An Illinois federal court recently reinforced the distinction between a properly plead consumer fraud claim and an express warranty claim merely masquerading as a consumer fraud claim, while granting a defendant’s motion to dismiss.
In Parrott v. Family Dollar, Inc.the plaintiff alleged breach of warranty and consumer fraud claims against Family Dollar, Inc. regarding its aloe vera product. The Hon. Jorge L. Alonso of the Northern District of Illinois unmasked plaintiff’s consumer fraud claim as nothing more than a breach of warranty claim by another name, and subsequently granted defendant’s motion to dismiss.
Previously, the court had dismissed the plaintiff’s breach of express and implied warranties claims with prejudice for lack of notice. The court also dismissed the plaintiff’s claim made pursuant to the Illinois Consumer Fraud and Deceptive Trade Practices Act (ICFA) because the plaintiff had not alleged a deceptive act separate from her breach of express warranty claim, as required to sustain a claim under the Act. However, the court dismissed the ICFA claim without prejudice because it was “conceivable that plaintiff could state a claim.” According to the court, to resurrect her ICFA claim, the plaintiff would need to allege deceptive conduct beyond just a breach of warranty. It “is insufficient merely to restate the same contract breach as an omission.”
The plaintiff’s third amended complaint once again alleged three counts. First, plaintiff repleaded her claims for breach of express and implied warranties, despite the court having previously dismissed them with prejudice, to “preserve them for appeal.” The court held this was “unnecessary and improper,” and struck the first two counts from the amended pleading.
Only the amended ICFA claim remained. In support, the plaintiff plead two main allegations. Neither was sufficient to survive the defendant’s motion to dismiss.
To begin, the plaintiff alleged the defendant “concealed and omitted that the Product was of such inferior quality that it does not offer benefits of ‘aloe vera.’” The court observed that this “sound[ed] like an allegation distinct from a breach of express warranty” claim at “first blush,” but the plaintiff’s “other allegations” confirmed it was “merely a restatement of a claim for breach of express warranty.” The plaintiff alleged that the key benefits of aloe vera included sunburn relief, and that the reason the plaintiff purchased the at-issue product was because “she wanted aloe to heal her skin and give her relief from sunburn.” The plaintiff also alleged that the product’s label expressly stated it “helps to soothe and cool sunburned or dry skin.” From these allegations, the court held that the plaintiff’s allegation that the defendant failed to disclose that the product did not provide the benefits of aloe vera was “just another way of alleging a breach of the promise that the Product would soothe and cool sunburned or dry skin,” and as such the allegations did not state a claim under the ICFA.
Next, the plaintiff alleged the defendant “concealed the material fact that the lack of discernable Aloe Vera in the Product renders it to be of inferior quality.” This allegation failed to support a claim under the ICFA for two reasons. First, the alleged “failure to disclose” was “merely a restatement of plaintiff’s claim for breach of express warranty, namely breach of the promise on the Product’s label.” Second, the plaintiff failed to cite any case law suggesting it was fraudulent under the ICFA for a company to fail to disclose that its product is of “inferior quality.” Citing Avery v. State Farm Mut. Auto Ins. Co., 216 Ill.2d 100, 171 (Ill. 2005), the court stressed that “there will always be some brands of that product that are not as good as, or which are ‘categorically inferior’ to, other brands of the same product” and the “state’s economy would come to a grinding halt if the sale of anything less than the single, best brand of every consumer good were considered fraudulent.” Accordingly, the court granted the defendant’s motion to dismiss the plaintiff’s third amended complaint.
Parrott v. Family Dollar, Inc. confirms that plaintiffs cannot shoehorn warranty-based claims into the framework of a claim under the Illinois Consumer Fraud and Deceptive Trade Practices Act. In the absence of allegations of deceptive conduct beyond a breach of warranty, such consumer fraud claims necessarily fail.