United States District Court, N.D. Illinois, Eastern Division
JOSE RODRIGUEZ and MARY ARROYO, on behalf of themselves and those similarly situated, Plaintiffs,
ANSELMO, LINDBERG & ASSOCIATES, LLC, BOSCO CREDIT II TRUST SERIES 2010-1, and FRANKLIN CREDIT MANAGEMENT CORPORATION, Defendants.
MEMORANDUM OPINION AND ORDER
Rodriguez and Mary Arroyo allege that Anselmo, Lindberg &
Associates, LLC, Bosco Credit II Trust Series 2010-1, and
Franklin Credit Management Corporation violated the Fair Debt
Collection Practices Act (“FDCPA”), 15 U.S.C.
§ 1692 et seq., and the Illinois Consumer Fraud
and Deceptive Practices Act (“ICFA”), 815 ILCS
505/1 et seq., by bringing a state court foreclosure
action in violation of the Illinois Collection Agency Act
(“ICAA”), 225 ILCS 425/1 et seq. Doc. 1.
Defendants move to stay this suit under Colorado River
Water Conservation District v. United States, 424 U.S.
800 (1976). Doc. 19. The motion is granted.
The State Court Foreclosure Action
April 2018, non-party Deutsche Bank National Trust Company-as
trustee on behalf of Bosco, at the direction of Franklin as
Bosco's loan servicer, and with Anselmo as its
counsel-brought a state court foreclosure action against
Plaintiffs. Doc. 1 at ¶¶ 14, 17, 23, 27-28, 34,
36-37; Doc. 1-1 at 2-15; see Deutsche Bank Nat'l Tr.
Co. v. Rodriguez, No. 18 CH 5297 (Ill. Cir. Ct., Cook
Cnty.). After filing a pro se answer, Plaintiffs
retained counsel and on January 4, 2019 moved to amend their
answer to assert as an affirmative defense that, because
Bosco had not obtained a debt collection license, Defendants
violated the ICAA by bringing the foreclosure action. Doc.
28-1. On February 6, 2019, the state court denied the motion
without explanation. Doc. 28-2.
that day, Plaintiffs filed another motion for leave to assert
the same affirmative defense, this time attaching a proposed
pleading. Doc. 28-3. Bosco opposed the motion on the ground
that the proposed affirmative defense was futile, Doc. 28-4
at 2-3, and Plaintiffs replied at length that Defendants
violated the ICAA by bringing the foreclosure action without
Bosco having obtained a debt collection license, id.
at 3-12. The state court denied Plaintiffs' motion, this
time with an explanation that directly addressed the merits
of the ICAA issue: “Defendant's motion for leave to
file affirmative defenses is denied, the court finding no
Collection Agency Act violation occurred.” Doc.
28-5 (emphasis added).
brought this suit on January 14, 2019, ten days after filing
their first motion for leave to amend in the foreclosure
action. Doc. 1. Their complaint, which alleges violations of
the FDCPA and the ICFA, rests on the same premise as their
rejected affirmative defense in the foreclosure action-that
Defendants violated the ICAA by bringing that action without
Bosco first obtaining a debt collection license. Doc. 1 at
¶¶ 21-23, 25, 34, 38, 40-50, 53, 57, 63-64. In
fact, Plaintiffs' rejected affirmative defense is
substantially identical their complaint in this case.
Compare id. at ¶¶ 15, 18, 20, 25, 33, 38,
40-48 with Doc. 28-3 at pp. 8-12, ¶¶ 7-8,
Colorado River doctrine provides that “a
federal court may stay or dismiss a suit in federal court
when a concurrent state court case is underway, but only
under exceptional circumstances and if it would promote
‘wise judicial administration.'” Freed v.
JPMorgan Chase Bank, N.A., 756 F.3d 1013, 1018 (7th Cir.
2014) (quoting Colorado River, 424 U.S. at 818);
see also Caminiti & Iatarola, Ltd. v. Behnke
Warehousing, Inc., 962 F.2d 698, 700 (7th Cir. 1992).
The Supreme Court “has cautioned that abstention is
appropriate only in ‘exceptional circumstances,'
and has also emphasized that federal courts have a
‘virtually unflagging obligation … to exercise
the jurisdiction given them.'” AXA Corp. Sols.
v. Underwriters Reins. Corp., 347 F.3d 272, 278 (7th
Cir. 2003) (alteration in original) (quoting Colorado
River, 424 U.S. at 813, 817). In determining whether to
abstain, the court's task is “not to find some
substantial reason for the exercise of federal jurisdiction
by the district court; rather, the task is to ascertain
whether there exist exceptional circumstances, the clearest
of justifications, that can suffice under Colorado
River to justify the surrender of that
jurisdiction.” Moses H. Cone Mem'l Hosp. v.
Mercury Constr. Corp., 460 U.S. 1, 25-26 (1983)
(internal quotation marks and emphases omitted).
Colorado River analysis has two steps. First, the
court asks “whether the state and federal court actions
are parallel.” Freed, 756 F.3d at 1018. If the
proceedings are not parallel, Colorado River
abstention must be denied. See ibid. If the
proceedings are parallel, the court must weigh ten
non-exclusive factors to determine whether abstention is
proper. See ibid.
The Federal and State Suits Are Parallel.
Colorado River purposes … [p]recisely formal
symmetry” between the state and federal suits “is
unnecessary” to find parallelism. Adkins v. VIM
Recycling, Inc., 644 F.3d 483, 498-99 (7th Cir. 2011);
see also Interstate Material Corp. v. City of
Chicago, 847 F.2d 1285, 1288 (7th Cir. 1988)
(“Interstate is correct in its assertion that
differences [between the two suits] exist. However, the
requirement is of parallel suits, not identical
suits.”). Rather, suits are parallel where
“substantially the same parties are contemporaneously
litigating substantially the same issues in another
forum.” Freed, 756 F.3d at 1019 (internal
quotation marks omitted). Thus, “[t]he question is not
whether the suits are formally symmetrical, but whether there
is a substantial likelihood that the [state] litigation will
dispose of all claims presented in the federal case.”
AAR Int'l, Inc. v. Nimelias Enters. S.A., 250
F.3d 510, 518 (7th Cir. 2001) (internal quotation marks
omitted); see also Huon v. Johnson & Bell, Ltd.,
657 F.3d 641, 646 (7th Cir. 2011) (same). “Any doubt
regarding the parallel nature of the [state] suit should be
resolved in favor of exercising jurisdiction.”
Adkins, 644 F.3d at 499 (alteration in original,
internal quotation marks omitted).
parallelism test is satisfied here. Plaintiffs' FDCPA and
ICFA claims rest on the premise that Defendants violated the
ICAA by bringing the foreclosure action without Bosco having
obtained a debt collection license. If there was no ICAA
violation in connection with the foreclosure action,
Plaintiffs' FDCPA or ICFA claims necessarily fail. So,
the central issue here-whether Defendants violated the
ICAA-is being litigated in the foreclosure action, and the
state trial court has already ruled that there was no
violation. Doc. 28-5. If Plaintiffs do not appeal that
ruling, or if they appeal unsuccessfully, the foreclosure
action “will dispose of all claims presented in the
federal case” on preclusion grounds, AAR Int'l,
Inc., 250 F.3d at 518 (internal quotation marks
omitted), by undercutting an essential premise of
Plaintiffs' FDCPA and ICFA claims. That establishes
parallelism between the present suit and the foreclosure
action. See ibid. (holding that Colorado
River requires only that there be a “substantial
likelihood, ” not a certainty, ...