IN THE UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

JOSEPH SPIVAK, individually )

and on behalf of a class of )

similarly situated persons, )

)

Plaintiff, )

)

vs. ) Case No. 12 C 1116

)

WILLIS OF ILLINOIS, INC. )

and PS ILLINOIS TRUST, )

)

Defendants. )

MEMORANDUM OPINION AND ORDER

MATTHEW F. KENNELLY, District Judge:

Joseph Spivak filed a putative class action complaint against the defendants,

Willis of Illinois and PS Illinois Trust. The defendants have moved to dismiss the

complaint for lack of subject matter jurisdiction, contending that the case is moot

because they offered to compensate Spivak for the harm alleged. For the reasons

stated below, the Court denies defendants’ motion.

Background

On January 24, 2012, Spivak filed a lawsuit in Illinois state court against Willis

and PS. Spivak alleged that he had rented a storage unit from PS and that PS and

Willis sold him storage insurance at the time of the rental. Spivak alleged that the

defendants told him that had to purchase insurance to be able to rent the storage unit

and that they failed to provide him with information required by Illinois law to the effect

that insurance in fact was not required and that storage insurance might duplicate other
insurance he already had. Willis alleged that defendants deliberately made

misrepresentations to him and other prospective storage unit renters to induce them to

purchase insurance. He asserted claims under the Illinois Consumer Fraud Act (ICFA)

and the federal Racketeer Influence and Corrupt Organizations Act (RICO).

Spivak’s complaint included allegations that defendants had made similar

misrepresentations to thousands of renters of storage units. Compl. ¶ 19. He alleged

that the lawsuit should proceed on behalf of a class, reciting that the requirements for

class certification were met. Id. ¶¶ 20-24. Paragraph 24 of his complaint stated as

follows: “Plaintiff thus moves here for certification of the Class as alleged as part of the

relief sought under this Complaint.” Id. ¶ 24.

Willis was served with summons on January 26, 2012, and PS was served on

February 6, 2012. On February 3, 2012, an attorney representing both defendants

wrote to Spivak’s counsel. See Mem. in Support of Defs.’ Mot. to Dismiss, Ex. A. In the

letter, counsel stated that defendants wished to resolve Spivak’s claims in full and

made a “binding settlement offer” including the following terms:

- reimbursement of all the insurance premiums Spivak had paid; 

- reimbursement of insurance premiums paid by ten other persons who met

the class definition, up to $500 per person; 

- payment of up to $5,000 in attorney’s fees and expenses; 

- agreement to “evaluate and revise as necessary the manner in which

[PS’s] employees explain insurance options to customers to ensure

compliance with applicable law”; and 

- agreement to “ensure that, to the extent this is not already being done,”

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written materials as required by Illinois statute are available at every PS

facility within Illinois.

Id. The letter went on to state that “this offer is intended to make the Plaintiff whole and

fully satisfy his pending legal claims against Defendants, and Defendants believe it

renders moot Plaintiff's pending lawsuit.” Id. It remained open until February 13. 

Spivak did not respond to the offer.

Defendants removed the case to federal court on February 16, 2012, citing the

federal RICO claim and the Class Action Fairness Act, 28 U.S.C. §§ 1332(d) & 1453.

One week later, they moved to dismiss, arguing that in light of the settlement offer,

Spivak no longer had a personal stake in the outcome of the suit and thus lacked

standing to pursue his claim. 

Discussion

The Seventh Circuit recently reaffirmed in Damasco v. Clearwire Corp., 662 F.3d

891 (7th Cir. 2011), that “once the defendant offers to satisfy the plaintiff’s entire

demand, there is no dispute over which to litigate, and a plaintiff who refuses to

acknowledge this loses outright, under Fed. R. Civ. P. 12(b)(1), because he has no

remaining stake.” Id. at 895 (internal quotation marks and citations omitted). The court

rejected the plaintiff’s contention that there should be an exception to this rule in a

putative class action if the defendant offers relief to the named plaintiff before he has “a

reasonable opportunity to seek certification.” The court stated that “[t]o allow a case,

not certified as a class action and with no motion for class certification even pending, to

continue in federal court when the sole plaintiff no longer maintains a personal stake

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defies the limits on federal jurisdiction expressed in Article III” of the Constitution. Id. at

896. “After [defendant] made its offer, [plaintiff’s] federal case was over.” Id. The court

noted that class-action plaintiffs could easily avoid this problem by “mov[ing] to certify

the class at the same time that they file their complaint. The pendency of that motion

protects a putative class from attempts to buy off the named plaintiffs.” Id.

Defendants argue that their offer satisfied the entirety of Spivak’s demand and

thus rendered the case moot whether or not he accepted it. Spivak disagrees. He

makes three arguments, but the Court need only deal with one of them. Spivak argues

that defendants did not offer him complete relief because their offer made no provision

for punitive damages under ICFA or treble damages under RICO and did not provide

for completely curative injunctive relief. Defendants concede that they offered only to

repay the amount that Spivak had actually paid. They give Spivak’s argument about

treble and punitive damages the back of their hand, saying only the following:

Plaintiff’s argument that the offer must allocate an amount for punitive

damages is both misguided and speculative. It is misguided because it

ignores the fact that the settlement offer made Plaintiff whole by returning

to him all of the money he paid to Defendants, i.e., all of his conceivable

actual damages. It is also speculative because it assumes, without any

evidence whatsoever, that there is a basis for imposing punitive damages

in this case.

Defs.’ Reply at 6. 

Defendants essentially argue that a settlement offer that includes no provision

for punitive damages in a case brought under a statute authorizing them (ICFA) and no

provision for trebling of actual damages in a case brought under a statute requiring this

(RICO) nonetheless amounts to “satisfy[ing] the plaintiff’s entire demand.” They cite no

authority to support this proposition, and it is not up to the Court to do their work for

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them. Defendants have effectively forfeited the point. Even were that not the case, the

Court notes that Damasco itself involved a statute that provided for trebling of damages

upon a finding of willfulness, and the settlement proposal in that case specifically

offered to treble (to $1,500) the fixed statutory award for the named plaintiff and five

others. See Damasco, 662 F.3d at 893. Defendants did not make Spivak an offer of

like kind. The Court rejects defendants’ contention that this was not required because

the availability of damages beyond the amount Spivak paid out is “speculative.” Liability

for punitive damages is no less speculative than liability for compensatory damages,

and more importantly, trebling of damages under RICO is mandatory and thus anything

but speculative.

Because defendants’ offer did not satisfy plaintiff’s “entire demand,” Damasco,

662 F.3d at 895, the case is not moot, and the Court need not consider Spivak’s

argument that defendants’ settlement offer did not satisfy his request for injunctive

relief.

Conclusion

For the reasons stated above, the Court denies defendants’ motion to dismiss

[docket no. 7].

________________________________

MATTHEW F. KENNELLY

 United States District Judge

Date: May 15, 2012

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