United States District Court, N.D. Illinois, Eastern Division
September 14, 2005.
ELGIN DAIRY FOODS, INC., an Illinois corporation, M & E DISTRIBUTION, LLC, an Illinois limited liability company, and ROBERT L. MARTIN, an individual, Plaintiffs,
SAVANT SOFTWARE, INC., an Arizona corporation, JIM CAWLEY, an individual and DIANE CAWLEY, an individual, Defendants.
The opinion of the court was delivered by: SAMUEL DER-YEGHIAYAN, District Judge
This matter is before the court on Defendant Jim Cawley's ("J.
Cawley") and Defendant Diane Cawley's ("D. Cawley") (collectively
referred to as "the Cawleys") motion to dismiss. Additionally,
this matter is before the court on Defendant Savant Software,
Inc.'s ("Savant") motion to dismiss, motion to strike, and motion
for a more definite statement. Finally, this matter is also
before the court on Plaintiff/Counter-Defendant Elgin Dairy
Foods, Inc.'s ("Elgin") and Plaintiff/Counter-Defendant M&E
Distribution, LLC's ("M&E") motion to dismiss the fraud counter-claim (Count III). For the reasons stated
below, we deny the Cawleys' motion to dismiss. We also grant in
part and deny in part Savant's motion to dismiss, deny Savant's
motion to strike, deny Savant's motion for a more definite
statement, and deny Plaintiffs' motion to dismiss.
Plaintiffs allege that prior to September 2003, they operated a
warehouse distribution center in McCook, Illinois. Plaintiffs
allegedly desired to expand their operations at the McCook
facility and open an additional facility in Bolingbrook,
Illinois. Plaintiffs allege that they contracted with ePartners
Inc. to review the existing operating systems at the McCook
facility and recommend software systems "for accounting and
warehousing/logistics needs." (Compl. Par. 13). ePartners and
Plaintiffs allegedly decided to use Great Plains for their
accounting needs and Defendant Savant for their
warehousing/logistics software needs. Plaintiffs claim that
Savant represented "both on-line and in person" (Compl. Par. 15)
at the McCook, Illinois facility and at ePartners in Schaumburg,
Illinois that "the software provided by Savant would meet and
exceed all of their needs and expectations." (Compl. Par. 15).
Plaintiffs claim that during the discussions with Savant, the
parties specifically discussed certain things that the Savant
software would provide and that the Software needed to be
compatible with the Great Plains software. Furthermore,
Plaintiffs allege that Defendants represented that they were experienced in handling needs for third-party logistics
Plaintiffs contend that the software provided by Savant
("Software") did not meet the needs previously discussed by the
parties, and was not compatible with the Great Plains software.
Plaintiffs allege that they ultimately had to dispose of Savant's
Software and purchase a new system. Plaintiffs claim that Savant
had never implemented this system before and used plaintiffs as
"guinea pigs" (Compl. Par. 23). Plaintiffs also allege that
Savant placed on its website a testimonial provided by Robert L.
Martin ("Martin"), Controller of Elgin Dairy Foods, Inc., stating
that Savant had met all of the demands of its third-party
customers and had helped the company to operate efficiently.
Finally, Plaintiffs claim that neither Martin nor anyone working
for Plaintiffs had authorized the statement.
Plaintiffs brought the instant action and included in their
complaint a breach of warranty claim (Count I), a claim alleging
a violation of the Illinois Consumer Fraud and Deceptive Business
Practices Act ("Fraud Act"), 815 ILCS 505/12 et seq. (Count
II), a common law fraud claim (Count III), a claim alleging a
violation of the Right of Publicity Act ("Publicity Act"),
765 ILCS 1075/1 et seq. (Count IV), and a claim alleging violations
of the Lanham Act, 15 U.S.C. § 1051 et seq. (Count V). Savant
has filed three counter-claims, which include a breach of
contract claim (Count I), a claim alleging that an account stated
was created mandating certain payment, (Count II), and a common
law fraud claim (Count III).
