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Lawrence S. Brodsky, Individually and As the Representative of A v. Humanadental Insurance Company D/B/A Humana Specialty Benefits

February 8, 2011

LAWRENCE S. BRODSKY, INDIVIDUALLY AND AS THE REPRESENTATIVE OF A CLASS OF SIMILARLY-SITUATED PERSONS, PLAINTIFF,
v.
HUMANADENTAL INSURANCE COMPANY D/B/A HUMANA SPECIALTY BENEFITS, DEFENDANT.



The opinion of the court was delivered by: James F. Holderman, Chief Judge:

MEMORANDUM OPINION AND ORDER

In March 2010, plaintiff Lawrence Brodsky ("Brodsky") filed a class action complaint against defendant HumanaDental Insurance Company ("HumanaDental"), in the Circuit Court of Cook County alleging violations of the Telephone Consumer Protection Act ("TCPA"), 47 U.S.C. § 227 (Count I), common law conversion under Illinois law (Count II), and violations of the Illinois Consumer Fraud and Deceptive Business Practices Act ("Consumer Fraud Act"), 815 ILCS 505/2, as well as "substantially [sic] consumer protection statutes of states in which other class members reside" (Count III). (10-C-3233, Dkt. No. 1, Ex. B ("2010 Compl.") ¶¶ 19-44.) On May 26, 2010, HumanaDental timely filed a notice of removal under 28 U.S.C. § 1446. (10-C-3233, Dkt. No. 1.) Currently before this court is HumanaDental's "Motion to Dismiss Pursuant to Fed. R. Civ. P. 12" (10-C-3233, Dkt. No. 14 ("HumanaDental's Mot.").) For the reasons explained below, HumanaDental's Motion to Dismiss is denied, but HumanaDental's request to strike the references to unnamed consumer protection statutes and request for injunctive relief under the Consumer Fraud Act set forth in Brodsky's complaint filed in 2010 is granted.

BACKGROUND

In July 2008, Brodsky filed a class action lawsuit in the Circuit Court of McHenry County, Illinois against Humana, Inc., ("Humana") the parent company of HumanaDental ("2008 Case"). (08-C-50188, Dkt. No. 1, Ex. B.) In his complaint in the 2008 Case ("2008 Complaint"), Brodsky alleged that Humana transmitted unsolicited fax advertisements to Brodsky and other class members without consent and absent any established business relationships, thereby violating both the TCPA and the Consumer Fraud Act and committing common law conversion. (Id. ¶¶ 1129.) Brodsky also filed a motion for class certification in the Circuit Court of McHenry County, which described the potential class members and stated that "[p]laintiff will file a supporting Memorandum of Law in due course." (08-C-50188, Dkt. No. 1, Ex. C.)

On August 25, 2008, Humana removed the 2008 Case to the Northern District of Illinois, Western Division, where it was assigned to United States District Judge Philip G. Reinhard and United States Magistrate Judge P. Michael Mahoney. (08-C-50188, Dkt. No. 1.) On October 7, 2008, Brodsky voluntarily dismissed his common law conversion (Count II) and Consumer Fraud Act (Count III) claims in the 2008 Case. (08-C-50188, Dkt. No. 18.) Thereafter, Brodsky's TCPA claim against Humana was the only remaining claim in the 2008 Complaint.

On August 12, 2009, Humana contacted Brodsky and offered to settle his claims for $3,500. (10-C-3233, Dkt. No. 19 ("Brodsky's Resp."), Ex. D.) After tendering this settlement offer, Humana proceeded to file a motion to dismiss Brodsky's claims for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1), arguing that its settlement offer to Brodsky mooted his claims against Humana. (08-C-50188, Dkt. No. 59.)

While Humana's motion to dismiss was pending, Brodsky, having determined that Humana was not the proper defendant, filed a "Motion for Leave to Amend Complaint to Substitute Defendants" (08-C-50188, Dkt. No. 69), seeking leave to amend his 2008 Complaint to replace defendant Humana with HumanaDental, a subsidiary of Humana.*fn1 Magistrate Judge Mahoney denied Brodsky's motion for leave to amend on November 13, 2009, noting that Brodsky would have to "file a separate lawsuit" against HumanaDental. (11/13/09 Tr. 9:9-14 (attached as Ex. G to Brodsky's Resp.); 08-C-50188, Dkt. No. 72.)

