drew and chase morgan bank3

8/14/2019 Drew and Chase Morgan Bank3

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IN THE UNITED STATES DISTRICT COURTFOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

Plaintiff,)))) Case No. 09 C 06746)))))

Hon Judge Ronald A. Guzman

DREW W. PETERSON,

v.JPMORGAN CHASE BANK, N.A.,

Defendant.JPMORGAN CHASE BANK, N.A.'S RESPONSE MEMORANDUM IN OPPOSITION

TO PLAINTIFF'S MOTION TO EXPEDITE AND ADVANCE ON DOCKET

Defendant JPMorgan Chase Bank, N.A. ("Chase"), by its counsel, hereby submits itsresponse and opposition to Plaintiff Drew Peterson's motion to expedite and advance on docket.

INTRODUCTIONPeterson moves to expedite discovery in this case for reasons that contradict the very

basis of his complaint. In his complaint, Peterson asserts claims under the Truth in Lending Act,15 U.S.C. 1601, et seq. ("TILA"), and various state law theories. TILA and its implementingRegulation Z permit a creditor to prohibit additional extensions of credit from a home equity lineof credit when, among other reasons, "the creditor has reason to believe that the consumer willbe unable to comply with the repayment requirements of the account due to a material change inthe consumer's financial circumstances." 15 U.S.C. 1647(c)(2)(C); see also 12 C.F.R. 226.5b(f)(3)(vi)(B). On the one hand, in his complaint, Peterson argues Chase improperlysuspended his home equity line of credit, even though his income has purportedly increased, notdecreased, since the time Chase first opened his line of credit. On the other hand, in his motionto expedite, Peterson urges the Court to expedite discovery, because "Plaintiff desperately needsimmediate access to his HELOC to obtain money to defend himself." (PI. Memo., p. 5.) In other

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words, Peterson admittedly faces enormous litigation expenses in connection with his murdertrial, yet claims that there has not been a material change in his financial situation. This blatantcontradiction aside, under the proper standard applied in cases where the plaintiff does not seek apreliminary injunction, Peterson has failed to establish that expedited discovery is warranted. 1

LEGAL STANDARDRule 26(d) provides that "a party may not seek discovery from any source before the

parties have conferred as required by Rule 26(f), except in a proceeding exempted from initialdisclosure under Rule 26(a)(1)(B), or when authorized by these rules, by stipulation, or by court

order." Fed. R Civ. P. 26(d). Here, the parties have not had a 26(f) conference. As such,Peterson may not commence discovery without Chase's consent or an order from this Court.

While there is no Seventh Circuit case addressing the standard for expediting discovery,courts have applied one of two standards (or a combination thereof), depending on the context inwhich expedited discovery is sought. In determining whether expedited discovery is appropriatein cases that do not involve a motion for preliminary injunction - as here - courts, includingthose in the Seventh Circuit, have typically applied the following factors (the Notaro factors):(1) irreparable injury, (2) some probability of success on the merits, (3) some connectionbetween the expedited discovery and the avoidance of the irreparable injury, and (4) someevidence that the injury that will result without expedited discovery looms greater than the injurythat the defendant will suffer if the expedited relief is granted. See Notaro v. Koch, 95 F.RD.403, 405 (D.C.N.Y. 1982); Edgenet, Inc. v. Home Depot US.A., Inc., - F.RD. -, 2009 WL

1 In addition to his efforts to get Chase to pay his mounting legal bills, Peterson (or moreaccurately, his attorney) also recently publicly announced Peterson's intention to auction hishome to Fox News to raise money for his legal defense. See Michael Sneed, "Peterson's HouseGoing to Auction Block?," Chicago Sun-Times, Nov. 11, 2009, available athttp://www.suntimes.com/news/sneedI1876990.CST-NWS-SNEED11.article (last visitedNovember 17, 2009), attached as Exhibit A.

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2970494, at *1 (E.D. Wis. Sept. 16,2009) (applying the Notaro test "in cases in which a partyclaims that without expedited discovery and the resulting earlier trial they would sufferirreparable damage") (internal quotations omitted); Centrifugal Acquisition Corp., Inc. v.Moon,No. 09-C-327, 2009 WL 1249294, at *1 (E.D. Wis. May 6,2009) (applying the Notaro factorswhere there is no pending preliminary injunction motion).

