United States District Court, N.D. Illinois, Eastern Division
Heather McCombs, D.P.M., L.L.C., individually and on behalf of similarly situated persons, Plaintiff,
Cayan LLC, d/b/a Capital Bankcard, and Wells Fargo Bank, N.A., Defendants.
MEMORANDUM OPINION AND ORDER
Honorable Thomas M. Durkin United States District Judge.
Heather McCombs, D.P.M., LLC brings this putative class
action against Defendants Cayan LLC, doing business as
Capital Bankcard (“Capital Bankcard”), and Wells
Fargo Bank, N.A. (“Wells Fargo”), alleging that
in late November 2015, she and others similarly situated
received an unsolicited fax advertisement by or on behalf of
Defendants in violation of the Telephone Consumer Protection
Act (“TCPA”), 47 U.S.C. § 227, et
seq. See R. 8 (motion for class certification);
R. 22 (amended complaint). The defendants move to dismiss the
suit for lack standing and mootness under Rule 12(b)(1), and
for failure to state a claim under Rule 12(b)(6).
See R. 27 (12(b)(1) motion); R. 29 (12(b)(6)
motion); R. 88 (supplemental 12(b)(1) motion). They also move
to strike Plaintiff's class claims under rule 12(f).
See R. 29 (12(f) motion). For the following reasons,
Defendants' motions are denied.
Bankcard enables merchants to process electronic payments by,
among other things, providing them with credit card payment
processing terminals. See R. 22-1 (Fax) at 2
(“your current terminal will be upgraded to a new free
EMV chip capable and PCI compliant terminal”) (emphasis
omitted). It does so as a registered independent sales
organization (ISO) and member services provider (MSP) of
Wells Fargo. See id at 3; R. 30 at 3-4 n. 2.
“It is well known and established in the merchant
processing industry that ISOs and MSPs are not banks and that
the actual handling of merchant money is done by an acquiring
or processing bank that has contracted with the
ISO/MSP.” R. 30 at 4. In other words, Capital Bankcard
does not process transactions for the merchants to which it
provides payment processing equipment; Wells Fargo, as the
sponsoring bank that has contracted with Capital Bankcard to
service merchant accounts, does so. Id.; R. 22
(Complaint) ¶ 8.
a small medical business, alleges that the defendants are
responsible for its receipt on November 25, 2015 of an
unsolicited, four-page fax advertisement about their jointly
offered merchant payment processing services. R. 22 ¶ 4.
Specifically, Plaintiff alleges that Capital Bankcard sent
the fax or caused it to be faxed, id. ¶ 5, and
that it did so on behalf of Wells Fargo, its sponsoring bank,
id. ¶ 8. The cover page of the fax indicates
that was sent by “Chelsea Miller, ” “an
account manager” for “Merchant Services.”
R. 22-1 at 2. The sender identifies itself as “a Wells
Fargo bank member.” The fax begins, “We called
your office earlier regarding LOWERING your merchant rate
considerably . . .” Id. (emphasis in
original). Plaintiff alleges, however, that it had “no
prior relationship with Defendants.” Id.
¶ 9. The cover sheet directs Plaintiff to complete the
enclosed forms. R. 22-1 at 2.
the forms is titled, “Merchant Processing Application
and Agreement.” Id. at 5. The first page of
the Merchant Processing Application and Agreement requests a
variety of business and financial information from Plaintiff,
and bears the following marking in its footer: “Capital
Bankcard is a registered ISO/MSP of Wells Fargo Bank, N.A.,
Walnut Creek, CA.” Id. The second page
contains the “terms” of the proposed contract,
including applicable fee schedules, conditions of use, and a
requirement that Plaintiff consent to receive unsolicited
calls and electronic mail on a going-forward basis.
Id. at 4. It also contains a Personal Guarantee,
which Plaintiff is to sign for the benefit of both of the
defendants. Id. It reads:
In exchange for Capital Bankcard and Wells Fargo Bank, N.A.
(the Guaranteed Parties) acceptance of, as applicable, the
Agreement, the undersigned unconditionally and irrevocably
guarantees the full payment and performance of Client's
obligations under the foregoing agreements.
Id. The Application and Agreement concludes with
three signature lines, one for Plaintiff, and one for each of
the defendants. Id. In addition to the Application
and Agreement, the fax also enclosed a “Free Equipment
Use Agreement, ” which is printed on Capital
Bankcard's letterhead, bearing its logo in the top
right-hand corner and its address and contact information at
the bottom of the page. Id. at 3.
relation to the receipt of the allegedly unwanted fax,
Plaintiff claims that its (and the proposed class
members') “right to privacy was invaded, costs of
toner and ink were incurred, or time to review and delete the
subject form faxes were expended.” R. 22 ¶ 13. The
complaint does not propose a class definition. It does seek
certification of the suit as a class action, actual and
statutory damages, injunctive relief, a determination that
Plaintiff is an adequate class representative and thus
entitled to a “fair, reasonable and adequate incentive
award, ” and “[c]osts of suit, including an award
of attorney's fees if permissible.” Id. at
December 11, 2015, less than ten days after this lawsuit was
filed, the defendants served upon Plaintiff a Rule 68 Offer
of Judgment along with a freestanding settlement offer. R.
28-1 at 5-8. The offers read, in relevant part:
[This] offer is for the sum of $7, 500.00. This offer
encompasses payment of (i) $1, 501.00 for the one allegedly
unsolicited fax . . . plus a nominal payment for the ink and
toner expended for the receipt of the fax; (ii) costs
incurred in the Action; and (iii) reasonable attorneys'
fees. . . . Cayan and Wells Fargo would agree . . . not to
send any further unsolicited faxes.
Id. The freestanding offer further provided that a
settlement and release would be subject to a confidentiality
provision, and would be made without admission of liability
or wrongdoing by the defendants. Id. Plaintiff
rejected both offers, see Id. at 9, and filed a
motion for class certification later the same day, R. 8.
January 20, 2016, the Supreme Court issued its ruling in
Campbell-Ewald Company v. Gomez, 136 S.Ct. 663
(2016). Based on their reading of the Campbell-Ewald
decision, the defendants sent Plaintiff an amended Rule 68
Offer of Judgment and a renewed freestanding settlement
offer, this time including a $7, 500 bank check. R. 28-1 at
27-32. Plaintiff again rejected the offers and voided the
tendered check. Id. at 33-36.
defendants then filed three motions: (1) a motion under Rule
67 to deposit the proposed-settlement funds with the Court,
R. 31, (2) a motion under Rule 12(b)(1) to dismiss the case
as moot, R. 27, and (3) a motion under Rules 12(b)(6) and
12(f) to dismiss the class complaint, R. 29. Though the Court
denied the defendants' motion to deposit funds with the
Clerk of Court, it permitted them to deposit a $7, 500 check
with a trusted intermediary. R. 39.
thereafter, the Supreme Court decided Spokeo, Inc. v.
Robins, 136. S.Ct. 1540 (2016), another case Defendants
interpret to require dismissal of this case. The defendants
supplemented their Rule 12(b)(1) motion accordingly, R. 88,