Midwest Title Loans, Inc. v. Ripley

Citation616 F.Supp.2d 897
Decision Date24 March 2009
Docket NumberNo. 1:07-cv-1479-SEB-DML.,1:07-cv-1479-SEB-DML.
PartiesMIDWEST TITLE LOANS, INC., Plaintiff, v. Judith J. RIPLEY, In Her Official Capacity as Director of the Indiana Department of Financial Institutions, Defendant.
CourtU.S. District Court — Southern District of Indiana

Alan S. Kaplinsky, Jeremy T. Rosenblum, Ballard Spahr Andrews & Ingersoll, LLP, Philadelphia, PA, John R. Maley, Paul L. Jefferson, Stanley C. Fickle, Barnes & Thornburg LLP, Indianapolis, IN, for Plaintiff.

Chadwick C. Duran, Gary W. Bippus, Indiana Office of the Attorney General, Indianapolis, IN, for Defendant.

ENTRY GRANTING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT AND PERMANENT INJUNCTION

SARAH EVANS BARKER, District Judge.

This cause is before the Court on Plaintiff Midwest Title Loans, Inc.'s ("Midwest Title") Motion for Summary Judgment and Permanent Injunction [Docket No. 38], filed on March 24, 2008; and Defendant Judith J. Ripley's cross motion for Summary Judgment [Docket No. 42], filed on March 24, 2008. Midwest Title brought its complaint, pursuant to 42 U.S.C. § 1983, against Defendant, Judith J. Ripley, in her official capacity as Director of the Indiana Department of Financial Institutions ("IDFI"), seeking to enjoin Ms. Ripley from enforcing the Indiana Uniform Consumer Credit Code, Ind.Code § 24-4.5-1-101 to 24-4.5-7-212 (the "IUCCC"), against Midwest Title. Plaintiff filed its action following receipt of a cease-and-desist letter issued by the Supervisor of the IDFT Consumer Credit Division charging Midwest Title with being in violation of the IUCCC. Plaintiff asserts that, under Seventh Circuit and Supreme Court precedent, Defendant is forbidden by the Commerce Clause of the United States Constitution (Art. I, § 8) from applying the IUCCC extraterritorially to an Illinois business.1

For the reasons detailed below, Plaintiffs Motion for Summary Judgment and Permanent Injunction is GRANTED, and Defendant's Motion for Summary Judgment is DENIED.

Factual Background

Plaintiff Midwest Title is an Illinois business corporation licensed by the Illinois Department of Financial Institutions as a consumer installment loan company. Stip. at ¶ 1. Defendant Judith Ripley is chief executive and administrative officer of the Indiana Department of Financial Institutions ("IDFI"). Id. at ¶ 3.

Plaintiff issues consumer loans, which are secured by the borrower's motor vehicle, and operates exclusively from 23 separate locations throughout the state of Illinois. Plaintiff has no business locations within Indiana. Id. at ¶¶ 1-2; 4. Plaintiff does not own or lease property in Indiana and does not hold a certificate of authority or license to do business in Indiana. Id. at ¶ 9. The parties agree that no Midwest Title agent or employee solicits business in person in Indiana, and all reminder and collection calls to Indiana borrowers are made from Plaintiffs Illinois-based offices. Id. at ¶ 8. However, Plaintiff does solicit business from Indiana consumers via other means. See id. at ¶ 8.

The parties have stipulated to certain uncontested facts [see Docket No. 39 (Designation of Evidence in Support of Plaintiffs Motion for Summary Judgment, Pl.'s Exh. 1); Docket No. 43 (Designation of Evidence in Support of Defendant's Motion for Summary Judgment, Def.'s Exh. A)]. The following material facts are lifted from those stipulations or are otherwise undisputed:

Prior to August 2007, Midwest Title accepted in-person applications for loans from Indiana residents. To apply, an applicant drove his motor vehicle and certificate of title to one of Midwest Title's Illinois locations. If approved, the applicant executed the necessary loan documents at the Illinois location and provided Midwest Title with a set of keys to the vehicle to secure the loan.2 Stip. at ¶ 8(a). Midwest Title would then submit the necessary documentation to the Indiana Bureau of Motor Vehicles to have its lien noted on the borrower's certificate of title. Id. at ¶ 8(f). Loan funds were disbursed in person to the borrower at the Illinois business location. Borrowers could make principal and interest payments at any Midwest Title location in Illinois. Payments were also accepted via money order or certified check transmitted through U.S. mail, by credit card, or through Western Union. Id. at ¶ 8(a), (g).

Plaintiff admits that it engaged in advertising and solicitation activities targeting Indiana customers. Plaintiff made annual mailings to Indiana residents who had previously used its services, with the effect of soliciting repeat business from those customers. Id. at ¶ 8(b). Plaintiff further admits to advertising on television stations in Indianapolis and Terre Haute, Indiana, and on Chicago-based television and radio stations that reached Indiana residents. Id. at ¶ 8(c). In addition, Plaintiff was listed in the Yellow Pages telephone directory in some Indiana communities. Id. at ¶ 8(d).

