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BLAIR v. SUPPORTKIDS INC.

April 17, 2003

WALTER BLAIR AND JOHN GRAY, PLAINTIFFS,
v.
SUPPORTKIDS, INC., D/B/A CHILD SUPPORT ENFORCEMENT; AND RICHARD "CASEY" HOFFMAN, DEFENDANTS.



The opinion of the court was delivered by: Amy J. St. Eve, United States District Judge

MEMORANDUM OPINION AND ORDER

Plaintiffs Walter Blair and John Gray have moved for class certification on their claims for fraud (Count III), tortious interference (Count IV), unauthorized practice of law (Count V), violation of the Illinois Collection Agency Act (Count VI), and violation of the Illinois Consumer Fraud Act (VII). For the reasons set forth below, Plaintiffs' motion for class certification is denied.

BACKGROUND

Defendant SupportKids, Inc. d/b/a as Child Support Enforcement (hereinafter "CSE") is a child support collection agency that purports to represent parents owed child support obligations. (See R. 24-1, Am. Complaint, ¶ 9.) Defendant Richard "Casey" Hoffman is the chief executive officer of CSE. (Id., ¶ 8.)

Plaintiffs Blair and Gray allege that Defendants sent purported "Order/Notices to Withhold Income for Child Support" to their respective employers, suggesting that Blair and Gray have outstanding child support obligations. (See R. 24-1, Am. Complaint, ¶¶ 12, 33.) Plaintiffs contend that they have satisfied their support obligations and that CSE is not entitled to collect money on behalf of their former spouses. (Id., ¶¶ 41-51.) Instead, Plaintiffs suggest that under Illinois law only the appropriate public agency, the obligee, or an attorney licensed to practice law in Illinois can send the order/notices for income withholding. (Id., ¶¶ 45-46.)

Plaintiffs seek a declaratory judgment that CSE is not entitled to collect $460,391.02 from Plaintiffs. (See R. 24-1, Am. Complaint, ¶¶ 52-53.) In addition, Plaintiffs seek damages for fraud (Count II), defamation (Count III), tortious interference with a contract (Count IV), unlicensed practice of law (Count V), violation of the Illinois Collection Agency Act ("ICAA") (Count VI), and violation of the Illinois Consumer Fraud Act ("ICFA"). (Id., ¶¶ 54-125.)

Plaintiffs have moved for certification of two different classes. The first purported class, brought under the fraud, tortious interference, unauthorized practice of law, and ICFA claims, consists of"[a]ll putative Illinois obligors with respect to whom CSE has issued a purported "order/notice of withholding' such as [the order/notices used with Blair and Gray." (R. 21-1, Pls.' Mot. for Class Certification, at p. 1.) The second purported class, brought under the claim for violation of the ICAA, consists of "all putative Illinois obligors to whom CSE has issued a purported "order/notice of withholding.'" (Id.)

ANALYSIS

I. JURISDICTION

As an initial matter, in their opposition to class certification, Defendants suggest that the Court should dismiss Plaintiffs' claims because they lack jurisdiction for three reasons. First, Defendants suggest that the declaratory judgment claim by the two named plaintiffs, Blair and Gray, does not satisfy the amount in controversy requirement. Second, even if Plaintiffs' declaratory judgment claim does satisfy the amount in controversy requirement, Defendants argue that Plaintiffs' claim falls within the "domestic relations" exception to jurisdiction. Third, Defendants contend that there is no diversity jurisdiction over the Amended Complaint's class claims. None of these arguments has merit.

A. The Amount In Controversy

The Amended Complaint alleges that Defendants sent purported order/notices to the Blair and Grays' employers, seeking to collect $85,376.56 and $375,014.46 respectively. (See R. 24-1, Am. Complaint, ¶¶ 12, 33.) Plaintiffs seek a declaratory judgment that the Defendants are not entitled to collect these amounts, which plainly exceed the jurisdictional minimum. See 28 U.S.C. § 1332 (a). Nonetheless, Defendants suggest that the amount in controversy requirement is not satisfied because CSE managed to collect only a few hundred dollars from Blair and Gray before they filed this lawsuit.

Without citation to any authority, Defendants argue that diversity jurisdiction can only be premised on the damages actually sustained by Blair and Gray and not the amounts that Defendants apparently believe they were entitled to collect from Plaintiffs. That is incorrect. It is well-settled that the amount in controversy in a declaratory judgment action like this is the value of the of the plaintiff's purported obligation to the defendant. See, e.g., Motorists Mut. Ins. Co. v. Simpson, 404 F.2d 511, 515 (7th Cir. 1968) ("`Where an insurer denies his obligations under a liability insurance policy . . . the amount in controversy is measured ...


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