After Magistrate Judge Mahoney denied Brodsky's Motion for Leave to Amend the Complaint, Humana sent a second settlement letter to Brodsky on November 13, 2009, reiterating its offer to settle Brodsky's claims for $3,500 plus any recoverable costs. (Brodsky's Resp., Ex. H.) In that letter, Humana additionally stated that the settlement offer was made on behalf of HumanaDental. (Id.) On December 22, 2009, Judge Reinhard dismissed Brodsky's claims against Humana without prejudice, finding that the court no longer had subject matter jurisdiction over Brodsky's claims because Brodsky admitted "he [had] no claim against Humana, Inc." (08-C-50188, Dkt. No. 83.) This admission, according to Judge Reinhard, "eliminate[d] any pending case or controversy depriving [the] court of subject matter jurisdiction." (Id.) In the dismissal order, Judge Reinhard also expressly recognized that the "plaintiff's proper course of action would be to file a new action against the new defendant." (Id.) Brodsky then filed a complaint against HumanaDental in the Circuit Court of Cook County ("2010 Complaint") in March 2010, along with a motion for class certification. (10-C-3233, Dkt. No. 1, Exs. B & C.)

In his 2010 Complaint, Brodsky brings three counts against HumanaDental: violations of the TCPA (Count I), common law conversion under Illinois law (Count II), and violations of the Consumer Fraud Act, as well as "substantially [sic] consumer protection statutes of states in which other class members reside" (Count III). (10-C-3233, Dkt. No. 1, Ex. B, Compl. ¶¶ 19 44.) HumanaDental timely removed this case to the Northern District of Illinois, Eastern Division, pursuant to 28 U.S.C. § 1441(b), (10-C-3233, Dkt. No. 1), and proceeded to file its "Motion to Dismiss Pursuant to Fed. R. Civ. P. 12" (Dkt. No. 14), which is currently before this court. Specifically, HumanaDental moves to dismiss Brodsky's claims under Federal Rule of Civil Procedure 12(b)(1) for lack of subject matter jurisdiction or, alternatively, under Rule 12(b)(6) for failure to state a claim upon which relief can be granted. In addition, HumanaDental requests that the court strike certain references in Brodsky's complaint. For the reasons explained below, HumanaDental's Motion to Dismiss (Dkt. No. 14) is denied, and HumanaDental's request to strike certain references in the 2010 Complaint is granted.

ANALYSIS

I. Rule 12(b)(1) Motion to Dismiss for Lack of Subject Matter Jurisdiction

In reviewing a Rule 12(b)(1) motion to dismiss, the court accepts as true the allegations in the complaint and weighs the evidence submitted by the parties "to determine whether jurisdiction has been established." U. Phosphorus, Ltd. v. Angus Chem. Co., 322 F.3d 942, 946 (7th Cir. 2003). The party asserting jurisdiction bears the burden of proof. Id. In this case, HumanaDental argues that Brodsky's claims are moot based on Humana's previous settlement letters to Brodsky. As a result, according to HumanaDental, this court lacks subject matter jurisdiction over Brodsky's claims.

Under Article III of the U.S. Constitution, federal courts only have subject matter jurisdiction over actual cases and controversies. U.S. Const. art. III; Goldhamer v. Nagode, 621 F.3d 581, 584 (7th Cir. 2010). To satisfy this constitutional requirement, "a litigant must have suffered some actual injury that can be redressed by a favorable judicial decision." Iron Arrow Honor Soc'y v. Heckler, 464 U.S. 67, 70 (1983). A case, therefore, "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." Holstein v. City of Chi., 29 F.3d 1145, 1147 (7th Cir. 1994).

According to HumanaDental, Brodsky's claims do not present an actual case or controversy because Humana's August 12, 2009 and November 13, 2009 settlement letters offered Brodsky "all the relief he sought" in the 2008 Case. (10-C-3233, Dkt. No. 16, Ex. A ("HumanaDental's Mem.") at 6.) Brodsky, on the other hand, argues that HumanaDental "is not allowed to 'short-circuit' a class action after a plaintiff filed his motion for class certification, but before the court can rule on the motion for class certification." (Brodsky's Resp. 5 (citing Susman v. Lincoln Am. ...


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