Motion For Class Cert Granted:Murray v.New Cingular Wireless

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Motion For Class Cert Granted:Murray v.New Cingular Wireless

Postby Administrator » Wed Nov 30, 2005 7:50 pm

--- F.R.D. ----, 2005 WL 3115813 (N.D.Ill.)

United States District Court,
N.D. Illinois,
Eastern Division.
Thomas MURRAY, Plaintiff,
No. 04 C 7666.
Nov. 17, 2005.

Background: Recipient of mass-mailed promotion from wireless communications provider brought putative class action against provider, alleging that provider's accessing recipient's credit report prior to sending promotion constituted violation of Fair Credit Reporting Act (FCRA).

Holdings: On motion for class certification, the District Court, Castillo, J., held that:
(1) named plaintiff was not rendered inadequate representative by virtue of his lack of understanding of minutiae of case;
(2) counsel was not rendered inadequate by its motion to consolidate several FCRA actions pending in district into one case;
(3) predominance criterion for class certification was met; and
(4) superiority criterion also was met.

Motion granted

David A. Szwak

Postby David A. Szwak » Sun Dec 11, 2005 9:00 am

Murray v. New Cingular Wirless Services, Inc.
--- F.R.D. ----, 2005 WL 3115813


*1 Plaintiff Thomas Murray ("Murray") has sued Defendant New Cingular Wireless Services [FN1] ("Cingular") claiming that Cingular, while doing business as AT & T, unlawfully accessed his credit report prior to sending him a promotion for wireless service. He alleges that AT & T's actions do not constitute a permissible basis to obtain a consumer report and violates the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681 et seq. (R. 30, Pl.'s Mot. for Class Cert. at 1.) Murray now seeks to certify a class consisting of all persons with Illinois addresses who received the promotion from AT & T on or after November 24, 2002 and before December 14, 2004. (R. 29-1.) The class would exclude those individuals who received the promotion and signed up for AT & T's wireless service. (R. 43, Pl.'s Reply at 5 n.4.)

Murray alleges that in October 2004, AT & T sent him a promotion [FN2] containing the following disclosure: "You were selected to receive this special offer because you satisfied certain credit criteria for creditworthiness, which we have previously established. We used information obtained from a consumer-reporting agency.... You have the right to prohibit information contained in your credit files with this and any other consumer-reporting agency from being used with any credit transaction that is not initiated by you ...." (Id., Ex. A, AT & T Solicitation.) Section 1681b of FCRA states that a consumer reporting agency may furnish consumer credit information only in certain situations, such as when the information is used for employment purposes, for the underwriting of insurance, where the consumer has authorized the release of his information, or where the transaction consists of a firm offer of credit or insurance. Murray argues that this promotion does not qualify as a "firm offer of credit" or meet any of FCRA's other permissible bases for accessing a consumer's credit report. (Id. at 2.) Murray further argues that even if the promotion qualifies as a firm offer of credit, the disclosure of the consumer's privacy rights in fine print on the bottom of the second page of the promotion violates FCRA's requirement that the disclosure be "clear and conspicuous." [FN3] (Id. at 3.) Murray seeks statutory damages on behalf of himself and the proposed class under 1681n(a). For the following reasons, we grant Murray's motion for class certification.

A plaintiff seeking class certification has the burden of proving that the proposed class meets the requirements of Rule 23 of the Federal Rules of Civil Procedure. Jackson v. National Action Fin. Servs., Inc., 227 F.R.D. 284, 286 (N.D.Ill.2005). A class may be certified if "(1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class." Fed.R.Civ.P. 23(a). Failure to meet any of the requirements of Rule 23(a) precludes class certification. Retired Chic. Police Ass'n v. City of Chic., 7 F.3d 584, 596 (7th Cir.1993). Once these prerequisites are met, the potential class must also satisfy at least one provision of Rule 23(b). Rosario v. Livaditis, 963 F.2d 1013, 1017 (7th Cir.1992). A plaintiff seeking monetary damages, as Murray does here, must demonstrate that "questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy." Fed.R.Civ.P. 23(b)(3). A court has broad discretion to determine whether the proposed class has met the requirements of Rule 23. Jackson, 227 F.R.D. at 286.

