United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
D. Leinenweber, Judge United States District Court.
the Court are OneUp Trader's Motion to Dismiss the Second
Amended Complaint for failure to state a claim [ECF No. 35]
and Alsabah's Motion to Dismiss for lack of personal
jurisdiction and failure to state a claim [ECF No. 48]. For
the reasons stated herein, both Motions to Dismiss are
granted in part and denied in part.
following facts are taken from TopstepTrader's Second
Amended Complaint (“Complaint”) and are presumed
true for the purpose of this Motion. See, Munson v.
Gaetz, 673 F.3d 630, 632 (7th Cir. 2012). TopstepTrader
is an Illinois-based company that operates a website platform
that trains its users to trade via simulations and then (if
they are successful in training) allows them to trade in the
market using TopstepTrader's capital. (Compl.
¶¶ 9-14.) The eventual profits made by the users
are split with TopstepTrader. (Id.) Saddam Alsabah
(“Alsabah”) is a resident of Kuwait who signed up
for an account with TopstepTrader in the fall of 2015 with
the alleged purpose of copying its intellectual property and
business model and creating his own copycat business using
the copied material. (Id. ¶¶ 3, 35-51.)
Alsabah created Defendant OneUp Trader (“OneUp”)
as the copycat business. (Id.) TopstepTrader alleges
that by copying its materials, Alsabah and OneUp breached its
copyrighted material. The Complaint brings four counts
against Defendants: copyright infringement (Count I), breach
of contract (Count II), unjust enrichment (Count III), and
fraud (Count IV). Both Defendants move to dismiss the
Complaint under Rule 12(b)(6) for failure to state a claim
and Alsabah individually moves to dismiss under Rule 12(b)(2)
for lack of personal jurisdiction.
Alsabah's 12(B)(2) Motion to Dismiss
motion to dismiss for lack of personal jurisdiction under
Federal Rule of Civil Procedure 12(b)(2) tests whether a
federal court has personal jurisdiction over a defendant. A
complaint need not include facts alleging personal
jurisdiction. However, once the defendant moves to dismiss
under Rule 12(b)(2) for lack of personal jurisdiction, the
plaintiff bears the burden of demonstrating the existence of
jurisdiction. Purdue Research Found. v.
Sanofi-Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir.
2003) (citations and quotations omitted). Where personal
jurisdiction is decided on the papers as opposed to after an
evidentiary hearing, the plaintiff “need only make out
a prima facie case of personal jurisdiction.” Hyatt
Int'l Corp. v. Coco, 302 F.3d 707, 713 (7th Cir.
2002). Although the Court must accept the plaintiff's
uncontroverted allegations as true, if “the defendant
has submitted affidavits or other evidence in opposition to
the exercise of jurisdiction, the plaintiff must [then] go
beyond the pleadings and submit affirmative evidence
supporting the exercise of jurisdiction.” Purdue
Research, 338 F.3d at 783. All disputes concerning
relevant facts are resolved in the plaintiff's favor.
Id. at 782-83.
asserts personal jurisdiction under two independent theories:
first, that Alsabah consented to jurisdiction by agreeing to
the Terms, which contained a forum selection clause, and
second, that Alsabah's minimum contacts with Illinois are
sufficient for personal jurisdiction. We address each
contention in that order.
Forum Selection Clause
forum selection clause is sufficient to establish personal
jurisdiction. See, TruServ Corp. v. Flegles, Inc.,
419 F.3d 584, 589 (7th Cir. 2005). Alsabah argues that
TopstepTrader's Terms (and the forum selection clause
within them) are unenforceable because the agreement lacks
consideration. This argument is meritless. The consideration
exchanged was access to the website. See, LKQ Corp. v.
Thrasher, 785 F.Supp.2d 737, 742 (N.D. Ill. 2011)
(“Under the traditional rule, consideration is
relatively easy to show. As long as the person receives
something of value in exchange for her own promise or
detriment, the courts will not inquire into the adequacy of
the consideration.”) Alsabah rebuts by pointing out
that the website was publicly available via YouTube, but the
import of this is an enigma. A YouTube video does not allow a
user to actually use the website, nor does it
include the website's full content. (Compl. ¶ 19.)
TopstepTrader gave Alsabah the ability to use
TopstepTrader's website and access its full content,
which is sufficient for consideration. Id.; see,
Reger Dev., LLC v. Nat'l City Bank, 592 F.3d 759,
766 (7th Cir. 2010) (quoting Mid-Town Petroleum, Inc. v.
