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

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under any standard of proof, State Farm’s statements with respect to non-OEM parts were not deceptive: State Farm fully disclosed in its policies that it could specify non-OEM parts and told policyholders when it was doing so. The mere fact that plaintiffs now disagree about the quality of non-OEM parts in general hardly makes State Farm’s disclosures — many of which were mandated by state law — deceptive. Plaintiffs also failed to offer any evidence to show that any class member suffered any harm as a result of the fact that State Farm described non-OEM parts as “quality replacement parts” and failed to provide any rationale for the award of $130 million in completely duplicative “disgorgement” damages. Finally, as demonstrated in Part IV below, even if the ICFA judgment could somehow withstand review by this Court, the $600 million punitive damages award would have to be reversed. State Farm did not specify non-OEM parts in order to harm anyone. On the contrary, it did so to promote sorely-needed competition in the automobile parts industry, to reduce repair costs, and to save its policyholders money on their insurance premiums. Moreover, State Farm was not alone in promoting the specification of non-OEM parts: consumer groups and state legislatures and regulators around the country have endorsed the specification of non-OEM parts. Under these circumstances, there is no justification for imposing any punitive damages on State Farm. Indeed, punishing State Farm under Illinois law for engaging in conduct outside Illinois that is expressly allowed in a majority of states would constitute both unconstitutional extraterritorial punishment under BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 568-73 (1996), and a deprivation of State Farm’s constitutional right to fair notice that its conduct in specifying non-OEM parts could subject it to punishment. -30-
ARGUMENT I. Class Certification Violated The Illinois Class Action Statute And Deprived State Farm Of Its State And Federal Due Process Right To A Fair Trial. The Illinois class action statute establishes four requirements that a plaintiff must meet before a class may be certified. Plaintiffs bear the burden of proving that: (1) The class is so numerous that joinder of all members is impracticable; (2) There are questions of fact or law common to the class, which common questions predominate over any questions affecting only individual members; (3) The representative parties will fairly and adequately protect the interest of the class; and (4) The class action is an appropriate method for the fair and efficient adjudication of the controversy. 735 ILCS 5/2-801. See McCabe v. Burgess, 75 Ill.2d 457, 464 (1979); Wood River Area Dev. Corp. v. Germania Fed. Sav. & Loan, 198 Ill.App.3d 445, 449 (5th Dist. 1990). A circuit court has a continuing duty to assess the propriety of an order certifying a class as the case develops. If it becomes apparent at any point in the proceedings that the class no longer meets all of the statutory requirements, the class must be decertified. See, e.g., Barnes v. American Tobacco Co., 161 F.3d 127, 140 (3d Cir. 1998); Hervey v. City of Little Rock, 787 F.2d 1223, 1227 (8th Cir. 1986). 15/ See also Getto v. City of Chicago, 86 Ill.2d 39, 47 (1981) (class certification order “is always subject to amendment or modification before a final judgment is entered”). 15/ Because Illinois’ class action statute is “patterned” after Rule 23 of the Federal Rules of Civil Procedure, Getto v. City of Chicago, 86 Ill.2d 39, 47 (1981), Illinois courts routinely cite federal cases interpreting Rule 23 in deciding issues under the Illinois statute. See, e.g., Schlessinger v. Olsen, 86 Ill.2d 314, 320 (1981); Wood River, 198 Ill.App.3d at 450. -31-
Page 1 and 2: 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
Page 23 and 24: 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: loss condition. Instead of requirin
Page 55 and 56: members.” Slimack v. Country Life
Page 57 and 58: of evidence State Farm would be ent
Page 59 and 60: that are incongruous with the effic
Page 61 and 62: fenders to its pre-loss condition.
Page 63 and 64: a result of Allstate’s specificat
Page 65 and 66: insurance regulators and consumer a
Page 67 and 68: 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 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 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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