Santangelo v. Comcast Corporation

Filing 62

MEMORANDUM Opinion and Order Signed by the Honorable John Z. Lee on 2/8/16Mailed notice(ca, ).

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
KEITH SANTANGELO,
Plaintiff,
v.
COMCAST CORPORATION,
Defendant.

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15-cv-0293
Judge John Z. Lee

MEMORANDUM OPINION AND ORDER
After the Court dismissed Keith Santangelo’s original complaint against
Comcast Corporation without prejudice, Santangelo filed an amended complaint,
again on behalf of himself and a putative class. According to the amended
complaint, Santangelo contacted Comcast to set up internet service and paid a $50
deposit in exchange for Comcast’s promise not to pull his credit report. Comcast
then pulled his credit report anyway, an action Santangelo claims violated the Fair
Credit Reporting Act (FCRA), 15 U.S.C. § 1681 et seq., as well as Illinois statutory
and common law. He also alleges that Comcast has done the same thing to many
other consumers.
Comcast moves to dismiss the amended complaint under Federal Rules of
Civil Procedure 12(b)(1) and 12(b)(6), arguing that Santangelo lacks Article III
standing to bring an FCRA claim and also that he has failed to state any claim. For
the reasons provided below, the Court denies Comcast’s motion.

I. Factual and Procedural Background
Santangelo alleges in his amended complaint that he contacted Comcast
through the company’s online customer service “Chat” function in December 2014
and requested internet service for his new apartment. Am. Compl. ¶ 14. During the
chat session, a Comcast representative asked Santangelo for permission to run a
credit inquiry. Id. ¶ 15. Santangelo asked if any option was available to avoid the
credit inquiry. Id. ¶ 16. The Comcast representative told him that the company
would forgo the inquiry if he paid a $50 deposit. Id.
The option to pay a $50 deposit in order to avoid a credit inquiry was an
explicit part of Comcast’s official Risk Management Policy and was set forth on the
company’s pubic website. Id. ¶¶ 10–11. The policy also required a $50 deposit from
any prospective customer who agreed to a credit inquiry but whose credit score
proved to be unsatisfactory. Id. ¶ 12. According to Santangelo, the deposit policy
“reflects Comcast’s calculated business decision and belief that the collection of a
$50 deposit is sufficient to cover the risk presented by a person with bad credit and
is sufficient to cover the risk presented by a person who refuses a credit pull.” Id.
¶ 13.
Santangelo opted to pay the $50 deposit in lieu of a credit inquiry. Id. ¶ 17.
To facilitate payment of his deposit, the Comcast representative created a web
portal through which Santangelo provided his credit card information. Id. ¶ 18.
Comcast then charged his credit card $50. Id. ¶ 19. Nevertheless, Comcast, without

2

Santangelo’s authorization, pulled his credit report via a “hard inquiry” that same
day. Id. ¶ 21. This credit inquiry depleted Santangelo’s credit score. Id.
According to Santangelo, Comcast has done the same thing to many
consumers. Id. ¶ 2 (citing Comcast help forum topic threads). He contends that
Comcast’s practice harmed him and the other members of the putative class by
obtaining their personal and private financial information without justification and
by taking $50 from each putative class member in exchange for a promise it didn’t
keep. Id. ¶ 32.
Comcast moved to dismiss the Santangelo’s original complaint on the basis
that Santangelo lacked standing to bring an FCRA claim and on the basis that his
allegations did not state a claim. The Court rejected Comcast’s standing argument
but agreed that Santangelo had not stated an FCRA claim, noting that the
complaint included no allegations about the Risk Management Policy that
Santangelo had relied upon in his brief. Santangelo v. Comcast Corp., No. 15-CV0293, 2015 WL 3421156, at *2–*5 (N.D. Ill. May 28, 2015). The Court then declined
to exercise supplemental jurisdiction over his state law claims. Id. at *5.
Santangelo has since filed an amended complaint that includes the
allegations summarized above about Comcast’s deposit policy. Comcast now moves
to dismiss the amended complaint.

