State Supreme Court Rejects Tolling Based on Prior Class Action

A state's supreme court ruled earlier this month that the filing of a putative class action in another state does not stop the clock on the running of the Virginia statute of limitations for absent class members.  See Casey v. Merck & Co.,  No. 111438 (Va., 3/2/12).

The issue arose in the context of the Fosamax litigation and the somewhat unique civil procedure of Virginia.  On September 15, 2005, a putative class action, Wolfe v. Merck & Co., was filed in the United States District Court for the Middle District of Tennessee. The putative class included "[a]ll persons who consume or have consumed FOSAMAX, whether intravenously or by mouth." The representative plaintiffs in the class action asserted claims of strict liability, negligence, and medical monitoring against Merck.  The case became part of the MDL for this product, and the MDL court denied class certification in 2008.  But prior to the dismissal of the Wolfe putative class action, four plaintiffs, all residents of Virginia, filed individual state law based actions against Merck in the Southern District of New York, asserting federal diversity jurisdiction. It was undisputed that all four plaintiffs filed suit more than two years after the latest possible date that they sustained their respective alleged injuries, and that Virginia law applied to their claims.

Defendant naturally moved for summary judgment, alleging that the four plaintiffs’ actions were untimely under Virginia's two-year statute of limitations for personal injuries. In response, the plaintiffs claimed that the Wolfe putative class action, which was filed within the two-year limitation period, tolled the running of the Virginia statute of limitations on their individual actions because they would have been members of the proposed class had certification been granted.

The district court agreed with defendant, but on appeal the Second Circuit certified, asking the Virginia Supreme Court to determine whether Virginia law permits equitable or statutory tolling of a Virginia statute of limitations due to the pendency of a putative class action in another jurisdiction.

The court began from the proposition that limitations periods are a creature of statute, and a statute of limitations may not be tolled, or an exception applied, in the absence of a clear statutory enactment to such effect. Any doubt must be resolved in favor of the enforcement of the statute. Given these principles, there was no authority in Virginia jurisprudence for the equitable tolling of a statute of limitations based upon the pendency of a putative class action in another jurisdiction.

As for statutory tolling, Virginia Code § 8.01-229(E)(1) provided that, “If any action is commenced within the prescribed limitations period and for any cause abates or is dismissed without determining the merits, the time such action is pending shall not be computed as part of the period within which such action may be brought, and another action may be brought within the remaining period.”  The plaintiffs contended that Code § 8.01-229(E)(1) statutorily tolled the statute of limitations for plaintiffs’ claims during the pendency of the putative class action, and that the court's decision in Welding, Inc. v. Bland Cnty. Serv. Auth., 261 Va. 218, 541 S.E.2d 909 (2001), indicated that Virginia had recognized cross-jurisdictional putative class action tolling.

In Welding, the court had stated that, under Virginia law, an action filed in a foreign jurisdiction may indeed trigger tolling under the Code section. Although there is no particular type of action that must be filed and no particular jurisdiction in which that action must be brought for the commencement of an action to trigger tolling under Code § 8.01-229(E)(1), for tolling to be permitted, the subsequently filed action must be filed by the same party in interest on the same cause of action in the same right.  Welding differed from the instant case because it concerned a situation where the same plaintiff initially sued in federal court on the same cause of action he subsequently pursued in state court. The plaintiff in both actions was clearly the same. In the instant matter, said the court, it is undisputed that the four plaintiffs were not named plaintiffs in the putative class action that they claim triggered the tolling. They were merely absent members of a putative class that included everyone in the country who had taken this drug.

For the filing of an action to toll the statute of limitations from running on a subsequently filed action, there must be a true identity of the parties in the two lawsuits. In other words, for the statute of limitations to be tolled for a subsequent action, the party who brought the original action must be the same as the plaintiff in the subsequent action or a recognized representative of that plaintiff asserting the same cause and right of action. A putative class action is a representative action in which a representative plaintiff attempts to represent the interests of not only named plaintiffs, but also those of unnamed class members. But Virginia jurisprudence does not recognize class actions. Under Virginia law, a class representative who files a putative class action is not recognized as having standing to sue in a representative capacity on behalf of the unnamed members of the putative class. Thus, under Virginia law, there is no identity of parties between the named plaintiff in a putative class action and the plaintiff in a subsequent action filed by a putative class member individually. Accordingly, a putative class action cannot toll the limitations period for unnamed putative class members under Virginia law.