Other courts have applied a less-stringent "good cause" or "reasonableness" standardbased on need and fairness, typically where the movant seeks to expedite discovery for a pendingpreliminary injunction motion. See Merrill Lynch, Pierce, Fenner & Smith, Inc. v. O'Connor,

194 F.RD. 618, 624 (N.D. Ill. 2000). However, those cases are expedited by the very nature ofthe proceeding (e.g., discovery for a pending preliminary injunction motion or discoveryexpedited to meet looming statute of limitations deadline). For example, the court in MerrillLynch declined to apply the Notaro factors, finding it inappropriate to use factors so similar topreliminary injunction analysis factors where the plaintiff sought expedited discovery in order toprepare for a preliminary injunction hearing. Id at 624. However, the Merrill Lynch court didacknowledge that the Notaro factors could be appropriate in considering a motion to expeditediscovery in other circumstances (e.g. where the plaintiff seeks expedited discovery in lieu of apreliminary injunction). Id.; see also Vance v. Rumsfeld, No. 06 C 6964, 2007 WL 4557812(N.D. Ill. Dec. 21, 2007) (granting expedited discovery under a "reasonableness" standard toidentify unknown defendants before the looming statute of limitations deadline); Lamar v.Hammel, No. 08-02-MJR-CJP, 2008 WL 370697, at *3 (S.D. Ill. Feb. 11,2008) (same).

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ARGUMENTAs discussed above, other than when discovery is sought for a preliminary injunction

hearing, district courts in the Seventh Circuit apply the Notaro factors in determining whetherexpedited discovery is appropriate. Applying these factors here, Peterson fails to establish thatexpedited discovery is appropriate in this case. First, Peterson does not establish a likelihood ofsuccess on the merits. "'Probability of success' implies that the moving party [ ] must have a veryclear and strong case." Gucci Am., Inc. v. Daffy's, Inc., No.Civ.AOO-4463, 2000 WL 1720738,at *7 (D. N.J. Nov. 14, 2000) (internal quotations and citation omitted). Peterson claims Chase

improperly suspended his home equity line of credit, even though his income increased sinceChase opened his credit line. (CompI., paras. 16-19; PI. Memo., pp. 3-4.) He suggests that aperson's financial circumstance is based simply on income. However, income is only part of theequation. Peterson would be hard-pressed to find any statement, report or balance sheet thatignores liabilities in determining financial conditions. Peterson faces a murder trial andenormous, possibly insurmountable legal bills. He has publicly announced his intent to auctionhis home to help finance his defense. (Exhibit A) An allegedly steady income does not changethe fact that Peterson's financial situation has changed drastically since being charged withmurder. Basing his entire case on an incomplete, nonsensical analysis of his financial condition,Peterson has not and cannot establish a probability of success on the merits.

Peterson points to affidavits from Chase employees and argues that those affidavitsestablish Chase suspended his home equity line of credit in violation of TILA (PI. Memo., p. 3.)On the contrary, the affidavits Peterson relies on (Exhibits D-G attached to his complaint), showChase consulted and reviewed Regulation Z and the Federal Reserve official commentary to thatregulation and "determined that there had been a material change in [Peterson's] financial

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condition. II (E.g., CompI., Ex. D., para. 3.) "Due to the circumstances of [Peterson's]incarceration [Chase] believed that Mr. Peterson would be unable to pay his account if weallowed it to be substantially drawn down. II (Jd.)

Second, Peterson has not demonstrated an irreparable injury, a connection between theexpedited discovery and the avoidance of such injury, or that the balance of harms weighs in hisfavor. Notaro, 95 F.RD. at 405 (expedited discovery may be warranted where party establishesirreparable injury and some connection between the expedited discovery and the avoidance ofthe irreparable injury). As with his unsupported claim of financial stability, Peterson merely

concludes that he will be irreparably injured without the requested relief. (PI. Memo., p. 10("Plaintiff continues to suffer ... irreparable injury in the form of continuing confinement andinability to adequately provide for his defense. ").) He has not offered any specific evidence todemonstrate that the home equity line of credit is sufficient to lift him out of an otherwiseirreparable situation. Certainly, some money is better than none. However, without knowing theamount of his current and future debts, this Court cannot determine whether the line of creditwill make a material difference in his situation. For all this Court knows, his debts could be solarge that a couple hundred thousand dollars will have no real impact. In any case, Peterson hasnot met his burden of demonstrating that expedited discovery is warranted.

