Tri-Plex Technical Service, Ltd v. Jon-Don, LLC

2022 IL App (5th) 210210-U

• Court: Appellate Court of Illinois
• Decided: November 4, 2022
• Docket: 5-21-0210
• Status: Unpublished

Opinion

NOTICE 2022 IL App (5th) 210210-U NOTICE Decision filed 11/04/22. The This order was filed under text of this decision may be NO. 5-21-0210 Supreme Court Rule 23 and is changed or corrected prior to not precedent except in the the filing of a Petition for Rehearing or the disposition of IN THE limited circumstances allowed under Rule 23(e)(1). the same.

APPELLATE COURT OF ILLINOIS

FIFTH DISTRICT ________________________________________________________________________

TRI-PLEX TECHNICAL SERVICES, LTD., ) Appeal from the ) Circuit Court of Plaintiff-Appellant, ) St. Clair County. ) v. ) No. 20-L-237 ) JON-DON, LLC; LEGEND BRANDS, INC.; ) CHEMICAL TECHNOLOGIES INTERNATIONAL, ) INC.; BRIDGEPOINT SYSTEMS; GROOM ) SOLUTIONS; and HYDRAMASTER, LLC., ) Honorable ) Heinz M. Rudolf, Defendants-Appellees. ) Judge, presiding. ________________________________________________________________________

JUSTICE CATES delivered the judgment of the court. Justices Welch and Barberis concurred in the judgment.

ORDER

¶1 Held: The trial court erred in dismissing the second amended complaint with prejudice where the plaintiff alleged sufficient facts to state claims under the Illinois Consumer Fraud Act and the Uniform Deceptive Trade Practices Act, and for civil conspiracy. The judgment dismissing the second amended complaint with prejudice is reversed, and the cause is remanded for further proceedings.

¶2 The plaintiff, Tri-Plex Technical Services, Ltd., appeals from the trial court’s

judgment, dismissing the plaintiff’s claims against the defendants, Jon-Don, LLC,

1 Legend Brands, Inc., Chemical Technologies International, Inc., Bridgepoint Systems,

Groom Solutions, and Hydramaster, LLC, with prejudice. We reverse and remand.

¶3 I. BACKGROUND

¶4 The plaintiff is an Illinois corporation in the business of developing,

manufacturing, distributing, and selling commercial grade carpet cleaning products to

carpet care professionals in Illinois. The defendants are plaintiffs’ competitors. They also

manufacture, distribute, and/or sell commercial grade carpet cleaning products to carpet

care professionals in Illinois.

¶5 On March 25, 2020, the plaintiff brought this action against the defendants, under

the Consumer Fraud and Deceptive Business Practices Act (ICFA) (815 ILCS 505/1

et seq. (West 2020)) and the Uniform Deceptive Trade Practices Act (UDTPA) 1 (815

ILCS 510/1 et seq. (West 2020)). In the second amended complaint, at issue here, the

plaintiff asserts that each defendant has engaged in unfair competition and unfair and

deceptive trade practices with respect to the manufacture, distribution, and sale of its

carpet cleaning products 2 in violation of the ICFA and the UDTPA.

¶6 In the general allegations pertaining to all counts of the complaint, the plaintiff

initially noted that Illinois regulates the amount of phosphorous and volatile organic

materials (VOMs) in cleaning products because phosphorous and VOMs are harmful to

the environment and human health. The Regulation of Phosphorous in Detergents Act

1 The abbreviations “ICFA” and “UDTPA” were used in the parties’ pleadings and the trial court’s order. We retained those abbreviations in this order for consistency. 2 The various carpet cleaning products that were manufactured, distributed, and/or sold by the defendants to Illinois consumers were specifically identified by their brand names in the second amended complaint. In addressing the issues raised in this appeal, we need only identify these products collectively. 2 (Detergents Act) provides that “no person may use, sell, manufacture, or distribute for

sale any cleaning agent containing more than 0.5% phosphorous by weight, expressed as

elemental phosphorous, in Illinois, except as otherwise provided in this Section.” 415

ILCS 92/5(a) (West 2020). Additionally, the Illinois Environmental Protection Agency

(Illinois EPA) limits the amount of VOMs used in dilutable carpet cleaners to 0.1% or

less by weight (35 Ill. Adm. Code 223.205(a)(17)(B) (2012)). The plaintiff claimed that

its cleaning products comply with Illinois laws and regulations, while the defendants’

cleaning products do not. The plaintiff alleged that the defendants’ products contain more

than 0.5% phosphorous by weight and do not fall within any of the exceptions

enumerated in the Detergents Acts. It further alleged that the products manufactured,

distributed, and/or sold by Don-Joy products and Legend Brands contain more than 0.1%

VOMs by weight and do not fall within any exceptions set out in the Illinois EPA

regulations.