*2 Murray argues that his proposed class meets the requirements of Rule 23(a) and Rule 23(b)(3). Cingular contends that Murray has failed to satisfy his burden because the proposed class does not meet the adequacy, predominance, and superiority requirements of Rule 23. We will consider the class's suitability for certification under each prong of Rule 23.
I. Rule 23(a) Requirements
A. Rule 23(a)(1): Numerosity
Rule 23(a) requires that a proposed class be so numerous that joinder is impractical. " 'Where the class is large, the numbers alone are dispositive of the impracticability of joinder,' and the Court need not consider other factors to determine whether the numerosity requirement is met." Wallace v. Chi. Hous. Auth., 224 F.R.D. 420, 427 (N.D.Ill.2004) (citing Thillens, Inc. v. Cmty. Currency Exch. Ass'n, 97 F.R.D. 668, 677 (N.D.Ill.1983)). Here, AT & T sent over 700,000 solicitations to Illinois residents. The proposed class, as defined, can consist of any or all of these individuals. Murray estimates that the class will contain approximately 733,400 individuals after excluding those individuals who signed up for wireless service. (R. 43, Pl.'s Reply at 5 n.4.) Cingular does not contest numerosity, and given the potential number of claimants, joinder is entirely impractical. Wilson v. Collecto, Inc., 03 C 4673, 2004 WL 432509, *2 (N.D.Ill. Feb.25, 2004). We find that the proposed class meets the numerosity requirement.
B. Rule 23(a)(2): Commonality
A plaintiff must also show that there are questions of fact or law that are common to the class. "A common nucleus of operative fact is usually enough to satisfy the commonality requirement of Rule 23(a)(2)." Rosario, 963 F.2d at 1018. "[C]laims arising out of standard documents present a 'classic case for treatment as a class action." ' Ingram v. Corporate Receivables, Inc., 02 C 6608, 2003 WL 21982152, *3 (N.D.Ill. Aug.19, 2003) (citing Haroco, Inc. v. Am. Nat'l Bank & Trust Co. Chic., 121 F.R.D. 664, 668 (N.D.Ill.1998)); Sledge v. Sands, 182 F.R.D. 255, 258 (N.D.Ill.1998). In this case, AT & T sent identical solicitations to each potential class member. The central issue common to all potential classmates is whether AT & T violated FCRA in screening the credit of the individuals who received its solicitation. Accordingly, we find that the proposed class meets Rule 23(a)(2)'s commonality requirement.
C. Rule 23(a)(3): Typicality
Rule 23(a)(3) requires that the claims of the class representative be typical of the claims of the entire class. "A plaintiff's claim is typical if it arises from the same event or practice or course of conduct that gives rise to the claims of other class members and his or her claims are based on the same legal theory." De La Fuente v. Stokely-Van Camp, Inc., 713 F.2d 225, 232 (7th Cir.1983). Murray's claim arises from the same course of conduct as the claims of other class members--AT & T's inappropriate prescreening of his consumer credit. His claim is also based on the same legal theory as the claims of the other class members--that AT & T's practice of prescreening the credit of recipients of its promotion violates FCRA because the promotion does not contain clear and conspicuous disclosures as required of firm offers of credit nor does it comport with any of the other permissible bases for screening consumer credit under FCRA. Thus, we find that Murray has satisfied the typicality requirement of Rule 23(a)(3).
D. Rule 23(a)(4): Adequacy
*3 [1] To determine if the plaintiff has met the adequacy requirement of Rule 23(a)(4), three factors must be present: "1) the proposed representative does not have antagonistic or conflicting claims with other members of the class; 2) the proposed representative has sufficient interest in the outcome of the case to ensure vigorous advocacy; and 3) its counsel is competent, qualified, experienced and able to vigorously conduct the litigation." Tatz v. Nanophase Techs. Corp., 01 C 8440, 2003 WL 21372471, * 8 (N.D.Ill. June 13, 2003). Murray brings an identical claim on behalf of himself and the putative class members so there is no danger of conflicting claims.
[2] With respect to the second requirement, Cingular argues that Murray lacks the competency and the interest to vigorously pursue this action on behalf of the other class members because of his health problems--specifically, his recurrent memory loss as a result of a stroke. This Court has closely examined Murray's deposition testimony. While there is some evidence of memory loss, it is not nearly as extensive as Cingular presents it to be. For example, when asked about the effects of his memory loss, Murray cited examples such as forgetting to lock doors or return phone calls. (R. 40, Def.'s Resp. to Pl.'s Mot. for Class Cert., Ex. D, Pl.'s Dep. at 8-9 .) His memory loss hardly rises to a level sufficient to disqualify him as class representative. Compare Latona v. Carson Pirie Scott & Co., 96 C 2119, 1997 WL 109979, *2 (N.D.Ill. Mar.7, 1997) (determining that plaintiff would not be an adequate class representative because she suffered from a benign tumor and a spinal condition without much chance of recovery); In re Am. Med. Sys., 75 F.3d 1069, 1083 (6th Cir.1996) (suggesting that plaintiff's history of psychological problems made him unsuitable as class representative); Roundtree v. Cincinnati Bell, Inc., 90 F.R.D. 7, 10 (S.D.Ohio 1979) (finding that plaintiff's history of physical ailments and corresponding neurosis rendered him an inadequate class representative).
[3][4] Cingular also argues that Murray has abdicated all responsibility for representing the class' interests to class counsel as evidenced by his lack of knowledge and understanding of the case. It is well established that a named plaintiff's lack of knowledge and understanding of the case is insufficient to deny class certification, Surowitz v. Hilton Hotels Corp. et al., 383 U.S. 363, 86 S.Ct. 845, 15 L.Ed.2d 807 (1966), unless his ignorance unduly impacts his ability to vigorously prosecute the action, see, e.g., In re Telectronics Pacing Sys., Inc. Prod. Liab. Litig., 168 F.R.D. 203, 218-19 (S.D.Ohio 1996) (finding that a class representative was inadequate where he was unsure why he agreed to act as class representative, was never told what it meant to be a class representative, and had not found out how and if the cause of action impacts other individuals). "[T]he burden in demonstrating that the class representative meets this standard is not difficult." Weiner et al. v. The Quaker Oats Co., 98 C 3123, 1999 WL 1011381, *8 (N.D.Ill. Sept.30, 1999). "An understanding of the basic facts underlying the claims, some general knowledge, and a willingness and ability to participate in discovery are sufficient to meet this standard." Id.
*4 Apparently, Cingular expects Murray to have the same knowledge of the case as his attorneys have. Cingular argues that during his deposition Murray was unable to show that he understood the basis for settling a class, nor could he recall the terms of a settlement for a case he was previously involved in, or that he was aware that his attorneys had filed certain motions in the current case. Understanding the minutia of a case is not a prerequisite to being a class representative. See Culver v. City of Milwaukee, 277 F.3d 908, 913 (7th Cir.2002) ("Experience teaches that it is counsel for the class representative and not the named parties, who direct and manage these actions. Every experienced federal judge knows that any statements to the contrary is [sic] sheer sophistry.") (citations omitted). "As long as a class representative's interests do not conflict with those of the proposed class, she need only have a marginal familiarity with the facts of her case and need not understand the larger legal theories upon which her case is based." Randle v. GC Servs., L.P., 181 F.R.D. 602, 604 (N.D.Ill.1998). The deposition testimony illustrates that Murray meets the standard of knowledge required by Rule 23(a). He understands the basic facts underlying the case-- the receipt of the promotion by AT & T and the potential FCRA liability. (R.40, Def.'s Resp. to Pl.'s Mot. for Class Cert., Ex. D at 44-48.) He also has general knowledge about what is required of the class representative because he has served in this capacity on numerous occasions. [FN4] (Id. at 50-53.) In addition, Cingular has not alleged that Murray has failed to comply with his obligations as class representative or that he has refused to participate in discovery. Accordingly, we find that Murray is an adequate class representative.
[5] Finally, Cingular argues that Edelman Combs, the law firm handling this action, has failed to adequately represent the interests of the class. This allegation stems from a motion to reassign filed by Edelman Combs to consolidate six separate FCRA actions pending in this district into one case. Cingular argues that because each case involved a different defendant and a different solicitation, class counsel disregarded the interests of class members in its attempt to lump together cases that necessarily have different merits and interests at stake.
We do not find this argument compelling. It is within an attorney's discretion to decide how to litigate a case absent the commission of any egregious or unethical behavior. See, for example, Ortiz v. Fibreboard Corp., 527 U.S. 815, 853, 119 S.Ct. 2295, 144 L.Ed.2d 715 (U.S.1999) (noting that class counsel who represent a different class against the same defendant or who engage in side settlements have an impermissible conflict of interest). Edelman Combs' motion to reassign was not behavior that illustrates a conscious disregard for the interests of the class. Edelman Combs is extremely experienced in the field of consumer class actions and has not acted inappropriately in this litigation. [FN5]
*5 Cingular further contends that Edelman Combs has abdicated responsibility for this case to one of its youngest attorneys, Thomas Soule. [FN6] Even if this is the case, Mr. Soule is a licensed attorney working at a law firm that has extensive experience in consumer class actions. Furthermore, Mr. Soule is handling this case with the aid of more senior attorneys at Edelman Combs. (R. 43, Pl.'s Reply at 12.) Thus, this Court finds that Murray, Edelman Combs, and Mr. Soule meet the adequacy requirement of Rule 23(a).
II. Rule 23(b)(3) Requirements
In addition to the four requirements of Rule 23(a), a plaintiff seeking to certify a class action for monetary damages pursuant to Rule 23(b)(3) also must show that (1) common questions of fact or law predominate over questions affecting individual class members and (2) that a class action is superior to other methods of adjudication. Fed.R.Civ.P. 23(b)(3).
In considering Rule 23(b)(3)'s requirements, the court must review the substantive elements of plaintiffs' cause of action, the proof necessary for the various elements and the manageability of the trial on these issues. The court is obligated to determine whether the existence of individual issues preclude certification, and must take into account the substantive law, facts, procedural due process, and fundamental fairness. Where liability determinations are both individual and fact-intensive, class certification under Rule 23(b)(3) is improper.
Pastor v. State Farm Mut. Auto. Ins. Co., 05 C 1459, 2005 WL 2453900, *5 (N.D.Ill. Sept.30, 2005) (citation omitted).
A. Predominance