The Cawleys have filed a motion to dismiss pursuant to Federal
Rule of Civil Procedure 12(b)(2). Savant has filed a motion to dismiss Counts
II, III, and IV pursuant to Federal Rule of Civil Procedure
12(b)(1) and 12(b)(6). Savant has also filed a motion to strike
and a motion for a more definite statement.
Plaintiff/Counter-Defendants Elgin and M&B have filed a motion to
dismiss the fraud counter-claim (Count III).
Federal Rule of Civil Procedure 12(b)(1) ("Rule 12(b)(1)")
requires a court to dismiss an action when it lacks subject
matter jurisdiction. United Phosphorus, Ltd. v. Angus Chemical
Co., 322 F.3d 942, 946 (7th Cir. 2003). If the concern of the
court or party challenging subject matter jurisdiction is that
"subject matter jurisdiction is not evident on the face of the
complaint, the motion to dismiss pursuant to Rule 12(b)(1) would
be analyzed as any other motion to dismiss, by assuming for
purposes of the motion that the allegations in the complaint are
true." Id.; see also Ezekiel v. Michel, 66 F.3d 894, 897 (7th
Cir. 1995) (stating that when reviewing a motion to dismiss
brought under Rule 12(b)(1), this court "must accept as true all
well-pleaded factual allegations, and draw reasonable inferences
in favor of the plaintiff"). However, if the complaint appears on
its face to indicate that the court has subject matter
jurisdiction, "but the contention is that there is in fact no
subject matter jurisdiction, the movant may use affidavits and
other material to support the motion." Id. For the purpose of
determining subject matter jurisdiction, this court "may properly look beyond the jurisdictional
allegations of the complaint and view whatever evidence has been
submitted on the issue to determine whether in fact subject
matter jurisdiction exists." Ezekiel, 66 F.3d at 897 (quoting
Capitol Leasing Co. v. Federal Deposit Insurance Corp.,
999 F.2d 188, 191 (7th Cir. 1993)). The burden of proof in regard to
a Rule 12(b)(1) motion is "on the party asserting jurisdiction."
United Phosphorus, Ltd., 322 F.3d at 946.
Federal Rule of Civil Procedure 12(b)(2) directs a court to
dismiss a claim for lack of personal jurisdiction.
Fed.R.Civ.P. 12(b)(2). For the purposes of such a motion to dismiss, the
"court accepts all well-pleaded allegations in the complaint as
true." Hyatt Intern. Corp. v. Coco, 302 F.3d 707, 712-13
(7th Cir. 2002). If a defendant moves to dismiss pursuant to
Rule 12(b)(2), "the court must decide whether any material facts
are in dispute" in regard to personal jurisdiction and "[i]f so,
it must hold an evidentiary hearing to resolve them, at which
point the party asserting personal jurisdiction must prove what
it alleged." Id. If the court finds that there are material
facts in dispute, "the party asserting personal jurisdiction need
only make out a prima facie case of personal jurisdiction," if
and until the court holds the necessary hearing. Id.
In ruling on a motion to dismiss brought pursuant to Federal
Rule of Civil Procedure 12(b)(6), the court must draw all
reasonable inferences that favor the plaintiff, construe the
allegations of the complaint in the light most favorable to the
plaintiff, and accept as true all well-pleaded facts and
allegations in the complaint. Thompson v. Illinois Dep't of Prof'l Regulation, 300 F.3d 750,
753 (7th Cir. 2002); Perkins v. Silverstein, 939 F.2d 463, 466
(7th Cir. 1991). The allegations of a complaint should not be
dismissed for a failure to state a claim, "unless it appears
beyond doubt that the plaintiff can prove no set of facts in
support of his claim which would entitle him to relief." Conley
v. Gibson, 355 U.S. 41, 45-46 (1957); see also Baker v.
Kingsley, 387 F.3d 649, 664 (7th Cir. 2004) (stating that
although the "plaintiffs' allegations provide[d] little detail . . .
[the court could not] say at [that] early stage in the
litigation that plaintiffs [could] prove no set of facts in
support of their claim that would entitle them to relief").
