United States District Court, N.D. Illinois, Eastern Division
October 8, 2004.
CHRISTOPHER IOSELLO, Plaintiff,
VICTOR LAWRENCE, d/b/a LEXINGTON LAW FIRM Defendants.
The opinion of the court was delivered by: MICHAEL MASON, Magistrate Judge
REPORT AND RECOMMENDATION
Plaintiff, Christopher Iosello, filed a class action complaint
against Victor Lawrence, d/b/a Lexington Law Firm, alleging
violations of the Credit Repair Organizations Act
(15 U.S.C. § 1679 et seq.) and the Illinois Consumer Fraud and Deceptive
Business Practices Act (815 ILCS § 505/2 et seq.). Plaintiff
also filed a motion for class certification. The District Court
referred the matter of class certification to us for a report and
recommendation. For the following reasons, we recommend that the
District Court deny plaintiff's motion for class certification.
Plaintiff's Second Amended Complaint alleges that during 2002,
he contracted with Lexington Law Firm ("Lexington") for credit
repair services, via the Internet, mail and telephone.
Plaintiff's contract terms were set forth on a website maintained
by Lexington. Those terms are attached to the Second Amended
Complaint as Exhibits A and B. Plaintiff alleges that Lexington's
business practices do not comply with the Credit Repair Organizations Act ("CROA") or the Illinois Consumer Fraud and
Deceptive Business Practices Act ("ICFA"). Plaintiff claims that
Lexington's contract violates the CROA in multiple respects. In
particular, plaintiff alleges three categories of CROA
violations: (1) insufficient and improper disclosures; (2) false
and misleading representations; and (3) payment violations
(requiring an initial retainer fee prior to sending credit repair
letters). Plaintiff further alleges that the CROA violations also
constitute violations of the ICFA.
Plaintiff's complaint also alleges two class action claims.
Plaintiff's CROA claim is brought on behalf of a class consisting
of all persons who contracted with Lexington within five years
prior to the filing of this action. Plaintiff's ICFA claim is
brought on behalf of a class consisting of all persons with an
Illinois address who contracted with Lexington within three years
prior to the filing of this action.
Plaintiff's class certification motion requests certification
of two classes against defendant Victor Lawrence, d/b/a Lexington
Law Firm. Plaintiff defines the two classes as follows:
The CROA Class is defined as "all consumers who paid a fee to,
or were charged a fee by, Lexington Law Firm or Victor Lawrence
for the purpose of challenging inaccurate, misleading or
unverifiable negative items on their credit reports between Feb.
10, 1998 and the present."
The ICFA Class is defined as "all consumers located in Illinois
who paid a fee to, or were charged a fee by, Lexington Law Firm
or Victor Lawrence for the purpose of challenging inaccurate,
misleading or unverifiable negative items on their credit reports
between Feb. 10, 2000 and the present." Analysis
In order for a class to be certified under Federal Rule of
Civil Procedure 23, the named plaintiff must demonstrate that the
four requirements of Rule 23(a) are satisfied. Retired Chicago
Police Ass'n v. City of Chicago, 7 F.3d 584, 596 (7th Cir.
1993). The four requirements of Rule 23(a) are: (1) the class is
so numerous that joinder of all members is impracticable; (2)
there are questions of law or fact common to the class; (3) the
claims or defenses of the representative parties are typical of
the claims or defenses of the class; and (4) the representative
parties will fairly and adequately protect the interests of the
class. Fed.R. Civ. P. 23(a). All of these elements are
prerequisites to certification and failure to meet any one of
them precludes certification as a class. Retired Chicago
Police, 7 F.3d at 596.
Both the 23(a)(2) commonality and 23(a)(3) typicality
requirements are closely related. Rosario v. Livadits,
963 F.2d 1013, 1018 (7th Cir. 1992). Rule 23(a)(2) requires that the class
have common questions of law or fact. Rule 23(a)(3) requires that
the claims of the class representative be typical of the claims
of the class. Indeed, the class representative's claims must have
the same essential characteristics as the claims of the class.
Retired Chicago Police, 7 F.3d at 597 (citing De La Fuente v.