¶7 According to the more specific allegations under the UDTPA, each defendant

omitted from its labeling, and otherwise failed to notify consumers in the marketplace,

that its cleaning products contain more than 0.5% phosphorous by weight and do not

comply with the Detergents Act. In addition, defendants Jon-Don and Legend Brands

omitted from their labeling and otherwise failed to notify consumers that their cleaning

products contain more than 0.1% VOMs by weight and do not comply with Illinois EPA

regulations limiting VOMs. The plaintiff further alleged that consumers in the

marketplace purchased the defendants’ products and refused to purchase plaintiff’s

products because the defendants’ phosphorus-laden products and VOM-laden products 3 clean better. These consumers were unaware that products containing excessive amounts

of phosphorous and VOMs could not be legally sold in Illinois. They assumed that the

defendants’ cleaning products complied with Illinois law because they were able to

purchase them in Illinois. They would be surprised to learn that the approval, uses, and

quality of the cleaning products were not as represented. The plaintiff asserted that the

defendants’ deceptive acts caused a likelihood of confusion and misunderstanding in the

marketplace as to “the sponsorship, approval, characteristics, ingredients, uses, benefits,

or certification” of the subject products, and constituted deceptive practices under

subsections 2(a)(2), (5), and (12) of the UDTPA (815 ILCS 510/2(a)(2), (5), (12) (West

2020)).

¶8 The plaintiff alleged that the defendants’ deceptive practices created and continued

to create unfair competition in the marketplace. The plaintiff further alleged that the

defendants willfully engaged in these practices. The plaintiff asserted that as a direct

result of the defendants’ practices, it “suffered and continues to suffer a loss of ability to

compete in the marketplace and a loss of sales.” The plaintiff sought a finding that each

defendant willfully engaged in deceptive trade practices, an order enjoining each

defendant from distributing or selling the subject products in Illinois, and an award of

reasonable attorney fees and costs.

¶9 In the specific allegations under the ICFA, the plaintiff initially incorporated all of

the preceding allegations. According to the allegations, each defendant employed

“deception, fraud, and false pretenses” to conceal the fact that its products contained

excessive quantities of phosphorous and/or VOMs, and did not comply with Illinois laws. 4 Each defendant committed these acts with the intent that unwary consumers rely upon the

misrepresentations and purchase its products. The misrepresentations were material

because they concerned the type of information upon which a reasonable consumer

would be expected to rely in making purchasing decisions. The plaintiff further alleged

the defendants knowingly and willfully misled consumers into purchasing the subject

products, and charged a premium for the products, as if those products were legal and of

a superior quality. The plaintiff also alleged that the practices exposed consumers to

unwanted, harmful, and illegal levels of phosphorous and VOMs.

¶ 10 The plaintiff asserted that the defendants’ acts constituted unfair methods of

competition and unfair and deceptive acts or practices. In addition, the defendants’ unfair

practices offended Illinois public policy because the subject products did not comply with

Illinois environmental laws, and because Illinois consumers have an interest in

purchasing products that do not harm the environment. These practices also offended the

public’s expectation that it would be told the truth about products sold in the marketplace.

¶ 11 The plaintiff claimed that the defendants acted willfully and with the intent to

economically harm the plaintiff; that the defendants profited by selling illegal products to

unwary consumers in Illinois, at the expense of the plaintiff and consumers alike; and that

the plaintiff was and is unable to fairly compete in the markets where the subject products

are sold. The plaintiff requested a finding that each defendant willfully violated the

ICFA, and an order enjoining each defendant from distributing or selling the subject

products in Illinois. The plaintiff also requested actual damages; punitive damages for

5 willful violations of Illinois law that negatively impacted competition, the environment,

and consumer health and safety; and reasonable attorney fees and costs.

¶ 12 In the sole count for civil conspiracy, the plaintiff incorporated all of its preceding

factual allegations. The plaintiff then alleged that Jon-Don and Legend Brands, acting in

concert, intentionally and knowingly marketed, distributed, sold, and/or delivered illegal

Legend Brands’ phosphorous-laden and VOM-laden products to unwary customers in

Illinois in open violation of Illinois environmental laws. The plaintiff further alleged that

these defendants conspired to rebrand and sell certain Legend Brands products as Jon-

Don products to Illinois customers in open violation of Illinois environmental laws. The

plaintiff claimed that Jon-Don and Legend Brands engaged in a civil conspiracy to

deprive the plaintiff of sales and profits, and that it suffered and continues to suffer a

significant loss of sales and profits as a result of this conspiracy. The plaintiff requested a

finding that Jon-Don and Legend Brands engaged in a civil conspiracy, and a judgment

awarding the plaintiff an amount to be determined at trial, equal to its lost profits,

incidental and consequential damages, punitive damages, and reasonable attorney fees

and costs.

¶ 13 The defendants filed separate motions to dismiss the second amended complaint.

They also adopted the arguments made in their codefendants’ motions. The defendants

moved to dismiss the complaint for failure to state a cause of action under section 2-615

of the Code of Civil Procedure (Code) (735 ILCS 5/2-615 (West 2020)). They also

sought dismissal under section 2-619 of the Code (735 ILCS 5/2-619 (West 2020)),

6 asserting that the plaintiff lacked standing under the ICFA, and that other affirmative

matters barred the plaintiff’s claims.

¶ 14 On May 6, 2021, the trial court heard arguments on the defendants’ motions and

took the matter under advisement. On June 8, 2021, the court dismissed all counts in the

second amended complaint with prejudice. In its order, the court noted the pending

motions included overlapping arguments and some unique arguments. The court

addressed all of the arguments collectively because each defendant adopted the

arguments of its codefendants.

¶ 15 Initially, the trial court found that the alleged violations of environmental statutes

and regulations could not form the basis for claims under the ICFA and the UDTPA. The

court reasoned that the Illinois Pollution Control Board has the exclusive authority to

enforce the provisions of the Detergents Act and environmental laws and regulations

governing emissions, and that the plaintiff could not use its UDTPA and ICFA claims as

a means to enforce those laws and regulations.

