MOTION by Plaintiff Toni Ivanov to certify class and supporting memorandum of law (Attachments: # (1) Supporting Memorandum, # (2) Exhibits A-F)(Soule, Thomas)
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Case 1:08-cv-02134 Document 11 Filed 05/06/2008 Page 1 of 5 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION TONI IVANOV, individually and on behalf of a class, Plaintiff, v.
ALA CARTE ENTERTAINMENT, INC.
and EXCALIBUR CHICAGO, INC., and DOES 1-10, Defendants.
08 C 2134
Judge Zagel Magistrate Judge Mason PLAINTIFF’S MOTION FOR CLASS CERTIFICATION Plaintiff respectfully requests that this Court enter an order determining that this action alleging violation of the Fair and Accurate Credit Transactions Act (“FACTA”) be certified as a class action.
Plaintiff defines the class as “all persons to whom defendants provided an electronically printed receipt at the point of sale or transaction, in a transaction occurring in Illinois after December 4, 2006, which receipt displays either (a) more than the last five digits of the person’s credit card or debit card number, or (b) the expiration date of the person’s credit or debit card, or
(c) both.” Plaintiff further requests that Edelman, Combs, Latturner & Goodwin, LLC be appointed one of the counsel for the class.
In support of this motion, plaintiff states as follows:
NATURE OF THE CASE
1.
One provision of FACTA, codified as 15 U.S.C. §1681c(g), provides that No person that accepts credit cards or debit cards for the transaction of business shall print more than the last 5 digits of the card number or the expiration date upon any receipt provided to the cardholder at the point of sale or transaction.
2.
15 U.S.C. §1681c(g) is not ambiguous. “The plain meaning of the statute is that a
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Case 1:08-cv-02134 Document 11 Filed 05/06/2008 Page 2 of 5 merchant shall not print more than the last 5 digits of the credit card number upon any receipt and a merchant shall not print the expiration date upon any receipt. In other words, a retailer must print no more than five digits of a card number, and a retailer must also remove the expiration date from the credit card receipt. Printing either more than five digits of the credit card number or the expiration date of the credit card violates Section 1681c(g).” Iosello v. Leiblys, Inc., 502 F.Supp.2d 782, 786 (N.D.Ill. 2007); accord, Follman v. Hospitality Plus of Carpentersville, Inc., 532 F.Supp.2d 960, 963 (N.D.Ill. 2007), and Cicilline v. Jewel Food Stores, Inc., _____ F.Supp.2d _____, 2008 U.S. Dist. LEXIS 29501 (N.D.Ill. Mar. 31, 2008) (rejecting claimed affirmative defenses based on First Amendment grounds). 3.
On May 27, 2007, plaintiff received from Excalibur, at its establishment located at 632 North Dearborn Street, Chicago, Illinois, a computer-generated cash register receipt which displayed both the expiration date and the full credit card number of plaintiff’s credit card. 4.
15 U.S.C. §1681c(g) is an essential protection against identity theft, which according to the Federal Trade Commission victimized some 9 million persons and caused over $57 billion in harm in 2006 alone. “Stevens ID Theft Prevention Act Passes Commerce Committee,” States News Service, Apr. 25, 2007 (Exhibit A). One common modus operandi of identity thieves is to collect lost or discarded credit card receipts, or steal them, and use the information on them to engage in fraudulent transactions. Identity thieves who do this are known as “carders” and “dumpster divers.” This is more common than the use of sophisticated electronic means to obtain the information. Robin Sidel, “Identity Theft – Unplugged – Despite the High-Tech Threat, When You Get Ripped Off It’s Usually Still the Old Way,” Wall Street Journal, Oct. 5, 2006, p. B1 (Exhibit B).
5.
To curb identity theft, Congress prohibited merchants who accept credit cards and debit cards from issuing electronically-generated receipts that display either the expiration date or more than the last five digits of the card number. The law gave merchants who accept credit and debit cards up to three years to comply. Full compliance was required by December 4, 2006.
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Case 1:08-cv-02134 6.
Document 11 Filed 05/06/2008 Page 3 of 5 The need to “truncate” receipts was widely publicized among retailers. For example, the CEO of Visa USA, Carl Pascarella, explained on March 6, 2003 that “Today, I am proud to announce an additional measure to combat identity theft and protect consumers. Our new receipt truncation policy will soon limit cardholder information on receipts to the last four digits of their accounts. The card’s expiration date will be eliminated from receipts altogether.... The first phase of this new policy goes into effect July 1, 2003 for all new terminals....” “Visa USA Announces Account Truncation Initiative to Protect Consumers from ID Theft; Visa CEO Announces New Initiative at Press Conference With Sen. Dianne Feinstein,” PR Newswire, March 6, 2003 (Exhibit C).
7.
The August 12, 2006 edition of “Rules for Visa Merchants” (Exhibit D, p. 62), which is binding upon all merchants that accept Visa cards, similarly makes clear that “only the last four digits of an account number should be printed on the customer’s copy of the receipt” and “the expiration date should not appear at all.” VISA required complete compliance by merchants accepting Visa card by July 1, 2006, five months ahead of the statutory deadline. (Id.)
8.
Most of defendants’ business peers and competitors readily brought their receipt printing process into compliance.
9.
A private remedy is provided by 15 U.S.C. §1681n, which provides as follows: §1681n. Civil liability for willful noncompliance
(a) In general. Any person who willfully fails to comply with any requirement imposed under this title [15 USC §§1681 et seq.] with respect to any consumer is liable to that consumer in an amount equal to the sum of– (1)
(A) any actual damages sustained by the consumer as a result of the failure or damages of not less than $ 100 and not more than $ 1,000...
CLASS CERTIFICATION REQUIREMENTS
10.
All requirements of Rule 23(a) and (b)(3) of the Federal Rules of Civil Procedure
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Case 1:08-cv-02134 Document 11 Filed 05/06/2008 Page 4 of 5 have been met.
11.
On information and belief, there are at least 100 persons to whom defendants provided an electronically printed receipt at the point of sale or transaction, in a transaction occurring in Illinois after December 4, 2006, which receipt displays either (a) more than the last five digits of the person’s credit card or debit card number, or (b) the expiration date of the person’s credit or debit card, or (c) both. Defendants operate a nightclub which, approximately six months after the effective date of 15 U.S.C. §1681c(g), issued non-compliant receipts to plaintiff. The nightclub, located in a historic building in downtown Chicago, can hold up to 1,000 people at a time. (Exhibit E.) Therefore, it is reasonable to conclude that more than 100 non-compliant receipts were issued by defendants during the class period. 12.
Plaintiff will obtain the exact number of class members through discovery, and requests a briefing schedule long enough to obtain such information.
13.
There are questions of law and fact common to the class, which questions predominate over any questions affecting only individual class members. The predominant common questions include the following:
a.
Whether defendants had a practice of providing customers with a sales or transaction receipt on which defendants printed more than the last five digits of the credit or debit card, or the expiration date of the credit or debit card, or both; 14.
b.
Whether defendants thereby violated FACTA; and c.
Whether defendants’ conduct was willful.
Plaintiff's claims are typical of those of the class members. All are based on the same factual and legal theories.
15.
Plaintiff will fairly and adequately represent the class members. Plaintiff has no interests that conflict with the interests of class members. Plaintiff has retained experienced counsel. (Exhibit F.)
16.
A class action is superior for the fair and efficient adjudication of the class
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Case 1:08-cv-02134 Document 11 Filed 05/06/2008 Page 5 of 5 members' claims, in that:
17.
a.
Consumers are unlikely to recognize the violation; and b.
Individual actions are uneconomical.
Courts have recently held that actions alleging willful FCRA violations and seeking statutory damages are appropriate for class resolution. Cicilline v. Jewel Food Stores, Inc., _____ F.Supp.2d _____, 2008 U.S. Dist. LEXIS 29505 (N.D.Ill. Mar. 31, 2008), Matthews v. United Retail, Inc., 2008 U.S. Dist. LEXIS 17217 (N.D.Ill. Mar. 5, 2008), Harris v. Circuit City Stores, Inc., 2008 U.S. Dist. LEXIS 12596 (N.D.Ill. Feb. 7, 2008), Halperin v. Interpark, Inc., 2007 U.S. Dist. LEXIS 87851 (N.D.Ill. Nov. 29, 2007).
18.
In further support of this motion, plaintiff submits the accompanying memorandum of law.
WHEREFORE, plaintiff respectfully requests that this Court enter an order determining that this action may proceed as a class action.
Respectfully submitted, s/ Thomas E. Soule Thomas E. Soule Daniel A. Edelman Cathleen M. Combs James O. Latturner Thomas E. Soule EDELMAN, COMBS, LATTURNER & GOODWIN, LLC 120 S. LaSalle Street, 18th Floor Chicago, Illinois 60603
(312) 739-4200
(312) 419-0379 (FAX) courtecl@edcombs.com
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Case 1:08-cv-02134 Document 11-2 Filed 05/06/2008 Page 1 of 10 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION TONI IVANOV, individually and on behalf of a class, Plaintiff, v.
ALA CARTE ENTERTAINMENT, INC.
and EXCALIBUR CHICAGO, INC., and DOES 1-10, Defendants.
08 C 2134
Judge Zagel Magistrate Judge Mason MEMORANDUM IN SUPPORT OF PLAINTIFF'S MOTION FOR CLASS CERTIFICATION Plaintiff has requested that this Court enter an order determining that this action may proceed as a class action against defendants. This memorandum is submitted in support of that motion.
I.
NATURE OF THE CASE
Following Murray v. GMAC Mortgage Corp., 434 F.3d 948 (7th Cir. 2006), District Judges have certified claims made under the Fair and Accurate Credit Transactions Act of 2003 (“FACTA”), as class actions. Cicilline v. Jewel Food Stores, Inc., _____ F.Supp.2d _____, 2008 U.S. Dist. LEXIS 29505 (N.D.Ill. Mar. 31, 2008), Matthews v. United Retail, Inc., 2008 U.S. Dist. LEXIS 17217 (N.D.Ill. Mar. 5, 2008), Harris v. Circuit City Stores, Inc., 2008 U.S. Dist. LEXIS 12596 (N.D.Ill. Feb. 7, 2008), Halperin v. Interpark, Inc., 2007 U.S. Dist. LEXIS 87851 (N.D.Ill. Nov. 29, 2007). See Claffey v. River Oaks Hyundai, Inc., 238 F.R.D. 464 (N.D.Ill. 2006) (Fair Credit Reporting Act litigation certified). Given the facts here, plaintiff respectfully submits that this Court should reach the same conclusion.
A.
Plaintiff’s claims Plaintiff filed this class action under the Fair Credit Reporting Act (“FCRA”), as amended by FACTA, contending that defendants violated a provision designed to prevent
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Case 1:08-cv-02134 Document 11-2 Filed 05/06/2008 Page 2 of 10 identity theft. 15 U.S.C. §1681c(g) provides that “no person that accepts credit cards or debit cards for the transaction of business shall print more than the last 5 digits of the card number or the expiration date upon any receipt provided to the cardholder at the point of sale or transaction.” Defendants provided a non-compliant receipt to plaintiff on May 27, 2007 – almost six months after §1681c(g) became effective. Plaintiff claims that this change in the law was widely publicized, that defendants’ contracts contained images of what a receipt had to look like, and that defendants’ non-compliance months after the effective date demonstrates that defendants willfully violated the law. Discovery in this matter has not yet commenced; plaintiff respectfully submits that the evidence will show that defendants violated FACTA willfully. B.
The holdings of GMAC Mortgage support certification GMAC Mortgage is on point supporting plaintiff’s arguments that a class should be certified in this case. GMAC Mortgage held, in pertinent part, that:
1.
the class action procedure “was designed for situations such as this, in which the potential recovery is too slight to support individual suits, but injury is substantial in the aggregate” [GMAC Mortgage, 434 F. 3d at 953]; 2.
statutory damages provide relief for actual losses that are small and hard to quantify, without proof of injury [Id.]; and 3.
an award to the class “that would be unconstitutionally excessive may be reduced.... but constitutional limits are best applied after a class has been certified [when] a judge may evaluate the defendant’s overall conduct and control its total exposure” [Id. at 954 (citing State Farm Mutual Automobile Insurance Co. v. Campbell, 538 U.S. 408 (2003))].
These factors set forth by the Seventh Circuit clearly indicate that the matter before this Court is suitable for class certification. Proof in this case is standardized – from the receipts that were given to plaintiffs and other customers, to the hardware and software that produced them.
II.
STANDARD FOR CLASS CERTIFICATION
Class actions are essential to enforce laws protecting consumers. As the Court stated in Eshaghi v. Hanley Dawson Cadillac Co., 214 Ill.App.3d 995, 574 N.E.2d 760 (1st Dist. 1991):
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In a large and impersonal society, class actions are often the last barricade of consumer protection.... To consumerists, the consumer class action is an inviting procedural device to cope with frauds causing small damages to large groups. The slight loss to the individual, when aggregated in the coffers of the wrongdoer, results in gains which are both handsome and tempting. The alternatives to the class action—private suits or governmental actions—have been so often found wanting in controlling consumer frauds that not even the ardent critics of class actions seriously contend that they are truly effective. The consumer class action, when brought by those who have no other avenue of legal redress, provides restitution to the injured, and deterrence of the wrongdoer. [Id., 574 N.E.2d at 764, 766.]
Cases essentially the same as the present one, and brought by counsel who are representing plaintiff here, were certified as class actions. In several of these cases, and others listed in Exhibit F, plaintiff’s counsel has been appointed as class counsel, having been found adequate under Fed.R.Civ.P. 23(a)(4).
Classes have been certified in a number of other FCRA cases as well. Wood v. Capital One Auto Finance, 2006 U.S. Dist. LEXIS 67513 (E.D.Wis. Sept. 19, 2006). See also In re Farmers Insurance Co., Inc., FCRA Litigation, 2006 U.S. Dist. LEXIS 27290 (W.D.Okla. Apr. 13, 2006); In re Trans Union Corp. Privacy Litigation, 2005 U.S. Dist. LEXIS 17548 (N.D.Ill. August 17, 2005); Thomas v. NCO Financial Systems, Inc., 2004 U.S. Dist. LEXIS 5405 (E.D.Pa., March 31, 2004) (settlement; illegal “reaging” of old debts on credit reports); Perry v. FleetBoston Financial Corp., 229 F.R.D. 105 (E.D.Pa. 2005) (settlement; illegal accessing of credit reports); Clark v. Experian Information Solutions, Inc., 2004 U.S. Dist. LEXIS 28324 (D.S.C., Jan. 14, 2004) (settlement, improper reporting of debts); Ciccarone v. B. J. Marchese, Inc., 2004 U.S. Dist. LEXIS 26489 (E.D.Pa., Dec. 14, 2004), later opinion, 2004 U.S. Dist. LEXIS 25747 (E.D.Pa., Dec. 22, 2004) (settlement; alleged unauthorized accessing of consumer reports); Stoner v. CBA Information Services, 352 F.Supp.2d 549 (E.D.Pa. 2005) (settlement; alleged policy of refusing to investigate consumer disputes regarding items on their credit reports); Ashby v. Farmers Ins. Co.,, 2004 U.S. Dist. LEXIS 21053 (D.Ore. Oct. 18, 2004) (class certified in action alleging failure to give notice of adverse action); Braxton v. Farmer’s Ins. Group, 209 F.R.D. 654 (N.D.Ala. 2002) (similar); White v. Imperial Adjustment Corp., 2002
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Case 1:08-cv-02134 Document 11-2 Filed 05/06/2008 Page 4 of 10 U.S. Dist. LEXIS 26610 (E.D.La., Aug. 6, 2002), affirmed by unpublished opinion, 2003 U.S.App. LEXIS 20162 (5th Cir., Oct. 2, 2003), later opinion, 2005 U.S.Dist. LEXIS 13382 (E.D.La., June 28, 2005) (impermissible accessing of consumer reports); and Mathews v. Government Employees Ins. Co., 23 F.Supp.2d 1160 (S.D.Cal. 1998) (same). In the present case, the critical issues are (a) whether defendants had a practice of providing customers with a sales or transaction receipt on which defendants printed more than the last five digits of the credit or debit card, or the expiration date of the credit or debit card, or both; and (b) whether defendants thereby willfully violated FACTA. Such claims can be resolved, in part or in whole, at summary judgment. Both of these inquiries are uniform with respect to the entire class, and will be decided on facts that apply equally to all class members. This Court has the discretion to adjust the statutory damages, if necessary, to address any concerns about the size of a potential award to the class, after class certification is granted. GMAC Mortgage held that a limitation on supposedly excessive damages, on due process grounds, is best applied after a class has been certified . Then a judge may evaluate the defendants’ overall conduct and control its total exposure. “Reducing recoveries by forcing everyone to litigate independently—so that constitutional bounds are not tested, because the statute cannot be enforced by more than a handful of victims—has little to recommend it.” GMAC Mortgage, 434 F.3d at 954.
Furthermore, the possibility of excessive damages “might be invoked, not to prevent certification, but to nullify that effect and reduce the aggregate damage award.” Parker v. Time Warner Entertainment Co., 331 F.3d 13, 22, 27-28 (2d Cir. 2003); State of Texas v. American Blast Fax, Inc., 164 F.Supp.2d 892 (W.D.Tex. 2001) (same).
III.
THE PROPOSED CLASS MEETS THE CERTIFICATION REQUIREMENTS
A.
Numerosity Fed.R.Civ.P. 23(a)(1) requires that the class be “so numerous that joinder of all members is impracticable.” “When the class is large, numbers alone are dispositive....” 4 Riordan v. Smith
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Barney, 113 F.R.D. 60, 62 (N.D.Ill.1986). Where the class numbers at least 40, joinder is generally considered impracticable. Cypress v. Newport News General & Nonsectarian Hosp. Ass’n, 375 F.2d 648, 653 (4th Cir. 1967) (18 sufficient); Swanson v. American Consumer Industries, 415 F.2d 1326, 1333 (7th Cir. 1969) (40 sufficient); Riordan, supra, 113 F.R.D. 60 (10-29 sufficient); Philadelphia Electric Co. v. Anaconda American Brass Co., 43 F.R.D. 452, 463 (E.D.Pa. 1968) (25 sufficient); Sala v. National R. Pass. Corp., 120 F.R.D. 494, 497 (E.D.Pa. 1988) (40-50 sufficient); Scholes v. Stone, McGuire & Benjamin, 143 F.R.D. 181, 184 (N.D. Ill. 1992) (about 70). It is not necessary that the precise number of class members be known. “A class action may proceed upon estimates as to the size of the proposed class.” In re Alcoholic Beverages Litigation, 95 F.R.D. 321 (E.D.N.Y. 1982); Lewis v. Gross, 663 F. Supp.
1164, 1169 (E.D.N.Y. 1986).
Here, the class size is currently unknown; plaintiff will seek in discovery to ascertain the exact number of class members. However, defendants operate a nightclub in downtown Chicago with a large capacity. (See Motion, ¶11 and Exhibit E.) Defendants provided to plaintiff receipts which did not comply with FACTA almost six months after the effective date of the provision at issue. Given the size of the establishment and the length of the class period, plaintiff suggests that the class is no smaller than 100 individuals; this would satisfy the numerosity requirement of Fed.R.Civ.P. 23(a)(1).
B.
Predominance of common questions of law or fact
Fed.R.Civ.P. 23(a)(2) requires that there be a common question of law or fact. Rule 23(b)(3) requires that the questions of law or fact common to all members of the class predominate over questions pertaining to individual members.
These requirements are normally satisfied when there is an essential common factual link between all class members and the defendant for which the law provides a remedy. Halverson v. Convenient Food Mart, Inc., 69 F.R.D. 331 (N.D. Ill. 1974). Where a question of law involves “standardized conduct of the defendant toward members of the proposed class, a common
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nucleus of operative facts is typically presented, and the commonality requirement... is usually met.” Franklin v. City of Chicago, 102 F.R.D. 944, 949 (N.D.Ill. 1984); Patrykus v. Gomilla, 121 F.R.D. 357, 361 (N.D.Ill. 1988). The authorities hold that cases dealing with the legality of standardized documents or conduct are generally appropriate for resolution by means of a class action because the document or conduct is the focal point of the analysis. Halverson, 69 F.R.D. 331; Haroco v. American Nat’l Bank, 121 F.R.D. 664, 669 (N.D. Ill. 1988) (improper computation of interest); Kleiner v. First Nat’l Bank, 97 F.R.D. 683 (N.D.Ga. 1983) (same); Heastie v. Community Bank, 125 F.R.D. 669 (N.D.Ill. 1989) (execution of home improvement financing documents in sequence that evaded consumers’ rescission rights). This is true even though the nature and amount of damages may differ among the members of the class. Id. In this case, the “common nucleus of operative fact,” Halverson, 69 F.R.D. at 335, is that defendants provided to plaintiff and the class members noncompliant receipts. The dispositive issues – indeed, the only issues – are (1) whether the material provided to plaintiff complies with 15 U.S.C. §1681c(g), and (2) whether defendants violated the FCRA willfully. The alleged failure to comply with FACTA is the same for each person who received a noncompliant receipt; thus, each class member has the same claim. GMAC Mortgage held that this sort question does not call for any sort of individualized inquiry. Accordingly, the questions of whether noncompliant receipts were provided and whether the FACTA violation was willful depends on facts involving defendants’ activities, and not the activities of plaintiff or class members.
