Chicago Business Litigation Lawyer Blog
The complaint arrives styled as a class action, and the number at the bottom of the page is built to frighten you. A single fee, a single line in a form contract, or a single advertisement, multiplied across every customer you have served for years, until the demand looks large enough to swallow the company. The plaintiff’s lawyer wants you to see that number and reach for the checkbook before anyone asks the harder question. Can this case be a class action at all?
Most consumer fraud class actions are won or lost at class certification, the stage where the court decides whether one named plaintiff may sue on behalf of thousands. Illinois law gives a defendant real tools to defeat certification, and the strongest of them rests on one idea. A consumer fraud claim requires that each plaintiff was actually deceived, and deception rarely reaches thousands of people the same way.
What must a plaintiff prove to certify a class in Illinois?
A plaintiff who wants to represent a class under 735 ILCS 5/2-801 has to establish four things: that the class is so numerous that joining everyone is impracticable, that common questions of law or fact predominate over individual ones, that the representative will fairly and adequately protect the class, and that a class action is an appropriate way to resolve the controversy. The requirements are conjunctive, so the plaintiff must satisfy all four. The one that sinks most consumer fraud classes is predominance. The statute demands “questions of fact or law common to the class, which common questions predominate over any questions affecting only individual members,” and a fraud that happened differently to different customers does not clear
that bar.
What does the Consumer Fraud Act require from each plaintiff?
The Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/2, prohibits unfair or deceptive acts, including the concealment or omission of a material fact made with intent that others rely on it. A private plaintiff cannot stop there. Under the Act’s private-action provision, the plaintiff must prove actual damage proximately caused by the deception. As the Illinois Supreme Court set out in Connick v. Suzuki Motor Co., a private ICFA claim requires a deceptive act, an intent that the plaintiff rely on it, occurrence in the course of trade or commerce, and actual damage proximately caused by the deception. Proximate cause is the pressure point, because it ties every recovery back to an individual who was actually misled.
The strongest defense: every class member had to be actually deceived
Illinois does not let a consumer fraud class recover on a theory that the market as a whole was misled. In Oliveira v. Amoco Oil Co., the Supreme Court rejected exactly that, holding that “a plaintiff must allege that he was, in some manner, deceived” to state an ICFA claim. The Court went further in De Bouse v. Bayer AG, holding that “the plaintiff must actually be deceived by a statement or omission,” and that where nothing was communicated to the plaintiff, “there have been no statements and no omissions,” so proximate cause cannot be shown. In Avery v. State Farm Mutual Automobile Insurance Co., the Court held that “a plaintiff must prove that he or she was actually deceived by the misrepresentation in order to establish the element of proximate
causation.”
Put those holdings against a proposed class, and the individual questions swamp the common ones. Different customers saw different advertisements, read different contract language, spoke with different salespeople, or saw nothing at all. Deciding whether each of them was actually deceived, and whether that deception caused a loss, is a person-by-person inquiry. That is the argument that defeats predominanceand keeps the case from ever becoming a class action.
Can an Illinois class sweep in customers from other states?
Usually not. In Avery, the Supreme Court held that the Consumer Fraud Act does not apply to transactions that take place outside Illinois, and that a plaintiff may pursue an ICFA claim only where the circumstances of the disputed transaction occurred primarily and substantially in Illinois. A nationwide class built on the laws of a single state runs straight into that limit, and the extraterritoriality problem alone can defeat certification of a multistate class.
Do individualized damages defeat certification too?
They can. Even where a defendant’s conduct was uniform, the injury often is not. Customers paid different prices, bought different products, and suffered different losses, so proving damages becomes a series of individual trials rather than a common question. Illinois courts weigh that when they decide whether a class action is an appropriate method of adjudication, and a damages model that collapses into thousands of separate calculations undercuts both predominance and manageability.
How do you attack the named plaintiff?
The named plaintiff has to be typical of the class and an adequate representative, and a close look often shows the plaintiff is neither. A representative who was not actually deceived, who read the disclosure the class did not, or who faces a unique defense cannot carry the class. In Barbara’s Sales, Inc. v. Intel Corp., the Supreme Court answered a certified question by holding that Illinois law governed and that the “Pentium 4” branding was non-actionable puffery rather than a deceptive statement of fact, a ruling that reversed the appellate court and undercut the class claim. The lesson for a defendant is to test the named plaintiff’s own transaction early, because a flaw there can end the class before certification is briefed.
What should you do when the class complaint arrives?
Move carefully in the first weeks, because early mistakes are expensive. Do not rush to answer on the merits in a way that waives stronger threshold defenses. Check at once whether a valid arbitration agreement with a class waiver can send the dispute to individual arbitration, and whether the case belongs in federal court under the Class Action Fairness Act. Preserve your records and put a litigation hold in place. Then build the certification defense from the first filing, because the plan to defeat predominance, not the reaction to the demand number, is what protects the company.
A class action is only a class action until a court says it may proceed as one. The consumer fraud complaint that looks catastrophic on day one often shrinks to a single disappointed customer once the requirement of individual deception is put to the proof.
Big-firm firepower, with the partners on your case
Peter S. Lubin and James V. DiTommaso are Chicago business litigation lawyers who try cases throughout Illinois. Peter is a University of Chicago Law School graduate who has taught trial practice there for decades and is an Illinois Super Lawyer. He has served as lead counsel in more than one hundred class actions and has handled more than one hundred shareholder, LLC, derivative, breach of fiduciary duty, or fraud matters on both the plaintiff and the defense side. Crain’s Chicago Business credited him with the largest class action settlement
of its year, a forty million dollar recovery. The firm has been named DuPage County Law Firm of the Year, and its lawyers have represented companies including McDonald’s, Motorola, and Experian and have litigated against adversaries including AT&T and General Motors. James DiTommaso is a Chicago-Kent College of Law graduate with a
certificate in business law who served with the Illinois Appellate Court and argued a case before the Illinois Supreme Court. When you hire this firm, the lawyers whose names are on the door handle your case.
If your business has been served with a consumer fraud class action, the defense you build in the first weeks can decide whether the case ever becomes a class action. Call DiTommaso Lubin, P.C. at 630-333-0333 for a free consultation, or contact us
online.