Dwyer v. American Exp. Co.

• Decision Date: 30 June 1995
• Docket Number: No. 1-92-3944,1-92-3944
• Citation: 210 Ill.Dec. 375,652 N.E.2d 1351,273 Ill.App.3d 742
• Parties: , 210 Ill.Dec. 375 Patrick E. DWYER, Individually and on Behalf of All Others Similarly Situated, and Maria Teresa Rajas, Mark H. Neiberg, and Deborah Kogen, Plaintiffs-Appellants, v. AMERICAN EXPRESS COMPANY, American Express Credit Corporation, and American Express Travel Related Services Company, Defendants-Appellees.
• Court: United States Appellate Court of Illinois

Page 1351

652 N.E.2d 1351

273 Ill.App.3d 742, 210 Ill.Dec. 375

Patrick E. DWYER, Individually and on Behalf of All Others Similarly Situated, and Maria Teresa Rajas, Mark H. Neiberg, and Deborah Kogen Plaintiffs-Appellants, v. AMERICAN EXPRESS COMPANY, American Express Credit Corporation, and American Express Travel Related Services Company, Defendants-Appellees.

No. 1-92-3944.

Appellate Court of Illinois First District, First Division.

June 30, 1995.

Krislov & Associates, Ltd., (Clinton A. Krislov, Jonathan Nachsin, of counsel); Lowrey & Smerz, Ltd., (John J. Lowrey, of counsel); Edelman & Combs, (Daniel A. Edelman, Cathleen M. Combs, of counsel); Walner & Associates, Ltd., (Lawrence Walner, of counsel); Donald A. Statland, Chicago (Richard S. Cohan, of counsel), for appellants.

Grippo & Elden, Chicago (Charles S. Bergen, George R. Dougherty, Michael D. Smith, of counsel), for appellees.

Justice BUCKLEY delivered the opinion of the court:

Plaintiffs, American Express cardholders, appeal the circuit court's dismissal of their claims for invasion of privacy and consumer fraud against defendants, American Express Company, American Express Credit Corporation, and American Express Travel Related Services Company, for their practice of renting information regarding cardholder spending habits.

On May 13, 1992, the New York Attorney General released a press statement describing an agreement it had entered into with defendants. The following day, newspapers reported defendants' actions which gave rise to this agreement. According to the news articles, defendants categorize and rank their cardholders into six tiers based on spending habits and then rent this information to participating merchants as part of a targeted joint-marketing and sales program. For example, a cardholder may be characterized as "Rodeo Drive Chic" or "Value Oriented." In order to characterize its cardholders, defendants analyze where they shop and how much they spend, and also consider behavioral characteristics and spending histories. Defendants then offer to create a list of cardholders who would most likely shop in a particular store and rent that list to the merchant.

Defendants also offer to create lists which target cardholders who purchase specific types of items, such as fine jewelry. The merchants using the defendants' service can also target shoppers in categories such as mail-order apparel buyers, home-improvement shoppers, electronics shoppers, luxury lodgers, card members with children, skiers, frequent business travelers, resort users, Asian/European travelers, luxury European car owners, or recent movers. Finally, defendants offer joint-marketing ventures to merchants who generate substantial sales through the American Express card. Defendants mail special promotions devised by the merchants to its cardholders and share the profits generated by these advertisements.

On May 14, 1992, Patrick E. Dwyer filed a class action against defendants. His complaint alleges that defendants intruded into their cardholders' seclusion, commercially appropriated their cardholders' personal spending habits, and violated the Illinois consumer fraud statute and consumer fraud statutes in other jurisdictions. Maria Teresa Rojas later filed a class action containing the same claims. The circuit court consolidated the two actions. Plaintiffs moved to certify the class, add parties, and file an amended, consolidated complaint. Defendants moved to dismiss the claims. The parties fully briefed the motions to dismiss and to certify the class. After hearing argument on the motion to dismiss, the circuit court granted that motion and denied plaintiffs' motions as moot. Plaintiffs appeal the circuit court order.

Plaintiffs have alleged that defendants' practices constitute an invasion of their privacy and violate the Illinois Consumer Fraud and Deceptive Business Practices Act (Act or Consumer Fraud Act) (Ill.Rev.Stat.1991, ch. 121 1/2, par. 261 et seq. (now 815 ILCS 505/1 et seq. (West 1992))). For the reasons discussed below, we find that plaintiffs have not stated a cause of action under either of these theories.

Invasion of Privacy

There are four branches of the privacy invasion tort identified by the Restatement (Second) of Torts. These are: (1) an unreasonable intrusion upon the seclusion of another; (2) an appropriation of another's name or likeness; (3) a public disclosure of private facts; and (4) publicity which reasonably places another in a false light before the public. (Restatement (Second) of Torts §§ 652B, 652C, 652D, 652E, at 378-94 (1977); W. Keeton, Prosser & Keeton on Torts § 117, at 849-69 (5th ed. 1984).) Plaintiffs' complaint includes claims under the first and second branches.

