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Barbara Ford and Phillip Favia, Individually and On Behalf of All v. Judge Joan H. Lefkow Pacific Webworks

February 4, 2011

BARBARA FORD AND PHILLIP FAVIA, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, PLAINTIFFS,
v.
JUDGE JOAN H. LEFKOW PACIFIC WEBWORKS, INC., A NEVADA CORPORATION, THE QUAD GROUP, LLC, A UTAH LIMITED LIABILITY COMPANY, BLOOSKY INTERACTIVE, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY, AND INTERMARK COMMUNICATIONS, INC., A NEW YORK CORPORATION, DEFENDANTS.



The opinion of the court was delivered by: Joan Humphrey Lefkow United States District Judge

OPINION AND ORDER

Barbara Ford and Phillip Favia (collectively, "plaintiffs") brought this putative class action against Pacific WebWorks, Inc. ("Pacific WebWorks"), The Quad Group, LLC ("the Quad Group"), Bloosky Interactive, LLC ("Bloosky"), and Intermark Communications, Inc. ("Intermark") (collectively, "defendants"), based on defendants' alleged deceptive and fraudulent marketing and billing of work-at-home products that promise consumers fast cash using Google. Plaintiffs bring claims for violation of the Illinois Consumer Fraud and Deceptive Business Practices Act ("ICFA"), 815 Ill. Comp. Stat. 505/1 et seq., and the Automatic Contract Renewal Act, 815 Ill. Comp. Stat. 601/1 et seq., common law fraud, conspiracy to commit common law fraud, breach of contract, and unjust enrichment.*fn1 Before the court are Bloosky's motions to dismiss plaintiffs' second amended complaint*fn2 and to strike plaintiffs' class definition, and Pacific WebWorks and the Quad Group's motion for judgment on the pleadings. For the following reasons, Bloosky's motion to dismiss [#75] is granted, Bloosky's motion to strike plaintiffs' class definition [#77] is denied as moot, and Pacific WebWorks and the Quad Group's motion for judgment on the pleadings [#86] is granted in part and denied in part.

LEGAL STANDARD

A motion for judgment on the pleadings under Rule 12(c) is subject to the same standard of review as a motion to dismiss under Rule 12(b)(6). N. Ind. Gun & Outdoor Shows, Inc. v. City of S. Bend, 163 F.3d 449, 452 (7th Cir. 1998). In considering a Rule 12(c) motion, the court considers the complaint, the answer, and any written instruments attached as exhibits. Id. at 452--53. The court must accept all well-pleaded allegations in the complaint as true and must draw all reasonable inferences in the non-movant's favor. United States v. Wood, 925 F.2d 1580, 1581 (7th Cir. 1991). A grant of judgment on the pleadings is appropriate where "it is beyond doubt that the non-movant can plead no facts that would support his claim for relief." Id. Allegations of fraud are subject to the heightened pleading standard of Rule 9(b), which requires a plaintiff to "state with particularity the circumstances constituting fraud or mistake." Fed. R. Civ. P. 9(b). This means that the plaintiff must plead 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).

BACKGROUND*fn3

Pacific WebWorks and the Quad Group are related companies that provide online work-at-home products. Second Am. Compl. ¶¶ 3--4. Bloosky and Intermark are ad networks that generate online advertisements, consumer traffic, and conversion optimization for Pacific WebWorks and the Quad Group. Id. ¶¶ 5--6. They also act as affiliate marketers for Pacific WebWorks and the Quad Group. Id.

Of relevance to this case, defendants collaborate to host and market products purporting to provide consumers with the opportunity to work directly with and be paid by Google. Id.

¶¶ 10--11. Bloosky and Intermark, through its employee affiliate managers and affiliate publishers, create and operate spam email offers, sponsored links, banner ads on search pages, and links in fake news articles and blogs related to the Google offer. Id. ¶¶ 11--12, 14. These fake blogs, news articles, and consumer review sites have stories about how various individuals have made thousands of dollars a month using Pacific WebWorks's and the Quad Group's work-at-home products. Id. ¶¶ 20--21. The pages use stock photos and fabricated testimonials generated to correspond to the location of the consumer's computer's IP address. Id. ¶¶ 19, 22. Internet traffic from these offers and links is directed to Pacific WebWorks and the Quad Group landing pages, where consumers may purchase the advertised Google work-at-home product. Id.

¶¶ 12, 16. Bloosky and Intermark receive payment from Pacific WebWorks and the Quad Group for driving traffic to the landing pages. Id. ¶¶ 41, 50.

The work-at-home products sold by Pacific WebWorks and the Quad Group promise purchasers the ability to, for example, "Earn up to $978 or more a day using GOOGLE" or "Work from Home & learn to make $1000s a day using GOOGLE!" Id. ¶¶ 16, 18. The landing pages typically present endorsements of the product from media networks even though the networks have never endorsed the products nor consented to use of their logos. Id. ¶ 17. In order to take advantage of what is billed as a limited time offer, consumers must provide Pacific WebWorks and the Quad Group with certain personally identifying information. Id. ¶ 23. They are promised the work-at-home products for $2.00 or less. Id. ¶ 24. On the online transaction page, the only term regarding price that is clearly and conspicuously displayed reads "Total: $1.97." Id. ¶¶ 27, 35. Unbeknownst to purchasers, however, they are charged a monthly fee of $79.90 for the product and often a separate $24.90 fee for another product as well. Id. ¶¶ 32--33.

Barbara Ford clicked on an advertisement on her AOL home page that offered a Google work-at-home opportunity as described above. Id. ¶ 39. The advertisement was placed by one of Bloosky's affiliate publishers and led to a fake news article describing how a woman made $5,000 a month using a Pacific WebWorks/Quad Group product. Id. After clicking on a link in the article, Ford was routed through Bloosky's server to a Pacific WebWorks/Quad Group landing page. Id. From this page, Ford understood that she could receive the advertised work-at-home product for $1.97. Id. She entered her credit card number on the transaction page, authorizing a charge of $1.97. Id. ¶ 41. She was charged an additional $79.90, a portion of which Pacific WebWorks/the Quad Group remitted to Bloosky. Id. Ford called repeatedly asking to cancel her order and for a refund, claiming that she never authorized the $79.90 charge and never received the product. Id. ¶ 42. Ford did not receive a refund, however. Id. ¶¶ 43--44. She then proceeded to cancel her credit card to avoid being billed again without authorization.

Id. ¶ 44.

Favia also clicked on an advertisement link offering a Google work-at-home opportunity that had been placed by one of Intermark's affiliate publishers. Id. ¶ 46. He was routed through Intermark's server to a Pacific WebWorks/Quad Group landing page, which offered him the work-at-home product for $1.97. Id. ¶ 47. When he sought to navigate away from the page, a pop-up offered him the product for just $0.99. Id. ¶ 48. He then chose to purchase the product, authorizing his credit card to be billed $0.99. Id. ¶ 50. Like Ford, he was also charged an additional $79.90, a portion of which Pacific WebWorks/the Quad Group remitted to Intermark. Id. ¶ 50. Favia never received the ...


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