Khorloo v. Heath
| Decision Date | 31 March 2020 |
| Docket Number | No. 18-cv-01778,18-cv-01778 |
| Parties | ODONCHIMEG KHORLOO and ENKHAMGALAN TSOGTSAIKHAN, individually and on behalf of others similarly situated, Plaintiffs, v. JOHN C. HEATH ATTORNEY AT LAW, PLLC d/b/a LEXINGTON LAW FIRM, et al., Defendants. |
| Court | U.S. District Court — Northern District of Illinois |
MEMORANDUM OPINION AND ORDER
Plaintiffs Odonchimeg Khorloo and Enkhamgalan Tsogtsaikhan have brought this putative class action against Defendants John C. Heath Attorney at Law, PLLC d/b/a Lexington Law Firm ("Lexington"), Patrick Gibson, d/b/a 700life.net ("Gibson"), and other unknown owners of 700life.net. The class action complaint includes one count under the Telephone Consumer Protection Act ("TCPA"), 47 U.S.C. § 227, and four counts under Illinois state law. Each of the five counts concerns unsolicited marketing text messages that Defendants allegedly sent. Plaintiffs have moved for default and default judgment against Gibson. (Dkt. No. 52.) Meanwhile Lexington has moved for summary judgment in its favor. (Dkt. No. 45.) For the reasons explained below, the Court finds Gibson in default and enters a default judgment of $9,000 against him. The Court denies Plaintiffs' request to defer consideration of Lexington's summary judgment motion and their motion for leave to file a supplemental brief. Instead, the Court directs briefing of the summary judgment motion to proceed.
Plaintiffs have moved for both entry of default and entry of a default judgment against Defendant Gibson. (Mot. for Entry of Default & Default J. at 1, Dkt. No. 52.) Concerning the former request, the Clerk must enter a default when "a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend." Fed. R. Civ. P. 55(a). Plaintiffs have shown that they properly served Gibson in September 2018 through alternative service authorized by the Court. (9/11/2018 Minute Entry, Dkt. No. 31; Return of Service, Dkt. No. 52-1.) Nonetheless, Gibson has never appeared or filed any documents in this case. Plaintiffs therefore have shown that it is appropriate to enter default against Gibson. The Court thus proceeds to the request for a default judgment.1
Because Gibson has defaulted, the allegations against him in Plaintiffs' complaint will be accepted as true for purposes of the instant motion. See Domanus v. Lewicki, 742 F.3d 290, 303 (7th Cir. 2014). Nonetheless, Plaintiffs must still prove up their damages. Id. This Court has broad latitude in quantifying damages, particularly when the defendant's conduct impedes quantification of damages. Id. To establish their damages, Plaintiffs have submitted a memorandum, a supplemental memorandum, and their attorneys' billing records. (Dkt. Nos. 52, 52-3, 64.) Plaintiffs have asked for a default judgment in the total amount of $19,367.95, which would be composed of $9,000 in statutory penalties, $450 in actual damages, $9,253 in attorneys' fees, and $664.95 in costs. Although this suit was filed as a putative class action, no class has yetbeen certified and Plaintiffs seek damages only on an individual basis. The Court will address each of the requested forms of relief in turn.
The TCPA forbids any person from making a call using an "automatic telephone dialing system" to any cellphone, subject to certain exceptions. 47 U.S.C. § 227(b)(1)(A)(iii). The term "call" has been construed to include text messages. See Campbell-Ewald Co. v. Gomez, 136 S. Ct. 663, 667 (2016); Gadelhak v. AT&T Servs., Inc., 950 F.3d 458, 460 (7th Cir. 2020). The TCPA provides for a private right of action for a violation of this provision, and a private plaintiff may recover his or her actual monetary loss or $500 in statutory penalties for each violation, whichever is greater. 47 U.S.C. § 227(b)(3)(B).
Plaintiffs have alleged that Gibson, through his business 700life.net, used an automatic telephone dialing system to send ten text messages to Plaintiff Khorloo and eight text messages to Plaintiff Tsogtsaikhan without their consent. (Class Action Compl. ¶¶ 18-45.) Taken as true, those allegations establish Gibson's liability under 47 U.S.C. § 227(b)(1)(A)(iii). For those violations, the Court concludes that Plaintiffs are entitled to $500 per violation because, as they acknowledge in their supplemental memorandum, their actual damages per text message are minimal and they are entitled to the greater of $500 per violation or actual damages. (Suppl. Mem. in Supp. of Claim for Actual Damages at 2, Dkt. No. 64.) Gibson violated the statute 18 times, once for each text message. At a rate of $500 per violation, Plaintiffs thus are due $9,000 in statutory penalties.
