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QVC Class Action Defense Cases–Mulligan v. QVC: Illinois State Court Affirms Denial Of Class Action Treatment And Summary Judgment In Favor Of Defense In Unfair Business Practice Class Action

Class Action Plaintiff Failed to Establish Proximate Cause Underlying Consumer Fraud Claim based on QVC’s “Retail Value” Comparisons of Retail Products, and Trial Court Properly Denied Plaintiff’s Motion for Class Action Certification and Properly Granted QVC’s Motion for Summary Judgment Illinois State Court Holds

Plaintiff filed a class action complaint in Illinois state court against QVC – a retailer of consumer products on television and on an Internet website – alleging violations of the state’s Consumer Fraud and Deceptive business Practices Act. Mulligan v. QVC, Inc., 888 N.E.2d 1190, 1192 (Ill.App. 2008). QVC generally lists a “comparative price” for its products; QVC airs on television “viewer education spots” that advise prospective customers that when it lists a “retail value” for a product, “that figure represents either an actual comparison-shopped price or the price QVC believes that the same or a comparable product would be offered by department stores or other retailers using a customary markup for that product category.” Id., at 1192-93. QVC also explains that the “retail value” listed “does not necessarily represent the prevailing retail price in every community, or the price at which the item was previously sold by QVC.” Id., at 1193. The class action complaint “alleged that QVC’s listed ‘retail value’ overstated the prevailing market price for certain products it sold and falsely created the impression that consumers were receiving a bargain by purchasing at lower QVC prices.” Plaintiff’s lawyer moved the trial court to certify the litigation as a class action, but the court denied the motion because “individual issues of law and fact predominated.” Id., at 1192. Defense attorneys then moved the court for summary judgment as to plaintiff’s individual claims; the trial court granted the defense motion, thereby terminating all individual and class claims in the putative class action. Id. Plaintiff appealed, arguing that the trial court erred in granting summary judgment and further erred in denying her motion for class action treatment. Id. The appellate court affirmed.

An understanding of the facts foretells the appellate court’s holdings. Plaintiff purchased more than 200 items from QVC, and specifies in her class action complaint four products that she purchased for substantially less than QVC’s listed “retail value”; the retail values ranged from $39-$60, and plaintiff paid from $26.75-$38.12. Mulligan, at 1193. Plaintiff’s expert testified that “she determined comparable prices for the products [plaintiff] purchased from QVC by using a cost and a market approach to valuation,” and that in so doing the retail value for some items was actually less than the amount paid by plaintiff, though she “did not factor in ay applicable sales tax, shipping and handling, or other additional costs.” Id., at 1194. The expert also admitted that the “margin of error on her appraisal” could be $5, and that there were “other factors” that QVC properly could have considered but that she did not incorporate into her appraisals. Id. Plaintiff’s purchased these items for many reasons, “including whether the product was appealing, affordable, an impulse purchase, on sale, and whether she was searching for a particular product.” Id., at 1193. She found it convenient to shop from home, and felt like she was part of the QVC “family.” Id. She had seen QVC’s education spots, and admitted that at times she believed the retail value listed by QVC “seemed…awfully high,” but she would make the purchase because she still believed that she was paying a fair price for the item. Id. Additionally, plaintiff purchased items from QVC even if it did not list a retail value, and plaintiff continued to make purchases from QVC even after she filed her class action complaint. Id. As the appellate court explained at page 1193, “[plaintiff] acknowledges that a consumer could not legitimately claim to be actually deceived by QVC’s retail values if the consumer continued to purchase the products after suing QVC.”

The Appellate Court of Illinois rejected plaintiff’s claim that she “did not receive the benefit of the bargain” and that she was entitled to “damages as the difference between the actual retail value as expressed by [plaintiff’s expert] and the value those items would have had if the QVC listed retail value was in fact correct.” Mulligan, at 1194. QVC presented its own expert’s testimony, that was critical of the methodology utilized by plaintiff’s expert, see id., but the appellate court did not consider this testimony in affirming the judgment. Rather, the Court held that even accepting as true the proposition that QVC’s retail values were inflated, plaintiff failed to create any genuine issue of material fact as to actual damage or proximate cause. Id., at 1196. Under Illinois law, the private party prosecuting a Consumer Fraud Act claim “must prove that she suffered actual damage as a result of a violation of the Act.” Id. (citation omitted). Plaintiff failed to establish actual damage because she was not “actually harmed” by QVC’s conduct. Id., at 1197. Even under her expert’s valuations, plaintiff obtained the four items underlying her class action complaint for less than their fair retail value. Id., at 1197-98. In short, plaintiff received the benefit of the bargain and now seeks a windfall in the form of damages that are “not necessary to make her whole.” Id., at 1198-99. Additionally, plaintiff’s testimony established that she would have made the challenges purchases irrespective of the retail values listed by QVC. Id., at 1199. Thus, she could not establish the “but for” connection necessary to proximate cause. Id. Accordingly, the trial court did not err in granting summary judgment, id., at 1199-1200.

Based on this conclusion, the class action certification ruling was plainly correct. As the Appellate Court explained at page 1200, “[Plaintiff’s] failure to establish a private right of action is fatal not only to her cause of action, but to the entire class action. When a class representative has not proven his claim for consumer fraud, the consumer fraud claim asserted on behalf of the class cannot stand.” (Citation omitted.) The Court therefore affirmed the judgment of the trial court in its entirety.

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