In re Ameriquest Mortg. Co. Mortg. Lending Practices Litig. - No. 05-CV-7097, 2007 U.S. Dist. LEXIS 29641 (N.D. Ill. Apr. 23, 2007)

Rule:

To invoke federal court jurisdiction, plaintiffs must demonstrate an actual "case or controversy." A complaint must allege: a) an "injury in fact" - an invasion of a legally protected interest which is concrete and particularized, and actual or imminent, not conjectural or hypothetical; b) a causal connection between the injury and the conduct complained of, which can be fairly traceable to the challenged action of the defendant, and not the result of the independent action of some third party not before the court; and c) that it is "likely," as opposed to merely speculative, that the injury will be redressed by a favorable decision. 

Facts:

Defendants Ameriquest Mortgage Company; AMC Mortgage Services, Inc.; Town & Country Credit Corporation; Ameriquest Capital Corporation; Town & Country Title Services, Inc.; and Ameriquest Mortgage Securities, Inc. move to dismiss the borrower plaintiffs' Consolidated Class Action Complaint in its entirety. Defendants contend that: a) plaintiffs have failed to show through "clear and specific allegations of fact" that they have standing to bring this suit; b) plaintiffs' first cause of action, for a declaration as to their rescission rights under the Truth-in-Lending Act, 15 U.S.C. § 1601, et seq., fails because TILA rescission is not susceptible to class relief; c) plaintiffs' second and third causes of action fail because neither the Equal Credit Opportunity Act, 15 U.S.C. § 1691, et seq., nor the Fair Credit Reporting Act, 15 U.S.C. § 1681, et seq. require notices of "adverse actions" in this case; and d) plaintiffs' twelfth cause of action fails because California's Civil Legal Remedies Act, Cal. Civ. Code § 1750, et seq. does not apply to the residential mortgage loans here. In the alternative, defendants move for a more definite statement of plaintiffs' claims. Defendants contend that the complaint contains "only legal conclusions," with no factual support for the plaintiffs' claims, and that the complaint therefore falls short of both Federal Rules of Civil Procedure 9(b) and 8.

Issue:

Did the borrowers fail to show through "clear and specific allegations of fact" that they have standing to bring this suit?

Answer:

No.

Conclusion:

The court held that the borrowers set forth sufficient facts and allegations to establish their standing; they identified themselves, explained that they - not the public in general - signed residential mortgage contracts with lenders, described the practices at issue, and alleged that they were harmed by the lenders' alleged practices. As to the borrowers' claim for declarations of rescission rights, the borrowers were simply seeking a declaration to facilitate their respective pursuits of an individual remedy, and neither the plain language of TILA nor Fed. R. Civ. P. 23 prohibited the borrowers from doing so on a class-wide basis. Regarding the ECOA and FCRA claims, the complaint alleged a bait-and-switch departure from offers the lenders made, not a series of rejections and counteroffers in response to any offers made by the borrowers. Because the complaint did not clearly demonstrate that the borrowers accepted counteroffers of credit, the court denied the lenders' motion to dismiss ECOA and FCRA causes of action. Finally, the court found that the borrowers satisfied the heightened pleading requirements of Fed. R. Civ. P. 9(b) with respect to their fraud and misrepresentation claims.