Gowen, 611 N.E.2d 1221, 1227 (Ill.App.Ct. 1993))
(“A peppercorn can be considered sufficient
consideration to support a contract in a court of
law.”) (as amended (Dec. 16, 2010)).
next argument carries more weight. He contends that he never
accepted the Terms by creating an account because: (1) he
never agreed to a clickwrap agreement, and (2) under a
browsewrap agreement, he lacked notice of the Terms.
TopstepTrader attempts to evade this argument by merely
concluding that “Alsabah accepted the Terms and its
forum selection clause when he created an account on
TopstepTrader's website. In doing so, he consented to
this Court's jurisdiction over him.” (Mem. in
Opp'n to Alsabah's Mot. to Dismiss at 2, Dkt. 72.)
This argument does not address Alsabah's argument that he
never agreed to the Terms in the first instance. The only
case TopstepTrader cites involving a website agreement is
Productive People, LLC v. Ives Design, No. CV 09
1080, 2009 WL 1749751, at *1 (D. Ariz. June 18, 2009), but in
that case, it was undisputed that defendants agreed to
plaintiff's terms of service agreement. That is not the
case here. Thus, the Court must determine whether Alsabah
agreed to the Terms when he created an account on
contracts formed by creating an account on a website are a
“newer form of contracting, ” the same common
law contract principles apply:
In Illinois, as in many states, the law governing the
formation of contracts on the Internet is still in the early
stages of development. But there is no reason to think that
Illinois's general contract principles do not apply.
Formation of a contract requires mutual assent in virtually
all jurisdictions; Illinois courts use an objective approach
to that question.
Sgouros v. TransUnion Corp., 817 F.3d 1029, 1034
(7th Cir. 2016); see also, Register.com, Inc. v. Verio,
Inc., 356 F.3d 393, 403 (2d Cir. 2004) (“While new
commerce on the Internet has exposed courts to many new
situations, it has not fundamentally changed the principles
of contract.”). In translating the principles of
contract formation to the internet, the relevant inquiry is
(1) “whether the web pages presented to the consumer
adequately communicate all the terms and conditions of the
agreement, ” and (2) “whether the circumstances
support the assumption that the purchaser receives reasonable
notice of those terms.” Sgouros, 817 F.3d at
1034. Such an inquiry is “fact-intensive.”
the fact-intensive inquiry, the exact wording and layout of
the TopstepTrader website in the fall of 2015 is relevant
here. In September 2015, Alsabah was presented with a webpage
that stated “Join Now for Free.” (See,
Ex. D to Mem. in Supp. of TRO, Dkt. 8-5; Testimony of Rudman
at TRO Hearing (July 13, 2018) Dkt. 18 at 73:14-24,
80:21-81:7, 90:23-91:18.) The webpage had boxes to fill in
personal information. Id. Right below this form for
personal information was a fairly large button with large,
white print labeled “Sign Up.” Id. The
phrase “I agree to the terms and conditions”
appeared directly under the “Sign Up” button in
small print. Id. This phrase was hyperlinked,
meaning that clicking on the phrase produced a copy of the
Terms. Id. An image of the layout is replicated
below, id. :
parties dispute whether the alleged contract before the court
is a “clickwrap” or “browsewrap”
agreement. A “clickwrap” agreement is formed when
website users click a button or check a box that explicitly
affirms that the user has accepted the terms after having the
opportunity to view or scroll through the terms posted on the
website and this type of agreement is generally enforced.
Sgouros v. TransUnion Corp., No. 14 C 1850, 2015 WL
507584, at *4 (N.D. Ill. Feb. 5, 2015), aff'd,817 F.3d 1029 (7th Cir. 2016) (citing Nguyen v. Barnes
& Noble,763 F.3d 1171, 1175-76 (9th Cir. 2014));
see also, Van Tassell v. United Mktg. Grp., LLC, 795
F.Supp.2d 770, 790 (N.D. Ill. 2011) (courts “regularly
uphold” clickwrap agreements when structured properly).
A “browsewrap” agreement, on the other hand, is
an agreement where users are bound to the website's terms
by merely navigating or using the website; the user is not
required to sign an electronic document or explicitly click
an “accept” or “I agree” button.
Sgouros, 2015 WL 507584, at *6 (citations and
quotations omitted). “Courts enforce ...