8-year-old Tillery class action against Gateway gets new life at Supreme Court

By Steve Korris | Feb 3, 2011


SPRINGFIELD – Half of Stephen Tillery's class action over the speed of Pentium processors died at the Illinois Supreme Court, but the other half has gained new life there.

On Feb. 3, all seven Justices agreed that Tillery client William Carr can pursue a claim against processor maker Gateway Inc. in
Madison County.

They found Gateway can't enforce an arbitration clause in a sales contract because the arbitrator that the clause required no longer accepts consumer cases.

Tillery sued Gateway and Intel in 2002, for Carr and others, claiming the companies falsely represented that Pentium 4 worked faster than Pentium 3.

Associate Judge Ralph Mendelsohn severed the cases in 2003, taking one as Carr v. Gateway and the other as Barbara's Sales v. Intel.

He certified the Intel suit as a class action, but the Justices
reversed him in 2007.

They held that Intel's alleged representations were not actionable under Illinois law.

In the other case, Gateway asked Mendelsohn to send Carr to the National Arbitration Forum in accordance with the contract.

Mendelsohn held a hearing in 2007, denied arbitration, and sealed the transcript.

Gateway appealed to the Fifth District in Mount Vernon.

As Gateway awaited resolution, the National Arbitration Forum dropped out of the business of consumer complaints.

Gateway persisted in the appeal, arguing it could pick a substitute.

Fifth District judges denied the appeal, finding the designation of the forum integral to the contract.

Supreme Court Justices agreed, though they suggested Gateway should have found a new arbitrator who would follow the old arbitrator's rules.

"Neither party has indicated whether an arbitrator could be appointed who would be allowed to conduct arbitration under NAF rules," Justice Rita Garman wrote.

"Nor is it known whether NAF rules could be used in a consumer arbitration, given the fact that NAF no longer accepts such arbitrations," she wrote.

"Thus, any finding by this court concerning the use of NAF rules by a substitute arbitrator would be based on speculation," she wrote.

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