Illinois courts dismiss IFC suits v. NorVergence customers on jurisdiction and res judicata grounds

Randy Brook

Senior Attorney

Federal Trade Commission

“The Hon. James Ryan of the Circuit Court of Cook County, IL, 3rd Municipal District, has just issued his third decision and order dismissing suits by IFC Credit Corp. against consumers who had NorVergence Rental Agreements ("NRA") assigned to IFC. Judge Ryan held that the forum selection clause in the NRAs was "unenforceable because it offends the public policy of fundamental fairness" and, therefore, the Illinois courts have no personal jurisdiction over the out-of-state defendants. A copy of the Streng opinion and order is attached. Judge Ryan gave particular note to the significance of the Master Program Agreement between NorVergence and IFC that pre-dated any signing of the NRAs by consumers. This decision follows, and expands the reasoning of, prior decisions of the same court involving 14 separate cases brought by IFC.

“In addition, Judge Mary K. Rochford of the 2nd Municipal District dismissed an IFC suit against Magnetic Technologies on the merits, based on res judicata grounds. As yet there is only a handwritten order (copy attached).

“The FTC takes no position on these decisions. The undersigned staff attorney, speaking only for himself, does note that the FTC has long held that filing distant forum lawsuits against individual and small business consumers are unfair practices that violate the FTC Act, regardless of whether any particular state may uphold its courts' jurisdiction against distant consumers based on a forum selection or waiver clause in the contract.”

http://leasingnews.org/PDF/Magnetic%20Tech%20Dismissal%20Order.pdf

http://leasingnews.org/PDF/IFCvStreng.pdf

“The Hon. Blanche Manning, US District Judge in the Northern District of Illinois, has dismissed an IFC lawsuit against Warner Robbins Supply on jurisdictional grounds. Judge Manning considered conflicting lower court decisions and held, on motion to reconsider, that the NorVergence forum selection was not enforceable and there was no other basis to exercise jurisdiction in IL.

“The case was handled by IL attorney Michael Fleck.”

http://leasingnews.org/PDF/Memorandum%20Opinion%20and%20Order.pdf

http://leasingnews.org/PDF/Minute%20Order%20dismissing%20case.pdf