Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—S.D. Ill.: Knowledge of prior Wal-Mart mislabeling barred IDTPA claim, (Jul 18, 2016)

By Edward L. Puzzo, J.D.

Plaintiffs’ knowledge that Wal-Mart had falsely advertised certain products as American-made provided sufficient knowledge to avoid future harm and thus barred a claim under the Illinois Uniform Deceptive Trade Practices Act, which cannot be sustained without an allegation that plaintiff is likely to be harmed in the future, the federal district court in East St. Louis, Illinois, has ruled (Johnson v. Wal-Mart Stores Inc., July 14, 2016, Herndon, D.).

Plaintiffs Cathy and Randal Johnson alleged that they were damaged by paying a premium for products Wal-Mart had incorrectly advertised as "Made in USA," "Assembled in the USA," or "Origin of Components USA." They brought a claim on this basis against Wal-Mart under the Illinois Uniform Deceptive Trade Practices Act (IDTPA).

A claim under the IDTPA cannot be stated absent an allegation that the plaintiff is likely to be damaged in the future. Wal-Mart argued that the plaintiffs could not plead a likelihood of future harm because they are aware of the advertising conduct at issue and, under Camasta v. Jos. A. Bank Clothiers, Inc., 761 F.3d 732 (7th Cir. 2014), individual plaintiffs cannot allege IDTPA claims when they are aware of the conduct at issue and, as a result, are able to avoid the harm they complain about in the future.

Type of knowledge. The specific issue here, the court explained, is the type of knowledge that is sufficient to enable the consumer to avoid future harm. In an earlier ruling in this case, the Magistrate Judge noted that the plaintiffs’ complaint was not limited to specific products but instead on a deceptive sales practice that could be used to mislabel thousands of different products. Thus plaintiffs’ knowledge of Wal-Mart’s use of incorrect advertising as to certain products did not arm them with knowledge sufficient to prevent future harm as to other products, the Magistrate Judge reasoned.

Avoiding future harm. The court rejected the Magistrate Judge’s reasoning. The relevant question, the court stated, was not whether the deceptive conduct was connected to a single product or line of products, but instead whether knowledge of the deceptive conduct enabled the plaintiffs to avoid future harm. Here, the plaintiffs were aware that any "Made in the USA" claims made by Wal-Mart as to any of its products was suspect. That knowledge alone allowed plaintiffs to avoid future harm by declining to make any purchases at Wal-Mart premised on claims that the product was "Made in the USA."

Without more than a speculative claim regarding future harm, the court ruled, plaintiffs are not entitled to injunctive relief under the IDTPA, and any amendment to the plaintiffs’ IDTPA claim would be futile. The court therefore dismissed plaintiffs’ IDTPA claim with prejudice.

The case is Civil Action No. 3:15-cv-00775-DRH-DGW.

Attorneys: D. Frank Davis (Davis & Norris, LLP) for Cathy Johnson. Caitlin M. Annatoyn (Greenberg Traurig) for Wal-Mart Stores Inc. and Wal-Mart.com USA, LLC.

Companies: Wal-Mart Stores Inc.; Wal-Mart.Com USA, LLC

Cases: StateUnfairTradePractices Advertising IllinoisNews