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II. Analysis
A. FCRA Claim
FCRA prohibits the obtaining of a “consumer report,” commonly known as a
credit report, except for purposes authorized by that statute. 15 U.S.C. § 1681b(f).
The statute lists specific permissible purposes, such as “in connection with a credit
transaction involving the consumer on whom the information is to be furnished and
involving the extension of credit.” Id. §1681b(a)(3)(A). The statute also allows
reports to be obtained for any other “legitimate business need . . . in connection with
a business transaction that is initiated by the consumer,” §1681b(a)(3)(F)(i). These
limitations are intended to produce a “balance between consumer privacy and the
needs of a modern, credit-driven economy.” Stergiopoulos & Ivelisse Castro v. First
Midwest Bancorp, Inc., 427 F.3d 1043, 1045–46 (7th Cir. 2005).
Santangelo contends that Comcast did not have a permissible purpose for
obtaining his credit report after he paid the $50 deposit in exchange for the
company’s promise not to check his credit. 1 If he is correct and the company’s
violation was “willful,” he would be entitled to recover attorney’s fees and either
“actual damages” or statutory damages between $100 and $1000. See 15 U.S.C.

Santangelo also alleges that Comcast, because it lacked a permissible purpose to
obtain his credit report, must have done so under “false pretenses.” Am. Compl. ¶ 43. But
even assuming, as other courts have, that “false pretenses” and “without a permissible
purpose” are equivalent, see Pappas v. City of Calumet City, 9 F. Supp. 2d 943, 949 (N.D. Ill.
1998) (citing Zamora v. Valley Fed. Sav. & Loan Assoc., 811 F.2d 1368, 1370 (10th Cir.
1987), the “false pretenses” provisions are inapplicable to this case. One provision applies
only when the defendant is a “natural person,” i.e., not a corporation, see 15 U.S.C.
§ 1681n(a)(1)(B), another provides for damages only to reporting agencies (not to
consumers), see 15 U.S.C. § 1681n(b), and the last creates only criminal liability, see id. §
1681q.
1

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§ 1681n(a)(1). If the company’s violation was merely negligent, Santangelo would be
permitted to recover only attorney’s fees and “actual damages.” See 15 U.S.C.A.
§ 1681o(a)(1).
1. Standing
Comcast first argues that Santangelo lacks standing to bring his FCRA
claim. To establish standing under Article III, “a plaintiff must show (1) it has
suffered an ‘injury in fact’ that is (a) concrete and particularized and (b) actual or
imminent, not conjectural or hypothetical; (2) the injury is fairly traceable to the
challenged action of the defendant; and 3) it is likely, as opposed to merely
speculative, that the injury will be redressed by a favorable decision.” Friends of the
Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 180–81 (2000) (citing
Lujan v. Defenders of Wildlife, 504 U.S. 555, 560–61 (1992)).
According to Comcast, Santangelo has not alleged an injury-in-fact that is
fairly traceable to the FCRA violation he claims. Mem. Supp. at 4–7. Santangelo
responds that he has sustained three injuries-in-fact: the loss of the $50 he paid as
a deposit, the violation of his legal right not to have his credit report pulled without
a permissible purpose, and the resulting depletion of his credit score. Resp. Br. at 2–
4.
The Court concluded in the order dismissing Santangelo’s original complaint
that Comcast’s retention of his $50 deposit was sufficient to satisfy the injury-infact requirement. See Santangelo v. Comcast Corp., No. 15-CV-0293, 2015 WL
3421156, at *2 (N.D. Ill. May 28, 2015). Comcast asks the Court to reconsider that

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conclusion, arguing that the company’s possession of the $50 is not fairly traceable
to the claimed violation of the FCRA. Mem. Supp. at 4–5.
Comcast is correct that the actual act that constitutes the alleged FCRA
violation—Comcast’s execution of a credit pull—did not cause Santangelo to give
Comcast $50. After all, he had given Comcast the $50 willingly before the credit
inquiry was made. On the other hand, it was the very fact that Comcast received
the $50 from Santangelo before it performed the credit check that made it illegal.
(Santangelo’s theory, remember, is that Comcast lacked a permissible purpose to
make the credit inquiry after receiving his $50.) And once Comcast checked
Santangelo’s credit, it should have refunded the deposit immediately, rather than
keeping it. Comcast’s receipt and withholding of the $50, therefore, is inextricable
from the FCRA violation and can be said to be fairly traceable to the FCRA
violation. And as the Court explained in the previous order, “even if the $50.00
deposit were fully refundable, Santangelo still has standing based on the lost timevalue of the money.” Santangelo, No. 15-CV-0293, 2015 WL 3421156, at *3 (citing
Habitat Educ. Ctr. v. U.S. Forest Serv., 607 F.3d 453, 457 (7th Cir. 2010) (“Every
day that a sum of money is wrongfully withheld, its rightful owner loses the timevalue of the money.”). 2
Deposit aside, the Court concludes that Santangelo also has sufficiently
alleged an injury-in-fact by alleging that Comcast obtained his credit report without
a permissible purpose in violation of the FCRA. Comcast contends otherwise,