Nonetheless, in order to withstand a motion to dismiss, a
complaint must allege the "operative facts" upon which each claim
is based. Kyle v. Morton High School, 144 F.3d 448, 454-55 (7th
Cir. 1998); Lucien v. Preiner, 967 F.2d 1166, 1168 (7th Cir.
1992). Under the current notice pleading standard in federal
courts, a plaintiff need not "plead facts that, if true,
establish each element of a `cause of action. . . .'" See
Sanjuan v. American Bd. of Psychiatry and Neurology, Inc.,
40 F.3d 247, 251 (7th Cir. 1994) (stating that a "[a]t this
stage the plaintiff receives the benefit of imagination, so long
as the hypotheses are consistent with the complaint" and that
"[m]atching facts against legal elements comes later"). The
plaintiff need not allege all of the facts involved in the claim
and can plead conclusions. Higgs v. Carter, 286 F.3d 437, 439
(7th Cir. 2002); Kyle, 144 F.3d at 455. However, any
conclusions pled must "provide the defendant with at least
minimal notice of the claim," Id., and a plaintiff cannot
satisfy federal pleading requirements merely "by attaching bare legal conclusions
to narrated facts which fail to outline the bases of [his]
claims." Perkins, 939 F.2d at 466-67. The Seventh Circuit has
explained that "[o]ne pleads a `claim for relief' by briefly
describing the events." Sanjuan, 40 F.3d at 251.
I. Personal Jurisdiction
The Cawleys argue that the court lacks personal jurisdiction
over them. In a diversity action, the extent of the court's
personal jurisdiction is governed by state law regarding personal
jurisdiction. Dehmlow v. Austin Fireworks, 963 F.2d 941, 945
(7th Cir. 1992). The Illinois Long Arm Statute authorizes service
of process both on in-state defendants and out-of-state
defendants, stating that "[a]ny person, whether or not a citizen
or resident of this State, who in person or through an agent does
any of the acts hereinafter enumerated, thereby submits such
person, and, if an individual, his or her personal
representative, to the jurisdiction of the courts of this State
as to any cause of action arising from the doing of any of such
acts: . . . [t]he transaction of any business within this State;
. . . [t]he commission of a tortious act within this State; . . .
[and] [t]he making or performance of any contract or promise
substantially connected with this State;. . . ."
735 ILCS 5/2-209. The Illinois Long Arm statute also provides that "[a]
court may also exercise jurisdiction on any other basis now or hereafter permitted by the Illinois Constitution and
the Constitution of the United States." Id. Thus, in addition
to the specific authorized instances of personal jurisdiction,
Illinois law allows the exercise of personal jurisdiction over
non-resident defendants if doing so comports with the due process
provisions of the Illinois and federal constitutions. RAR, Inc.
v. Turner Diesel, Ltd., 107 F.3d 1272, 1276 (7th Cir. 1997).
A party is considered "doing business" in Illinois if "it
operates within the state, `not occasionally or casually, but
with a fair measure of permanence and continuity.'" Michael J.
Neuman & Associates, Ltd. v. Florabelle Flowers, Inc.,
15 F.3d 721, 724 (7th Cir. 1994) (quoting Cook Assocs., Inc. v.
Lexington United Corp., 429 N.E.2d 847, 852 (Ill. 1981)). The
Supreme Court of Illinois has differentiated between the Illinois
and federal constitutions. See RAR, 107 F.3d at 1276 (noting
that the Supreme Court of Illinois "has made clear that the
Illinois due process guarantee is not necessarily co-extensive
with federal due process protections"). However, the Illinois
courts have given little guidance in how the two constitutions
differ. Id. The Supreme Court of Illinois has simply stated
that "[j]urisdiction is to be asserted only when it is fair,
just, and reasonable to require a nonresident defendant to defend
an action in Illinois, considering the quality and nature of the
defendant's acts which occur in Illinois or which affect
interests located in Illinois." Id. (quoting Rollins v.