¶ 16 The trial court also found that those claims that were based upon a failure to

adequately label the subject products were barred “due to compliance with federal

regulations.” The court found that the content of a product label “falls within the scope of

the federal regulations requiring the disclosure of certain information, including the

presence of hazardous chemicals,” citing 29 C.F.R. § 1910.1200(a)(1). The court

concluded that the plaintiff did not “plausibly allege” that the defendants’ product labels

were not in compliance with that regulation, or identify any other law or regulation that

7 would require the defendants to notify consumers of their noncompliance with the

Detergents Act or Illinois’s emission standards.

¶ 17 Next, the trial court found that the plaintiff had failed to adequately allege facts

that established a “likelihood of confusion” under the UDPTA. Applying the meaning of

“likelihood of confusion,” as used in trademark infringement cases, the court stated that a

“likelihood of confusion” only existed when a defendant’s use of a deceptive trade name,

trademark, or other distinctive symbol was likely to confuse or mislead consumers “as to

the source or origin of the product or service.” The court concluded that the plaintiff did

not allege the type of marketplace confusion prohibited by the UDPTA.

¶ 18 Turning to the ICFA claims, the trial court found that the plaintiff failed to

establish standing because it was not a consumer and could not satisfy the “consumer

nexus” test. The court also found that the ICFA claims were deficient because the

plaintiff alleged an omission of law, rather than an omission of fact, and because the

plaintiff did not adequately allege that it suffered damages proximately caused by the

defendants’ conduct.

¶ 19 Finally, the court concluded that the civil conspiracy claim failed as a matter of

law. The court found that the conspiracy claim was dependent on the existence of a viable

cause of action under the ICFA or the UDTPA, and that the plaintiff failed to state a

cause of action under either statute.

8 ¶ 20 II. ANALYSIS

¶ 21 On appeal, the plaintiff claims that the trial court erred in dismissing its second

amended complaint with prejudice. The trial court set forth five main grounds for

dismissal, and the plaintiff challenges each one.

¶ 22 A motion to dismiss under section 2-615 of the Code (735 ILCS 5/2-615 (West

2020)) challenges the legal sufficiency of the complaint based upon defects apparent on

the face of the complaint. Marshall v. Burger King Corp., 222 Ill. 2d 422, 429 (2006).

When ruling on a section 2-615 motion to dismiss, the court will consider whether the

allegations in the complaint, when viewed in a light most favorable to the plaintiff, are

sufficient to state a claim upon which relief can be granted. Marshall, 222 Ill. 2d at 429.

All well-pleaded facts are taken as true, and all reasonable inferences are drawn in favor

of the nonmoving party. Marshall, 222 Ill. 2d at 429. A complaint should not be

dismissed under section 2-615 unless it is clearly apparent that no set of facts can be

proven that will entitle the plaintiff to relief. Marshall, 222 Ill. 2d at 429. An order

granting a 2-615 motion is reviewed de novo. Marshall, 222 Ill. 2d at 429.

¶ 23 A motion to dismiss under section 2-619 of the Code (735 ILCS 5/2-619 (West

2020)) admits the legal sufficiency of the complaint, accepts all well-pleaded facts as

true, and asserts that an affirmative matter outside the complaint bars or defeats the

plaintiff’s claim. Reynolds v. Jimmy John’s Enterprises, LLC, 2013 IL App (4th) 120139,

¶ 31. A 2-619 motion should be granted only if the plaintiff can prove no set of facts that

would support a cause of action. Reynolds, 2013 IL App (4th) 120139, ¶ 31. Lack of

standing is an “affirmative matter” that is properly raised in a motion to dismiss under 9 section 2-619(a)(9) (735 ILCS 5/2-619(a)(9) (West 2020)). Reynolds, 2013 IL App (4th)

120139, ¶ 33. The propriety of an order dismissing an action based on a lack of standing

presents a question of law that is reviewed de novo. Reynolds, 2013 IL App (4th) 120139,

¶ 31.

¶ 24 Claims Premised on Violations of Environmental Law

¶ 25 In its order, the trial court found that the alleged violations of the Detergents Act

and the environmental regulations governing emissions could not form the bases for

claims under the ICFA and the UDTPA. 3 The court reasoned that the Illinois Pollution

Control Board has the exclusive authority to enforce those environmental laws and

regulations, and that the plaintiff could not use the ICFA and UDTPA as a means to

enforce those laws and regulations.

¶ 26 The regulation of phosphorous in detergents is an exclusive power of the State of

Illinois. 415 ILCS 92/5(f) (West 2020). The Illinois Pollution Control Board has been

authorized to promulgate rules for the administration, regulation, and enforcement of the

Detergents Act (415 ILCS 92/5(e), (f) (West 2020)), and to implement other

environmental control standards for Illinois (415 ILCS 5/5 (West 2020)).

3 In considering this matter, the trial court found that Manzo v. Uber Technologies, Inc., 2014 WL 3495401 (N.D. Ill. July 14, 2014), an unpublished decision cited by the defendants, was instructive. In Manzo, the federal district court found that that the alleged deception hinged on the anticipated interpretation of an ambiguous regulation. The federal court determined that the plaintiff could not state a cause of action based upon the plaintiff’s preferred interpretation of the regulation where the regulatory framework was ambiguous with regard to the defendant’s activity. In contrast, federal courts have allowed unfair competition claims based upon violations of unambiguous statutes and regulations. See, e.g., Malden Transportation, Inc. v. Uber Technologies, Inc., 286 F. Supp. 3d 264, 278 (D. Mass. 2017). As distinguished from Manzo, the unfair competition claims in this case do not involve alleged violations of ambiguous statutes or regulations. 10 ¶ 27 In this case, the plaintiff did not bring suit under the Detergents Act or any other

environmental laws or regulations. Rather, the plaintiff invoked those laws and

regulations as evidence to support its claims of unfair competition and unfair practices.