2

In its reply brief, Comcast states that it has refunded the $50 plus interest to Plaintiff on March 21, 2015.
But this was months after the credit check was performed.

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arguing that a bare violation of the FCRA—one that does not inflict “actual
damages”—is merely an “injury in law” rather than an injury-in-fact. Mem. Supp.
at 5–7. But this argument has no support in this Circuit, where it is clear that a
plaintiff can sufficiently allege an injury-in-fact without alleging actual damages.
See Sterk v. Redbox Automated Retail, LLC, 770 F.3d 618, 623 (7th Cir. 2014)
(explaining that “the separate issue of whether plaintiffs have suffered financial
harm” must not be confused “with Article III’s injury-in-fact requirement for
purposes of constitutional standing to bring suit in the first place”); Abbott v.
Lockheed Martin Corp., 725 F.3d 803, 808 (7th Cir. 2013) (“Injury-in-fact for
standing purposes is not the same thing as the ultimate measure of recovery.”)
Because the FCRA grants consumers a legally protected interest in limiting
access to their credit reports and provides redress for violations, the Court
concludes that Santangelo’s allegations about Comcast’s interference with that
legally protected interest are sufficient to establish Article III standing. Although
the Supreme Court is considering the scope of Congress’s ability to decide what
constitutes injury-in-fact in an FCRA case, see Spokeo, Inc. v. Robins, 135 S.Ct.
1892 (Mem) (2015) (granting certiorari), this Court remains obliged to follow the
law as it stands now. And, currently, Congress—though it “‘may not lower the
threshold for standing below the minimum requirements imposed by the
Constitution’”—“does have the power to ‘enact statutes creating legal rights, the
invasion of which creates standing, even though no injury would exist without the

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statute.’” Sterk, 770 F.3d at 623 (quoting Kyles v. J.K. Guardian Sec. Servs., Inc.,
222 F.3d 289, 294 (7th Cir. 2000).
Additionally, even if the Supreme Court were to conclude in Spokeo that a
bare violation of the FCRA does not constitute an injury-in-fact, Santangelo also
alleges that the FCRA violation in this case depleted his credit score. In response,
Comcast contends that a reduced credit score, without resulting damages, does not
constitute an injury for standing purposes, Mem. Supp. at 5, but the cases upon
which it relies address the statutory requirement of “actual damages” under 15
U.S.C.A. § 1681o(a)(1), rather than Article III standing. See Novak v. Experian Info.
Sols., Inc., 782 F. Supp. 2d 617, 623 (N.D. Ill. 2011); Renninger v. ChexSystems, No.
98 C 669, 1998 WL 295497, at *6 (N.D. Ill. May 22, 1998); Young v. Harbor Mortor
Works, Inc., No. 2:07CV0031JVB, 2009 WL 187793, at *5 (N.D. Ind. Jan. 27, 2009).
In short, the Court agrees with Santangelo that a depleted credit score is
sufficient to constitute an injury-in-fact for the purposes of establishing Article III
standing. Credit scores are of great importance in our economy, and a depleted
credit score could affect a consumer in numerous ways, inflicting harm that often
may be difficult to prove or quantify. Congress has the power to discourage the
needless depletion of consumers’ credit scores even when the depleted score cannot
be neatly tied to a financial harm. While discovery may well show that Santangelo
did not suffer any actual damages as a result of his lower credit score, at this
preliminary stage, his allegations are sufficient to establish Article III injury-infact.

