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

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overruled the considered judgments of numerous state legislatures and regulators as to how the interests of consumers in their states are best protected. Because invoking state consumer fraud laws requires different procedures, different substantive proof and different remedies for class members from each state, courts routinely refuse to certify nationwide consumer fraud class actions. See, e.g., Castano v. American Tobacco Co., 84 F.3d 734, 741 (5th Cir. 1996) (“In a multi-state class action, variations in state law may swamp any common issues and defeat predominance”); Tylka, 178 F.R.D. at 498; Fisher v. Bristol-Myers Squibb Co., 181 F.R.D. 365, 371-72 (N.D. Ill. 1998). 32/ Indeed, the Fourth District recently upheld an order denying certification of a nationwide class alleging consumer fraud violations on the ground that variations in state consumer fraud laws created so many individual issues of fact and law that a nationwide class could not be certified. See Oliveira v. Amoco Oil Co., 311 Ill.App.3d 886, 726 N.E.2d at 61-62. That decision was undoubtedly correct: merely figuring out what rules would apply to class members in each state would be a complex undertaking. Actually trying a nationwide consumer fraud case under a complex web of differing procedures and legal rules would be an impossible task. Second, the circuit court erred as a matter of law in concluding that predominance could be manufactured by the simple expedient of applying ICFA to all claims of all class members regardless of where the deception allegedly occurred. In Oliveira, plaintiffs tried 32/ See also Dhamer v. Bristol-Myers Squibb Co., 183 F.R.D. 520, 532-34 (N.D. Ill. 1998); In re Jackson Nat’l Life Ins. Co. Premium Litig., 183 F.R.D. 217, 222-23 (W.D. Mich. 1998); Clement v. American Honda Fin. Corp., 176 F.R.D. 15, 23 & nn.10-12 (D. Conn. 1997); In re Stucco Litig., 175 F.R.D. 210, 216 (E.D.N.C. 1997). -62-
the same shortcut, arguing — just as plaintiffs did in this case — that ICFA could be applied to Amoco’s conduct nationwide because Amoco was headquartered in Illinois and the allegedly false advertising campaign at issue in that case was conceived in and disseminated from its headquarters. The Fourth District rejected that argument as a matter of law, holding that ICFA was not intended to apply — and could not constitutionally be applied — to outof-state transactions affecting non-Illinois citizens. As explained in greater detail in Part III(A)(1) below, the Fourth District correctly held that ICFA was limited, by its terms, to consumer transactions that occurred in the State of Illinois, and that Illinois “has no authority to regulate out-of-state transactions affecting non-Illinois citizens, such as the purchase of gasoline, and has no interest in doing so.” Oliveira, 311 Ill.App.3d 886, 726 N.E.2d at 61. The same analysis applies here. Illinois has no authority to regulate insurance transactions that take place in other states and affect only non-Illinois consumers. By contrast, other states have a critical interest in making sure that their own insurance and consumer fraud laws are applied to insurance transactions that take place in their own jurisdictions and involve their own citizens. Thus, if a Massachusetts consumer had brought an individual consumer fraud suit against State Farm challenging its specification of a non- OEM part in Massachusetts under a Massachusetts policy form, there is no doubt that the only proper law to apply would be the Massachusetts consumer protection statute. See Mass. Gen. Laws ch. 93A. That result does not change simply because plaintiffs’ counsel chose to bring this case as a class action. See Cimino, 151 F.3d at 312 (class certification does not alter the “identity of the substantive law” governing the plaintiffs’ claims). Because the application of differing state consumer fraud laws destroys any conceivable claim that -63-
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No. 5-99-0830 IN THE APPELLATE COUR
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Charles Hester Enters. v. Illinois
Page 5 and 6:
In re Fibreboard Corp., 893 F.2d 70
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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
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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
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
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: As the circuit court itself recogni
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
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occurred outside Illinois. 51/ In t
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laws of the State where the policy
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This Court should follow the weight
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other states, Illinois cannot apply
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state’s law when it is not within
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headquartered in Michigan); Endo, 1
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for this Court to alter that author
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y using parts of like kind and qual
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plaintiffs’ failure to identify a
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percentage of the class (New York a
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committing fraud: if all non-OEM pa
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specification damages they had soug
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A. It Is Unconstitutional To Punish
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that will subject him to punishment
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fact benefitted from access to non-
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deterrence and therefore must be va
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517 U.S. at 576. This case is not i
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either higher premiums or the incre
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