The predominance inquiry is far more demanding than Rule 23(a)'s commonality requirement. Amchem Prods. v. Windsor, 521 U.S. 591, 623-24, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997). "If individual issues predominate, then class certification is usually not a superior method for resolving the controversy, since management of such issues by a court will not be efficient." Murry v. America's Mortg. Banc, Inc., 03 C 5811, 03 C 6186, 2005 WL 1323364, *3 (N.D.Ill. May 5, 2005) (citing Szabo v. Bridgeport Machines, Inc., 249 F.3d 672, 675 (7th Cir.2001)).
[6] Cingular, citing Cole v. U.S. Capital Inc., 389 F.3d 719 (7th Cir.2004), argues that the question of whether the promotion represents a firm offer of credit raises individualized issues that defeat predominance and preclude class certification. In Cole, the Seventh Circuit stated that "a court must consider the entire offer and the effect of all material conditions that comprise the credit product in question" in determining whether an offer has value within the meaning of FCRA. 389 F.3d at 728 (emphasis in original). Cingular argues that this individualized assessment would have to be made for each class member because the "value" of the offer varies among class members. [FN7]
Cole can be distinguished from the present case. First, Cole did not involve a motion for class certification, but a motion to dismiss under Rule 12(b)(6). The Seventh Circuit's assessment in Cole, therefore, may be relevant to the merits of this case, but the Court did not discuss whether differences in the value of the promotion to each class members is sufficient to deny class certification.
*6 Second, common issues of fact and law stemming from highly generalized proof (the solicitation) predominate over any individualized assessment that may be needed. If anything, determining the value of the promotion from one class member to another is more relevant to the issue of damages. However, since the class is requesting statutory as opposed to actual damages, the existence of individual damages is not a barrier to class certification. To the extent that any individual damages may be relevant, they are not dispositive. See Murry, 2005 WL 1323364 at *9 (stating that "the existence of individual damages issues will not generally preclude certification") (quoting Carnegie v. Household Int'l, Inc., 376 F.3d 656, 660-661 (7th Cir.2004), cert. denied, --- U.S. ----, 125 S.Ct. 877, 160 L.Ed.2d 772 (2005)); see also Ciccarone v. B.J. Marchese, Inc., 03 CV 1660, 2004 U.S. Dist. LEXIS 26489, *18 (E.D.Pa. Dec. 14, 2004) ("While there may well be individualized differences in damages suffered by various class members, the common questions of law and fact regarding the other elements of plaintiff's claims substantially outweigh these differences."). The focal point of these proceedings will be Cingular/AT & T's alleged course of conduct in depriving putative class members of their rights under the FCRA. This issue certainly predominates over any individual damages issues that might exist.
[7] Cingular also argues that even though Murray is requesting statutory damages, Murray still has the burden of proving actual injury or harm, which cannot be resolved on a class wide basis. To receive statutory damages under FCRA, "[t]he plaintiff must only show that the defendant 'knowingly and intentionally committed an act in conscious disregard for the rights' of the consumer." Buxton v. Equifax Credit Info. Servs., 02 C 6288, 2003 WL 22844245, *5 (N.D.Ill.Dec.1, 2003). Actual damages, on the other hand, require a showing of harm. Wantz v. Experian Info. Solutions, 386 F.3d 829, 833 (7th Cir.2004). Statutory damages are an alternative remedy to actual damages, and a plaintiff cannot get both actual and statutory damages. In re Trans Union Corp. Privacy Litig., 211 F.R.D. 328, 342 (N.D.Ill.2002). Consequently, a plaintiff does not have to prove actual injury or harm in order to get statutory damages. [FN8] See, e.g., Sampson v. Western Sierra Acceptance Corp., 03 C 1396, 2004 WL 406992, *3 (N.D.Ill. Feb.27, 2004) ("the application of statutory damages ... are unrelated to any actual harm suffered by Plaintiff ...).
Cingular relies very heavily on the Seventh Circuit's recent decision in Ruffin-Thompkins v. Experian Info. Solutions, Inc., 422 F.3d 603 (2005), for the proposition that a plaintiff in a FCRA case has to prove actual pecuniary injury in order to establish liability. In Ruffin-Thompkins, however, the plaintiff had to establish actual injury as an element of his claim under section 1681i(a)(1)(A) of the Act. That statutory provision required the plaintiff to show a causal relationship between the credit reporting agency's failure to properly investigate and correct an inaccuracy in her credit report and any loss of credit she suffered. 422 F.3d at 609; see also Perry v. Experian Info. Solutions, Inc., 05 C 1578, 2005 WL 2861078, *10 (N.D.Ill. Oct.28, 2005). Proof of actual damage is not required to state a cause of action under the provision at issue here. Murray only has to show that the prescreening of the proposed class's credit did not comport with any of the permissible purposes outlined in section 1681b. As such, actual damages are not a bar to class certification here. [FN9]
*7 Lastly, Cingular argues that there are individualized issues for those class members who signed up for wireless phone service because their claims are subject to arbitration pursuant to the service agreements entered into by such individuals. This argument is moot, however, because the class definition has been narrowed to exclude these individuals, who constitute approximately 5% of the 772,000 individuals who received the mailing. (R. 43, Pl.'s Reply at 5.) Because common questions of law and fact predominate over any individualized inquiries, we find that Murray has satisfied the predominance requirement of Rule 23(b)(3).
B. Superiority
[8] "A class action is superior where potential damages may be too insignificant to provide class members with incentive to pursue a claim individually." Jackson, 227 F.R.D. at 290. Class treatment is especially appropriate for consumer claims. Amchem, 531 U.S. at 625; In re Mex. Money Transfer Litig., 267 F.3d 743, 747 (7th Cir.2001). In this case, Cingular engaged in standardized conduct that affected many consumers and an individual consumer's claim would likely be too small to vindicate through an individual suit. Therefore, a class action appears to be a superior method to resolve these claims. Smith v. Short Term Loans, L.L.C., 99 C 1288, 2001 WL 127303, *14 (N.D.Ill. Feb.14, 2001).
Cingular argues that a class action is not a superior method because the potential statutory award under FCRA is disproportionate to the harm caused. Courts have refused to certify classes where the application of statutory damages is grossly disproportionate to the harm caused because of due process concerns. Id. at *3; In re Trans Union, 211 F.R.D. at 347-52. However, the concern in those cases was the possibility that a large and disproportionate damage award would lead to the financial ruin of the defendant and this risk outweighed the benefits of the class action mechanism. [FN10] See Sampson, 2004 WL 406992 at *3 (stating that "certification should not be denied solely because of the possible financial impact on defendant," but denying certification because "consideration [of the defendant's financial status] is proper when the damage award is grossly disproportionate to the actual harm caused.").
FCRA provides a minimum of $100 and a maximum of $1000 in statutory damages. § 1681n(a)(1)(A). This Court is mindful, given the size of the proposed class, of the potentially significant financial impact that a successful class action could have on Cingular. Cingular has not, however, asserted that the potential damages in this case will deal a fatal financial blow to its business in the event of a loss, [FN11] only that a disproportionate damage award will violate its due process rights. Moreover, this Court could reduce damages in the event of any successful judgment against Cingular if necessary to comport with due process. See Parker v. Time Warner Entm't Co., L.P., 331 F.3d 13, 22 (2d Cir.2003). As the Parker court noted:
*8 It may be that the aggregation in a class action of large numbers of statutory damages claims potentially distorts the purpose of both statutory damages and class actions. If so, such a distortion could create a potentially enormous aggregate recovery for plaintiffs, and thus an in terrorem effect on defendants, which may induce unfair settlements. And it may be that in a sufficiently serious case the due process clause might be invoked, not to prevent certification, but to nullify that effect and reduce the aggregate damage award.
Id.; see also Pichler v. Unite, 228 F.R.D. 230, 259 (E.D.Pa.2005) (declining to hold that the possibility that the defendant could face up to seventy million in damages is sufficient to deny class certification). Reducing an unnecessarily large statutory damage award is a more palatable option than allowing defendants to commit substantive violations of the law and escape liability essentially because they have violated the rights of too many individuals, all of whom want to sue as is their right. See Carnegie, 376 F.3d at 661; In re Napster _ Litig. Leiber v. Bertelsmann AG, C MDL-00-1369 MHP, C 04-1671 MHP, 2005 WL 1287611, *11 (N.D.Cal. June 1, 2005) [FN12]; Ashby, 2004 WL 2359968 at *8.
Any risk that reducing the damage award would prevent each class member from recovering the amount that he would otherwise be entitled to if the suit was brought individually is remedied by Rule 23(b)(3)'s notice provisions which allow class members to opt out of the litigation and pursue their own individual suits. See Williams v. GE Capital Auto Lease, 94 C 7410, 1995 WL 765266, *8 (N.D.Ill.Dec.20, 1995). In any event, if due process remains an issue and modifying the damage award is not a viable solution, then the order granting certification can always be revisited. Fed.R.Civ.P. 23(c)(1)(C). We are not prepared at this point, however, to deny class certification on these grounds.
[9] Lastly, Cingular takes issue with the size of the putative class arguing that "a class of 772,000 individuals is anything but 'modest," ' and in fact, is "per se excessive." (R. 30, Def.'s Resp. to Pl.'s Mot. for Class Cert. at 6-7.) To accept this argument would be to ignore the twin aims of the class action procedural device. "Class actions were designed 'not only to compensate victimized members of groups who are similarly situated ... but also to deter violations of the law, especially when small individual claims are involved." ' Gammon v. GC Servs. Ltd. P'ship, 162 F.R.D. 313, 321 (N.D.Ill.1995) (quoting H. Newberg, Class Actions § 4.36). Large classes often have been certified in the consumer claim context, see id. at 317 n. 4 (certifying a class of potentially four million individuals under the FDCPA); Clark v. Equifax et al, Civ.A.8:00-1217-24, Civ.A.8:00-1218-24, Civ.A.8:00- 1219-24, 2002 WL 2005709, *2 n. 1 (D.S.C. June 26, 2002) (certifying a class that could contain anywhere from 40,000 to 1.6 million individuals under FCRA); Shaw v. Toshiba, 91 F.Supp.2d 942, 954 (E.D.Tx.2000) (certifying a settlement only class consisting of hundreds of thousands, possibly millions of individuals), and the potential class size in this case should not be a barrier to certification, see Carnegie, 376 F.3d at 661 ("[A] class action has to be unwieldy indeed before it can be pronounced an inferior alternative--no matter how massive the fraud or other wrongdoing that will go unpunished if class treatment is denied--to no litigation at all."). Thus, we find that Murray has met the superiority requirement of Rule 23(b)(3).

