unauthorized uses was the identity of the passengers, the credit card agency had no effective way to tell one from the other.
Although Illinois courts appear not to have taken sides in that debate, this Court need not agonize here over a choice in those terms. Under either of those perspectives, Travel Dimensions possessed apparent authority as a matter of law to charge Draiman's Platinum Card account for the four El Al tickets. Draiman had not only given Travel Dimensions his credit card number voluntarily, but an abundance of background circumstances also confirmed to American Express that the travel agency had been authorized to charge his account. First, the extended course of prior dealings among the parties had created the appearance that Travel Dimensions was a competent and responsible ticketing outfit that faithfully executed its customer's orders. Travel Dimensions had charged Draiman's account several times in the past, and Draiman had reimbursed American Express without objection.
Second, from what American Express could see there was nothing to distinguish the final transaction from its predecessors: Travel Dimensions was not submitting charges for mink coats and diamond rings, but was simply ordering yet another set of airplane tickets. Third, travel agencies use customer credit cards all the time, and nothing in that settled practice could reasonably be expected to have raised American Express's corporate eyebrow.
In sum, Draiman's Section 1643 claim (like that under Section 1642) must fail on limitations grounds. In addition, Section 1643 does not in any event limit Draiman's liability, both because Travel Dimensions had apparent authority to make the disputed charges and because Draiman benefited thereby (either of those two factors would also render Section 1643 inapplicable--and together they surely do so). Accordingly American Express is also entitled to the dismissal of the balance of Draiman's Count I TILA claim.
Draiman next argues that by reinstating his credit card and seeking to collect the $ 4,908.02 debt American Express violated the Illinois Act's prohibition against deceptive or unfair trade practices (815 ILCS 505/2). Those two adjectives--"deceptive" and "unfair"--will be examined separately.
None of what Draiman ascribes to American Express really involves deception. American Express's reinstatement policy is set out clearly in the cardholder agreement, and its unwritten practice of not reinstating accounts that have been closed for "derogatory" reasons did not affect Draiman and was therefore immaterial. American Express's debt collection efforts were likewise conducted out in the open.
As for whether American Express' conduct constituted an unfair trade practice, Draiman's major problem is that the Illinois Supreme Court has essentially read the word "unfair" out of the statute by limiting the statutory reach to conduct that "defrauds or deceives" ( Laughlin v. Evanston Hosp., 133 Ill. 2d 374, 389-90, 550 N.E.2d 986, 993 (1990); see also Sullivan's Wholesale Drug Co. v. Faryl's Pharmacy Inc., 214 Ill. App. 3d 1073, 1082, 573 N.E.2d 1370, 1375-76, 158 Ill. Dec. 185 (5th Dist. 1991)). This Court has had prior occasion to comment on that curious reading of the statute ( Kedziora v. Citicorp Nat'l Servs., Inc., 780 F. Supp. 516, 532-34 (N.D.Ill. 1991)
), and it refrains from any repetition in that regard--except to note that it remains improper for a federal court to second guess Illinois' highest court on a matter of state law. Thus American Express is also entitled to the dismissal of Draiman's Count II Illinois state law claim.
New York General Business Law
Draiman lastly claims that the same conduct by American Express violated the corresponding New York prohibition against deceptive trade practices (N.Y. Gen. Bus. Law § 349 (McKinney 1988)). Draiman's difficulty in that respect is if anything even more basic than its problem under the Illinois Act. New York's statute (unlike its Illinois counterpart) makes no mention of "unfair" practices, so it is hardly surprising that New York courts require that a defendant's actions must be materially misleading before a cause of action for deceptive trade practices will be recognized ( Varela v. Investors Ins. Holding Corp., 81 N.Y.2d 958, 615 N.E.2d 218, 598 N.Y.S.2d 761 (N.Y. 1993)(mem. op.)). Because its actions were not deceptive, American Express is finally entitled to the dismissal of Draiman's Count III New York state law claim.
American Express' Counterclaim
Although the ruling in the preceding section has used the term "finally," that is not literally true: American Express has earlier responded to Draiman's AC with a three-count Counterclaim seeking to collect the outstanding $ 4,908.02--an attempt that had not been made the subject either of (1) a lawsuit during the extended time period since Draiman failed to pay the charge against his account or (2) the request for relief or the discussion in the inch-thick filings (including no fewer than five memoranda!) on the current motion. Because of the small amount involved, that Counterclaim found its way into this federal court via piggyback--under the supplemental jurisdiction auspices of 28 U.S.C. § 1367.
With Draiman's only federal-question claim now having been dismissed, the jurisdictional support for the Counterclaim has been removed. That leaves for decision whether this Court (1) should follow the most common practice of dismissing without prejudice such remaining state law claim that lacks any federal jurisdictional underpinning (as counseled by United Mine Workers v. Gibbs, 383 U.S. 715, 726, 16 L. Ed. 2d 218, 86 S. Ct. 1130 (1966) and its progeny) or (2) should instead act as a small claims court for resolution of a claim that American Express--when left to its own devices--had apparently not viewed as meriting the filing of a lawsuit.
Frankly this Court is presently inclined to the first of those alternatives, but instead of ruling on that issue in this opinion it will set this action for an early status hearing. If at that time the parties have not resolved the small claim as between themselves, both sides' counsel should come prepared to address the appropriate disposition of the remaining dispute embodied in American Express' Counterclaim.
As to all aspects of Draiman's Amended Complaint, there are no genuine issues of material fact and American Express is entitled to a judgment as a matter of law. Accordingly AC Counts I, II and III are dismissed. This action is set for a further status hearing at 8:45 a.m. July 28, 1995.
Milton I. Shadur
Senior United States District Judge
Date: July 21, 1995