Opinion
No. 03 C 987.
December 8, 2004
ORDER
Lexington makes a factual attack on jurisdiction, see Cedars-Sinai Med. Ctr. v. Watkins, 11 F.3d 1573, 1583 (Fed. Cir. 1993), and argues that because Iosello has received a refund of the money he paid Lexington for credit repair services, he no longer has an Article III injury or stake in the controversy and that this mools the controversy because he does not yet have competent proof of any other damages to support his claims under the Credit Repair Organizations Act ("CROA"), 15 U.S.C. § 1679, and the Illinois Consumer Fraud and Deceptive Business Practices Act ("ICFA"), 815 ILL. COMP. STAT. § 505/2. Although the cases Lexington cites involve a Rule 68 offer and judgment, the Court is unaware of any Rule 68 offer and judgment in this case, and therefore it cannot consider the refund to be such.
In Ploog v. Homeside Lending, Inc., 209 F.Supp.2d 863, 869 (N.D. Ill. 2002), this Court determined that actual damages included emotional and mental distress under the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. § 2605, based upon other courts' determinations of what constitutes actual damages in other consumer fraud statutes, including: United States v. Balistrieri, 981 F.2d 916, 931 (7th Cir. 1992) (holding that actual damages include emotional distress under the Fair Housing Amendments Act, 42 U.S.C. § 3614 et seq.); Biggs v. Vill. of Dupo, 892 F.2d 1298, 1304 (7th Cir. 1990) (holding actual damages include mental distress under 42 U.S.C. § 1983); Fischl v. Gen. Motors Acceptance Corp., 708 F.2d 143, 148 (5th Cir. 1983) (holding that actual damages include mental anguish under the Equal Credit Opportunity Act, 15 U.S.C. § 1691(e); and Millstone v. O'Hanlon Reports, Inc., 528 F.2d 829, 834-35 (8th Cir. 1976) (holding that actual damages include emotional distress and humiliation under the Fair Credit Reporting Act, 15 U.S.C. § 1681(n)). In addition, actual damages in consumer protection statutes have been found by the courts to include non-monetary damages and are to be interpreted broadly in order to give effect to their remedial purposes. Ploog, 209 F. Supp. 2d at 870.
The CROA is a consumer protection statute and is to be interpreted broadly. Parker v. 1-800 Bar None, No. 01 C 4488, 2002 WL 215530, at *2 (N.D. Ill. Feb. 12, 2002). In addition, because the CROA is a consumer protection statute, non-monetary damages are available. Even if Iosello failed to produce evidence of mental anguish or the additional expenses above and beyond the refunded $145 as of the filing of the motion to dismiss, at that time, discovery had not yet been completed. It would be unfair to grant dismissal when the plaintiff had yet to exercise all of his opportunities for pretrial discovery. Gibson v. City of Chic., 910 F.2d 1510, 1520 (7th Cir. 1990). Further, the CROA specifies as one of its remedies punitive damages. Lexington argues that punitive damages cannot exist absent actual damages. (Mot. Dismiss at 14-15.) In Parker v. 1-800 Bar None, the court found otherwise: "Punitive damages under § 1679g(a)(2) are not merely ancillary to actual damages, but are instead an independent basis for relief." 2002 WL 215530, at *7-8. Even if Iosello has not been able to produce evidence to support the award of punitive damages, discovery at the time of the filing of the instant motion had not yet been completed. In addition, punitive damages under 15 U.S.C. § 1679 are not dependent solely upon injury to the plaintiff, but focuses on the actions of the defendant. See 15 U.S.C. § 1679(g). Therefore, regardless of any evidence Lexington may have developed so far showing a lack of injury to Iosello, punitive damages are still available as an independent basis for relief, and such relief depends not only on injury to Iosello, but on Lexington's actions. Finally, with regard to Iosello's request for attorney's fees, Lexington argues that the United States Supreme Court has rejected the idea of attorney's fees being the only remedy available, citing Doe v. Chao, 124 S. Ct. 1204, 1211 (2004). However, in this case, that issue is moot as attorney's fees are not the only remedy requested by Iosello. Iosello has also asked for punitive and actual damages.
In addition, Lexington moves to dismiss the ICFA claim pursuant to Rule 12(b)(1) under the same argument as it made for the CROA claim. For the same reasons discussed with regard to the CROA claim, ICFA allows for punitive and actual damages and reasonable attorney's fees and costs. Under ICFA, actual damages include aggravation and inconvenience. Roche v. Fireside Chrysler-Plymouth, Mazda, Inc., 600 N.E.2d 1218, 1228 (Ill.App.Ct. 1992). Because Iosello's complaint prays for appropriate damages, and the statute allows for punitive damages, injunctive relief, and reasonable attorney's fees and costs, regardless of the return of the $145 in credit repair services, a live controversy exists and the Court still has subject matter jurisdiction.
Although at the time of the filing of the motion to dismiss there may not yet have been sufficient evidence of the claims, discovery had not yet been completed. Lexington cites several cases in its brief stating that Iosello cannot meet the additional burden of proof required for either the summary judgment standard or to be the representative of a class. At this time, Iosello does not have to meet the summary judgment standard or show that he is anadequate representative for a class action as the only issue currently before the Court is a motion to dismiss. Both of these issues are premature and not properly before the Court. Defendant's motion to dismiss the Second Amended Complaint pursuant to Rule 12(b)(1) is therefore denied.