*9 For the reasons set forth above, Murray's motion for class certification is granted. (R. 29-1.) Pursuant to Federal Rule of Civil Procedure 23(b)(3), this Court will certify a class consisting of all persons with Illinois addresses who received the promotion from AT & T on or after November 24, 2002 and before December 14, 2004 with the exception of those individuals who signed up for AT & T wireless service.
The parties are requested to reevaluate their final settlement positions in light of the opinion prior to the Court's next status hearing on December 1, 2005 at 9:45 a.m.

FN1. AT & T Wireless Services, Inc. ("AT & T") was the original defendant in this case, but the company was subsequently acquired by Cingular, which is currently named in this litigation in lieu of AT & T. (R.36, Def.'s Answer to Pl.'s Second Am. Compl. at 1.) For purposes of clarity, we refer to Defendant as AT & T when discussing events that occurred prior to the filing of this litigation.

FN2. AT & T mass mailed a promotion for wireless phone service. Since it is disputed whether this document constitutes a firm offer of credit, the Court will refer to it as a "promotion."

FN3. Anyone who uses consumer credit information to extend a firm offer of credit also must comply with the requirements of 1681m which reads in pertinent part: any person who uses a consumer report ... shall provide with each written solicitation made to the consumer regarding the transaction a clear and conspicuous statement that-(A) information contained in the consumer's consumer report was used in connection with the transaction; (B) the consumer received the offer of credit or insurance because the consumer satisfied the criteria for credit worthiness [creditworthiness] or insurability under which the consumer was selected for the offer; (C) if applicable, the credit or insurance may not be extended if, after the consumer responds to the offer, the consumer does not meet the criteria used to select the consumer for the offer or any applicable criteria bearing on credit worthiness or insurability or does not furnish any required collateral; (D) the consumer has a right to prohibit information contained in the consumer's file with any consumer reporting agency from being used in connection with any credit or insurance transaction that is not initiated by the consumer; and (E) the consumer may exercise the right referred to in subparagraph (D) by notifying a notification system established under section 604(e) [15 USCS § 1681b(e) ].

FN4. Murray has been the class representative in a plethora of lawsuit suits: Murray v. Indymac Bank, F.S.B., 04 C 7669 (Der-Yeghiayan, J.); Murray v. AmeriQuest Mortgage, 05 C 1218 (Andersen, J.); Murray v. ELOAN, Inc., 05 CV 1219 (Shadur, J.); Murray v. Household Bank, 05 C 1227 (Gettleman, J.); Murray v. Cross Country Bank, 05 C 1252 (Zagel, J.); Murray v. Finance America, 05 C 1255 (St.Eve, J.); Murray v. First Premiere Bank, 05 C 1873 (Bucklo, J.); Murray v. American International Group, 05 C 3881 (St.Eve, J.); and Murray v. Cingular Wireless II, 05 C 1334 (Manning, J.). Most of these cases are still pending. Household Bank, Cross Country Bank, and Cingular Wireless II were dismissed because the cases were filed after amendments to FCRA eliminated the private right of action under section 1681m(d). Indymac Bank resulted in a class wide settlement. His wife, Nancy Murray, also has served as a class representative. See, e.g., Murray v. Cub Shaver Imports Bradley, Inc., 04 C 7766 and Murray v. Sunrise Chevrolet, Inc. et al, 04 C 7668. In short, Murray has ample experience serving as a class representative.

FN5. We are aware of Judge Der Yeghiayan's recent opinion in Murray v. GMAC Mortgage Corp., 05 C 1229, 2005 U.S. Dist. LEXIS 27254 (N.D.Ill. Nov. 8, 2005) where Judge Der Yeghiayan found that the proposed class failed to meet the adequacy and superiority requirements of Rule 23. Judge Der Yeghiayan stated that the class counsel was inadequate based in part on its decision not to seek recovery for any actual damages suffered by the class. Furthermore, his decision not to certify the class was based also on the litigious nature of the named plaintiff, whom he called "a professional plaintiff" because of her participation in numerous class action lawsuits. While the Murrays have participated in numerous class actions, we have no evidence of any improper actions by Mr. Murray or his attorneys. Nevertheless, the Court will continue to use its supervising responsibilities over this lawsuit to closely monitor these issues.

FN6. Mr. Soule graduated from law school in 2003 and was admitted to the Illinois bar in 2004. (R. 40, Def.'s Resp. to Pl.'s Mot. for Class Cert. at 15.)