In August 2007, Plaintiff received a letter from the IDFI informing the company of a recent amendment, the "Territorial Application Provision," to the IUCCC. Stip. at ¶ 5, 10. As amended, the IUCCC imposes Indiana licensing and regulatory requirements on lenders "who are soliciting by any means and then making consumer loans to Indiana residents ..." IND. CODE § 24-4.5-1-201. For purposes of the Territorial Application Provision, a sale, lease, or loan transaction occurs in Indiana "if a consumer who is a resident of Indiana enters into a sale, lease, or loan transaction with a creditor in another state and the creditor has advertised or solicited sales, leases, or loans in Indiana by any means, including by mail, brochure, telephone, print, radio, television, the Internet, or electronic means ..." IND.CODE § 24-4.5-1-201(d) (emphasis added). The letter noted that if a creditor violates this provision, "the loan is void and the debtor is not obligated to pay either the principal or loan finance charge, as set forth in IC 24.4.5-5-202."3 IND.CODE § 24-4.5-1-201(8). Finally, IDFI warned Plaintiff that "failure to comply with Indiana law concerning loans made to Indiana residents could subject your company to regulatory enforcement by the office of the Indiana Attorney General and raise possible civil claims by customers." Stip. at ¶ 10. The parties agree that while the letter does not explicitly say so, "it is the position of the Director that the IUCCC does not apply to a loan consummated in a face-to-face meeting outside Indiana unless the loan resulted from either a solicitation received by the borrower in Indiana or media advertising originating in Indiana." Id. at ¶ 11.

Upon receipt of the warning letter, Plaintiff immediately suspended offering loans to Indiana residents. Id. at ¶ 12. Plaintiff also stopped charging and collecting interest on loans made to Indiana borrowers between July 1, 2007, and Plaintiff's receipt of the letter, and refunded all previously made payments of interest on the covered loans. Id. at ¶ 13.

Plaintiff extended a total of 2,054 loans to Indiana borrowers in 2006, which represented approximately 9 percent of Plaintiffs business. Id. at ¶ 6, Pl.'s Br. in Supp. at 2. The interest rate charged by Plaintiff exceeds the 36 percent per annum limit allowed by the IUCCC, Stip. at ¶ 4; therefore, the loans do not comply with Indiana law.

Legal Analysis
I. Standard of Review

Summary judgment is appropriate when the record establishes that there is "no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Disputes concerning material facts are genuine where the evidence is such that a reasonable jury could return a verdict for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In deciding whether genuine issues of material fact exist, the court construes all facts in a light most favorable to the non-moving party and draws all reasonable inferences in favor of the non-moving party. See id. at 255, 106 S.Ct. 2505. However, neither the "mere existence of some alleged factual dispute between the parties," id. at 247, 106 S.Ct. 2505, nor the existence of "some metaphysical doubt as to the material facts," Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986), will defeat a motion for summary judgment. Michas v. Health Cost Controls of Illinois, Inc., 209 F.3d 687, 692 (7th Cir.2000).

The moving party "bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of [the record] which it believes demonstrate the absence of a genuine issue of material fact." Celotex, 477 U.S. at 323, 106 S.Ct. 2548. The party seeking summary judgment on a claim on which the non-moving party bears the burden of proof may discharge its burden by showing an absence of evidence to support the non-moving party's case. Id. at 325, 106 S.Ct. 2548.

When the issues presented are purely questions of law, as the case at bar, summary judgment standards nonetheless apply. See Oneida Tribe of Indians of Wisconsin v. State of Wisconsin, 951 F.2d 757, 760 (7th Cir.1991). Courts are often confronted with cross-motions for summary judgment because Rules 56(a) and (b) of the Federal Rules of Civil Procedure allow both plaintiffs and defendants to move for such relief. "In such situations, courts must consider each party's motion individually to determine if that party has satisfied the summary judgment standard." Kohl v. Ass'n. of Trial Lawyers of Am., 183 F.R.D. 475 (D.Md.1998). While cross motions for summary judgment may lead to a judgment without trial, the standard for determining whether summary judgment should issue is unchanged from that which applies when only a single party has moved for the relief.

II. Dormant Commerce Clause:

The...

To continue reading

Request your trial
20 cases
  • Berman v. City of N.Y.
    • United States
    • U.S. District Court — Eastern District of New York
    • 29 d6 Setembro d6 2012
    ...outside of the State," it "impose[d] a fee only for cigarettes actually sold within the State"). Midwest Title Loans, Inc. v. Ripley, 616 F. Supp. 2d 897 (S.D. Ind. 2009), aff'd sub nom Midwest Title Loans v. Mills, is perhaps most similar to the case here. Midwest Title was an Illinois bus......
  • Legato Vapors LLC v. Cook
    • United States
    • U.S. District Court — Southern District of Indiana
    • 30 d4 Junho d4 2016
  • Hendrix v. Hendrixlicensing.Com, C09–285Z.
    • United States
    • U.S. District Court — Western District of Washington
    • 8 d2 Fevereiro d2 2011
    ...regulation. Healy v. Beer Inst., 491 U.S. 324, 336, 109 S.Ct. 2491, 105 L.Ed.2d 275 (1989). But see Midwest Title Loans, Inc. v. Ripley, 616 F.Supp.2d 897, 903 n. 4 (S.D.Ind.2009) (observing that commentators have questioned whether extraterritorial principles are an appropriate outgrowth o......
  • Eric M. Berman, P.C. v. City of N.Y.
    • United States
    • U.S. District Court — Eastern District of New York
    • 29 d6 Setembro d6 2012
    ...outside of the State,” it “impose[d] a fee only for cigarettes actually sold within the State”). Midwest Title Loans, Inc. v. Ripley, 616 F.Supp.2d 897 (S.D.Ind.2009), aff'd sub nom. Midwest Title Loans v. Mills, is perhaps most similar to the case here. Midwest Title was an Illinois busine......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT