Kasbohm, 475 N.E.2d 984, 986) (Ill. App. Ct. 1985)). Defendants argue that Clark’s alleged injury
occurred in Illinois. Clark does not argue that California is the place of injury, but does argue that
the place of injury cannot be determined. If Clark is right, then this court should not focus on section
145 of the Restatement, which places heavy emphasis on the place of injury, but should instead focus
on section 148(2). As explained below, this court rules that the place of injury in this case is Illinois,
which is also the state with the greatest interest in this case. But even if this court accepted the
argument that section 148 should apply because Clark’s place of injury cannot be determined, this
court still would hold that Illinois is the state with the most significant contacts to this case.

This court does not believe that this is a case where the place of injury cannot be determined.
The Seventh Circuit has unequivocally held that in a consumer fraud case, “the injury is decidedly
where the consumer is located.” In Re: Bridgestone/Firestone Inc., 288 F.3d at 1017. The
defendants argue that this holding by the Seventh Circiut is controlling here, but they may come to
that conclusion too quickly because in Bridgestone/Firestone the Seventh Circuit was analyzing
Indiana law.? This court need not linger on the issue though, because even if not controlling, the
conclusion reached by the Seventh Circuit in Bridgestone/Firestone — that in a consumer fraud case
injury is where the consumer is located — is consistent with the law of Illinois.

Like the party in Bridgestone/Firestone asking the District Court for the Southern District
of Indiana to apply out-of-state law, Clark cannot point to a single Illinois “case applying any law
other than [Illinois’s] to warranty or fraud claims arising from consumer products designed (or

contract terms written) out of state, unless a choice-of-law clause was involved.” /d. at 1018. In fact,

? Clark has not attempted to distinguish the holding of Bridgestone/Firestone, even
though this court is bound by the law of the Seventh Circuit.

5


Clark. This argument has been foreclosed by the Seventh Circuit and the Supreme Court. Jn Re:
Brdigestone/Firestone Inc., 288 F.3d at 1018 (citing BMW of North America Inc. v. Gore, 517 U.S.
559, 568-73, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996)) (“State consumer-protection laws vary
considerably, and courts musts respect these differences rather than apply one state’s law to sales in
other states with different rules.”). That case law also makes it clear that California’s stated interest
in applying its laws outside of its borders does not override Illinois’s more significant contacts to this
case. Cal. Bus. & Prof. Code § 17500.
CONCLUSION

For the foregoing reasons, defendants’ Renewed Motion For Summary Judgment is granted.

Counts One, Two and Three of Plaintiff's Amended Complaint are dismissed. This case is set for

status on May 19, 2005 to set a further schedule for this case.

ENTER:

MES F, HOLDERMAN
nited States District Judge

DATE: April 26, 2005.

10


contact to which section 145 points, is Illinois.

The remaining factors under section 145 are likely neutral, but in any event do not override
Illinois’s interest. The parties’ domiciles are split between California and Illinois, and no real
relationship exists between them except for the single transaction giving rise to this suit. The place
of the conduct giving rise to the injury may favor California, but not so strongly as to override
Illinois’s interest as the state where the injury occurred. Furthermore, in regard to the conduct giving
rise to her injury, Clark also admits, for purposes of venue, that a “substantial part of the events and
conduct giving rise to the violations of law complained of herein occurred in or emanated” in the
Northern District of Illinois. (Am. Compl 4 4.) See Cox v. Zale Del., Inc., No. 97 C 4464, 1998 WL
397841, at *6 (N.D. Ill. July 13, 1998).

The factors set forth in section 148(2)* also point toward Illinois as having the most
significant relationship to the facts underlying this litigation. The Restatement states:

(2) When the plaintiffs action in reliance took place in whole or in part in a state

other than that where the false representations were made, the forum will consider

such of the following contacts, among others, as may be present in the particular case

in determining the state which, with respect to the particular issue, has the most

significant relationship to the occurrence and the parties:

(a) the place, or places, where the plaintiff acted in reliance upon the
defendant’s representations,

(b) the place where the plaintiff received the representations,

(c) the place where the defendant made the representations,

(d) the domicile, residence, nationality, place of incorporation and place of
business of the parties,

significance of a contact must also be resolved in favor of applying California law. The choice-
of-law question, including the significance of certain contacts, is a legal determination for this
court to rule on, not a factual question to resolve in favor of Clark in the face of ambiguity.

‘ Neither party relies on Section 148(1) because that section only applies when “the
plaintiff's action in reliance took place in the state where the false representations were made and
received.” Restatement § 148.


all of the cases cited by the parties concerning courts sitting in Illinois considering whether to apply
Mlinois or California consumer-protection statutes have chosen the Illinois consumer-protection
statute. Nicholson, 953 F.Supp. at 1016-17, Vogel, 1998 WL 111576, at * 9-10, Perovich, 1997 WL
674975, at *5-6, This includes the only court cited by the parties from the State of Illinois
considering the issue, which has rejected the application of the California consumer-protection
statutes. Barbara's Sales Inc. v. Intel Corp., No. 02-788, slip op. at 6 (Cir. Ct. Madison County, Ill.
July 12, 2004) (“Illinois courts have not held that the laws of another state (the state of a
manufacturer’s principal place of business) governs the consumer fraud claims of Illinois residents
for goods purchased in Illinois . . . .).

Furthermore, as Clark points out, Illinois courts evaluate the significance of a contact “only
to the extent that [it] relate[s] to the policies and purposes sought to be vindicated” by the underlying
law. Jones, 682 N.E.2d at 249-250. This “interest analysis” leads to the conclusion that Clark’s
injury in this case occurred in Illinois. Determining where the injury occurred requires an
examination of the policies and purposes sought to be vindicated by the consumer-protection
statutes. The primary purpose of consumer-protection statutes is to protect consumers from
fraudulent sales. The focus of the statutes is protecting the consumer. The harm the statutes are
designed to protect against occurs when a consumer is defrauded. It follows then from an “interest
analysis,” which Clark urges this court to employ, that the injury in a consumer fraud case occurs

where the consumer is located.’ In this case, the place of Clark’s injury, the first and most important

3 Clark seems to make the argument that this court should resolve the disagreement as to
whether or not the place of the injury can be determined under the summary judgment standard
which requires this court to view the facts in the light most favorable to the nonmoving party.
Payne v, Pauley, 337 F.3d 767, 770 (7th Cir. 2003). Factual issues, of course, are considered
under the standard, but Clark misapplies that rule by arguing that any ambiguity in the legal

6


domicile of the plaintiff, which the comments make clear is more important than the domicile of the
defendants, also clearly points to Illinois.’ Thus, Clark received and relied upon the representation
all in the state of her residence, which is Illinois.

In regard to the last two contacts highlighted by section 148(2), Clark has established that the
credit report she allegedly did not receive was saved on defendant Consumerinfo’s computer servers
in California, (Def.’s 56.1(b)(3)(B) Resp. {4 30-31), but even assuming that a saved credit report can
be the tangible subject of a transaction, that contact does not tip the balance of factors in favor of
applying California law. The last factor also does not strongly point toward California as Clark
argues, because even if her action can be properly described as “render[ing] performance under a
contract,” Illinois is where Clark acted. Restatement § 148(2)(f). Illinois is where Clark resides,
where she received and relied upon the allegedly deceptive representations of defendants, and Illinois
therefore is the state with the most significant contact to Clark’s claim. Under section 145 or 148
of the Restatement, Illinois is the state with the most significant contacts to this case.

Finally, this court comes to Clark’s primary argument, which is that the policies of both
States’ laws favor applying the California consumer-protection statute. In short, Clark argues that
froma policy standpoint, there is no harm to Illinois in applying California law. Therefore, according

to Clark, this court should just apply California law because it is presumably more beneficial to

7 The comment states:

Other contacts. The plaintiff's domicil or residence, if he is a natural person, or the
principal place of business, if plaintiff is a corporation, are contacts of substantial significance
when the loss is pecuniary in its nature, as is true of the situations covered by this Section. This
is so because a financial loss will usually be of greatest concern to the state with which the
person suffering the loss has the closest relationship.

Restatement § 148(2), cmt. i.


IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

EVELYN CLARK, on behalf of herself )
and all others similarly situated, )
)
Plaintiff, )

) No. 03 C 7882
v. )
)
EXPERIAN INFORMATION SOLUTIONS )
INC., and CONSUMERINFO.COM )
)
Defendants. )

MEMORANDUM OPINION AND ORDER

JAMES F. HOLDERMAN, District Judge:

Before this court is Defendants’ Experian Information Solutions Inc. and Consumerinfo.com
Renewed Motion For Summary Judgment On Counts One Through Three Of Plaintiff's Amended
Complaint filed on February 14, 2005. In short, this dispute arises out of plaintiff Evelyn Clark’s
(“Clark”) allegation that defendants “engaged in an unfair and deceptive act and practice by luring
customers onto their website with promises of a ‘free’ credit report” or a “Three Bureau Credit
Report” for the price of $ 24.95, “which results in consumers unknowingly enrolling in and being
charged $79.95 for (dJefendants’ CreditCheck monitoring services.” (Am. Compl. { 2.)

Defendants’ motion requests summary judgment on Counts One through Three of Clark’s
Amended Complaint. These first three counts alleged causes of action based on California consumer-
protection statutes, Defendants’ position, advanced in the instant motion, is that these California
consumer-protection statutes cannot apply under Illinois choice-of-law principles. Defendants first

motion for summary judgment was denied without prejudice to allow Clark more time for discovery,


(e) the place where a tangible thing which is the subject of the transaction

between the parties was situated at the time, and

(f) the place where the plaintiff is to render performance under a contract

which he has been induced to enter by the false representations of the

defendant.
Restatement § 148(2). Defendants are correct that the first factor, the place where the plaintiffacted
in reliance upon the defendants’ representations, is very significant in making a choice-of-law
determination under this section.’ The comments to section 148(2) make clear that while the place
where the plaintiff received the representations, and the place where the defendant made the
representations are equally important, neither of those contacts are as important “as is the place

where the plaintiff acted in reliance on the defendant’s representations.” This important contact

clearly points to Illinois, where Clark encountered defendants’ allegedly deceptive website. The

5 This court rejects Clark’s strained argument that “plaintiff's reliance” as described in
section 148(2)(a) is somehow irrelevant because of “Defendants’ omissions of material fact,
rather than overt reliance.” (P].’s Resp. at 14.) The language of the Restatement clearly focuses
the court on the “place . . . where the plaintiff acted in reliance,” and does not refer to whether
the defendant’s representations were deceptive because they were overtly false or simply
omissions. Restatement § 148(2)(a) (emphasis added). Furthermore, Clark’s other attempt to
distinguish the importance of the place of reliance by quoting the language of the Restatement
that states “[t]he place of loss may be even more difficult to locate when . . . plaintiff's reliance
simply takes the form of non-action” is completely misplaced because in this case, Clark, who is
the plaintiff, took action — she purchased a product — and did not choose to forego an action in
reliance on defendants’ representations. (PI.’s Resp. at 14.)

6 The comment states in full:

The place where the plaintiff received the representation. This is the place where the
representations were first communicated to the plaintiff. This place constitutes approximately as
important a contact as does the place where the defendant made the representations. On the other
hand, this place is not so important a contact as is the place where the plaintiff acted in reliance
on the defendant’s representations.

Restatement § 148(2), cmt. g.


unnecessary to rule equivocally on whether a conflict of law exists, because even assuming such a
conflict, Illinois substantive law applies to this lawsuit. Perovich v. Humphrey, No. 97 C 3209, 1997
WL 674975, at *5 (N.D. Il. Oct. 28, 1997).

“Under Illinois choice-of-law principles, the ‘most significant contacts’ must be examined.”
Jones v. State Farm Mutual Auto. Ins. Co., 682 N.E.2d 238, 249 (Ill. App. Ct. 1997) (citation
omitted). In assessing the most “significant contacts,” both parties rely primarily on section 145 of
the Restatement (Second) of Conflict of Laws (“Restatement”), which requires that a court consider
the following important contacts with respect to a tort:

(a) the place where the injury occurred,

(b) the place where the conduct causing the injury occurred,

(c) the domicile, residence, nationality, place of incorporation and place of business of the

parties, and

(d) the place where the relationship, if any, between the parties is centered.
Restatement § 145(2). Both parties also rely on section 148 of the Restatement, which exists for
situations of fraud and misrepresentation when “there may be little reason in logic or persuasion to
say that one state rather than another is the place of injury.” Restatement § 145, cmt. e. Under either
test, Illinois courts do not simply tally contacts, but instead favor an “interest analysis,” which “is
based on the conclusion that ‘[c]ontacts obtain significance only to the extent that they relate to the
policies and purposes sought to be vindicated by the conflicting laws.’” Jones, 682 N.E.2d at 249-
250 (citing Mitchell v. United Asbestos Corp., 426 N.E.2d 350 (Ill. App. Ct. 1981)).

