring) the use of non-OEM parts would have been meaningless acts. See, e.g., R. 10684-85, 11879-80. Thirty-seven states have concluded that consent or specified disclosures are sufficient to protect consumers. These states could have required the disclosures that the circuit court apparently deemed necessary, but none did. Indeed, the circuit court converted state disclosure laws into traps for the unwary, because there is no way to comply without -132-
committing fraud: if all non-OEM parts are inferior, then the state-mandated disclosures are never accurate. The circuit court had no power to hold that compliance with thirty-seven states’ laws is always fraudulent. See BMW, 517 U.S. at 573 & n.19. 60/ 5. The “Disgorgement” Damages Must Be Vacated Because The Circuit Court Erred As A Matter Of Law In Imposing A Constructive Trust On State Farm’s “Savings.” The ICFA judgment should be reversed for all of the reasons outlined above. But there are additional reasons why the award of “disgorgement” damages must be vacated. ICFA allows the “court, in its discretion, [to] award actual economic damages or any other relief which the court deems proper.” 815 ILCS 505/10a(a). The circuit court acknowledged that the ICFA class members had already been fully compensated for their actual economic damages through the specification and installation damages awarded by the jury and that they could not use ICFA to recover twice. A. 12. Nevertheless, the court inexplicably went on to award “disgorgement” damages to the plaintiff class by imposing a “constructive trust” on the $130 million it found State Farm had “saved” during the class period by specifying non-OEM parts. Id. That decision was wrong as a matter of law. Because it is an equitable remedy, the imposition of a constructive trust is permissible only in situations where the plaintiff has no adequate remedy at law. See Hill v. Names & Addresses, Inc., 212 Ill.App.3d 1065, 1082 (1st Dist. 1<strong>99</strong>1) (“when a plaintiff’s 60/ Punishing conduct authorized by state law also contradicts the policy behind ICFA’s safe harbor provision. See 815 ILCS 505/10b(1); Aurora Firefighter’s Credit Union v. Harvey, 163 Ill.App.3d 915, 926 (2d Dist. 1987) (§10b reflects “policy against imposing greater requirements under the generalized consumer protection legislation than are imposed by other statutes which address specific kinds of activities and are administered by a State regulatory body”); Weatherman v. Gary-Wheaton Bank, 186 Ill.2d 472, 488-89 (1<strong>99</strong>9); Lanier v. Associates Finance, Inc., 114 Ill.2d 1, 17-18 (1986). -133-
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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
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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
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paid the difference in cost out of
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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
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William Anderton, who had previousl
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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 (
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had an adequate remedy at law if St
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loss condition. Instead of requirin
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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
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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
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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
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epresentatives who appeared at tria
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— was injured by the alleged dece
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Litig., 182 F.R.D. at 225. Basic fa
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Meineke’s continued financial via
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this decision, plaintiffs were excu
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corresponding OEM part. R. 7169. In
Page 99 and 100:
Mathur’s testimony was particular
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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 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: percentage of the class (New York a
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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