Hаrbor Financial Group specializes in loans to customers who have trouble obtaining credit elsewhere. Extra risk is worthwhile only in exchange for extra compensation, and Harbor predictably charges high interest rates, both directly through a stated annual rate of interest and indirectly by deducting “points” from the amount advanced to the borrower. Between 1989 and 1991 Harbor charged more than 3 points in Illinois for loans secured by junior mortgages on real estate, believing that 815 ILCS 205/4.1a, which limits a lender to 3 points if it charges interest at an annual rate exceeding 8%, had been repealed by an amendment to a related section of the same statute, the Illinois Interest Act. So
Currie v. Diamond Mortgage Corp.,
No person shall be liable under this Act for any act done or omitted in good faith in conformity with any rule, regulation, inter *1132 pretation, or opinion issued by the Commissioner of Bаnks and Real Estate or the Department of Financial Institutions or any other department or agency of the State, notwithstanding that after such act or omission has occurred, such rule, regulation, interpretation, or opinion is amendеd, rescinded, or determined by judicial or other authority to be invalid for any reason.
In February 1989 the Legal Counsel of the state’s Department of Financial Institutions signed a letter stating in part:
It is the Department’s position that the Currie Court [sic] clearly held that the 1981 amendments to Section 4(1)(L) (Par. 6404(1)(L) . of the Statute [now § 205/4(l)(i) ] provide that it is lawful to charge any rate of interest or compensation on loans secured by a mortgage on real estate. This amendment is so clearly inconsistent with the points limitation in Section 4.1a of the Statute that such limitation is necessarily repealed. Under these circumstances, the licensee [i.e., the lender] is no longer bound by the points limitation in Section 4.1a.
Interpreting an earlier version оf § 205/6’s second paragraph, the district judge granted summary judgment to the defendants using reasoning that we need not recount, because all parties to the litigation agree that the current version, which took effect in July 1997, is fully retroactive. The question presented, therefore, is whether the Legal Counsel’s 1989 opinion letter gives defendants a safe harbor under the 1997 version of § 205/6. Before turning,- to that question, however, we take up a number of jurisdictional questions.
First, there is the question what this case is doing' in federal court. ' Complete diversity of citizenship has not been established, and none of the plaintiffs’ claims exceeds $75,000 in value. Section 1441(d) permits a “foreign state as defined in section 1603(a) of this title”-to remove a “civil aсtion” brought against it. Defendant Resolution GGF Oy, an entity established and owned by the Government Guarantee Fund of Finland, fits the definition of a “foreign state” and removed the action.
In re Air Crash Disaster Near Roselawn, Indiana,
Second, there is a question what Nor-west Financial Illinois, Inc., one of the defendants, is doing in any- court. Norwest bought some of Harbor’s paper but does not hold the notes signed by any of the plaintiffs, and it asked the court to dismiss it from the case on the ground that none of the plaintiffs had standing to pursue a claim against it. The district judge did not act on this motion. Like any other jurisdictional issue, this subject should have received priority consideration. Norwest’s position is impeсcable. Some other borrowers may have claims against it, but none of these plaintiffs does— and as the case was not certified as a class action, the only claims before the court are those of the plaintiffs personally. We need not decide whether Norwest would have been a proper defendant had a class been certified even though none of the representative plaintiffs held a legal claim against it. There is no case or controversy between Norwest and any of the named plaintiffs, so Norwest must be dismissed as a party.
Warth v. Seldin,
Third, there is a question whether any relief is available against Resolution GGF Oy, which maintains that as a “foreign state” it is immune to financial penalties. Again this is а subject that the district court should have addressed before taking up the merits.
See Puerto Rico Aqueduct & Sewer Authority v. Metcalf & Eddy, Inc.,
As to any claim for relief with respect to which a foreign state is not entitled to immunity under section 1605 or 1607 of this chapter, the foreign state shall be liable in the same manner аnd to the same extent as a private individual under like circumstances; but a foreign state except for an agency or instrumentality thereof shall not be liable for piinitive damages; if, however, in any case wherein death Was causеd, the law of the place where the action or omission occurred provides, or has been construed to provide, for damages only punitive in nature, the foreign state shall be liable for actual or compensatory damages measured by the pecuniary injuries resulting from such death which were incurred by the persons for whose benefit the action was brought.