FN7. To receive a free wireless phone, the promotion requires consumers to activate a qualified plan that has a minimum one year service agreement, and pay any roaming, additional minutes, and long distances charges. (R.40, Def.'s Resp. to Pl.'s Mot. for Class Cert., Ex. C, AT & T Solicitation.)

FN8. See also Reed v. Experian Info. Solutions, Inc., 321 F.Supp.2d 1109, 1113 (N.D.Minn.2004) (stating that if a defendant has willfully violated the act, then a plaintiff may be entitled to statutory damages without a showing of actual damages); Ashby, 2004 WL 2359968 at *4-5 (stating that to the extent the proposed class seeks statutory damages, their subjective understanding of the adverse actions taken against them by the defendant is irrelevant).

FN9. To find otherwise would mark a departure from standard judicial treatment of statutory damages in this context. For example, statutory and actual damages enjoy similar treatment in other federal consumer protection acts. See, for example, Keele v. Wexler, 95 C 3483, 1996 WL 124452, *2 (N.D.Ill. March 19, 1996) (stating that the Fair Debt Collection Practices Act does not require the plaintiff to establish actual damages in order to recover statutory damages); Kittrell v. RRR, L.L.C., 280 F.Supp.2d 517, 521 n. 6 (E.D.Va.2003) ("Courts interpreting § 1640(a)(2)(A) [of the Truth in Lending Act] specifically state that a plaintiff may recover statutory damages without proof of injury or harm.") (citation omitted); Cook v. VFS, Inc., C-3-96-191, 2000 WL 33727940, *4 n. 4 (S.D.Ohio Sept.27, 2000) (stating that the Fair Debt Collection Practices Act "provides that a plaintiff may recover statutory damages, in the absence of evidence that a
debt collector's actions caused actual harm ...").

FN10. In fact, Judge Zagel, who authored the opinion in Sampson, later reconsidered his motion denying class certification and granted certification as to the remaining defendant. Sampson v. Ridge Chrysler, 03 C 1396, 2004 WL 725471 (N.D.Ill. April 1, 2004). Judge Zagel felt that the reasoning of the earlier opinion "was better applied to Western Sierra, a company that could have certainly been put out of business by a large damage award ... [whereas] Ridge Chrysler [the remaining defendant] ... has gone out of business and will not suffer great injury in the event of a large damage award." Id. at 1.

FN11. Murray has asserted that damage award in this case if all class members receive the minimum in statutory damages is $73,340,000. This amount represents 0.2% of Cingular's net worth or 2.1% of Cingular's cash on hand. (R. 43, Pl.'s Reply at 5-6.)

FN12. The Napster court rejected an argument similar to the one advanced by Cingular, stating: While these cases [Parker and Trans Union ] are doubtlessly correct to note that a punitive and grossly excessive statutory damages award
violates the Due Process Clause, it is far from clear why class actions should be singled out for heightened scrutiny under such a theory. Indeed, the sum of the actual damages suffered by a class of plaintiffs will be the same regardless of whether their claims are prosecuted as a single class action or as a myriad of individual suits. In the absence of any theory to explain why the amount of statutory damages awarded would expand faster than the size of the class, the assumption that class action treatment exacerbates concerns about excessive damages awards is either a product of mathematical error or based on the assumption that defendants who injure large number of individuals are less culpable than those who spread the effects of their unlawful conduct less widely. While the former could be chalked up to the mathematical illiteracy of the legal profession, the latter rationale is clearly incompatible with the purpose of Rule 23, which is in part intended to serve as vehicle for redressing widely dispersed harm that might otherwise go uncompensated. Id at 39-40.

Murray v. New Cingular Wirless Services, Inc.
--- F.R.D. ----, 2005 WL 3115813 (N.D.Ill.)

David A. Szwak

Earlier Denial of Class Action Cert in Murray

Postby David A. Szwak » Sun Dec 11, 2005 9:02 am

Slip Copy, 2005 WL 3019412 (N.D.Ill.)

United States District Court,
N.D. Illinois, Eastern Division.
Nancy R. MURRAY, Plaintiff,
No. 05 C 1229.
Nov. 8, 2005.


*1 This matter is before the court on Plaintiff Nancy R. Murray's ("Murray") motion for class certification. For the reasons stated below, we deny the motion for class certification.

Murray filed for bankruptcy in early 2004. Murray alleges that after she filed for bankruptcy, she received a promotional flyer ("Flyer") in the mail notifying her that, subject to certain conditions, she had been pre-approved for a loan based on the equity in her home by Defendant GMAC Mortgage Corporation ("GMAC"), which was doing business as Murray contends that the Flyer did not contain a firm offer of credit and that GMAC unlawfully assessed her credit report. Murray brought the instant action alleging violations of the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681 et. seq. Plaintiffs now seek class certification.

A plaintiff seeking class certification must first satisfy the requirements of Federal Rule of Civil Procedure 23(a) ("Rule 23(a)"). Rule 23(a) provides the following: "[o]ne or more members of a class may sue or be sued as representative parties on behalf of all only if (1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class." Fed.R.Civ.P. 23(a). Failure by a plaintiff to satisfy any one of the above requirements in Rule 23(a) precludes a court from granting the certification of a class. Retired Chicago Police Ass'n v. City of Chicago, 7 F.3d 584, 596 (7th Cir.1993). If a plaintiff is able to satisfy all of the requirements of Rule 23(a), the district court must then determine whether a plaintiff's action can be maintained as a class action by meeting one of the requirements of Federal Rule of Civil Procedure 23(b)("Rule 23(b)"). See Williams v. Chartwell Fin. Servs., Ltd., 204 F.3d 748, 760 (7th Cir.2001)(explaining Rule 23(b)). In order to determine whether a class should be certified, a court may make any "factual and legal inquiries ... necessary under Rule 23." Szabo v. Bridgeport Machines, Inc., 249 F.3d 672, 675-76 (7th Cir.2001). A court need not accept a plaintiff's assertions as conclusive, but may receive any evidence necessary to make a decision on class certification. See id. (explaining why the court accepts a complaint's factual allegations when ruling on motions to dismiss under Rule 12(b)(6) but does not when ruling on class certification motions under Rule 23).

