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Wallace Stilz, Iii v. Standard Bank and Trust Company

December 14, 2010


The opinion of the court was delivered by: Judge James B. Zagel



On March 30, 2010, Plaintiff filed his one-count complaint on behalf of himself and others similarly situated. In his complaint, Plaintiff alleges that Defendant failed to post fee notices on an automated teller machine ("ATM") as required by the Electronic Funds Transfer Act, 15 U.S.C. § 1693 et seq. ("EFTA") and its implementing Regulation E, 12 C.F.R. § 205.1 et seq. Specifically, Plaintiff claims that on March 29, 2010, he withdrew money from an ATM and was charged a $2.50 fee despite no notice being posted on or near the ATM disclosing that users would be charged a fee to conduct an electronic fund transfer. Plaintiff seeks actual and statutory damages, attorneys' fees, and costs.

Defendant claims that it made an offer of judgment to Plaintiff pursuant to Federal Rule of Civil Procedure 68 on June 17, 2010 for $1,000.00 plus reasonable attorneys' fees and costs which fully satisfied Plaintiff's claim. 15 U.S.C. 1693 (m)(a) provides for statutory damages in individual actions of not less than $100 nor greater than $1,000. Plaintiff did not accept Defendant's offer and moved for class certification on August 16, 2010. Defendant now moves to dismiss for lack of standing. For the following reasons, Defendant's motion to dismiss is granted.


Article III of the United States Constitution grants to federal courts "judicial power" over "cases" and "controversies." U.S. Const. Art. III § 2. "Both litigants must have a personal interest in the case at the beginning of the litigation, and their interests must persist throughout its entirety." Holstein v. City of Chi., 29 F.3d 1145, 1147 (7th Cir. 1994) (citation omitted). "A case becomes moot when the dispute between the parties no longer rages, or when one of the parties loses his personal interest in the outcome of the suit." Id. "Once the defendant offers to satisfy the plaintiff's entire demand, there is no dispute over which to litigate, and a plaintiff who refuses to acknowledge this loses outright, under Fed.R.Civ.P. 12(b)(1), because he has no remaining stake." Rand v. Monsanto Co., 926 F.2d 596, 598 (7th Cir. 1991) (citation omitted). "You cannot persist in suing after you've won." Greisz v. Household Bank (Illinois), 176 F.3d 1012, 1015 (7th Cir.1999).

In the context of a class action, where a plaintiff seeks to represent a class of individuals with similar claims, the application of this doctrine is more complicated. Holstein, 29 F.3d at 1147. "If the district court has certified the class before the expiration of the plaintiff's claims, mootness is avoided." Id.


Defendant moves to dismiss this action on the ground that Defendant's Rule 68 offer moots Plaintiff's claim. Plaintiff admits that he rejected Defendant's offer of judgment, but argues that because Defendant's offer did not account for Plaintiff's actual damages, it was not an offer for all of the relief Plaintiff requested and therefore does not deprive this Court of subject matter jurisdiction.

A. Plaintiff Cannot Recover Actual Damages.

In his complaint, Plaintiff alleges that he and the putative class members suffered actual and statutory damages as a result of Defendant's failure to post the required fee notices and subsequent charging of fees. The EFTA permits a consumer to recover actual damages sustained "as a result" of a defendant's failure to comply with its provisions. 15 U.S.C. § 1693(m). Defendant argues Plaintiff can only recover actual damages under the EFTA if he can show detrimental reliance. Pursuant to 12 C.F.R. § 205.16(c) an ATM must provide notice of fees both on the machine and on the screen (or on paper prior to the consumer committing to pay a fee). Though Plaintiff alleges that Defendant failed to provide proper notice of fees on the machine, Defendant asserts that it is undisputed that when Plaintiff made his cash withdrawal, a fee notice was presented to him on the ATM screen and he had to click "yes" to accept the fee before he was charged $2.50. Accordingly, Defendant argues that the fee cannot be considered an actual damage because he knowingly agreed to the fee and cannot show detrimental reliance.

In Brown v. Bank of America, N.A., the court borrowed from caselaw interpreting the identical damages provision of the Truth in Lending Act ("TILA") in its EFTA analysis. 457 F.Supp.2d 82, 90 (D.Mass. 2006) (citing Johnson v. W. Suburban Bank, 225 F.3d 366, 378-79 (3d Cir. 2000) (finding identical class action language in TILA and EFTA to have identical substantive meaning)). In doing so, the court noted that it was the first reported case interpreting the actual damages provision of the EFTA. Id. at 90. The Brown court held that to recover actual damages, "[p]laintiffs must establish causation of harm through detrimental reliance." Id. (citations omitted). In Brown, the plaintiffs could not establish detrimental reliance because even if the ATM machine did not have proper notice on the machine, the ATM provided a "click through" screen that Plaintiff needed to accept prior to being charged a fee. Because the plaintiffs received actual notice of the fee and gave electronic consent, there was "no causal link between an ill-placed decal and monetary loss necessary to recover actual damages under EFTA."

Plaintiff argues that he need not prove detrimental reliance to recover actual damages for EFTA violations and asserts that "a majority of the district courts in the Seventh Circuit" have concurred with his assertion. In support, he cites to three cases from the Western District of Wisconsin decided by the same judge (Magistrate Judge William E. Callahan). See, Savrnoch v. First Am. Bankcard, Inc., No. 07 C 0241, 2007 WL 3171302, at *2-5 (E.D. Wis. Oct. 27, 2007); Mayotte v. Associated Bank, N.A., No. 07 C 0033, 2007 WL 2358646, at *4 (E.D. Wis. Aug. 17, 2007); Voeks v. Wal-Mart Stores, Inc., No 07 C 0030, 2007 WL 2358645, at *4 (E.D. Wis. Aug. 17, 2007). Other judges, both in the Eastern District of Wisconsin and here in the Northern District of Illinois, have reached the opposite conclusion. See Voeks v. Pilot Travel Centers, 560 F.Supp.2d 718, 725 (E.D. Wis. 2008); Stilz v. Global Cash Network, Inc., No. 10 C 1998, Judge Gettleman (Oct. 7, 2010).

Relying on the language of ยง 1693m(a)(1), the courts in Savrock, Wal-mart, and Mayotte found that though a plaintiff must prove causation to recover damages, proof of causation did not necessarily need to include detrimental reliance. Pilot Travel, 560 F.Supp.2d at 721. The rationale used in the three opinions ...

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