See Gainer Bank, N.A. v. Jenkins, 284 Ill. App. 3d 500, 503 (1996). A plaintiff may

establish an unfairness claim by showing that the defendants’ deceptive practices offend

public policy. Robinson v. Toyota Motor Credit Corp., 201 Ill. 2d 403, 417-18 (2002). A

practice may offend public policy if it violates a standard of conduct set forth in an

existing statute or common law doctrine that typically applies to such a situation. See,

e.g., Robinson, 201 Ill. 2d at 417-18; Elder v. Coronet Insurance Co., 201 Ill. App. 3d

733, 743 (1990).

¶ 28 In the second amended complaint, the plaintiff alleged that the defendants engaged

in unfair or deceptive practices under the ICFA, and unfair competition under the

UDPTA by manufacturing, distributing, and selling cleaning products that did not

comply with Illinois environmental laws, without notifying unwary consumers about the

excessive quantities of phosphorous and/or VOMs in those products, and the restrictions

on use of those products in Illinois. The plaintiff also alleged that the defendants

intentionally mispresented the approvals, permitted uses, and qualities of those products

with the intent to profit at the expense of the plaintiff and Illinois consumers. The unfair

and deceptive practices that the plaintiff sought to remedy through its ICFA and UDTPA

claims were separate and distinct from the regulatory decisions and enforcement actions

of the Pollution Control Board. We do not agree that the plaintiff used the ICFA and

UDTPA as a means to bring a private right of action to enforce the Detergents Act or 11 environmental laws governing emissions. Rather, these statutes and regulations simply

offer a quantum of proof regarding the deceptive actions. Therefore, this was not a proper

ground for dismissal.

¶ 29 Deceptive Practices & OSHA Regulations

¶ 30 Next, the trial court determined that plaintiff’s claims based on a failure to

adequately label the subject products were barred “due to compliance with federal

regulations.” The court stated that compliance with federal regulations was a complete

defense to a consumer fraud claim based on the alleged failure to make additional

disclosures related to a product. The court found that the content of a product label “falls

within the scope of the federal regulations requiring the disclosure of certain information,

including the presence of hazardous chemicals,” citing 29 C.F.R. § 1910.1200(a)(1), and

that the plaintiff did not “plausibly allege” that defendants’ product labels did not comply

with that regulation. The court concluded that the product labeling allegations fell within

the exemptions in the UDTPA and ICFA.

¶ 31 Section 4 of the UDTPA provides that the Act does not apply to “conduct in

compliance with the orders or rules of or a statute administered by a Federal, state or

local governmental agency.” 815 ILCS 510/4(a) (West 2020). Similarly, the ICFA does

not apply to “[a]ctions or transactions 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 2020). To trigger these exemptions, a regulatory

body must be acting within its statutory authority and the challenged conduct must be

“specifically authorized” by that regulatory body. Price v. Philip Morris, Inc., 219 Ill. 2d 12 182, 247-49 (2005); Martin v. Heinold Commodities, Inc., 163 Ill. 2d 33 (1994) (mere

compliance with applicable federal regulations is not necessarily a shield against liability

under the ICFA).

¶ 32 In the second amended complaint, the plaintiff specifically alleged that each

defendant “omits from its labeling, and otherwise fails to notify” consumers that its

products contain excessive amounts of phosphorous and/or VOMs. The plaintiff further

alleged that consumers purchased the subject products, unaware that those products did

not comply with environmental laws and regulations and were potentially harmful to the

environment and human health. In its order, the trial court did not discuss the plaintiff’s

allegations regarding the overall failure to notify consumers about the subject products’

ingredients, restrictions on use, and potential harm to the environment and human health.

The trial court limited its consideration to the “omits from its labeling” portion of the

allegation, and found that the labeling allegation was barred due to compliance with 29

C.F.R. § 1910.1200.

¶ 33 At the outset, we note that the subject product labels were not attached or

incorporated into the second amended complaint. In addition, the labels were not attached

in support of defendants’ arguments that their labeling complied with 29 C.F.R.

§ 1910.1200. Neither the labels themselves, nor the specific content of the labels, were

before the trial court as it considered the motions to dismiss. Grounds for dismissal that

do not appear on the face of the pleadings should be supported by affidavit or other

documentary evidence. Illinois Graphics Co. v. Nickum, 159 Ill. 2d 469, 485-86 (1994).

A motion to dismiss is legally insufficient when extrinsic facts crucial to the motion are 13 not supported by affidavit or other documentary evidence. Becker v. Zellner, 292 Ill. App.

3d 116, 124 (1997). Whether the subject product labels were covered by, and/or complied

with, 29 C.F.R. § 1910.1200, or another federal regulation, cannot be discerned from the

pleadings. Likewise, whether the labels adequately informed consumers or users of the

products’ ingredients, qualities, and restrictions on use cannot be determined from the

pleadings. Thus, the trial court’s findings of compliance are not supported by the record.

¶ 34 In addition, we note that section 1910.1200 contains workplace safety regulations 4

implemented under the Occupational Safety and Health Act (OSHA). See 29 U.S.C.