In the instant action, GMAC concedes that the numerosity prong is satisfied and that there are at least some common issues of fact and law among class members. GMAC also acknowledges that the typicality prong is satisfied. However, GMAC argues vehemently in its answer to the motion for class certification that the court cannot grant the motion because Murray has not satisfied the adequate representation prong of Rule 23(a) or the requirements of Rule 23(b).
I. Adequacy of Representation Prong
*2 Murray argues that her counsel can adequately represent the class. In order to show that a named plaintiff's counsel would fairly and adequately represent the interests of the class members: "(a) the plaintiff's attorney must be qualified, experienced, and generally able to conduct the proposed litigation, and (b) the plaintiff must not have interests antagonistic to those of the class." Susman v. Lincoln American Corp., 561 F.2d 86, 90 (7th Cir.1977).
Murray's interests are antagonistic to other class members' interests because Murray may desire to settle her claim alone. Murray might be able to recover more funds individually with fewer complications if she settled individually. However, there is no indication that her counsel, who are in such a rush to obtain a class settlement, have considered such matters.
Murray has also not shown her counsel to have any particular expertise in class actions and has not shown that her counsel is able to competently represent the class or its interests. Murray's counsel's conduct in this action draws into question whether counsel will look out for the proposed class members' interests. Murray's counsel filed a motion before the court seeking to withdraw Murray's motion for an extension of discovery, to strike all deadlines, and to advise the court that the parties were finalizing a class settlement. We denied the motion as improper since the court had not yet ruled on Murray's motion for class certification and thus a class settlement was premature. When the court inquired at a status hearing on November 2, 2005, whether Murray's counsel had even attempted to settle Murray's claim by itself since she was currently the only Plaintiff in this action, GMAC's counsel responded that no such effort was made by Murray's counsel and that the only settlement proposals made by her counsel were for a class settlement. It seems unlikely that Murray's counsel will look out for the interests of an entire class when counsel is so determined to get a class settlement (and the substantial attorneys fees that go with such a settlement) that counsel has not considered the individual interests of Murray.
Also, in the complaint Murray only seeks recovery for technical violations of the FCRA on behalf of the proposed class. The fact that Murray has neglected to seek a recovery for any possible actual damages suffered by any of the proposed class members shows that Murray's counsel is not looking out for the class members' interests. Likewise, Murray's counsel chose to pursue only a willful violation claim and did not pursue a negligence-based claim on behalf of any proposed class members. This also shows a lack of concern for the potential class members' interests. There may be proposed class members that have suffered actual damages and have been subjected to negligent conduct by GMAC whose rights will not be vindicated in the proposed class action. Perhaps such an additional request for actual damages and an additional claim could have hindered Murray's counsel's plans to obtain a quick and easy class settlement without the need for actually putting in any real effort representing the proposed class members in this action. We also note that, according to GMAC, Murray, her spouse, and their children are in fact professional plaintiffs. GMAC claims that Murray, her spouse, and their children are participants in more than fifty assorted suits seeking compensation for technical violations of the FCRA which are all being handled by the same law firm. Murray does not deny this fact in her reply. This is also an indication that Murray and her counsel are merely seeking the "quick buck" from a class settlement and are not truly interested in vindicating any of the rights of the proposed class members. Therefore, since we find that Murray's counsel is not competent to be the class representative and has not shown that counsel will protect the proposed class members' interests, we conclude that Murray has not satisfied the adequacy of representation prong.
II. Rule 23(b) Requirement
*3 Murray claims that she satisfies the requirements of Rule 23(b)(3). (Mem.10-11). Federal Rule of Civil Procedure 23(b)(3) provides the following:
An action may be maintained as a class action if the prerequisites of subdivision (a) are satisfied, and in addition: ...
(3) the court finds that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy. The matters pertinent to the findings include: (A) the interest of members of the class in individually controlling the prosecution or defense of separate actions; (B) the extent and nature of any litigation concerning the controversy already commenced by or against members of the class; (C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; (D) the difficulties likely to be encountered in the management of a class action.
Fed.R.Civ.P. 23(b)(3). In the instant action, a class action is not "superior to other available methods for the fair and efficient adjudication of the controversy." Id. A class action would do nothing more than award a windfall to Murray's counsel. Murray is not seeking damages for herself or the proposed class members for any actual damages and is solely seeking to recover statutory damages for technical violations of the FCRA. Thus, neither Murray nor the potential class members will be asserting that they suffered any damages due to GMAC's violations of the FCRA. If the court were to certify a class and the proposed class settlement occurs, GMAC will lose a significant amount of money, each individual class member will get a pittance, and Murray's counsel will receive a handsome sum. Murray attempts to minimize the potential recovery by the proposed class by claiming that she has "defin[ed] a relative [ly] modest class." (Mem.5). However, this statement appears to be misleading because Murray has not adequately contested GMAC's estimation that the proposed class could contain as many as 1.2 million individuals. If Murray and the proposed class members were to prevail at trial, GMAC would face a potential liability in the billions of dollars for purely technical violations of the FCRA that did not cause any actual damages. Such a result would merely promote professional plaintiffs and the class action law firms that consider class action suits a profitable enterprise, rather than treating class actions as a vehicle to vindicate class members' rights. Rule 23 is not intended to encourage such abuses of the class action mechanism. See In re Trans Union Corp. Privacy Litigation, 211 F.R.D. 328, 351 (N.D.Ill.2002)(stating that "[a]lthough certification should not be denied solely because of the possible financial impact it would have on a defendant, consideration of the financial impact is proper when based on the disproportionality of a damage award that has little relation to the harm actually suffered by the class, and on the due process concerns attended upon such an impact"). Therefore, we conclude that a class action is not a superior method for resolving the proposed class members' claims.

*4 Based on the foregoing analysis, we deny Murray's motion for class certification.
Murray v. GMAC Mortg. Corp.
Slip Copy, 2005 WL 3019412 (N.D.Ill.)

David A. Szwak

Eeven Earlier Decision in Murray

Postby David A. Szwak » Sun Dec 11, 2005 10:57 am

386 F.Supp.2d 993

United States District Court,
N.D. Illinois,
Eastern Division.
Thomas A. MURRAY, Nancy R. Murray, and Deborah Jackson, Plaintiffs,
HOUSEHOLD BANK (SB), N.A.; Household Credit Services, Inc.; Household Credit
Services (II), Inc.; and HSBC North America Holdings, Inc., Defendants.
No. 05 C 1227.
Sept. 12, 2005.

Background: Consumers brought putative class action against creditors, alleging that their mailings violated the Fair Credit Reporting Act (FCRA). Creditors moved for judgment on the pleadings.

Holdings: The District Court, Gettleman, J., held that:
(1) mailings from creditors did not lose their status as firm offers of credit, and
(2) amendment to FCRA, eliminating private civil actions for violations of disclosure requirements, applied to entire section of the FCRA dealing with disclosure requirements.

Motion granted.


GETTLEMAN, District Judge.
Plaintiffs Thomas A. Murray, Nancy R. Murray, and Deborah Jackson filed a six-count putative class action [FN1] alleging that defendants Household Bank (SB), N.A., Household Credit Services, Inc., Household Credit Services (II), Inc., and HSBC North America Holdings, Inc. failed to comply with the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681 et seq. On June 7, 2005 [FN2], defendants filed a renewed motion for judgment on the pleadings pursuant to Fed.R.Civ.P. 12(c). On August 24, 2005, the court granted defendants' motion for leave to cite additional authority. On September 1, 2005, the court granted plaintiffs' motion for leave to file instanter a response to defendants' supplemental authority.

FN1. The court notes that the caption fails to state that the action is brought as a class action.

FN2. With leave of the court, defendants filed a corrected memorandum of law in support of their motion on June 20, 2005.

Plaintiffs are individuals who reside in the Northern District of Illinois. Defendant Household Bank (SB), N.A. is a bank with offices in Las Vegas, Nevada and does business in Illinois. Defendants Household Credit Services, Inc. and *995 Household Credit Services (II), Inc. are corporations with offices in Prospect Heights, Illinois. HSBC North America Holdings, Inc. is a Delaware corporation with offices in Prospect Heights, Illinois.
Defendants sent plaintiffs seven "prescreened" mailings offering pre-approved MasterCard credit cards to be issued by Household Bank (SB), N.A. and serviced by one of the two Household Credit Services entities. The mailings were sent by HSBC North America subsequent to February 15, 2004. Each mailing contains an FCRA disclosure statement that the "information contained in your credit report was obtained from a credit reporting agency and was used in connection with selecting you for this offer." In six of the seven mailings, the FCRA disclosure was contained in a black-and-white insert that stated that it contained rates, fees, and contract terms. The front of the solicitation letter and another insert displaying credit card designs were in color. In the seventh mailing, the FCRA disclosure was on the reverse of the solicitation letter, and appeared under the heading "Additional Terms and Conditions." Nothing in the mailings alerts the reader to that fact that the disclosure information also applies to consumers who do not want the credit offer.

