United States District Court, N.D. Illinois, Eastern Division
November 15, 2005.
BRITT A SHAW, on Behalf of Himself and All Others Similarly Situated, Plaintiffs,
HYATT INTERNATIONAL CORPORATION, Defendant.
The opinion of the court was delivered by: HARRY LEINENWEBER, District Judge
MEMORANDUM OPINION AND ORDER
Defendant Hyatt International Corporation (hereinafter,
"Hyatt") has moved to dismiss Plaintiff Britt A. Shaw's
(hereinafter, "Plaintiff") Complaint pursuant to Federal Rule of
Civil Procedure 12(b)(6). For the reasons stated below,
Defendant's motion is granted.
Plaintiff, a U.S. citizen currently residing in London, filed
this diversity action against Hyatt for alleged
misrepresentations and deceptive practices relating to a hotel
room reservation he booked through Hyatt's website. Plaintiff
made a reservation for three nights in February 2005 at the
Ararat Park Hyatt in Moscow, Russia. On its website, Hyatt
provided him with a rate of $502.00 per night in U.S. dollars. At
checkout, Plaintiff was presented with a bill for 16,064.00,
quoted in Russian rubles, which reflected an exchange rate of 32 rubles per dollar. However,
according to Plaintiff, at that time, the official exchange rate
set by the Central Bank of Russia was approximately 28 rubles per
dollar. Plaintiff alleges that, due to this inflated exchange
rate, he was deceived into paying approximately 14-16% more than
the rate originally quoted on Hyatt's website. In other words,
under the government-established rate, Plaintiff should have paid
closer to 14,000 rubles per night for the room. Plaintiff claims
that Hyatt employed and continues to employ these deceptive
practices for the purpose of defrauding consumers and profiting
The two-count Complaint alleges a violation of the Illinois
Consumer Fraud and Deceptive Business Practices Act,
815 ILCS 505/1, et seq. (the "ICFA") (Count I) and a claim based on
unjust enrichment (Count II). Plaintiff also seeks to certify a
class of similarly-situated Hyatt guests based on allegations
that Hyatt's misrepresentations and deceptive practices were
perpetrated on other guests at the Ararat Park Hyatt and at other
II. LEGAL STANDARD
In ruling on a motion to dismiss pursuant to Rule 12(b) (6), a
court must accept as true all well-pleaded facts and allegations
in the complaint, draw all reasonable inferences that favor the
plaintiff, and construe the allegations of the complaint in the
light most favorable to the plaintiff. Thompson v. Ill. Dep't
of Prof. Reg., 300 F.3d 750, 753 (7th Cir. 2002). A complaint
should be dismissed only if 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).
A. Illinois Consumer Fraud Act
Hyatt contends that Plaintiff's ICFA claim (Count I) should be
dismissed on two separate grounds. First, Hyatt asserts that the
ICFA does not apply to the disputed transaction because Plaintiff
is a non-resident and the events alleged in the Complaint have no
connection with Illinois. Second, Hyatt argues that Plaintiff's
claim is fundamentally a breach of contract claim, which is not
actionable under the ICFA.
In support of its first contention, Hyatt cites a recent
Illinois Supreme Court case, which holds that a non-resident
plaintiff may sue under the ICFA only if the fraudulent
transaction occurs "primarily and substantially" within Illinois.
(Def. Mem. at 2-3 (citing Avery v. State Farm Mut. Auto. Ins.
Co., No. 91494, 2005 Ill. LEXIS 959, *128 (Ill. Aug. 18, 2005)).
Hyatt points out that Plaintiff is not an Illinois resident, and
contends that the disputed transaction at issue was conducted
wholly outside of Illinois. (Def. Mem. at 3.) Plaintiff agrees that Avery sets forth the relevant test, but
asserts that he has alleged facts tending to show that the
transaction occurred primarily and substantially within Illinois.
In support, Plaintiff contends that Hyatt's allegedly deceptive
practices relating to currency exchange inflation "originated" in
Illinois; that Hyatt maintains its principal place of business in
Illinois; and that the website through which Plaintiff made his
reservations contained a choice of law clause selecting Illinois
law. (Pl. Resp. at 4-5.)
The Court agrees with Defendant that the allegations in the
Complaint are not actionable under the ICFA. Simply put, those
allegations have virtually no connection to Illinois. In Avery,
the Illinois Supreme Court specifically considered and rejected
the same arguments being advanced by Plaintiff to bolster his
contention that the disputed transaction occurred primarily and
substantially in Illinois. See 2005 Ill. LEXIS 959, at
**133-36. Significantly, the court reversed the appellate court's
holding that the ICFA could apply to circumstances where the
deceptive practices were devised in and disseminated from the
defendant's headquarters in Illinois. Id. at **131-32. Rather,
those allegations were insufficient as a matter of law to support
an ICFA claim. Id. at *135.
