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Weidner v. Carroll

September 28, 2007

CHAD WEIDNER, AN INDIVIDUAL, KAROLIEN WALRAVENS, AN INDIVIDUAL, PLAINTIFFS,
v.
RUSTY CARROLL, AN INDIVIDUAL, R2C2, INC., A CORPORATION, DEFENDANTS.



The opinion of the court was delivered by: Herndon, District Judge

MEMORANDUM AND ORDER

I. Introduction

Now before the Court is Defendant's Motion to Dismiss. (Doc. 11.) Defendants move to dismiss the Complaint in its entirety based on a number of theories too numerous to summarize. Plaintiffs respond in opposition. (Doc. 13.) After careful consideration, the Court finds that each of Defendants' arguments, save one, lacks merit. Therefore, the motion to dismiss is DENIED in part and GRANTED in part. (Doc. 11.)

II. Background

On October 12, 2006, Plaintiffs Chad Weidner and Karolien Walravens, on their own behalf and as representatives of a class of individuals and entities similarly situated, filed a Complaint against Defendants Rusty Carroll and R2C2, Inc. ("R2C2") alleging copyright infringement, violation of Section 43(a) of the Lanham Act, unfair competition under Illinois statutes and common law, violation of federal RICO statute, and unjust enrichment. (Doc. 2.) Plaintiffs further allege that Defendants own and operate several web sites that sale term papers, without proper authorization from the actual owners. The Complaint defines the putative class as "all persons or entities who are the owners of the materials offered to the public through Carroll's Term Paper Web Sites." (Doc. 2, ¶ 13.)

III. Motion to Dismiss

A. Legal Standards

1. Federal Rule of Civil Procedure 12(b)(6)

When ruling on a motion to dismiss for failure to state a claim under FEDERAL RULE OF CIVIL PROCEDURE 12(b)(6), the Court must look to the complaint to determine whether it satisfies the threshold pleading requirements under FEDERAL RULE OF CIVIL PROCEDURE 8. Rule 8 states that a complaint need only contain a "short and plain statement of the claim showing that the pleader is entitled to relief." FED.R.CIV.P.8(a)(2). In a recent opinion issued on May 21, 2007, the Supreme Court held that Rule 8 requires that a complaint allege "enough facts to state a claim to relief that is plausibleon its face" to survive a Rule 12(b)(6) motion. Bell Atlantic Corp. v. Twombly, ___ U.S. ___, 127 S.Ct. 1955, 1974 (2007). In other words, the Supreme Court explained it was "a plaintiff's obligation to provide the 'grounds' of his 'entitle[ment] to relief'" by providing "more than labels and conclusions," because "a formulaic recitation of the elements of a cause of action will not do . . . ." Id. at 1964-65 (quoting Papasan v. Allain, 478 U.S. 265, 286 (1986)). The Seventh Circuit has read the Bell Atlanticdecision to impose "two easy-to-clear hurdles":

First, the complaint must describe the claim in sufficient detail to give the defendant 'fair notice of what the . . . claim is and the grounds upon which it rests.' Second, its allegations must plausibly suggest that the plaintiff has a right to relief, raising that possibility above a 'speculative level'; if they do not, the plaintiff pleads itself out of court. E.E.O.C. v. Concentra Health Services, Inc., 2007 WL 2215764, 2 (7th Cir. 2007) (citations omitted).

2. Federal Rule of Civil Procedure 9(b)

Defendant argues that several counts in Plaintiffs' complaint must be dismissed due to their failure to plead the fraud claims with the particularity demanded by Federal Rule of Civil Procedure 9(b). Plaintiffs disagree.

Federal Rule of Civil Procedure 9(b) states that "[i]n all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity."*fn1 This heightened pleading requirement is premised upon a desire "to minimize the extortionate impact that a baseless claim of fraud can have on a firm or an individual." Fidelity Nat'l Title Ins. Co. v. Intercounty Nat'l Title Ins. Co., 412 F.3d 745, 748 (7th Cir. 2005);see also Ackerman v. Northwestern Mutual Life Ins. Co., 172 F.3d 467, 469 (7th Cir. 1999). The purpose of the requirement is to "force the plaintiff to do more than the usual investigation before filing his complaint," a task that is warranted in light of the "great harm" that can result to company or individual upon the filing of a fraud action. Ackerman, 172 F.3d at 469; see also Fidelity Nat'l Title Ins. Co., 412 F.3d at 749 (noting that Rule 9(b) "forces the plaintiff to conduct a careful pretrial investigation and thus operates as a screen against spurious fraud claims"). In order to meet Rule 9(b)'sstrictures and survive dismissal, a plaintiff must generally allege the who, what, where, and when of the alleged fraud. Ackerman, 172 F.3d at 469; DiLeo v. Ernst & Young, 901 F.2d 624, 627 (7th Cir. 1990); see also Vicom, Inc. v. ...


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