IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

SHIRLEY DAVIDSON, Individually

and on Behalf of the Class,

Plaintiff,

v.

WORLDWIDE ASSET PURCHASING,

LLC; WORLDWIDE ASSET

PURCHASING II, LLC; and WEST

RECEIVABLE SERVICES, INC.,

 Defendants.

Case No. 12 C 4359

Hon. Harry D. Leinenweber

MEMORANDUM OPINION AND ORDER

Before the Court is Defendant Worldwide Asset Purchasing II,

LLC’s (hereinafter, “WAP II”) Motion to Dismiss. For the following

reasons, the Court grants the Motion.

I. BACKGROUND

Plaintiff Shirley Davidson (hereinafter, “Davidson” or

“Plaintiff”) is a resident of Illinois. On November 30, 2007,

Defendant Worldwide Asset Purchasing, LLC (“WAP I”) sued Davidson

to collect “an alleged debt incurred for personal, family or

household purposes.” Am. Compl. 7. On March 10, 2008, WAP I

obtained a judgment in Illinois state court against Davidson and

then collected on that judgment between June 2008 and July 2008. 

Subsequently, the judgment was vacated and the case dismissed on

July 21, 2008.

Case: 1:12-cv-04359 Document #: 39 Filed: 12/27/12 Page 1 of 12 PageID #:358
Plaintiff alleges WAP I’s actions violated the Illinois

Collection Agency Act (the “ICAA”) because, effective January 1,

2008, the act prohibited an unlicensed collection agency from

engaging in debt collection within the state. 225 ILL. COMP. STAT.

425/4. The statute regulates when collection agencies may refer an

account to an attorney, which Plaintiff contends makes clear that

litigation is considered part of debt collection under the statute. 

Id. at 425/8a-1.

WAP I was not licensed as a collection agency in Illinois

until September 4, 2008. (WAP II also became licensed on this

date.) Plaintiff contends WAP I thus violated the law by obtaining

the judgment and collecting on it while unlicensed.

WAP I is chartered under Nevada law and has its principal

office in Nebraska. It is a wholly-owned subsidiary of Defendant

West Receivable Services, Inc. (“West”), a Delaware Corporation

with its principal place of business in Nebraska. WAP II is also

chartered under Nevada law. It is wholly-owned by Galaxy Asset

Purchasing, LLC (“GAP”). GAP, in turn, is wholly owned by Galaxy

Capital Inc. (“GC”).

Plaintiff alleges West “directed the collection activities of

both WAP [I] and WAP II while both were unlicensed,” (Am. Compl. 3)

and that West itself was unlicensed during 2008, when it owned both

WAP I and WAP II.

Plaintiff alleges WAP II is ultimately owned by 14

individuals: Steve Sherrill, Richard Lundeberg, Darrell T. Hanna,

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Stephanie A. Hanna, Susan Vasiliadis, Kenneth S. Hurt, Joseph

Barbito, Deidri McBrayer, Michael LaFleur, James Hanna, Sydney

Hanna, Spencer Hanna, Leslie Abstein III and Kelly Hebert.

Darrell Hanna has been an officer of WAP I (the Complaint does

not say when), as has Mr. Lundeberg. Plaintiff further alleges

that “WAP [I] and WAP II were acting in a common course” of action

and that “defendants had common employees and managers directing

each defendant’s actions as a collection agency [and] defendants

used common procedures and practices.” Am. Compl. 4. 

“[D]efendants were, in fact, distinguishable by name only.” Id.

Finally, Plaintiff alleges “Defendants jointly and

cooperatively participated in a common course of conduct – namely,

the collection of debts without being properly licensed – contrary

to the ICAA, through actions of common employees and managers, and

practices equally applicable to each defendant.” Id. at 7. In her

response brief, Plaintiff maintains that this last sentence in the

Complaint supports the inference that “all defendants, including

WAP II, are co-conspirators, as all of them agreed to conduct that

was unlawful and took action towards that conduct.” Pl.’s Resp. 4. 

