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Customguide v. Careerbuilder

August 24, 2011

CUSTOMGUIDE, PLAINTIFF,
v.
CAREERBUILDER, LLC, DEFENDANT.



The opinion of the court was delivered by: James F. Holderman, Chief Judge:

MEMORANDUM OPINION AND ORDER

On January 7, 2011, plaintiff CustomGuide filed a complaint against defendant CareerBuilder, LLC ("CareerBuilder") in the Circuit Court of Cook County, bringing the following claims: breach of contract (Count I); violation of the Computer Fraud and Abuse Act, 18 U.S.C. § 1030(a)(4) (Count II); intentional interference with prospective business opportunities (Count III); violation of the Illinois Uniform Deceptive Trade Practices Act, 815 ILCS 510/1 (Count IV); violation of the Illinois Consumer Fraud and Deceptive Trade Practices Act, 815 ILCS 505/1 (Count V); common law misappropriation of intellectual property rights (Count VI); injunctive relief (Count VII); common law fraud (Count VIII); conversion (Count IX); accounting (Count X); trespass (Count XI); and unjust enrichment (Count XII). (Compl. ¶¶ 44-124 (attached as Ex. A to Dkt. No. 1).) CareerBuilder timely filed a Notice of Removal (Dkt. No. 1), removing the case to the U.S. District Court for the Northern District of Illinois based on federal question jurisdiction under 28 U.S.C. § 1331. Currently before this court is CareerBuilder's "Motion to Dismiss" (Dkt. No. 5). For the reasons explained below, CareerBuilder's motion is granted in part and denied in part as set forth in the Conclusion section of this opinion.

BACKGROUND

The following are the relevant facts of this case, viewing the factual allegations in CustomGuide's complaint in the light most favorable to CustomGuide. See Cole v. Milwaukee Area Tech. Coll. Dist., 634 F.3d 901, 903 (7th Cir. 2011).

CareerBuilder owns and operates the CareerBuilder.com and CareerBuilderInstitute.com websites. (Compl. ¶ 6.) CustomGuide is a Minnesota-based company owned by brothers Jon and Daniel High (collectively "High brothers"). (Id. ¶ 11.) The High brothers developed and own online computer application training modules, courses, and related Quick Reference Guides, which train users on how to operate various software programs, such as Microsoft Windows. (Id. ¶ 12.) CustomGuide dedicated approximately two years and $1.75 million to develop CustomGuide's online training products. (Id. ¶ 13.)

At some point, CareerBuilder engaged CustomGuide in negotiations to obtain a license to sell certain CustomGuide products. (Id. ¶ 15.) Throughout those negotiations, the High brothers expressed their concern to Christian Idiodi ("Idiodi"), Director of the CareerBuilder Institute, that CareerBuilder could only sell CustomGuide's products to individual consumers and not to businesses because sales to businesses would directly compete with CustomGuide's business-to-business sales. (Id. ¶ 16.) Idiodi repeatedly represented to the High brothers in January and February 2008 that CareerBuilder would only use CustomGuide's products for business-to-consumer sales and as otherwise authorized by the parties' contemplated licensing agreement. (Id. ¶ 17.) The High brothers relied on Idiodi's representations and entered into a Partnership and Development Agreement ("Agreement"), which was dated February 4, 2008, and had a one- year term, terminated on February 4, 2009. (Id. ¶ 20; Agreement (attached as Ex. A to Compl).)*fn1

Under the terms of the Agreement, CareerBuilder's license was limited to business-to-consumer sales. (Compl. ¶ 21.) CareerBuilder nevertheless decided that it wanted to sell CustomGuide's content in the business- to-business market. (Id. ¶23.)

On or about August 4, 2008, Idiodi and CareerBuilder.com's Chief Marketing Officer, Richard Castellini ("Castellini"), flew to Minnesota to meet with the High brothers. (Id ¶ 26.) CareerBuilder's purported purpose for the meeting was to enter into an agreement with CustomGuide to allow CareerBuilder to use CustomGuide's content for business-to-business sales. (Id. ¶ 26.) The High brothers ultimately decided against signing the contract. (Id. ¶ 35.)