Ellwood, 565 N.E.2d 1302, 1316 (Ill. 1990)). As a result, the
Seventh Circuit has concluded that there is "no operative
difference between the limits imposed by the Illinois Constitution and the federal
limitations on personal jurisdiction." Hyatt Int'l Corp.,
302 F.3d at 715 (citing RAR, 107 F.3d at 1276). Accordingly, the
court will proceed with an analysis of federal constitutional
limits on jurisdiction. See RAR, 107 F.3d at 1277 (choosing to
"move on to address the federal constitutional issues directly").
Federal due process requirements determine when a court "may
exercise personal jurisdiction over nonresident defendants."
Jennings v. AC Hydraulic A/S, 383 F.3d 546, 549 (7th Cir.
2004) (explaining that the due process law is intended to
"allow? potential defendants to structure their contacts with
different forums so as to plan where their business activities
will and will not render them liable to suit). A court may only
exercise personal jurisdiction over a defendant if the defendant
has "certain minimum contacts with [the state] such that the
maintenance of the suit does not offend `traditional notions of
fair play and substantial justice.'" RAR, Inc. v. Turner Diesel,
Ltd., 107 F.3d 1272, 1277 (7th Cir. 1997) (quoting
International Shoe Co. v. Washington, 326 U.S. 310, 316
The two types of personal jurisdiction are specific
jurisdiction and general jurisdiction. Jennings,
383 F.3d at 549. Specific jurisdiction is personal jurisdiction over a
defendant in an action "arising out of or related to the
defendant's contacts with the forum." RAR, Inc.,
107 F.3d at 1277 (quoting Helicopteros Nacionales de Colombia, S.A. v.
Hall, 466 U.S. 408, 414 n. 8 (1984). For the personal
jurisdiction analysis, a court must "focus on whether it is
fundamentally fair to require the defendant to submit to the jurisdiction of the court with respect
to this litigation." Purdue Research Found. v.
Sanofi-Synthelabo, S.A., 338 F.3d 773, 780 (7th Cir. 2003)
(citing World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286,
292 (1980) and International Shoe, 326 U.S. at 316-17). The
court must consider "foreseeability" by the defendant, meaning
whether or not "the defendant could have anticipated being haled
into the courts of the state with respect to the matter at
issue." Purdue Research Found., 338 F.3d at 780. In assessing
such forseeability, it is the defendant's conduct that is
pertinent because "it must be the activity of the defendant that
makes it amenable to jurisdiction, not the unilateral activity of
the plaintiff or some other entity." Id. In other words, it
must be established that the "defendant purposefully availed
itself of the privilege of conducting activities within the forum
If a defendant's contacts "with the forum state are unrelated
to the subject matter of the lawsuit, general personal
jurisdiction may be established if the defendant's contacts are
so continuous and systematic that the defendant could reasonably
foresee being haled into court in that state for any matter."
International Medical Group, Inc. v. American Arbitration Ass'n,
Inc., 312 F.3d 833, 846 (7th Cir. 2002); RAR,
107 F.3d at 1277. The criteria for "general jurisdiction is `considerably
more stringent' than that required for specific jurisdiction."
Purdue Research Foundation, 338 F.3d at 787. The defendant's
contacts with the forum state "must be so extensive to be
tantamount to [the defendant] being constructively present in the state to such a degree that it would be fundamentally fair to
require it to answer in an [Illinois] court in any litigation
arising out of any transaction or occurrence taking place
anywhere in the world." Id.
Plaintiffs contend that the Cawleys have had sufficient
contacts with Illinois to subject them to specific personal
jurisdiction in this matter. The Cawleys contend that they do not
have sufficient contacts with Illinois. However, the Cawleys are
able to maintain such a position only by artfully offering facts
that do not tie them to Illinois, and by failing to respond to
the particular allegations in the complaint that indicate they
have had contact with Illinois. The Cawleys acknowledge that they
are the corporate officers and principal shareholders of Savant.