As a preliminary matter, we note that a cause of action for intrusion into seclusion has never been recognized explicitly by the Illinois Supreme Court. In Lovgren v. Citizens First National Bank (1989), 126 Ill.2d 411, 128 Ill.Dec. 542, 534 N.E.2d 987, the supreme court discussed this tort as enunciated by the Restatement and Prosser, but stated that its discussion did not imply a recognition of the action by the court. (Lovgren, 126 Ill.2d at 416-17, 128 Ill.Dec. at 543-44, 534 N.E.2d at 988-89.) The court concluded that the defendants' alleged actions in that case did not constitute an unreasonable intrusion into the seclusion of another and declined to address the conflict among the appellate court districts as to whether the cause of action should be recognized in this State. ^* Lovgren, 126 Ill.2d at 417, 128 Ill.Dec. at 544, 534 N.E.2d at 989.

In 1979, this district declined to entertain a cause of action for intrusion into the seclusion of another in Kelly v. Franco (1979), 72 Ill.App.3d 642, 28 Ill.Dec. 855, 391 N.E.2d 54. In Kelly, the plaintiffs contended that the defendant repeatedly made phone calls to their home, only to hang up when one of the plaintiffs answered. The plaintiffs also alleged that the defendant verbally threatened and abused them and harassed their son. (Kelly, 72 Ill.App.3d at 644, 28 Ill.Dec. at 857, 391 N.E.2d at 56.) This court noted that the law in Illinois was inconsistent on this matter and held that even if it were to recognize such a cause of action the plaintiff's allegations were insufficient to support a cause of action for unreasonable intrusion into another's seclusion. Kelly, 72 Ill.App.3d at 646-47, 28 Ill.Dec. at 859, 391 N.E.2d at 58.

The third district recognized the intrusion tort in Melvin v. Burling (1986), 141 Ill.App.3d 786, 95 Ill.Dec. 919, 490 N.E.2d 1011, seven years after Kelly. In Melvin, the court set out four elements which must be alleged in order to state a cause of action: (1) an unauthorized intrusion or prying into the plaintiff's seclusion; (2) an intrusion which is offensive or objectionable to a reasonable man; (3) the matter upon which the intrusion occurs is private; and (4) the intrusion causes anguish and suffering. (Melvin, 141 Ill.App.3d at 789, 95 Ill.Dec. at 921-22, 490 N.E.2d at 1013-14.) Since the third district set out the four elements in Melvin, this district has applied these elements without directly addressing the issue of whether the cause of action exists in this State. In Mucklow v. John Marshall Law School (1988), 176 Ill.App.3d 886, 126 Ill.Dec. 314, 531 N.E.2d 941, and again in Miller v. Motorola, Inc. (1990), 202 Ill.App.3d 976, 148 Ill.Dec. 303, 560 N.E.2d 900, this district held that the plaintiff's allegations did not satisfy the first element of Melvin, without expressing a view as to the conflict regarding the recognition of the cause of action. Mucklow, 176 Ill.App.3d at 894, 126 Ill.Dec. at 319, 531 N.E.2d at 946; Miller, 202 Ill.App.3d at 981-82, 148 Ill.Dec. at 307, 560 N.E.2d at 904.

Plaintiffs' allegations fail to satisfy the first element, an unauthorized intrusion or prying into the plaintiffs' seclusion. The alleged wrongful actions involve the defendants' practice of renting lists that they have compiled from information contained in their own records. By using the American Express card, a cardholder is voluntarily, and necessarily, giving information to defendants that, if analyzed, will reveal a cardholder's spending habits and shopping preferences. We cannot hold that a defendant has committed an unauthorized intrusion by compiling the information voluntarily given to it and then renting its compilation.

Plaintiffs claim that because defendants rented lists based on this compiled information, this case involves the disclosure of private financial information and most closely resembles cases involving intrusion into private financial dealings, such as bank account transactions. Plaintiffs cite several cases in which courts have recognized the right to privacy surrounding financial transactions. See Zimmermann v. Wilson (3d Cir.1936), 81 F.2d 847 (holding examination of information in taxpayers' bank books would violate the taxpayers' privacy rights); Brex v. Smith (1929), 104 N.J.Eq. 386, 146 A. 34 (upholding claim for unauthorized intrusion into the plaintiff's bank account); Hickson v. Home Federal (N.D.Ga.1992), 805 F.Supp. 1567 (finding bank disclosure to credit bureau of borrower's loan payment delinquency could violate borrower's right to privacy); Suburban Trust Co. v. Waller (1979), 44 Md.App. 335, 408 A.2d 758 (holding bank cannot reveal information about customers' account or transaction unless compelled by legal process); Mason v. Williams Discount Center, Inc. (Mo.1982), 639 S.W.2d 836 (finding store's posting of names of bad check risks invades plaintiff's privacy).

However, we find that this case more closely resembles the sale of magazine subscription lists, which was at issue in Shibley v. Time, Inc. (1975), 45 Ohio App.2d 69, 341 N.E.2d 337. In Shibley, the plaintiffs claimed that the defendant's practice of selling and renting magazine subscription lists without the subscribers' prior consent "constitut...