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Appleby v. Sprint Nextel Corp.

May 20, 2008

PAULA APPLEBY, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, PLAINTIFF,
v.
SPRINT NEXTEL CORPORATION, D/B/A SPRINT NEXTEL, NEXTEL OR SPRINT AND F/K/A/ SPRINT CORPORATION, SPRINT SPECTRUM L.P. A/K/A/ SPRINT PCS, SPRINT SOLUTIONS, INC., SPRINT/UNITED MANAGEMENT COMPANY, NEXTEL RETAIL STORES, NEXTEL OPERATIONS, INC., NEXTEL PARTNERS OPERATING CORP., AND NEXTEL WEST CORP., DEFENDANTS.



The opinion of the court was delivered by: J. Phil Gilbert District Judge

MEMORANDUM AND ORDER

This matter comes before the Court on Defendants's Motion to Dismiss (Doc. 29) under Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure. Plaintiff has responded (Doc. 55) and Defendants have replied (Doc. 58). For the following reasons, the Court GRANTS the Motion.

BACKGROUND

For purposes of a motion to dismiss, the court must accept all factual allegations in the complaint as true and draw all reasonable inferences from those facts in favor of the plaintiff. Erickson v. Pardus, 127 S.Ct. 2197, 2200 (2007) (per curiam ) (quoting Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1965 (2007)); Tricontinental Indus., Ltd. v. PricewaterhouseCoopers, LLP, 475 F.3d 824, 833 (7th Cir.2007). The Court, accepting all of Plaintiff's allegations as true and drawing all reasonable inferences it her favor, finds the following facts for purposes of this motion.

In 1999, Plaintiff Paula Appleby (Appleby) contracted with Defendants, collectively referred to as Sprint, for cellular telephone service and products. Appleby lived in Madison County, Illinois, the contract was entered into in Madison County, Illinois, and Sprint's products and services were to be used in Madison County, Illinois. Over the years, Appleby has attempted to cancel her service with Sprint a number of times. Each time she attempted to cancel her service, she has been told that her contract had previously been extended. Appleby did not agree to any contract extensions. Sprint never provided Appleby with a copy of the contract extensions. Sprint falsely told Appleby her contract had been extended in order to get Appleby to continue using and paying for Sprint's services when she was under no obligation to do so, thereby foregoing better rates offered by Sprint's competitors. When she inquired into terminating Sprint's services, Appleby was told that she would be charged an early termination fee. Sprint falsely told Appleby her contract had been extended in order to get Appleby to pay an early termination fee although she was under no obligation to do so.

Appleby brought a six count complaint on behalf of herself and all others similarly situated. In Counts I and II, Appleby alleges that Sprint violated the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1 et seq. In Counts III and IV, Appleby alleges that Sprint committed acts of common law fraudulent omission and common law fraudulent misrepresentation. In Count V, Appleby alleges that Sprint negligently made false statements or omissions. In Count VI, Appleby asserts Sprint's actions violate the Statute of Frauds and asks for declaratory judgment to that effect.

ANALYSIS

Sprint filed the instant motion to dismiss asserting that Appleby has failed to establish that she has standing to bring her complaint, that Appleby's complaint is deficient under Rules 8 and 9 of the Federal Rules of Civil Procedure, and that, as a matter of law, no relief can be granted for Appleby's negligence claim or her declaratory judgment claim.

I. Appleby's Complaint Does Not Meet Pleading Requirements

The federal system of notice pleading requires only that the plaintiff provide "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). Therefore, the complaint need not allege detailed facts. Pisciotta v. Old Nat'l Bancorp, 499 F.3d 629, 633 (7th Cir.2007). However, in order to provide fair notice of the grounds for his claim, the plaintiff must allege sufficient facts "to raise a right to relief above the speculative level." Id. (quoting Twombly, 127 S.Ct. at 1965 (2007) (internal quotations omitted)). The complaint must offer "more than labels and conclusions, and a formulaic recitation of a cause of action's elements will not do." Twombly, 127 S.Ct. at 1965. The plaintiff's pleading obligation is to avoid factual allegations "so sketchy that the complaint does not provide the type of notice of the claim to which the defendant is entitled under Rule 8." Airborne Beepers & Video, Inc. v. AT & T Mobility LLC, 499 F.3d 663, 667 (7th Cir.2007). However, "when a complaint adequately states a claim, it may not be dismissed based on a district court's assessment that the plaintiff will fail to find evidentiary support for his allegations or prove his claim to the satisfaction of the factfinder." Twombly, 127 S.Ct. at 1969 n8.

A complaint alleging fraud must meet a heightened pleading standard. "In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally."

Fed. R. Civ. Pro. 9(b). The "circumstances constituting fraud" must include the "who, what, when, where and how: the first paragraph of any newspaper story." DiLeo v. Ernst & Young, 901 F.2d 624, 627 (7th Cir. 1990).

A. Counts I through V

Counts I through V of the Complaint are all premised on Appleby's allegations that Sprint made misstatements (either intentionally or negligently) that caused her to enter into a contract with Sprint or that caused her to believe that she owed Sprint contractual obligations when she did not.*fn1 Appleby cites Centerline Equip. Corp. v. Banner Pers. Serv., 2008 U.S. Dist. Lexis 15946, for the proposition that "a claim brought under the Illinois Consumer Fraud Act premised upon unfairness does not allege fraud or misrepresentation." This is a misreading of the case and a misrepresentation of its holding. The court in Centerline was dealing with complaints that the defendant sent the plaintiffs unrequested faxes for which the plaintiffs were charged. The Centerline court determined that although this allegation constituted an "unfair" business practice, it did not constitute an allegation of "fraud or misrepresentation," and therefore the complaint did not need to ...


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