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Price v. Philip Morris12/15/2005
here. Indeed, "agency policy and practice" and the consent orders relied on by the majority as authorization are neither specific nor particular.
Nowhere in section 10b(1) is there any reference to "agency policy and practice." Yet the majority concludes that agency policy and practice have the force of law. Statutes and published rules made in accordance with statutory authority are clearly "laws administered by a regulatory body." To the extent statutes and published rules authorize certain conduct, that conduct cannot serve as a predicate for an action under the Consumer Fraud Act. That was the import of this court's holding in Lanier.
Lanier did not, however, hold that agency policy and practice allowed use of the unexplained "Rule of 78's" term in loan documents. Instead, we held that Regulation Z permitted use of the term without further elaboration. Regulation Z is a set of comprehensive rules, enacted and published by the Federal Reserve Board, pursuant to authority granted by Congress implementing the principles of the Truth in Lending Act. Lanier, 114 Ill. 2d at 11. In holding the conduct complained of was specifically authorized by law, we relied on a formal, published Federal Reserve Board staff interpretation of a section of Regulation Z. That regulation required identification of the method of computing any unearned portion of the finance charge in the event of prepayment. The published staff interpretation concluded that a simple reference by name to the "Rule of 78's" without describing its operation satisfied the identification requirement. Lanier, 114 Ill. 2d at 12.
We held that the Federal Reserve Board's formal, published interpretation of its own rules is entitled to great deference, absent any obvious repugnance to the Truth in Lending Act. Lanier, 114 Ill. 2d at 13. We observed that the Truth in Lending Act absolved creditors from liability "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.' [Citation.]" (Emphasis added.) Lanier, 114 Ill. 2d at 14.
We concluded that the foregoing provision evinced a congressional determination to treat the Board's administrative determinations under the Truth in Lending Act as authoritative. Lanier, 114 Ill. 2d at 14. Thus, we held section 10b(1) of the Consumer Fraud Act exempted from liability conduct authorized by federal statutes and regulations, including those administered by the Federal Reserve Board, and that "defendant's compliance with the disclosure requirements of the Truth in Lending Act is a defense to liability under the Illinois Consumer Fraud Act in the present case." (Emphasis added.) Lanier, 114 Ill. 2d at 18.
It is apparent, therefore, that Lanier upheld the creditor's section 10b(1) defense because the disclosure was specifically authorized by the federal Truth in Lending Act. We found defendant complied with the requirements of the Act because a formal, published agency interpretation of a regulation authorized by Congress, specifically authorized the disputed conduct.
Conversely, the record in this case does not present a basis for application of Lanier. Congress has empowered and directed the Federal Trade Commission to prevent the use of unfair or deceptive acts or practices in or affecting commerce. 15 U.S.C. §45. It has also delegated rulemaking authority to the Commission. 16 C.F.R. §1.22. As the defendant's expert, Dr. Peterman, conceded, the Commission has never promulgated any rule authorizing the use of the specific
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