§ 651(b); 29 C.F.R. § 1910.1200 (2020). Congress enacted OSHA to assure so far as

possible that every worker has “safe and healthful working conditions.” 29 U.S.C.

§ 651(b). Congress included a “savings clause” that demonstrates a clear intent to

preserve and not preempt state tort law. See 29 U.S.C. § 653(b)(4); In re Welding Fume

Product Liability Litigation, 364 F. Supp. 2d 669, 688-89 (2005); Wickham v. American

Tokyo Kasei, Inc., 927 F. Supp. 293 (1996); Pedraza v. Shell Oil Co., 942 F.2d 48, 54

(1st Cir. 1991). Section 1910.1200 contains a preemptive provision. 5 29 C.F.R.

§ 1910.1200(a)(2). This provision has been construed to preempt state tort law only when

4 Each employer has a duty to furnish to his employees “employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm to his employees,” and a duty to comply with OSHA standards, rules, regulations, and orders. 29 U.S.C. § 654(a). 5 The HazCom Standard contains a provision indicating that it is “intended to address comprehensively the issue of classifying the potential hazards of chemicals, and communicating information concerning hazards and appropriate protective measures to employees, and to preempt any legislative or regulatory enactments of a state, or political subdivision of a state, pertaining to this subject.” 29 C.F.R. § 1910.1200(a)(2). 14 a state’s tort law directly, clearly, and substantially conflicts with federal law. Welding

Fume Product Liability Litigation, 364 F. Supp. 2d at 692.

¶ 35 Section 1910.1200 is commonly called the “HazCom Standard.” The stated

purpose of the HazCom Standard is to “ensure that the hazards of all chemicals produced

or imported are classified, and that information concerning the classified hazards is

transmitted to all employers and employees by means of safety data sheets or labels.” 29

C.F.R. § 1910.1200(a)(1). Containers holding hazardous chemicals must be labeled,

tagged, and marked with “appropriate hazard warnings.” 29 C.F.R. § 1910.1200(f)(1),

(5). The HazCom Standard requires that labels include a product identifier, signal words,

hazard statement, pictograms, precautions statements, and contact information for the

chemical manufacturer, importer, or other responsible party (29 C.F.R.

§ 1910.1200(f)(1)), but it does not mandate a specific label, prescribe specific content or

wording, or define what makes a hazard warning “appropriate.” Furthermore, these

labeling requirements do not apply to all chemicals and hazardous waste substances. See

29 C.F.R. § 1910.1200(b)(5), (6).

¶ 36 The HazCom Standard pertains to regulations governing employers and

employees in the workplace, and “does not reach broadly to include common law duties

to warn owed by manufacturers and suppliers to end users of their products.” Welding

Fume Product Liability Litigation, 364 F. Supp. 2d at 692-93 (citing Medtronic, Inc. v.

Lohr, 518 U.S. 470, 488-89 (1996)). The plaintiff’s unfair and deceptive practice claims

do not pertain to workplace safety. Additionally, these claims are directed at the

manufacturers, distributors, and suppliers of the subject products, not employers. The 15 alleged deception involves the failure to notify consumers that the defendants’ products

contain excessive amounts of phosphorous and VOMs; that there are limits on the

approved uses of the products; and that the products could be harmful to the environment

and human health. Even if the subject product labeling is found to comply with an

applicable federal regulation, consumers may nonetheless be deceived about the quality

and safety of the products. See Martin, 163 Ill. 2d at 50-52 (customers may be deceived

about material facts despite receiving information required by an agency’s regulations).

¶ 37 Bare assertions that a product label complies with a federal regulation are

insufficient to support a motion to dismiss. A defendant must provide legal arguments

and supporting documentation so that the trial court can determine whether the federal

regulation applies to a particular claim, and whether compliance with that regulation

provides a complete defense to the claim. In this case, the defendants have not established

that section 1910.1200 would trigger the exemptions in the UDPTA and/or the ICFA.

Accordingly, it was error to dismiss the second amended complaint on that basis.

¶ 38 The ICFA Claims

¶ 39 The trial court also determined that the plaintiff failed to plead actionable claims

under the ICFA. The court found that the plaintiff did not establish standing to pursue its

claims. The court also found that the ICFA claims were deficient because the plaintiff

alleged an omission of law, rather than an omission of fact, and because the plaintiff did

not adequately allege that it suffered damages proximately caused by the unfair or

deceptive practices.

16 ¶ 40 The ICFA is a regulatory and remedial statute intended to protect consumers,

borrowers, and businesspersons from fraud, unfair methods of competition, and other

unfair and deceptive acts or practices in the conduct of trade or commerce, and it is to be

liberally construed to effectuate its purpose. Robinson, 201 Ill. 2d at 416-17. To state a

claim under the ICFA, a plaintiff must allege that (1) the defendant committed a

deceptive act or practice, (2) the defendant intended the plaintiff to rely on the deception,

and (3) the deception occurred during a course of conduct involving trade or commerce.

Robinson, 201 Ill. 2d at 417. The plaintiff’s actual reliance is not an element of statutory

fraud, but the plaintiff must show that the consumer fraud proximately caused the

plaintiff’s injury. Connick v. Suzuki Motor Co., 174 Ill. 2d 482, 501 (1996). A complaint

for statutory consumer fraud violation must be alleged with the same particularity and

specificity as required under common law fraud. Connick, 174 Ill. 2d at 501. To bring an

action for civil damages under the ICFA, the plaintiff must prove that it suffered actual

damages. 815 ILCS 505/10a(a) (West 2020); White v. DaimlerChrysler Corp., 368 Ill.

