Davidson v. Worldwide Asset Purchasing, LLC

914 F. Supp. 2d 918, 2012 WL 6720699, 2012 U.S. Dist. LEXIS 182107
CourtDistrict Court, N.D. Illinois
DecidedDecember 27, 2012
DocketCase No. 12 C 4359
StatusPublished
Cited by2 cases

This text of 914 F. Supp. 2d 918 (Davidson v. Worldwide Asset Purchasing, LLC) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Davidson v. Worldwide Asset Purchasing, LLC, 914 F. Supp. 2d 918, 2012 WL 6720699, 2012 U.S. Dist. LEXIS 182107 (N.D. Ill. 2012).

Opinion

MEMORANDUM OPINION AND ORDER

HARRY D. LEINENWEBER, District Judge.

Before the Court is Defendant Worldwide Asset Purchasing II, LLC’s (hereinafter, “WAP II”) Motion to Dismiss. For the following reasons, the Court grants the Motion.

I. BACKGROUND

Plaintiff Shirley Davidson (hereinafter, “Davidson” or “Plaintiff’) is a resident of Illinois. On November 30, 2007, Defendant Worldwide Asset Purchasing, LLC (“WAP I”) sued Davidson to collect “an alleged debt incurred for personal, family or household purposes.” Am. Compl. 7. On March 10, 2008, WAP I obtained a judgment in Illinois state court against Davidson and then collected on that judgment between June 2008 and July 2008. Subsequently, the judgment was vacated and the case dismissed on July 21, 2008.

Plaintiff alleges WAP I’s actions violated the Illinois Collection Agency Act (the “ICAA”) because, effective January 1, 2008, the act prohibited an unlicensed collection agency from engaging in debt collection within the state. 225 ILL. COMP. STAT. 425/4. The statute regulates when collection agencies may refer an account to an attorney, which Plaintiff contends makes clear that litigation is considered part of debt collection under the statute. Id. at 425/8a-l.

WAP I was not licensed as a collection agency in Illinois until September 4, 2008. (WAP II also became licensed on this date.) Plaintiff contends WAP I thus violated the law by obtaining the judgment and collecting on it while unlicensed.

WAP I is chartered under Nevada law and has its principal office in Nebraska. It is a wholly-owned subsidiary of Defendant West Receivable Services, Inc. (“West”), a Delaware Corporation with its principal place of business in Nebraska. WAP II is also chartered under Nevada law. It is wholly-owned by Galaxy Asset Purchasing, LLC (“GAP”). GAP, in turn, is wholly owned by Galaxy Capital Inc. (“GC”).

Plaintiff alleges West “directed the collection activities of both WAP [I] and WAP II while both were unlicensed,” (Am. Compl. 3) and that West itself was unlicensed during 2008, when it owned both WAP I and WAP II.

Plaintiff alleges WAP II is ultimately owned by 14 individuals: Steve Sherrill, Richard Lundeberg, Darrell T. Hanna, Stephanie A. Hanna, Susan Vasiliadis, Kenneth S. Hurt, Joseph Barbito, Deidri McBrayer, Michael LaFleur, James Hanna, Sydney Hanna, Spencer Hanna, Leslie Abstein III and Kelly Hebert.

[921]*921Darrell Hanna has been an officer of WAP I (the Complaint does not say when), as has Mr. Lundeberg. Plaintiff further alleges that ‘WAP [I] and WAP II were acting in a common course” of action and that “defendants had common employees and managers directing each defendant’s actions as a collection agency [and] defendants used common procedures and practices.” Am. Compl. 4. “[Defendants were, in fact, distinguishable by name only.” Id.

Finally, Plaintiff alleges “Defendants jointly and cooperatively participated in a common course of conduct — namely, the collection of debts without being properly licensed — contrary to the ICAA, through actions of common employees and managers, and practices equally applicable to each defendant.” Id. at 7. In her response brief, Plaintiff maintains that this last sentence in the Complaint supports the inference that “all defendants, including WAP II, are co-conspirators, as all of them agreed to conduct that was unlawful and took action towards that conduct.” Pl.’s Resp. 4.

In addition to WAP I’s litigation against Davidson, WAP I and WAP II (while unlicensed) instituted lawsuits against more than 30 Illinois consumers in 2008. They also collected money from other Illinois consumers.

Plaintiff sues on behalf of a class and a subclass. The class consists of “all individuals against whom defendants [WAP I or WAP II] obtained a judgment, filed a collection lawsuit, or collected money, in Illinois between January 1, 2008 and September 4, 2008.” Am. Compl. 8. The subclass consists of “class members who had judgments or lawsuits filed against them, but do not presently have judgments outstanding.” Id.

Plaintiff sues under four counts. Count I alleges Defendants’ coordinated actions “constitute a public nuisance” as defined by the act. 225 ILL. COMP. STAT. 425/14a. Count II alleges liability for the filing and pursuit of lawsuits during the unlicensed 2008 period. Count III alleges Defendants violated Section 425/9(a)(20) by attempting to enforce a right or remedy with knowledge or reason to know that the right or remedy does not exist. Count IV seeks restitution of any monies obtained as a result of collection activities while unlicensed in 2008.

II. LEGAL STANDARD

To withstand a Motion to Dismiss, a Complaint “must be plausible on its face, meaning that the plaintiff must have pled ‘factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.’ ” G & S Holdings LLC v. Cont’l Cas. Co., 697 F.3d 534, 537 (7th Cir.2012) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 556, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) and Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009)). A complaint need not contain detailed factual allegations to meet that standard, but must go beyond mere labels and conclusions. G & S Holdings LLC, 697 F.3d at 537-38.

III. ANALYSIS

A. Consideration of Standing Before Class Certification

WAP I and West answered the Amended Complaint, but WAP II brought a Motion to Dismiss. WAP II argues that Davidson has no Article III standing to sue WAP II because the Complaint acknowledges that WAP I, rather than the separate legal entity of WAP II, sued Davidson.

The requirements of Article III case-or-controversy standing are threefold: (1) an injury in-fact; (2) fairly traceable to the defendant’s action; and (3) capable of [922]*922being redressed by a favorable decision from the court. Parvati Corp. v. City of Oak Forest, 680 F.3d 512, 516 (7th Cir. 2010). Because Davidson’s injury is traceable to WAP I rather than WAP II, she has no standing to assert the injuries caused by WAP II against the unnamed class members, WAP II argues.

Plaintiff counters this argument with what seems to be three arguments. The first two arguments are fairly clear. The third is more murky.

First, Plaintiff argues that it is improper for the Court to consider the standing argument before Rule 23 class certification has been considered. This argument is grounded in Amchem Products, Inc., et al. v. Windsor et al., 521 U.S. 591, 612-613, 117 S.Ct. 2231,138 L.Ed.2d 689 (1997), and Ortiz, et al. v. Fibreboard Corp. et al., 527 U.S. 815, 831, 119 S.Ct. 2295, 144 L.Ed.2d 715 (1999). In both these cases, the Supreme Court decided whether class certification was proper before considering issues of standing. This was somewhat askance with the previous view that standing was the first inquiry to be made. O’Shea v. Littleton,

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Bluebook (online)
914 F. Supp. 2d 918, 2012 WL 6720699, 2012 U.S. Dist. LEXIS 182107, Counsel Stack Legal Research, https://law.counselstack.com/opinion/davidson-v-worldwide-asset-purchasing-llc-ilnd-2012.