United States District Court, N.D. Illinois, Eastern Division
GARY MEDNICK and STEVEN BAYER, Individually and on Behalf of All Others Similarly Situated, Plaintiffs,
PRECOR, INC., a Delaware Corporation, Defendant.
MEMORANDUM OPINION AND ORDER
D. Leinenweber, Judge.
the Court is the parties' dispute over whether Plaintiffs
should have the Court's permission to file an Amended
Complaint [ECF Nos. 130, 141]. For the reasons stated herein,
Plaintiffs are given leave to amend their Complaint subject
to some limitations.
or denial of a motion to amend a pleading is within the
discretion of the district court judge. Foman v.
Davis, 371 U.S. 178, 182 (U.S. 1962). Nonetheless, Rule
15(a) of the Federal Rules of Civil Procedures instructs
judges to “freely give leave when justice so
requires.” Thus, in the absence of “undue delay,
bad faith or dilatory motive on the part of the movant,
repeated failure to cure deficiencies by amendments
previously allowed, undue prejudice to the opposing party by
virtue of allowance of the amendment, [or] futility of
amendment, ” leave to amend should and will be given.
Foman, 371 U.S. at 182.
is still the question of what evidence the Court may consider
when reviewing a motion for leave to amend a complaint.
Plaintiffs urged that the Court look solely to the pleadings
and determine if their claim is “plausible on its
face.” (Pls.' Reply Mem. Supp. Mot. Am. Compl., ECF
No. 141, p.5.) Plaintiffs say that this is because “a
proposed amendment is futile only if it could not withstand a
Rule 12(b)(6) motion to dismiss.” Id., p.6
(internal quotation marks omitted). But the very case that
Plaintiffs cite for this proposition, Peoples v. Sebring
Capital Corp., acknowledged that the above statement is
only “generally” true. Peoples v. Sebring
Capital Corp., 209 F.R.D. 428, 430 n.1 (N.D. Ill. 2002).
Peoples explicitly noted that the statement is not
true when courts have pending before them a motion for
summary judgment. See, id. In such circumstances,
courts may consider extrinsic materials, indeed the same
materials considered in summary judgment, in ruling on the
motion for leave to amend. Id. While there is no
summary judgment motion before this Court, the Court has
already decided a Motion on Class Certification. As such, the
Court will consider the same materials in deciding this
Motion as it did for class certification.
factual background of this case was discussed at length in
the Court's Memorandum Opinion denying class
certification on June 10, 2016. See, ECF No. 125, p.
1-8. Below is an account of the facts as they have unfolded
since that last ruling. Other facts will be discussed in the
analysis as they become relevant.
Proceedings since Denial of Class Certification
after the denial of class certification, the parties appeared
again before the Court. During this appearance on June 30,
Plaintiffs' counsel said that Plaintiffs would
“seek leave to file an amended complaint, your Honor,
that is much narrower than the original complaint the class
sought in the class cert motion.” (Transcript, ECF No.
134, p. 2.) Defendant Precor's counsel replied, “We
would need to see the motion, your Honor.” Id.
at 3. The Court then set the briefing schedule for the
initial filing, response, and reply. Id. The
exchange between the parties and the Court makes clear that
the Court was setting the schedule for a Motion for Leave to
Amend the Complaint and not for the filing of an Amended
Complaint itself. The minute order issued on the same day,
however, stated, “Plaintiff to file amended complaint
by 7/14/2016.” (ECF No. 126.)
filed its First Amended Complaint (the “FAC”) by
the deadline. (ECF No. 127.) Plaintiffs' Complaint now
alleges a single cause of action: violation of the Illinois
Fraud and Deceptive Business Practices Act and nine other
consumer protection statutes “which are materially
similar” to Illinois law. Id. ¶¶
97-102. The ten states whose laws are implicated are
California, Florida, Illinois, Massachusetts, Michigan,
Minnesota, Missouri, New Jersey, New York, and Washington.
Id. ¶ 99.
sought to represent four different classes in their Amended
Complaint. The first new class, called the “Multi-State
Damages Class, ” was made up of all persons, not
otherwise excluded, who are residents of the ten states and
“who purchased a Precor treadmill equipped
with a touch sensor heart rate monitor from either Precor or
a third-party retailer.” FAC ¶ 86 (emphasis
added). In the alternative, Plaintiffs bring the action on
behalf of an “Illinois Resident Damages Class, ”
which is defined in the same way as the Multi-State Damages
Class but is confined to residents of Illinois. Id.
addition to the damages classes, Plaintiffs sought to
represent a Multi-State Injunctive Relief Class and an
Illinois Resident Injunctive Relief Class. These injunctive
relief classes are defined in the same way as the damages
classes, although presumably their members are entitled only
to a remedy in equity. (FAC ¶¶ 88-89.) Plaintiffs
also expanded on the injunctive relief they seek, naming five
specific ways in which they would have Precor enjoined.
Id. at 27. All five are forms of prospective
injunctive relief having to do with how Precor advertises its
treadmills in the future. For instance, Plaintiffs asked for
an order “enjoining Precor from making representations
regarding the validity, reliability or accuracy of the Touch
Sensor Monitoring feature on its treadmills.”
money damages, Plaintiffs requested the same types of damages
as in their original Complaint. These included
“compensatory damages . . . and treble, multiple,
disgorgement, punitive or other damages” as well as
“pre-judgment and post-judgment interest” and
awards of “attorney fees, expenses, and costs.”
(FAC at 27.)
Plaintiffs' sole claim for relief is now predicated on
the allegation that Precor engaged in unfair and misleading
representations in marketing its heart rate monitors,
Plaintiffs also refined and expanded on their allegations of
Precor's allegedly deceptive advertising. See,
FAC ¶¶ 5-14, 42-54. For example, Plaintiffs
emphasized that, “In every product accompanying a
Precor treadmill, Precor made the exact same statement, that,
“whether you walk or run, ” the [touch
sensor heart rate monitoring] feature allows the consumer to
‘maximize' their workout, ” all the while
knowing that such a statement was false. Id. at
¶¶ 15, 16, 45 (emphasis in original).
factual allegations may be distilled thusly: (1)
“Precor's Touch Sensor Monitoring in treadmills
does not work as advertised” (FAC ¶¶ 15, 26);
(2) Precor knew that its Touch Sensor technology
“cannot perform as advertised” (FAC ¶¶
22, 26); and (3) by “inducing [consumers] to pay a
premium price for a feature that simply could not work as
advertised, ” Precor had violated the consumer
protection laws of the ten named states (FAC ¶¶ 22,
raised four issues with Plaintiffs' Amended Complaint.
The first is a procedural issue arising from the fact that
Plaintiffs had not filed a Motion for Leave to Amend a
Complaint prior to filing the Amended Complaint itself. The
remaining are substantive arguments related to standing,
futility, and undue prejudice. The Court will address each in
it is true that Plaintiffs had not filed a Motion for Leave
to Amend, the Court recognized that its minute order issued
on June 30 had in error allowed Plaintiffs to file an Amended
Complaint directly. See, Min. Order, ECF No. 137
(correcting the June 30 minute order). The Court will thus
treat the parties' briefs on the issue as a Motion for
Leave to Amend the Complaint. In so doing, the Court
exercises its discretion and rejects Precor's attempt to
have this Court deny leave solely on the procedural ground
that Plaintiffs did not file a motion.