In addition to WAP I’s litigation against Davidson, WAP I and

WAP II (while unlicensed) instituted lawsuits against more than 30

Illinois consumers in 2008. They also collected money from other

Illinois consumers. 

Plaintiff sues on behalf of a class and a subclass. The class

consists of “all individuals against whom defendants [WAP I or WAP

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II] obtained a judgment, filed a collection lawsuit, or collected

money, in Illinois between January 1, 2008 and September 4, 2008.” 

Am. Compl. 8. The subclass consists of “class members who had

judgments or lawsuits filed against them, but do not presently have

judgments outstanding.” Id.

Plaintiff sues under four counts. Count I alleges Defendants’

coordinated actions “constitute a public nuisance” as defined by

the act. 225 ILL. COMP. STAT. 425/14a. Count II alleges liability

for the filing and pursuit of lawsuits during the unlicensed 2008

period. Count III alleges Defendants violated Section 425/9(a)(20)

by attempting to enforce a right or remedy with knowledge or reason

to know that the right or remedy does not exist. Count IV seeks

restitution of any monies obtained as a result of collection

activities while unlicensed in 2008. 

II. LEGAL STANDARD

To withstand a Motion to Dismiss, a Complaint “must be

plausible on its face, meaning that the plaintiff must have pled

‘factual content that allows the court to draw the reasonable

inference that the defendant is liable for the misconduct

alleged.’” G&S Holdings LLC v. Cont’l Cas. Co., No. 11-1813, 2012

U.S. App. LEXIS 19728, at *4 (7th Cir. Sept. 20, 2012) (citing Bell

Atlantic Corp. v. Twombly, 550 U.S. 544, 556 (2007) and Ashcroft v.

Iqbal, 556 U.S. 662, 678 (2009)). A complaint need not contain

detailed factual allegations to meet that standard, but must go

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beyond mere labels and conclusions. G&S Holdings LLC, 2012 U.S.

App. LEXIS 19729, at *4.

III. ANALYSIS

A. Consideration of Standing Before Class Certification

WAP I and West answered the Amended Complaint, but WAP II

brought a Motion to Dismiss. WAP II argues that Davidson has no

Article III standing to sue WAP II because the Complaint

acknowledges that WAP I, rather than the separate legal entity of

WAP II, sued Davidson.

The requirements of Article III case-or-controversy standing

are threefold: (1) an injury in-fact; (2) fairly traceable to the

defendant’s action; and (3) capable of being redressed by a

favorable decision from the court. Parvati Corp. v. City of Oak

Forest, 630 F.3d 512, 516 (7th Cir. 2010). Because Davidson’s

injury is traceable to WAP I rather than WAP II, she has no

standing to assert the injuries caused by WAP II against the

unnamed class members, WAP II argues.

Plaintiff counters this argument with what seems to be three

arguments. The first two arguments are fairly clear. The third is

more murky.

First, Plaintiff argues that it is improper for the Court to

consider the standing argument before Rule 23 class certification

has been considered. This argument is grounded in Amchem Products,

Inc., et al. v. Windsor et al., 521 U.S. 591, 612-613 (1997), and

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Ortiz, et al. v. Fibreboard Corp. et al, 527 U.S. 815, 831 (1999). 

In both these cases, the Supreme Court decided whether class

certification was proper before considering issues of standing. 

This was somewhat askance with the previous view that standing was

the first inquiry to be made. O’Shea v. Littleton, 414 U.S. 488,

494 (1974) (noting that “if none of the named plaintiffs purporting

to represent a class establishes the requisite case or controversy

with the defendants, none may seek relief on behalf of himself or

any other member of the class.”); see also, Robinson v. City of

Chicago, 868 F.2d 959, 968 (7th Cir. 1989) (“[A] class will not be

certified unless the named plaintiff has standing at that time.”).

Ortiz and Amchem have caused “a great deal of mischief,” as

one observer put it. In re Plasma-Derivative Protein Therapies

Antitrust Litigation, No. 09-7666, 2012 U.S. Dist. LEXIS 2501, at

*18 (N.D. Ill. Jan. 9, 2012) (citing Linda S. Mullenix, Standing

and Other Dispositive Motions After Amchem and Ortiz: The Problem

of “Logically Antecedent” Inquiries, 2004 MICH. ST. L. REV. 703, 707

(Fall 2004)). 

