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Price v. Philip Morris12/15/2005
ay that made him or her tangibly worse off. Theoretical harm is insufficient. Damages may not be predicated on mere speculation, hypothesis, conjecture or whim. See Petty v. Chrysler Corp., 343 Ill. App. 3d 815, 823 (2003).
The record in the case before us shows that PMUSA developed and marketed Marlboro Lights and Cambridge Lights cigarettes in response to heightened public concern over health risks posed by smoking. The company believed that it could forestall declining sales by offering a product which consumers perceived as better for them than conventional "full-flavored" brands. Pursuant to that strategy, PMUSA advertised Marlboro Lights and Cambridge Lights cigarettes in a way that led consumers to believe that the brands posed a lower health risk than their "full flavored" counterparts. In reality, and as PMUSA was fully aware, the so-called "light" cigarettes not only offered no health benefits, but were actually more toxic.
When a consumer chooses one product over another in the belief that it will be less harmful to his or her health, only to discover later that it may have been more harmful, the existence of damages might seem self-evident. In this case, however, plaintiffs are not seeking damages based on any heightened adverse effects on their health. Personal injury is not at issue. The losses for which plaintiffs seek compensation are purely economic. Their claim is simply that they did not receive what they bargained for. They paid for health benefits they did not get.
The benefit-of-the-bargain rule invoked by plaintiffs governs common law fraudulent misrepresentation cases. Gerill Corp. v. Jack L. Hargrove Builders, Inc., 128 Ill. 2d 179, 196 (1989). Although plaintiffs' cause of action is statutory in nature, the parties agree that the benefit-of- the-bargain rule provides the appropriate standard for ascertaining plaintiffs' right to damages in this case. Under the rule, damages are determined by looking at the loss to the plaintiff rather than the gain to the defendant. The rule is based on the rationale that the defrauded party is entitled to be placed in the same financial position he would have occupied had the misrepresentations in fact been true. See Martin v. Allstate Insurance Co., 92 Ill. App. 3d 829, 835 (1981). Consistent with this rationale, the measure of damages
"is such an amount as will compensate the plaintiff for the loss occasioned by the fraud, or, as it has been expressed, the amount which the plaintiff is actually out of pocket by reason of the transaction *." 19A Ill. L. & Prac., Fraud ยง 61 (1991).
When this case ultimately proceeded to trial, two individuals were identified as representing the plaintiff class, Sharon Price and Michael Fruth. Both named plaintiffs testified that they switched to light cigarettes because they believed such cigarettes to be lower in tar and nicotine and therefore healthier. Price also stated that she valued the health component of light cigarettes, or what she thought was the health component of lights. Significantly, however, Price also admitted that she continued smoking PMUSA's light cigarettes even after this litigation alerted her to the fact that the cigarettes were not, in fact, any healthier and may actually be more harmful than the regular version of those cigarettes. News that PMUSA's low tar and light representations were illusory likewise did not deter Fruth from continuing to smoke, although he testified that he did switch back from lights to regulars.
Whatever valuation the class representatives may have placed on the health component of light cigarettes, that valuation had no observable economic consequences. Neither Price nor Fruth offered any tes
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