The only individual issue is the identification of the consumers who were provided with a noncompliant receipt. Defendants will be asked to produce a class list, through discovery requests. At any rate, identification of class members is not an obstacle to class certification. Heastie v. Community Bank, supra, 125 F.R.D. 669 (N.D.Ill. 1989) (court found that common issues predominated where individual questions of injury and damages could be determined by “merely comparing the contract between the consumer and the contractor with the contract
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Case 1:08-cv-02134 Document 11-2 Filed 05/06/2008 Page 7 of 10 between the consumer and Community Bank”); Wilkinson v. F.B.I., 99 F.R.D. 148, 157 (C.D.Cal. 1983) (“a need for individual proof of damages would not preclude class certification. The amount of damages is invariably an individual question and does not defeat class treatment.’”); Franklin, 102 F.R.D. at 949 (similar).
C.
Typicality Rule 23 requires that the claims of the named plaintiff be typical of the claims of the 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. The typicality requirement may be satisfied even if there are factual distinctions between the claims of the named plaintiffs and those of other class members. Thus, similarity of legal theory may control even in the face of differences of fact. [De La Fuente v. Stokely-Van Camp, Inc., 713 F.2d 225, 232 (7th Cir. 1983) (citation omitted).]
In the instant case, typicality is inherent in the class definition. Each of the class members has been subjected to the same practice as the named plaintiff.
D.
Adequacy The rule also requires that the named plaintiff provide fair and adequate protection for the interests of the class. That protection involves two factors: (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. Rosario v. Livaditis, 963 F.2d 1013, 1018 (7th Cir. 1992); accord, Wetzel v. Liberty Mutual Ins. Co., 508 F.2d 239, 247 (3d Cir. 1975); In re Alcoholic Beverages Litigation, 95 F.R.D. 321.
Plaintiff understands the obligations of a class representative, and has retained experienced counsel, as is indicated by Exhibit F, which sets forth counsel’s qualifications. Plaintiff’s counsel brought the seminal GMAC Mortgage case, the opinion in which has been relied upon by many judges in this Circuit. As listed in Exhibit F, several Courts have certified FCRA and FACTA class actions, finding plaintiff’s same counsel adequate. Plaintiff’s counsel has also been approved as class counsel in scores of additional consumer protection cases. (Id.)
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Another relevant consideration under Rule 23(a)(4) is whether the interests of the named plaintiff are coincident with the general interests of the class. Here, both plaintiff and the class members seek money damages as the result of defendants’ violation of the FCRA. Given the identity of claims between plaintiff and the class members, there is no potential for conflicting interests in this action. There is no antagonism between the interests of the named plaintiff and those of the class.
E.
Superiority
In GMAC Mortgage, the Seventh Circuit held that cases such as this one, where hundreds of people have exactly the same claim, are well-suited for class resolution: [Fed.R.Civ.P] 23(b)(3) was designed for situations such as this, in which the potential recovery is too slight to support individual suits, but injury is substantial in the aggregate. See, e.g., Mace v. Van Ru Credit Corp., 109 F.3d 338, 344-345 (7th Cir. 1997). Reliance on federal law avoids the complications that can plague multi-state classes under state law, see In re Bridgestone/Firestone, Inc., Tires Products Liability Litigation, 288 F.3d 1012 (7th Cir. 2002), and society may gain from the deterrent effect of financial awards. The practical alternative to class litigation is punitive damages, not a fusillade of smallstakes claims. See Mathias v. Accor Economy Lodging, Inc., 347 F.3d 672 (7th Cir. 2003). [GMAC Mortgage, 434 F.3d at 953.]
Generally speaking, efficiency is the primary focus in determining whether the class action is the superior method for resolving the controversy presented. Eovaldi v. First Nat’l Bank, 57 F.R.D. 545 (N.D. Ill. 1972). The Court is required to determine the best available method for resolving the controversy in keeping with judicial integrity, convenience, and economy. Scholes, 143 F.R.D. at 189; Hurwitz v. R.B. Jones Corp., 76 F.R.D. 149 (W.D.Mo. 1977). It is proper for a court, in deciding the “best” available method, to consider the “....inability of the poor or uninformed to enforce their rights, and the improbability that large numbers of class members would possess the initiative to litigate individually.” Haynes v. Logan Furniture Mart, Inc., supra, 503 F.2d 1161, 1165 (7th Cir. 1974).
In this case there is no better method available for the adjudication of the claims which might be brought by each individual consumer. The vast majority of consumers are undoubtedly unaware that their rights are being violated. Furthermore, the filing of hundreds, or thousands,
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of FCRA suits against defendants would be unduly burdensome to the Courts; judicial efficiency would be greatly promoted through the adjudication of identical claims through a single proceeding.
The fact that there are large numbers of class members “is no argument at all” against certification. Carnegie v. Household Int’l, Inc., 376 F.3d 656, 660-61 (7th Cir. 2004). “The more claimants there are, the more likely a class action is to yield substantial economies in litigation. It would hardly be an improvement to have in lieu of this single class action 17 million suits each seeking damages of $15 to $30.... The realistic alternative to a class action is not 17 million individual suits, but zero individual suits, as only a lunatic or a fanatic sues for $30. But 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.” Id. GMAC Mortgage concurred with this view, finding that:
reducing recoveries by forcing everyone to litigate independently—so that constitutional bounds are not tested, because the statute cannot be enforced by more than a handful of victims—has little to recommend it. [GMAC Mortgage, 434 F.3d at 954.]
The special efficacy of the consumer class action has been noted by the courts and is applicable to this case. In re Folding Carton Antitrust Litigation, 75 F.R.D. 727, 732 (N.D. Ill. 1977), noted that a class action permits a large group of claimants to have their claims adjudicated in a single lawsuit. This is particularly important where, as here, a large number of small and medium sized claimants may be involved. In light of the awesome costs of discovery and trial, many of them would not be able to secure relief if class certification were denied . . . . (Citations omitted.)
Furthermore, Lake v. First Nationwide Bank, 156 F.R.D. 615, 628-629 (E.D.Pa 1994) held that, given the relatively small amount recoverable by each potential litigant, it is unlikely that, absent the class action mechanism, any one individual would pursue his claim, or even be able to retain an attorney willing to bring the action. As Professors Wright, Miller and Kane have discussed, in analyzing consumer protection class actions such as the instant one, ‘typically the individual claims are for small amounts, which means that
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the injured parties would not be able to bear the significant litigation expenses involved in suing a large corporation on an individual basis. These financial barriers may be overcome by permitting the suit to be brought by one or more consumers on behalf of others who are similarly situated.’ 7B Wright et al., §1778, at 59; see e.g., Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 809 (1985) (‘Class actions . . . may permit the plaintiff to pool claims which would be uneconomical to litigate individually.’) The public interest in seeing that the rights of consumers are vindicated favors the disposition of the instant claims in a class action form.
Class certification will provide an efficient and appropriate resolution of the controversy. Zanni v. Lippold, 119 F.R.D. 32, 35 (C.D.Ill. 1988).
IV.
CONCLUSION
The proposed class meets the requirements of Rules 23(a) and 23(b)(3). Plaintiff
respectfully requests that this Court certify a class as set forth above. Respectfully submitted, s/Thomas E. Soule Thomas E. Soule Daniel A. Edelman Cathleen M. Combs James O. Latturner Thomas E. Soule EDELMAN, COMBS, LATTURNER & GOODWIN, LLC 120 S. LaSalle Street, 18th Floor Chicago, Illinois 60603
(312) 739-4200
(312) 419-0379 (FAX) courtecl@edcombs.com
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Case 1:08-cv-02134 Document11-3 Filed 05/06/2008 Page 1 of 21 . Page 1 STEVENS ID THEFT PREVENTION ACT PASSES COMMERCE COMMITTEE States News Service April 25, 2007 Wednesday 14 of 257 DOCUMENTS Copyright 2007 States News Service States News Service April 25, 2007 Wednesday LENGTH: 351 words HEADLINE: STEVENS iD THEFT PREVENTION ACT PASSES COMMERCE COMMITTEE BYLINE: States News Service DATELINE: WASHINGTON BODY:
The following information was released by Senate Committee on Commerce, Science and Transportation: The Senate Committee on Commerce, Science and Transportation today passed S. 1178 the "Identity Theft Prevention Act." Committee Vice Chairman Senator Ted Stevens (R-Alaska) introduced the legislation and it is cosponsored by Commerce Committee Chairman Daniel Inouye (D-Hawaii), Senator Gordon Smith (R-Ore.) and Senator Mark Pryor (D-Ark.) and Senator Bill Nejson (D-FL). This bid would strengthen information safeguards and ensure notification to consumers whose sensitive personal information has been acquired without authorization. The bill would atso direct the Federal Trade Commission (FTC) to enforce rules to protect such information. Under the bill, consumers would be able to freeze their credit for a reasonable ise to protect themselves from identity theft. The bill now moves fo the Senate where it awaits consideration.
"ID theft is a growing problem that plagues Americans in the far reaches of our nation and everywhere in between," said Senator Stevens. "Studies of identity theft show that Alaskans are particularly susceptible to this criminal activity. it is time for Congress to act. We must take steps to belp people protect themselves. | urge the Senate to take up this bill, which has received broad bipartisan support, and pass it quickly.” Identity theft has risen dramatically nationwide over the past decade and the FTC estimates that each year nearly 9 million Americans - or roughly 4.6 percent of the domestic adult population - are victimized by identity thieves. The FTC indicates that physical and online identity theft accounted for 40 percent of the more than 616,000 consumer fraud complaints filed last year with the agency. ‘The costs associated with identity theft are enormous. In 2006, it is estimated that the losses to businesses and financial institutions due to identity theft totaled $52.6 billion, and the outof-pocket losses to consumers totaled $5 billion, which does not take into account the average 300 hours spent by each victim to restore their good name.
LOAD-DATE: April 26, 2007 EXHIBIT JA 2 a a o 2 z am
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Case 1:08-cv-02134 Document11-3 Filed 05/06/2008 Page 2 of 21 Page | Identity Theft - Unplugged --- Despite the High-Tech Threat, When You Get Ripped Off It's Usually Still the Old Way The Wall Street Journal October 8, 2005 Saturday 7 of 4 DOCUMENTS Copyright 2005 Factiva, a Dow Jones and Reuters Company All Rights Reserved m8 factiva.
THE WALL STREET JOURNA
The Wall Street Journal October 8, 2005 Saturday .
SECTION: Pg. Bi LENGTH: 1438 wards HEADLINE; Identity Theft ~- Unplugged --- Despite the High-Tech Threat, When You Get Ripped Off It's Usually Stitl the Old Way BYLINE: By Robin Sidel BODY:
WORRIED THAT shadowy gangs of Russian hackers are breaking into computer networks, stealing your financial secrets? Don't lose too much sleep over it, But you might want to hide your checkbook when friends and relatives come visit your home. Despite a series of alarming reports in recent months about security breaches that have made persenal data potentially vulnerabie to crooks — such as the one at credit-card processor CardSystems Solutions Inc. affecting 40 million credit-card accounts —- most bank-related crimes remain stubbornly low-tech. They range from simple forgery of a check, to unauthorized credit-card use, to Dumpster-diving, which is when someone plucks a bank statement or creditcard bill froma your garbage.
And the perpetrator probably may not be a stranger.
According to one recent study, by Javelin Strategy & Research, a consulting firm in Pleasanton, Calif., in 26% of all cases the fraud victims knew the person who had misused their personal information. (Typically it was a family member, friend or neighbor, or in-home employee.) In addition, as much as 50% of debit-card fraud occurs when a card is snagged by a family member or friend who knows the card's personal-identification number, according to a recent report from TowerGroup, a unit of MasterCard International Inc.
‘The term “identity theft" is often used loosely to describe a wide array of crimes, But true identity theft occurs wher someone uses stolen information to create a new form of identity, such as opening a new credit-card account under the victim's name. That differs significantly from other kinds of bank fraud, such as when a criminal uses a stolen ATM card to get cash out of a teller machine.
Whether it's full-blown ID theft or small-scale fraud, even in cases where the criminal is a stranger, it's almost never ~a case of sophisticated computer hacking. Although 75% of all households use the Internet and 65% of those do some: online banking, "most criminals obtain personal information through traditional rather than electronic channels,” according to the Javelin study. Some 29% of victims surveyed said their personal information was obtained through a lost or stolen wallet, checkbook or credit card.
According to the study, the bulk of the rest were attributed to friends and relatives, corrupt employees, stolen mail, Dumpster-diving, and computer spyware. Computer viruses or hackers accounted for only 2.2% of incidents, While FXHIBIT 5B a a ss = z e S a
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Case 1:08-cv-02134 Document11-3 Filed 05/06/2008 Page 3 of 21 Page 2 Identity Theft -- Unplugged ~~ Despite the High-Tech Threat, When You Get Ripped Off it's Usually Stil the Old Way The Wall Street Journal October 8, 2005 Saturday there has been a significant increase in the number of electronic attempts at identity theft, “the ones that are working are the traditional ones,” said James Van Dyke, Javelin's president.
The Federal Trade Commission itself defines identity theft broadly, describing it as when someone possesses or uses @ person's personal or financial information without their knowledge with the intent of committing fraud or other crimes.
The commission estimates that identity theft affects nearly 5% of the adult population, costing businesses and individuals a combined $53 billion annually, It received 246,000 reports of identity theft last year, nearly triple the number received in 2001, The FTC has attributed much of that tise to heightened awareness of the issue among consumers, making them more likely to report Incidents as identity theft, Overall, statistics on identity theft are spotty. For one thing, research has found that most victims of identity theft don't report the crime to police. In many cases, they aren't even certain that they are truly crime victims and don't know how the incident occurred. Banks increasingly alert authorities when incidents occur, but even those disclosures can be incomplete, There are a number of steps individuals can take to protect thernselves.
Many financial institutions are increasingly urging their clients to start using paper shredders at home, Household models can be relatively inexpensive, and they significantly reduce the chances that a criminal can find any useful personal information in the trash. Banks typically recommend shredding documents that contain account information, Social Security numbers, credit-card and ATM receipts and credit-card offers. Also, shred blank checks that sometimes come in the mail as part of a solicitation, Another suggestion; Be particularly aware if credit-card bills or bank statements are missing from the mailbox. Ifa bill arrives more than two weeks late, the American Bankers Association suggests contacting the local post office to be sure it isn't being forwarded without the recipient's knowledge. Also check with the company where the bill originated. It's also wise to avoid disclosing any personal information on forms or applications unless absolutely necessary, says Mike Cunningham, senior vice president in the credit-card fraud department at J.P, Morgan Chase & Co. Asan example, Mr. Cunningham says, he was recently filling out an application to be a coach on his son’s neighborhood football team in Arizona, and the form asked for his social security number, driver's license number and other personal information. He dectined to provide the information, because there was no way for him to know whether his personal information would be kept under lock and key.
"! just told the team mom that | didn't see why they needed it -~ it was the perfect amount of information for an identity thief," he said. He got the job anyway.
The only organizations you're required to provide with your social security number are your employer and your financial institutions. (This is for tax purposes.) If anyone else asks -- say, a retailer -- you don't have to give it, The company can decline to provide the service, but i's worth asking what other identification they might accept instead. Amid the proliferation of old-fashioned fraud, some financial institutions are fighting back by urging their customers to abandon paper statements altogether and instead view their accounts online. Among them is E*Trade Financial Corp., which says its online system is more secure than paper statements that can be stolen or copied, A spokeswoman declined to specify how much money the company wil! save by eliminating the printing and mailing of paper statements, Banks are having a particularly tough time battling one of the oldest and most common kinds of crime: check fraud, Attempts of check fraud rose to $5.5 billion in 2003 from $4.3 billion in 2001, according to the American Bankers Association. The incidents resulted in losses of $677 million, representing a slight decline from $698 million in 2001; the trade group attributed the drop to better fraud-detection methods.
That slight decline isn't so reassuring to Lee Roberts, senior vice president at National Penn Bancshares Inc.,a “7 regional bank based in Boyertown, Pa. As recently as the past few weeks, the bank has been hit by a wave of incidents ~ in which criminals have copied checks and then altered them for fraudulent use. That practice "has been around for seven or eight years," says Mr. Roberts. But as photocopiers and image-manipulation computer software become more sophisticated, he says, "they're getting better af it.”
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Case 1:08-cv-02134 Document11-3 Filed 05/06/2008 Page 4 of 21 Page 3 Identity Theft -- Unplugged --- Despite the High-Tech Threat, When You Get Ripped Off It’s Usually Still the Old Way The Wall Street Journal October 8, 2005 Saturday Battling Identity Theft Despite all the buzz about high-tech online identity theft, most instances revolve around old-fashioned fraud such as forging a signature on a check. Here are steps for reducing the risk:
-- Check up on yourself regularly Get a copy of your credit report every year from each of the major credit bureaus (TransUnion, Equifax, Experian) to make sure the records are accurate. Also, closely review all monthly bank and billing statements for discrepancies.
-~- Travel light avoid carrying around credit-card or personal documents unless you reatly need them.
-- Keep personal data under wraps Don't share personal ID numbers or passwords with anyone. Don't provide information over the phone or hand over personal data unless you know why if is needed, Keep a list of all account numbers in a secure place so that you have quick access if cards or documents gel stolen or lost. -- Buy a shredder for the home Tear up or shred all credit-card receipts and all new-card offers that arrive in mail. Also destroy all documents that contain account numbers or other personal financial information.
-- Check the mail pon't Let mail sit in the mailbox for days on end. And don't place sensitive outgoing mail, such as bills, in your home mailbox to await collection. Instead, drop it in a collection box.
Sources: Federal Trade Commission, American Bankers Association NOTES:
PUBLISHER: Dow Jones & Company, inc.
LOAD-DATE: October 8, 2003
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Case 1:08-cv-02134 Document 11-3 Filed 05/06/2008 Page 5 of 21 Page 17 Visa USA Announces Account Truncation Initiative to Protect Consumers from ID Theft; Visa CEO Announces New Initiative at Press Conference With Sen. Dianne Feinstein PR Newswire March 6, 2003 Thursday 6 of 9 DOCUMENTS Copyright 2003 PR Newswire Association, Inc.
PR Newswire March 6, 2003 Thursday SECTION: WASHINGTON DATELINE DISTRIBUTION: TO BUSINESS AND NATIONAL EDITORS LENGTHS: 774 words HEADLINE: Visa USA Announces Account Truncation initiative to Protect Consumers from ID Theft; Visa CEO Announces New Initiative at Press Conference With Sen. Dianne Feinstein DATELINE: WASHINGTON March 6 BODY:
Ata press conference today on Capitol Hill with Senators Dianne Feinstein (D-CA), Judd Gregg (R-NH)}, Jon Corzine (D- NJ) and Patrick Leahy (D-VT), Visa USA CEO Carl Pascarella, announced Visa USA's new account truncation program to protect consumers from identity theft. The following are excerpts of Mr. Pascarella's remarks: "Tam here today to talk about the steps that Visa is taking to put identity theft protections in place. Visa USA and our Member financial institutions have a long history of using state of the art technology to further protect cardholder information. Visa was the first payments company to adopt a zero Hability policy for unauthorized purchases, and we've continued this leadership role with Verified by Visa, which authenticates cardholders for Internet purchases, and our sophisticated neural networks that monitor spending anomafies.
"We have also implemented our Cardholder Information Security Program, OF CISP, a set of 12 requirements for protecting cardholder data for which all Visa payment system participants need to comply, In fact, Visa is adding more resources to our auditing process to ensure any entity that touches a Visa transaction Will be comptiant with our Cardholder Information Security Program rules. The CISP ‘Digital Dozen' was the first set of standards within the payments industry for protecting cardholder data and served as a best practices model by the G-8 conference on cybercrime in Tokyo.
“Today, 1 am proud te announce an additional measure to combat identity theft and protect consumers. Our new receipt truncation policy will soon limit cardholder information on receipts to the last four digits of their accounts. The card's expiration date will be eliminated from receipts altogether- This ig an added security measure for consumers that doesn't require any action by the cardholder. We are proud to be the first payments brand to announce such a move fo protect cardholders’ identities by restricting access to their account information on receipts. “The first phase of this new policy goes into effect July 1, 2003 for al} new terminals. { would like to add, however, that even before this policy goes into effect, many merchants have already voluntarily begun truncating receipts, thanks to groundwork that we began together several years ago.
"Receipt truncation is good news for consumers, and bad news for identity thieves. identity thieves thrive on discarded receipts and documents containing consumers! information such as payment account numbers, addresses, Social Security numbers, and more. Visa's new policy will protect consumers by limiting the information these thieves can access, . wae Visa's new receipt truncation measure builds upon our other security measures | mentioned, zero liability cardholder protection, Verified by Visa, neural networks and the Cardholder Information Security Program. *Our receipt truncation policy is the latest initiative jn Visa's broader identity theft consumer protection effort. | can't go into the details at the moment, but we will be announcing a series of additional steps to combat identity theft and offer tools fo consumers.
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Case 1:08-cv-02134 Document11-3 Filed 05/06/2008 Page 6 of 21 Page 18 Visa USA Announces Account Truncation Initiative to Protect Consumers from ID Theft; Visa CEO Announces New Initiative at Press Conference With Sen. Dianne Feinstein PR Newswire March 6, 2003 Thursday "isa is focused on maintaining the trust we have earned through our security leadership, Because there is no silver bulfet to eliminate identity theft, we are constantly adding new layers of security to protect cardholders. As a result of these, and many other security measures, fraud within the Visa system has fallen to an all-time low of just 7 cents per $100 transacted.
