Reliance as a Defense to Consumer Fraud

As the increasing popularity of consumer lawsuits shows no signs of slowing down, manufacturers and retailers face a growing risk with everything that they sell to the public. When defending against a consumer fraud lawsuit, our Chicago consumer lawsuit lawyers know that there are a number of considerations to keep in mind, including how the product was engineered, the standards that dictated the design, the assembly and manufacturing sequence, the way in which it was meant to be used, as well as the product's practical utility.

Another major factor that has facilitated successful consumer fraud lawsuits is the fact that most consumer fraud statutes do not require the plaintiff to prove reliance. This means that, if a defendant falsely misrepresents a product, the plaintiff does not have to prove that she relied on the misrepresentation when making her purchase. This has serious implications, in particular for consumer lawsuits filed as class actions, since it means that consumers who were not even aware of the misrepresentation can be included in the class and receive an award for damages.

In 2008, though, the Eighth Circuit Court of Appeals made a ruling which made the matter of reliance a serious issue in consumer fraud lawsuits. While the Court maintained that the plaintiff does not need to prove reliance, it held that the defendants can prove that there was no reliance as a valid defense. The case was St. Jude Medical, Inc., Silzone Heart Valve Products Liability Litigation and involved a class of plaintiffs who had received prosthetic heart valves. Once it was discovered that the valves were subject to an increased risk of leakage, the manufacturer, St. Jude Medical, issued a recall of the valve. As a result, plaintiffs from all over the country filed lawsuits alleging consumer fraud, medical monitoring, and personal injuries. The consumer lawsuits were all consolidated into a single case in Minnesota.

Although the district court certified the case, the Eighth Circuit Court found that the complaints were comprised largely of individual issues. For example, the court found that, "[w]hether the information on which physicians based their actions ultimately can be traced to a representative by St. Jude undoubtedly will vary by physician." In support of this statement, the court listed some of the different ways in which the physicians learned about the heart valve. "One doctor heard about the valve from a senior partner, another discovered it at a cardiology conference, and a third learned about the valve from a St. Jude sales representative and a St. Jude advertisement." Even in instances where it was proven that the physician talked with a St. Jude representative or saw Silzone promotions materials, "the physicians assert[ed] that they did not rely on the representations by St. Jude in deciding to recommend the Silzone valve to their patients." Further discovery revealed that not every plaintiff had been exposed to the same representation of the valve. Observing this case from our Chicago office, our consumer lawsuit attorneys recognized the importance of this fact.

Plaintiffs cited the case of Group Health Inc., to support their argument that class certification was still appropriate regardless of whether there was reliance. The court, however, reasoned that evidence of no reliance should not be ignored when it is available. "[A]ssuming this case fits within the Group Health category, and thus does not require that plaintiffs present direct proof of individual reliance, Group Health surely does not prohibit St. Jude from presenting direct evidence that an individual plaintiff (or his or her physician) did not rely on representation from St. Jude. When such evidence is available, then it is highly relevant and probative on the question whether there is a causal nexus between alleged misrepresentation and any injury."

The Chicago consumer lawsuit attorneys at Lubin Austermuehle, P.C. have decades of experience defending against consumer fraud lawsuits. With offices conveniently located in Elmhurst and Chicago, Illinois, we have represented businesses located in the Chicagoland area such as Warrenville, Hoffman Estates, and Naperville. To consult with a skilled consumer lawsuit lawyer in the Chicago area today, contact us online or call us at (833) 306-4933.