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2. Sufficiency of Santangelo’s allegations
Comcast next argues that Santangelo’s allegations do not state an FCRA
claim. Mem. Supp. at 7–10. To survive a motion to dismiss, a complaint must “state
a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). In assessing
the sufficiency of a complaint, the Court must view it in the light most favorable to
the plaintiff, accept all well-pleaded facts as true, and give the plaintiff the benefit
of all reasonable inferences. Lavalais v. Vill. of Melrose Park, 734 F.3d 629, 632 (7th
Cir. 2013); Tamayo v. Blagojevich, 526 F.3d 1074, 1081 (7th Cir. 2008). In addition
to the complaint itself, the Court may consider “documents attached to the
complaint, documents that are critical to the complaint and referred to in it, and
information that is subject to proper judicial notice.” Geinosky v. City of Chicago,
675 F.3d 743, 745 n.1 (7th Cir. 2012).
In dismissing Santangelo’s original complaint, the Court concluded that he
had not sufficiently alleged that Comcast lacked a permissible purpose for pulling
his credit report. See Santangelo v. Comcast Corp., No. 15-CV-0293, 2015 WL
3421156, at *4–*5 (N.D. Ill. May 28, 2015). To support his original allegations,
Santangelo had argued that Comcast’s agreement not to pull his credit report made
such a request legally impermissible and thus illegitimate, but this argument
conflated his contract claim with whether Comcast had a legitimate business need
under the FCRA. Id. Santangelo also argued that Comcast’s own policies revealed
that it did not have a legitimate business need for his credit report after receiving

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his $50 deposit, but he had not included any allegations about Comcast’s policies in
his complaint. Id. at *5.
In his amended complaint, Santangelo does allege that Comcast’s deposit
policies demonstrate its lack of a legitimate need to run credit checks with respect
to consumers who paid a $50 deposit. According to the amended complaint,
Comcast’s established policy is to forgo a credit check in exchange for a $50 deposit.
The company also has a policy of accepting a $50 deposit from consumers who opt
for a credit check but prove to have poor credit. Santangelo compares this situation
to that of a car dealer who accepts a cash payment for the full purchase price of a
car. The FTC has explained that the car dealer in that hypothetical does not have a
legitimate need to obtain the purchaser’s credit report. See Kaiser, FTC Informal
Staff

Opinion

Letter

(July

16,

1998),

available

at

https://www.ftc.gov/policy/advisory-opinions/advisory-opinion-kaiser-07-16-98
(accessed Jan. 3, 2016). Similarly, a landlord does not have a legitimate need to
obtain a tenant’s credit report if the tenant is entitled to a lease renewal without
regard to creditworthiness. See, e.g., Ali v. Vikar Mgmt. Ltd., 994 F. Supp. 492, 499
(S.D.N.Y. 1998).
In response, Comcast first argues that it had a legitimate business need to
establish Santangelo’s creditworthiness despite his deposit because—unlike in the
car dealer example—his $50 deposit would cover less than two months of service in
a long-term contract. Mem. Supp. at 8–9. 3 But the Company’s assertions about the
Although Comcast’s seems to be arguing that it was extending credit to Santangelo
in the form of internet service, the company does not invoke 15 U.S.C.A. § 1681b(a)(3)(A),
3

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cost of Santangelo’s service and the existence of a long-term contract do not appear
in Santangelo’s complaint or attached documents and thus cannot be the basis for
granting a motion under Rule 12(b)(6). See Travel All Over the World, Inc. v.
Kingdom of Saudi Arabia, 73 F.3d 1423, 1430 (7th Cir. 1996) (“[I]f the district court
considers matters outside the pleadings in connection with a motion to dismiss, it
must treat the motion as one for summary judgment. Failure to treat such a motion
as one for summary judgment and provide the litigants with notice and an
opportunity to respond can constitute reversible error.” (citations omitted)). And
even assuming that Santangelo’s deposit did not negate all financial risk to
Comcast, he contends that, under company policy, his creditworthiness was
irrelevant to Comcast’s determination of his eligibility for service once the deposit
was collected, much like the tenants in Ali.
If Santangelo is correct that Comcast did not obtain his credit report to
assess his creditworthiness, the company would still have been justified in
obtaining the report if it had some other “legitimate business need.” Comcast
contends that it had such a need: to verify Santangelo’s identity. But the Court has
no basis at this stage for accepting this assertion as true, and a defendant may not
defeat an FCRA claim simply by offering what may be a post hoc rationale for
having obtained a credit report. Moreover, the company itself highlights the current
lack of clarity about why it obtained the report by arguing at another point that
which explicitly provides that a credit report may be obtained when an “extension of credit”
is involved. A debt incurred in exchange for a service is a form of credit. See 15 U.S.C.A. §§
1681a(r)(5), 1691a(d). Comcast instead relies entirely on § 1681b(a)(3)(F)(ii), the residual
clause.