"Visa USA is pleased to be working with Senator Feinstein, and the other senators here today in the fight to protect consumers from identity theft. We look forward to continuing our joint efforts; after all, we share the same goals." About Visa Visa is the world's leading payment brand and largest consumer payment system, enabling banks to provide their consumer and merchant customers with a wide variety of payment alternatives. Nearly 21,000 financial institutions worldwide rely on Visa's processing system, VisaNet, to facilitate $2.4 trillion in annua} transaction volume with virtually 100 percent reliability. Consumers in more than 4150 countries carry more than one billion Visa-branded cards, accepted at 30 million locations around the world. Within the United States, nearly 14,000 financial institutions issue more than 385 million Visa cards, accounting for $970 billion in annual transaction volume, Visa offers a trusted, reliable and convenient way fo access and mobilize financial resources -- anytime, anywhere, anyway. For more information about Visa, please visit htip/Ayww.visa.com .
SOURCE Visa USA CONTACT: Adam Bromberg, +4-703-683-5004, ext. 102, for Visa USA URL: http:/Awww.prnewswire.com LOAD-DATE: March 7, 2003
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Rules for Visa Merchants
Card Acceptance and Chargeback Management Guidelines
EXHIBIT
Blumberg No. 5208
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Case 1:08-cv-02134 Document11-3 Filed 05/06/2008 Page 8 of 21 PSECTION FIVE: SOPY REQUESTS
Transaction Receipt Requirements— Card-Present Merchants The following are Visa requirements for all transaction recelpts generated from electronic point-of-sale terminals (including cardholderactivated terminals). Electronic Point-of-sale Terminal Receipts Merchant or member name and location, or the city and state of the Automated Dispensing Machine or Self-Service Terminal L
Truncated Account Number Visa requires that all new Transaction Date XYZ SHOES electronic POS terminals \ 1040 PARK ST provide account number ANYTOWN, CA 94561 f truncation on transaction Merchant PHONE # (000)555-5555 receipts, This means that only Location Code .. | Nov 10, 2005 12:30PM the last four digits of an account | . number should be printed on the Effective November 2, 2005, MERCH ID: 08233004 customer's copy of the receipt the payment brand used to complete the transaction REF # ; 003 In addition, the expiration must be identified on the ACT fo: RERRHERAA*ERE 220 date should net appear at all. cardholder's copy of the EXP} XX/XX Gen nmmmnnion Existing POS terminals must | transaction receipt, i CARD : VISA comply with these requirements $21.69 by July 1, 2006, To ensure your XN POS terminals are properly set Authorization Code, ff up for account number trunca- ——» APPROVAL CODE: O35789 Levon Pebmment Service TRAN LD: VGF7ET800815 rn contact your merchant Transactions.
I AGREE TO PAY ABOVE Transaction Amount Space for Cardholder TOTAL AMOUNT ACCORDING Signature, except for: TO CARD ISSUER AGREEMENT Transactions in which the PIN isan acceptable 9 ~~~" X
substitute for Cardholder SIGNATURE:
signature
* Limited-Amount Terminal THANK YOU Transactions CARDHOLDER COPY a
SelfService Terminal Transactions Exoress Payment Service Transactions
62 Rutes for Visa Marchants—Card Acceptance and Chargeback Management Guldelines DRICG Visu USA. Inc., all ribhts reserved, t9 he usad solely for the numose of providing Vise Card accaplonca services 23 authorized pursuant to agreement with & Yisz member Gnanciat jasttuilon.
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EXHIBIT
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Case 1:08-cv-02134 Document11-3 Filed 05/06/2008 Page 11 of 21
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
TONI IVANOV, }
individually and on behalf of a class, ) ) Plaintiff, ) ) Vv. ) 08 C 2134 ) Judge Zagel ALA CARTE ENTERTAINMENT, INC.) Magistrate Judge Mason and EXCALIBUR CHICAGO, INC., ) and DOES 1-10, ) ) Defendants. }
DECLARATION OF DANIEL A. EDELMAN
Daniel A. Edelman declares under penalty of perjury, as provided for by the laws of the United States (28 U.S.C. §1746), that the following statements are true:
1. Edelman, Combs, Latturner & Goodwin, LLC, has 5 principals, Daniel A. Edelman, Cathleen M. Combs, James O. Latturner, Tara L. Goodwin, and Michelle R. Teggelaar and 9 associates.
2. Daniel A. Edelman is a 1976 graduate of the University of Chicago Law School. From 1976 to 1981 he was an associate at the Chicago office of Kirkland & Ellis with heavy involvement in the defense of consumer class action litigation (such as the General Motors Engine Interchange cases). In 1981 he became an associate at Reuben & Proctor, a mediumsized firm formed by some former Kirkland & Ellis lawyers, and was made a partner there in 1982. From the end of 1985 he has been in private practice in downtown Chicago. Virtually all of his practice involves litigation on behalf of consumers, mostly through class actions. He is the co-author of Rosmarin & Edelman, Consumer Class Action Manual (2d-4th editions, National Consumer Law Center 1990, 1995 and 1999); author of Payday Loans: Big Interest Rates and Little Regulation, 11 Loy.Consumer L,Rptr. 174 (1999); author of Consumer Fraud and Insurance Claims, in Bad Faith and Extracontractual Damage Claims in Insurance Litigation, Chicago Bar Ass'n 1992; co-author of Chapter 8, "Fair Debt Collection Practices Act," Ohio Consumer Law (1995 ed.); co-author of Fair Debt Collection; The Need for Private Enforcement, 7 Loy.Consumer L.Rptr. 89 (1995); author of An Overview of The Fair Debt Collection Practices Act, in Financial Services Litigation, Practicing Law Institute (1999); coauthor of Residential Mortgage Litigation, in Financial Services Litigation, Practicing Law Institute (1996); author of Automobile Leasing: Problems and Solutions, 7 Loy.Consumer
psu Blumberg No. 5208
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L.Rptr. 14 (1994); author of Current Trends in Residential Mortgage Litigation, 12 Rev. of Banking & Financial Services 71 (April 24, 1996); author of Applicability of Illinois Consumer Fraud Act in Favor of Out-of-State Consumers, 8 Loy.Consumer L.Rptr. 27 (1996); co-author of IHinois Consumer Law (Chicago Bar Ass'n 1996); co-author of D. Edelman and M. A. Weinberg, Attorney Liability Under the Fair Debt Collection Practices Act (Chicago Bar Ass'n 1996); author of The Fair Debt Collection Practices Act: Recent Developments, 8 Loy.Consumer L. Rptr. 303 (1996); author of Second Mortgage Frauds, Nat'l Consumer Rights Litigation Conference 67 (Oct. 19-20, 1992); and author of Compulsory Arbitration of Consumer Disputes, Nat'l Consumer Rights Litigation Conference 54, 67 (1994), He is a member of the Illinois bar and admitted to practice in the following courts: United States Supreme Court, Seventh Circuit Court of Appeals, First Circuit Court of Appeals, Second Circuit Court of Appeals, Third Circuit Court of Appeals, Fifth Circuit Court of Appeals, Eighth Circuit Court of Appeals, Ninth Circuit Court of Appeals, Tenth Circuit Court of Appeals, Eleventh Circuit Court of Appeals, United States District Courts for the Northern and Southern Districts of Indiana, United States District Courts for the Northern, Central, and Southern Districts of Dlinois, United States District Court for the District of Arizona, United States District Court for the District of Connecticut, and the Supreme Court of Illinois. He is a member of the Northern District of Illinois trial bar.
3. Cathleen M. Combs is a 1976 graduate of Loyola University Law School. She formerly supervised the Northwest office of the Legal Assistance Foundation of Chicago, where she was lead or co-counsel in class actions in the areas of unemployment compensation, prison law, social security law, and consumer law. She joined what is now Edelman, Combs & Latturner in early 1991. Decisions in which she was involved prior to joining the firm include: Johnson vy. Heckler, 607 F.Supp. 875 (N.D.Il. 1984), and 100 F.R.D. 70 (N.D. Ill. 1983); Sanders v. Shephard, 185 TH. App.3d 719, 541 N.B.2d 1150 (1st Dist. 1989); Maller v. Cohen, 176 Ill_App.3d 987, 531 N.E.2d 1029 (1st Dist. 1988); Wright v. Department of Labor, 166 Ill. App.3d 438, 519 N.E.2d 1054 (Ist Dist. 1988); Barron v. Ward, 165 Tl. App.3d 653, 517 N.E.2d 591 (1st Dist, 1987); City of Chicago v. Leviton, 137 Ill_App.3d 126, 484 N.E.2d 438 (1st Dist. 1985); Jude v. Morrissey, 117 UL App.3d 782, 454 N.E.2d 24 (1st Dist. 1983). She is a member of the Northern District of Ilinois trial bar.
4, James O. Latturner is a 1962 graduate of the University of Chicago Law School. Until 1969, he was an associate and then a partner at the Chicago law firm of Berchem, Schwanes & Thuma. From 1969 to 1995 he was Deputy Director of the Legal Assistance Foundation of Chicago, where he specialized in consumer law, including acting as lead counsel in over 30 class actions. His publications include Chapter 8 ("Defendants") im Federal Practice Manual for Legal Services Attorneys (M. Masinter, Ed., National Legal Aid and Defender Association 1989); Governmental Tort Immunity in Illinois, 55 ULB.J. 29 (1966); Illinois Should Explicitly Adopt the Per Se Rule for Consumer Fraud Act Violations, 2 Loy.Consumer L.Rep. 64 (1990), and Illinois Consumer Law (Chicago Bar Ass'n 1996). He has taught in a nationwide series of 18 Federal Practice courses sponsored by the Legal Services Corporation, each lasting four days and designed for attorneys with federal litigation experience. He has argued over 30 appeals, including two cases in the United States Supreme Court, three in the Illinois Supreme
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Court, and numerous cases in the Seventh, Third, Fifth, and Eleventh Circuits. Mr. Latturner was involved in many of the significant decisions establishing the rights of Illinois consumers. He is a member of the Northern District of Ulinois trial bar.
5. Tara L. Goodwin is a graduate of the University of Chicago (B.A., with general honors, 1988)and Illinois Institute of Technology, Chicago-Kent College of Law (J.D., with high honors,1991). She has been with the firm since her graduation and has participated in many of the cases described below. Reported Cases. Williams v. Chartwell Financial Services, LTD, 204 F.3d 748 (7th Cir. 2000); Hillenbrand v. Meyer Medical Group, 682 N.E.2d 101 (Ill. 1st Dist. 1997), 720 N.E.2d 287 (Ill. 1st Dist. 1999); Bessette v. Avco Fin, Servs., 230 F.3d 439 (1" Cir. 2000); Large v. Conseco Fin. Servicing Co,, 292 F.3d 49 (1" Cir. 2002);; Carbajal v. Capital One, 219 F.R.D. 437 (N.D.H1. 2004); Russo v. B&B Catering, 209 F.Supp.2d 857 (N.D.IL 2002); Garcia v. Village of Bensenville, 2002 U.S.Dist. LEXIS 3803 (N.D.UL); Romaker v. Crossland Mtg, Co., 1996 U.S.Dist. LEXIS 6490 (N.D.IL); Mount v, LaSalle Bank Lake View, 926 F.Supp. 759 (N.D-II] 1996). She is a member of the Northern District of Illinois trial bar.
6. Michelle R. Teggelaar is a graduate of the University of Ilinots (B.A., 1993) and Chicago-Kent College of Law, Illinois Institute of Technology (J.D., with honors, 1997). Reported Cases: Johnson v. Revenue Management, Inc,, 169 F.3d 1057 (7" Cir.1999); ; Hernandez v. Attention, LLC, 429 F. Supp. 2d 912 (N.D. Hl. 2005); Coelho v. Park Ridge Oldsmobile, Inc., 247 F. Supp. 2d 1004 (N.D. IIL 2003); Dominguez v. Alliance Mtge., Co., 226
F. Supp. 2d 907 (N.D. Ill. 2002); Watson v. CBSK Financial Group, Inc., 197 F. Supp. 2d 1118 (N.D. TIL. 2002); Van Jackson v. Check ‘N Go of Illinois, Inc. 123 F. Supp. 2d 1085 (N.D. If. 2000), Van Jackson v. Check ‘N Go of Illinois, Inc., 123 F. Supp. 2d 1079, Van Jackson v. Check ‘N Go of Illinois, Inc., 114 F. Supp. 2d 731 (ND. Ill. 2000); Van Jackson v, Check ‘N Go of Illinois, Inc., 193 F.R.D. 544 (N.D. Ill. 2000); Vines v. Sands, 188 F.R.D. 302 (N.D. Ill. 1999), Veillard v. Mednick, 24 F. Supp. 2d 863 (N.D. 111.1998); Sledge v. Sands, 182 F.R.D. 255 (N.D. Iil. 1998), Vines v. Sands, 188 F.R.D, 203 (N.D. IIL. 1999), Livingston v. Fast Cash USA, Inc, 753 N.E.2d 572 (Ind. 2001); Binder v. Atlantic Credit and Finance, Inc., 2007 U.S. Dist. LEXIS 11483 (S.D. Ind. 2007); Carroll v. Butterfield Heath Care, Inc., 2003 WL 22462604 (N.D. III. 2003); Payton v. New Century Mtge., Inc., 2003 WL 22349118 (N.D, Tl. 2003); Seidat v. Allied Interstate, Inc., 2003 WL 2146825 (N.D. Ill. 2003) (Report and Recommendation); Michalowski y. Flagstar Bank, FSB, 2002 WL 112905 (N.D. Ill. 2002); Bigalke v. Creditrust Corp., 2001 WL 1098047 (N.D. Ill 2001) (Report and Recommendation); Donnelly vy, Illini Cash Advance, 2000 WL 1161076 (N.D. Ill. 2000); Mitchem v. Paycheck Advance Express, 2000 WL 419992 (N.D. Ill 2000); Pinkett v. Moolah Loan Co., 1999 WL 1080596 (N.D. Ill. 1999); Farley v. Diversified Collection Serv., 1999 WL 965496 (N.D. Ill. 1999); Davis v. Commercial Check Control, 1999 WL 965496 (N.D. Ill. 1999); Sledge v. Sands, 1999 WL 261745 (N.D. HL. 1999); Slater v. Credit Sciences, Inc., 1998 WL 341631 (N_D. Ill. 1998); Slater v. Credit Sciences, Inc., 1998 WL 299803 (N.D. Tl. 1998).
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7. Associates
a. Francis R. Greene is a graduate of Johns Hopkins University (B.A., with honors, May 1984), Rutgers University (Ph.D., October 1991), and Northwestern University Law School (J.D., 2000). Reported Cases: Johnson v. Thomas, 342 Ill. App.3d 382, 794 N.E.2d 919 (1* Dist. 2003); Jolly v. Shapiro & Kreisman, 237 F. Supp. 2d 888 (N.D. II. 2002); Parker v. 1-800 Bar None, a Financial Corp., Inc. 2002 WL 215530 (N.D. Ill. 2002); Jiang vy. Allstate Ins. Co, (199 F.R.D. 267); Hill v. AMOCO Oil Co. 2003 WL 262424, 2001 WL 293628 (N.D. Ill. 2003); Roquet v. Arthur Anderson LLP 2002 WL 1900768 (N.D. II. 2002); White v. Financial Credit, Corp. 2001 WL 1665386 (N.D. IIL); Ransom v. Gurnee Volkswagen 2001 WL 1241297 (N.D. Ill. 2001) and 2002 WL 449703 (N.D. Ill 2002); Doxie v. Impac Funding Corp. 2002 WL 31045387 (N.D. Ill. 2002); Levin v, Kluever & Platt LLC 2003 WL 22757763 and 2003 WL 22757764 (N.D. Ill. 2003); Pleasant v. Risk Management Alternatives 2003 WL 22175390 (N.D. Ill. 2003); Jenkins v. Mercantile Mortgage 231 F. Supp. 2d 737 (N.D. Ill. 2002); Hobson v. Lincoln Ins. Agency, Inc. 2001 WL 55528, 2001 WL 648958 (N_D. HI. 2001), Anderson v. Lincoln Ins. Agency 2003 WL 291928, Hobson v. Lincoln Ins, Agency 2003 WL 338161 (N.D. Hl. 2003); Handy v. Anchor Mortgage Corp., 464 F.3d 760 (7" Cir. 2006). He is a member of the Northern District of Illinois trial bar.
b. Julie Clark (nee Cobolovic) is a graduate of Northern Hlinois University (B.A., 1997) and DePaul University College of Law (J.D., 2000). Reported Cases: Qualkenbush y. Harris Trust & Savings Bank 219 F.Supp.2d 935 (N.D.H1.,2002); Covington- Mclntosh v. Mount Glenwood Memory Gardens 2002 WL 31369747 (N.D.ILL.,2002), 2003 WL 22359626 (N.D. Il. 2003); Ballard Nursing Center, Inc, vy. GF Healthcare Products, Inc., 2007 U.S. Dist. LEXIS 84425 (N.D. IIL Nov. 14, 2007), Record-A-Hit, Inc. v. Nat'l. Fire Ins. Co., No. 1-07-0684, 2007 IH. App. LEXIS 1194 (ll. App. 1* Dist. Nov. 13, 2007).
ce. Heather A. Kolbus (neé Piccirilli) is a graduate of DePaul University (B.S. cum laude, 1997), and Roger Williams University School of Law (J.D., 2002). Reported Cases: Clark v. Experian Info. Solutions, Inc., 2004 U.S, Dist. LEXIS 28324 (D.S.C. Jan. 14, 2004); DeFrancesco v. First Horizon Home Loan Corp., 2006 U.S. Dist. LEXIS 80718 (S.D. Ill. Nov. 2, 2006); Jeppesen v. New Century Mortgage Corp., 2006 U.S, Dist. LEXIS 84035 (N.D. Ind. Nov. 17, 2006); Benedia v. Super Fair Cellular, Inc., 2007 U.S. Dist. LEXIS 71911 (NLD. Ill. Sept. 26, 2007).
d. Thomas E. Soule is a graduate of Stanford University (B.A., 2000), and the University of Wisconsin Law School (J.D., 2003). Reported Cases: Murray v. Sunrise Chevrolet, Inc., 441 F.Supp.2d 940 (N.D. Tl. 2006); Iosello v. Leiblys, Inc., 502 F Supp.2d 782 (N.D. If. 2007); Claffey v. River Oaks Hyundai, Inc., 486 F.Supp.2d 776 (N.D. Ill, 2007).
e. Cassandra P. Miller is a praduate of the University of Wisconsin — Madison (B.A. 2001) and John Marshall Law School (J.D. magna cum laude 2006).
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Case 1:08-cv-02134 Document11-3 Filed 05/06/2008 Page 15 of 21 Reported Cases: Pietras v. Sentry Ins. Co., 513 F.Supp.2d 983 (N.D, Ill. 2007); Hernandez y. Midland Credit Mgmt., 2007 U.S. Dist. LEXIS‘16054 (N_D. Ill. Sept. 25, 2007); Balogun v. Midland Credit Memt., 2007 U.S. Dist. LEXIS 74845 (S.D. Ind. Oct. 5, 2007), f. Tiffany N. Hardy is a graduate of Tuskegee University (B.A.
1998) and Syracuse University College of Law (J.D.2001).
g. Zachary A. Jacobs is a graduate of the University of South Dakota (B.S. 2002) and Chicago-Kent College of Law, llinois Institute of Technology (J.D. 2007).
h. Rupali R. Shah is a graduate of the University of Chicago (B.A.
2004) and University of Mlinois (J.D. cum laude 2007).
i. Michael J. Aschenbrener is a graduate of the University of Minnesota (B.A. 2001) and the Chicago-Kent College of Law, Illinois Institute of Technology (J.D. May 2007).
8. The firm also has 15 legal assistants, as well as other support staff. 9, Since its inception, the firm has recovered more than $500 million for consumers.
10. The types of cases handled by the firm are illustrated by the following:
11. Mortgage charges and servicing practices: The firm has been involved in dozens of cases, mostly class actions, complaining of illegal charges on mortgages and improper servicing practices. These include MDL-899, In re Mortgage Escrow Deposit Litigation, and MDL-1604, In re Ocwen Federal Bank FSB Mortgage Servicing Litigation, as well as the Fairbanks mortgage servicing litigation. Decisions in the firm’s mortgage cases include: Christakos v. Intercounty Title Co., 196 F.R.D. 496 (N.D.IIL 2000); Johnstone v. Bank of America, N.A., 173 F.Supp.2d 809 (N.D.ILL. 2001); Leon v. Washington Mut. Bank, F.A., 164 F.Supp.2d 1034 (N.D.IIL. 2001); Williamson v. Advanta Mortg. Corp., 1999 U.S. Dist. LEXIS 16374 (N.D.ILL, Oct. 5, 1999); McDonald v. Washington Mui. Bank, F.A., 2000 U.S. Dist. LEXIS 11496 (N.D.HL., June 22, 2000); Metmor Financial, Inc. v. Eighth Judicial District Court, No. 23848 (Nev.Sup.Ct., Apr. 27, 1993); GMAC Mige. Corp. v. Stapleton, 236 IIL App.3d 486, 603 N.E.2d 767 (1st Dist. 1992), leave to appeal denied, 248 Tl.2d 641, 610 N.E.2d 1262 (1993); Leff v. Olympic Fed. 5. & L. Ass'n, 1986 WL 10636 (N.D.IIl. 1986); Aitken v. Fleet Mtge. Corp., 1991 U.S.Dist. LEXIS 10420 (N.D.IIL 1991), and 1992 U.S.Dist. LEXIS 1687 (N.D.IIL, Feb, 12, 1992); Poindexter v. National Mtge. Corp., 1991 U.S.Dist. LEXIS 19643 (N.D.IIL., Dec, 23, 1991), later opinion, 1995 U.S.Dist. LEXIS 5396 (N.D.ILL, April 24, 1995); Sanders v. Lincoln Service Corp., 1993 U.S.Dist. LEXIS 4454 (N.D.IL. 1993); Robinson v. Empire of America Realty Credit Corp., 1991 U.S.Dist. LEXIS 2084 (N.D.IIL, Feb, 20, 1991); In re
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Case 1:08-cv-02134 Document11-3 Filed 05/06/2008 Page 16 of 21 Mortgage Escrow Deposit Litigation, M.D.L. 899, 1994 U.S.Dist. LEXIS 12746 (N.D.IIL, Sept. 8, 1994); Greenberg v. Republic Federal S. & L. Ass'n, 1995 U.S.Dist. LEXIS 5866 (N.D.IL, May 1, 1995).
