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Stavropoulos v. Hewlett-Packard Co.

United States District Court, N.D. Illinois, Eastern Division

December 17, 2014

NECTOR STAVROPOULOS, individually and as the representative of a class of similarly situated persons, Plaintiff,
v.
HEWLETT-PACKARD COMPANY, Defendant.

OPINION AND ORDER

SARA L. ELLIS, District Judge.

After this Court's June 9, 2014 Opinion and Order dismissing Count II (Illinois Consumer Fraud and Deceptive Business Practices Act ("ICFA")) and Count III (unjust enrichment) of his Amended Complaint, Plaintiff Nector Stavropoulos filed a series of amended complaints in an attempt to successfully re-plead these claims. Defendant Hewlett-Packard Company ("HP") now moves to dismiss these two counts from the Fourth Amended Complaint ("Complaint"). Because Stavropoulos has sufficiently pleaded an ICFA deceptive practices claim, HP's motion is denied as it relates to that count. Stavropoulos has not successfully pleaded an ICFA unfair practices theory, however, and he cannot pursue that theory under Count II. HP's attempt to dismiss Stavropoulos' "generally deceptive" allegations is denied. Stavropoulos may plead his unjust enrichment claim in the alternative; thus, HP's motion to dismiss that claim is denied and Stavropoulos' request for disgorgement of profits can stand.

BACKGROUND[1]

For the purposes of this second motion to dismiss, the Court presumes familiarity with the facts as summarized in this Court's June 9, 2014 Opinion and Order and will only discuss the relevant additions to Stavropoulos' Complaint.

Stavropoulos now states that HP should have included in its advertising, including its online product listing and the packaging of the 1040 and 1050 fax machines, "a fire hazard warning of the type approved by the CPSC and recommended by the American National Standards Institute." Compl. ¶ 50. HP failed to disclose, "on the product packaging, advertising or elsewhere that (i) the 1040 and 1050 was defective, dangerous, and a fire hazard; and (ii) the 1040 and 1050 contained the same power supply defect as the 1010 and 1010xi." Id. ¶ 51. By not including such warnings, HP "communicated to Stavropoulos and members of the putative class that the 1040 and 1050 were not fire hazards." Id. ¶ 50. Further, HP intended that Stavropoulos and the class rely on "its suppression of the defective and dangerous condition of the 1040 and 1050 in making their choice to purchase those products." Id. ¶ 52. Stavropoulos viewed the packaging of the 1040 fax machine prior to his purchase. Id. ¶ 50. He states that he would not have purchased the 1040 fax machine if he knew it caused a risk of fire and burns. Id. ¶ 20. Stavropoulos further contends that no reasonable consumer would have purchased these models of fax machine if he or she had known the products were defective and a fire hazard. Id. ¶ 53.

Also, throughout the Complaint Stavropoulos has added claims that the HP model 1040 and 1050 fax machines were "generally defective." See, e.g., Id. ¶ 32 (Count I), ¶ 50 (Count II), ¶ 65 (Count III).

Finally, Stavropoulos includes a request for "disgorgement of profits unjustly retained by HP in connection with its sale of 1040s and 1050s" in the Count III (unjust enrichment) plea for damages. Id. at 19.

LEGAL STANDARD

A motion to dismiss under Rule 12(b)(6) challenges the sufficiency of the complaint, not its merits. Fed.R.Civ.P. 12(b)(6); Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990). In considering a Rule 12(b)(6) motion to dismiss, the Court accepts as true all well-pleaded facts in the plaintiff's complaint and draws all reasonable inferences from those facts in the plaintiff's favor. AnchorBank, FSB v. Hofer, 649 F.3d 610, 614 (7th Cir. 2011). To survive a Rule 12(b)(6) motion, the complaint must not only provide the defendant with fair notice of a claim's basis but must also be facially plausible. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009); see also Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678.

Rule 9(b) requires a party alleging fraud to "state with particularity the circumstances constituting fraud." Fed.R.Civ.P. 9(b). This "ordinarily requires describing the who, what, when, where, and how' of the fraud, although the exact level of particularity that is required will necessarily differ based on the facts of the case." AnchorBank, FSB, 649 F.3d at 615 (citation omitted). Rule 9(b) applies to "all averments of fraud, not claims of fraud." Borsellino v. Goldman Sachs Grp., Inc., 477 F.3d 502, 507 (7th Cir. 2007). "A claim that sounds in fraud'- in other words, one that is premised upon a course of fraudulent conduct-can implicate Rule 9(b)'s heightened pleading requirements." Id.

ANALYSIS

I. ICFA Claim (Count II)

A. Deceptive Packaging

The Court initially dismissed Stavropoulos' ICFA claim because he did not allege that he received any kind of communication from HP and an ICFA claim requires the consumer receive some communication or advertising from the defendant. June 9, 2014 Opinion at 10. The Complaint now states that HP's advertising, and specifically, the packaging of the 1040 model, was deceptive because it did not include "a fire hazard warning of the type approved by the CPSC and recommended by the American National Standards Institute." Compl. ¶ 50. HP argues that Stavropoulos does not allege that he was actually deceived by this omission-that he actually read or ...


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