Certified questions answered in the negative.

  

State Supreme Court Revises "Two-Injury" Rule

The traditional single claim rule requires a plaintiff to bring at one time a suit for all the injuries arising from the same accident or incident, or risk being barred.  In the toxic tort context, the issue is complicated by the fact that an exposure may put a plaintiff at risk for different diseases that have different latency periods, meaning different time periods before the injuries will manifest themselves.  Courts have to consider the impact of the statute of limitations, res judicata, and the pros and cons of encouraging premature filings relating to the mere risk of future disease or of allowing a plaintiff to, in a sense, split a cause of action into separate claims arising from the same product, same exposure, and same alleged conduct of the defendant.

Last week, the Pennsylvania Supreme Court modified its rules on these issues, holding that plaintiffs seeking damages for certain asbestos-related health problems can file separate lawsuits for distinct cancers they may develop. See Daley v. A.W. Chesterton Inc., et al., No. J-98-2010 (Pa. 2012).

In 1989, plaintiff/appellee Herbert L. Daley was diagnosed with pulmonary asbestosis and squamous-cell carcinoma of the right lung.  He sued several defendants, and the case eventually settled.  A decade later, Daley was diagnosed with malignant pleural mesothelioma.  He sued a dozen asbestos defendants. Plaintiffs conceded that the mesothelioma was caused by the same asbestos exposure that resulted in his lung cancer and pulmonary asbestosis for which he
sought and obtained compensation in the 1990's.  Defendants (who had not been in the first case, presumably because of the terms of the releases) filed motions for summary judgment, contending that, because Daley previously filed an action for a malignant asbestos-related condition in 1990, Pennsylvania’s “two-disease” rule did not allow him to file an action for a second malignant asbestos-related disease – here, mesothelioma.

Pennsylvania had been one of the states to adopt a two-disease rule, which under certain circumstances created an exception to Pennsylvania’s single cause of action rule, and allowed certain second actions without running afoul of the two-year statute of limitations or the notion of res judicata.  Specifically, the courts had adopted, for purposes of asbestos litigation, a two-disease rule, allowing plaintiffs to bring one action based on a nonmalignant asbestos disease
and a subsequent action for any separately diagnosed malignant disease.  The court determined that malignant and nonmalignant asbestos-related injuries constituted separate claims.  Here, though, the issue was a little different: was plaintiff limited to one cause of action for a malignant asbestos-related disease and one cause of action for a nonmalignant asbestos-related disease? 

Defendants argued, with compelling logic, that the rule clearly arose in the context of malignant vs. non-malignant disease.  (Readers of MassTortDefense know the great administrative burdens, ethical questions, and significant policy issues, that the non-malignant asbestos claims have created.) Moreover, allowing plaintiffs to bring more than one lawsuit for asbestos-related diseases of the same category would cause the judicial system to be burdened with more piece-meal litigation.  Residents of other states would seek to benefit by this expansion of the two-disease rule by filing suits in Pennsylvania. Allowing a plaintiff to bring separate lawsuits for separate malignant diseases, such as lung cancer and mesothelioma, would also make the determination of an appropriate award of damages more difficult due to an inability to segregate the damages for each of the separate diseases.

