Chicago Firm Alleges Unfair Business Practices, False Claims

A mid-sized Chicago healthcare company is alleging unfair business practices and false claims on the part of a rival company based in Downers Grove, according to a report by Crain's Chicago Business.

Our Chicago business lawyers understand that these types of cases require a legal team experienced in business law because of the complex elements required to meet the high legal standard. That said, there are many different actions a commercial rival could take that could fall into one of these categories.

In this case, the healthcare firm, which is in the medical imaging industry, alleges that its competitor caused it to lose at least 40 accounts, amounting to tens of millions of dollars in lost business revenue. The firm says the competitor didn't do this by simply being better. Rather, the competitor misled potential clients about the future and stability of the healthcare company, as administrators are seeking a possible sale.

The suit was filed late last month in the Chicago U.S. District Court.

The claim of losses is believable, given that the healthcare company managed to pull in nearly $60.5 million during the most recent quarter. Still, the company is battling a number of issues right now, including a shrinking customer base, as doctors' offices and hospitals are seeking to streamline services and consolidate. There are also larger providers of the same equipment, which are able to command lower prices from manufacturers.

The defendant in this case is a similarly-sized firm, which vehemently denies the allegations.

The two companies have been fiercely competing for contracts with local medical practices that require certain computer systems to archive and share results of MRIs and X-rays.

Unfair business practices are defined in 815 ILCS 505/2. This holds that methods of unfair competition in the course of any commerce or trade can involve the use of false pretense, deception fraud, false promises, misrepresentation or concealment, omission or suppression of material facts with the intent that others may rely upon that material fact or any violation of the Uniform Deceptive Trade Practices Act of 1965. The statutes hold that state courts should defer to the interpretations of these violations as laid forth by both the Federal Trade Commission and decisions made by federal courts regarding the Federal Trade Commission Act.

With regard to false claims, Illinois addresses such conduct in 740 ILCS 175/3. This statute holds that a person or company may be held liable when claims that are fraudulent, false and for payment are knowingly made or presented.

In this case, the Chicago healthcare firm reportedly first discovered the allegedly unlawful actions of its rival back in the spring, when it obtained e-mails and advertisements from the competitor that indicated the healthcare firm was planning to replace a particular type of computer system. Customers knew that such a move was going to be not only tough on staffers, but was likely to be expensive.

The plaintiff healthcare firm says it had been seeking alternatives to this action. However, the marketing material of its competitor, alleging the switch was inevitable, continued to be produced.

As a result, the healthcare firm is seeking civil damages.

Jeremy A. Gibson & Associates is a law firm dedicated to business litigation in Chicago and elsewhere in Illinois. Call 877-452-4529 for a free consultation.

Additional Resources:
Merge sues rival for allegedly smearing image, Nov. 27, 2012, By Kristin Schorsch, Crain's Chicago Business