Resolution GGF Oy is not entitled to immunity because it participates in commerce within the United States. 28 U.S.C. § 1605(a)(2). It aсquired the assets of Union Mortgage Company in 1992, after the transactions that gave rise to this litigation, and in the process acquired any liabilities attached to Union Mortgage’s assets. Because Resolution GGF Oy is “an agency or instrumentality” of Finlаnd rather than the Finnish State itself, see 28 U.S.C. § 1603(b), it is exposed to punitive damages too. So even if the penalties under § 205/6 should be understood as “punitive damages” — although that term usually refers to a common law remedy rather than to a statutory pеnalty such as treble damages under the antitrust laws — Resolution GGF Oy still would be treated just like any other lender or buyer of commercial paper. Cf.
O’Melveny & Myers v. FDIC,
512 ILLS. 79,
Thus we arrive ‘at the principal question: whether charging more than 3 points on loans made after the Legal Counsel’s letter, and before
Fidelity Financial Services,
was “in conformity with any rule, regulation, interpretation, or opinion issued by ... the Department of Financial Institutions”. The letter is not a “rule” or “regulation” because it was not published for comment or includеd with the state’s body of administrative rules,
see Biverboat Development Corp. v. Illinois Gaming Board,
Section 205/6 resembles.15 U.S.C. §1640(f), which allows the Federal
Reserve
Board to create safe harbors, but there is a potentially important difference: although §1640(f) extends protection to a person who relies on an “interpretation or approval by an official or employeе of the Federal Reserve System duly authorized by the Board to issue such interpretations or approvals”, § 205/6 is limited to interpretations and other acts “by ... the Department of Financial Institutions”. Does the Legal Counsel’s letter fit that descriptiоn? No one would suppose that a letter from a junior attorney established an interpretation by the Department itself just because it appeared on the Department’s letterhead. What then of a letter by the. Department’s chief lawyer? A statute attaching consequences to a decision of “the Governor” surely refers to a decision of the Governor personally (at least one to which the Governor has lent his name), not of the Governor’s lawyer — though perhaps st .aw would allow the Governor to delegate some decisions. We held in
Chicago Board of Trade v. SEC,
Strangely the parties have been silent on these questions. The record does not reveal whether the Legal Counsel was exercising delegated authority, and the parties have not presented any statutes or eases discussing the permissible scope of delegation under Illinois law. The omission cannot be ascribed to differences between old and new versions of § 205/6. Both versions speak of action “by ... the Department of Financial Institutions”. The district court assumed that the Legal Counsel’s letter was issued “by ... the Department of Financial Institutions”, and although plaintiffs refer to cases such as Ives and Jones that deal with the distribution of powers within thе Federal Reserve Board and the interpretation of the former version of § 1640(f), these cases deal with advice by junior staff members rather than the chief legal officer. Plaintiffs do not tell us how Illinois treats the acts of agency generаl counsels (with or without express delegation from the agency) in agencies as small as the Department of Financial Institutions. The head of the Department’s Consumer Credit Division stated in an affidavit that the Legal Counsel’s letter representеd the “interpretation of the Department at that time” (that is, 1989), which implies that the head of the Department approved the letter, but the record does not reveal whether this understanding is correct. We conclude that all potеntial objections to the status of the Legal Counsel’s letter as an act “by ... the Department of Financial Institutions” have been forfeited.
Plaintiffs’ remaining position — that Harbor Financial did not rely “in good faith” on the Legal Counsel’s letter — is not supported by the record. Harbor’s President testified by deposition that until Harbor received the letter it did not charge more than 3 points on loans secured by junior mortgages. The district judge remarked: “Plaintiffs have produced no evidence that would show that [Harbor’s] decision was not based upon the 1989 opinion letter and that the decision was not made in good faith.” It is awfully hard to see how a business decision supported by an opinion of this court and fortified by a letter from the top lawyer at the state agency regulating the subject could be other than in “good faith”. Demanding more than this record discloses on that subject would undermine the ability of the Department to offer safe harbor to persons who rely on its rules or interpretations, and so destroy the function of § 205/6.
Affirmed.