However, the state supreme court said that defendants were reading the asbestos precedents too narrowly; the decision to allow a plaintiff to file one cause action for a nonmalignant asbestos-related disease, and a subsequent cause of action for a malignant asbestos-related disease, arose from a recognition that requiring a plaintiff to seek recovery for all present and future asbestos-related diseases, including malignant and nonmalignant diseases, upon first experiencing symptoms of any asbestos-related disease, was likely to result in anticipatory lawsuits, protracted litigation, evidentiary hurdles, speculative damages, and excessive or inadequate compensation.  While the separate disease rule initially developed from, and has since been applied in, cases involving a cause of action for a nonmalignant disease, followed by a cause of action for a malignant disease, the concerns that the rule was designed to address
were, said the court, not limited to situations where a plaintiff suffers one nonmalignant asbestos-related disease and one malignant asbestos-related disease. The court emphasized that with regard to mesothelioma, the estimated latency period for is 30 to 50 years, whereas the estimated latency period for asbestosis and most lung cancers is 10 to 20 years. Thus, it was unlikely a plaintiff would be diagnosed with mesothelioma until long after he had been  diagnosed with, and the statute of limitations had expired for, lung cancer. Requiring a plaintiff to seek damages for a potential future diagnosis of mesothelioma at the time he is diagnosed with lung cancer not only imposes nearly insurmountable evidentiary hurdles on the plaintiff, said the majority, but also may subject a defendant to payment of damages for a serious disease which a vast majority of plaintiffs will not actually develop.

In view of these circumstances, the court concluded that a plaintiff who is diagnosed with a malignant disease, and later diagnosed with a separate and distinct malignant disease caused by the same asbestos exposure, may benefit from the separate disease rule. The court did note that relevant factors for "separate and distinct" may include evidence that the diseases: developed by different mechanisms; originated in different tissue or organs; affected different tissue or organs; manifested themselves at different times and by different symptoms; progressed at different rates; and carried different outcomes.

The decision was 6-1;  time will tell whether the defendants were correct in predicting the rule change will lead to more asbestos filings, or the majority was right in predicting fewer.

Dismissal of Bellwether Case in FEMA MDL Upheld

The plaintiff who at one time had been the first-in-line bellwether plaintiff in the FEMA Trailer MDL has lost her appeal of the dismissal of her claims. In Re: Fema Trailer Formaldehyde Products Liability Litigation (Alana Alexander, plaintiff), No. 10-30451(5th Cir. June 24, 2011).

Plaintiffs sued the government, alleging exposure to potentially dangerous, high levels of formaldehyde in their Federal Emergency Management Agency (FEMA) provided emergency housing unit. Following Hurricanes Katrina and Rita, FEMA provided EHUs to the displaced victims of the storms. The hurricanes’ destruction created an urgent and immediate need for an unprecedented number of EHUs. In response, FEMA purchased more than 140,000 new EHUs from manufacturers and dealers. Alexander and her children were among the Louisiana residents who received an EHU. The Alexander family moved into their EHU in May 2006 and almost immediately noticed a “chemical smell” in the unit that caused the children's asthma to worsen. Other physical manifestations allegedly  included  irritation, burning, and tearing of the eyes; irritation and burning of nasal membranes; eczema; headaches; difficulty breathing; wheezing; shortness of breath; and new allergies and worsening allergies.

Alexander admitted that she knew the smell came from the EHU. Shortly after moving in, Alexander claimed, she asked an unidentified Government representative or contractor about  the smell. She claimed that he told her that that the smell was “nothing to worry about.”

In July, 2008, Alexander submitted an administrative claim with FEMA and in early 2009 filed a complaint in the district court, alleging under the Federal Tort Claims Act that the Government was careless, reckless, grossly negligent, and acted with deliberate indifference by failing to disclose the exposure to potentially dangerous and high levels of formaldehyde in the trailers.

Defendant moved to dismiss the complaint as untimely (in cases where the government has waived sovereign immunity, the statute of limitations issue is jurisdictional). Although the FTCA does not define when a claim accrues, it is well-settled that a tort action under the FTCA accrues when the plaintiff knows or has reason to know of the alleged injury that is the basis of the action. The trial court dismissed the case, and plaintiff appealed.

On appeal, Alexander argued that the accrual of her claim was delayed or tolled pursuant to either: (1) the discovery rule, (2) equitable estoppel, or (3) the continuing tort doctrine. The 5th Circuit found these arguments were without merit.

