Wednesday, August 17, 2011

One last whirl: court makes potentially significant state law ruling

LG Electronics U.S.A., Inc. v. Whirlpool Corp., 2011 WL 3510889 (N.D. Ill.)

LG lost most of its false advertising claims against Whirlpool, but the jury found in favor of LG on its Illinois UDTPA claim. The court denied LG’s motion for a permanent injunction and attorneys’ fees, and Whirlpool moved for judgment as a matter of law on the IUDTPA claim, which the court here granted. LG failed to show that Whirlpool’s advertising occurred primarily and substantially in Illinois, as the court found was required by the law. Evidence of a nationwide course of conduct without evidence of Illinois-specific conduct doesn’t trigger the IUDTPA.

Shouldn’t LG at least be able to suppress that false advertising which occurred in Illinois? I find it hard to believe that you couldn’t bring an IUDTPA claim on behalf of Illinois consumers against ads in Illinois. The court said that a non-consumer plaintiff could sue under the IUDTPA if it established “that the challenged advertising occurred primarily and substantially within the state.” The only sensible way to read this, especially since the distinction between consumers and nonconsumers seems to have little relevance here, is that a plaintiff could sue over (challenge) the Illinois component of a national ad campaign. The court also said that it couldn’t issue a nationwide injunction based on a violation of state law, apparently willing to hold that in a Lanham Act false advertising case the coordinate state claim couldn’t generally be maintained—this would substantially diminish the value, where present, of adding such claims. (Consider, for example, the consequences of this ruling when a state law has minimum damages or automatic fee provisions for prevailing plaintiffs.)

Here, LG didn’t introduce evidence of Illinois ads or Illinois damages, only that Whirlpool had a business relationship with Kenmore (Illinois HQ) and sold dryers in Illinois. Despite the precedent of numerous cases allowing nationwide IUDTPA claims by competitors (I think uniformly joined with Lanham Act claims, as is standard), the court said that none of them had decided this issue.

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