The opinion of the court was delivered by: CASTILLO
Plaintiffs Harry and Patricia Benion have brought this class action suit against Bank One, Dayton, N.A., Echo Acceptance Corporation, and Superior Satellite, Inc., alleging violations of the Truth In Lending Act ("TILA") in Count I, and the Illinois Consumer Fraud Act ("ICFA") in Count II. Bank One and Echo have moved for summary judgment pursuant to Fed. R. Civ. P. 56. Superior has filed a piggyback motion for summary judgment, arguing that if summary judgment is granted in favor of Bank One and Echo, it cannot be liable either. Finally, the plaintiffs have cross-moved for summary judgment, seeking a ruling that the defendants are liable to them as a matter of law. This opinion addresses all of the parties' motions for summary judgment.
For the reasons described below, this court reluctantly finds that the defendants are, on the undisputed facts of this case, entitled to summary judgment. Our conclusion is reluctant because consumers' use of the charge card credit plan at issue here undeniably tends to undermine their ability to appreciate fully the cost of their credit obligations, to the detriment of Congress' goal in enacting TILA--enabling consumers to shop for and use credit wisely. See 15 U.S.C. § 1601(a) ("It is the purpose of this subchapter to assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit"); Ford Motor Credit Co. v. Milhollin, 444 U.S. 555, 559, 63 L. Ed. 2d 22, 100 S. Ct. 790 (1980) (same). A thoughtful consideration of the issues presented in this case suggests that the present test for compliance with TILA does not cope well with advances in the marketing of big-ticket consumer products by creditors and retailers. However, fine-tuning the scope of TILA is a legislative rather than a judicial function. Further legislative or administrative treatment of these issues is sorely needed. In the absence of better guidance in this area, we apply the law as it is written and find that the undisputed facts of this case entitle the defendants to judgment in their favor as a matter of law.
In February 1995, the Benions visited a Sam's Club store in which a salesman for Superior Satellite, a local consumer electronics retailer, was demonstrating and selling satellite television systems. Patricia Benion--like many Chicagoans, an avid sports fan--was entranced by the astounding number of sports games available with a satellite television system. On the spot, the Benions agreed to purchase a satellite television system for $ 4,297.52. In addition to a satellite dish, roof mount, and various free accessories, the sale included one year's worth of programming (the most expensive programming package available, so that Patricia Benion could be sure to get all her games) which cost $ 996.00 by itself. When Patricia Benion expressed doubt that her credit rating was good enough to enable her to make this purchase, the salesman suggested that she apply for an EchoStar Revolving Charge Plan. The Benions signed the application for the charge plan without reading it. The parties disagree about what information the Benions were given about the charge plan before they signed the application. A charge account was opened for the Benions with a credit limit of $ 4,500.00, a few hundred dollars above the amount of their first purchases. There is no evidence of whether it is typical that the credit limits on EchoStar accounts are set just above the amount of the first purchases.
The application completed by the Benions was for the EchoStar Revolving Charge Plan ("Plan"), a private label credit card offered by Bank One, a national bank with its principal place of business in Dayton, Ohio. Bank One began issuing this credit card in 1994 through an agreement with Echo Acceptance Corporation, a consumer finance company specializing in arranging credit for the sales of equipment and programming related to satellite television systems. Once an account under the Plan is opened for a consumer, the consumer is issued a plastic credit card that may be used to make purchases at any Echo authorized dealer, of which there are several hundred throughout the country, or to order products or television programming directly from Echo or programming packagers. Authorized dealers sell satellite dishes, receivers, accessories, and programming distributed by EchoStar Communications Corporation, and also typically stock other consumer electronics products including televisions, VCRs, and stereo equipment. Superior Satellite is one such authorized dealer. According to instructions issued to Echo dealers, a satellite receiver must be included in the first purchase a consumer makes using the new credit card. The initial purchase of a satellite receiver, related equipment, and installation generally totals between $ 2,000.00 and $ 4,000.00, although a low-cost satellite dish standing alone can cost as little as $ 199.00.
The EchoStar Revolving Charge Plan is set up much as any other credit card account. A consumer may make purchases using the card up to the credit limit set for the account. Paying part or all of the outstanding balance on the account replenishes the available credit to the extent of the payment. Bank One periodically imposes a finance charge on outstanding balances. Consumers receive monthly statements listing the outstanding balance, the minimum payment due on that balance, and the amount of remaining available credit. When enrolling in the Plan, consumers are supposed to receive all disclosures required by TILA for open-end credit plans, although the plaintiffs state that they did not receive such disclosures when they signed up for the EchoStar plan.
Before entering into the agreement with Echo to create the Plan, Bank One reviewed sales data from a similar private label credit card plan that another company, Household Retail Services, had operated in conjunction with Echo. In 1993, there were 30,420 first-time purchases made under the Household plan, and 4,260 repeat purchases through the plan. Thus, 12.3% of all purchases made using the Household plan in 1993 were repeat purchases. The plaintiffs point out that these repeat sales only amounted to 2.3% of the income from purchases under the plan. For the first five months of 1994, repeat purchases were 17% of all Household plan purchases; these repeat purchases accounted for 3.8% of the dollar amount produced by sales under the plan. The above figures do not reflect accounts opened under the plan that were never used for any purchases.
After the inception of the Bank One/EchoStar Revolving Charge Account plan in November 1994, Bank One included advertisements for Echo products and programming packages in its monthly statements to consumers. In its instructions to Echo dealers, Bank One also encouraged the dealers to promote the availability of the credit card for future purchases. Whether as a result of these promotions or for some other reason, consumers have made some additional purchases using their EchoStar credit cards. In April, 1995, repeat sales were 6.97% of all sales under the Plan. One year later, repeat sales accounted for 11.40% of the sales under the Plan. (In June and July of 1996 repeat sales accounted for half of all Plan sales, but the plaintiffs argue that these months are not representative.) By August, 1996, 51,476 accounts had been opened under the Plan. Just under 60% of the accounts had been used to finance a purchase; a little over 40% had never been used. Of the 30,673 accounts that had been used for at least one purchase, 6,356 had also been used for an additional purchase. Thus, 12.3% of all accounts (active and inactive), or 20.7% of the active accounts, had been used for repeat purchases. A random sample of 75 repeat purchases made between March 1995 and May 1996 shows that 29% of the repeat purchases were for programming packages. Repairs or parts accounted for almost one quarter of the "add-on" sales. Another 25% was for satellite-related equipment such as additional receivers, remote controls, or surge protectors. The remaining purchases were stereo or sound equipment, televisions, VCRs, extended warranties, and programming guides.
Summary judgment is proper only if the record shows that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). A genuine issue for trial exists only when "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). The court must view all evidence in the light most favorable to the nonmoving party, Valley Liquors, Inc. v. Renfield Importers, Ltd., 822 F.2d 656, 659 (7th Cir.1987), and draw all inferences in the nonmovant's favor. Santiago v. Lane, 894 F.2d 218, 221 (7th Cir.1990). In making its decision, the court's sole function is to determine whether sufficient evidence exists to support a verdict in the non-movant's favor. Anderson, 477 U.S. at 255. Credibility determinations, weighing evidence, and drawing reasonable inferences are jury functions, not those of a judge when deciding a motion for summary judgment. Id.
Where, as here, cross-motions for summary judgment have been submitted, the court is not obliged to grant judgment as a matter of law for one side or the other. Heublein, Inc. v. United States, 996 F.2d 1455, 1461 (2d Cir. 1993). The court must evaluate each party's motion on its own merits, resolving all factual uncertainties and drawing all reasonable inferences against the party whose motion is under consideration. ...