12. The recoveries in the escrow overcharge cases alone are over $250 million. Leff was the seminal case on mortgage escrow overcharges.
13. The escrow litigation had a substantial effect on industry practices, resulting in limitations on the amounts which mortgage companies held in escrow.
14. Bankruptey: The firm brought a number of cases complaining that money was being systematically collected on discharged debts, in some cases through the use of invalid reaffirmation agreements, including the national class actions against Sears and General Electric. Conley v. Sears, Roebuck, 1:97cv11149 (D.Mass); Fisher_v. Lechmere Inc., 1:97¢v3065, (N.D.II1.). These cases were settled and resulted in recovery by nationwide classes. Cathieen Combs successfully argued the first Court of Appeals case to hold that a bankruptcy debtor induced to pay a discharged debt by means of an invalid reaffirmation agreement may sue to recover the payment. Bessette v. Avco Financial Services, 99-2291 (ist Cir., October 27, 2000).
15. Automobile sales and financing practices: The firm has brought many cases challenging practices relating to automobile sales and financing, including: a. Hidden finance charges resulting from pass-on of discounts on auto purchases. Walker v. Wallace Auto Sales, Inc, 155 F.3d 927, 1998 U.S. App. LEXUS 22663 (7th Cir. 1998).
b. Misrepresentation of amounts disbursed for extended warranties.
Taylor v. Quality Hyundai, Inc., 150 F.3d 689, 1998 U.S.App. LEXIS 16434 (7th Cir. 1998); Grimaldi v. Webb, 282 IIL App.3d 174, 668 N.E.2d 39 (1st Dist. 1996), leave to appeal denied, 169 Ill.2d 566 (1996); Slawson v. Currie Motors Lincoin Mercury, Inc., 1995 U.S.Dist. LEXIS 451 (N.D.IIL, Jan. 5, 1995); Cirone-Shadow v. Union Nissan, Inc., 1995 U.S.Dist. LEXIS 1379 (N.D.UI., Feb. 3, 1995), later opinion, 1995 U.S.Dist. LEXIS 5232 (N.D.IIL, April 20, 1995) (same); Chandler vy, Southwest Jeep-Eagle, Inc., 1995 U.S. Dist. LEXIS 8212 (N.D.IL, June 8, 1995); Shields v. Lefta, Inc., 1995 U.S.Dist. LEXIS 7807 (N.D-IIL., June 5, 1995).
c. Spot delivery. Janikowski v. Lynch Ford, Inc., 1999 U.S. Dist.
LEXIS 3524 (N.D.I., March 11, 1999); Diaz v. Westgate Lincoln Mercury, Inc., 1994 U.S.Dist. LEXIS 16300 (N.D.HL. 1994); Grimaldi v. Webb, 282 IILApp.3d 174, 668 N.E.2d 39 (1st Dist. 1996), leave to appeal denied, 169 IIl.2d 566 (1996).
d. Force placed insurance. Bermudez v. First of America Bank Champion, N.A., 860 F.Supp. 580 (N.D.Hl. 1994); Travis v. Boulevard Bank, 1994 U.S.Dist.
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LEXIS 14615 (N.D.IIL, Oct. 13, 1994), modified, 880 F.Supp. 1226 (N.D.III., 1995); Moore v. Fidelity Financial Services, Inc., 884 F. Supp. 288 (N.D.I1. 1995).
e. Improper obligation of cosigners. Lee v, Nationwide Cassell, 174 Ill.2d 540, 675 N.E.2d 599 (1996); Taylor v. Trans Acceptance Corp., 267 Hl. App.3d 562, 641 N.E.2d 907 (1st Dist. 1994), leave to appeal denied, 159 Ill.2d 581, 647 N.E.2d 1017 (1995).
f. Evasion of FTC holder rule. Brown v. LaSalle Northwest Nat'l Bank, 148 F.R.D. 584 (N.D-HL 1993), 820 F.Supp, 1078 (N.D_ILL. 1993), and 1993 U.S.Dist. LEXIS 11419 (N.D.UI, Aug. 13, 1993),
16. These cases also had a substantial effect on industry practices. The warranty cases, such as Grimaldi, Gibson, Slawson, Cirone-Shadow, Chandler, and Shields, resulted in the Federal Reserve Board's revision of applicable disclosure requirements, so as to prevent car dealers from representing that the charge for an extended warranty was being disbursed to a third party when that was not in fact the case.
17.“ Predatory lending practices: The firm has brought numerous cases challenging predatory mortgage and "payday" lending practices, mostly as class actions. Livingston v. Fast Cash USA, Inc., 753 N.E.2d 572 (Ind. Sup. Ct. 2001); Williams v, Chartwell Fin. Servs,, 204 F.3d 748 (7th Cir. 2000); Parker v. 1-800 Bar None, a Financial Corp., Inc., 01 C 4488, 2002 WL 215530 (N.D.IIL, Feb 12, 2002); Gilkey v. Central Clearing Co., 202 F.R.D. 515 (E.D.Mich. 2001); Van Jackson v. Check 'N Go of Il., Inc., 114 F.Supp.2d 731 (N.D.IIl. 2000), later opinion, 193 F.R.D. 544 (N.D.IIL. 2000), 123 F.Supp. 2d 1079 (N.D.ILE. 2000), later opinion, 123 F.Supp. 2d 1085 (N.D.IIl. 2000); Henry v. Cash Today, Inc., 199 F.R.D. 566 (S.D.Tex. 2000); Donnelly v. Illini Cash Advance, Inc., 00 C 94, 2000 WL 1161076, 2000 U.S. Dist. LEXIS 11906 (N.D.IIL, Aug. 14, 2000); Jones vy. Kunin, 2000 U.S. Dist. LEXIS 6380 (8.D.IHL., May 1, 2000); Davis v. Cash for Payday, 193 F.R.D. 518 (N.D.III. 2000); Reese v. Hammer Fin, Corp., 99 C 716, 1999 U.S. Dist. LEXIS 18812, 1999 WL 1101677 (N.D.IIL, Nov. 29, 1999); Pinkett v. Moolah Loan Co., 1999 U.S. Dist. LEXIS 17276 (N.D.IIL, Nov. 1, 1999); Gutierrez v. Devon Fin. Servs., 1999 U.S. Dist. LEXIS 18696 (N.D.Tl., Oct. 6, 1999); Vance v. National Benefit Ass'n, 99 C 2627, 1999 WL 731764, 1999 U.S, Dist. LEXIS 13846 (N.D.IIL., Aug. 26, 1999).
18. Other consumer credit issues: The firm has also brought a number of other Truth in Lending and consumer credit cases, mostly as class actions, involving such issues as:
a. Phony nontiling insurance. Edwards v. Your Credit Inc., 148 F.3d 427, 1998 U.S. App. LEXIS 16818 (5th Cir. 1998); Adams vy. Plaza Finance Co., 1999 U.S. App. LEXIS 1052 (7th Cir., January 27, 1999); Johnson v. Aronson Furniture Co., 1997 U.S. Dist. LEXIS 3979 (N.D. Ill, March 31, 1997).
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b. The McCarran Ferguson Act exemption. Autry v. Northwest Premium Services, Inc., 144 F.3d 1037, 1998 U.S. App. LEXIS 9564 (7th Cir. 1998).
c. Loan flipping. Emery vy, American General, 71 F.3d 1343 (7th Cir.
1995), Emery limited the pernicious practice of "loan flipping," in which consumers are solicited for new loans and are then refinanced, with "short" credits for unearned finance charges and insurance premiums being given through use of the "Rule of 78s."
d. Home improvement financing practices. Fidelity Financial Services, Inc. v. Hicks, 214 Ml. App.3d 398, 574 N.E.2d 15 (1st Dist. 1991), leave to appeal denied, 141 I1.2d 539, 580 N.E.2d 112; Heastie v. Community Bank of Greater Peoria, 690 F.Supp. 716 (N.D.Il. 1989), later opinion, 125 F.R.D. 669 (N.D.IIL 1990), later opinions, 727 F.Supp. 1133 (N.D.Iil. 1990), and 727 F.Supp. 1140 (N.D.IIL 1990). Heastie granted certification of a class of over 6,000 in a home improvement fraud case.
@. Arbitration clauses. Wrightson v. ITT Financial Services, 617 So.2d 334 (Fla. 1st DCA 1993).
f. Insurance packing. Elliott v. IFT Corp., 764 F.Supp. 102 (N.D.TE.
19. Automobile leases: The firm has brought a number of a cases alleging illegal charges and improper disclosures on automobile leases, mainly as class actions. Decisions in these cases include Lundquist v. Security Pacific Automotive Financial Services Corp., Civ. No. 5:91-754 (TGFD) (D.Conn.), aff'd, 993 F.2d 11 (2d Cir. 1993); Kedziora v. Citicorp Nat'l Services, Inc., 780 F.Supp. 516 (N.D.IIl. 1991), later opinion, 844 F.Supp. 1289 (N.DHL 1994), later opinion, 883 F.Supp. 1144 (N.D.IIL. 1995), later opinion, 1995 U.S.Dist. LEXIS 12137 (N.D.UI., Aug. 18, 1995), later opinion, 1995 U.S.Dist. LEXIS 14054 (N.D.IIL, Sept. 25, 1995); Johnson v. Steven Sims Subaru and Subaru Leasing, 1993 U.S.Dist. LEXIS 8078 (N.D_II., June 9, 1993), and 1993 U.S.Dist. LEXIS 11694 (N.D.II1., August 20, 1993); McCarthy v. PNC Credit Corp., 1992 U.S.Dist. LEXIS 21719 (D.Conn., May 27, 1992); Kinsella v. Midland Credit Memt., Inc., 1992 U.S.Dist. LEXIS 1405, 1992 WL 26908 (N.D.IH. 1992); Highsmith y, Chrysler Credit Corp., 18 F.3d 434 (7th Cir. 1994); Black v. Mitsubishi Motors Credit of America, Inc., 1994 U.S.Dist. LEXIS 11158 (N.D.IIL, August 10, 1994); Simon v. World Omni Leasing Inc., 146 F.R.D. 197 (S.D.Ala. 1992), Settlements in such cases include Shepherd v. Volvo Finance North America, Inc., 1-93-CV-971 (N.D.Ga.)($8 million benefit); McCarthy v. PNC Credit Corp., 291 CV 00854 PCD (D.Conn.); Lynch Leasing Co. v. Moore, 90 CH 876 (Circuit Court of Cook County, Illinois) (class in auto lease case was certified for litigation purposes, partial summary judgment was entered, and case was then settled); Blank v. Nissan Motor Acceptance Corp., 91 L 8516 (Circuit Court of Cook County, linois); Mortimer v. Toyota Motor Credit Co., 91 L 18043 (Circuit Court of Cook County, Illinois); Duffy v. Security Pacific Automotive Financial Services, Inc., 93-729 IEG (BTM) (S.D.Cal, April 28, 1994),
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20. Lundquist and Highsmith are leading cases; both held that commonly-used lease forms violated the Consumer Leasing Act: As a result of the Lundquist case, the Federal Reserve Board completely revamped the disclosure requirements applicable to auto leases, resulting in vastly improved disclosures to consumers.
21. Collection practices: The firm has brought a number of cases under the Fair Debt Collection Practices Act, both class and individual. Decisions in these cases include: Jenkins v. Heintz, 25 F.3d 536 (7th Cir, 1994), affd 115 8.Ct. 1489, 131 L.Ed.2d 395 (1995); Johnson v. Revenue Management Corp., 169 F.3d 1057, 1999 U.S. App. LEXIS 3142 (7th Cir. 1999); Keele v. Wexler & Wexler, 1996 U.S.Dist. LEXIS 3253 (N.D.ILL., March 18, 1996) (class), 1995 U.S.Dist. LEXIS 13215 (N.D.HL. 1995) (merits), aff'd, 149 F.3d 589, 1998 U.S.App. LEXIS 15029 (7th Cir. 1998); Mace v. Van Ru Credit Corp., 109 F.3d 338, 1997 U.S. App. LEXTS 5000 (7th Cir., Mar. 17, 1997); Maguire v. Citicorp Retail Services, Inc., 147 F.3d 232, 1998 U.S.App. LEXIS 16112 (2d Cir. 1998); Young v. Citicorp Retail Services, Inc., 1998 U.S.App. LEXIS 20268 (2d Cir. 1998); Charles v. Lundgren & Assocs.. P.C., 119 F.3d 739, 1997 U.S. App. LEXIS 16786 (9th Cir. 1997); Avila v. Rubin, 84 F.3d 222 (7th Cir. 1996), affg Avila v. Van Ru Credit Corp., 1995 U.S.Dist. LEXIS 461 (N.D.IL, Jan. 10, 1995), later opinion, 1995 U.S.Dist. LEXIS 1502 (N.D.IIL, Feb. 6, 1995), later opinion, 1995 U.S.Dist. LEXIS 17117 (N.D.IIL, Nov. 14, 1995); Tolentino v, Friedman, 833 F.Supp. 697 (N.D.IIL. 1993), affd in part and rev'd in part, 46 F.3d 645 (7th Cir. 1995); Blakemore v, Pekay, 895 F.Supp.972 (N.D.IH, 1995); Oglesby v. Rotche, 1993 U.S.Dist. LEXIS 15687 (N.D.IIL., Nov. 4, 1993), later opinion, 1994 U.S.Dist. LEXIS 4866 (N.D.IL, April 15, 1994); Laws v. Cheslock, 1999 U.S.Dist. LEXIS 3416 (N.D.IIL, Mar. 8, 1999);Davis v. Commercial Check Control, Inc., 1999 US. Dist. LEXIS 1682 (N.D.I., Feb. 12, 1999); Hoffman v. Partners in Collections, Inc., 1993 U.S.Dist. LEXIS 12702 (N.D.IIL., Sept. 15, 1993); Vaughn v. CSC Credit Services, Inc., 1994 U.S.Dist. LEXIS 2172 (N.D.II., March 1, 1994), adopted, 1995 O.S.Dist. LEXIS 1358 (N.D.IH., Feb. 3, 1995); Beasley v. Blatt, 1994 U.S.Dist. LEXIS 9383 (N.D.IIL, July 14, 1994); Taylor v. Fink, 1994 U.S.Dist. LEXIS 16821 (N.D.IIL, Nov. 23, 1994); Gordon v. Fink, 1995 U.S.Dist. LEXIS 1509 (N.D.HL, Feb. 7, 1995); Brajis v. Shaw, 876 F.Supp. 198 (N.D.IIL. 1995). Settlements in such cases include Boddie v. Meyer, 93 C 2975 (N.D.IIl.); and Cramer v. First of America Bank Corporation, 93 C 3189 (N.D_IL).
22. Jenkins v. Heintz is a leading decision regarding the liability of attorneys under the Fair Debt Collection Practices Act. I argued it before the Supreme Court and Seventh Circuit. Avila v. Rubin is a leading decision on phony "attorney letters."
23. Fair Credit Reporting Act: The firm has filed numerous cases under the Fair Credit Reporting Act, primarily as class actions. One line of cases alleges that lenders and automotive dealers, among others, improperly accessed consumers’ credit information, without their consent and without having a purpose for doing so permitted by the FCRA. Important decisions in this area include: Cole v. U.S. Capital, Inc., 389 F.3d 719 (7" Cir. 2004), Murray v, GMAC Mortgage Corp., 434 F.3d 948 (7"" Cir. 2006); Perry v. First National Bank, 459 F.3d 816 (7" Cir. 2006); Murray v. Sunrise Chevrolet, Inc., 441 F. Supp.2d 940 (N.D. IL]. 2006); Murray v.
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GMAC Mortgage Corp., 05 C 1229, F.Supp.2d 2007 U.S. Dist. LEXIS 26726 (N.D.IL April 10, 2007); Shellman v. Countrywide Home Loans, Inc., 1:05-CV-234-TS, 2007 US. Dist. LEXIS 27491 (N.D.Ind., April 12, 2007); In re Ocean Bank, 06 C 3515, 2007 U.S. Dist. LEXIS 28973 (N.D.HL, March 16, 2007), later opinion, 2007 U.S. Dist. LEXTS 29443 (N.D. Il, Apr. 9, 2007); Asbury v. People's Choice Home Loan, Inc., 05 C 5483, 2007 U.S. Dist. LEXIS 17654 (N.D.UL, March 12, 2007); Claffey vy. River Oaks Hyundai, Inc., 238 F.R.D. 464 (N.D.U, 2006); Murray v. IndyMac Bank, FSB, 461 F.Supp.2d 645 (N.D-Iil. 2006); Kudlicki v. Capital One Auto Finance, Inc., 2006 U.S. Dist. LEXIS 81103 (N.D. IIL, Nov. 2, 2006); Thomas v. Capital One Auto Finance, Inc., 2006 U.S. Dist. LEXIS 81358 (N.D. IL., Oct. 24, 2006); Pavone v. Aegis Lending Corp., 2006 U.S, Dist. LEXIS 62157 (N.D. Ill, Aug. 31, 2006); Murray v. E*Trade Financial Corp., 2006 U.S. Dist. LEXIS 53945 (N.D. ILL, July 19, 2006); Bonner v. Home 123 Corp., 2006 U.S. Dist. LEXIS 37922 (N.D. Ind., May 25, 2006); Murray v. Sunrise Chevrolet , Inc., 2006 U.S, Dist. LEXIS 19626 (N.D. IIL, Mar. 30, 2006); and Murray v. Finance America, LLC, 2006 U.S. Dist. LEXIS 7349 (N.D. ILL, Jan 5, 2006), More than 15 such cases have been settled on a classwide basis.
24. Class action procedure: Important decisions include Crawford v.
Equifax Payment Services, Inc., 201 F.3d 877 (7th Cir. 2000); Blair v. Equifax Check Services, Inc., 181 F.3d 832 (7th Cir. 1999); Mace v. Van Ru Credit Corp,, 109 F.3d 338, 344 (7th Cir. 1997); and Gordon v. Boden, 224 Il.App.3d 195, 586 N.E.2d 461 (ist Dist. 1991).
25. Landlord-tenant: The firm has brought a number of class actions against landlords for failing to pay interest on security deposits or commingling security deposits.
26. Some of the other reported decisions in our cases include: Elder v. Coronet Ins. Co., 201 IL App.3d 733, 558 N.E.2d 1312 (1st Dist. 1990); Smith v. Keycorp Mtge.. Inc., 151 Bankr. 870 (N.D.IL 1992}; Gordon v. Boden, 224 Tll.App.3d 195, 586 N.E.2d 461 (1st Dist. 1991), leave to appeal denied, 144 IN.2d 633, 591 N.E.2d 21, cert. denied, U.S. (1992); Armstrong v. Edelson, 718 F.Supp. 1372 (N.D.IH. 1989); Newman v. Ist 1440 Investment, Inc., 1993 U.S.Dist. LEXIS 354 (N.D.IIL 1993); Mountain States Tel. & Tel. Co. v. District Court, 778 P.2d 667 (Colo. 1989); Disher v. Fulgoni, 124 Il_App.3d 257, 464 N.E.2d 639, 643 (1st Dist. 1984); Harman v. Lyphomed, Inc., 122 F.R.D. 522 (N.D.IIl. 1988); Haslam v. Lefta, Inc., 1992 U.S.Dist. LEXIS 3623 (N.D.IIL, March 25, 1994); Source One Mortgage Services Corp. v. Jones, 1994 U.S.Dist. LEXIS 333 (N.D.UL, Jan. 13, 1994),
27. Gordon v. Boden is the first decision approving "fluid recovery" in an [tlinois class action. Elder v. Coronet Insurance held that an insurance company's reliance on lie detectors to process claims was an unfair and deceptive trade practice.
Case 1:08-cv-02134
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IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
TONI IVANOV,
individually and on behalf of a class,
Plaintiff,
v.
ALA CARTE ENTERTAINMENT, INC.
and EXCALIBUR CHICAGO, INC.,
and DOES 1-10,
Defendants.
)
)
)
)
)
)
)
)
)
)
)
)
08 C 2134
Judge Zagel
Magistrate Judge Mason
PLAINTIFF’S MOTION FOR CLASS CERTIFICATION
Plaintiff respectfully requests that this Court enter an order determining that this action
alleging violation of the Fair and Accurate Credit Transactions Act (“FACTA”) be certified as a
class action.
Plaintiff defines the class as “all persons to whom defendants provided an electronically
printed receipt at the point of sale or transaction, in a transaction occurring in Illinois after
December 4, 2006, which receipt displays either (a) more than the last five digits of the person’s
credit card or debit card number, or (b) the expiration date of the person’s credit or debit card, or
(c) both.”
