The opinion of the court was delivered by: Reagan, District Judge
I. Introduction & Procedural Background
According to the Oxford English Dictionary, the phrase "caveat emptor," let the buyer beware, has been part of the English language since 1523, when it was used in connection with the sale of a horse, which might have been ridden upon and be tame or might be "wylde." If "wylde," it was not the merchant who had to beware, but "caveat emptor be ware thou byer." The Oxford English Dictionary (online ed.) available at http://dictionary.oed.com. This wisdom, a part of our lexicon for nearly 500 years, would have stood Quinten Spivey in good stead when he placed a call to a telemarketer to purchase an Atkins diet product. From that small beginning springs the putative class action lawsuit now under consideration by the Court.
In September 2007, Spivey filed suit against Vertrue, Inc., alleging, inter alia, that Vertrue "crammed" consumers' credit cards, debit cards and bank accounts with membership charges without consumers' knowledge or authorization. The lawsuit was filed in the Circuit Court of Monroe County, Illinois, and timely removed to this United States District Court by Vertrue in November 2007. The action now proceeds under Spivey's First Amended Complaint ("FAC") with similar allegations of "cramming" against Adaptive Marketing, LLC (Doc. 50). The two-count complaint against Adaptive alleges breach of contract and unjust enrichment.
II. Jurisdiction and Venue
This Court has original jurisdiction over this matter pursuant to 28 U.S.C. § 1332(d)(2)(A), as amended by the Class Action Fairness Act of 2005 ("CAFA"), because this is a class action in which (a) the matter in controversy exceeds the sum or value of $5,000,000 when the claims of individual class members are aggregated, exclusive of interests and costs; and (b) any member of the class is a citizen of a State different from that of any defendant.
Adaptive Marketing, LLC, has the citizenship of its sole member, Idaptive Marketing, LLC, which in turn has the citizenship of its sole member, Vertrue, Inc. Vertrue, Inc., is a Delaware corporation with Connecticut as its principal place of business. Vertrue, Inc., therefore, is a citizen of the states of Delaware and Connecticut for purposes of diversity jurisdiction. See 28 U.S.C. § 1332(c)(1). As a result, Adaptive is a citizen of Delaware and Connecticut for purposes of diversity jurisdiction. The putative class Spivey seeks to represent contains citizens of Illinois and Spivey himself is a citizen of Illinois. Accordingly, as required by 28 U.S.C. § 1332(d)(2)(A) at least one member of the class is a citizen of a state different from any defendant. Additionally, the number of putative class members satisfies CAFA's requirement of 100 or more class members.
Venue is proper in the Southern District of Illinois pursuant to 28 U.S.C. § 1391 because a substantial part of the events or omissions giving rise to the claims occurred in this district.
Summary judgment is appropriate where the pleadings, discovery and disclosure materials on file and any affidavits show that there is no genuine issue of material fact, and the moving party is entitled to judgment as a matter of law. Estate of Suskovich v. Anthem Health Plans of Virginia, Inc., 553 F.3d 559, 563 (7th Cir. 2009), citing Fed. R. Civ. P. 56(c). Accord Breneisen v. Motorola, Inc., 512 F.3d 972 (7th Cir. 2008); Levy v. Minnesota Life Ins. Co., 517 F.3d 519 (7th Cir. 2008).
In ruling on a summary judgment motion, the Court construes all facts and reasonable inferences in the light most favorable to the non-moving party (here, Spivey). Lloyd v. Swifty Transp., Inc., 552 F.3d 594, 600 (7th Cir. 2009); TAS Distributing Co., Inc. v. Cummins Engine Co., Inc., 491 F.3d 625, 630 (7th Cir. 2007); Reynolds v. Jamison, 488 F.3d 756, 764 (7th Cir. 2007).
The non-movant cannot rest on his pleadings, though. Rather, the non-movant must provide evidence on which the jury or court could find in his favor. Maclin v. SBC Ameritech, 520 F.3d 781, 786 (7th Cir. 2008). As the Seventh Circuit Court of Appeals explained earlier this year:
[T]he non-moving party must submit evidence that there is a genuine issue for trial. Fed. R. Civ. P. 56(e); Ptasznik v. St. Joseph Hosp., 464 F.3d 691, 694 (7th Cir. 2006). The existence of merely a scintilla of evidence in support of the non-moving party's position is insufficient; there must be evidence on which the jury could reasonably find for the non-moving party.
Giant Screen Sports v. Canadian Imperial Bank of Commerce, 553 F.3d 527, 531-32 (7th Cir. 2009).
The Court applies the substantive law of Illinois, the state in which this diversity case was filed, to Spivey's claims. Id., citing Global Relief Found., Inc. v. New York Times Co., 390 F.3d 973, 981 (7th Cir. 2004).
In January 2003, Spivey called a telemarketing number because he wanted to buy an Atkins diet product. Adaptive has produced what it claims is a partial recording of that conversation:
Telemarketer: Thank you for your order. We're sending you a risk free 30-day membership to HomeWorks, offering hundreds of dollars in savings at stores like the Home Depot, K-Mart, Linens & Things and many more. After 30 days, the service is extended to a full year for just $8.00 per month, just $96.00 annually. Billed in advance as Homeworks with the credit card you are using today. You will be charged an annual fee at the end of your 30-day trial period and at the beginning of each new membership year. If you want to cancel, simply call the toll-free number that appears in your kit in the first 30 days and you will not be billed. If you don't save hundreds of dollars in your first year, just call and you'll get a full refund. So look for your kit in your mail is that okay?
Male (allegedly, Spivey): Okay.
According to the FAC, Spivey does not recall participating in this conversation and cannot confirm that the voice on the recording is his. Spivey also claims that he received no "welcome kit" from Adaptive, or, if he did receive a kit, it was designed to look like junk mail so that he discarded it without opening it. Spivey maintained throughout discovery that he had no recollection of the conversation or of receiving the kit. Doc. 158-2, Spivey Deposition 50:21-51-1; 77:20-24. After listening to the tape recording, Spivey admitted that the voice on the recording resembled his voice with a cold. Spivey Dep. 51:6-21.
A. Breach of Oral Contract
Adaptive contends that Spivey's claim for breach of an alleged oral contract fails as a matter of law for four reasons: (1) the contract between the parties was written, not oral; (2) Spivey cannot establish that he assented to an oral contract; (3) the alleged oral contract on which Spivey relies contained no "static price" guarantee for Adaptive to have breached; and (4) the Statute of Frauds bars his claim because it relates to performance more than one year after the alleged contract.*fn1
Spivey contends that an oral contract was created during the alleged telemarketing call. According to Spivey, only the alleged written contract permitted Adaptive to increase annual charges to him, but he did not receive a copy of the written contract, and, even if he had, the ...