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Santangelo’s

allegations

“suggest

that

[Comcast]

obtained

his

report

unintentionally.” Reply. Br. at 9.
The bottom line is that Santangelo’s allegations about Comcast’s deposit
policy—when combined with the reasonable inference that Comcast instituted this
policy because it had no need to check the credit of consumers who paid deposits—
remedied the deficiencies in his original complaint. As the Court concluded in the
previous order, Comcast’s mere violation of its alleged agreement not to pull
Santangelo’s credit report does not support an FCRA claim. Santangelo, No. 15-CV0293, 2015 WL 3421156, at *4. But the possibility that the company itself believed
that its customers’ creditworthiness was irrelevant if they paid a deposit is enough
at the pleading stage. Discovery may show that Comcast did have a legitimate
business need for Santangelo’s credit report even after his deposit was paid, but the
Court cannot say so at this point and must grant all reasonable inferences to
Santangelo.
Comcast’s final argument for dismissing Santangelo’s FCRA claim is that he
neither explicitly alleges that the company’s actions were “willful,” which is
necessary to trigger statutory damages, see 15 U.S.C. § 1681n(a)(1)(A), nor
identifies any “actual damages” that he could recover if Comcast acted only
negligently, see id. § 1681o(a)(1). Mem. Supp. at 9–10. But even assuming that
Santangelo’s $50 deposit and depleted credit score do not constitute “actual
damages,” he has nevertheless stated a claim because he has sufficiently alleged
that Comcast acted willfully. Although he does not use the word “willful” in his

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complaint, he alleges that the company obtained his credit report despite that it
“knew that it did not have a legitimate business need.” Am. Compl. ¶41. He also
alleges that “Comcast is engaged in this practice on a widespread basis.” Id. ¶ 2.
These allegations imply recklessness at the very least, and reckless conduct
qualifies as willful conduct under the FCRA. See Murray v. New Cingular Wireless
Services, Inc., 523 F.3d 719, 725–26 (7th Cir. 2008) (“[S]tatutory damages are
available only for willful violations of the Act, and the Supreme Court held in Safeco
Insurance Co. v. Burr, 551 U.S. 47 (2007), that this means recklessness—something
more than negligence but less than knowledge of the law’s requirements.”)
B. State Law Claims
1. Standing
Comcast argues for the first time in its Reply Brief that Santangelo no longer
has standing to bring any of his state law claims. Reply Br. at 9. In support, the
company has attached an affidavit and billing records purporting to show that,
since this lawsuit was filed, Santangelo has received a credit in the amount of his
$50 deposit, plus interest in the amount of $.10. Comcast contends that this refund
means that Santangelo’s injury for the reported breach of contract cannot be
redressed by a favorable judicial decision as is required for standing.
Normally, an argument raised for the first time in a reply brief is deemed
forfeited, Narducci v. Moore, 572 F.3d 313, 324 (7th Cir. 2009), but courts have an
independent responsibility to inquire into whether they have jurisdiction to decide a
claim, Olson v. Bemis Co., 800 F.3d 296, 300 (7th Cir. 2015). In fulfilling that