Despite not having a license for business-to-business sales of CustomGuide's content, CareerBuilder made unauthorized access to CustomGuide's system and used CustomGuide's content for business-to-business sales. (Id. ¶ 37.) CareerBuilder also actively promoted and misrepresented CustomGuide's products as CareerBuilder's own products. (Id. ¶ 38.) In addition, CareerBuilder.com promoted CustomGuide's products as a value-add to the businesses posting jobs on CareerBuilder.com. (Id. ¶40.) When posting a job, CareerBuilder.com would provide employers with a hyperlink advertising online training for the posted position. (Id.) The hyperlink would be directed to unauthorized samples of CustomGuide's training products, re-branded with the CareerBuilder logo. (Id.) CareerBuilder also bundled CustomGuide's Quick Reference Guides with other CareerBuilder products, giving the Reference Guides to CareerBuilder's customers for free. (Id. ¶41.) CustomGuide eventually demanded that CareerBuilder discontinue this process. (Id. ¶42.) Initially, CareerBuilder did comply with CustomGuide's request but then returned to distributing CustomGuide's Quick Reference Guides for free to CareerBuilder's customers. (Id.) After the termination of the Agreement, CareerBuilder continued to access CustomGuide's system and sell CustomGuide's products to consumers. (Id. ¶ 43.)

CustomGuide filed a complaint in the Circuit Court of Cook County against CareerBuilder bringing claims for breach of contract (Count I); violation of the Computer Fraud and Abuse Act, 18 U.S.C. § 1030(a)(4) (Count II); intentional interference with prospective business opportunities (Count III); violation of the Illinois Uniform Deceptive Trade Practices Act, 815 ILCS 510/1 (Count IV); violation of the Illinois Consumer Fraud and Deceptive Trade Practices Act, 815 ILCS 505/1 (Count V); common law misappropriation of intellectual property rights (Count VI); injunctive relief (Count VII); common law fraud (Count VIII); conversion (Count IX); accounting (Count X); trespass (Count XI); and unjust enrichment (Count XII). (Compl. ¶¶ 44-124.) After removing the action to the U.S. District Court for the Northern District of Illinois (Dkt. No. 1), CareerBuilder filed its "Motion to Dismiss" (Dkt. No. 5), which is currently before the court.

LEGAL STANDARD

Under the Federal Rules of Civil Procedure, 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). The complaint must "give the defendant fair notice of what the . . . claim is and the grounds upon which it rests." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). Although the complaint need not contain "detailed factual allegations," "labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555. The complaint must "include sufficient facts 'to state a claim for relief that is plausible on its face.'" Cole v. Milwaukee Area Tech. Coll. Dist., 634 F.3d 901, 903 (7th Cir. 2011) (quoting Justice v. Town of Cicero, 577 F.3d 768, 771 (7th Cir. 2009)). In ruling on a Rule 12(b)(6) motion, the court "construe[s] the . . .

[c]omplaint in the light most favorable to Plaintiff, accepting as true all well-pleaded facts and drawing all possible inferences in [its] favor." Id.

ANALYSIS

In its motion, CareerBuilder moves to dismiss all of CustomGuide's claims. The court will address each claim in turn.

I. Breach of Contract (Count I)

The parties do not dispute that Illinois law applies to CustomGuide's state law claims.

To state a claim for breach of contract under Illinois law, the plaintiff must allege the following: "(1) the existence of a valid and enforceable contract; (2) performance by the plaintiff; (3) breach of contract by the defendant; and (4) resultant injury to the plaintiff." See, e.g., Van Der Molen v. Wash. Mut. Fin., Inc., 835 N.E.2d 61, 69 (Ill. App. Ct. 2005).

CareerBuilder argues that CustomGuide's breach of contract claim should be dismissed for two reasons. First, according to CareerBuilder, the breach of contract claim fails because CustomGuide alleges that the purported breaches occurred after the February 2009 expiration of the contract. Thus, CustomGuide's complaint does not plead the first element of the breach of contract claim: a valid contract. Second, CareerBuilder argues that even assuming ...


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