There was no dispute that Alexander was aware of the injuries by May 2006. When the family moved into the trailer in May 2006, almost immediately, the asthma worsened, and the kids
experienced a plethora of other health issues. The primary dispute was thus whether  Alexander knew or in the exercise of reasonable diligence should have discovered the cause of the  injuries such that her claim accrued at that time.

Plaintiff claimed she did not discover the Government’s role in the alleged injuries until July 2007, when FEMA issued its second round of flyers about formaldehyde emissions in the EHUs. This argument was "not convincing."  The court of appeals held that plaintiff had enough information regarding the injury and its cause by May 2006 that would lead a reasonable person in plaintiff's  position to further investigate the specific cause of that injury. All the facts were not in the control of the putative defendant, unavailable to the plaintiff or at least very difficult to obtain. Plaintiff could have established FEMA’s connection to the EHU, from which the “chemical smell” was emanating.

Second, plaintiff argued that because she reasonably relied on the claims of the representative that there was “nothing to worry about,” the limitations period should be equitably tolled. Because the limitations periods in statutes waiving sovereign immunity are jurisdictional, the district court properly held that equitable tolling did not apply to this case. 

Finally, Plaintiff could not cite any Fifth Circuit case law indicating that accrual should be delayed when the plaintiff knows about the injury and could have discovered, with a reasonable inquiry, the putative defendant’s, here the Government’s, potential liability. The court thus declined the invitation to apply the continuing tort doctrine to the facts presented in this case.

Supreme Court Declines to Clarify Tolling Effect of Mass Tort Class Actions

Earlier this week, the Supreme Court declined to take a case raising the tricky issues of cross-jurisdictional class action tolling.  Novartis Pharmaceuticals Corp. v. Stevens, No. 10-1196 (U.S., certiorari denied 5/31/11).

The question presented in the cert petition was whether was whether tolling the statute  of limitations for individual claimants based on the pendency of a mass personal injury class action violates fundamental federal due process protections where the class action provides no notice to a defendant of the identity of unnamed class members, thus absolutely precluding the timely preservation of evidence and testimony critical to presenting an effective defense.

Defendant/petitioner has been involved for several years in litigation claiming that the drug Zometa is linked to osteonecrosis of the jaw or “ONJ.”  Plaintiff below obtained a jury verdict on such a claim, affirmed by the Montana Supreme Court . 358 Mont. 474, 247 P.3d 244 (2010). The sole aspect of the Montana Supreme Court’s opinion at issue here was its ruling that the pendency of a never-certified federal class action on ONJ acts to resurrect respondent’s otherwise time-barred personal injury claims. The Montana Supreme Court determined as a matter of first impression in Montana that federal class action tolling should apply to render timely respondent’s complaint against petitioner. The Montana court noted that the concept of federal class action tolling was articulated by the Supreme Court in American Pipe & Construction Co. v. Utah, 414 U.S. 538 (1974). In American Pipe, the Court held that in some contexts, the commencement of the class action suit satisfied the purpose of the limitation provision as to all those who might subsequently participate in the suit as well as for the named plaintiffs. One reason was concerns of judicial economy, as a contrary holding might invite a multiplicity of activity that the federal rules of procedure were designed to avoid, as individual plaintiffs would be forced to file preventative motions to join or intervene as parties if the class action status was still pending at the expiration of the statute of limitations.

The problem is that in the specific context of a personal injury mass tort, the application of American Pipe federal class action tolling seems to infringe on a defendant’s ability to defend itself -- in violation of due process principles. Suspending statutes of limitation indefinitely for all purported members of the kinds of  “worldwide” classes we see of personal injury plaintiffs, based on nothing more than the filing a Rule 23 federal class action, introduces systemic unfairness to defendants. 