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obligation, the Court may consider evidence outside the pleadings, St. John’s United
Church of Christ v. City of Chi., 502 F.3d 616, 625 (7th Cir. 2007), meaning that the
Court may consider the evidence Comcast has attached to its brief for purposes of
deciding this jurisdictional question.
When a plaintiff had standing to bring a claim at the time the claim was
filed, and the defendant subsequently takes some action to compensate the plaintiff
for the alleged wrong, the question becomes whether the case is moot rather than
whether the plaintiff has standing. Friends of the Earth, Inc. v. Laidlaw Envtl.
Servs. (TOC), Inc., 528 U.S. 167, 189 (2000). The distinction is important because a
defendant who argues that it has taken an action that moots the case bears the
burden of establishing mootness, whereas standing is the plaintiff’s burden to
establish. Id.
Establishing mootness is not easy. Just recently, the Supreme Court
reiterated that a “case becomes moot . . . only when it is impossible for a court to
grant any effectual relief whatever to the prevailing party. As long as the parties
have a concrete interest, however small, in the outcome of the litigation, the case is
not moot.” Campbell-Ewald Co. v. Gomez, No. 14-857, 2016 WL 228345, at *5 (Jan.
20, 2016) (internal quotation marks and citations omitted).
Despite the refund of his deposit, Santangelo still has an interest in the
outcome of his state law claims. Although the refund of his deposit with interest
may mean that there is little or no additional money he can recover, the Court
cannot conclude that it is “impossible . . . to grant any effectual relief” to

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Santangelo. For example, Santangelo may ultimately be able to prove damages
resulting from his depleted credit score (whether in the form of a higher interest
rate on credit, a missed opportunity, or even reputational harm). Additionally,
under the Illinois Consumer Fraud and Deceptive Practices Act, Santangelo is not
just seeking compensatory damages but is also seeking punitive damages and
injunctive relief. Because Comcast has not made an offer of judgment that would
have entirely satisfied Santangelo’s state law claims, the claims are not moot. See
id. at *7. See also Scott v. Westlake Servs. LLC, 740 F.3d 1124, 1126 (7th Cir. 2014)
(“[I]f the defendant offers to pay only what it thinks might be due, the offer does not
render the plaintiff's case moot.”)
2. Sufficiency of Allegations
a. Breach of Contract
The elements of a breach of contract claim in Illinois are (1) a valid contract,
(2) performance by the plaintiff, (3) breach by the defendant, and (4) resulting
damages. Razor Capital v. Antaal, 972 N.E.2d 1238, 1246 (Ill. App. 2012).
Santangelo alleges that Comcast offered to forgo a credit check in exchange for a
$50 deposit and that he accepted the offer and paid the deposit. Comcast then
breached, he asserts, by running a credit check. Santangelo says he was damaged
by the loss of the use of his $50 and the reduction of his credit score.
According to Comcast, however, Santangelo’s contract claim must be
dismissed based on the existence of a subsequent written contract, Mem. Supp. 10–
12, a copy of which the company has attached to its memorandum in support of its

15

motion to dismiss, id. at Ex. 1-A.. That contract purports to “replace any and all
prior written or verbal agreements” about “the subject matter of this Agreement,”
and the contract authorizes Comcast “to make inquiries and to receive information
about your credit experience from others.” Santangelo responds in part with several
arguments that this document has no bearing on his contract claim, including that
the breach he alleges took place before he could possibly have entered into the
written contract, even assuming that he did eventually enter into it. His more
important argument right now, however, is that the Court may not consider the
written contract at this stage of the case.
A motion to dismiss under Rule 12(b)(6) must be decided based on the
complaint, “documents attached to the complaint, documents that are critical to the
complaint and referred to in it, and information that is subject to proper judicial
notice.” Geinosky, 675 F.3d at 745 n.1 (7th Cir. 2012). The contract submitted by
Comcast falls into none of these categories. If the Court were to consider the
contract, the company’s motion to dismiss would necessarily be converted into a
motion for summary judgment, and Santagelo would need to be given the discovery
and opportunity to respond. See Travel All Over the World, 73 F.3d at 1430.
Comcast also argues that Santangelo does not allege any compensable
damages, explaining that his complaint does not address “whether Comcast has or
will refund interest on his deposit” 4 and that he “does not allege that any harm

Comcast correctly does not suggest that the Court should consider the affidavit and billing
records that it submitted in support of its argument for dismissal under Rule 12(b)(1). As explained,
the Court may consider evidence outside the pleadings when applying Rule 12(b)(1) but not
Rule 12(b)(6).

