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Cuculich v. Thomson Consumer Electronics

November 01, 2000

NANCY CUCULICH AND DONALD CUCULICH, CLASS PLAINTIFFS,
PLAINTIFFS-APPELLANTS,
V.
THOMSON CONSUMER ELECTRONICS, INC., A FOREIGN CORPORATION,
DEFENDANT-APPELLEE.



The opinion of the court was delivered by: Justice Burke

(NUNC PRO TUNC September 27, 2000)

Appeal from the Circuit Court of Cook County. Honorable Thomas A. Hett, Judge Presiding.

Plaintiffs Nancy and Donald Cuculich appeal from an order of the circuit court granting defendant Thomson Consumer Electronics, Inc.'s motion for judgment pursuant to section 2--1110 of the Illinois Code of Civil Procedure (735 ILCS 5/2--1110 (West 1998)) following the close of plaintiffs' evidence at a bench trial on their claim against defendant for violation of the Illinois Consumer Fraud and Deceptive Business Practices Act (Consumer Fraud Act) (815 ILCS 505/1 et seq. (West 1996)). On appeal, plaintiffs contend that the trial court erred in preventing plaintiffs' expert from testifying regarding ultimate issues in the case, that the trial court erred in denying the admission of one of plaintiffs' exhibits, and that the trial court applied the wrong standard of proof to plaintiffs' claim for violation of the Consumer Fraud Act in considering defendant's motion for judgment. For the reasons set forth below, we reverse and remand.

On February 23, 1993, plaintiffs filed a third amended class action complaint. *fn1 Plaintiffs brought the action on behalf of themselves and on behalf of all persons "who purchased televisions manufactured by [defendant] Thomson, which include the Thomson XS System, and labeled and advertised as 'stereo.'" In support of their complaint, plaintiffs alleged the following facts: that defendant sold television sets under the RCA and GE brand name labels, and that they purchased a Thomson manufactured television advertised as "stereo" and labeled as a "ColorTrack Stereo Monitor" in August 1991; that "[a] key element of stereo reproduction is the signal separation between left and right audio channels"; that in order to achieve stereo reproduction, the manufacturer must include circuitry that can establish the signal separation; that defendant had developed an alternate system called the XS System and that this system lacked the capacity to produce more than 7 decibels of separation between the right and left channels which was below the industry standard of 15 decibels; and that defendant, through its owner's manual, represented to consumers that its televisions are capable of decoding the Multichannel Television Sound (MTS) stereo signal, the signal through which stereo sound is broadcast, in order to reproduce MTS as it is broadcast.

In their complaint, plaintiffs also cited the following statements in defendant's owner's manual:

"Two-Speaker Stereo Sound System--lets you enjoy high-fidelity stereo sound from the MTS stereo TV broadcasts (where available). Built-in wideband noise reduction system automatically suppresses unwanted noise from stereo broadcasts. Audio also reproduces 2-channel sound from stereo VCR playback. [Page 2 of the owner's manual.]

***

Your TV is fully capable of reproducing stereo sound from TV stations transmitting stereo sound in your area. All you have to do to enjoy stereo sound is make sure the TV's Stereo/Mono function is set to 'STEREO' so the TV can receive stereo broadcasts. [Page 14 of the owner's manual.]"

Plaintiffs further alleged that defendant placed the label "STEREO" on the front of the XS System televisions it sold.

Count I for "Deceit" alleged that defendant "intentionally or recklessly made false statements" about the capabilities of its televisions to induce members of the class to purchase them and that they relied on defendant's "misstatements." Count II alleged violations of the Consumer Fraud Act (815 ILCS 505/1 et seq.), stating that defendant made false representations of material fact concerning the capability of its televisions to reproduce MTS stereo sound as broadcast with the intent that plaintiffs and the class rely on the misrepresentations. Among the other relief requested, plaintiffs sought actual and punitive damages. Prior to trial, plaintiffs' claim for common law fraud was withdrawn, and the jury demand waived. *fn2

During a bench trial on plaintiffs' claim under the Consumer Fraud Act, plaintiffs called Emil Torick, an audio engineer who served as a representative of CBS on the Broadcast Television Systems Committee (BTSC), as an expert witness. Torick testified that the BTSC was an industry committee that convened in 1979 with the goal of making recommendations to the Federal Commerce Commission (FCC) for the purpose of establishing stereo sound reproduction for television similar to radio. The BTSC was a joint effort by the Electronic Industries Association (EIA) and the National Association of Broadcasters (NAB). The committee analyzed two main issues: (1) the encoding and decoding of stereo broadcasts and (2) a noise reduction system to decrease background "noise" in stereo signals.

Torick testified that the BTSC selected a "dbx" noise reduction system and a Zenith encoding system from among several choices. The committee presented recommendations to the FCC, but the FCC did not give the recommendations the force of law. The committee recommended that stereo televisions use circuitry that achieved at least 20 dB's of electrical separation. Torick criticized the "Thomson" expander (i.e., the XS System), which was an alternative system to the dbx expander that had been adopted by the committee, because it failed to achieve a separation of the left and right signals by a level of 20 dB's. Torick equated the Thomson expander to some earlier efforts to create stereo sound and stated that the XS System could not reproduce a stereo signal as it is broadcast because of the degree the Thomson expander mixed the left and right signals. He further testified that the effect would be an "out of phase" signal with strange acoustical effects. Torick described the system used by defendant as being noncomplimentary to the recommendations made by the BTSC. He admitted that the BTSC made recommendations and did not create standards and that the FCC did not require manufacturers to follow the BTSC methods. When plaintiffs' counsel asked Torick whether defendant's representation in the documents referring to its television, that its system provided "surprisingly good" sound was a replacement for "stereo" sound, the trial court upheld defendant's objection to the question as calling for an opinion on an ultimate issue.

On October 23, 1998, plaintiffs called Harold Sanders, an electrical engineer and the head of engineering at the Enrico Fermi Institute at the University of Chicago, as an expert witness. Sanders denied that the decoding circuitry provided in defendant's television reproduced the MTS stereo signal because it was only capable of a much lower quality. He believed there was a problem with defendant's decoder because it "crossed" the left and right signal, making the XS system incapable of coming close to creating adequate stereo sound. He testified that adequate stereo was achieved by circuitry achieving 16 or 17 dB's of electrical separation. The highest reading for the XS System was 6.77 dB of separation. Sanders also stated that the "floating sound" described by plaintiffs was a flaw in the television's sound. He agreed with the accuracy of a definition for "stereo" contained in the "Electronic Industry Products Dictionary," relied upon by defendant, which indicated the stereo sound was accomplished by two channels of sound creating a three-dimensional effect. Sanders did not believe that defendant's decoder complied with this definition because it did not use two "separate" channels.

Sanders also testified that no television was capable of reproducing sound exactly as it is broadcast. He stated that the listener would need to add external speakers to a 19" television in order to receive good stereo sound. He believed that it was a misrepresentation to call a television with a noncomplimentary decoding system, such as defendant's system, a "stereo" television. He also stated that the XS System is incapable of producing stereo. ...


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