While some courts and observers suggest Ortiz’s consideration

of class status before Article II standing is always appropriate

(e.g., Salsitz v. Peltz, 210 F.R.D. 95, 97 (S.D.N.Y. 2002), others

read the language of Amchem and Ortiz as mere dicta explaining

that, in those two particular cases, the Court chose to expound on

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class certification issues rather than standing issues. Mullenix,

2004 MICH. ST. L. REV. at 714. 

The Seventh Circuit appeared headed toward the former

interpretation in Payton v. County of Kane when it called Ortiz’s

language a “directive” to consider class certification before

issues of standing. Payton v. County of Kane, 308 F.3d 673, 680

(7th Cir. 2002). However, the Seventh Circuit appeared to retreat

from that language in Arreola v. Godinez when it agreed that, at

least in that case, “standing is an antecedent legal issue that we

must resolve before proceeding to our evaluation of the district

court’s class certification decision.” Arreloa v. Godinez, 546

F.3d 788, 794 (7th Cir. 2008).

This Court concedes the field is muddied with reasonable

interpretations of Ortiz and Amchem on both sides, but it endorses

Mullenix’s view that the cases do not require that class

certification issues always be resolved before standing issues are

addressed. Moreover, the Court finds the distinction provided by

an Indiana case persuasive. In Catlin v. Hanser, the Court noted

that cases where standing has been raised before class

certification motions are made are easily distinguishable from

Payton. Catlin v. Hanser, 2011 U.S. Dist. LEXIS 28323, at *24-25

(S.D. Ind. March 17, 2011). Like Catlin, no class certification

motion is pending here, and the Court will not defer the issue of

Article III standing.

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B. Juridical Link Doctrine

In her second argument, Plaintiff contends that the “Juridical

Link” Doctrine is an exception to the standing requirement that

applies here. The doctrine posits that “if all the defendants took

part in a similar scheme that was sustained either by a contract or

a conspiracy, or was mandated by a uniform state rule, it is

appropriate to join as defendants even parties with whom the named

class representative did not have direct contact.” Payton, 308

F.3d at 679.

Payton involved a suit by arrestees against 19 counties. The

named plaintiffs, who had been detained by only two of the

defendant counties, alleged that the state statute that allowed the

counties to add a bail fee to the bail amount set by the court was

unconstitutional. The Seventh Circuit decided that even though the

named plaintiffs only had direct interactions with two of the

defendants, it might nonetheless be allowable for the class to

proceed against all 19 defendants (and possibly, eventually, all

102 counties in Illinois).

Key to the Seventh Circuit’s decision was the fact that the

case might be in a category “where appropriate relief may only be

obtained through one broad suit, and it will be impossible to find

a named plaintiff to match each defendant.” Payton, 308 F.3d at

681. “These putative representatives were personally injured by

the operation of the very same statute that caused the injuries to

all other members of the proposed class.”

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Following those guideposts, the Court finds this case unlike

Payton. Here, while there is an overarching statute involved

(ICAA), it does not pave the way to injuring the Plaintiff by

unconstitutionally authorizing the actions of Defendants as the

offending statute allegedly did in Payton. Further, there are not

another potential 101 defendants who would be impossible otherwise

to reach. As Defendants point out, there is just one other

Defendant here (WAP II) that is not reached by this class action. 

That Defendant may be manageably reached by any number of

(currently) unnamed class plaintiffs who were injured by WAP II’s

lawsuits during the period in question.

Even accepting as true Plaintiff’s common course of action and

conspiracy allegations (many of which only come in its response

brief, not its Complaint) as the court must in a motion to dismiss,

they do not equate the class’ situation in this case to the class

in Payton, where logistical considerations prohibited any alternate

path to relief.

Absent a more definitive directive from the Seventh Circuit

(which has never again taken up the Juridical Link Doctrine in the

10 years since Payton), this Court declines to broaden the

Juridical Link Doctrine to apply to a circumstance such as this. 

