Class Actions - Illinois No Longer A Judicial Hell Hole
December, 2005
By two split decisions issued in late 2005, the Illinois Supreme Court has slammed the door on that which may charitably be characterized as “creative” claims of economic damage.
In Avery v. State Farm Mutual, 216 Ill. 2d 100, the trial court had entered a judgment for almost $1.2 billion in favor of that class of insureds which contended that their vehicles lost value when the defendant, their insurer, specified in repair estimates that repairs should be made with cheaper, non-OEM (Original Equipment Manufacturer’s) parts. In Price v. Phillip Morris, Inc., 2005 WL 343368, the trial court had entered a $10.1 billion award in favor of the plaintiff class, which contended that it received less than full value when buying low tar/low nicotine cigarettes, which the defendant had falsely represented to be safer than full flavor cigarettes. In fact, the “lights” provide no health benefit but are actually more toxic than the full flavored variety.
Plaintiffs in both cases adduced the testimony of a damages expert, who testified to aggregate damages. One theory proffered by the Avery plaintiffs was that they suffered the cost of replacing non-OEM parts with OEM parts and that loss was sustained when the former had been installed. The Price plaintiffs did not seek damages based upon the heightened adverse effect the cigarettes would have upon their health. Their claim was purely that of economic loss -- that they did not get that for which they had bargained.
In Avery there were exceptional circumstances which could reduce the alleged loss. For instance, there was no way to identify those who had installed OEM parts, even though non-OEM parts had been specified. There thus was the potential for inaccuracy and, according to the Court, where that potential is substantial it has constitutional implications. The Price court also appears to have recognized that the so-called injury was the product of creative contrivance. The plaintiffs relied on an Internet survey of fewer than 300 respondents, asserting that their damages are the value the cigarettes would have had if they had possessed the qualities represented.
The majority in Avery, and concurring Justices Karmeier and Fitzgerald in Price, found a failure to prove actual loss. If a plaintiff cannot prove that he/she was any worse off financially as a result of the defendant’s misconduct, the plaintiff’s personal feelings of disappointment or dissatisfaction with the transaction are of no legal consequence. The point is, in reality the defendants’ conduct cost the plaintiffs nothing extra. •
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