O'Keefe v. Walgreens Boots Alliance, Inc.

2020 IL App (5th) 190448

172 N.E.3d 1159

Brian O'KEEFE, Individually and on Behalf of All Others Similarly Situated, Plaintiff-Appellant,

v.WALGREENS BOOTS ALLIANCE, INC., Defendant-Appellee.

NO. 5-19-0448

Appellate Court of Illinois, Fifth District.

Rule 23 order filed May 4, 2020.

Modified upon denial of rehearing and motion to publish granted August 31, 2020.

Opinion Filed: August 31, 2020

James J. Rosemergy, of Carey, Danis & Lowe, of St. Louis, Missouri, and Tiffany M. Yiatras, of Consumer Protection Legal, LLC, of Ellisville, Missouri, for appellant.

David B. Sudzus, of Faegre Drinker Biddle & Reath LLP, of Chicago, and Anthony J. Weibell, of Wilson Sonsini Goodrich & Rosati, of Palo Alto, California, for appellee.

JUSTICE MOORE delivered the judgment of the court, with opinion.

¶ 1 The plaintiff, Brian O'Keefe, individually and on behalf of all others similarly situated, appeals the September 26, 2019, order of the circuit court of St. Clair County, which granted the motion of the defendant, Walgreens Boots Alliance, Inc., to dismiss his complaint. For the following reasons, we affirm.

¶ 2 I. BACKGROUND

¶ 3 The plaintiff filed a class action complaint against the defendant on March 13, 2019. The complaint alleges that the defendant intentionally misrepresented and/or made material omissions regarding the storage capacity of USB flash drives in its method of advertising, marketing, and/or packaging them. The complaint alleges the following facts by way of background. The average consumer understands digital storage capacity and file size to be measured using the "base-2" or "binary" counting system. In the "binary" counting system, 1 gigabyte (GB) is equivalent to 1024 megabytes, which is equivalent to 1,073,741,824 bytes. In accord with the binary system, several dictionaries define the term gigabyte as equaling 1024 megabytes. Furthermore, all computers and digital processors, including Microsoft Windows, Linux, and Apple (except Mac OS X version 10.6 and later) and all other operating systems, as well as PDAs, digital cameras, cell phones, and gaming systems, use the binary system to display file sizes and data storage capacity.

¶ 4 The complaint alleges that, in the "base-10" or "decimal" counting system, 1 GB is equivalent to 1000 megabytes, which is equivalent to 1 billion bytes. So, 1 GB in the decimal system contains fewer bytes than 1 GB in the binary system. The defendant calculates the GBs in its products using the decimal system. The plaintiff purchased a Walgreens Infinitive brand USB flash drive that was advertised and packaged to represent that its storage capacity was 32 GB. The complaint alleges that, in purchasing the drive, the plaintiff believed that he was receiving 32 binary GBs, but instead he received 32 decimal GBs, which is 6.7% less storage capacity than he was expecting to receive.

¶ 5 The complaint alleges that the defendant does not disclose to the consumer the discrepancy between the defendant's decimal-GB offering and the expected binary-GB offering. On the front of the defendant's packaging, the defendant represents in font that is larger and in a different color than surrounding text and separate and apart from other words, the number of GBs the USB flash drive contains. The complaint alleges that the defendant does not meaningfully, adequately, or conspicuously disclose that the defendant's product contains less storage than it represents on the front of the packaging. According to the complaint, "[a]ll Defendant does is place an asterisk on the number of GBs advertised and extremely fine print on the back of its packaging that arbitrarily defines GB as one billion bytes."

¶ 6 Count I of the complaint alleges a cause of action for breach of contract. Count II alleges a breach of the covenant of good faith and fair dealing. Count III alleges the defendant violated the Consumer Fraud and Deceptive Business Practices Act (Consumer Fraud Act) ( 815 ILCS 505/1 et seq. (West 2018)). Count IV alleges the defendant violated the Uniform Deceptive Trade Practices Act ( 815 ILCS 510/1 et seq. (West 2018)). Count V requests a "declaration that Defendant's acts and practices are deceptive and misleading, and preliminary and permanent injunctive relief to enjoin Defendants from continuing to engage in these deceptive, false and misleading acts and practices."

¶ 7 On June 10, 2019, the defendant filed a motion to dismiss the complaint. The defendant attached several exhibits to its motion to dismiss. First, the defendant attached actual size photographs of the packaging for the USB flash drive at issue. The back of the package contains the following words, in small print: "1 GIGABYTE (GB) = 1 BILLION BYTES. SOME CAPACITY NOT AVAILABLE FOR DATA STORAGE."