(Caw Dis 1). They contend however, that it was ePartners rather
than Savant that actually sold the software to Savant and that
Savant did not directly provide software to Plaintiffs. The
Cawleys further claim that they are residents of Arizona and that
they have not maintained any office or place of business in
Illinois, nor paid state income taxes or real estate taxes in
Illinois. The Cawleys claim that they have not maintained an
office in Illinois, but the complaint contained no allegations
that the Cawleys have ever done so. Plaintiffs allege that
"Defendants" made representations to Plaintiffs in Illinois "in
person" and "discussed" Plaintiffs' needs, "represented" certain
qualifications on their part, and made "presentations," all while
in Illinois. (Compl. Par. 15-17). Although the complaint does not
specify either of the Cawleys by name in regards to the
discussions, representations, or presentations, the Cawleys are
the only individual defendants named in this suit and Plaintiffs
claim in their answer to the instant motion that the software
"was, in part, installed by the Individual Defendants in
Illinois." (Ans. Caw 5). Plaintiffs also claim that D. Cawley
"traveled to Illinois to assist in the programming of the
Software and to train M&E employees to use such Software." (Ans.
Caw 5). Plaintiffs have provided an affidavit to support this
The Cawleys again merely make evasive responses in their reply
brief, and fail to directly address Plaintiffs' allegations
concerning personal jurisdiction. For instance, the Cawleys claim
in their reply brief that Plaintiffs "did not order Savant's"
software "directly from either of the Individual Defendants."
(Reply Caw 2). However, Plaintiffs have not contended that
Plaintiffs ordered the software from the Cawleys in Illinois.
Rather, Plaintiffs contend that the Cawleys made representations
and helped install the software while present in Illinois. In the
Cawleys' reply brief, the Cawleys state only in the most general
terms that Plaintiffs "fail to allege or demonstrate that either
of the Individual Defendants personally transacted any business
in Illinois or that the Individual Defendants entered into any
sort of contract with the Corporate Plaintiffs." (Reply Caw 2).
However, the Cawleys continue to avoid pertinent allegations of
their personal contacts with Illinois. The Cawleys have not
explicitly denied or admitted whether or not they went to
Illinois to engage in discussions with Plaintiffs, helped to
install the Software, or made representations about the Software.
The Cawleys have not specifically denied making the alleged statements in Illinois
upon which Plaintiffs base the fraud and breach of warranty
claims. Finally, D. Cawley has not specifically denied that she
traveled to Illinois to assist in the programming of the software
and to train employees to use the software.
We also note that the Cawleys attempt to distance themselves
from any involvement with Plaintiffs, arguing that they only sold
the software to ePartners and not directly to Plaintiffs.
However, Defendants' allegations regarding the statement of
Martin, an employee of Plaintiffs, which indicated that Savant
had provided a quality product to Plaintiffs undercuts the
Cawleys' contention that they had simply sold the software to
ePartners and were not involved in any way with the distribution
to Plaintiffs. Likewise, the alleged involvement in the
installation and training regarding the software by the Cawleys
is inconsistent with the Cawleys' depiction of themselves as
simply working for a remote third-party seller.
Based upon the information presented to the court, Plaintiffs
have shown that the Cawleys' Software was ultimately sold to
Plaintiffs in Illinois and that the Cawleys traveled to Illinois
on multiple occasions to facilitate the installation, programing,
training concerning their company's software, in addition to
making promises concerning the Software to Plaintiffs. It is not
necessary to conduct an evidentiary hearing to address the
personal jurisdiction issue because the Cawleys have not directly
denied the pertinent allegations made by Plaintiffs, despite the
fact that the Cawleys have been given an opportunity to do so in
their briefs. Such contacts by Defendants with the state of Illinois are sufficient
to subject the Cawleys to specific personal jurisdiction in
regard to the issues presented in the instant action. Therefore,
we deny the Cawleys' motion to dismiss.
II. Savant's Motions
Savant moves to dismiss the fraud-based claims (Counts II and
III) under Federal Rule of Civil Procedure 9(b) ("Rule 9(b)").