The Court finds the Juridical Link Doctrine inapplicable in this

case.

C. Civil Conspiracy

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Plaintiff’s third argument is a bit murky, but seems to

contend not that an exception to standing exists, but that it has

standing with regards to WAP II because WAP II engaged in civil

conspiracy against it with regards to the injury by WAP I. This

allegation is murky because Plaintiff never termed this

“conspiracy” in her Complaint; it only refers to it as such in her

response to WAP II’s Motion to Dismiss. It was not clear, at least

from the Complaint, if Plaintiff was alleging “conspiracy” as part

of a necessary component of the “juridical link” doctrine, or if

she was alleging the separate theory of civil conspiracy.

“The elements of an Illinois civil conspiracy are (1) a

combination of two or more persons, (2) for the purpose of

accomplishing by some concerted action either an unlawful purpose

or a lawful purpose by unlawful means, (3) in the further of which

one of the conspirators committed an overt tortious or unlawful

act.” Milliman v. McHenry County, 2012 U.S. Dist. LEXIS 151570, at

*9 (N.D. Ill. Oct. 22, 2012) (internal punctuation and quotations

omitted, citing Fritz v. Johnston, 807 N.E.2d 461, 470 (Ill. 2004).

The “agreement” requirement is what troubles the Court with

this Complaint. Here, Plaintiff has alleged that WAP I and WAP II

shared a number of employees, officers and a common owner (West). 

But no explicit agreement is alleged between WAP II and the other

two defendants. Plaintiff does allege that “Defendants jointly and

cooperatively participated [in] a common course of conduct –

namely, the collection of debts without being properly licensed –

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contrary to the ICAA, through actions of common employees and

managers, and practices equally applicable to each defendant.” Am.

Compl. 7.

The Court does not think that merely because the companies

shared a number of officers and employees, or merely because the

two companies engaged in similar business practices, an agreement

has been alleged between the two companies. 

“The mere characterization of a combination of acts as a

conspiracy is insufficient to withstand a motion to dismiss.” 

Lerman v. Turner, No. 10-2169, 2010 U.S. Dist. LEXIS 117825, at *7-

8 (N.D. Ill. Nov. 5, 2010). To allege an actionable conspiracy,

the plaintiff must do more than simply allege that a corporate

defendant participated in a conspiracy. Hollinger Int’l v.

Hollinger Inc., No. 04-0698, 2005 U.S. Dist. LEXIS 21305, at *47

(N.D. Ill. March 11, 2005). Instead the plaintiff must (1) point

to evidence showing the existence of a conspiracy and the

defendants’ knowing participation in that conspiracy and (2) allege

specific facts warranting an inference that the defendant was a

member of the conspiracy. Id. 

Additionally, “mere knowledge of the fraudulent or illegal

actions of another is also not enough to show a conspiracy.” GMAC,

LLC v. Hillquist, 652 F.Supp.2d 908, 923 (N.D. Ill. 2009).

Although this is a close call, this Court ultimately cannot

find that Plaintiff has adequately alleged an agreement between WAP

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II and either of the other corporate defendants to engage in

illegal conduct. 

Indeed, it was not clear until Plaintiff’s response brief that

civil conspiracy was even being alleged. Even taking the response

brief into account, the agreement was never adequately alleged. As

the entire point of a complaint is to give a defendant notice of

what it stands accused of, this Court finds that Plaintiff failed

to adequately allege civil conspiracy to violate the Illinois

Collection Agency Act.

D. Standing to Sue WAP II

With these decisions reached, the question of whether Davidson

has standing to sue WAP II is a foregone conclusion. WAP II is a

separate legal entity from WAP I that had no direct interaction

with Davidson. Thus, her injury cannot be traced to WAP II. That

West allegedly owned both WAP I and WAP II at the time in question

does not change this conclusion.

IV. CONCLUSION

For the reasons stated herein, the Motion to Dismiss WAP II as

a Defendant for lack of a Named Plaintiff with Standing is granted.

IT IS SO ORDERED.

Harry D. Leinenweber, Judge

United States District Court

DATE:12/27/2012

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