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Intel Class Action Defense Case-Barbara’s Sales v. Intel: California Law Applies To Unfair Business Practice Class Action Against Intel And Nationwide Class Should Have Been Certified Illinois Court Holds

After Trial Court Held that Illinois Law Applies to Unfair Business Practice Class Action Against Intel and Certified Only a Statewide Class. Appellate Court Reversed and Held California Law Applies and Nationwide Class Should Have Been Certified

Purchasers of computers run by Intel’s Pentium 4 processors filed a nationwide class action in Illinois state court alleging claims for unfair business practices under California law and Illinois law based on the allegation that, contrary to its billion dollar marketing campaign, the Pentium 4 performed no better than the Pentium III. Barbara’s Sales, Inc. v. Intel Corp., __ N.E.2d __ (Ill.App. July 25, 2006). Defense attorneys opposed class certification in part on the grounds that Illinois law applied thus barring the two claims based on California law – one under California’s Consumer Legal Remedies Act (CLRA) and one under California’s Unfair Competition Law (UCL). The trial court agreed that Illinois law applied and denied class certification on the California-law claims. The trial court also found that Illinois law “could not be applied to a nationwide class action” and so certified only a statewide class under the Illinois Consumer Fraud and Deceptive Business Practices Act claim. Slip Opn., at 4-5. The appellate court reversed, rejecting defense arguments that California law should not be applied.

The Illinois appellate court held that the trial court’s analysis was “fatally flawed” because “it did not first consider which state has the most significant relationship to the occurrence.” Slip Opn., at 6. Based on its fact-intensive analysis, the appellate court concluded, “California’s interest in having its regulatory schemes applied to the conduct of Intel is most significant” and that “California is clearly the only state where conduct relevant to all the potential [nationwide] class members occurred.” Id., at 9. The appellate court held, therefore, that the trial court “misapplied” the rules governing choice-of-law, vacated its order regarding class certification, and remanded the matter “with directions for the [trial] court to apply California substantive law and to reconsider its class certification order in light of the applicability of California law.” Id., at 11.

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