Plaintiff further requests that Edelman, Combs, Latturner & Goodwin, LLC be appointed
one of the counsel for the class.
In support of this motion, plaintiff states as follows:
NATURE OF THE CASE
1.
One provision of FACTA, codified as 15 U.S.C. §1681c(g), provides that
No person that accepts credit cards or debit cards for the transaction of
business shall print more than the last 5 digits of the card number or the
expiration date upon any receipt provided to the cardholder at the point of
sale or transaction.
2.
15 U.S.C. §1681c(g) is not ambiguous. “The plain meaning of the statute is that a
1
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Case 1:08-cv-02134
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merchant shall not print more than the last 5 digits of the credit card number upon any receipt
and a merchant shall not print the expiration date upon any receipt. In other words, a retailer
must print no more than five digits of a card number, and a retailer must also remove the
expiration date from the credit card receipt. Printing either more than five digits of the credit
card number or the expiration date of the credit card violates Section 1681c(g).” Iosello v.
Leiblys, Inc., 502 F.Supp.2d 782, 786 (N.D.Ill. 2007); accord, Follman v. Hospitality Plus of
Carpentersville, Inc., 532 F.Supp.2d 960, 963 (N.D.Ill. 2007), and Cicilline v. Jewel Food
Stores, Inc., _____ F.Supp.2d _____, 2008 U.S. Dist. LEXIS 29501 (N.D.Ill. Mar. 31, 2008)
(rejecting claimed affirmative defenses based on First Amendment grounds).
3.
On May 27, 2007, plaintiff received from Excalibur, at its establishment located
at 632 North Dearborn Street, Chicago, Illinois, a computer-generated cash register receipt
which displayed both the expiration date and the full credit card number of plaintiff’s credit card.
4.
15 U.S.C. §1681c(g) is an essential protection against identity theft, which
according to the Federal Trade Commission victimized some 9 million persons and caused over
$57 billion in harm in 2006 alone. “Stevens ID Theft Prevention Act Passes Commerce
Committee,” States News Service, Apr. 25, 2007 (Exhibit A). One common modus operandi of
identity thieves is to collect lost or discarded credit card receipts, or steal them, and use the
information on them to engage in fraudulent transactions. Identity thieves who do this are
known as “carders” and “dumpster divers.” This is more common than the use of sophisticated
electronic means to obtain the information. Robin Sidel, “Identity Theft – Unplugged – Despite
the High-Tech Threat, When You Get Ripped Off It’s Usually Still the Old Way,” Wall Street
Journal, Oct. 5, 2006, p. B1 (Exhibit B).
5.
To curb identity theft, Congress prohibited merchants who accept credit cards and
debit cards from issuing electronically-generated receipts that display either the expiration date
or more than the last five digits of the card number. The law gave merchants who accept credit
and debit cards up to three years to comply. Full compliance was required by December 4, 2006.
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The need to “truncate” receipts was widely publicized among retailers. For
example, the CEO of Visa USA, Carl Pascarella, explained on March 6, 2003 that “Today, I am
proud to announce an additional measure to combat identity theft and protect consumers. Our
new receipt truncation policy will soon limit cardholder information on receipts to the last four
digits of their accounts. The card’s expiration date will be eliminated from receipts altogether....
The first phase of this new policy goes into effect July 1, 2003 for all new terminals....” “Visa
USA Announces Account Truncation Initiative to Protect Consumers from ID Theft; Visa CEO
Announces New Initiative at Press Conference With Sen. Dianne Feinstein,” PR Newswire,
March 6, 2003 (Exhibit C).
7.
The August 12, 2006 edition of “Rules for Visa Merchants” (Exhibit D,
p. 62), which is binding upon all merchants that accept Visa cards, similarly makes clear that
“only the last four digits of an account number should be printed on the customer’s copy of the
receipt” and “the expiration date should not appear at all.” VISA required complete compliance
by merchants accepting Visa card by July 1, 2006, five months ahead of the statutory deadline.
(Id.)
8.
Most of defendants’ business peers and competitors readily brought their
receipt printing process into compliance.
9.
A private remedy is provided by 15 U.S.C. §1681n, which provides as follows:
§1681n. Civil liability for willful noncompliance
(a) In general. Any person who willfully fails to comply with any requirement
imposed under this title [15 USC §§1681 et seq.] with respect to any consumer is
liable to that consumer in an amount equal to the sum of–
(1)
(A) any actual damages sustained by the consumer as a result of the
failure or damages of not less than $ 100 and not more than $ 1,000...
CLASS CERTIFICATION REQUIREMENTS
10.
All requirements of Rule 23(a) and (b)(3) of the Federal Rules of Civil Procedure
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have been met.
11.
On information and belief, there are at least 100 persons to whom
defendants provided an electronically printed receipt at the point of sale or transaction, in a
transaction occurring in Illinois after December 4, 2006, which receipt displays either (a) more
than the last five digits of the person’s credit card or debit card number, or (b) the expiration date
of the person’s credit or debit card, or (c) both. Defendants operate a nightclub which,
approximately six months after the effective date of 15 U.S.C. §1681c(g), issued non-compliant
receipts to plaintiff. The nightclub, located in a historic building in downtown Chicago, can hold
up to 1,000 people at a time. (Exhibit E.) Therefore, it is reasonable to conclude that more than
100 non-compliant receipts were issued by defendants during the class period.
12.
Plaintiff will obtain the exact number of class members through discovery, and
requests a briefing schedule long enough to obtain such information.
13.
There are questions of law and fact common to the class, which questions
predominate over any questions affecting only individual class members. The predominant
common questions include the following:
a.
Whether defendants had a practice of providing customers
with a sales or transaction receipt on which defendants printed more than the last five digits of
the credit or debit card, or the expiration date of the credit or debit card, or both;
14.
b.
Whether defendants thereby violated FACTA; and
c.
Whether defendants’ conduct was willful.
Plaintiff's claims are typical of those of the class members. All are based
on the same factual and legal theories.
15.
Plaintiff will fairly and adequately represent the class members. Plaintiff
has no interests that conflict with the interests of class members. Plaintiff has retained
experienced counsel. (Exhibit F.)
16.
A class action is superior for the fair and efficient adjudication of the class
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members' claims, in that:
17.
a.
Consumers are unlikely to recognize the violation; and
b.
Individual actions are uneconomical.
Courts have recently held that actions alleging willful FCRA violations and
seeking statutory damages are appropriate for class resolution. Cicilline v. Jewel Food Stores,
Inc., _____ F.Supp.2d _____, 2008 U.S. Dist. LEXIS 29505 (N.D.Ill. Mar. 31, 2008), Matthews
v. United Retail, Inc., 2008 U.S. Dist. LEXIS 17217 (N.D.Ill. Mar. 5, 2008), Harris v. Circuit
City Stores, Inc., 2008 U.S. Dist. LEXIS 12596 (N.D.Ill. Feb. 7, 2008), Halperin v. Interpark,
Inc., 2007 U.S. Dist. LEXIS 87851 (N.D.Ill. Nov. 29, 2007).
18.
In further support of this motion, plaintiff submits the accompanying
memorandum of law.
WHEREFORE, plaintiff respectfully requests that this Court enter an order determining
that this action may proceed as a class action.
Respectfully submitted,
s/ Thomas E. Soule
Thomas E. Soule
Daniel A. Edelman
Cathleen M. Combs
James O. Latturner
Thomas E. Soule
EDELMAN, COMBS, LATTURNER & GOODWIN, LLC
120 S. LaSalle Street, 18th Floor
Chicago, Illinois 60603
(312) 739-4200
(312) 419-0379 (FAX)
courtecl@edcombs.com
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IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
TONI IVANOV,
individually and on behalf of a class,
Plaintiff,
v.
ALA CARTE ENTERTAINMENT, INC.
and EXCALIBUR CHICAGO, INC.,
and DOES 1-10,
Defendants.
)
)
)
)
)
)
)
)
)
)
)
)
08 C 2134
Judge Zagel
Magistrate Judge Mason
MEMORANDUM IN SUPPORT OF
PLAINTIFF'S MOTION FOR CLASS CERTIFICATION
Plaintiff has requested that this Court enter an order determining that this action may
proceed as a class action against defendants. This memorandum is submitted in support of that
motion.
I.
NATURE OF THE CASE
Following Murray v. GMAC Mortgage Corp., 434 F.3d 948 (7th Cir. 2006), District
Judges have certified claims made under the Fair and Accurate Credit Transactions Act of 2003
(“FACTA”), as class actions. Cicilline v. Jewel Food Stores, Inc., _____ F.Supp.2d _____, 2008
U.S. Dist. LEXIS 29505 (N.D.Ill. Mar. 31, 2008), Matthews v. United Retail, Inc., 2008 U.S.
Dist. LEXIS 17217 (N.D.Ill. Mar. 5, 2008), Harris v. Circuit City Stores, Inc., 2008 U.S. Dist.
LEXIS 12596 (N.D.Ill. Feb. 7, 2008), Halperin v. Interpark, Inc., 2007 U.S. Dist. LEXIS 87851
(N.D.Ill. Nov. 29, 2007). See Claffey v. River Oaks Hyundai, Inc., 238 F.R.D. 464 (N.D.Ill.
2006) (Fair Credit Reporting Act litigation certified). Given the facts here, plaintiff respectfully
submits that this Court should reach the same conclusion.
A.
Plaintiff’s claims
Plaintiff filed this class action under the Fair Credit Reporting Act (“FCRA”), as
amended by FACTA, contending that defendants violated a provision designed to prevent
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identity theft. 15 U.S.C. §1681c(g) provides that “no person that accepts credit cards or debit
cards for the transaction of business shall print more than the last 5 digits of the card number or
the expiration date upon any receipt provided to the cardholder at the point of sale or
transaction.”
Defendants provided a non-compliant receipt to plaintiff on May 27, 2007 – almost six
months after §1681c(g) became effective. Plaintiff claims that this change in the law was widely
publicized, that defendants’ contracts contained images of what a receipt had to look like, and
that defendants’ non-compliance months after the effective date demonstrates that defendants
willfully violated the law. Discovery in this matter has not yet commenced; plaintiff respectfully
submits that the evidence will show that defendants violated FACTA willfully.
B.
The holdings of GMAC Mortgage support certification
GMAC Mortgage is on point supporting plaintiff’s arguments that a class should be
certified in this case. GMAC Mortgage held, in pertinent part, that:
1.
the class action procedure “was designed for situations such as this, in
which the potential recovery is too slight to support individual suits, but
injury is substantial in the aggregate” [GMAC Mortgage, 434 F. 3d at
953];
2.
statutory damages provide relief for actual losses that are small and hard
to quantify, without proof of injury [Id.]; and
3.
an award to the class “that would be unconstitutionally excessive may be
reduced.... but constitutional limits are best applied after a class has been
certified [when] a judge may evaluate the defendant’s overall conduct and
control its total exposure” [Id. at 954 (citing State Farm Mutual
Automobile Insurance Co. v. Campbell, 538 U.S. 408 (2003))].
These factors set forth by the Seventh Circuit clearly indicate that the matter before this
Court is suitable for class certification. Proof in this case is standardized – from the receipts that
were given to plaintiffs and other customers, to the hardware and software that produced them.
II.
STANDARD FOR CLASS CERTIFICATION
Class actions are essential to enforce laws protecting consumers. As the Court stated in
Eshaghi v. Hanley Dawson Cadillac Co., 214 Ill.App.3d 995, 574 N.E.2d 760 (1st Dist. 1991):
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In a large and impersonal society, class actions are often the last barricade of consumer
protection.... To consumerists, the consumer class action is an inviting procedural device
to cope with frauds causing small damages to large groups. The slight loss to the
individual, when aggregated in the coffers of the wrongdoer, results in gains which are
both handsome and tempting. The alternatives to the class action—private suits or
governmental actions—have been so often found wanting in controlling consumer frauds
that not even the ardent critics of class actions seriously contend that they are truly
effective. The consumer class action, when brought by those who have no other avenue
of legal redress, provides restitution to the injured, and deterrence of the wrongdoer. [Id.,
574 N.E.2d at 764, 766.]
Cases essentially the same as the present one, and brought by counsel who are
representing plaintiff here, were certified as class actions. In several of these cases, and others
listed in Exhibit F, plaintiff’s counsel has been appointed as class counsel, having been found
adequate under Fed.R.Civ.P. 23(a)(4).
Classes have been certified in a number of other FCRA cases as well. Wood v. Capital
One Auto Finance, 2006 U.S. Dist. LEXIS 67513 (E.D.Wis. Sept. 19, 2006). See also In re
Farmers Insurance Co., Inc., FCRA Litigation, 2006 U.S. Dist. LEXIS 27290 (W.D.Okla. Apr.
13, 2006); In re Trans Union Corp. Privacy Litigation, 2005 U.S. Dist. LEXIS 17548 (N.D.Ill.
August 17, 2005); Thomas v. NCO Financial Systems, Inc., 2004 U.S. Dist. LEXIS 5405
(E.D.Pa., March 31, 2004) (settlement; illegal “reaging” of old debts on credit reports); Perry v.
FleetBoston Financial Corp., 229 F.R.D. 105 (E.D.Pa. 2005) (settlement; illegal accessing of
credit reports); Clark v. Experian Information Solutions, Inc., 2004 U.S. Dist. LEXIS 28324
(D.S.C., Jan. 14, 2004) (settlement, improper reporting of debts); Ciccarone v. B. J. Marchese,
Inc., 2004 U.S. Dist. LEXIS 26489 (E.D.Pa., Dec. 14, 2004), later opinion, 2004 U.S. Dist.
LEXIS 25747 (E.D.Pa., Dec. 22, 2004) (settlement; alleged unauthorized accessing of consumer
reports); Stoner v. CBA Information Services, 352 F.Supp.2d 549 (E.D.Pa. 2005) (settlement;
alleged policy of refusing to investigate consumer disputes regarding items on their credit
reports); Ashby v. Farmers Ins. Co.,, 2004 U.S. Dist. LEXIS 21053 (D.Ore. Oct. 18, 2004) (class
certified in action alleging failure to give notice of adverse action); Braxton v. Farmer’s Ins.
Group, 209 F.R.D. 654 (N.D.Ala. 2002) (similar); White v. Imperial Adjustment Corp., 2002
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U.S. Dist. LEXIS 26610 (E.D.La., Aug. 6, 2002), affirmed by unpublished opinion, 2003
U.S.App. LEXIS 20162 (5th Cir., Oct. 2, 2003), later opinion, 2005 U.S.Dist. LEXIS 13382
(E.D.La., June 28, 2005) (impermissible accessing of consumer reports); and Mathews v.
Government Employees Ins. Co., 23 F.Supp.2d 1160 (S.D.Cal. 1998) (same).
In the present case, the critical issues are (a) whether defendants had a practice of
providing customers with a sales or transaction receipt on which defendants printed more than
the last five digits of the credit or debit card, or the expiration date of the credit or debit card, or
both; and (b) whether defendants thereby willfully violated FACTA. Such claims can be
resolved, in part or in whole, at summary judgment. Both of these inquiries are uniform with
respect to the entire class, and will be decided on facts that apply equally to all class members.
This Court has the discretion to adjust the statutory damages, if necessary, to address any
concerns about the size of a potential award to the class, after class certification is granted.
GMAC Mortgage held that a limitation on supposedly excessive damages, on due process
grounds, is best applied after a class has been certified . Then a judge may evaluate the
defendants’ overall conduct and control its total exposure. “Reducing recoveries by forcing
everyone to litigate independently—so that constitutional bounds are not tested, because the
statute cannot be enforced by more than a handful of victims—has little to recommend it.”
GMAC Mortgage, 434 F.3d at 954.
Furthermore, the possibility of excessive damages “might be invoked, not to prevent
certification, but to nullify that effect and reduce the aggregate damage award.” Parker v. Time
Warner Entertainment Co., 331 F.3d 13, 22, 27-28 (2d Cir. 2003); State of Texas v. American
Blast Fax, Inc., 164 F.Supp.2d 892 (W.D.Tex. 2001) (same).
III.
THE PROPOSED CLASS MEETS THE CERTIFICATION REQUIREMENTS
A.
Numerosity
Fed.R.Civ.P. 23(a)(1) requires that the class be “so numerous that joinder of all members
is impracticable.” “When the class is large, numbers alone are dispositive....”
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Barney, 113 F.R.D. 60, 62 (N.D.Ill.1986). Where the class numbers at least 40, joinder is
generally considered impracticable. Cypress v. Newport News General & Nonsectarian Hosp.
Ass’n, 375 F.2d 648, 653 (4th Cir. 1967) (18 sufficient); Swanson v. American Consumer
Industries, 415 F.2d 1326, 1333 (7th Cir. 1969) (40 sufficient); Riordan, supra, 113 F.R.D. 60
(10-29 sufficient); Philadelphia Electric Co. v. Anaconda American Brass Co., 43 F.R.D. 452,
463 (E.D.Pa. 1968) (25 sufficient); Sala v. National R. Pass. Corp., 120 F.R.D. 494, 497
(E.D.Pa. 1988) (40-50 sufficient); Scholes v. Stone, McGuire & Benjamin, 143 F.R.D. 181, 184
(N.D. Ill. 1992) (about 70). It is not necessary that the precise number of class members be
known. “A class action may proceed upon estimates as to the size of the proposed class.” In re
Alcoholic Beverages Litigation, 95 F.R.D. 321 (E.D.N.Y. 1982); Lewis v. Gross, 663 F. Supp.
1164, 1169 (E.D.N.Y. 1986).
Here, the class size is currently unknown; plaintiff will seek in discovery to ascertain the
exact number of class members. However, defendants operate a nightclub in downtown Chicago
with a large capacity. (See Motion, ¶11 and Exhibit E.) Defendants provided to plaintiff
receipts which did not comply with FACTA almost six months after the effective date of the
provision at issue. Given the size of the establishment and the length of the class period,
plaintiff suggests that the class is no smaller than 100 individuals; this would satisfy the
numerosity requirement of Fed.R.Civ.P. 23(a)(1).
B.
Predominance of common questions of law or fact
Fed.R.Civ.P. 23(a)(2) requires that there be a common question of law or fact. Rule
23(b)(3) requires that the questions of law or fact common to all members of the class
predominate over questions pertaining to individual members.
These requirements are normally satisfied when there is an essential common factual link
between all class members and the defendant for which the law provides a remedy. Halverson v.
Convenient Food Mart, Inc., 69 F.R.D. 331 (N.D. Ill. 1974). Where a question of law involves
“standardized conduct of the defendant toward members of the proposed class, a common
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nucleus of operative facts is typically presented, and the commonality requirement... is usually
met.” Franklin v. City of Chicago, 102 F.R.D. 944, 949 (N.D.Ill. 1984); Patrykus v. Gomilla,
121 F.R.D. 357, 361 (N.D.Ill. 1988). The authorities hold that cases dealing with the legality of
standardized documents or conduct are generally appropriate for resolution by means of a class
action because the document or conduct is the focal point of the analysis. Halverson, 69 F.R.D.
331; Haroco v. American Nat’l Bank, 121 F.R.D. 664, 669 (N.D. Ill. 1988) (improper
computation of interest); Kleiner v. First Nat’l Bank, 97 F.R.D. 683 (N.D.Ga. 1983) (same);
Heastie v. Community Bank, 125 F.R.D. 669 (N.D.Ill. 1989) (execution of home improvement
financing documents in sequence that evaded consumers’ rescission rights). This is true even
though the nature and amount of damages may differ among the members of the class. Id.
In this case, the “common nucleus of operative fact,” Halverson, 69 F.R.D. at 335, is that
defendants provided to plaintiff and the class members noncompliant receipts. The dispositive
issues – indeed, the only issues – are (1) whether the material provided to plaintiff complies with
15 U.S.C. §1681c(g), and (2) whether defendants violated the FCRA willfully.
The alleged failure to comply with FACTA is the same for each person who received a
noncompliant receipt; thus, each class member has the same claim. GMAC Mortgage held that
this sort question does not call for any sort of individualized inquiry. Accordingly, the questions
of whether noncompliant receipts were provided and whether the FACTA violation was willful
depends on facts involving defendants’ activities, and not the activities of plaintiff or class
members.
The only individual issue is the identification of the consumers who were provided with a
noncompliant receipt. Defendants will be asked to produce a class list, through discovery
requests. At any rate, identification of class members is not an obstacle to class certification.
Heastie v. Community Bank, supra, 125 F.R.D. 669 (N.D.Ill. 1989) (court found that common
issues predominated where individual questions of injury and damages could be determined by
“merely comparing the contract between the consumer and the contractor with the contract
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between the consumer and Community Bank”); Wilkinson v. F.B.I., 99 F.R.D. 148, 157
(C.D.Cal. 1983) (“a need for individual proof of damages would not preclude class certification.
The amount of damages is invariably an individual question and does not defeat class
treatment.’”); Franklin, 102 F.R.D. at 949 (similar).
C.
Typicality
Rule 23 requires that the claims of the named plaintiff be typical of the claims of the
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. The typicality requirement may be satisfied even if there
are factual distinctions between the claims of the named plaintiffs and those of other class
members. Thus, similarity of legal theory may control even in the face of differences of
fact. [De La Fuente v. Stokely-Van Camp, Inc., 713 F.2d 225, 232 (7th Cir. 1983)
(citation omitted).]
In the instant case, typicality is inherent in the class definition. Each of the class
members has been subjected to the same practice as the named plaintiff.
D.
