United States District Court, N.D. Illinois
January 21, 2004.
GREGORY A. WUJEC and JOHN P. SCINTO, individually and on behalf of all those similarly situated, Plaintiffs,
AT & T CORP., Defendant
The opinion of the court was delivered by: PAUL PLUNKETT, Senior District Judge
MEMORANDUM OPINION AND ORDER
Gregory A. Wujec and John P. Scinto*fn1 have sued AT&T Corp. for
its alleged violations of the Illinois Sales Representative Act, 820 ILL.
COMP. STAT. 120/1 et seq. AT&T has filed a Federal Rule of Civil
Procedure ("Rule") 12(b)(6) motion to dismiss. For the reasons set forth
below, the motion is granted.
Wujec was employed by AT&T as a senior account executive from
October 2, 2000 to July 31, 2002. (Compl. ¶ 4.) Scinto was employed
by AT&T as a senior account executive from February 2001 to August 1,
2002. (Id. ¶ 5.) Both men were paid on a salary plus
commission basis. (Id. ¶ 6.)
On July 10, 2003, AT&T sent Wujec a letter demanding that he repay
$5,663.52 in commissions purportedly overpaid to him during his
employment. (Id. ¶ 7.) The same day, AT&T sent a
similar letter to Scinto demanding that he return $21,790.51 in allegedly
overpaid commissions. (Id. ¶ 8.) A month later, AT&T
sent each man a second demand letter. (Id. ¶¶ 10-11.)
Plaintiffs claim that AT&T's attempts to collect commissions earned
by and paid to Wujec and Scinto during their employment with the company
violate the Illinois Sales Representative Act.
The Legal Standard
On a Rule 12(b)(6) motion to dismiss, the Court accepts as true all
well-pleaded factual allegations of the complaint, drawing all reasonable
inferences in plaintiff's favor. Forseth v. Village of Sussex,
199 F.3d 363, 368 (7th Cir. 2000). No claim will be dismissed unless "it
is clear that no relief could be granted under any set of facts that
could be proved consistent with the allegations." Hishon v. King
& Spalding, 467 U.S. 69, 73 (1984).
In relevant part, the Illinois Sales Representative Act provides:
All commissions due at the time of termination of
a contract between a sales representative and
principal shall be paid within 13 days of
termination, and commissions that become due after
termination shall be paid within 13 days of the
date on which such commissions become due. Any
provision in any contract between a sales
representative and principal purporting to waive
any of the provisions of this Act shall be void.
820 ILL. COMP. STAT. 120/2, A "sales representative," according to
the Act, is "a person who contracts with a principal to solicit orders
and who is compensated, in whole or in part, by
commission." 820 ILL. COMP. STAT. 120/1(4). The Act defines a
"principal" as "a sole proprietorship, partnership, corporation or other
business entity" that:
(A) Manufactures, produces, imports, or
distributes a product for sale;
(B) Contracts with a sales representative to
solicit orders for the product; and
(C) Compensates the sales representative, in whole
or in part, by commission.
820 ILL. COMP. STAT. 120/1(3). AT&T says that the Act does not
apply to plaintiffs because AT&T does not sell "products" and, thus,
is not a "principal," as the Act defines it.
The Court agrees. Though the Illinois Supreme Court has not decided the
issue, in English v. Northwest Envirocon, Inc., 663 N.E.2d 448
(Ill.App. Ct. 1996), the state appellate court held that the term
"principal" is limited to people and entities that sell tangible goods.
The English court based its conclusion on the plain language of
Despite the fact that [English] presents a
persuasive argument in favor of construing the
Sales [Representative] Act to include services
sellers not otherwise covered by specific
enactments, we find that we are constrained by the
language of the statute. . . . Despite
[English's] efforts to persuade us that the term
"products" is sometimes defined broadly in common
usage, we conclude that the employment of terms
such as "manufactures," "distributes," and
"imports" evidences the legislature's clear intent
that the Sales [Representative] Act apply only to
purveyors of tangible goods, not services. . . .
[I]f the legislature had intended the act to
apply to services, it could easily have
employed broader language.
Id. at 454. Two judges of this district have reached the
same conclusion. See Formestic, Inc. v. Residential Warranty
Corp., No. 96 C 6638, 1997 WL 51490, at *4 (N.D. Ill. Feb. 4, 1997)
("After examining the well-reasoned discussion of the scope of `product'
under the Act in English, we have not been persuaded that the
Illinois Supreme Court would determine that `product' has a wider
definition than was determined in English."); Kenebrew v.
Connecticut Gen. Life Ins. Co., 882 F. Supp. 749, 754 (N.D. Ill.
1995) ("While the language of the statute does not explicitly define
products only in terms of manufactured products or tangible goods, the
most reasonable construction
of the statute's plain meaning is to not include intangibles such
as insurance because of the context in which the term `product' is
found."). Given the plain language of the Act, we believe that the
Illinois Supreme Court would follow the reasoning of those courts and
hold that only sellers of tangible goods qualify as "principals."
Plaintiffs' affirmative allegation that they sold only AT&T's
services, not its products, (see Compl. ¶ 2), establishes
that AT&T is not a principal as the term is defined under the
Illinois Sales Representative Act. Accordingly, plaintiffs' claims must
Plaintiffs do not dispute the Court's interpretation of the Act. In
fact, they do not address the Act at all. (See Pls.' Resp. Mot.
Dismiss.) Instead, they seek to file an amended complaint that reduces
the amount in controversy to less than $75,000.00 and ask that the case,
as amended, be remanded to state court.
That we cannot do. The existence of subject matter jurisdiction over a
lawsuit removed from state court is determined at the time of removal.
St. Paul Indem. Co. v. Red Cab Co., 303 U.S. 283,
291 (1938). If, after removal, the plaintiff "by stipulation, by
affidavit, or by amendment of his pleadings, reduces the claim below the
requisite [jurisdictional] amount, [that] does not deprive the court of
jurisdiction." Id. at 292; Chase v. Shop'N Save Warehouse
Foods, Inc., 110 F.3d 424, 429 (7th Cir. 1997) (noting that the
Seventh Circuit follows the holding of St. Paul that plaintiff
cannot defeat jurisdiction by reducing his claim after removal).
Otherwise, the St. Paul Court said, "defendant's supposed
statutory right of removal would be subject to the plaintiffs caprice,"
Id. at 294.
When AT&T removed this case, plaintiffs were seeking in excess of
$75,000.00 in damages, (Compl. ¶ 25 A, B), and the parties were of
diverse citizenship.*fn3 Having alleged their way into federal court,
plaintiffs cannot now amend their way out. Accordingly, plaintiffs'
motions to amend their complaint and to remand this case to state court
For the reasons stated above, defendant's Rule 12(b)(6) motion to
dismiss is granted and this case is dismissed with prejudice. Plaintiffs'
motions to file an amended complaint and to remand the case to state
court are denied. This is a final and appealable order.