Stokely-Van Camp, Inc., 713 F.2d 225, 232 (7th Cir. 1983)). "A
plaintiff's claim is typical if it arises from the same event or
practice or course of conduct that gives rise to the claims of
other class members and his or her claims are based on the same
legal theory." Retired Chicago Police, 7 F.3d at 597.
Here, plaintiff's claims are based on his contract with
Lexington. In his class certification motion, plaintiff argues that the primary questions
in this action are whether Lexington's contracts comply with the
CROA and whether the systematic violations of the CROA are
deceptive or unfair under the ICFA. All of the CROA violations
plaintiff alleges in his complaint arise out of plaintiff's
contract with Lexington and the disclosures plaintiff viewed on
Lexington's website. However, the CROA and the ICFA classes as
defined are not limited to individuals who entered into the same
contract as the plaintiff or to individuals who reviewed and
relied on the same web pages as the plaintiff. Instead, the
classes include (with certain time period and location
restrictions) all consumers who paid or were charged a fee by
Lexington for the purpose of challenging inaccurate, misleading
or unverifiable negative items on their credit reports.
Plaintiff contends that each credit repair customer has been
subjected to one or more of the alleged CROA violations. While
allegations in support of a motion for certification generally
are presumed true, the plaintiff may not rest on mere conclusory
allegations, and must make a minimal factual showing that the
conditions for certification exist. Panache Broadcasting v.
Richardson Elecs., 1995 U.S. Dist. LEXIS 14462, *19 (N.D. Ill.,
September 27, 1995). Here, plaintiff has made no factual showing
that the conditions for certification exist. In particular,
plaintiff has failed to establish that any of the proposed class
members entered into contracts that contained the same alleged
CROA disclosure violations, false representations or payment
violations as the plaintiff's contract. It is entirely possible
that members of the proposed class entered into contracts which
did not contain any of the CROA violations alleged in plaintiff's
complaint. As a result, it is impossible to determine whether
plaintiff's claims arise from the same practice or course of
conduct as the class members' claims. Because plaintiff has not demonstrated that his claims arise
from the same practice or course of conduct as the class members'
claims, plaintiff has failed to establish that his claims are
typical of the claims of the class. Plaintiff also failed to
establish the commonality requirement because a plaintiff who
does not meet the typicality requirement does not have a claim
common to the class. Seidat v. Allied Interstate, Inc., 2003
U.S. Dist. LEXIS 10413, *9 (N.D. Ill., June 18, 2003)
(recognizing that a plaintiff who does not meet the typicality
requirement does not have a claim common to the class and
consequently, such a plaintiff fails to meet the commonality
Furthermore, plaintiff has not met his burden to establish the
Rule 23(a)(1) numerosity requirement. A plaintiff cannot satisfy
the numerosity requirement without demonstrating that persons
other than himself are similarly situated. Jenkins v. Mercantile
Mortg. Co., 231 F. Supp. 2d 737, 744 (N.D. Ill. 2002). Plaintiff
argues that Lexington had 80,000 clients over the past several
years and therefore, Lexington had more than 40 clients for
credit repair services during the class period. However,
plaintiff made no factual showing that any other Lexington
clients were subjected to the same CROA violations as plaintiff
alleges in his complaint. Therefore, plaintiff has not shown that
persons other than himself are similarly situated. Additionally,
a party seeking class certification cannot rely on speculation as
to the size of the class to satisfy the numerosity requirement.
Id. (recognizing that the mere fact that the defendant had many
other customers did not necessarily mean other class members
Because plaintiff failed to establish the Rule 23(a)
numerosity, commonality and typicality requirements, plaintiff's
motion for class certification must be denied. Plaintiff's
failure to satisfy the Rule 23(a) requirements obviates the need
to discuss whether plaintiff satisfied the requirements of Rule 23(b).
This Court recommends that the District Court deny plaintiff's
motion for class certification because plaintiff failed to
satisfy the requirements of Rule 23(a). Specific written
objections to this report and recommendation may be served and
filed within 10 business days from the date that this order is
served. Fed.R. Civ. P. 72. Failure to file objections with the
District Court within the specified time will result in a waiver
of the right to appeal all findings, factual and legal, made by
this Court in the report and recommendation. Lorentzen v.
Anderson Pest Control, 64 F.3d 327, 330 (7th Cir. 1995).
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