Judge Charles E. Freeman on Class Actions/Class Action abuse
From Judgepedia
- Justice Freeman concurred in the majority opinion, written by Justice Thomas R. Fitzgerald, which concluded amongst other things, that defendant Intel's representation that its Pentium 4 computer processer was the best and fastest on the market, in contrast to its prior model, the Pentium 3 processer, was not a statement subject to attack as fraudulent, or as a "deceptive business practice" under the Illinois Consumer Fraud and Deceptive Business Practices Act. In so ruling the Court overturned the decision of the circuit judge where the case originated, in notorious Madison County, Illinois.
ISSUES:
The issue before the Court was whether Intel decieved an entire class of consumers "with a false representation implicit in the name Pentium 4, that the microprocesser was the best and fastest processer on the market."
HOLDINGS:
The court specifically held that Intel's acts of labeling its product the "Pentium 4" constiuted "puffing," which denotes the exaggerations reasonably expected of a seller as to the degree of quality of his or her product, the truth or falsity of which cannot be precisely determined, statements which, in "the usual sense signifies meaningless superlatives that no reasonable person would take seriously, and so it is not actionable as fraud,” rather than affirmative misprepresentation or fraud.
MAJORITY REASONING:
- (1) One "Plaintiff states that while she remembers seeing advertisements, printed materials and commercials about Pentium 4/P4 processors in personal computers, she cannot specifically remember any particular advertisement or statement. She based her decision to purchase the computer on the label Pentium 4/P4 which meant to her that the computer was faster than the Pentium III or PIII.” "Other named plaintiffs could not recall any specific advertisements, from any source, containing a specific statement made by Intel that the Pentium 4 microprocessor was faster than the Pentium III processor."
- (2) "[P]laintiffs can only identify one statement, the name “Pentium 4,” that was communicated to the entire class. Because this is indistinguishable from the use of the term “best,” a statement we found not actionable as puffery in Avery, we also find that the implicit representation inherent in the name Pentium 4 is mere puffery.
- (3) Our precedent disallowing such actions premised on puffery is based on the sound reasoning that no reasonable consumer would rely on such an implicit assertion as the sole basis for making a purchase. A reasonable consumer would not rely on it because there is nothing specific or explicit about the name “Pentium 4,” or even its alleged implicit meaning of “4 is better than 3” or “best,” that can be said to have a specific attribute other than the actual processor itself. One can say almost anything is the “best” because it is a mere suggestion, a belief, or an opinion. It is not, standing alone, a representation of fact. Though plaintiffs may have correctly felt that “4 meant better than 3,” it is merely, as plaintiffs call it, “implicit” that it was best.
- (4) No named plaintiff solely consulted the name “Pentium 4” before making the purchase. For example, plaintiff Donald Braddy consulted a Dell advertisement touting the Pentium 4's high performance as well as viewed different computers in retail stores before making his purchase on Dell's Web site
- (5) Plaintiffs mistakenly make much of their expert's opinion that the “performance” of any Pentium 4 can be compared to any Pentium III according to a single benchmark. This is an issue the parties dispute and, if this case were to go forward, would need to be resolved at trial. However, there is nothing in the “4 is better than 3” marketing formulation that presents more than a vague promise of something better. Notably, the word “performance” was not a word that was communicated to the entire class. As such, plaintiffs' theory requires vague suggestion upon vague suggestion: that “best” means “performance,” that “performance” means “speed,” and that “speed” can be tested for all P4s and P3s according to one benchmark.
- (6) "[W]e also note that a number of additional statements made by Intel are not actionable because no plaintiff was aware of these statements. Under Oliveira and its progeny, plaintiffs must prove that each and every consumer who seeks redress actually saw and was deceived by the statements in question."