Adequacy
The rule also requires that the named plaintiff provide fair and adequate protection for the
interests of the class. That protection involves two factors: (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. Rosario v. Livaditis, 963 F.2d 1013,
1018 (7th Cir. 1992); accord, Wetzel v. Liberty Mutual Ins. Co., 508 F.2d 239, 247 (3d Cir.
1975); In re Alcoholic Beverages Litigation, 95 F.R.D. 321.
Plaintiff understands the obligations of a class representative, and has retained
experienced counsel, as is indicated by Exhibit F, which sets forth counsel’s qualifications.
Plaintiff’s counsel brought the seminal GMAC Mortgage case, the opinion in which has been
relied upon by many judges in this Circuit. As listed in Exhibit F, several Courts have certified
FCRA and FACTA class actions, finding plaintiff’s same counsel adequate. Plaintiff’s counsel
has also been approved as class counsel in scores of additional consumer protection cases. (Id.)
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Another relevant consideration under Rule 23(a)(4) is whether the interests of the named
plaintiff are coincident with the general interests of the class. Here, both plaintiff and the class
members seek money damages as the result of defendants’ violation of the FCRA. Given the
identity of claims between plaintiff and the class members, there is no potential for conflicting
interests in this action. There is no antagonism between the interests of the named plaintiff and
those of the class.
E.
Superiority
In GMAC Mortgage, the Seventh Circuit held that cases such as this one, where hundreds
of people have exactly the same claim, are well-suited for class resolution:
[Fed.R.Civ.P] 23(b)(3) was designed for situations such as this, in which the potential
recovery is too slight to support individual suits, but injury is substantial in the aggregate.
See, e.g., Mace v. Van Ru Credit Corp., 109 F.3d 338, 344-345 (7th Cir. 1997). Reliance
on federal law avoids the complications that can plague multi-state classes under state
law, see In re Bridgestone/Firestone, Inc., Tires Products Liability Litigation, 288 F.3d
1012 (7th Cir. 2002), and society may gain from the deterrent effect of financial awards.
The practical alternative to class litigation is punitive damages, not a fusillade of smallstakes claims. See Mathias v. Accor Economy Lodging, Inc., 347 F.3d 672 (7th Cir.
2003). [GMAC Mortgage, 434 F.3d at 953.]
Generally speaking, efficiency is the primary focus in determining whether the class
action is the superior method for resolving the controversy presented. Eovaldi v. First Nat’l
Bank, 57 F.R.D. 545 (N.D. Ill. 1972). The Court is required to determine the best available
method for resolving the controversy in keeping with judicial integrity, convenience, and
economy. Scholes, 143 F.R.D. at 189; Hurwitz v. R.B. Jones Corp., 76 F.R.D. 149 (W.D.Mo.
1977). It is proper for a court, in deciding the “best” available method, to consider the
“....inability of the poor or uninformed to enforce their rights, and the improbability that large
numbers of class members would possess the initiative to litigate individually.” Haynes v.
Logan Furniture Mart, Inc., supra, 503 F.2d 1161, 1165 (7th Cir. 1974).
In this case there is no better method available for the adjudication of the claims which
might be brought by each individual consumer. The vast majority of consumers are undoubtedly
unaware that their rights are being violated. Furthermore, the filing of hundreds, or thousands,
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of FCRA suits against defendants would be unduly burdensome to the Courts; judicial efficiency
would be greatly promoted through the adjudication of identical claims through a single
proceeding.
The fact that there are large numbers of class members “is no argument at all” against
certification. Carnegie v. Household Int’l, Inc., 376 F.3d 656, 660-61 (7th Cir. 2004). “The
more claimants there are, the more likely a class action is to yield substantial economies in
litigation. It would hardly be an improvement to have in lieu of this single class action 17
million suits each seeking damages of $15 to $30.... The realistic alternative to a class action is
not 17 million individual suits, but zero individual suits, as only a lunatic or a fanatic sues for
$30. But 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.” Id. GMAC Mortgage concurred with this
view, finding that:
reducing recoveries by forcing everyone to litigate independently—so that constitutional
bounds are not tested, because the statute cannot be enforced by more than a handful of
victims—has little to recommend it. [GMAC Mortgage, 434 F.3d at 954.]
The special efficacy of the consumer class action has been noted by the courts and is
applicable to this case. In re Folding Carton Antitrust Litigation, 75 F.R.D. 727, 732 (N.D. Ill.
1977), noted that
a class action permits a large group of claimants to have their claims adjudicated in a
single lawsuit. This is particularly important where, as here, a large number of small and
medium sized claimants may be involved. In light of the awesome costs of discovery and
trial, many of them would not be able to secure relief if class certification were denied . .
. . (Citations omitted.)
Furthermore, Lake v. First Nationwide Bank, 156 F.R.D. 615, 628-629 (E.D.Pa 1994)
held that,
given the relatively small amount recoverable by each potential litigant, it is unlikely
that, absent the class action mechanism, any one individual would pursue his claim, or
even be able to retain an attorney willing to bring the action. As Professors Wright,
Miller and Kane have discussed, in analyzing consumer protection class actions such as
the instant one, ‘typically the individual claims are for small amounts, which means that
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the injured parties would not be able to bear the significant litigation expenses involved
in suing a large corporation on an individual basis. These financial barriers may be
overcome by permitting the suit to be brought by one or more consumers on behalf of
others who are similarly situated.’ 7B Wright et al., §1778, at 59; see e.g., Phillips
Petroleum Co. v. Shutts, 472 U.S. 797, 809 (1985) (‘Class actions . . . may permit the
plaintiff to pool claims which would be uneconomical to litigate individually.’) The
public interest in seeing that the rights of consumers are vindicated favors the disposition
of the instant claims in a class action form.
Class certification will provide an efficient and appropriate resolution of the controversy.
Zanni v. Lippold, 119 F.R.D. 32, 35 (C.D.Ill. 1988).
IV.
CONCLUSION
The proposed class meets the requirements of Rules 23(a) and 23(b)(3). Plaintiff
respectfully requests that this Court certify a class as set forth above.
Respectfully submitted,
s/Thomas E. Soule
Thomas E. Soule
Daniel A. Edelman
Cathleen M. Combs
James O. Latturner
Thomas E. Soule
EDELMAN, COMBS, LATTURNER & GOODWIN, LLC
120 S. LaSalle Street, 18th Floor
Chicago, Illinois 60603
(312) 739-4200
(312) 419-0379 (FAX)
courtecl@edcombs.com
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STEVENS ID THEFT PREVENTION ACT PASSES COMMERCE COMMITTEE States News Service April 25, 2007
Wednesday
14 of 257 DOCUMENTS
Copyright 2007 States News Service
States News Service
April 25, 2007 Wednesday
LENGTH: 351 words
HEADLINE: STEVENS iD THEFT PREVENTION ACT PASSES COMMERCE COMMITTEE
BYLINE: States News Service
DATELINE: WASHINGTON
BODY:
The following information was released by Senate Committee on Commerce, Science and Transportation:
The Senate Committee on Commerce, Science and Transportation today passed S. 1178 the "Identity Theft
Prevention Act." Committee Vice Chairman Senator Ted Stevens (R-Alaska) introduced the legislation and it is
cosponsored by Commerce Committee Chairman Daniel Inouye (D-Hawaii), Senator Gordon Smith (R-Ore.) and
Senator Mark Pryor (D-Ark.) and Senator Bill Nejson (D-FL). This bid would strengthen information safeguards and
ensure notification to consumers whose sensitive personal information has been acquired without authorization. The bill
would atso direct the Federal Trade Commission (FTC) to enforce rules to protect such information. Under the bill,
consumers would be able to freeze their credit for a reasonable ise to protect themselves from identity theft. The bill
now moves fo the Senate where it awaits consideration.
"ID theft is a growing problem that plagues Americans in the far reaches of our nation and everywhere in between,"
said Senator Stevens. "Studies of identity theft show that Alaskans are particularly susceptible to this criminal activity.
it is time for Congress to act. We must take steps to belp people protect themselves. | urge the Senate to take up this bill,
which has received broad bipartisan support, and pass it quickly.”
Identity theft has risen dramatically nationwide over the past decade and the FTC estimates that each year nearly 9
million Americans - or roughly 4.6 percent of the domestic adult population - are victimized by identity thieves. The
FTC indicates that physical and online identity theft accounted for 40 percent of the more than 616,000 consumer fraud
complaints filed last year with the agency. ‘The costs associated with identity theft are enormous. In 2006, it is
estimated that the losses to businesses and financial institutions due to identity theft totaled $52.6 billion, and the out-
of-pocket losses to consumers totaled $5 billion, which does not take into account the average 300 hours spent by each
victim to restore their good name.
LOAD-DATE: April 26, 2007
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Identity Theft - Unplugged --- Despite the High-Tech Threat, When You Get Ripped Off It's Usually Still the Old Way
The Wall Street Journal October 8, 2005 Saturday
7 of 4 DOCUMENTS
Copyright 2005 Factiva, a Dow Jones and Reuters Company
All Rights Reserved
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factiva.
THE WALL STREET JOURNA
The Wall Street Journal
October 8, 2005 Saturday .
SECTION: Pg. Bi
LENGTH: 1438 wards
HEADLINE; Identity Theft ~- Unplugged --- Despite the High-Tech Threat, When You Get Ripped Off It's Usually
Stitl the Old Way
BYLINE: By Robin Sidel
BODY:
WORRIED THAT shadowy gangs of Russian hackers are breaking into computer networks, stealing your financial
secrets? Don't lose too much sleep over it,
But you might want to hide your checkbook when friends and relatives come visit your home.
Despite a series of alarming reports in recent months about security breaches that have made persenal data
potentially vulnerabie to crooks — such as the one at credit-card processor CardSystems Solutions Inc. affecting 40
million credit-card accounts —- most bank-related crimes remain stubbornly low-tech. They range from simple forgery of
a check, to unauthorized credit-card use, to Dumpster-diving, which is when someone plucks a bank statement or credit-
card bill froma your garbage.
And the perpetrator probably may not be a stranger.
According to one recent study, by Javelin Strategy & Research, a consulting firm in Pleasanton, Calif., in 26% of
all cases the fraud victims knew the person who had misused their personal information. (Typically it was a family
member, friend or neighbor, or in-home employee.) In addition, as much as 50% of debit-card fraud occurs when a card
is snagged by a family member or friend who knows the card's personal-identification number, according to a recent
report from TowerGroup, a unit of MasterCard International Inc.
‘The term “identity theft" is often used loosely to describe a wide array of crimes, But true identity theft occurs
wher someone uses stolen information to create a new form of identity, such as opening a new credit-card account
under the victim's name. That differs significantly from other kinds of bank fraud, such as when a criminal uses a stolen
ATM card to get cash out of a teller machine.
Whether it's full-blown ID theft or small-scale fraud, even in cases where the criminal is a stranger, it's almost never ~-
a case of sophisticated computer hacking. Although 75% of all households use the Internet and 65% of those do some:
online banking, "most criminals obtain personal information through traditional rather than electronic channels,”
according to the Javelin study. Some 29% of victims surveyed said their personal information was obtained through a
lost or stolen wallet, checkbook or credit card.
According to the study, the bulk of the rest were attributed to friends and relatives, corrupt employees, stolen mail,
Dumpster-diving, and computer spyware. Computer viruses or hackers accounted for only 2.2% of incidents, While
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Identity Theft -- Unplugged ~~ Despite the High-Tech Threat, When You Get Ripped Off it's Usually Stil the Old Way
The Wall Street Journal October 8, 2005 Saturday
there has been a significant increase in the number of electronic attempts at identity theft, “the ones that are working
are the traditional ones,” said James Van Dyke, Javelin's president.
The Federal Trade Commission itself defines identity theft broadly, describing it as when someone possesses or
uses @ person's personal or financial information without their knowledge with the intent of committing fraud or other
crimes.
The commission estimates that identity theft affects nearly 5% of the adult population, costing businesses and
individuals a combined $53 billion annually, It received 246,000 reports of identity theft last year, nearly triple the
number received in 2001, The FTC has attributed much of that tise to heightened awareness of the issue among
consumers, making them more likely to report Incidents as identity theft,
Overall, statistics on identity theft are spotty. For one thing, research has found that most victims of identity theft
don't report the crime to police. In many cases, they aren't even certain that they are truly crime victims and don't know
how the incident occurred. Banks increasingly alert authorities when incidents occur, but even those disclosures can be
incomplete,
There are a number of steps individuals can take to protect thernselves.
Many financial institutions are increasingly urging their clients to start using paper shredders at home, Household
models can be relatively inexpensive, and they significantly reduce the chances that a criminal can find any useful
personal information in the trash. Banks typically recommend shredding documents that contain account information,
Social Security numbers, credit-card and ATM receipts and credit-card offers. Also, shred blank checks that sometimes
come in the mail as part of a solicitation,
Another suggestion; Be particularly aware if credit-card bills or bank statements are missing from the mailbox. Ifa
bill arrives more than two weeks late, the American Bankers Association suggests contacting the local post office to be
sure it isn't being forwarded without the recipient's knowledge. Also check with the company where the bill originated.
It's also wise to avoid disclosing any personal information on forms or applications unless absolutely necessary,
says Mike Cunningham, senior vice president in the credit-card fraud department at J.P, Morgan Chase & Co.
Asan example, Mr. Cunningham says, he was recently filling out an application to be a coach on his son’s
neighborhood football team in Arizona, and the form asked for his social security number, driver's license number and
other personal information. He dectined to provide the information, because there was no way for him to know whether
his personal information would be kept under lock and key.
"! just told the team mom that | didn't see why they needed it -~ it was the perfect amount of information for an
identity thief," he said. He got the job anyway.
The only organizations you're required to provide with your social security number are your employer and your
financial institutions. (This is for tax purposes.) If anyone else asks -- say, a retailer -- you don't have to give it, The
company can decline to provide the service, but i's worth asking what other identification they might accept instead.
Amid the proliferation of old-fashioned fraud, some financial institutions are fighting back by urging their
customers to abandon paper statements altogether and instead view their accounts online. Among them is E*Trade
Financial Corp., which says its online system is more secure than paper statements that can be stolen or copied, A
spokeswoman declined to specify how much money the company wil! save by eliminating the printing and mailing of
paper statements,
Banks are having a particularly tough time battling one of the oldest and most common kinds of crime: check fraud,
Attempts of check fraud rose to $5.5 billion in 2003 from $4.3 billion in 2001, according to the American Bankers
Association. The incidents resulted in losses of $677 million, representing a slight decline from $698 million in 2001;
the trade group attributed the drop to better fraud-detection methods.
That slight decline isn't so reassuring to Lee Roberts, senior vice president at National Penn Bancshares Inc.,a “7
regional bank based in Boyertown, Pa. As recently as the past few weeks, the bank has been hit by a wave of incidents ~
in which criminals have copied checks and then altered them for fraudulent use. That practice "has been around for
seven or eight years," says Mr. Roberts. But as photocopiers and image-manipulation computer software become more
sophisticated, he says, "they're getting better af it.”
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Identity Theft -- Unplugged --- Despite the High-Tech Threat, When You Get Ripped Off It’s Usually Still the Old Way
The Wall Street Journal October 8, 2005 Saturday
Battling Identity Theft
Despite all the buzz about high-tech online identity theft, most instances
revolve around old-fashioned fraud such as forging a signature on a check.
Here are steps for reducing the risk:
-- Check up on yourself regularly
Get a copy of your credit report every year from each of the major credit
bureaus (TransUnion, Equifax, Experian) to make sure the records are
accurate. Also, closely review all monthly bank and billing statements for
discrepancies.
-~- Travel light
avoid carrying around credit-card or personal documents unless you reatly
need them.
-- Keep personal data under wraps
Don't share personal ID numbers or passwords with anyone. Don't provide
information over the phone or hand over personal data unless you know why if
is needed, Keep a list of all account numbers in a secure place so that you
have quick access if cards or documents gel stolen or lost.
-- Buy a shredder for the home
Tear up or shred all credit-card receipts and all new-card offers that
arrive in mail. Also destroy all documents that contain account numbers or
other personal financial information.
-- Check the mail
pon't Let mail sit in the mailbox for days on end. And don't place
sensitive outgoing mail, such as bills, in your home mailbox to await
collection. Instead, drop it in a collection box.
Sources: Federal Trade Commission, American Bankers Association
NOTES:
PUBLISHER: Dow Jones & Company, inc.
LOAD-DATE: October 8, 2003
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Page 17
Visa USA Announces Account Truncation Initiative to Protect Consumers from ID Theft; Visa CEO Announces New
Initiative at Press Conference With Sen. Dianne Feinstein PR Newswire March 6, 2003 Thursday
6 of 9 DOCUMENTS
Copyright 2003 PR Newswire Association, Inc.
PR Newswire
March 6, 2003 Thursday
SECTION: WASHINGTON DATELINE
DISTRIBUTION: TO BUSINESS AND NATIONAL EDITORS
LENGTHS: 774 words
HEADLINE: Visa USA Announces Account Truncation initiative to Protect Consumers from ID Theft;
Visa CEO Announces New Initiative at Press Conference With Sen. Dianne Feinstein
DATELINE: WASHINGTON March 6
BODY:
Ata press conference today on Capitol Hill with Senators Dianne Feinstein (D-CA), Judd Gregg (R-NH)}, Jon
Corzine (D- NJ) and Patrick Leahy (D-VT), Visa USA CEO Carl Pascarella, announced Visa USA's new account
truncation program to protect consumers from identity theft. The following are excerpts of Mr. Pascarella's remarks:
"Tam here today to talk about the steps that Visa is taking to put identity theft protections in place. Visa USA and
our Member financial institutions have a long history of using state of the art technology to further protect cardholder
information. Visa was the first payments company to adopt a zero Hability policy for unauthorized purchases, and we've
continued this leadership role with Verified by Visa, which authenticates cardholders for Internet purchases, and our
sophisticated neural networks that monitor spending anomafies.
"We have also implemented our Cardholder Information Security Program, OF CISP, a set of 12 requirements for
protecting cardholder data for which all Visa payment system participants need to comply, In fact, Visa is adding more
resources to our auditing process to ensure any entity that touches a Visa transaction Will be comptiant with our
Cardholder Information Security Program rules. The CISP ‘Digital Dozen' was the first set of standards within the
payments industry for protecting cardholder data and served as a best practices model by the G-8 conference on cyber-
crime in Tokyo.
“Today, 1 am proud te announce an additional measure to combat identity theft and protect consumers. Our new
receipt truncation policy will soon limit cardholder information on receipts to the last four digits of their accounts. The
card's expiration date will be eliminated from receipts altogether- This ig an added security measure for consumers that
doesn't require any action by the cardholder. We are proud to be the first payments brand to announce such a move fo
protect cardholders’ identities by restricting access to their account information on receipts.
“The first phase of this new policy goes into effect July 1, 2003 for al} new terminals. { would like to add, however,
that even before this policy goes into effect, many merchants have already voluntarily begun truncating receipts, thanks
to groundwork that we began together several years ago.
"Receipt truncation is good news for consumers, and bad news for identity thieves. identity thieves thrive on
discarded receipts and documents containing consumers! information such as payment account numbers, addresses,
Social Security numbers, and more. Visa's new policy will protect consumers by limiting the information these thieves
can access, . wae
Visa's new receipt truncation measure builds upon our other security measures | mentioned, zero liability
cardholder protection, Verified by Visa, neural networks and the Cardholder Information Security Program.
*Our receipt truncation policy is the latest initiative jn Visa's broader identity theft consumer protection effort. |
can't go into the details at the moment, but we will be announcing a series of additional steps to combat identity theft
and offer tools fo consumers.
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Visa USA Announces Account Truncation Initiative to Protect Consumers from ID Theft; Visa CEO Announces New
Initiative at Press Conference With Sen. Dianne Feinstein PR Newswire March 6, 2003 Thursday
"isa is focused on maintaining the trust we have earned through our security leadership, Because there is no silver
bulfet to eliminate identity theft, we are constantly adding new layers of security to protect cardholders. As a result of
these, and many other security measures, fraud within the Visa system has fallen to an all-time low of just 7 cents per
$100 transacted.
"Visa USA is pleased to be working with Senator Feinstein, and the other senators here today in the fight to protect
consumers from identity theft. We look forward to continuing our joint efforts; after all, we share the same goals."
About Visa
Visa is the world's leading payment brand and largest consumer payment system, enabling banks to provide their
consumer and merchant customers with a wide variety of payment alternatives. Nearly 21,000 financial institutions
worldwide rely on Visa's processing system, VisaNet, to facilitate $2.4 trillion in annua} transaction volume with
virtually 100 percent reliability. Consumers in more than 4150 countries carry more than one billion Visa-branded cards,
accepted at 30 million locations around the world. Within the United States, nearly 14,000 financial institutions issue
more than 385 million Visa cards, accounting for $970 billion in annual transaction volume, Visa offers a trusted,
reliable and convenient way fo access and mobilize financial resources -- anytime, anywhere, anyway. For more
information about Visa, please visit htip/Ayww.visa.com .
SOURCE Visa USA
CONTACT: Adam Bromberg, +4-703-683-5004, ext. 102, for Visa USA
URL: http:/Awww.prnewswire.com
LOAD-DATE: March 7, 2003
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Rules for Visa Merchants
Card Acceptance and Chargeback
Management Guidelines
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PSECTION FIVE: SOPY REQUESTS
Transaction Receipt Requirements—
Card-Present Merchants
The following are Visa requirements for all transaction recelpts generated from
electronic point-of-sale terminals (including cardholderactivated terminals).
