Opinion
No. 98 C 6966
June 22, 2000
MEMORANDUM OPINION AND ORDER
Theresa L. Cannon Williams sues Chartwell Financial Services, Ltd. ("Chartwell") for violations of the Truth in Lending Act ("TILA"), 15 U.S.C. § 1601 et. seq. (Counts II and III), for relief from unconscionable loan contracts under Illinois law (Count IV), and for consumer fraud pursuant to the Illinois Consumer Fraud Act ("ICFA"), 815 ILCS 505/1 et seq. (Count V). Lois Reed sues Chartwell for violations of the TILA. In her renewed motion for class certification, Williams moves to certify a class of persons who borrowed money from Chartwell on or after March 31, 1998 pursuant to Fed.R.Civ.P. 23(b)(3). Williams also moves for reconsideration of the protective order entered by this court on March 16, 1999.
Williams and Reed claim that the cash collateral requirement resulted in a significantly higher actual APR than disclosed by Chartwell in the loan agreements. Similarly, they claim the alternative payment schedule resulted in an actual APR that was different than the disclosed APR. They conclude that Chartwell violated the disclosure requirements of the TILA. Williams further alleges Chartwell's practices resulted in unconscionable loan contracts in violation of Illinois law and that Chartwell violated the ICFA.
B Class allegations
Chartwell began making loans in March 1998 and has made between 115 and 122 Illinois consumer loans from March 31, 1999 to the present. Chartwell used the same TILA disclosure forms and required payment of cash collateral for all of its loan customers. Chartwell admits that these loan agreements charged all customers between 150% and 350% interest. Plaintiffs allege these interest charges resulted in APR's for class members ranging from 76.98% to 551.39%. Based on these factual allegations, Williams seeks to certify a class of "all persons who borrowed money from Chartwell on or after March 31, 1998."
II Procedural history
Reed and Williams filed their complaints alleging TILA violations against Chartwell on October 30, 1998. In her class action complaint, Williams included claims for relief from an unconscionable contract and consumer fraud. Williams originally filed a motion for class certification on February 12, 1999. In her first motion, Williams sought to certify two separate but overlapping classes of plaintiffs: one class for plaintiffs who paid cash collateral, and another class for plaintiffs who received the alternative payment documents. On March 10, 1999, this court denied Williams' motion on the ground she had failed to establish numerosity as required by Fed.R.Civ.P. 23(a). This court agreed . . . interests of the class. Fed.R.Civ.P. 23(a). If these prerequisites are satisfied, the court must determine that one of the standards of Fed.R.Civ.P. 23(b) is met. Williams moves to certify her class under Rule 23(b)(3) because the common questions of law or fact predominate over questions pertaining to individual members and a class action is superior to other available methods for the fair and efficient adjudication of this controversy.
A Rule 23(a)
In addressing whether Williams meets the requirements of Rule 23, the court does not write on a clean slate. This court previously determined that Williams met the requirements of Rule 23(a) when it denied her original motion for class certification on March 24, 1999. See Reed, 1999 WL 181986 at *2-3. There is nothing in Williams renewed motion for class certification that changes the 23(a) analysis. The renewed motion simply seeks to certify a single class of all Chartwell's customers instead of two separate classes proposed earlier. The legal claims and factual allegations are the same. Furthermore, the Seventh Circuit did not take issue with any of these findings. Williams' new proposed class meets all four requirements. Chartwell made approximately 120 loans during its short existence. This is sufficient to meet the numerosity requirement. The commonality requirement is met because recovery on plaintiffs' claims depends on the legal effect of Chartwell's standardized conduct toward all customers. See Franklin v. City of Chicago 102 F.R.D. 944, 949 (N.D. Ill. 1984). Each class member entered into the same or a similar contract with Chartwell. Similarly, the typicality requirement is met because all class members' claims are based on the same legal theory. See De La Fuente v. Stokely-Van Camp, Inc., 713 F.2d 225, 232 (7th Cir. 1983). Finally, Williams is an adequate class representative. Plaintiffs' lawyers have significant experience in class action litigation and Williams' interests are not antagonistic to those of the proposed class. Thus, Williams' proposed class meets the requirements for certification of Rule 23(a).
B Rule 23(b)(3)
In its March 24, 1999 memorandum opinion, this court declined to certify Williams' original class because it concluded she failed to meet the requirements of Rule 23(b)(3). In her original class certification motion, Williams sought to certify two separate classes. However, the membership of the two classes appeared to overlap significantly. In light of possible confusion stemming from the two classes, the court concluded that "the structure of the proposed class action presented management difficulties so significant that the court is not persuaded that the proposed class action is superior to other methods of adjudication." In See Reed, 1999 WL 181986 at *4. The Seventh Circuit took issue with this conclusion. It determined that "it appears as if the district court may have placed too much weight on the issue of subclasses" and remanded the class certification issue for further proceedings. Reed, 204 F.3rd at 760-61. Williams no longer requests certification of two separate classes. In her renewed class certification motion, Williams seeks to certify a single class of Chartwell's customers. Thus, the management difficulties that were inherent in Williams' original motion are no longer a concern.
Williams' renewed class certification motion meets the requirements of 23(b)(3). The central issue in this case is legality of the loans. Because Chartwell used standardized documents, including the alternative payment option, and charged similar interests rates to all customers, the common questions of law and fact predominate over questions pertaining to individual members. See Heastie v Community Bank, 125 F.R.D. 669, 679 (N.D. Ill. 1989); Haroco v. American Nat'l Bank, 121 F.R.D. 664, 669 (N.D. Ill. 1988). Furthermore, in the absence of the earlier management problems, a class action is superior to other available methods for the fair and efficient adjudication of this controversy. Class actions are particularly appropriate in consumer protection cases where, as here, there is a large number of small or medium-sized claims. See In re Folding Carton Antitrust Litigation, 75 F.R.D. 727, 732 (N.D. Ill. 1977).
II The protective order
Williams moves for reconsideration of the protective order entered on March 16, 1999. She objects to the provisions of the order that prevent her from "making any use" of the class members' loan files and prevent her from contacting other class members prior to class certification. In light of the fact that Williams' renewed motion for class certification is granted, the motion for reconsideration of the protective order is moot.
CONCLUSION
Williams' renewed motion for class certification is granted. The motion for reconsideration of the protective order is moot.