App. 3d 278, 283 (2006).

¶ 41 Section 2 of the ICFA provides:

“Unfair methods of competition and unfair or deceptive acts or practices,

including but not limited to the use or employment of any deception, fraud, false

pretense, false promise, misrepresentation or the concealment, suppression or

omission of any material fact, with intent that others rely upon the concealment,

suppression or omission of such material fact *** in the conduct of any trade or

17 commerce[6] are hereby declared unlawful whether any person has in fact been

misled, deceived or deceived or damaged thereby.” 815 ILCS 505/2 (West 2020).

¶ 42 The protections of the ICFA are not limited to consumers. That is made clear by

the full title of the Act, “An Act to protect consumers and borrowers and businessmen

against fraud, unfair methods of competition and unfair or deceptive acts or practices in

the conduct of any trade or commerce ***.” (Emphasis omitted and internal quotation

marks omitted.) Sullivan’s Wholesale Drug Co. v. Faryl’s Pharmacy, Inc., 214 Ill. App.

3d 1073, 1082 (1991). There is “a clear mandate from the Illinois legislature that

[Illinois] courts *** utilize the Act to the utmost degree in eradicating all forms of

deceptive and unfair business practices and grant appropriate remedies to injured parties.”

(Internal quotation marks omitted.) Downers Grove Volkswagen, Inc. v. Wigglesworth

Imports, Inc., 190 Ill. App. 3d 524, 534 (1989). Thus, aggrieved businesses have standing

to sue under the ICFA. Sullivan’s Wholesale Drug Co., 214 Ill. App. 3d at 1083;

Wigglesworth Imports, 190 Ill. App. 3d at 534.

¶ 43 The plaintiff readily admits it is not a consumer of the defendants’ products. The

question is whether the plaintiff has alleged sufficient facts to establish standing under

the “consumer nexus” test.

¶ 44 When a dispute involves two businesses who are not consumers of each other’s

products or services, the test for standing is whether the deceptive conduct involves trade

6 The terms “trade” and “commerce” mean “the advertising, offering for sale, sale, or distribution of any services and any property, tangible or intangible, real, personal or mixed, and any other article, commodity, or thing of value wherever situated, and shall include any trade or commerce directly or indirectly affecting the people of this State.” 815 ILCS 505/1(f) (West 2020).

18 practices addressed to the market generally or otherwise implicates consumer protection

concerns. See Empire Home Services, Inc. v. Carpet America, Inc., 274 Ill. App. 3d 666,

669 (1995); Wigglesworth Imports, 190 Ill. App. 3d at 534. To sufficiently establish an

implication of consumer protection concerns, plaintiffs must plead and otherwise prove

the following: “(1) that their actions were akin to a consumer’s actions to establish a link

between them and consumers; (2) how defendant’s representations *** concerned

consumers other than themselves; (3) how defendant’s particular breach *** involved

consumer protection concerns; and (4) how the requested relief would serve the interests

of consumers.” Brody v. Finch University of Health Sciences/The Chicago Medical

School, 298 Ill. App. 3d 146, 160 (1998).

¶ 45 Here, the plaintiff alleged that the defendants directed their deceptive practices

toward consumers. The defendants allegedly deceived consumers about the ingredients,

approved uses, and quality of defendants’ cleaning products, and the harmful impact of

those products on the environment and human health. The plaintiff further alleged that

the defendants knowingly and willfully charged a premium for their products, as if those

products were legal and of a superior quality; and that the defendants profited from the

sale of illegal products to unwary Illinois consumers. The plaintiff also asserted that the

defendants’ practices created an anticompetitive effect on the plaintiff’s ability to place

safe and compliant products into the marketplace and to compete there. Taking these

allegations and all reasonable inferences therefrom as true, we find that the alleged

conduct sufficiently implicates consumer protection concerns to establish standing. Thus,

the trial court erred in dismissing the plaintiff’s ICFA claims based on a lack of standing. 19 ¶ 46 The trial court next found that the plaintiff failed to adequately allege a deceptive

statement or omission under the ICFA. Initially, the court pointed to the plaintiff’s

allegation that the defendants deceptively omitted to inform customers that their products

were “illegal per se” because they contained excessive phosphorous. The court found that

this allegation was legally incorrect in many circumstances because the Detergents Act

contains several exceptions to the 0.5% limit on phosphorous in detergents, including

exceptions for cleaning products used in health care facilities, nursing homes,

commercial bathrooms, and veterinary facilities.

¶ 47 Under the Detergents Act, “no person may use, sell, manufacture, or distribute for

sale any cleaning agent containing more than 0.5% phosphorous by weight, *** except as

otherwise provided in this Section.” 415 ILCS 92/5(a) (West 2020). There are limited

exceptions. For example, cleaning agents containing more than 0.5% phosphorous may

be used in hospitals, clinics, nursing homes, and veterinary hospitals. 415 ILCS 92/5(b)

(West 2020). The plaintiff has conceded that the “illegal per se” language is imprecise,

acknowledging that when it alleged the subject products were “illegal per se,” it meant

that Illinois bans them “for general sale and use.” Viewing this specific allegation in

isolation, we agree that it is not accurate. Upon proper motion, the per se language in the

allegation may be stricken from the second amended complaint, or excised and corrected.

