in deciding to structure the EchoStar plan as a credit card plan, Bank One reasonably expected that consumers would continue to make purchases using the EchoStar card over time. Many of the parties' factual submissions relate to this issue. Fairly summarized, the submissions show that Bank One viewed repeat sales as a goal of the Plan, and genuinely believed that the credit card would encourage repeat sales to a relatively captive consumer base. Bank One planned to encourage such sales through advertising enclosed with the monthly account statements, as well as through other promotions.
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. Id.; Buttitta v. City of Chicago, 803 F. Supp. 213, 217 (N.D. Ill. 1992), aff'd, 9 F.3d 1198 (7th Cir. 1993).
Count I - TILA Claim
TILA sets out two different types of credit that may be extended to consumers: open-end credit (the prototypical example is a credit card account), and closed-end credit, such as a car loan or other retail installment contract. Those who extend credit to consumers are responsible under TILA for knowing the difference between the two and making the appropriate mandatory disclosures to consumers. The regulation applicable to TILA (known as Regulation Z) requires that closed-end disclosures be made unless the credit at issue qualifies as an open-end plan. See Regulation Z, 12 C.F.R. § 226.5-17. Among other things, closed-end disclosures must include the total amount financed, including both the sale price and the total amount of interest that will be paid, the length of time over which payments may be made, the amount of each installment payment and the intervals between payments, and the amount of any finance charges. These disclosures must be made at the point of sale.
The disclosures required for open-end accounts are somewhat less onerous. They may be contained in a pre-printed form given to consumers before the account is opened, telling them (among other things) the annual percentage rate of interest charged on the account, and the nature and amount of any finance charges. Creditors have considerable incentive to structure credit in an open-end form if they can, both because the disclosures are less burdensome to provide, and because "they fear that certain closed-end credit disclosures, such as the total dollar amount of finance charge, the total of payments, and 'total sale price' might engender consumer resistance to the sale." Sheldon Feldman, "The Specious Open-End Credit Plan--A Discussion of the Law Leading up to FTC v. Traditional Industries," 45 Bus. Law. 1989, 1991 (June 1990). However, creditors may only treat a credit plan as open-end if it qualifies as such under TILA regulations. The plaintiffs contend that TILA required that the EchoStar Plan be structured as a closed-end credit plan, and that Bank One and Echo violated TILA by failing to provide them with closed-end disclosures.
The regulations define "open-end credit" as having the following three characteristics:
(i) The creditor reasonably contemplates repeated transactions;