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John L. Sharkey, On Behalf of Himself and the Classes Defined v. Nac Marketing Company

November 28, 2012


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


Plaintiff John L. Sharkey ("Sharkey") filed suit against NAC Marketing Company, LLC, doing business as New Vitality ("NAC"). Sharkey, who ordered a free trial of dietary supplements from New Vitality, claims NAC violated the Electronic Funds Transfer Act (Count I) and the Illinois Consumer Fraud and Deceptive Business Practices Act (Count II) when it automatically debited his bank account and processed a renewal shipment of dietary supplements. Sharkey additionally brings this action on behalf of a class.

NAC moves to dismiss both counts of Sharkey's Complaint and strike their respective class allegations. For the reasons stated below, NAC's Motion to Dismiss Count I is granted, with prejudice with respect to any Electronic Funds Transfer Act claim under § 1693e. NAC's Motion to Dismiss Count II is granted without prejudice and with leave to amend. The Motion to Strike the Class Allegations is denied as moot with leave to refile following the filing of any amended complaint.


The following facts are taken from Sharkey's Complaint and are assumed to be true for purposes of this Motion to Dismiss. See Tamayo v. Blagoyevich, 526 F.3d 1074, 1081 (7th Cir. 2008). All reasonable inferences are drawn in favor of Sharkey, the non-moving party. See Killingsworth v. HSBC Bank, 507 F.3d 614, 618 (7th Cir. 2007) (citing Savory v. Lyons, 469 F.3d 667, 670 (7th Cir. 2006)).

Through television and radio advertising, NAC offers consumers a free trial offer for its "Ageless Male" dietary supplement pills. (Comp. ¶¶ 6-7.) For the free trial offer, the customer pays a shipping and handling fee, receives a 10-, 15-, or 30-day supply of the product, and is automatically enrolled in NAC's "Preferred Free Shipping" program. (Id. ¶¶ 7-8.) Under the "Preferred Free Shipping" program, NAC automatically ships additional product from time to time without affirmative action by the customer. (Id. ¶ 8.)

Sharkey contacted NAC on or about February 24, 2012, and ordered a free trial of the product. (Id. ¶ 11.) NAC debited Sharkey's bank account for $6.99, the cost of shipping and handling. (Id. ¶ 12.) Sharkey received the product and a printed receipt marked "This is Not a Bill," summarizing his order, and containing a "Special Message" identifying Sharkey as a "Preferred Shipping Customer." (Id. at Exhibit A.) The message stated that the program offered "the convenience of savings plus automated shipping." The message further provided, "If you need to adjust your shipping interval, hold an order or cancel your participation in this program please call customer service at 1-800-943-6465." (Id. at Exhibit A.)

On April 23, 2012, approximately two months after Sharkey ordered a free trial of the product, NAC processed a second debit of Sharkey's bank account, this time for $41.94, and sent a second shipment of pills. (Id. ¶ 14.) Sharkey returned the second shipment of the pills upon receipt. (Id. ¶ 16.)

Sharkey did not affirmatively order the second shipment of pills, nor did he provide written authorization for the second debit to his account. (Id. ¶¶ 15, 17.) NAC did not send Sharkey advance written notice of the debit, and Sharkey did not anticipate additional shipments without further action on his part. (Id. ¶¶ 13, 26.) As a result of the second debit, Sharkey's bank account was overdrawn, causing him to incur overdraft fees (which were later reversed by his bank). (Id. ¶ 20.) Sharkey alleges that automatic renewal under the "Preferred Shipping Program" was not clearly and conspicuously disclosed when he contacted NAC in response to its advertising. (Id. ¶ 9.)


When considering a motion to dismiss under Rule 12(b)(6), the Court accepts as true all facts alleged in the complaint and construes all reasonable inferences in favor of the plaintiff. Killingsworth, 507 F.3d at 618 (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 compliant 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). To determine 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 there are well-pleaded factual allegations, the Court assumes their veracity and determines if they plausibly give rise to an entitlement to relief. Id. at 679. A claim has facial plausibility when the pleaded factual content allows the Court to draw a reasonable inference that the defendant is liable for the misconduct alleged. See Id. at 678.


I. Count I: Electronic Funds Transfer Act

In Count II of his Complaint, Sharkey alleges NAC violated ยง 1693e of the EFTA by debiting his account without written authorization and advanced written notice of the ...

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