A  pharmaceutical personal injury case may be an especially poor vehicle for federal class action tolling. Virtually no pharmaceutical personal injury class action has been certified over opposition and survived appeal in the federal system for a decade now. See, e.g., Jolly v. Eli Lilly & Co., 751 P.2d 923, 933-38 (Cal. 1988) (en banc) (rejecting tolling due to pending personal injury class action because such torts are not susceptible to class action certification). Tolling individual  actions based on a pending personal injury class action renders limitations periods impermissibly uncertain and invites unnecessary litigation by giving plaintiffs’ counsel everywhere an incentive to add putative class relief to every federal complaint just to toll statutes of limitations to the benefit of unknown future plaintiffs -- knowing there will never be a certified class.  Some lower courts have thus concluded that class action tolling should not be applied in the mass tort context unless the defendant had actual notice of the identities of unnamed class members.

Petitioner argued that tolling the limitations period for all purported members of the class during the pendency of class certification proceedings – which in a mass class action can take years – creates an unacceptable risk that by the time the claims of unnamed individuals are adjudicated, evidence critical to defending claims of that individual plaintiff will have been lost.  Issues relating to exposures, learned intermediaries, concurrent risk factors, specific (as opposed to general) causation, proximate causation regarding warnings, and assumption of the risk, all involve evidence that can be both peculiar to the individual plaintiff, and turn out to be the central evidence in the action.

Perhaps because of unique procedural issues below (involving fictitious parties), however, the Court passed on the opportunity to address these serious issues.


 

State Supreme Court Reverses Plaintiff Verdict in Welding Rod Litigation

While a handful of large plaintiff verdicts has garnered much of the media attention, most of the trials involving welding fume claims have been favorable to defendants. Something like 26 out of 31 trials have resulted in defense verdicts. Since January 2006, thousands of plaintiffs have abandoned their claims. In fact, plaintiffs have dismissed about 2/3 of the cases they had certified as trial‐worthy in the federal MDL court. Plaintiffs are now actively pursuing fewer than 750 cases in the MDL proceeding, a reduction of approximately 85 percent from the number of pending MDL cases in 2005.

The latest development in this mass tort sees the Mississippi Supreme Court overturning
a $1.86 million jury verdict in favor of a welder who claimed welding rods manufactured by
The Lincoln Electric Co. and ESAB Group Inc. caused his magnesium-related neurological
disease. Lincoln Electric Co. et al. v. McLemore, No. 09-CA-00320 (Miss. 12/9/10).

Plaintiff Stanley McLemore worked as a welder for almost thirty years. In the course of his
career, McLemore worked all over the country, with two long stints at Grand Gulf Nuclear
Power Station from 1980 through 1984 and from 1993 through 1998. He developed symptoms in 2001 and went to the doctor. While McLemore saw a host of physicians between December 2001 and his trial date in 2008, they determined that he had some form of Parkinsonism. A few considered manganism, but ultimately decided against that diagnosis. Dr. Swash was McLemore’s main expert witness at trial. This doctor was the only physician to diagnose McLemore with manganism. According to Dr. Swash, manganism is a syndrome with features of atypical Parkinsonism that is caused by exposure to manganese.

McLemore stated that he first learned that he suffered from manganism in 2005, and then he sued in late 2005. However, defendants claimed he had been diagnosed with a welding-related  neurological illness in early 2002.  McLemore filed various lawsuits claiming neurological injuries from exposure to welding products as early as February 2004, against various corporations for injuries suffered from those defendants’ sale and/or distribution of defective welding consumables. The complaint did not name either Lincoln Electric or ESAB.

Mississippi has a three year statute of limitations, and defendants therefore sought summary judgment. McLemore contended that he had no cause of action until he knew that he had manganism. Pursuant to Mississippi law, a plaintiff’s cause of action accrues at the point at which he discovered, or by reasonable diligence should have discovered, the injury. Therefore, the Court had to consider the application of the latent-injury/discovery rule and whether McLemore’s statute of limitations began to run when either (1) he knew of his diagnosis of Parkinsonism, or (2) he knew of the diagnosis of manganism. 

