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Glen Ellyn Pharmacy, Inc. v. Kloudscript, Inc.

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

December 2, 2019

GLEN ELLYN PHARMACY, INC., individually and behalf of others similarly situated, Plaintiff,
KLOUDSCRIPT, INC., and JOHN DOES 1-10, Defendants.


          Harry D. Leinenweber, Judge United States District Court

         For the reasons stated herein, Defendant's Motion to Dismiss (Dkt. No. 16) is granted in part and denied in part.

         I. BACKGROUND

         Plaintiff Glen Ellyn Pharmacy, Inc. is a pharmacy with offices in Glen Ellyn, Illinois. (Compl. ¶¶ 3, 10, Dkt. No. 1.) Defendant Kloudscript, Inc. (“Kloudscript”) is a Delaware corporation that sells software consulting services to pharmacies. (Compl. ¶ 5.) In 2018, Plaintiff received five one-page faxes from Kloudscript. These faxes invited Plaintiff to participate in two seminars (one held on June 2, 2018; the other on June 27, 2018) promoting services sold by Kloudscript. (See Kloudscript Faxes, Exs. A-E to Compl., Dkt. No. 1.)

         Plaintiff brings a putative class action against Kloudscript and various “John Does” who Plaintiff claims were responsible for sending the faxes. Plaintiff asserts a claim under § 227(b)(1)(C) of the TCPA, which prohibits the use of any device “to send, to a telephone facsimile machine, an unsolicited advertisement to a telephone facsimile machine.” 47 U.S.C. § 227(b)(1)(C). Plaintiff also asserts the following Illinois state law and tort claims: violation of the Illinois Consumer Fraud Act (ICFA), conversion, and trespass to chattels. Kloudscript moves to dismiss the Complaint in its entirety because Plaintiff lacks standing to proceed on its TCPA claim, has plead only de minimis injuries for the tort claims, and fails to state a claim under the ICFA.

         II. STANDARD

         Kloudscript moves to dismiss Plaintiff's suit for lack of standing, an argument that falls under Federal Rule of Civil Procedure 12(b)(1). Jane Atlas and Margaret Schwalbach v. Village of Glencoe, No. 19 C 3962, 2019 WL 6117579, at *2 (N.D. Ill. Nov. 18, 2019). The party invoking federal jurisdiction bears the burden of establishing standing. Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992). Kloudscript brings a facial challenge to Plaintiff's federal jurisdiction, as it claims that the allegations in Plaintiff's Complaint, even if true, are insufficient to establish standing. Apex Digital, Inc. v. Sears, Roebuck & Co., 572 F.3d 440, 444 (7th Cir. 2009). Facial challenges require only that the Court look to the Complaint to see if Plaintiff has sufficiently alleged a basis of subject matter jurisdiction. Id. at 443. Allegations in the Complaint are taken as true for such a motion. Id. at 444.

         Kloudscript's de minimis challenge standard falls under Rule 12(b)(6), which requires courts to dismiss complaints that fail to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). Under Rule 8(a)(2), a complaint must include “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). The short and plain statement under Rule 8(a)(2) must “give the defendant fair notice of what the claim is and the grounds upon which it rests.” Bell Atlantic v. Twombly, 550 U.S. 544, 555 (2007) (citation omitted). A “complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). In determining the sufficiency of a complaint under the plausibility standard, courts must “accept all well-pleaded facts as true and draw reasonable inferences in the plaintiffs' favor.” Roberts v. City of Chicago, 817 F.3d 561, 564 (7th Cir. 2016). When ruling on motions to dismiss, courts may also consider documents attached to the pleadings without converting the motion to dismiss into a motion for summary judgment, as long as the documents are referred to in the complaint and central to the plaintiff's claims. See Adams v. City of Indianapolis, 742 F.3d 720, 729 (7th Cir. 2014); Fed.R.Civ.P. 10(c).


         A. TCPA and Standing

         To establish standing, a plaintiff must allege an injury in fact that is traceable to the defendant's conduct and redressable by a favorable judicial decision. Lujan, 504 U.S. at 560-61. These requirements are rooted in Article III, which limits a federal court's authority to the resolution of “cases” or “controversies.” Casillas v. Madison Ave. Assocs., Inc., 926 F.3d 329, 333 (7th Cir. 2019). Kloudscript contends that Plaintiff has not met the injury-in-fact requirement. An “injury in fact” is “an invasion of a legally protected interest which is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical.” Lujan, 504 U.S. at 560. Article III standing “requires a concrete injury even in the context of a statutory violation.” Spokeo, Inc. v. Robins, 136 S.Ct. 1540, 1549 (2016). An alleged harm must be “concrete, ” not “abstract.” Id. at 1548.

         Kloudscript urges that Plaintiff's injury is insufficiently concrete, particularized, actual, and imminent to constitute an injury-in-fact. Plaintiff's asserted injury is that Kloudscript's unsolicited faxes deprived Plaintiff of its ink, toner, the use of its fax machine, and the time it spent identifying the source and purpose of the fax. (See Compl. ¶¶ 2, 25.) The Seventh Circuit, in Craftwood II, Inc. v. Generac Power Sys., Inc., 920 F.3d 479 (7th Cir. 2019), recently confirmed that such injuries are sufficient under Spokeo:

Plaintiffs allege that they received unsolicited fax ads, causing at least two kinds of injury: printing the faxes used paper and toner, which are costly, and the need to read the incoming faxes diverted the time of one or more employees from the businesses' profitable endeavors. These are concrete rather than abstract losses. The injuries may have been slight, but an “identifiable trifle” suffices. Plaintiffs' injuries were caused by the defendants' faxed ads and may be redressed by an award of damages. We have resolved dozens of fax-ad suits on the merits without suspecting that we were violating Article III of the Constitution. This suit is no more constitutionally suspect than they. Whether it is good public policy to use the cumbersome and costly process of adjudication to resolve disputes about annoying fax ads is for Congress to decide.

Craftwood II, Inc. v. Generac Power Sys., Inc., 920 F.3d 479, 481 (7th Cir. 2019) (internal citations omitted) (emphasis added). The Ninth Circuit has held similarly. See Van Patten v. Vertical Fitness Group, LLC, 847 F.3d 1037, 1043 (9th Cir. 2017) (plaintiff's receipt of unsolicited text messages was sufficient harm to confer standing, because “[u]nsolicited telemarketing phone calls or text messages, by their nature, invade the privacy and disturb the solitude of their recipients” such that a “plaintiff alleging a violation under the TCPA ...

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