Electronic Point-of-sale Terminal Receipts
Merchant or member name and location,
or the city and state of the Automated
Dispensing Machine or Self-Service Terminal
L
Truncated Account Number
Visa requires that all new
Transaction Date XYZ SHOES electronic POS terminals
\ 1040 PARK ST provide account number
ANYTOWN, CA 94561 f truncation on transaction
Merchant PHONE # (000)555-5555 receipts, This means that only
Location Code .. | Nov 10, 2005 12:30PM the last four digits of an account
| . number should be printed on the
Effective November 2, 2005, MERCH ID: 08233004 customer's copy of the receipt
the payment brand used to
complete the transaction REF # ; 003 In addition, the expiration
must be identified on the ACT fo: RERRHERAA*ERE 220 date should net appear at all.
cardholder's copy of the EXP} XX/XX Gen nmmmnnion Existing POS terminals must
| transaction receipt, i CARD : VISA comply with these requirements
$21.69 by July 1, 2006, To ensure your
XN POS terminals are properly set
Authorization Code, ff up for account number trunca-
——» APPROVAL CODE: O35789
Levon Pebmment Service TRAN LD: VGF7ET800815 rn contact your merchant
Transactions.
I AGREE TO PAY ABOVE Transaction Amount
Space for Cardholder TOTAL AMOUNT ACCORDING
Signature, except for: TO CARD ISSUER AGREEMENT
Transactions in which the
PIN isan acceptable 9 ~~~" X
substitute for Cardholder SIGNATURE:
signature
* Limited-Amount Terminal THANK YOU
Transactions CARDHOLDER COPY a
SelfService Terminal
Transactions
Exoress Payment Service
Transactions
62 Rutes for Visa Marchants—Card Acceptance and Chargeback Management Guldelines
DRICG Visu USA. Inc., all ribhts reserved, t9 he usad solely for the numose of providing Vise Card accaplonca services 23 authorized pursuant to agreement with & Yisz member Gnanciat jasttuilon.
Case 1:08-cv-02134 Document 11-3 Filed 05/06/2008
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Welcome to Excalibur's Special Event Guide
Thank you for your interest in Excaiibur’s banquet and catering services. In this section
you will find our menus, floor plans, photos and other information to be used as a
quideline for planning your event,
We are pleased to introduce our specialized event services to you. What distinguishes
Excalibur from restaurants and hotels is our unique landmark building, with its dramatic
interior and exterior, and the personal service we offer our guests, from planning through
execution. Our staff will work with you every step of the way lo make sure your event is
truly memorable.
Since 1989, Excalibur’s excellent food, top quality service, and unique environment have
earned numerous accolades. Whether it's a company cocktail reception, holiday gaia,
corporate meeting, fundraiser, bar/bat mitzvah, or wedding reception, we offer numerous
distinctive spaces of various sizes that can accommodate almost any event, from intimate
gatherings to groups of 1,000 or mere. Excalibur also offers unmatched audio, video,
sound and lighting systems that can transform any event into a truly extraordinary
experience.
Amenities include a full production kitchen, comprehensive A/V capabilities for meetings
and presentations, multiple dance floors, billiards room, game arcade room and valet
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Excalibur is located in the heart of the River North neighborhood, the epicenter of world-
class dining and entertainment in Chicago. The striking red granite building, designed by
famed architect Henry lves Cobb in 1892 to house the Chicago Historical Society, is
recognized as an architectural treasure and has been honored with designation as a
Chicago historical landmark.
We invite you to examine our many special event options and arrange to tour Excalibur,
so you can familiarize yourself with our unique facility and the many options that are
available for your special event.
Get an inside view of Excalibur! Click here to see the floorplan layouts!
Click here to jog on to Excalibur's web site.
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Case 1:08-cv-02134 Document11-3 Filed 05/06/2008 Page 11 of 21
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
TONI IVANOV, }
individually and on behalf of a class, )
)
Plaintiff, )
)
Vv. ) 08 C 2134
) Judge Zagel
ALA CARTE ENTERTAINMENT, INC.) Magistrate Judge Mason
and EXCALIBUR CHICAGO, INC., )
and DOES 1-10, )
)
Defendants. }
DECLARATION OF DANIEL A. EDELMAN
Daniel A. Edelman declares under penalty of perjury, as provided for by the laws
of the United States (28 U.S.C. §1746), that the following statements are true:
1. Edelman, Combs, Latturner & Goodwin, LLC, has 5 principals, Daniel A.
Edelman, Cathleen M. Combs, James O. Latturner, Tara L. Goodwin, and Michelle R. Teggelaar
and 9 associates.
2. Daniel A. Edelman is a 1976 graduate of the University of Chicago Law
School. From 1976 to 1981 he was an associate at the Chicago office of Kirkland & Ellis with
heavy involvement in the defense of consumer class action litigation (such as the General Motors
Engine Interchange cases). In 1981 he became an associate at Reuben & Proctor, a medium-
sized firm formed by some former Kirkland & Ellis lawyers, and was made a partner there in
1982. From the end of 1985 he has been in private practice in downtown Chicago. Virtually all
of his practice involves litigation on behalf of consumers, mostly through class actions. He is the
co-author of Rosmarin & Edelman, Consumer Class Action Manual (2d-4th editions, National
Consumer Law Center 1990, 1995 and 1999); author of Payday Loans: Big Interest Rates and
Little Regulation, 11 Loy.Consumer L,Rptr. 174 (1999); author of Consumer Fraud and
Insurance Claims, in Bad Faith and Extracontractual Damage Claims in Insurance Litigation,
Chicago Bar Ass'n 1992; co-author of Chapter 8, "Fair Debt Collection Practices Act," Ohio
Consumer Law (1995 ed.); co-author of Fair Debt Collection; The Need for Private
Enforcement, 7 Loy.Consumer L.Rptr. 89 (1995); author of An Overview of The Fair Debt
Collection Practices Act, in Financial Services Litigation, Practicing Law Institute (1999); co-
author of Residential Mortgage Litigation, in Financial Services Litigation, Practicing Law
Institute (1996); author of Automobile Leasing: Problems and Solutions, 7 Loy.Consumer
psu
Blumberg No. 5208
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Case 1:08-cv-02134 Document11-3 Filed 05/06/2008 Page 12 of 21
L.Rptr. 14 (1994); author of Current Trends in Residential Mortgage Litigation, 12 Rev. of
Banking & Financial Services 71 (April 24, 1996); author of Applicability of Illinois Consumer
Fraud Act in Favor of Out-of-State Consumers, 8 Loy.Consumer L.Rptr. 27 (1996); co-author of
IHinois Consumer Law (Chicago Bar Ass'n 1996); co-author of D. Edelman and M. A. Weinberg,
Attorney Liability Under the Fair Debt Collection Practices Act (Chicago Bar Ass'n 1996);
author of The Fair Debt Collection Practices Act: Recent Developments, 8 Loy.Consumer L.
Rptr. 303 (1996); author of Second Mortgage Frauds, Nat'l Consumer Rights Litigation
Conference 67 (Oct. 19-20, 1992); and author of Compulsory Arbitration of Consumer Disputes,
Nat'l Consumer Rights Litigation Conference 54, 67 (1994), He is a member of the Illinois bar
and admitted to practice in the following courts: United States Supreme Court, Seventh Circuit
Court of Appeals, First Circuit Court of Appeals, Second Circuit Court of Appeals, Third Circuit
Court of Appeals, Fifth Circuit Court of Appeals, Eighth Circuit Court of Appeals, Ninth Circuit
Court of Appeals, Tenth Circuit Court of Appeals, Eleventh Circuit Court of Appeals, United
States District Courts for the Northern and Southern Districts of Indiana, United States District
Courts for the Northern, Central, and Southern Districts of Dlinois, United States District Court
for the District of Arizona, United States District Court for the District of Connecticut, and the
Supreme Court of Illinois. He is a member of the Northern District of Illinois trial bar.
3. Cathleen M. Combs is a 1976 graduate of Loyola University Law
School. She formerly supervised the Northwest office of the Legal Assistance Foundation of
Chicago, where she was lead or co-counsel in class actions in the areas of unemployment
compensation, prison law, social security law, and consumer law. She joined what is now
Edelman, Combs & Latturner in early 1991. Decisions in which she was involved prior to
joining the firm include: Johnson vy. Heckler, 607 F.Supp. 875 (N.D.Il. 1984), and 100 F.R.D.
70 (N.D. Ill. 1983); Sanders v. Shephard, 185 TH. App.3d 719, 541 N.B.2d 1150 (1st Dist. 1989);
Maller v. Cohen, 176 Ill_App.3d 987, 531 N.E.2d 1029 (1st Dist. 1988); Wright v. Department of
Labor, 166 Ill. App.3d 438, 519 N.E.2d 1054 (Ist Dist. 1988); Barron v. Ward, 165 Tl. App.3d
653, 517 N.E.2d 591 (1st Dist, 1987); City of Chicago v. Leviton, 137 Ill_App.3d 126, 484
N.E.2d 438 (1st Dist. 1985); Jude v. Morrissey, 117 UL App.3d 782, 454 N.E.2d 24 (1st Dist.
1983). She is a member of the Northern District of Ilinois trial bar.
4, James O. Latturner is a 1962 graduate of the University of Chicago Law
School. Until 1969, he was an associate and then a partner at the Chicago law firm of Berchem,
Schwanes & Thuma. From 1969 to 1995 he was Deputy Director of the Legal Assistance
Foundation of Chicago, where he specialized in consumer law, including acting as lead counsel
in over 30 class actions. His publications include Chapter 8 ("Defendants") im Federal Practice
Manual for Legal Services Attorneys (M. Masinter, Ed., National Legal Aid and Defender
Association 1989); Governmental Tort Immunity in Illinois, 55 ULB.J. 29 (1966); Illinois Should
Explicitly Adopt the Per Se Rule for Consumer Fraud Act Violations, 2 Loy.Consumer L.Rep. 64
(1990), and Illinois Consumer Law (Chicago Bar Ass'n 1996). He has taught in a nationwide
series of 18 Federal Practice courses sponsored by the Legal Services Corporation, each lasting
four days and designed for attorneys with federal litigation experience. He has argued over 30
appeals, including two cases in the United States Supreme Court, three in the Illinois Supreme
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Case 1:08-cv-02134 Document11-3 Filed 05/06/2008 Page 13 of 21
Court, and numerous cases in the Seventh, Third, Fifth, and Eleventh Circuits. Mr. Latturner
was involved in many of the significant decisions establishing the rights of Illinois consumers.
He is a member of the Northern District of Ulinois trial bar.
5. Tara L. Goodwin is a graduate of the University of Chicago (B.A., with
general honors, 1988)and Illinois Institute of Technology, Chicago-Kent College of Law (J.D.,
with high honors,1991). She has been with the firm since her graduation and has participated in
many of the cases described below. Reported Cases. Williams v. Chartwell Financial Services,
LTD, 204 F.3d 748 (7th Cir. 2000); Hillenbrand v. Meyer Medical Group, 682 N.E.2d 101
(Ill. 1st Dist. 1997), 720 N.E.2d 287 (Ill. 1st Dist. 1999); Bessette v. Avco Fin, Servs., 230 F.3d
439 (1" Cir. 2000); Large v. Conseco Fin. Servicing Co,, 292 F.3d 49 (1" Cir. 2002);; Carbajal v.
Capital One, 219 F.R.D. 437 (N.D.H1. 2004); Russo v. B&B Catering, 209 F.Supp.2d 857
(N.D.IL 2002); Garcia v. Village of Bensenville, 2002 U.S.Dist. LEXIS 3803 (N.D.UL);
Romaker v. Crossland Mtg, Co., 1996 U.S.Dist. LEXIS 6490 (N.D.IL); Mount v, LaSalle Bank
Lake View, 926 F.Supp. 759 (N.D-II] 1996). She is a member of the Northern District of Illinois
trial bar.
6. Michelle R. Teggelaar is a graduate of the University of Ilinots (B.A.,
1993) and Chicago-Kent College of Law, Illinois Institute of Technology (J.D., with honors,
1997). Reported Cases: Johnson v. Revenue Management, Inc,, 169 F.3d 1057 (7" Cir.1999); ;
Hernandez v. Attention, LLC, 429 F. Supp. 2d 912 (N.D. Hl. 2005); Coelho v. Park Ridge
Oldsmobile, Inc., 247 F. Supp. 2d 1004 (N.D. IIL 2003); Dominguez v. Alliance Mtge., Co., 226
F. Supp. 2d 907 (N.D. Ill. 2002); Watson v. CBSK Financial Group, Inc., 197 F. Supp. 2d 1118
(N.D. TIL. 2002); Van Jackson v. Check ‘N Go of Illinois, Inc. 123 F. Supp. 2d 1085 (N.D. If.
2000), Van Jackson v. Check ‘N Go of Illinois, Inc., 123 F. Supp. 2d 1079, Van Jackson v.
Check ‘N Go of Illinois, Inc., 114 F. Supp. 2d 731 (ND. Ill. 2000); Van Jackson v, Check ‘N Go
of Illinois, Inc., 193 F.R.D. 544 (N.D. Ill. 2000); Vines v. Sands, 188 F.R.D. 302 (N.D. Ill. 1999),
Veillard v. Mednick, 24 F. Supp. 2d 863 (N.D. 111.1998); Sledge v. Sands, 182 F.R.D. 255 (N.D.
Iil. 1998), Vines v. Sands, 188 F.R.D, 203 (N.D. IIL. 1999), Livingston v. Fast Cash USA, Inc,
753 N.E.2d 572 (Ind. 2001); Binder v. Atlantic Credit and Finance, Inc., 2007 U.S. Dist. LEXIS
11483 (S.D. Ind. 2007); Carroll v. Butterfield Heath Care, Inc., 2003 WL 22462604 (N.D. III.
2003); Payton v. New Century Mtge., Inc., 2003 WL 22349118 (N.D, Tl. 2003); Seidat v. Allied
Interstate, Inc., 2003 WL 2146825 (N.D. Ill. 2003) (Report and Recommendation); Michalowski
y. Flagstar Bank, FSB, 2002 WL 112905 (N.D. Ill. 2002); Bigalke v. Creditrust Corp., 2001 WL
1098047 (N.D. Ill 2001) (Report and Recommendation); Donnelly vy, Illini Cash Advance, 2000
WL 1161076 (N.D. Ill. 2000); Mitchem v. Paycheck Advance Express, 2000 WL 419992 (N.D.
Ill 2000); Pinkett v. Moolah Loan Co., 1999 WL 1080596 (N.D. Ill. 1999); Farley v. Diversified
Collection Serv., 1999 WL 965496 (N.D. Ill. 1999); Davis v. Commercial Check Control, 1999
WL 965496 (N.D. Ill. 1999); Sledge v. Sands, 1999 WL 261745 (N.D. HL. 1999); Slater v. Credit
Sciences, Inc., 1998 WL 341631 (N_D. Ill. 1998); Slater v. Credit Sciences, Inc., 1998 WL
299803 (N.D. Tl. 1998).
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7. Associates
a. Francis R. Greene is a graduate of Johns Hopkins University
(B.A., with honors, May 1984), Rutgers University (Ph.D., October 1991), and Northwestern
University Law School (J.D., 2000). Reported Cases: Johnson v. Thomas, 342 Ill. App.3d 382,
794 N.E.2d 919 (1* Dist. 2003); Jolly v. Shapiro & Kreisman, 237 F. Supp. 2d 888 (N.D. II.
2002); Parker v. 1-800 Bar None, a Financial Corp., Inc. 2002 WL 215530 (N.D. Ill. 2002); Jiang
vy. Allstate Ins. Co, (199 F.R.D. 267); Hill v. AMOCO Oil Co. 2003 WL 262424, 2001 WL
293628 (N.D. Ill. 2003); Roquet v. Arthur Anderson LLP 2002 WL 1900768 (N.D. II. 2002);
White v. Financial Credit, Corp. 2001 WL 1665386 (N.D. IIL); Ransom v. Gurnee Volkswagen
2001 WL 1241297 (N.D. Ill. 2001) and 2002 WL 449703 (N.D. Ill 2002); Doxie v. Impac
Funding Corp. 2002 WL 31045387 (N.D. Ill. 2002); Levin v, Kluever & Platt LLC 2003 WL
22757763 and 2003 WL 22757764 (N.D. Ill. 2003); Pleasant v. Risk Management Alternatives
2003 WL 22175390 (N.D. Ill. 2003); Jenkins v. Mercantile Mortgage 231 F. Supp. 2d 737 (N.D.
Ill. 2002); Hobson v. Lincoln Ins. Agency, Inc. 2001 WL 55528, 2001 WL 648958 (N_D. HI.
2001), Anderson v. Lincoln Ins. Agency 2003 WL 291928, Hobson v. Lincoln Ins, Agency 2003
WL 338161 (N.D. Hl. 2003); Handy v. Anchor Mortgage Corp., 464 F.3d 760 (7" Cir. 2006).
He is a member of the Northern District of Illinois trial bar.
b. Julie Clark (nee Cobolovic) is a graduate of Northern Hlinois
University (B.A., 1997) and DePaul University College of Law (J.D., 2000). Reported Cases:
Qualkenbush y. Harris Trust & Savings Bank 219 F.Supp.2d 935 (N.D.H1.,2002); Covington-
Mclntosh v. Mount Glenwood Memory Gardens 2002 WL 31369747 (N.D.ILL.,2002), 2003 WL
22359626 (N.D. Il. 2003); Ballard Nursing Center, Inc, vy. GF Healthcare Products, Inc., 2007
U.S. Dist. LEXIS 84425 (N.D. IIL Nov. 14, 2007), Record-A-Hit, Inc. v. Nat'l. Fire Ins. Co., No.
1-07-0684, 2007 IH. App. LEXIS 1194 (ll. App. 1* Dist. Nov. 13, 2007).
ce. Heather A. Kolbus (neé Piccirilli) is a graduate of DePaul
University (B.S. cum laude, 1997), and Roger Williams University School of Law (J.D., 2002).
Reported Cases: Clark v. Experian Info. Solutions, Inc., 2004 U.S, Dist. LEXIS 28324 (D.S.C.
Jan. 14, 2004); DeFrancesco v. First Horizon Home Loan Corp., 2006 U.S. Dist. LEXIS 80718
(S.D. Ill. Nov. 2, 2006); Jeppesen v. New Century Mortgage Corp., 2006 U.S, Dist. LEXIS
84035 (N.D. Ind. Nov. 17, 2006); Benedia v. Super Fair Cellular, Inc., 2007 U.S. Dist. LEXIS
71911 (NLD. Ill. Sept. 26, 2007).
d. Thomas E. Soule is a graduate of Stanford University (B.A.,
2000), and the University of Wisconsin Law School (J.D., 2003). Reported Cases: Murray v.
Sunrise Chevrolet, Inc., 441 F.Supp.2d 940 (N.D. Tl. 2006); Iosello v. Leiblys, Inc., 502
F Supp.2d 782 (N.D. If. 2007); Claffey v. River Oaks Hyundai, Inc., 486 F.Supp.2d 776 (N.D.
Ill, 2007).
e. Cassandra P. Miller is a praduate of the University of Wisconsin
— Madison (B.A. 2001) and John Marshall Law School (J.D. magna cum laude 2006).
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Reported Cases: Pietras v. Sentry Ins. Co., 513 F.Supp.2d 983 (N.D, Ill. 2007); Hernandez y.
Midland Credit Mgmt., 2007 U.S. Dist. LEXIS‘16054 (N_D. Ill. Sept. 25, 2007); Balogun v.
Midland Credit Memt., 2007 U.S. Dist. LEXIS 74845 (S.D. Ind. Oct. 5, 2007),
f. Tiffany N. Hardy is a graduate of Tuskegee University (B.A.
1998) and Syracuse University College of Law (J.D.2001).
g. Zachary A. Jacobs is a graduate of the University of South
Dakota (B.S. 2002) and Chicago-Kent College of Law, llinois Institute of Technology (J.D.
2007).
h. Rupali R. Shah is a graduate of the University of Chicago (B.A.
2004) and University of Mlinois (J.D. cum laude 2007).
i. Michael J. Aschenbrener is a graduate of the University of
Minnesota (B.A. 2001) and the Chicago-Kent College of Law, Illinois Institute of Technology
(J.D. May 2007).
8. The firm also has 15 legal assistants, as well as other support staff.
9, Since its inception, the firm has recovered more than $500 million for
consumers.
10. The types of cases handled by the firm are illustrated by the following:
11. Mortgage charges and servicing practices: The firm has been involved
in dozens of cases, mostly class actions, complaining of illegal charges on mortgages and
improper servicing practices. These include MDL-899, In re Mortgage Escrow Deposit
Litigation, and MDL-1604, In re Ocwen Federal Bank FSB Mortgage Servicing Litigation, as
well as the Fairbanks mortgage servicing litigation. Decisions in the firm’s mortgage cases
include: Christakos v. Intercounty Title Co., 196 F.R.D. 496 (N.D.IIL 2000); Johnstone v. Bank
of America, N.A., 173 F.Supp.2d 809 (N.D.ILL. 2001); Leon v. Washington Mut. Bank, F.A., 164
F.Supp.2d 1034 (N.D.IIL. 2001); Williamson v. Advanta Mortg. Corp., 1999 U.S. Dist. LEXIS
16374 (N.D.ILL, Oct. 5, 1999); McDonald v. Washington Mui. Bank, F.A., 2000 U.S. Dist.
