December 2, 2015
from the United States District Court for the Northern
District of Illinois, Eastern Division. No. 14 C 8370 -
Virginia M. Kendall, Judge.
Kanne and Sykes, Circuit Judges, and Gilbert, District Judge.
Zahn filed a class-action complaint against North American
Power & Gas, LLC ("NAPG") - an Alternative
Retail Electric Supplier-alleging violations of the Illinois
Consumer Fraud and Deceptive Business Practices Act, breach
of contract, and unjust enrichment. NAPG moved to dismiss the
complaint for lack of subject-matter jurisdiction and for
failure to state a claim. The district court granted
NAPG's motion to dismiss for lack of subject-matter
jurisdiction, believing that "Illinois law grants the
[Illinois Commerce Commission ("ICC")] exclusive
jurisdiction over the matter." Zahn v. N. Am. Power
& Gas, LLC, No. 14 C 8370, 2015 WL 2455125, at *3
(N.D. Ill. May 22, 2015). The district court alternatively
granted NAPG's motion to dismiss for failure to state a
claim, addressing the merits of the suit. This appeal
original opinion in this case, we described NAPG's
argument that the district court lacked subject-matter
jurisdiction as "miscast." Zahn v. N. Am. Power
& Gas, LLC, 815 F.3d 1082, 1087 (7th Cir. 2016).
explained that states, including Illinois, do not have the
constitutional authority to limit a district court's
jurisdiction; that power lies exclusively with Congress. We
noted, however, that states do "have the power to
prevent the federal court from granting relief in a diversity
case by denying the substantive right of action
asserted." Id. (quoting Begay v. Kerr-McGee
Corp., 682 F.2d 1311, 1315 (9th Cir. 1982)). We thus
recast NAPG's jurisdictional challenge as "one to
the subject-matter jurisdiction of an Illinois state court.
If an Illinois state court does not have jurisdiction to hear
Zahn's claim, then Zahn has failed to state a claim upon
which relief may be granted in a federal court sitting in
we viewed this jurisdictional issue as an important and
unsettled matter of state law, we certified the following
question to the Illinois Supreme Court:
Does the ICC have exclusive jurisdiction over a reparation
claim, as defined by the Illinois Supreme Court in
Sheffler v. Commonwealth Edison Company, 955 N.E.2d
1110 (Ill. 2011), brought by a residential consumer against
an Alternative Retail Electric Supplier, as defined by 220
Id. at 1095. The Illinois Supreme Court answered
that question in the negative, holding that an Illinois trial
court would have subject-matter jurisdiction over this type
of claim. Zahn v. N. Am. Power & Gas, LLC, No.
120526, 2016 WL 7007876, at ""6-7 (Ill.Dec. 1,
2016). Because the district court had reached the opposite
conclusion, it erred in that regard: the district court has
jurisdiction to hear this case.
address the district court's alternative conclusion that
"[e]ven if the Court had jurisdiction over the
Complaint, the Court would dismiss the Complaint for failing
to state a claim under Rule 12(b)(6) of the Federal Rules of
Civil Procedure." Zahn v. N. Am. Power & Gas,
LLC, No. 14 C 8370, 2015 WL 2455125, at *3 (N.D. Ill.
May 22, 2015). We first note that the district court may have
committed error by addressing the merits after concluding
that it did not have jurisdiction to hear the case. Cf.
Steel Co. v. Citizens for a Better Env't, 523 U.S.
83, 94 (1998) (quoting Ex parte McCardle, 74 U.S. (1
Wall.) 506, 514 (1868)) ("Without jurisdiction the court
cannot proceed at all in any cause. Jurisdiction is power to
declare the law, and when it ceases to exist, the only
function remaining to the court is that of announcing the
fact and dismissing the cause."). That said, we will not
ignore the court's merits analysis here because doing so
would be an obvious waste of judicial resources.
district court dismissed all three of Zahn's claims,
concluding that she had not pled sufficient facts to
demonstrate that NAPG violated the Illinois Consumer Fraud
and Deceptive Business Practices Act, breached a contract, or
was unjustly enriched. "We review de novo a
district court's dismissal of a complaint for failure to
state a claim." Berger v. Nat'l Collegiate
Athletic Ass'n, 843 F.3d 285, 289 (7th Cir. 2016).
In so doing, we construe the complaint in the "light
most favorable to the nonmoving party, accept well-pleaded
facts as true, and draw all inferences in [the nonmoving
party's] favor." Bell v. City of Chicago,
835 F.3d 736, 738 (7th Cir. 2016) (internal quotation marks
dismissing Zahn's complaint, the district court did not
address Zahn's allegation that NAPG promised and their
contract reflected a "New Customer Rate" of $.0499
per kilowatt hour. Zahn alleged that NAPG "lures
consumers into switching to its electricity supply service by
offering teaser rates that are much lower than its regular
rates." (R. 2 at ¶ 13.) She alleged that the teaser
rate NAPG offered her was $.0499 per kilowatt hour (R. 2 at
¶ 15) and that she never received that initial rate but
instead was charged $.0599 per kilowatt hour on her initial
bill. (R. 2 at ¶ 18.) She further alleged that
"[a]t no time during this period did [NAPG] charge less
than $0.05990 per kilowatt hour." (R. 2 at ¶ 18.)
That alone, if true, could constitute a breach of contract or
a deceptive business practice. Because the district court did
not address that allegation, it committed error.
foregoing reasons, we REVERSE the district court's
decision that it lacked jurisdiction to hear this case,
VACATE its decision regarding the merits, and REMAND ...