Here, as in Avery, the overwhelming majority of the
circumstances relating to the transaction between Plaintiff and Hyatt concern events outside of Illinois. Even assuming, as the
Court must for purposes of a motion to dismiss, that Hyatt's
currency inflation scheme originated in its principal place of
business in Illinois, Avery makes clear that this fact alone
does not warrant application of the ICFA. Id.; see also Rolfing
v. Manor Care, Inc., 172 F.R.D. 330, 340 (N.D. Ill. 1997)
(holding that a non-Illinois plaintiff cannot recover under the
ICFA where the only connection with Illinois is the headquarters
of the defendant, or the fact that the scheme emanated from
Illinois). Moreover, the remaining allegations do not implicate
Illinois at all. Plaintiff, a London resident (and former New
York resident), reserved a hotel room in Russia through Hyatt's
website, and was charged more than originally quoted on the
website due to the hotel's inflated currency exchange rates.
These allegations do not establish the requisite nexus with
Illinois, and thus, there is no basis for the application of the
ICFA to the transaction at issue.
Plaintiff suggests that Hyatt should be held liable under the
ICFA because of the choice of law provision on Hyatt's website
specifies Illinois law. However, the existence of such a clause
has no impact on whether the ICFA applies in the first instance.
As discussed above, the extraterritorial application of the ICFA
is limited to deceptive trade practices occurring "primarily and
substantially within Illinois." The fact that Illinois law was
selected to govern disputes arising out of Hyatt's website does nothing to further the contention that the allegedly deceptive
practices occurred in Illinois. The cases cited by Plaintiff in
his response brief are unavailing. (See Pl. Resp. at 7-8.) As
the Illinois Supreme Court observed in Avery, Martin v. Heinhold
Commodities, Inc. held that the application of Illinois law to a
multi-state class was consistent with principles of due process;
it did not address the scope of the ICFA as a matter of statutory
interpretation. See Avery, 2005 Ill. LEXIS 959, at *134 (citing
Martin, 510 N.E.2d 840, 846 (Ill.App.Ct. 1987). Cange v.
Stotler and Co. is also distinguishable because it dealt with a
contractual provision whereby the parties expressly acknowledged
that they were "transacting business in the State of Illinois."
913 F.2d 1204, 1210 (7th Cir. 1990).
Hyatt also contends that Plaintiff cannot prevail on his ICFA
claim because the alleged misrepresentations amount to a breach
of contract. Having dismissed Planitiff's ICFA claim based on the
jurisdictional limitations of the ICFA, the Court need not
address the merits of this argument.
B. Unjust Enrichment
Hyatt contends that Plaintiff's unjust enrichment claim (Count
II) is barred because an express contract governs the parties'
relationship. See Ind. Lift Truck Serv. Corp. v. Mitsubishi
Int'l Corp., 432 N.E.2d 999, 1002 (Ill.App.Ct. 1982) ("Where
there is a specific contract which governs the relationship of the parties, the doctrine of unjust enrichment has no
application."). Plaintiff does not deny the existence of an
express contractual agreement, but argues instead that he has
pled "more" than breach of contract. (Pl. Resp. at 11.)
Plaintiff's argument, however, pertains to whether his ICFA is
foreclosed in light of an express agreement and has no bearing on
whether he can recover based on unjust enrichment. Indeed, the
cases cited by Plaintiff address only the issue of whether a
plaintiff can seek relief under the ICFA in light of an express
contractual agreement, i.e., whether a breach of contract can
also be actionable as fraud. (See Pl. Resp., II.C.)
Furthermore, the Complaint alleges that a specific transaction
was entered into between the parties. Plaintiff's chief
contention is that he booked a hotel room at a particular price
through Hyatt's website, but was charged a different price at
checkout. Indeed, as Plaintiff himself acknowledges, Hyatt's
website contained several "Terms and Conditions," including a
choice of law clause. (Cmpl. ¶ 11.) Significantly, one of those
actionable "terms," according to Plaintiff, included Hyatt's
representation that "the price paid at time of hotel checkout
will be of the currency initially quoted and displayed." (Cmpl. ¶
17.) These provisions, which are fundamental to Plaintiff's
claims, point to the inescapable conclusion that the present
dispute arises out of an express contract. See, e.g., DeJohn v.
The TV Corp. Int'l, 245 F. Supp. 2d 913, 919 (N.D. Ill. 2003) (holding that parties
entered into express contract via defendant's website and
rejecting plaintiff's implied contract claim). Accordingly, his
claim for unjust enrichment must be dismissed as a matter of law.
For the reasons stated herein, Hyatt's Motion to Dismiss is
IT IS SO ORDERED.
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