¶ 8 Second, the defendant attached a copy of volume 63, No. 144, of the Federal Register, dated July 28, 1998, which contains a notice from the United States Department of Commerce's National Institute of Standards and Technology (NIST) entitled " Metric System of Measurement: Interpretation of the International System of Units for the United States." 63 Fed. Reg. 40334 (July 28, 1998). In the notice, NIST declares that the International System of Units (SI) is the preferred system of weights and measures for the United States trade and commerce. Id. The notice lists "giga" or "G" as an SI prefix and states that these prefixes "strictly represent powers of 10" and that it is "inappropriate to use them to represent powers of 2." Id . at 40338. The notice states, as an example, that one kilobit equals 1000 bit, and not 1024 bits. Id .

¶ 9 Third, the defendant attached NIST Special Publication 811, 2008 Edition, titled "Guide for the Use of International System of Units (SI)" to its motion to dismiss. The publication reiterates that SI prefixes, such as "giga" or ‘‘kilo," refer strictly to powers of 10 and should not be used to indicate powers of 2. Ambler Thompson & Barry N. Taylor, Nat'l Inst. of Standards & Tech., Guide for the Use of the International System of Units (SI) 74 (2008), https://nvlpubs.nist.gov/nistpubs/Legacy/SP/nistspecialpublications811e2008.pdf [https://perma. cc/Y92D-T8UL]. The publication explains that the prefixes for binary powers that were adopted by the International Electrotechnical Commission (IEC) should be used in the field of information technology to indicate binary powers to "avoid the incorrect usage of the SI prefixes." Thus, according to this publication, instead of "giga," the prefix "gibi" should be used to denote 1,073,741,824 bytes. The defendant asked that the circuit court take judicial notice of the NIST standards.

¶ 10 After further briefing and oral argument, the circuit court entered an order on September 26, 2019, granting the motion to dismiss. On October 25, 2019, the plaintiff filed a notice of appeal. On May 4, 2020, this court issued an order that affirmed the circuit court's order dismissing the plaintiff's complaint. On May 26, 2020, the plaintiff filed a petition for rehearing in this court. On June 5, 2020, this court entered an order requiring that the defendant file a response to the petition for rehearing and establishing a deadline for the plaintiff's reply. On June 26, 2020, the defendant filed an answer to the petition for rehearing. The plaintiff did not file a reply. After reviewing the arguments on rehearing, we now issue this modified opinion upon denial of rehearing.¹

¶ 11 II. ANALYSIS

¶ 12 At the outset we note that the plaintiff's brief on appeal only presents argument as to why the circuit court erred in dismissing count III of the complaint, which alleges the defendant violated the Consumer Fraud Act. As such, the plaintiff has forfeited any issues as to the propriety of the circuit court's dismissal of all other counts of the complaint. See Reynolds v. Jimmy John's Enterprises, LLC , 2013 IL App (4th) 120139, ¶ 55, 370 Ill.Dec. 628, 988 N.E.2d 984 (citing Ill. S. Ct. R. 341(h) (eff. July 1, 2008)). Accordingly, we limit our analysis to count III of the plaintiff's complaint.

¶ 13 The defendant's motion to dismiss does not specify which section of the Code of Civil Procedure (Code) the motion is based upon. However, in the briefs, both parties state that the circuit court dismissed the complaint pursuant to section 2-615 of the Code ( 735 ILCS 5/2-615 (West 2018) ). A motion to dismiss pursuant to section 2-615 of the Code presents the question of whether the facts alleged in the complaint, viewed in the light most favorable to the plaintiff, are sufficient to state a cause of action upon which relief may be granted. Doe-3 v. McLean County Unit District No. 5 Board of Directors , 2012 IL 112479, ¶ 16, 362 Ill.Dec. 484, 973 N.E.2d 880. In ruling on a section 2-615 motion, the court only considers (1) those facts apparent from the face of the pleadings, (2) matters subject to judicial notice, and (3) judicial admissions on record. Gillen v. State Farm Mutual Automobile Insurance Co. , 215 Ill. 2d 381, 385, 294 Ill.Dec. 163, 830 N.E.2d 575 (2005). Our standard of review is de novo . Doe-3 , 2012 IL 112479, ¶ 15, 362 Ill.Dec. 484, 973 N.E.2d 880.

¶ 14 To state a claim under the Consumer Fraud Act, a plaintiff must show (1) a deceptive act or practice by the defendant, (2) the defendant's intent that the plaintiff rely on the deception, (3) the deception occurred in the course of trade or commerce, and (4) the consumer fraud proximately caused the plaintiff's injury. Avon Hardware Co. v. Ace Hardware Corp. , 2013 IL App (1st) 130750, ¶ 23, 376 Ill.Dec. 348, 998 N.E.2d 1281. However, notwithstanding the existence of these elements, the "safe harbor" provision of the Consumer Fraud Act provides that the Consumer Fraud Act shall not apply to actions "specifically authorized by laws administered by any regulatory body or officer acting under statutory authority of this State or the United States." 815 ILCS 505/10b(1) (West 2018).² Accordingly, if a regulatory body acting under specific...