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Price v. Philip Morris12/15/2005
s under the TILA, the Consumer Fraud Act, and the Deceptive Practices Act. Aurora Firefighters, 163 Ill. App. 3d at 918. With regard to his counterclaim that the credit union failed to make required disclosures under the TILA, the court held that the TILA requires disclosure only to the borrower, not to the guarantor, in a credit transaction. Aurora Firefighters, 163 Ill. App. 3d at 919. With regard to his counterclaims under the Consumer Fraud Act and Deceptive Practices Act, the court agreed with the credit union it could not be held liable because its alleged failure to disclose was both authorized by and in compliance with the TILA. Aurora Firefighters, 163 Ill. App. 3d at 921-22. However, the court further held that the defendant should be allowed to assert defenses under the Consumer Fraud Act and the Deceptive Practices Act based on alleged abuses other than disclosure violations. Aurora Firefighters, 163 Ill. App. 3d at 926. Rejecting the credit union's reliance on its regulation by and compliance with the Credit Union Act, the court stated that the mere existence of such a statute does not create "a blanket exemption" for credit unions from the operation of the Consumer Fraud Act.
We conclude that the present case can be distinguished from Lanier and its progeny because it does not involve the alleged lack of disclosure in the context of loans, leases, or other transactions. Rather, this case involves the use of allegedly deceptive terms in the name and description of a consumer product. That is, this is not a case in which the plaintiff argues that the defendant should have made disclosures in addition to the disclosures specifically required by the applicable regulations. In the present case, the question is whether the FTC specifically authorized the use of the disputed terms.
Despite this distinction, Lanier and its progeny, including the case upon which the circuit court relied, do stand for three separate propositions that are relevant to the present case. First, if section 10b(1) is to apply to bar a claim, the authorization relied upon must come from a state or federal regulatory body. See Lanier, 114 Ill. 2d at 13 (the Federal Reserve Board "is the agency empowered by Congress to prescribe implementing and interpretive regulations" for the TILA); Lanier, 114 Ill. 2d at 18 (applying section 10b(1) because the TILA is "a law administered by the Federal Reserve Board). See also Datacom Systems, 146 Ill. 2d at 33 (defendant corporation, which engaged in impermissible conduct while attempting to collect unpaid parking fines under a contract with the City of Chicago , was not exempt under section 10b(1) of the Consumer Fraud Act; although hired by the city to perform this function, its "actions were not specifically authorized by any laws administered by a regulatory body acting under statutory authority of this State").
Second, such a regulatory body may specifically authorize conduct by regulated entities without engaging in formal rulemaking. A Federal Reserve Board staff interpretation, for example, may be a sufficient basis for a finding of specific authorization. See Lanier, 114 Ill. 2d at 13 (agency is "entitled to the greatest respect in the interpretation of its own regulations"; and noting that both Congress and the Supreme Court have expressed approval for treating staff interpretations as authoritative).
Third, while the authorization must be specific-related to a particular thing-it need not be express. Thus, in Lanier, full compliance with disclosure requirements of the TILA was a defense to liability because the required disclosure implicitly provided specific authorization not to make any additional disclosures Lanier, 114 Ill. 2d at 17. Neither
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