Savant also moves to dismiss the Publicity Act claim under Rule
A. Fraud Based Claims (Counts II and III)
Savant argues that Plaintiffs have not stated the fraud-based
claims with the particularity required under Rule 9(b), which
states that "[i]n all averments of fraud or mistake, the
circumstances constituting fraud or mistake shall be stated with
particularity." Fed.R.Civ.P. 9(b). The purpose of Rule 9(b),
in regard to fraud claims, "is to minimize the extortionate
impact that a baseless claim of fraud can have on a firm or an
individual" because, if a fraud claim is too vague during
discovery, the claim "will stand unrefuted, placing what may be
undue pressure on the defendant to settle the case in order to
lift the cloud on its reputation." Fidelity Nat. Title Ins. Co.
of New York v. Intercounty Nat. Title Ins. Co., 412 F.3d 745,
748-49 (7th Cir. 2005). Rule 9(b) requires a plaintiff to
provide sufficient specificity to allow a defendant accused of
fraud to respond "swiftly and effectively if the claim is groundless." Id.
In order to plead a fraud-based claim with particularity, the
plaintiff "must state `the identity of the person making the
misrepresentation, the time, place, and content of the
misrepresentation, and the method by which the misrepresentation
was communicated.'" Wade v. Hopper, 993 F.2d 1246, 1250
(7th Cir. 1993) (quoting in part Schiffels v. Kemper
Financial Servs., 978 F.2d 344, 352 (7th Cir. 1992)); see also
Sears v. Likens, 912 F.2d 889, 893 (7th Cir. 1990) (stating that
"[t]o meet the particularity requirements of Rule 9(b), a
complaint must specify the identity of the person making the
misrepresentation, the time, place, and content of the
misrepresentation, and the method by which the misrepresentation
was made and the method by which the misrepresentation was
communicated to the plaintiff . . . [and that a] complaint that
attributes misrepresentation to all defendants, lumped together
for pleading purposes, generally is insufficient"); Lachmund v.
ADM Investor Services, Inc., 191 F.3d 777, 782 (7th Cir.
1999) (stating that "[i]n order to survive dismissal on a Rule
12(b)(6) motion, the complaint "must plead the `who, what, when,
and where' of the alleged fraud"); Midwest Grinding Co., Inc. v.
Spitz, 976 F.2d 1016, 1020 (7th Cir. 1992) (stating that
Rule 9(b) requires the plaintiff "state the time, place, and
content of the alleged communications perpetrating the fraud").
In the instant action, Plaintiffs have utterly failed to meet
the requirements of Rule 9(b). Plaintiffs have not identified who
exactly made the various representations or presentations to
Plaintiffs, or who engaged in discussions with representatives of Plaintiffs. Plaintiffs acknowledge in their
answer to the motion to dismiss that they merely allege in the
complaint in a general fashion that "Defendants" made the
representations, presentations and engaged in the alleged
discussions. (Compl. Par. 15-17). No specific individual is
identified in the complaint in regards to any statements alleged
by Plaintiffs and Plaintiffs have not stated the time or place of
the alleged statements by Defendants. The complaint refers only
vaguely to the time period during which Plaintiffs had contact
with ePartners and Defendants, indicating that the alleged
statements were made sometime after September 2003. (Compl. Par.
11). Plaintiffs have also failed to make clear how the alleged
fraudulent statements were conveyed to Plaintiffs. The complaint
makes a vague reference to certain statements that were made
"on-line and in person," but fails to explain which statements
were made in person and which were made "on-line." Neither does
the complaint explain the manner in which the other alleged
statements were conveyed.
All of the above information that is lacking in Plaintiffs'
complaint should have been in Plaintiffs' possession and in
Plaintiffs' complaint. Plaintiffs claim that Defendants met with
them in Illinois and made representations to Plaintiffs.