[1] [2] [3] A party is permitted under Federal Rule of Civil Procedure 12(c) to move for judgment on the pleadings after the parties have the complaint and the answer. Fed.R.Civ.P. 12(c); Northern Indiana Gun & Outdoor Shows, Inc. v. City of South Bend, 163 F.3d 449, 452 (7th Cir.1998). A motion for judgment on the pleadings "under Rule 12(c) is reviewed under the same standard as a motion to dismiss under 12(b): the motion is not granted unless it appears beyond doubt that the plaintiff can prove no facts sufficient to support his claim for relief, and the facts in the complaint are viewed in the light most favorable to the non-moving party." Flenner v. Sheahan, 107 F.3d 459, 461 (7th Cir.1997). The court, in ruling on a motion for judgment on the pleadings, must "accept as true all well-pleaded allegations." Forseth v. Village of Sussex, 199 F.3d 363, 364 (7th Cir.2000). A court may rule on a judgment on the pleadings under Rule 12(c) based upon a review of the pleadings alone, which include the complaint, the answer, and any written instruments attached as exhibits. Id. at 452-53.
I. Firm offer of credit
Plaintiffs argue that defendants violated § 1681b of the FCRA because the credit mailings were not firm offers of credit and thus defendants did not have a permissible purpose for accessing plaintiffs' consumer reports. The FCRA protects the privacy of consumer reports obtained from consumer reporting agencies. See 15 U.S.C. § 1681(a). Under § 1681b of the FCRA, it is permissible to obtain a consumer report only with the written consent of the consumer or for certain "permissible purposes," such as the extension of a firm offer of credit. 15 U.S.C. § 1681b(c)(1)(B). Persons who use a consumer report to make a prescreened offer are required under § 1681m(d) to make certain disclosures in a "clear and conspicuous" manner. For example, users must state that "information contained in the consumer's consumer report was used in connection with the transaction" and that the consumer has a right to prohibit the information in his consumer report from being used "in connection with any credit or insurance transaction that is not initiated by the consumer." 15 U.S.C. § 1681m(d)(1).
In the instant case, plaintiffs did not authorize access to their consumer reports or initiate any transactions with defendants. Defendants' prescreened credit *996 card offers were thus permissible only if they fell under the firm offer of credit extension in § 1681b(c)(1)(B). Plaintiffs argue that the disclosures contained in defendants' credit offers did not comply with 15 U.S.C. § 1681m(d), which requires users making unsolicited offers of credit to provide "clear and conspicuous" disclosures regarding removing a consumer's name from consumer reporting agency lists, and thus the solicitations were not firm offers of credit. In particular, plaintiffs assert that the location and format of the disclosures were such that consumers who did not accept the credit card offer were unlikely to review them. According to plaintiffs, because the absence of an election by the consumer to have his name and address excluded from lists of names and addresses provided by consumer reporting agencies is a prerequisite of a firm offer of credit, 15 U.S.C. § 1681b(c)(1)(B)(iii), the failure to provide notice that such an election may be made precludes a solicitation from being a firm offer of credit.
[4] [5] Plaintiffs cite no case law supporting their novel, and ultimately unpersuasive, reading of the statute. The definition of a "firm offer of credit," contained in §§ 1681a(l ) and 1681b(c)(1)(B), does not include a requirement to give any disclosures. The disclosures described in § 1681m(d) are a separate and subsequent requirement, implicated only when a firm offer of credit is made, and the failure to provide these disclosures does not strip a solicitation of its status as a firm offer of credit. The Seventh Circuit recently recognized this distinction in Cole v. U.S. Capital, Inc., 389 F.3d 719, 729 n. 11 (7th Cir.2004), noting that "[t]he requirements of clear and conspicuous disclosures are only triggered if a valid firm offer was extended.... Consequently, if a solicitation is not provided pursuant to § 1681b(c)(1)(B), i.e., it is not a firm offer of credit, § 1681m(d) is not applicable." Id. A violation of § 1681m, therefore, does not nullify a firm offer of credit and does not create a separate violation of § 1681b.
Plaintiffs' only basis for their argument that defendants' mailings were not firm offers of credit and thus not permissible under § 1681b is their contention that insufficient § 1681m disclosures effectively invalidate a firm offer. Plaintiffs do not, for example, allege that the creditors will not honor the offers or that the credit offered is of no value to the consumers. See Cole, 389 F.3d at 726-728 (discussing definition of firm offer of credit). Accordingly, plaintiffs have failed to allege that defendants mailings were not firm offers of credit.
II. Private right of action under § 1681m
Plaintiffs also argue that defendants are liable under § 1681m of the FCRA because the prescreened disclosures provided in the mailings were insufficient. Defendants argue that recent amendments to the FCRA eliminated a private right of action for a violation of § 1681m.
[6] The Fair and Accurate Credit Reporting Act of 2003, P.L. 108-159 ("FACT Act"), amending the FCRA, became effective on December 1, 2004. Section 311(a) of the FACT Act added § 1681m(h), which concerns the use of consumer reports to offer credit to certain consumers on terms that are "materially less favorable than the most favorable terms available to a substantial proportion of consumers." 15 U.S.C. § 1681m(h)(1). Section 1681m(h)(8), titled "Enforcement," provides: "(A) No Civil actions. Sections 1681n and 1681o [FN3] of this title shall not *997 apply to any failure by any person to comply with this section. (B) Administrative enforcement. This section shall be enforced exclusively under section 1681s of this title by the Federal agencies and officials identified in that section."

FN3. 15 U.S.C. §§ 1681n and 1681o provide civil liability for "willful noncompliance" and "negligent noncompliance" with the FCRA, respectively.

Judge Zagel recently dismissed a similar FCRA case (filed by the same plaintiffs as in the instant case), Murray v. Cross County Bank, no. 05 C 1252, unpub. order (N.D.Ill. Aug. 15, 2005), based on his finding that there was no private right of action under § 1681m. Judge Zagel rejected the plaintiffs' argument (made in the instant case as well) that § 1681m(h)(8) eliminated a private right of action only as to § 1681(h), and held that Congress's use of the word "section" in § 1681m(h)(8) referred to § 1681m as a whole, rather than subsection (h) only. The parties in the instant case do not cite, and the court has not found, any circuit court decision that has addressed this particular issue of statutory construction. For the reasons set forth below, this court, like Judge Zagel, concludes that § 1681m(h)(8) precludes all private rights of action under § 1681m.
[7] "Congress ordinarily adheres to a hierarchical scheme in subdividing statutory sections," and the Senate and House manuals each provide that sections are to be divided in descending order into subsections, paragraphs, subparagraphs, and clauses. Koons Buick Pontiac GMC, Inc. v. Nigh, 543 U.S. 50, 125 S.Ct. 460, 467, 160 L.Ed.2d 389 (2004). Within § 1681m(h), the FCRA refers to 1681n, 1681o, and 1681s as "sections," indicating that a section is demarcated by the first letter after the number. Section 1681m(h)(4) uses "subsection (a)" to refer to § 1681m(a), indicating that a subsection is demarcated by the second letter in parenthesis. [FN4] The proper use of both terms within § 1681m(h) demonstrates that Congress, recognizing their different meanings, presumably understood how to limit the enforcement provision to the subsection. See Duncan v. Walker, 533 U.S. 167, 173, 121 S.Ct. 2120, 150 L.Ed.2d 251 (2001) ("it is generally presumed that Congress acts intentionally and purposefully" in using particular statutory language"); see also Nestle Holdings, Inc. v. Central States, Southeast & Southwest Areas Pension Fund, 342 F.3d 801, 804 (7th Cir.2003) ("The basic rule in statutory interpretation is that plain statutory language governs."). On its face, § 1681m(h)(8) eliminates a private right of action for the entire section, § 1681m.