Finally, the cases Peterson cites are inapposite. These cases address expediting trialand/or discovery in the context of preliminary injunctions and mostly involve intellectualproperty infringement claims. For example, Peterson cites Lakedreams v. Taylor, 932 F.2d 1103(5th Cir. 1991) for the proposition that certain circumstances call for an expedited trial on themerits. However, Lakedreams involved a copyright infringement action in which the courtpreliminarily enjoined the defendant from distributing shirts and other products containing an

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infringing design. The court noted that since the preliminary injunction may unjustifiablyrestrain the defendant, an expedited trial on the merits is encouraged. Id at 1110. See also,Allied Mktg. Group, Inc. v. CDL Mktg., Inc., 878 F.2d 806 (5th Cir. 1989) (copyrightinfringement action in which defendant was preliminarily enjoined). Here, Chase has not beenrestrained by the Court, and Peterson does not seek a preliminary injunction. Thus, the casescited by Peterson in support of an expedited trial on the merits are inapplicable.

Peterson also cites Gucci America, Inc. v . Daffy's, Inc., No.Civ.A.00-4463, 2000 WL1720738 (D. N.J. Nov. 14, 2000) and argues that the Court has "the authority and discretion to

order expedited discovery in the 'interests of justice.'" (PI. Memo., p. 9.) In Gucci, a trademarkinfringement case, the court applied the Notaro factors and determined that expedited discoverywas inappropriate. Gucci Am., Inc., 2000 WL 1720738, at *7-10. Among other reasons, therecord as it stood at the time of the motion presented a close question. Id. at *8. The courtdetermined that although the weight of the evidence may have tipped in favor of the plaintiff, itwas not sufficient to create a substantial likelihood of ultimate success. Id at *7-8. Likewise,Peterson has not presented sufficient evidence, namely, any indication of his current and futuredebts, to demonstrate a likelihood of success on the merits.

The other cases on which Peterson relies likewise do not help his case: Regal BeloitCorp. v . Drecoll, 955 F. Supp. 849 (N.D. Ill. 1996) (involving a preliminary injunction of formerofficers' attempts to purchase a company plaintiff corporation had sought to acquire);Philadelphia Newspapers, Inc. v . Gannett Satellite Information Network, Inc., No. CIY. A. 98-CV-2782, 1998 WL 404820 (E.D. Pa. July 15, 1998) (denying plaintiffs motion for expediteddiscovery for its preliminary injunction motion in a trademark infringement action); EllsworthAssociates, Inc. v. Us., 917 F. Supp. 841, 844 (D.D.C. 1996) (holding that "[e]xpedited

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discovery is particularly appropriate when a plaintiff seeks injunctive relief, because of theexpedited nature of injunctive proceedings"); Crawford-El v. Britton, 523 U.S. 574 (1998)(involving claim against a correctional official and cited by Peterson entirely out of context);Pod-Ners, LLC v. Northern Feed &Bean, 204 F.RD. 675 (D. Colo. 2002) (involving claims for"infringement, unfair competition, and tortious interference" and stating that "expediteddiscovery may be appropriate in cases where the plaintiff seeks a preliminary injunction")."

CONCLUSIONPeterson fails to meet his burden of establishing that expedited discovery is appropriate

under the proper standard. Therefore, JPMorgan Chase Bank, N.A. respectfully requests that thisCourt deny Peterson's motion to expedite and advance on docket.

Date: November 17, 2009 Respectfully submitted,JPMORGAN CHASE BANK, N.A.By: lsi LeAnn Pedersen Pope

One of its attorneysLeAnn Pedersen Pope (6186058)Michael G. Salemi (6279741)Burke, Warren, MacKay & Serritella, P.C.330 North Wabash Avenue, 22nd FloorChicago, Illinois 60611-3607Telephone: (312) 840-7000Facsimile: (312) 840-7900Email: [email protected]

[email protected]

2 Peterson also cites a number of military and habeas corpus cases, which areinapplicable to this action.

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CERTIFICATE OF SERVICE

The undersigned attorney hereby certifies that on November 17, 2009, a true and correctcopy of the foregoing document was filed electronically using the Court's Electronic Case FilingSystem. A Notice of Electronic Filing will be sent by electronic mail to all counsel of record byoperation of the Court's Electronic Filing System.

By: lsi LeAnn Pedersen Pope

11912\00082\623836v2


drew and chase morgan bank3

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