Plaintiffs thus should have been able to present allegations
concerning when and how the representations were made to
Plaintiffs. Therefore, we grant Savant's motion to dismiss the
fraud-based claims (Counts II and III). B. Publicity Act Claim (Count IV)
Savant argues that it is entitled to summary judgment on the
Publicity Act claim (Count IV) because this court does not have
subject matter jurisdiction over the claim. A district court has
diversity subject matter jurisdiction over "all civil actions
where the matter in controversy exceeds the sum or value of
$75,000, exclusive of interest and costs, and is between . . .
citizens of different States. . . ." 28 U.S.C. § 1332. Savant
argues that this court lacks subject matter jurisdiction over the
Publicity Act claim because the jurisdictional amount in
controversy requirement is not met. According to Savant, the
Publicity Act only provides a remedy of $1,000 per violation and
therefore it would be difficult for Plaintiffs to show sufficient
violations to meet the $75,000 amount in controversy threshold.
Defendants' argument lacks merit on this point. First, it is
yet to be determined if, consistent with the facts provided in
the complaint, there were sufficient violations to meet the
amount in controversy requirement. Second, Savant is entirely
mistaken in its contention that Plaintiffs must meet the amount
in controversy requirements separately for each individual count.
Although the Seventh Circuit has stated that "multiple persons'
claims cannot be combined to reach the minimum amount in
controversy," Del Vecchio v. Conseco, Inc., 230 F.3d 974, 977
(7th Cir. 2000), the Seventh Circuit has made it clear that
diversity subject matter jurisdiction relates to "federal
jurisdiction over `civil actions' satisfying the required minimum
amount in controversy, 28 U.S.C. § 1332(a), not over counts, thus permitting the plaintiff to aggregate the stakes in his separate
claims or counts to come up to the minimum." Herremans v.
Carrera Designs, Inc., 157 F.3d 1118, 1121 (7th Cir. 1998).
Finally, Savant's position is entirely without merit because this
court has subject matter jurisdiction over Count IV pursuant to
28 U.S.C. § 1332(a), and thus would have supplemental
jurisdiction pursuant to 28 U.S.C. § 1367.
C. Lanham Act Claim (Count V)
Savant argues that it cannot properly respond to the Lanham Act
claim, and requests that the court either strike paragraph 52 of
Count V or require Plaintiff to make a more definite statement in
regard to Count V. Savant first complains that confusion is
caused by the reference in Count V to the allegations in Count
IV. However, Savant's claimed confusion in this regard is not
plausible. The mere reference to the allegations in Count IV does
not cloud the meaning of the claim alleged in Count V. Savant
also complains about the irrelevant "surplusage" that is included
in Count V. However, the allegations complained of by Savant do
not warrant requiring Plaintiffs to amend their complaint, and a
federal district court cannot "dismiss a complaint merely because
it contains repetitious and irrelevant matter, a disposable husk
around a core of proper pleading." See Davis v. Ruby Foods,
Inc., 269 F.3d 818, 820 (7th Cir. 2001) (stating that to
hold otherwise "would cast district judges in the role of
editors, screening complaints for brevity and focus; they have better things to do with their time").
Savant also argues that "[i]f the Corporate Plaintiffs are
attempting to state a False Advertising Claim, they should be
required to concisely state that is the nature of their claim"
and "[i]f the Corporate Plaintiffs are attempting to state some
other cause of action under the Lanham Act, again, they should be
required to so state." (Sav. Reply). Perhaps Savant believes that
Plaintiffs "should be required" to set forth the precise cause of
action alleged in Count V, but such is not the law under the
federal notice pleading standard. The Seventh Circuit has made it
clear that a plaintiff does not have to plead specific causes of
action, and that the allegations of a complaint should not be
dismissed for a failure to state a claim, "unless it appears
beyond doubt that the plaintiff can prove no set of facts in
support of his claim which would entitle him to relief."
Conley, 355 U.S. at 45-46; see also Bartholet v. Reishauer
A.G. (Zurich), 953 F.2d 1073, 1078 (7th Cir. 1992) (stating
that under the federal notice pleading standard, "[i]nstead of
asking whether the complaint points to the appropriate statute, a
court should ask whether relief is possible under any set of
facts that could be established consistent with the
allegations"); Higgs, 286 F.3d at 439 (stating that plaintiffs
"don't have to plead legal theories"); Slaney v. The Intern.
Amateur Athletic Federation, 244 F.3d 580, 600 (7th Cir.
