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City of Fairview Heights v. Orbitz

March 31, 2008


The opinion of the court was delivered by: Herndon, Chief Judge


I. Introduction

Now before the Court are two motions: Plaintiff's motion for class certification (Doc. 178) and a motion to strike new argument in Plaintiff's reply in support of its motion for class certification filed by all Defendants (Doc. 236.) In addition, Defendants have filed an objection to Magistrate Judge Wilkerson's Order (Doc. 220) prohibiting Defendants from taking any depositions of Plaintiff's Aldermen. (Doc. 221.) For the following reasons, the Court denies Plaintiff's motion for class certification, grants Defendants' motion to strike Plaintiff's reply, and affirms Judge Wilkerson's Order.

II. Background

Plaintiff, an Illinois municipality, originally brought this action in the Circuit Court of St. Clair County, Illinois. Plaintiff brought this suit on behalf of a putative class of Illinois municipalities in order to redress Defendants' failure to pay taxes allegedly owed to Plaintiff and other putative class members. Defendants removed this action to this Court on November 28, 2005. (Doc. 1.) On July 12, 2006, the Court denied Plaintiff's motion to remand and denied in part and granted in part Defendants' motion to dismiss. (Doc. 65.) Count I, which alleges that Defendants violated Fairview Heights, Ill., Code § 36-2-2,*fn1 is the only remaining claim. In brief, Plaintiff contends that Defendants--owners and operators of Internet travel sites--unlawfully neglected to pay the full amount of hotel taxes due and owing under the City ordinance. Plaintiff contends that Defendants accomplished this first by contracting with hotels and motels to resell their hotel rooms to consumers (at higher rates), and then by paying taxes only on the lower, contracted-for rates they paid to the hotels and motels themselves, not the rates actually paid by consumers.

III. Motion for Class Certification

Plaintiff moves this Court for class certification pursuant to FEDERAL RULE OF CIVIL PROCEDURE 23(b)(2) and (3). The United States Supreme Court has explicitly held that a class "may only be certified if the trial court is satisfied, after a rigorous analysis, that the prerequisites of Rule 23(a) have been satisfied," and "actual, not presumed, conformance with Rule 23(a) remains. . . indispensable."

Davis v. Hutchins, 321 F.3d 641, 649 (7th Cir. 2003) quoting Gen. Tele. Co. of the S.W. v. Falcon, 457 U.S. 147, 160-161 (1982). "A party seeking class certification bears the burden of proving that each of the requirements under Rule 23 has been met, and a failure by the movant to satisfy any one of these prerequisite elements precludes certification." Westefer v. Snyder, Civil Nos. 00-162-GPM, 00-708-GPM, 2006 WL 2639972, at *2 (S.D. Ill. Sept. 12, 2006) (citations omitted). A district court judge need not accept all allegations as true and may consider the merits if there are conflicting factual or legal issues, see Szabo v. Bridgeport Machines, Inc., 249 F.3d 672, 675 (7th Cir. 2001). Moreover, a court has broad discretion to determine whether a proposed class meets the Rule 23 certification requirements. General Tel. Co. of S.W. v. Falcon, 457 U.S. 147, 160 (1982); Trotter v. Klincar, 748 F.2d 1177, 1184 (7th Cir. 1984).

A. Prerequisites to Class Certification

In order to certify a class, a court must determine whether the requirements of Rule 23(a) have been met: 1) the class is so numerous that joinder of all members is impracticable ("numerosity"); 2) there are questions of law or fact common to the class ("commonality"); 3) the claims or defenses of the representative are typical of the claims or defenses of the class; ("typicality"); and 4) the representative parties will fairly and adequately protect the interests of the class ("adequacy"). FED.R.CIV.P.23(a).

However, courts have implied two other prerequisites to class certification that must be satisfied prior to even addressing the requirements of Rule 23(a): (1) the class must be sufficiently defined so that the class is identifiable; and (2) the named representative must fall within the proposed class. Alliance to the End Repression v. Rochford, 565 F.2d 975, 977 (7th Cir. 1977). Proper identification of the proposed class serves two purposes. First it alerts the court and the parties to the potential burdens class certification may entail. Simer v. Rios, 661 F.2d 655, 670 (7th Cir. 1981).

"It is absolutely necessary that for a class action to be certified, the class must be susceptible to a precise definition. Therefore, the class definition must be sufficiently definite so that it is administratively feasible for the Court to determine whether a particular individual is a member of the proposed class." Clay v. American Tobacco Co., 188 F.R.D. 483, 490 (S.D. Ill. 1999). "Furthermore, for a class to be sufficiently defined, the identity of the class members must be ascertainable by reference to objective criteria ." Id. (citation omitted).

1. Class Definition

The Complaint (Doc. 2), Plaintiff's motion for class certification (Doc. 178), and Plaintiff's memorandum in support of its motion for class certification (Doc. 179) all seek to certify a class defined as: "All taxing authorities in the State of Illinois authorized to impose a tax upon persons engaged in the business of renting, leasing or letting rooms in a hotel or motel on the gross rental receipts from such renting, leasing or letting." Defendants' response in opposition (Doc. 224) argues that this definition is fatal for two reasons: 1) Plaintiff is not a member of the proposed class; and 2) the proposed class is overbroad and unworkable. The ...

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