- (7) Internal Intel documents also show that Intel was aware of the Pentium 4's inferiority on certain tests. Nevertheless, it is not apparent that Intel ever made any false public claims as to benchmarking. Further, plaintiffs do not argue that Intel made any uniform misrepresentation regarding clock speed, or falsely claimed that its product possessed a clock speed that it did not have. Intel merely asserted that its product was the highest performance microprocessor, a representation which the class members do not allege they all received in common.
- Justice Freeman dissented from the majority opinion of Rita B. Garman, which held that Based on these other authorities, read in conjunction with Illinois law, we conclude that the FTC could, and did, specifically authorize all United States tobacco companies to utilize the words “low,” “lower,” “reduced” or like qualifying terms, such as “light,” so long as the descriptive terms are accompanied by a clear and conspicuous disclosure of the “tar” and nicotine content. Thus Philip Morris could not be liable for defrauding smokers by using these terms, even if the terms were not accurate. In so ruling the Court overturned a contrasting $10.1 billion jury award out of notorious Madison County, Illinois.
THE MAJORITY'S HOLDINGS:
- "[W]e conclude that the FTC could, and did, specifically authorize all United States tobacco companies to utilize the words “low,” “lower,” “reduced” or like qualifying terms, such as “light,” so long as the descriptive terms are accompanied by a clear and conspicuous disclosure of the “tar” and nicotine content in milligrams of the smoke produced by the advertised cigarette." On this basis, the Court reversed the Circuit Court, ruled in favor of Philip Morris, and negated the $10.1 billion verdict.
HOLDING IN JUSTICE KARMEIER AND JUSTICE FITZGERALD'S CONCURRING OPINION
"[P]laintiffs failed to establish that they sustained actual damages. In reaching this conclusion, I hasten to add, as the majority opinion did, that rejection of plaintiffs' cause of action should in no way be construed as an endorsement of [Philip Morris]'s conduct. Our reversal of the circuit court's judgment is not an exoneration of [Philip Morris]. It is merely a conclusion that this particular cause of action by this particular group of claimants seeking this particular form of recovery cannot be sustained under the law of Illinois.
HOLDING IN JUSTICE FREEMAN'S DISSENTING OPINION (WITH JUSTICE KILBRIDE CONCURRING)
The court's action today is predicated upon an erroneous and irresponsible interpretation of our Consumer Fraud Act, an act which I note is to be interpreted so as to give full protection to the citizens of this state against the fraudulent conduct of others. The protection of consumers from unfair practices is, of course, a traditional state police power function. The court's construction of section 10b(1) serves not only to dilute needlessly the force of our state consumer protection legislation, but to limit unnecessarily our state's citizens' consumer protection in this area to a federal agency. For these reasons and because I do not agree that Philip Morris was exempt from liability under section 10b(1), I cannot join in the court's opinion. Rather, I would hold that the FTC did not specifically authorize Philip Morris, within the meaning of section 10b(1) of the Consumer Fraud Act, to use the disputed descriptors. I therefore respectfully dissent.
HOLDING IN JUSTICE KILBRIDE'S DISSENTING OPINION (WITH JUSTICE FREEMAN CONCURRING)
It is apparent that the complaint against American Brands was directed at particular advertising used only by that company. The order forbade only American Brands from making the reduced tar claims, and authorized only American Brands to use “low tar” descriptors only if accompanied by conspicuous disclosures of tar and nicotine content. The order cannot reasonably be viewed as directing the use of the descriptors. Indeed, it prohibited their use unless certain conditions were met. No reference whatever is made to the descriptors “light” or “lights,” as used by [Philip Morris]. The plain facts, therefore, demonstrate no basis to conclude that “lights” is a like qualifying term to “low in tar.” Thus, even if other cigarette marketers read the published consent order, they could not reasonably conclude it specifically authorized any descriptors other than “low tar” or “lower in tar.” Nor could they conclude that the agreed resolution of the Commission's claim against American Brands was anything other than the compromise of a disputed claim. It was not, and did not purport to be, a rule or regulation permitting the entire cigarette industry to use these or any other descriptors.