2001) (indicating that "plaintiffs are not required to plead
Plaintiffs allege that Savant utilized Elgin's name without its
consent and placed Martin's allegedly inaccurate statements on
the Savant website without prior consent by Plaintiffs. Plaintiffs have provided sufficient
allegations to provide notice to Savant of a Lanham Act false
advertising claim. See, e.g., Hot Wax, Inc. v. Turtle Wax,
Inc., 191 F.3d 813, 819-20 (7th Cir. 1999) (explaining
Lanhan Act false advertising claim). Despite Savant's protests
about the confusion regarding the claim alleged in Count V,
Savant specifically identifies the false advertising claim in its
reply, and its motions seeking to contest the claim and require
additional pleadings is not meritorious. Therefore, we deny
Savant's motion to strike portions of Count V and deny the
request for a more definite statement in regards to Count V.
III. Fraud Counter-Claim (Count III)
Plaintiffs seek a dismissal of the fraud counter-claim (Count
III). Plaintiffs do not argue, as Savant did in regard to
Plaintiffs' fraud claims, that Savant has failed to plead the
fraud counter-claim with particularity. Rather, Plaintiffs
contend that Savant has failed to plead all of the elements of a
claim for fraud by omission. Specifically, Plaintiffs complain
that Savant has not "allege[d] that Corporate Plaintiffs had a
duty to speak. . . ." (P Mot 2). However, Plaintiffs' focus upon
the various elements of a fraud-by-omission claim and its facts
that match up with the elements is improper. Under the federal
notice pleading standard, such a type of analysis is not employed
in determining whether or not a plaintiff has stated a claim.
See Head v. Chicago School Reform Bd. of Trustees,
225 F.3d 794, 801 (7th Cir. 2000) (stating that the plaintiff was not
required under the notice pleading standard to "plead? sufficient facts to establish the legal elements of his
claim."); Sanjuan v. American Bd. of Psychiatry and Neurology,
Inc., 40 F.3d 247, 251 (7th Cir. 1994) (stating that "[a]t
this stage the plaintiff receives the benefit of imagination, so
long as the hypotheses are consistent with the complaint" and
that "[m]atching facts against legal elements comes later").
Under the federal notice pleading standard a plaintiff is only
required to provide a defendant with notice of the claim and
clearly is not, as Savant argues, required to make specific
allegations such as "allege that Corporate Plaintiffs had a duty
to speak. . . ." Kyle, 144 F.3d at 45; (P Reply 2). Savant has
alleged sufficient facts that, when making all inferences in his
favor, could if proven true indicate that Plaintiffs had a duty
to speak and failed to do so.
Whether or not Savant will be able to point to sufficient
evidence that shows that Plaintiffs had such a duty to defeat a
dispositive motion or to prevail at trial is another matter that
is not before this court at this time. Plaintiffs attempt in
their motion to dismiss to draw the court into an evidentiary
inquiry as to whether or not Plaintiffs had a duty to speak,
arguing that Savant has not "show[n]" that Plaintiffs had a duty.
(P Mot. 4). Plaintiffs also argue that "it is obvious" that
Plaintiffs had no such duty and criticize Savant's contentions in
regard to this issue as being presented "rather lamely." (P Mot.
4, 6). Further, Plaintiffs refer to the fraud counter-claim as a
"baseless claim." However, we shall not be drawn into an inquiry
of the merits of the counter-claim which would be premature at
this juncture. The issue before us is whether the parties have
stated a claim and we find that Savant has alleged sufficient facts to state a valid claim. Therefore, we deny Plaintiffs'
motion to dismiss the fraud counter-claim (Count III).
Based on the foregoing analysis, we deny the Cawley's motion to
dismiss. We grant Savant's motion to dismiss the fraud-based
claims (Counts II and III), and we deny Savant's motion to
dismiss the Publicity Act claim (Count IV). We also deny Savant's
motion to strike and motion for a more definite statement in
regard to Count V. Finally, we deny Plaintiffs' motion to dismiss
the fraud counter-claim (Count III).
© 1992-2005 VersusLaw Inc.