The inaccurate allegation, however, is not a proper basis for dismissing the ICFA claims

in their entirety. Considered as a whole, the ICFA claims are premised upon the

defendants’ failure to disclose the ingredients, quality, restrictions on uses of their

20 products, and the defendants’ actions in misleading consumers into purchasing their

products, while charging a premium as if the products were of superior quality.

¶ 48 The trial court also found that the ICFA claims were deficient because the plaintiff

alleged an omission of law, rather than an omission of fact. Generally, a deceptive

representation of law does not constitute a violation of the ICFA because both parties are

presumed to be equally capable of knowing and interpreting the law. See generally

Capiccioni v. Brennan Naperville, Inc., 339 Ill. App. 3d 927, 933 (2003); Randels v. Best

Real Estate, Inc., 243 Ill. App. 3d 801, 805 (1993). The test is whether the

misrepresentation could have been discovered by merely reviewing the applicable law.

Capiccioni, 339 Ill. App. 3d at 934.

¶ 49 Here, the plaintiff alleged that the defendants engaged in unfair and deceptive

practices in that defendants failed to notify consumers that the subject products contained

quantities of phosphorous and/or VOMs in excess of the amounts permitted under Illinois

law; that they had restricted uses; and that they posed potential harm to human health and

the environment. These are misrepresentations or omissions of fact that concern the

specific ingredients, qualities, and uses of the subject products. In addition, on this

record, we cannot conclude that consumers might have learned whether they could safely

and lawfully use these products by reviewing provisions of the Detergents Act.

¶ 50 The plaintiff also argues that the trial court failed to consider its allegations under

the unfairness prong of its ICFA claim. The statute affords redress not only for deceptive

business practices, but also for business practices that, though not deceptive, are unfair.

Robinson, 201 Ill. 2d at 417. Factors to be considered when determining whether a course 21 of conduct or an act is unfair are “(1) whether the practice offends public policy;

(2) whether it is immoral, unethical, oppressive, or unscrupulous; (3) whether it causes

substantial injury to consumers.” Robinson, 201 Ill. 2d at 418 (citing Federal Trade

Comm’n v. Sperry & Hutchinson Co., 405 U.S. 233, 244 n.5 (1972)). All three criteria do

not need to be satisfied to support a finding of unfairness, as a practice may be unfair

because of the degree to which it meets one of the factors or because it meets all three to

a lesser extent. Robinson, 201 Ill. 2d at 418.

¶ 51 The plaintiff adequately alleged that the defendants have engaged in conduct that

offends the public policies underlying the Detergents Act, and other Illinois

environmental laws. The plaintiff also alleged substantial injury to consumers in that the

defendants knowingly and willfully charged a premium for their products, as if they were

legal and of a superior quality, and thus, profited at the expense of unwary consumers.

Additionally, the plaintiff alleged that defendants’ conduct posed substantial harm to

human health and the environment. Thus, we find that the plaintiff sufficiently alleged a

claim for unfair business practices under the ICFA. Robinson, 201 Ill. 2d at 417-18.

¶ 52 The trial court also found that the plaintiff failed to adequately allege proximate

cause. Proximate cause means any cause which, in nature or probable sequence, produced

the alleged injury. Capiccioni, 339 Ill. App. 3d at 937. Proximate cause is a question of

fact for the trier of fact. Sullivan’s Wholesale Drug Co., 214 Ill. App. 3d at 1086. Our

supreme court has said that the required allegation of proximate harm is “minimal”

because that determination is best left to the trier of fact. Connick, 174 Ill. 2d at 504.

Here, the plaintiff alleged the defendants knowingly and willfully misled consumers into 22 purchasing their products, and knowingly and willfully charged a premium as if their

products were of superior quality. Potential customers allegedly refused to purchase the

plaintiff’s phosphorous-free products because the defendants’ phosphorous-laden

products cleaned better than plaintiff’s products. The plaintiff alleged that the defendants

acted willfully and intentionally, with the intent to economically harm the plaintiff, and

further, that as a direct and proximate result of the defendants’ acts, the plaintiffs were

unable to compete in the marketplace. The plaintiff also alleged that the defendants

profited from the sale of their products, and that the plaintiff suffered and continues to

suffer a loss of the ability to compete in the marketplace and a loss of sales caused by the

defendants’ deceptive trade practices. The plaintiff has adequately alleged injuries

proximately caused by the defendants’ deceptive practices.

¶ 53 Taking the allegations under the ICFA as true, and viewing them in a light most

favorable to the plaintiff, for purposes of the section 2-615 motions to dismiss, we do not

find them to be so non-specific or speculative as to require dismissal. Whether the

plaintiff can present evidence to support its allegations is for another day. At this stage of

the litigation, we find that the plaintiff’s complaint contains sufficient allegations under

the ICFA to survive the defendants’ motions to dismiss.

¶ 54 The UDTPA Claims

¶ 55 The trial court also found that the plaintiff failed to plead actionable claims under

the UDTPA. Applying “likelihood of confusion,” as defined in trademark infringement

cases, the court concluded that the plaintiff failed to adequately allege the type of

marketplace confusion among products and services that is actionable under the UDTPA. 23 ¶ 56 The UDTPA provides consumers and business competitors with a means to

address and remedy a company’s deceptive trade practices, but limits the relief available.

815 ILCS 510/3 (West 2020); Empire Home Services, Inc. v. Carpet America, Inc., 274

Ill. App. 3d 666, 670 (1995); Zinser v. Rose, 245 Ill. App. 3d 881, 889 (1993). The

purpose of the UDTPA is “to prohibit unfair competition.” Phillips v. Cox, 261 Ill. App.