4

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resulted” from his decreased credit score. Mem. Supp. at 12. But Comcast offers no
authority for the proposition that Santangelo needed to include allegations relating
to Comcast’s intent to refund his deposit with interest, and the Court is aware of
none. Additionally, the Court declines to decide at the pleading stage that a reduced
credit score without identifiable financial consequences could never entitle a
plaintiff to damages.
b. Unjust Enrichment
Under Illinois law, “recovery for unjust enrichment is unavailable where the
conduct at issue is the subject of an express contract between the plaintiff and
defendant.” Cohen v. Am. Sec. Ins. Co., 735 F.3d 601, 615 (7th Cir. 2013). But a
plaintiff can bring an unjust enrichment claim in the alternative to a breach of
contract claim. Id.; Fed. R. Civ. P. 8(d)(2). Santangelo brings his unjust enrichment
claim in the alternative, meaning that, if the Court concludes that no contract
governed whether Comcast could obtain his credit report, Santangelo may still be
able to force Comcast to disgorge any ill-gotten gains.
Comcast argues that this claim, like Santangelo’s contract claim, should be
dismissed based on the existence of the written contract they have attached to their
motion to dismiss. Mem. Supp. at 12–13. But, as explained above, the Court is not
permitted to consider that contract in deciding whether to dismiss a claim under
Rule 12(b)(6). See Travel All Over the World, Inc, 73 F.3d at 1430.
Comcast also makes the related argument that the claim should be dismissed
because both parties agree that an express contract governs and only disagree about

17

which contract governs. Presumably, however, Comcast does not mean to concede
that it had a valid contract with Santangelo not to run a credit check until the
written contract went into effect. In any event, if the company does seek to make
that concession, it will need to do so in its answer to the complaint.
Finally, Comcast argues that Santangelo has not stated an unjust
enrichment claim because he has not alleged that the company “intended to retain
his deposit.” Mem. Supp. at 13. “To state a claim for unjust enrichment, the plaintiff
must allege that the defendant retained a benefit to the plaintiff's detriment, and
that the retention of that benefit violates fundamental principles of justice, equity,
and good conscience.” Prudential Ins. Co. of Am. v. Clark Consulting, Inc., 548 F.
Supp. 2d 619, 622 (N.D. Ill. 2008) (citing HPI Health Care Serv., Inc. v. Mt. Vernon
Hosp., Inc., 545 N.E.2d 672, 679 (Ill. 1989)).
Comcast is right that Santangelo did not allege anything about the company’s
intent, but he did allege that the company has in fact “retained the $50 deposit,”
Am. Compl. at 65, which is sufficient. Comcast points out that this allegation is no
longer true because the deposit has been refunded, but the evidence of the refund
(like the written contract) cannot be considered by the Court in applying Rule
12(b)(6) because it is a matter outside the pleadings. See Travel All Over the World,
Inc, 73 F.3d at 1430.
c. Consumer Fraud and Deceptive Business Practices Act
Illinois’s Consumer Fraud and Deceptive Business Practices Act, 815 ILCS
505 et seq., “is a regulatory and remedial statute intended to protect consumers,

18

borrowers, and business persons against fraud, unfair methods of competition, and
other unfair and deceptive business practices.” Robinson v. Toyota Motor Credit
Corp., 775 N.E.2d 951, 960 (Ill. 2002). “It is to be liberally construed to effectuate its
purpose.” Id. “The elements of a claim under the Act are: (1) a deceptive act or
practice by the defendant; (2) the defendant’s intent that the plaintiff rely on the
deception; and (3) the occurrence of the deception during a course of conduct
involving trade or commerce.” Id. Additionally, the plaintiff must have suffered
“actual damage.” 815 ILCS 505/10a. To determine whether conduct is “unfair”
under the Act, Illinois courts ask “(1) whether the practice offends public policy; (2)
whether it is immoral, unethical, oppressive, or unscrupulous; (3) whether it causes
substantial injury to consumers.” Robinson v. Toyota Motor Credit Corp., 775
N.E.2d 951, 961 (Ill. 2002).
Santangelo alleges that Comcast engaged in unfair and deceptive business
practices by promising to forgo a credit check in exchange for a $50 deposit and then
performing the credit check anyway. Am. Compl. ¶ 46. He says that the company
intended for him and others to rely on the deception, as “evidenced by the fact that
Comcast facilitated the deposits of $50 by providing a web portal to process the
deposit in real time.” Id. ¶ 48. He also alleges that Comcast’s “conduct offends
public policy because it is akin to a widespread fraud, violates federal law, harms
consumers, and harm’s consumer trust in the communications industry and credit
reporting industry.” Id. ¶ 51. As in each of his counts, he incorporates his earlier
allegations about the specifics of his dealings with Comcast. Id. ¶ 44.