In their brief in support of their motion for default judgment, Plaintiffs ask for $6,000 in actual damages for their claim under the Illinois Consumer Fraud and Deceptive BusinessPractices Act ("ICFA"), 815 ILCS 505/1 et seq. (Mot. for Default J. at 3.) But in their supplemental memorandum, Plaintiffs retract that damages request and instead ask for only $450 in actual damages, which equates to $25 per text message. (Suppl. Mem. at 2.) Plaintiffs claim that they suffered actual damages for "violation of their privacy rights, intrusion upon their seclusion, and depletion of their cell phone battery life." (Id.) They claim that such damages are still recoverable under the ICFA but provide no case law to support that proposition. (Id.) Plaintiffs do admit, however, that "such damages may be difficult if not impossible to quantify and may well be de minimis." (Id.)
"The actual damage element of a private ICFA action requires that the plaintiff suffer 'actual pecuniary loss.'" Kim v. Carter's Inc., 598 F.3d 362, 365 (7th Cir. 2010) (quoting Mulligan v. QVC, Inc., 888 N.E.2d 1190, 1197 (Ill. 2008)). Actual losses may come in several forms, including lost profits or being deprived of the benefit of the bargain. Id. But the "plaintiff must allege that she has been harmed in a concrete, ascertainable way." Frye v. L'Oreal USA, Inc., 583 F. Supp. 2d 954, 957 (N.D. Ill. 2008). A plaintiff's damages thus must be "calculable and measured by the plaintiff's loss." Burkhart v. Wolf Motors of Naperville, Inc. ex rel. Toyota of Naperville, 61 N.E.3d 1155, 1161 (Ill. App. Ct. 2016) (internal quotation marks omitted).
But even accepting the facts in the complaint as true, Plaintiffs have not alleged actual damages in this case.2 And the Court could not locate any Illinois case law suggesting that privacy violations—particularly not de minimis privacy violations such as receipt of unwanted advertisements by text message—provide a basis for actual damages under the ICFA. It seems unlikely that the statute allows plaintiffs to recover damages for privacy violations because the ICFA is concerned with fraudulent or unfair advertising, not with individual privacy rights. Thereceipt of the message by itself, moreover, does not provide not a basis for actual damages. See Dwyer v. Am. Express Co., 652 N.E.2d 1351, 1357 (Ill. App. Ct. 1995) ().
Plaintiffs' final argument is that they lost battery life on their phones when they received the text messages. Another district court has held that a business stated a claim under the ICFA for the receipt of an unwanted fax because it wasted paper and toner, wore down the fax machine, and wasted employee time. Centerline Equip. Corp. v. Banner Pers. Serv., Inc., 545 F. Supp. 2d 768, 779 (N.D. Ill. 2008). But several factors distinguish this case from Centerline. First, the alleged injury—battery life lost from receiving text messages—is even more de minimis than the loss of paper, toner, and employee time from faxes. Second, the plaintiff's burden to prove up damages for purposes of a default judgment motion is higher than his burden to plead damages in a complaint. See Domanus, 742 F.3d at 303. And third, the claims in Centerline were asserted on a class-wide basis, which was a factor in favor of finding that the plaintiff had pleaded actual damages. But while the complaint in this case seeks damages on a classwide basis, the default judgment motion only asks for damages on an individual basis. The Court therefore concludes that Plaintiffs have not proven actual damages in this case, as required by the ICFA.
Plaintiffs also seek attorneys' fees and costs under both the ICFA and the Illinois Uniform Deceptive Trade Practices Act ("UDTPA"), 815 ILCS 510/1 et seq. The Court concludes, however, that it would not be appropriate to award attorneys' fees or costs under either statute.
The ICFA allows a court to award reasonable attorneys' fees and costs to parties who prevail under the statute. See 815 ILCS 505/10a(c). It is not necessary for the Court to find bad faith or willfulness by a defendant to award attorneys' fees and costs to the plaintiff under thestatute. See Grove v. Huffman, 634 N.E.2d 1184, 1189-90 (Ill. App. Ct. 1994). But an award of fees and costs to a private party must be based on an award of actual damages. Id. 505/10a(a); Clayton v. Planet Travel Holdings, Inc., 988 N.E.2d 1110, 1116 (Ill. App. Ct. 2013) (). For the reasons given above, Plaintiffs have failed to establish that they suffered actual damages for the purposes of the ICFA. Therefore, an award of attorneys' fees and costs is not available under the ICFA.
The UDTPA also allows for awards of attorneys' fees and costs, but only under limited circumstances. First, the court must find that the defendant is liable for "willful engagement" in deceptive trade practices. 815 ILCS 510/3; see Tarin v. Pellonari, 625 N.E.2d 739, 747 (Ill. App. Ct. 1993). Second, a plaintiff may only recover attorneys' fees and...
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