3d 78, 81 (1994). It is primarily directed toward acts that “unreasonably interfere with

another’s conduct of his business.” (Internal quotation marks omitted.) Phillips, 261 Ill.

App. 3d at 81. Under the UDTPA, business competitors have standing to file suit and

enjoin deceptive business practices of a rival company. Zinser, 245 Ill. App. 3d at 889.

¶ 57 Section 2 of the UDTPA provides in pertinent part:

“(a) A person engages in a deceptive trade practice when, in the court of his

or her business, vocation, or occupation, the person:

***

(5) represents that goods or services have sponsorship, approval,

characteristics, ingredients, uses, benefits, or quantities that they do not

have or that a person has a sponsorship, approval, status, affiliation, or

connection that he or she does not have;

(7) represents that goods or services are of a particular standard,

quality, or grade or that goods are a particular style or model, if they are of

another;

*** 24 (12) engages in any other conduct which similarly creates a

likelihood of confusion or misunderstanding.

(b) In order to prevail in an action under this Act, a plaintiff need not prove

competition between the parties or actual confusion or misunderstanding.” 815

ILCS 510/2 (West 2020).

¶ 58 In this case, the trial court incorrectly concluded that a “likelihood of confusion”

under the UDTPA was limited to cases in which a defendant’s use of a trade name,

trademark, or other distinctive symbol was likely to confuse or mislead consumers as to

the source or origin of the product. “ ‘Unfair competition is a broader concept than

trademark infringement and depends upon likelihood of confusion as to the source of

plaintiff’s goods when the whole product, rather than just the service mark, is

considered.’ ” Chicago’s Pizza, Inc. v. Chicago’s Pizza Franchise Ltd. USA, 384 Ill. App.

3d 849, 865 (2008) (quoting Thompson v. Spring-Green Lawn Care Corp., 126 Ill. App.

3d 99, 113 (1984)); Empire Home Services, 274 Ill. App. 3d at 670. Any conduct that

creates a likelihood of consumer confusion or misunderstanding is potentially actionable

under subsection 2(a)(12). Phillips, 261 Ill. App. 3d at 81-82.

¶ 59 The plaintiff alleged that the defendants represented their cleaning products to

have approvals, uses, and qualities that they did not have. The defendants also allegedly

failed to disclose that their products contained excessive quantities of phosphorous and

VOMs, and as such, did not comply with Illinois environmental laws and regulations.

The plaintiff further alleged that unwary consumers in the marketplace believed that the

defendants’ products were legal and complied with Illinois law because those products 25 were offered for sale alongside the plaintiff’s compliant products. Those consumers,

confused by the defendants’ misrepresentations, purchased defendants’ cleaning products

(and refused to purchase the plaintiff’s cleaning products) because they were led to

believe that the defendants’ products were safe and of superior quality. The allegations fit

within the deceptive acts set forth in section 2(a) of the UDTPA (815 ILCS 510/2(a)

(West 2020)). Taking the allegations and the reasonable inferences therefrom as true, and

viewing them in a light most favorable to the plaintiff, we find that the plaintiff alleged

sufficient facts to show a likelihood of marketplace confusion that is actionable under the

UDTPA.

¶ 60 Some of the defendants contend that the plaintiff failed to allege sufficient facts to

establish willful violations of the UDTPA to support its prayer for attorney fees, and they

ask this court to strike that claim. Section 3 of the UDTPA provides that costs and

reasonable attorney fees may also be awarded, but only if the court finds that the

defendant “willfully engaged” in a deceptive practice. 815 ILCS 510/3 (West 2020).

After reviewing the second amended complaint, we find that the plaintiff adequately

alleged willful violations sufficient to support a prayer for attorney fees under section 3

of the UDTPA. Whether the plaintiff can present sufficient evidence to prove its claims is

not before us.

¶ 61 Civil Conspiracy

¶ 62 Finally, the trial court found that the plaintiff’s civil conspiracy claim failed as a

matter of law. The court reasoned that civil conspiracy is not an independent tort, and that

there must be an independent cause of action underlying a plaintiff’s conspiracy claim. 26 The court concluded that the conspiracy count was dependent on the existence of

violations of the ICFA or the UDTPA, and that the plaintiff failed to plead sufficient facts

to state a cause of action under either theory. Here, we have determined that the plaintiff

adequately asserted claims under the ICFA and the UDTPA, and therefore the plaintiff’s

claim for civil conspiracy also survives defendants’ 2-615 motions to dismiss.

¶ 63 III. CONCLUSION

¶ 64 Although the plaintiff’s second amended complaint is not a model pleading, it is

not so lacking in relevant factual allegations as to warrant a dismissal on the pleadings.

Upon proper motion by any party, inaccurate and surplus allegations can be stricken. As

we noted early on, the granting of a motion to dismiss for failure to state of cause of

action should be affirmed when no set of facts can be proved that will entitle the plaintiff

to relief. Taking the allegations and reasonable inferences as true, and viewing them in a

light most favorable to the plaintiff, we find that the plaintiff has alleged sufficient facts

to state claims under the ICFA, the UDTPA, and for civil conspiracy. Accordingly, the

trial court’s judgment dismissing the plaintiff’s second amended complaint with prejudice

is reversed, and the cause is remanded for further proceedings.

¶ 65 Reversed and remanded.