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M.E. Fields, Inc. D/B/A Fields Infiniti and Yampa Valley Enterprises, Inc. D/B/A Fields v. Nissan North America Inc.

December 8, 2011

M.E. FIELDS, INC. D/B/A FIELDS INFINITI AND YAMPA VALLEY ENTERPRISES, INC. D/B/A FIELDS INFINITI OF LAKE COUNTY,
PLAINTIFFS,
v.
NISSAN NORTH AMERICA INC., INFINITI DIVISION, DEFENDANT.



The opinion of the court was delivered by: Judge Ronald Guzman

MEMORANDUM OPINION AND ORDER

Plaintiffs M.E. Fields, Inc. and Yampa Valley Enterprises, Inc. (collectively "Fields") have sued defendant Nissan North America, Infiniti Division ("Infiniti") for alleged violations of the Illinois Motor Vehicle Franchise Act ("the Act"), 815 Ill. Comp. Stat. 710/6. The case is before the Court on defendant's motion to dismiss or stay. For the reasons set forth below, the Court grants in part and denies in part the motion.

Facts

On November 3, 2009, Fields filed an action with the Illinois Motor Vehicle Board claiming that Infiniti's addition of a warranty supplemental cost recovery charge ("additional charge") to the invoice for every new car it sells to Fields violates section 6 of the Act. (Compl. ¶¶ 17-19.) On November 15, 2010, a hearing officer issued a proposed decision finding that Infiniti's practice "violates the spirit and principle of Section 6." (Compl., Ex. A, 11/15/10 Proposed Decision 2.)

On February 10, 2011, the Board issued a final order adopting the proposed decision and ordering Infiniti to pay Board expenses. (Id., Ex. B, Final Order 1.)

Subsequently, Infiniti and Fields each filed suit in state court; Infiniti sought judicial review of the Board's order, and Fields sought damages for the statutory violations found by the Board. (Compl. 1-2.) Infiniti removed plaintiffs' suit to this Court and now asks the Court to dismiss it as premature or barred by res judicata or stay it pending resolution of Infiniti's state suit for judicial review.

Discussion

Infiniti contends that this suit is not ripe because the Board's order cannot be given preclusive effect until Infiniti's appeal is decided. Infiniti is partially correct. Under Illinois law, "a state agency's determination must be final and unappealed" before it can be given preclusive effect. Grobe v. Hollywood Casino-Aurora, Inc., 759 N.E.2d 154, 162 (Ill. App. Ct. 2001); see Univ. of Tenn. v. Elliott, 478 U.S. 788, 799 (1986) ("[F]ederal courts must give [a state] agency's fact-finding the same preclusive effect to which it would be entitled in the State's courts."). Consequently, because it is being appealed, the Board's order does not preclude Infiniti from contesting its liability in this suit.

That does not mean, however, that the suit is not ripe. A claim is not ripe for adjudication if it rests upon "contingent future events that may not occur as anticipated, or indeed may not occur at all." Texas v. United States, 523 U.S. 296, 300 (1998) (quotations omitted). Plaintiff filed this suit pursuant to section 13 of the Act, which authorizes "[a]ny franchisee or motor vehicle dealer who suffers any loss . . . as a result of the use or employment by a manufacturer, wholesaler, [or] distributor . . . of an unfair method of competition or an unfair or deceptive act or practice declared unlawful by this Act . . . [to] bring an action for damages and equitable relief." 815 Ill. Comp. Stat. 710/13. The basis for plaintiff's suit, Infiniti's imposition of the additional charge, has already occurred. Thus, though the state court's decision on Infiniti's appeal may moot this case, it is currently ripe for adjudication.

Infiniti fares no better with its paradoxical argument that the suit is barred by res judicata. That doctrine bars federal court litigation of claims that were or could have been raised in a prior state court suit that involved the same parties and causes of action and resulted in a final judgment on the merits. Lolling v. Patterson, 966 F.2d 230, 235 (7th Cir. 1992). As noted above, the Board's order is not final for the purposes of res judicata. Moreover, even if it were, the order would not preclude Fields from asserting its damages claim because such claims are outside of the Board's jurisdiction. See 815 Ill. Comp. Stat. 710/12, 13. Thus res judicata is not a bar to this suit.

Even if this suit is otherwise actionable, Infiniti urges the Court to abstain from exercising jurisdiction over it in accordance with the Colorado River and Pullman abstention doctrines. Abstention is appropriate under Colorado River if the state and federal actions are parallel, exceptional circumstances warrant a stay and a stay would promote "wise judicial administration." Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 818 (1976). Generally, two suits are parallel when they "involve the same parties, arise out of the same facts and raise similar factual and legal issues." Tyrer v. City of S. Beloit, 456 F.3d 744, 752 (7th Cir. 2006). Even if they are not entirely symmetrical, cases are parallel if there is "a substantial likelihood that the state litigation will dispose of all claims presented in the federal case." Lumen Constr. v. Brant Constr., 780 F.2d 691, 695 (7th Cir. 1985).

The two suits here involve the same parties, implicate the same facts and revolve around the same legal issue, i.e., whether Infiniti's imposition of the additional charge violates the Act. See 735 Ill. Comp. Stat. 5/3-110 (stating that administrative review "shall extend to all questions of law and fact presented by the entire record before the court"). But, because damages are not available in the state suit, the relief plaintiff seeks is different.

That is a distinction without a difference, Infiniti argues, citing Clark v. Lacy, 376 F.3d 682 (7th Cir. 2004), as support. The Clark court held that a federal suit in which plaintiff sought damages and equitable relief was parallel to a state suit in which plaintiff sought only damages because:

[T]he liability issues (which are the central legal issues) remain the same in both cases. Moreover, the relief requested in [the federal] case is substantially similar to that requested in the [state] action. Although Clark states in her complaint that "[p]laintiff on behalf of Sears has no adequate remedy at law," both complaints request jury trials and seek to recover damages from the individual defendants. . . . Clark's vague request for equitable ...


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