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Price v. Philip Morris12/15/2005
ors in marketing Marlboro Lights or Cambridge Lights.
The court correctly observes that our past decisions "make it clear that mere compliance with applicable federal regulations is not necessarily a shield against liability under the Consumer Fraud Act." Slip op. at 52. My colleagues, in fact, devote several pages of their analysis to discussing some of this court's decisions involving section 10b(1). Slip op. at 51-56 (discussing Lanier v. Associates Finance, Inc., 114 Ill. 2d 1 (1986), Martin v. Heinold Commodities, Inc., 163 Ill. 2d 33 (1994), and Jackson v. South Holland Dodge, Inc., 197 Ill. 2d 39 (2001)). None of these cases, however, support the court's holding in this case.
In Lanier, for example, the issue was whether the "specific authorization" requirement of section 10b(1) was found in a Federal Reserve Board staff interpretation of a federal regulation. This court explained as follows:
"The Truth in Lending Act was enacted by Congress to assure meaningful disclosure of credit terms, so that consumers can readily compare various credit options available to them. [Citation.] Congress granted the Federal Reserve Board the authority to prescribe regulations to carry out the purposes of the Truth in Lending Act. [Citation.] Pursuant to that authority, the Board enacted a comprehensive set of rules, known as Regulation Z [citation], implementing the principles of the Truth in Lending Act." (Emphasis added.) Lanier, 114 Ill. 2d at 11.
In 1973, the Federal Reserve Board staff issued an "official interpretation" of Regulation Z. Lanier, 114 Ill. 2d at 12. This court further explained:
"Although not binding upon the courts, the Federal Reserve Board's formal interpretations are entitled to a great degree of deference. This deference is especially appropriate in interpreting the Truth in Lending Act and the Board's own Regulation Z. [Citation.] The Supreme Court has stated that ` nless demonstrably irrational, Federal Reserve Board staff opinions construing the Act or regulation should be dispositive.' [Citations.]" Lanier, 114 Ill. 2d at 13.
The Lanier court explained as follows. The Federal Reserve Board is the agency that Congress empowered to prescribe implementing and interpretive regulations for the Truth in Lending Act. Therefore, the Board is entitled to the greatest respect in the interpretation of its own regulations. Further, it is unimportant that "formal interpretations" are issued by Federal Reserve Board staff rather than the Board itself, because judicial deference is based on agency expertise. Moreover:
"Congress included compliance with official staff interpretations when it absolved creditors from liability under the Truth in Lending Act for `any act done or omitted in good faith in conformity with any rule, regulation, or interpretation thereof by the Board or in conformity with any interpretation or approval by an official or employee of the Federal Reserve System duly authorized by the Board to issue such interpretations.' (15 U.S.C. sec. 1640(f) (1980).) Section 1640 evinces a clear congressional determination to treat the Board's administrative interpretations under the Truth in Lending Act as authoritative." Lanier, 114 Ill. 2d at 13-14.
The Lanier court concluded that the disclosure required by the Board's staff interpretation of Regulation Z implicitly provided "specific authorization" not to make any additional disclosures. Lanier, 114 Ill. 2d at 17-18.
The clarity and strength of the agency regulation in Lanier stands in marked contrast to the implicit and uncertain methodology of the FTC in this case. Lanier involved a formal staff interpretation of an agency's fo
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