The parties dispute whether or not the place of injury in this case can be determined. This
is significant because “Illinois law presumes that the law of the state where the injury occurred will

govern ‘unless another state has a more significant relationship to the occurrence or to the parties

involved.” Miller v. Long-Airodox Co., 914 F.2d 976, 978 (7th Cir. 1990) (citing Ferguson v.


18.) Clark used her computer in Illinois to submit information to defendants in order to effectuate
the transaction, which included information regarding her credit card information. That information
was received by defendants in California. (Id. ] 19.) According to Clark, she was not only charged
for the “Three Bureau Credit Report,” which she was allegedly never able to view and print from her
computer screen as she expected to do, but she was also charged $79.95 for defendants’ CreditCheck
monitoring service, which she did not know she purchased.
ANALYSIS

“[C]hoice-of-law rules come from the state in which the federal court sits,” which in this case
is Illinois. In Re: Bridgestone/Firestone Inc., 288 F.3d 1012, 1015 (7th Cir. 2002). “Under Illinois
choice-of-law rules, this court will apply Illinois substantive law unless a conflict of law exists and
makes a difference in the outcome of the litigation.” Nicholson v. Marine Corps W. Fed. Credit
Union, 953 F.Supp. 1012, 1015 (N.D. Il. 1997).

Two other judges in this district have previously held that a conflict exists between the
California and Illinois consumer-protection statutes, because the California Code, unlike the Illinois

us

Code, allows a plaintiff to file suit as a “‘private attorney general’ acting on behalf of the ‘general
public.’” Nicholson, 953 F.Supp. at 1016 (citing Cal. Bus. & Prof. Code § 17204); Pope v. Vogel,
No. 97 C 1835, 1998 WL 111576, at * 9 (N.D. Ill. Mar. 5, 1998). This court agrees with those
rulings, and does not believe that the recent changes in the California Code resulting from passage
of Proposition 64 in November of 2004 undermine the validity of those previous rulings. While the
California Code now requires a plaintiff to allege that she “suffered injury in fact and has lost money

or property as a result” of the alleged violation, Cal. Bus. & Prof. Code § 17204, the court assumes

based on the allegations in her complaint that Clark could make such an allegation. It is, however,


which she argued was necessary to allow her to properly respond to the motion for summary
judgment.' For the following reasons, defendants’ Renewed Motion For Summary Judgment On
Counts One Through Three Of Plaintiff's Amended Complaint is granted.
BACKGROUND

The following are the relevant undisputed facts gleaned from the parties submissions. Clark
is a resident of Illinois. (Pl.’s 56.1(b)(3)(A) Resp. § 1.) Defendant Consumerinfo.com
(“Consumerinfo”) is a California corporation with its primary place of business in California. (Id.
§ 2.) Defendant Experian Information Solutions (“Experian”) is an Ohio corporation with its
primary place of business in California. (Id, 3.) Both defendants’ headquarters have been located
in California throughout the period of time relevant to this litigation. (Def.’s 56.1(a) Resp. J 1.)

At some point, the complaint alleges March of 2003, Clark accessed Consumerinfo’s website
(“website”) from her workplace computer in Schamburg, Illinois. (P].’s 56.1(b)(3)(A) Resp. § 6.)
Clark proceeded to engage in a transaction with defendants while on that website. That transaction
forms the basis of the dispute between the parties. This court assumes, for purposes of this motion,
that the defendants are equally responsible for the website Clark accessed, All of the pages Clark
visited on the website are stored on Consumerinfo’s servers, which have always been located in
California. (Id. ¥ 13.)

During the transaction, Clark purchased a “Three Bureau Credit Report” for $24.95. (Id. §

' This court disagrees with Clark’s argument that because a genuine issue of fact exists as
to whether defendants’ representations to Clark were proper summary judgment is not
appropriate at this time. For purposes of the choice-of-law issue, this court assumes that Clark’s
allegations regarding defendants’ deceptive practices are true. There are no factual disputes that
preclude this court from deciding the choice-of-law issue at this time. Furthermore, this court
accorded Clark sufficient time for additional discovery to respond to defendants’ choice-of-law
argument.