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Murphy v. Capital One Bank

August 18, 2008

JOANNE MURPHY, ON BEHALF OF HERSELF AND ALL OTHER ILLINOIS RESIDENTS SIMILARLY SITUATED, PLAINTIFF,
v.
CAPITAL ONE BANK, A VIRGINIA STATE BANK, DEFENDANT.



The opinion of the court was delivered by: Charles P. Kocoras, District Judge

MEMORANDUM OPINION

This matter comes before the court on the motion of Defendant Capital One Bank ("Capital One") to strike Plaintiff Joanne Murphy's claim for damages based on overlimit fees assessed after March 1, 2008, pursuant to Federal Rule of Civil Procedure 12(f). For the reasons set forth below, the motion is denied.

BACKGROUND

Murphy, an Illinois resident, originally filed this action in January 2008, on behalf of herself and a putative class of Illinois residents similarly situated, in the Circuit Court of Cook County, Illinois, against Capital One, a Virginia corporation. Capital One removed Murphy's suit to this court, asserting federal subject matter jurisdiction in diversity pursuant to the Class Action Fairness Act, 28 U.S.C. § 1332(d)(2)(A).

According to the complaint, Capital One violated the Illinois Consumer Fraud and Deceptive Business Practices Act (the "ICFA"), 815 ILSC 505/2, by charging Murphy, a Capital One credit cardholder, and the purported class*fn1 an over-the-limit fee in one or more monthly billing cycles over the past three years even though each cardholder timely paid the "minimum amount due" for those cycles.

On March 1, 2008, Capital One converted from a Commonwealth of Virginia charter to a national bank.*fn2 Shortly thereafter, on June 26, 2008, Capital One filed the instant motion to strike Murphy's ICFA claim for damages based on overlimit fees assessed after March 1, 2008.

LEGAL STANDARD

Federal Rule of Civil Procedure 12(f) allows a district court to "strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter" upon a "motion made by a party either before responding to the pleading or, if a responsive pleading is not allowed, within 20 days after being served with the pleading." Despite this time restriction, a district court may "consider a motion to strike at any point in a case." Williams v. Jader Fuel Co., Inc., 944 F.2d 1388, 1400 (7th Cir. 1991). The purpose behind Rule 12(f) is to exclude irrelevant material from pending litigation. Donovan v. Robbins, 99 F.R.D. 593, 596 (N.D. Ill. 1983), rev'd on other grounds, 752 F.2d 1170 (7th Cir. 1984). Though motions to strike are not favored, they are considered to be useful and appropriate tools for weighing the legal significance of uncontroverted facts. U.S. v. 416.81 Acres of Land, 514 F.2d 627, 631 (7th Cir. 1975).

A court must construe all well-pleaded facts in the non-moving party's favor on a Rule 12(f) motion. Id. A motion to strike "will not be granted unless it appears to a certainty that plaintiffs would succeed despite any state of facts which could be proved in support of the defense and are inferable from the pleadings." Williams, 944 F.2d at 1400 (internal citations omitted).

With these principles in mind, we turn to the instant motion.

DISCUSSION

I. Federal Preemption

The main issue Capital One's motion presents is whether Capital One may be held liable for damages stemming from its alleged violations of the ICFA that took place after it became a national bank on March 1, 2008. Capital One argues that it cannot be held liable for these damages because, as a national bank, it is subject to the National Bank Act (the "NBA"), 12 U.S.C. § 21 et seq., and the NBA preempts the ICFA.

The NBA controls the business activities of national banks. Watters v. Wachovia Bank, N.A., 127 S.Ct. 1559, 1564 (7th Cir. 2007). As per Congress's instructions, the NBA is supervised by the Office of the Comptroller of the Currency (the ...


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