FN4. Other subsections of § 1681m appear to use "section" more generally. For example, § 1681m(b)(2)(B) refers to "section 1681a(k)(1)(A)." (See also, §§ 1681m(d)(1) and 1681m(h)(5)(D)). In these instances, however, the word "section" appears immediately adjacent to the number and is clearly intended to replace the " § " symbol, which is typically used to denote that it precedes a citation to a statute. Thus, the word "section" in these parts of the statute, unlike § 1681m(h)(8), do not indicate the precise hierarchical ranking of the provision cited.

The court agrees with plaintiffs that § 1681m is not a model of precise draftsmanship. For example, it would have been more logical to add the enforcement provision in a separate subsection, § 1681m(i), rather than including it as a paragraph of subsection § 1681m(h). In addition, the court agrees with plaintiff that § 1681m(h)(7) is redundant of § 1681m(c) because both provide that there is no liability for a violation of § 1681m if "reasonable policies and procedures to comply with this section" are maintained. See Witzke v. Femal, 376 F.3d 744, 753 (7th Cir.2004) ("We must read a statute to give effect to each word so as to avoid rendering any words meaningless, redundant, or superfluous."). Even under *998 plaintiffs' construction of the statute, however, which presumes that Congress intended to limit § 1681m(h)(7) to subsection (h), § 1681m(h)(7) is redundant because § 1681m(c) already applies the "reasonable procedures" defense to all of § 1681m, including § 1681m(h).
[8] Plaintiffs cite extensively to the legislative history of the FACT Act, which reveals an absence of discussion regarding the elimination of a private right of action under § 1681m as a whole, in support of their argument that the enforcement provision applies to subsection (h) only. None of the drafting choices identified by plaintiffs, however, rise to the level of a textual ambiguity or anomaly that would require, or even permit, the court to resort to legislative history. As the Supreme Court noted last term in Exxon Mobil Corp. v. Allapattah Servs., Inc., --- U.S. ----, ----, 125 S.Ct. 2611, 2624, 162 L.Ed.2d 502 (2005), a statute may contain an unintentional drafting error, but "it is up to Congress rather than the courts to fix it." 125 S.Ct. at 2624; see also Lamie v. United States Trustee, 540 U.S. 526, 542, 124 S.Ct. 1023, 157 L.Ed.2d 1024 (2004) ("If Congress enacted into law something different from what it intended, then it should amend the statute to conform to its intent. It is beyond our province to rescue Congress from its drafting errors, and to provide for what we might think ... is the preferred result.") (internal quotation marks and alteration omitted).
[9] The court understands plaintiffs' frustration that reading § 1681m(h)(8) as written eliminates a substantial private cause of action under a statute that was enacted to protect private consumers. See 15 U.S.C. § 1681(a)(4) ("There is a need to insure that consumer reporting agencies exercise their grave responsibilities with fairness, impartiality, and a respect for the consumer's right to privacy."). Courts, however, may not create a private right of action or private remedy, "no matter how desirable that might be as a policy matter, or how compatible with the statute." Alexander v. Sandoval, 532 U.S. 275, 286-87, 121 S.Ct. 1511, 149 L.Ed.2d 517 (2001).
It certainly would not have been unreasonable for Congress to debate, or at least mention, such a sweeping change in enforcement of a section of the FCRA before passing the FACT Act. Plaintiffs' argument that the lack of discussion in the legislative history evidences a lack of congressional intent, however, is mooted by Exxon Mobil. Decided after Koons, Exxon Mobil holds that a court may not consider legislative history when, as here, the text of a statute is unambiguous. 125 S.Ct. at 2626. Exxon Mobil addressed a conflict between unambiguous statutory language of 28 U.S.C. § 1367(a) and an unambiguous statement of congressional intent, and held that the statute's text controlled entirely. Id. at 2626 ("As we have repeatedly held, the authoritative statement is the statutory text, not the legislative history or any other extrinsic material"); see also Jacobs v. Bremner, 378 F.Supp.2d 861, 866 (N.D.Ill.2005) ("In short, Exxon Mobil declares that it is impermissible to consult legislative history when the statutory language is unambiguous.").
In the instant case, the legislative history appears silent regarding the continuing viability of a private right of action under § 1681m, rather than in express conflict with the statutory language, as in Exxon Mobil, 125 S.Ct. at 2630 (Stevens, J., dissenting) (Congress directly anticipated the issues raised and left a "virtual billboard of congressional intent" as to how that question should be resolved.). Under Exxon Mobil, which bars resort to legislative history to alter the "plain terms" of a statute, it would be improper to consider legislative history here because plaintiffs have failed *999 to point to any textual ambiguity in § 1681m(h)(8) and the court cannot identify any. Jacobs, 378 F.Supp.2d at 866.
Plaintiffs' citation to Koons, a Truth in Lending Act case in which the Court gave effect to congressional intent, is thus largely inapposite because the examination of legislative history in Koons was premised on the Court's finding that the statutory text created an "anomalous" result. The Koons court noted that the reading suggested by the defendant, "would lead to the anomalous result of double-the-finance-charge liability, uncapped by the fixed dollar limit ... for an open-end loan secured by real property, while liability would be capped ... at $2,000 for a closed-end loan secured by the same real property." 125 S.Ct. at 469 n. 10. Plaintiffs' citation to United States v. Turcotte, 405 F.3d 515, 522 (7th Cir.2005), in which the Seventh Circuit examined the statutory history of the Controlled Substance Analogue Act ("CSAA") to determine whether a portion of the statute should be read conjunctively or disjunctively, is equally inapposite here because, unlike the clauses at issue in Turcotte, the text of § 1681m(h)(8) is not susceptible to two different readings. In addition, the results of the plain language of the FCRA enforcement provision may be considered improvident or unfair by some, but they are not absurd. Cf. Id. at 522-23 (noting that a disjunctive reading of the CSAA would criminalizes benign substances such as sugar and flour if the seller represents that they are banned substances or have physiological effects similar to illegal drugs); see also Exxon Mobil, 125 S.Ct at 2624 ("The omission may seem odd, but it is not absurd.").
The plain language of § 1681m(h)(8), regardless of whether Congress gave scant consideration to its effect, is neither internally inconsistent nor unclear, and it does not produce an anomalous or nonsensical result. On its face, it eliminates all private rights of action under that section of the FCRA, § 1681m, and this court may not consult the legislative history or other extrinsic sources.
Accordingly, the court grants defendants' motion for judgment on the pleadings. Because the court grants defendants' motion, it need not consider defendants' alternative arguments in support of judgment in their favor.

For the reasons stated above, the court grants defendants' motion for judgment on the pleadings.
Murray v. Household Bank (SB), N.A.
386 F.Supp.2d 993

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