LEXIS 11496 (N.D.HL., June 22, 2000); Metmor Financial, Inc. v. Eighth Judicial District Court,
No. 23848 (Nev.Sup.Ct., Apr. 27, 1993); GMAC Mige. Corp. v. Stapleton, 236 IIL App.3d 486,
603 N.E.2d 767 (1st Dist. 1992), leave to appeal denied, 248 Tl.2d 641, 610 N.E.2d 1262 (1993);
Leff v. Olympic Fed. 5. & L. Ass'n, 1986 WL 10636 (N.D.IIl. 1986); Aitken v. Fleet Mtge.
Corp., 1991 U.S.Dist. LEXIS 10420 (N.D.IIL 1991), and 1992 U.S.Dist. LEXIS 1687 (N.D.IIL,
Feb, 12, 1992); Poindexter v. National Mtge. Corp., 1991 U.S.Dist. LEXIS 19643 (N.D.IIL., Dec,
23, 1991), later opinion, 1995 U.S.Dist. LEXIS 5396 (N.D.ILL, April 24, 1995); Sanders v.
Lincoln Service Corp., 1993 U.S.Dist. LEXIS 4454 (N.D.IL. 1993); Robinson v. Empire of
America Realty Credit Corp., 1991 U.S.Dist. LEXIS 2084 (N.D.IIL, Feb, 20, 1991); In re
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Mortgage Escrow Deposit Litigation, M.D.L. 899, 1994 U.S.Dist. LEXIS 12746 (N.D.IIL, Sept.
8, 1994); Greenberg v. Republic Federal S. & L. Ass'n, 1995 U.S.Dist. LEXIS 5866 (N.D.IL,
May 1, 1995).
12. The recoveries in the escrow overcharge cases alone are over $250
million. Leff was the seminal case on mortgage escrow overcharges.
13. The escrow litigation had a substantial effect on industry practices,
resulting in limitations on the amounts which mortgage companies held in escrow.
14. Bankruptey: The firm brought a number of cases complaining that
money was being systematically collected on discharged debts, in some cases through the use of
invalid reaffirmation agreements, including the national class actions against Sears and General
Electric. Conley v. Sears, Roebuck, 1:97cv11149 (D.Mass); Fisher_v. Lechmere Inc.,
1:97¢v3065, (N.D.II1.). These cases were settled and resulted in recovery by nationwide classes.
Cathieen Combs successfully argued the first Court of Appeals case to hold that a bankruptcy
debtor induced to pay a discharged debt by means of an invalid reaffirmation agreement may sue
to recover the payment. Bessette v. Avco Financial Services, 99-2291 (ist Cir., October 27,
2000).
15. Automobile sales and financing practices: The firm has brought many
cases challenging practices relating to automobile sales and financing, including:
a. Hidden finance charges resulting from pass-on of discounts on
auto purchases. Walker v. Wallace Auto Sales, Inc, 155 F.3d 927, 1998 U.S. App. LEXUS
22663 (7th Cir. 1998).
b. Misrepresentation of amounts disbursed for extended warranties.
Taylor v. Quality Hyundai, Inc., 150 F.3d 689, 1998 U.S.App. LEXIS 16434 (7th Cir. 1998);
Grimaldi v. Webb, 282 IIL App.3d 174, 668 N.E.2d 39 (1st Dist. 1996), leave to appeal denied,
169 Ill.2d 566 (1996); Slawson v. Currie Motors Lincoin Mercury, Inc., 1995 U.S.Dist. LEXIS
451 (N.D.IIL, Jan. 5, 1995); Cirone-Shadow v. Union Nissan, Inc., 1995 U.S.Dist. LEXIS 1379
(N.D.UI., Feb. 3, 1995), later opinion, 1995 U.S.Dist. LEXIS 5232 (N.D.IIL, April 20, 1995)
(same); Chandler vy, Southwest Jeep-Eagle, Inc., 1995 U.S. Dist. LEXIS 8212 (N.D.IL, June 8,
1995); Shields v. Lefta, Inc., 1995 U.S.Dist. LEXIS 7807 (N.D-IIL., June 5, 1995).
c. Spot delivery. Janikowski v. Lynch Ford, Inc., 1999 U.S. Dist.
LEXIS 3524 (N.D.I., March 11, 1999); Diaz v. Westgate Lincoln Mercury, Inc., 1994 U.S.Dist.
LEXIS 16300 (N.D.HL. 1994); Grimaldi v. Webb, 282 IILApp.3d 174, 668 N.E.2d 39 (1st Dist.
1996), leave to appeal denied, 169 IIl.2d 566 (1996).
d. Force placed insurance. Bermudez v. First of America Bank
Champion, N.A., 860 F.Supp. 580 (N.D.Hl. 1994); Travis v. Boulevard Bank, 1994 U.S.Dist.
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LEXIS 14615 (N.D.IIL, Oct. 13, 1994), modified, 880 F.Supp. 1226 (N.D.III., 1995); Moore v.
Fidelity Financial Services, Inc., 884 F. Supp. 288 (N.D.I1. 1995).
e. Improper obligation of cosigners. Lee v, Nationwide Cassell, 174
Ill.2d 540, 675 N.E.2d 599 (1996); Taylor v. Trans Acceptance Corp., 267 Hl. App.3d 562, 641
N.E.2d 907 (1st Dist. 1994), leave to appeal denied, 159 Ill.2d 581, 647 N.E.2d 1017 (1995).
f. Evasion of FTC holder rule. Brown v. LaSalle Northwest Nat'l
Bank, 148 F.R.D. 584 (N.D-HL 1993), 820 F.Supp, 1078 (N.D_ILL. 1993), and 1993 U.S.Dist.
LEXIS 11419 (N.D.UI, Aug. 13, 1993),
16. These cases also had a substantial effect on industry practices. The
warranty cases, such as Grimaldi, Gibson, Slawson, Cirone-Shadow, Chandler, and Shields,
resulted in the Federal Reserve Board's revision of applicable disclosure requirements, so as to
prevent car dealers from representing that the charge for an extended warranty was being
disbursed to a third party when that was not in fact the case.
17.“ Predatory lending practices: The firm has brought numerous cases
challenging predatory mortgage and "payday" lending practices, mostly as class actions.
Livingston v. Fast Cash USA, Inc., 753 N.E.2d 572 (Ind. Sup. Ct. 2001); Williams v, Chartwell
Fin. Servs,, 204 F.3d 748 (7th Cir. 2000); Parker v. 1-800 Bar None, a Financial Corp., Inc., 01 C
4488, 2002 WL 215530 (N.D.IIL, Feb 12, 2002); Gilkey v. Central Clearing Co., 202 F.R.D. 515
(E.D.Mich. 2001); Van Jackson v. Check 'N Go of Il., Inc., 114 F.Supp.2d 731 (N.D.IIl. 2000),
later opinion, 193 F.R.D. 544 (N.D.IIL. 2000), 123 F.Supp. 2d 1079 (N.D.ILE. 2000), later opinion,
123 F.Supp. 2d 1085 (N.D.IIl. 2000); Henry v. Cash Today, Inc., 199 F.R.D. 566 (S.D.Tex.
2000); Donnelly v. Illini Cash Advance, Inc., 00 C 94, 2000 WL 1161076, 2000 U.S. Dist.
LEXIS 11906 (N.D.IIL, Aug. 14, 2000); Jones vy. Kunin, 2000 U.S. Dist. LEXIS 6380 (8.D.IHL.,
May 1, 2000); Davis v. Cash for Payday, 193 F.R.D. 518 (N.D.III. 2000); Reese v. Hammer Fin,
Corp., 99 C 716, 1999 U.S. Dist. LEXIS 18812, 1999 WL 1101677 (N.D.IIL, Nov. 29, 1999);
Pinkett v. Moolah Loan Co., 1999 U.S. Dist. LEXIS 17276 (N.D.IIL, Nov. 1, 1999); Gutierrez v.
Devon Fin. Servs., 1999 U.S. Dist. LEXIS 18696 (N.D.Tl., Oct. 6, 1999); Vance v. National
Benefit Ass'n, 99 C 2627, 1999 WL 731764, 1999 U.S, Dist. LEXIS 13846 (N.D.IIL., Aug. 26,
1999).
18. Other consumer credit issues: The firm has also brought a number of
other Truth in Lending and consumer credit cases, mostly as class actions, involving such issues
as:
a. Phony nontiling insurance. Edwards v. Your Credit Inc., 148 F.3d
427, 1998 U.S. App. LEXIS 16818 (5th Cir. 1998); Adams vy. Plaza Finance Co., 1999 U.S. App.
LEXIS 1052 (7th Cir., January 27, 1999); Johnson v. Aronson Furniture Co., 1997 U.S. Dist.
LEXIS 3979 (N.D. Ill, March 31, 1997).
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b. The McCarran Ferguson Act exemption. Autry v. Northwest
Premium Services, Inc., 144 F.3d 1037, 1998 U.S. App. LEXIS 9564 (7th Cir. 1998).
c. Loan flipping. Emery vy, American General, 71 F.3d 1343 (7th Cir.
1995), Emery limited the pernicious practice of "loan flipping," in which consumers are solicited
for new loans and are then refinanced, with "short" credits for unearned finance charges and
insurance premiums being given through use of the "Rule of 78s."
d. Home improvement financing practices. Fidelity Financial
Services, Inc. v. Hicks, 214 Ml. App.3d 398, 574 N.E.2d 15 (1st Dist. 1991), leave to appeal
denied, 141 I1.2d 539, 580 N.E.2d 112; Heastie v. Community Bank of Greater Peoria, 690
F.Supp. 716 (N.D.Il. 1989), later opinion, 125 F.R.D. 669 (N.D.IIL 1990), later opinions, 727
F.Supp. 1133 (N.D.Iil. 1990), and 727 F.Supp. 1140 (N.D.IIL 1990). Heastie granted
certification of a class of over 6,000 in a home improvement fraud case.
@. Arbitration clauses. Wrightson v. ITT Financial Services, 617
So.2d 334 (Fla. 1st DCA 1993).
f. Insurance packing. Elliott v. IFT Corp., 764 F.Supp. 102 (N.D.TE.
1990}, later opinion, 150 B.R. 36 (N.D.IEL 1992),
19. Automobile leases: The firm has brought a number of a cases alleging
illegal charges and improper disclosures on automobile leases, mainly as class actions. Decisions
in these cases include Lundquist v. Security Pacific Automotive Financial Services Corp., Civ.
No. 5:91-754 (TGFD) (D.Conn.), aff'd, 993 F.2d 11 (2d Cir. 1993); Kedziora v. Citicorp Nat'l
Services, Inc., 780 F.Supp. 516 (N.D.IIl. 1991), later opinion, 844 F.Supp. 1289 (N.DHL 1994),
later opinion, 883 F.Supp. 1144 (N.D.IIL. 1995), later opinion, 1995 U.S.Dist. LEXIS 12137
(N.D.UI., Aug. 18, 1995), later opinion, 1995 U.S.Dist. LEXIS 14054 (N.D.IIL, Sept. 25, 1995);
Johnson v. Steven Sims Subaru and Subaru Leasing, 1993 U.S.Dist. LEXIS 8078 (N.D_II., June
9, 1993), and 1993 U.S.Dist. LEXIS 11694 (N.D.II1., August 20, 1993); McCarthy v. PNC Credit
Corp., 1992 U.S.Dist. LEXIS 21719 (D.Conn., May 27, 1992); Kinsella v. Midland Credit
Memt., Inc., 1992 U.S.Dist. LEXIS 1405, 1992 WL 26908 (N.D.IH. 1992); Highsmith y,
Chrysler Credit Corp., 18 F.3d 434 (7th Cir. 1994); Black v. Mitsubishi Motors Credit of
America, Inc., 1994 U.S.Dist. LEXIS 11158 (N.D.IIL, August 10, 1994); Simon v. World Omni
Leasing Inc., 146 F.R.D. 197 (S.D.Ala. 1992), Settlements in such cases include Shepherd v.
Volvo Finance North America, Inc., 1-93-CV-971 (N.D.Ga.)($8 million benefit); McCarthy v.
PNC Credit Corp., 291 CV 00854 PCD (D.Conn.); Lynch Leasing Co. v. Moore, 90 CH 876
(Circuit Court of Cook County, Illinois) (class in auto lease case was certified for litigation
purposes, partial summary judgment was entered, and case was then settled); Blank v. Nissan
Motor Acceptance Corp., 91 L 8516 (Circuit Court of Cook County, linois); Mortimer v.
Toyota Motor Credit Co., 91 L 18043 (Circuit Court of Cook County, Illinois); Duffy v. Security
Pacific Automotive Financial Services, Inc., 93-729 IEG (BTM) (S.D.Cal, April 28, 1994),
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20. Lundquist and Highsmith are leading cases; both held that commonly-used
lease forms violated the Consumer Leasing Act: As a result of the Lundquist case, the Federal
Reserve Board completely revamped the disclosure requirements applicable to auto leases,
resulting in vastly improved disclosures to consumers.
21. Collection practices: The firm has brought a number of cases under the
Fair Debt Collection Practices Act, both class and individual. Decisions in these cases include:
Jenkins v. Heintz, 25 F.3d 536 (7th Cir, 1994), affd 115 8.Ct. 1489, 131 L.Ed.2d 395 (1995);
Johnson v. Revenue Management Corp., 169 F.3d 1057, 1999 U.S. App. LEXIS 3142 (7th Cir.
1999); Keele v. Wexler & Wexler, 1996 U.S.Dist. LEXIS 3253 (N.D.ILL., March 18, 1996)
(class), 1995 U.S.Dist. LEXIS 13215 (N.D.HL. 1995) (merits), aff'd, 149 F.3d 589, 1998
U.S.App. LEXIS 15029 (7th Cir. 1998); Mace v. Van Ru Credit Corp., 109 F.3d 338, 1997
U.S. App. LEXTS 5000 (7th Cir., Mar. 17, 1997); Maguire v. Citicorp Retail Services, Inc., 147
F.3d 232, 1998 U.S.App. LEXIS 16112 (2d Cir. 1998); Young v. Citicorp Retail Services, Inc.,
1998 U.S.App. LEXIS 20268 (2d Cir. 1998); Charles v. Lundgren & Assocs.. P.C., 119 F.3d
739, 1997 U.S. App. LEXIS 16786 (9th Cir. 1997); Avila v. Rubin, 84 F.3d 222 (7th Cir. 1996),
affg Avila v. Van Ru Credit Corp., 1995 U.S.Dist. LEXIS 461 (N.D.IL, Jan. 10, 1995), later
opinion, 1995 U.S.Dist. LEXIS 1502 (N.D.IIL, Feb. 6, 1995), later opinion, 1995 U.S.Dist.
LEXIS 17117 (N.D.IIL, Nov. 14, 1995); Tolentino v, Friedman, 833 F.Supp. 697 (N.D.IIL.
1993), affd in part and rev'd in part, 46 F.3d 645 (7th Cir. 1995); Blakemore v, Pekay, 895
F.Supp.972 (N.D.IH, 1995); Oglesby v. Rotche, 1993 U.S.Dist. LEXIS 15687 (N.D.IIL., Nov. 4,
1993), later opinion, 1994 U.S.Dist. LEXIS 4866 (N.D.IL, April 15, 1994); Laws v. Cheslock,
1999 U.S.Dist. LEXIS 3416 (N.D.IIL, Mar. 8, 1999);Davis v. Commercial Check Control, Inc.,
1999 US. Dist. LEXIS 1682 (N.D.I., Feb. 12, 1999); Hoffman v. Partners in Collections, Inc.,
1993 U.S.Dist. LEXIS 12702 (N.D.IIL., Sept. 15, 1993); Vaughn v. CSC Credit Services, Inc.,
1994 U.S.Dist. LEXIS 2172 (N.D.II., March 1, 1994), adopted, 1995 O.S.Dist. LEXIS 1358
(N.D.IH., Feb. 3, 1995); Beasley v. Blatt, 1994 U.S.Dist. LEXIS 9383 (N.D.IIL, July 14, 1994);
Taylor v. Fink, 1994 U.S.Dist. LEXIS 16821 (N.D.IIL, Nov. 23, 1994); Gordon v. Fink, 1995
U.S.Dist. LEXIS 1509 (N.D.HL, Feb. 7, 1995); Brajis v. Shaw, 876 F.Supp. 198 (N.D.IIL. 1995).
Settlements in such cases include Boddie v. Meyer, 93 C 2975 (N.D.IIl.); and Cramer v. First of
America Bank Corporation, 93 C 3189 (N.D_IL).
22. Jenkins v. Heintz is a leading decision regarding the liability of attorneys
under the Fair Debt Collection Practices Act. I argued it before the Supreme Court and Seventh
Circuit. Avila v. Rubin is a leading decision on phony "attorney letters."
23. Fair Credit Reporting Act: The firm has filed numerous cases under the
Fair Credit Reporting Act, primarily as class actions. One line of cases alleges that lenders and
automotive dealers, among others, improperly accessed consumers’ credit information, without
their consent and without having a purpose for doing so permitted by the FCRA. Important
decisions in this area include: Cole v. U.S. Capital, Inc., 389 F.3d 719 (7" Cir. 2004), Murray v,
GMAC Mortgage Corp., 434 F.3d 948 (7"" Cir. 2006); Perry v. First National Bank, 459 F.3d 816
(7" Cir. 2006); Murray v. Sunrise Chevrolet, Inc., 441 F. Supp.2d 940 (N.D. IL]. 2006); Murray v.
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GMAC Mortgage Corp., 05 C 1229, F.Supp.2d 2007 U.S. Dist. LEXIS 26726
(N.D.IL April 10, 2007); Shellman v. Countrywide Home Loans, Inc., 1:05-CV-234-TS, 2007
US. Dist. LEXIS 27491 (N.D.Ind., April 12, 2007); In re Ocean Bank, 06 C 3515, 2007 U.S.
Dist. LEXIS 28973 (N.D.HL, March 16, 2007), later opinion, 2007 U.S. Dist. LEXTS 29443
(N.D. Il, Apr. 9, 2007); Asbury v. People's Choice Home Loan, Inc., 05 C 5483, 2007 U.S. Dist.
LEXIS 17654 (N.D.UL, March 12, 2007); Claffey vy. River Oaks Hyundai, Inc., 238 F.R.D. 464
(N.D.U, 2006); Murray v. IndyMac Bank, FSB, 461 F.Supp.2d 645 (N.D-Iil. 2006); Kudlicki v.
Capital One Auto Finance, Inc., 2006 U.S. Dist. LEXIS 81103 (N.D. IIL, Nov. 2, 2006); Thomas
v. Capital One Auto Finance, Inc., 2006 U.S. Dist. LEXIS 81358 (N.D. IL., Oct. 24, 2006);
Pavone v. Aegis Lending Corp., 2006 U.S, Dist. LEXIS 62157 (N.D. Ill, Aug. 31, 2006); Murray
v. E*Trade Financial Corp., 2006 U.S. Dist. LEXIS 53945 (N.D. ILL, July 19, 2006); Bonner v.
Home 123 Corp., 2006 U.S. Dist. LEXIS 37922 (N.D. Ind., May 25, 2006); Murray v. Sunrise
Chevrolet , Inc., 2006 U.S, Dist. LEXIS 19626 (N.D. IIL, Mar. 30, 2006); and Murray v. Finance
America, LLC, 2006 U.S. Dist. LEXIS 7349 (N.D. ILL, Jan 5, 2006), More than 15 such cases
have been settled on a classwide basis.
24. Class action procedure: Important decisions include Crawford v.
Equifax Payment Services, Inc., 201 F.3d 877 (7th Cir. 2000); Blair v. Equifax Check Services,
Inc., 181 F.3d 832 (7th Cir. 1999); Mace v. Van Ru Credit Corp,, 109 F.3d 338, 344 (7th Cir.
1997); and Gordon v. Boden, 224 Il.App.3d 195, 586 N.E.2d 461 (ist Dist. 1991).
25. Landlord-tenant: The firm has brought a number of class actions against
landlords for failing to pay interest on security deposits or commingling security deposits.
26. Some of the other reported decisions in our cases include: Elder v.
Coronet Ins. Co., 201 IL App.3d 733, 558 N.E.2d 1312 (1st Dist. 1990); Smith v. Keycorp Mtge..
Inc., 151 Bankr. 870 (N.D.IL 1992}; Gordon v. Boden, 224 Tll.App.3d 195, 586 N.E.2d 461 (1st
Dist. 1991), leave to appeal denied, 144 IN.2d 633, 591 N.E.2d 21, cert. denied, U.S. (1992);
Armstrong v. Edelson, 718 F.Supp. 1372 (N.D.IH. 1989); Newman v. Ist 1440 Investment, Inc.,
1993 U.S.Dist. LEXIS 354 (N.D.IIL 1993); Mountain States Tel. & Tel. Co. v. District Court,
778 P.2d 667 (Colo. 1989); Disher v. Fulgoni, 124 Il_App.3d 257, 464 N.E.2d 639, 643 (1st
Dist. 1984); Harman v. Lyphomed, Inc., 122 F.R.D. 522 (N.D.IIl. 1988); Haslam v. Lefta, Inc.,
1992 U.S.Dist. LEXIS 3623 (N.D.IIL, March 25, 1994); Source One Mortgage Services Corp. v.
Jones, 1994 U.S.Dist. LEXIS 333 (N.D.UL, Jan. 13, 1994),
27. Gordon v. Boden is the first decision approving "fluid recovery" in an
[tlinois class action. Elder v. Coronet Insurance held that an insurance company's reliance on lie
detectors to process claims was an unfair and deceptive trade practice.
Daniel A. Edelman
10
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