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Jack Haught, Individually and On Behalf of All Others Similarly Situated v. Motorola Mobility

August 23, 2012

JACK HAUGHT, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, PLAINTIFFS,
v.
MOTOROLA MOBILITY, INC., A DELAWARE CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Judge Virginia M. Kendall

MEMORANDUM OPINION AND ORDER

Plaintiff Jack Haught brings this class action suit on behalf of himself and all others similarly situated against Motorola Mobility, Inc. alleging three counts stemming from his purchase of a Motorola CLIQ XT mobile telephone: (1) false and misleading representations in violation of the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILSC 505/1 et seq. (Count I); (2) common law fraud by omission (Count II); and (3) unjust enrichment (Count III). Motorola moves to dismiss Haught's complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) on the grounds that Haught has failed to state a claim upon which relief may be granted. For the foregoing reasons, Motorola's Motion to Dismiss is granted in part and denied in part.

I. Background

In deciding the instant Motion, the Court assumes the veracity of the well-pleaded facts in the Complaint and construes all reasonable inferences in Haught's favor. See Killingsworth v. HSBC Bank, 507 F.3d 614, 619 (7th Cir. 2007) (citing Savory v. Lyons, 469 F.3d 667, 670 (7th Cir. 2006)); accord Murphy v. Walker, 51 F.3d 714, 717 (7th Cir. 1995).

Motorola is an international manufacturer of cellular telephones with its corporate headquarters and principal place of business in Libertyville, Illinois. On March 17, 2010, Motorola released the CLIQ XT, a mobile phone designed to utilize the Google Android operating system. A mobile phone's operating system allows the user to access and use the phone's primary features and functions. With this in mind, mobile phone manufacturers customarily upgrade operating systems installed on previously sold phones to provide additional features and enhanced functionality. Because third-party mobile application developers frequently update their products to function correctly with the most recent version of a particular operating system, mobile phones using an outdated operating system are often incompatible with popular third-party mobile applications.

Upon its release the CLIQ XT utilized Android version 1.5, a version of the Android operating system released in May 2009. At the time of the CLIQ XT's release the most current version of the Android operating system was Android version 2.1. That month Motorola included the CLIQ XT on an online upgrade status chart. Motorola indicated on the chart that for the CLIQ XT, "[u]pgrade to Android 2.1 planned for Q2." On the same chart, Motorola listed the upgrade status of other devices as "[u]pgrade under evaluation." On March 30, 2010, in response to customer inquiries regarding the operating system of the CLIQ XT, a Forum Manager of Motorola's online customer support forum highlighted the phone's inclusion on the upgrade status chart. Thereafter, until at least June 17, 2010, Motorola represented that an upgrade of the CLIQ XT to Android version 2.1 was planned for the second quarter of 2010.

On or around June 30, 2010, Jack Haught-a resident of the State of Ohio-purchased a CLIQ XT for approximately $100. Prior to purchasing the phone, Haught viewed Motorola's representations regarding the CLIQ XT's ability to run and store most commonly used mobile applications through its Android operating system. At the time of his purchase Haught was aware that his purchase was subject to a 30-day return and exchange policy. Thereafter, before the end of the 30-day return period, Haught viewed Motorola's online representations of the planned upgrade of the CLIQ XT operating system to Android version 2.1. Relying on these representations, Haught chose not to return his phone prior to the close of the return period.

On June 30, 2010, Motorola stated through its official Twitter account: "Continuing work on an upgrade for CLIQ/CLIQ XT to deliver even better experience and will update on timing when we can." Thereafter, between July 31, 2010, and December 22, 2010, Motorola continued to indicate on both its online customer service forum and its official Twitter account that an upgrade of the CLIQ XT's operating system was forthcoming. Finally, on February 3, 2011, Motorola announced through its online customer service forum that the CLIQ XT would remain on Android version 1.5. As a result, Haught alleges that his phone became outdated and incompatible with many popular mobile applications, thereby allegedly failing to provide most features beyond its basic functionality.

II. The Standard of Review

When considering a motion to dismiss under Rule 12(b)(6) the Court accepts as true all of the well-plead facts alleged in the complaint and construes all reasonable inferences in favor of the nonmoving party. See Killingsworth, 469 F.3d at 619 (citing Savory, 469 F.3d at 670); accord Murphy, 51 F.3d at 717. To state a claim upon which relief can be granted a complaint must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). "Detailed factual allegations" are not required, but the plaintiff must allege facts that, when "accepted as true . . . state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)) (internal quotations omitted). In analyzing whether a complaint meets this standard the "reviewing court [must] draw on its judicial experience and common sense." Iqbal, 556 U.S. at 678. When the factual allegations are well-plead the Court assumes their veracity and then determines if they plausibly give rise to an entitlement to relief. See Id. at 679.A claim has facial plausibility when the factual content plead in the complaint allows the Court to draw a reasonable inference that the defendant is liable for the misconduct alleged. See Id. at 678.

Claims alleging fraud must satisfy the heightened pleading requirement of Rule 9(b), which requires that "[i]n alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake." Fed. R. Civ. P. 9(b) (emphasis supplied). Rule 9(b) applies both to common law fraud claims and to claims brought under the Illinois Consumer Fraud and Deceptive Business Practices Act. See Pirelli Armstrong Tire Corp. Retiree Med. Benefits Trust v. Walgreen Co., 631 F.3d 436, 441 (7th Cir. 2011). "While [Rule 9(b)] does not require a plaintiff to plead facts that if true would show that the defendant's alleged misrepresentations were indeed false, it does require the plaintiff to state the identity of the person making the misrepresentation, the time, place, and content of the misrepresentation, and the method by which the misrepresentation was communicated to the plaintiff." Uni*Quality, Inc. v. Infotronx,

Inc., 974 F.2d 918, 923 (7th Cir. 1992) (quoting Bankers Trust Co. v. Old Republic Ins. Co., 959 F.2d 677, 683 (7th Cir. 1992)) (internal quotations omitted).

The heightened pleading requirement of Federal Rule of Civil Procedure 9(b) therefore mandates that a complaint alleging fraud contain more substance in order to survive a motion to dismiss than a complaint based on another cause of action governed only by the minimal pleading standards of Rule 8(a)(2). See Ackerman v. Nw. Mut. Life Ins. Co., 172 F.3d 467, 469 (7th Cir. 1999) (Rule 9(b) forces "the plaintiff to do more than the usual investigation before filing his complaint"); Vicom, Inc. v. Harbridge Merch. Servs., Inc., 20 F.3d 771, 777 (7th Cir. 1994) (the rule serves three main purposes: (1) protecting a defendant's reputation from harm; (2) minimizing "strike suits" and "fishing expeditions;" and (3) ...


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