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Wednesday, August 13, 2008

Mulligan v. QVC: Summary Judgment on Illinois Consumer Fraud Act Claim

In May, 2008, the First District of the Illinois Appellate Court decided Mulligan v. QVC, Inc., a case where the trial court denied class certification and granted summary judgment to the defendant on an Illinois Consumer Fraud Act claim. 2008 WL 1990450 (1st Dist. May 7, 2008). The plaintiff alleged QVC violated the ICFA by deceptively advertising suggested retail values that were too high. According to the plaintiff, these suggested retail values made it seem like shoppers were getting a better deal than they actually obtained by buying items from QVC.

But the plaintiff admitted that the suggested retail values seemed high to her when she saw the ads, that she continued purchasing QVC items even after filing the lawsuit, and that the suggested retail values were only one factor in her decision to purchase. Applying Barbara's Sales v. Intel, 227 Ill. 2d 45, 879 N.E.2d 910 (2007), the First District found the plaintiff failed to show she was actually deceived. (Under Intel and previous case law, to prove proximate cause in an ICFA case based on alleged deception, a plaintiff must show he or she was actually deceived.)

The Illinois appellate court also found the plaintiff sustained no actual damages. The court reasoned that because expert testimony showed the prices the plaintiff actually paid to QVC were still lower than the prices she would have paid in the market generally, she was not injured or damaged. In other words, she may not have gotten as good as a bargain as she'd hoped, but it didn't damage her financially because she still paid less by buying from QVC than she would have paid elsewhere.

Based on these findings, the appellate court affirmed summary judgment for the defendant, and affirmed the denial of class certification because the named plaintiff's claim failed.

While the appellate court did not further address class issues, this case can support a defendant's argument that both the actual deception/proximate cause and actual damages elements of an ICFA claim are individualized issues that a court will need to decide separately for each class member, precluding a finding that common issues predominate. Plaintiffs, on the other hand, can argue that Mulligan, Intel, and the previous seminal case Avery v. State Farm never addressed whether actual deception or actual damages can be determined on a class basis, so it is unknown how the Illinois Supreme Court woud rule on the question.

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