Ill. High Court Tosses Out Fraud Claim for Lack of Proximate Cause

February 9, 2004

The Illinois Supreme Court last week reversed an appellate court decision and reconfirmed that deceptive advertising cannot be the proximate cause of damages under the Illinois Consumer Fraud Act (ICFA) unless it actually deceives the plaintiff.

“The high court ruling reaffirms the original intent of the fraud law, which was not to provide an opening for meritless lawsuits asserting ICFA claims,” said Laura Kotelman, regional manager and senior counsel for the Property Casualty Insurers Association of America (PCI), which had filed an amicus brief in the case.

The judgment came in the class-action case of Shannon v. Boise Cascade, in which several homeowners claimed that Boise Cascade, a manufacturer of wood siding, had practiced consumer fraud and deceptive business practices in advertising that its product was of good quality although the plaintiffs experienced problems with the product. However, all plaintiffs reportedly admitted they had not received any representation from Boise Cascade and that in fact some of them had purchased homes with the siding already installed.

The original trial court entered a summary judgment for Boise Cascade, the appellate court reversed, and the Illinois Supreme Court vacated the appellate court’s judgment. However, the appellate court then reissued its pervious opinion in full.

In its amicus brief, PCI maintained that the appellate court’s decision would not only create a windfall for people who were not misled or deceived in any way, but would eliminate sensible limits that courts and legislatures have placed on false advertising claims, calling the appellate court’s interpretation “akin to a ‘six degrees of separation’ theory of causation.”

The Supreme Court reversed the appellate court decision, stating that there was no genuine issue of material fact that the plaintiffs were damaged because of Boise Cascade’s alleged deceptive advertising and reaffirmed the original court’s summary judgment for the defendant on the consumer fraud count.

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