In Angle v. Koppers, Inc., 42 So. 3d 1 (Miss. 2010), the state Court determined that the plain
language of the state act supported an interpretation “that the cause of action accrued upon
discovery of the injury, not discovery of the injury and its cause.” Id. at 5. Applying Angle to the instant case, McLemore knew of his injury in September, 2002. At that time, his doctor informed him of the correlation between his symptoms and welding; that is, informed McLemore that he had Parkinsonism and that it might have been related to his welding work.. The statute does not require a plaintiff to know the actual cause of the injury before accrual of the cause of action.  McLemore
thereafter sought legal advice which resulted in an initial filing of a lawsuit in 2004 claiming
“serious neurological injury” from exposure to manganese products. Consequently,
McLemore’s argument that he had no knowledge of his injury and its relation to welding
until his diagnosis of manganism failed. The Court rejected the plaintiff's distinction between knowledge of a diagnosis of a welding-related illness (Parkinsonism) and a welding-related injury (manganism).

No Second Bite of the Apple for HT Plaintiffs

A federal court granted summary judgment in litigation brought by hormone replacement drug plaintiffs whose suits were previously ruled untimely by a New York court. See Rick v. Wyeth Inc.,  No. 08-1287 (D. Minn., 9/23/10).

Plaintiffs, all citizens of New York, were women, and spouses of women, who allegedly used
hormone therapy drugs manufactured and sold by defendants. Plaintiffs further alleged that they developed breast cancer as a result of the use of HT drugs.  Plaintiffs had previously brought suit individually in New York state court where their claims were consolidated into a single
coordinated proceeding. In the New York proceeding, defendants moved for summary judgment based on the New York statute of limitations. Foreseeing the end of their suits, plaintiffs moved for a discontinuance without prejudice. While the dueling motions in the New York proceeding were pending, plaintiffs commenced another action in federal court in Minnesota (where there is a much longer, highly controversial statute of limitations; none of plaintiffs, nor any of the claims at issue, had any connection to Minnesota. Instead, it seems this case, like hundreds of others involving HT drugs, was brought solely to take advantage of Minnesota’s six-year statute of limitations.)

The New York trial court granted the defendants’ motion for summary judgment and denied the
plaintiffs’ motion for "discontinuance without prejudice." In doing so, the New York trial court reasoned that the defendants would be unfairly prejudiced by allowing the litigation to re-start in another forum after having completed discovery and reached the summary judgment phase in the New York proceeding.

In the federal court proceeding, defendants then moved for summary judgment arguing that the New York judgment was entitled to preclusive effect.  The traditional rule for claim preclusion was that dismissal for untimeliness does not bar a second action in another jurisdiction with a longer, unexpired statute of limitations. Semtek Int’l Inc. v. Lockheed Martin Corp., 531 U.S. 497, 504 (2001). However, the actual test for a federal court determining the preclusive effects of a prior state-court judgment is to ask ask what preclusive effect that state intends other jurisdictions to accord its judgments.  Here, the federal court determined that New York has not definitively answered that question in this context. Therefore, the court had to determine what rule New York would likely apply.

On one hand, the New York Court of Appeals has stated that, in general, New York views statutes of limitations as procedural rather than substantive. However, the New York Court of Appeals has also held that, in the narrow context of claim preclusion, statutes of limitations “in a practical sense may also be said to be substantive.”  Thus, said the federal court, the procedural/substantive distinction that formed the foundation of plaintiffs’ argument here was hardly clear under New York law. Indeed, while the procedural/substantive distinction may be a useful tool in some instances, a clear line between procedure and substance is not always ascertainable.

In interpreting this ambiguous area of New York law, the federal court was also mindful of the overarching principals of claim preclusion. Claim preclusion doctrine values judicial economy, preventing parties from burdening courts with claims already litigated.

Against this backdrop, the federal court found the procedural posture of the case decisive.  In the New York proceeding, the plaintiffs moved for a discontinuance without prejudice. Under New York law, an element of granting such a motion is whether the adverse party will suffer prejudice. The NY trial judge believed that a discontinuance without prejudice would not have preclusive effects in the federal action, and noted that granting the plaintiffs’ motion might thus allow plaintiffs’ Minnesota action to continue. Concluding that defendants would be highly prejudiced if forced to continue litigation in another forum, the trial judge denied the plaintiffs' motion. Implicit in that reasoning was that the grant of summary judgment instead would have preclusive effect in the federal litigation. Indeed, the New York trial court specifically stated that defendants had a right to judgment on the merits.