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Comcast first argues that Santangelo’s allegations fall short of stating a
claim under the Act because of the overlap between those allegations and the
allegations that support his breach of contract claim. The Illinois Supreme Court
has made clear that a “breach of contractual promise, without more, is not
actionable under the Consumer Fraud Act.” Avery v. State Farm Mut. Auto. Ins. Co.,
835 N.E.2d 801, 844 (Ill. 2005). The Seventh Circuit has elaborated that even a
“widespread” breaching of contracts is not enough to state a claim under the Act if it
is just “a simple breach of contract multiplied over a prospective plaintiff class.”
Greenberger v. GEICO Gen. Ins. Co., 631 F.3d 392, 400 (7th Cir. 2011).
“[A]ffirmative acts of misrepresentation,” however, can be enough to push a contract
claim into the ambit of the Act. Id.
Santangelo responds that his allegations in support of his claim under the
Act are not merely that Comcast breached its contract. Resp. Br. at 14–15. Rather,
he alleges that the company made affirmative false representations (both on its
website and while communicating directly with consumers), that it did so on a
widespread basis, and that it induced consumers to pay the $50 deposit right away
through an online payment portal. The Court agrees that these allegations describe
something beyond a simple breach of contract. See Rumford v. Countrywide
Funding Corp., 678 N.E.2d 369, 373 (Ill. App. 1997) (“[W]e find that plaintiff’s
consumer fraud claim was not based on a simple breach of contract but on an
allegation that defendant was engaged in a pattern of misrepresenting to customers

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that additional charges would not be assessed at the time their mortgages were
released.”)
Comcast’s second argument is that Santangelo has failed to state a claim
under the Act by “fail[ing] to plead any facts whatsoever that would support a
finding that Comcast intended to deviate from” its written policy of accepting a
deposit in lieu of a credit check. Mem. Supp. at 15. The company says that
Santangelo thus has not met the pleading standards of Rule 8(a) let alone the
heightened pleading standard set out in Rule 9(b) for fraud claims. Id.
The Seventh Circuit has stated that “[c]laims for violation of the Consumer
Fraud Act are subject to the same heightened pleading standards as other fraud
claims; as such, they must satisfy the particularity requirement of Rule 9(b) of the
Federal Rules of Civil Procedure.” Greenberger, 631 F.3d at 399 (7th Cir. 2011). The
Seventh Circuit has also made clear that a “cause of action for unfair practices
under the Consumer Fraud Act need only meet the notice pleading standard of Rule
8(a), not the particularity requirement in Rule 9(b).” Windy City Metal Fabricators
& Supply, Inc. v. CIT Tech. Fin. Servs., Inc., 536 F.3d 663, 670 (7th Cir. 2008).
Santangelo alleges that Comcast’s actions were both deceptive (fraudulent)
and unfair, complicating the question of which pleading standard applies. But the
Court concludes that resolving that question is unnecessary because Santangelo’s
allegations are sufficiently specific under either standard. The heightened pleading
standard of Rule 9(b) requires that the complaint include “the who, what, when,
where, and how” of the alleged fraud. DiLeo v. Ernst & Young, 901 F.2d 624, 627

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(7th Cir. 1990). Santangelo has included this information. And Comcast’s concern
that he has not sufficiently alleged their intent to deviate from their written policy
must be rejected because, under Rule 9(b), “intent . . . may be alleged generally.”
III. Conclusion
For the reasons given above, the Court denies Comcast’s motion to dismiss.

SO ORDERED

ENTER: 2/8/16
________________________________________
JOHN Z. LEE
United States District Judge

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