Thus, at the summary judgment phase, the timeliness issues were “sufficiently close to the
merits” to implicate claim preclusion. Plaintiffs chose to bring their claims in New York and continued litigation up to summary judgment.

 

Claim Against Classic Coke Down the Drain

The Coca-Cola Co. has successfully obtained summary judgment in a case alleging that the company unfairly marketed its Coca-Cola Classic soft drink as “original formula” despite allegedly having substituted high-fructose corn syrup for the ordinary table sugar it used when the drink was introduced. Judge Patrick Murphy issued an order last week in the U.S. District Court for the Southern District of Illinois.

Plaintiffs Amanda Kremers and Jason McCann, sued on behalf of themselves and a proposed class of Illinois citizens, alleging that Coca-Cola’s conduct in labeling cans and bottles of “Classic” Coke with the terms “Original Formula” constitutes a deceptive and unfair trade practice. This is because, plaintiffs contended, the “Original Formula” of Coke, which was invented in 1886, called for Coke to be sweetened using sucrose (ordinary table sugar, in essence), whereas “Classic” Coke currently is sweetened using high fructose corn syrup (“HFCS”). They alleged violation of the Illinois Consumer Fraud and Deceptive Business Practices Act (“ICFA”), and unjust enrichment.

Proposed class rep Kremers conceded at her deposition that she has known since the 1990's that “Classic” Coke contained HFCS and that “Classic” Coke is marketed as the “Original Formula” of Coke.  Kremers admitted also that she read the words “Original Formula” on a container of “Classic” Coke in the 1990s.  That was sufficient to put her on notice to inquire about her alleged claims, and that she knew or reasonably should have known of her so-called injury. Thus, her claim was barred by the statute of limitations, even with the discovery rule.

Turning to the merits of the case, the state statutory cause of action requires: (1) a deceptive act or practice by the defendant, (2) the defendant’s intent that the plaintiff rely on the deception, (3) the occurrence of the deception in the course of conduct involving trade or commerce, and (4) actual damage to the plaintiff (5) proximately caused by the deception.  To prove that element of proximate causation in a private cause of action brought under the ICFA, a plaintiff must allege that he was, in some manner, actually deceived. 

McCann’s testimony at his deposition was that he wasn't actually deceived.  He never read the key language until after he was approached by counsel for plaintiffs in this case about serving as the representative of the proposed class. Hence, he could not prove proximate causation for purposes of a claim for deceptive trade practices under the ICFA.

To establish a prima facie case of unfair trade practices under the ICFA, a plaintiff must prove that a defendant intentionally engaged in an unfair practice in the course of conduct involving trade or commerce, and that this practice proximately caused harm to the plaintiff. The court found that as a matter of law, the sales here were not unfair trade practices. The trade practices in dispute in this case were not deceptive acts (as above). No public policy of Illinois proscribed the use of HFCS as a sweetening agent in beverages and foodstuffs. The facts concerning plaintiffs' use hardly suggested they had been oppressed by Coca-Cola’s trade practices, or had been afforded the lack of meaningful choice necessary to establish unfairness.

Perhaps most importantly, McCann could not show the necessary substantial harm for an unfair trade practice, given the small amount of the product he purchased, the fact that he continued to purchase "Classic” Coke after the commencement of this suit and despite knowledge that the product contains HFCS, and because the alleged injury was one any consumer of “Classic” Coke quite easily could have avoided, by, for example, simply drinking a different soft drink or other beverage.

Although fraud is not an element of a claim for unjust enrichment under Illinois law, the Seventh Circuit nevertheless has made clear that where the plaintiff’s claim of unjust enrichment is predicated on the same allegations of fraudulent conduct that support an independent claim of fraud, resolution of the fraud claim against the plaintiff is dispositive of the unjust enrichment claim as well.

Class motion dismissed as moot.