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Flores v. United Airlines

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

December 10, 2019

PATRICIA FLORES, Plaintiff,
v.
UNITED AIRLINES, Defendant.

          MEMORANDUM OPINION AND ORDER

          HON. JORGE ALONSO UNITED STATES DISTRICT JUDGE.

         While using defendant's website to purchase a ticket for air travel, plaintiff Patricia Flores (“Flores”) was offered the option to purchase travel insurance, and she accepted. When plaintiff learned defendant United Airlines (“United”) would receive a cut of the money she paid for insurance, Flores brought this suit, asserting claims for violation of the Illinois Consumer Fraud and Deceptive Trade Practices Act and the RICO (“Racketeer Influenced and Corrupt Practices Act”) statute, as well as a claim for unjust enrichment.[1] United moves to dismiss. For the reasons set forth below, the Court grants the motion.

         I. BACKGROUND

         The following facts are from plaintiff's complaint, and the Court takes them as true.

         On its website, United sells tickets for the air transportation it provides. After a customer such as plaintiff has chosen a flight but before she has purchased it, United offers the customer the option to purchase travel insurance.

         United's customers are not required to purchase travel insurance in order to purchase a ticket to fly, but they are required either to accept or reject the option of travel insurance. Under the heading “United Travel Options, ” the website says, “Cover your trip with Travel Guard ® insurance[.]” (Am. Complt. ¶¶ 24-25). Below that, the website reads:

         Don't miss out! Plan includes:

--Flight refund if you can't travel for covered illness
-- Coverage for lost baggage including laptops, phones and cameras

(Am. Complt. ¶ 27). A customer then has two options from which to choose: (1) “Yes, insure my trip for only $[price;]” or (2) “No, I will travel without insurance for my [ticket price] trip.” Below the two options, the website says, “Coverage is offered by Travel Guard Group, Inc.” (Am. Complt. ¶ 33).

         Plaintiff, for her part, purchased a travel insurance policy from United's website on February 23, 2018. She does not say how much she paid. She later “received an email from the insurance provider attaching her policy, which did not reference United.” (Am. Complt. ¶ 51).

         Plaintiff alleges that “[w]hen United sends a receipt, it states that the cost of the trip insurance is remitted to Travel Guard Group, Inc.” (Am. Complt. ¶ 33). Specifically, plaintiff alleges the receipt “lists the specific amount charged for ‘Trip insurance' and states it will be ‘Billed separately by Travel Guard Group, Inc.” (Am. Complt. ¶ 36). Plaintiff does not allege that she received such a receipt.

         At no point during plaintiff's transaction to purchase travel insurance did United disclose to her that it had a financial interest in her purchase of travel insurance, but it did. Plaintiff alleges “United retains or ultimately receives for itself a portion of the funds for every trip insurance policy its customers purchase on its website.” The portion United receives is described by plaintiff variously as: a kickback, a commission, an illegal commission and a hidden profit center. (Am. Complt. ¶¶ 41, 43 & 44). According to plaintiff's complaint, “United has also concealed and/or failed to disclose to state regulators the fact that it receives a commission or kickback every time a customer elects to purchase a travel insurance product through its website.” (Am. Complt. ¶ 41).

         Plaintiff alleges that the price of the travel insurance “is set by the insurer, not United.” (Am. Complt. ¶ 48). Plaintiff alleges that neither the dates of travel nor the route affects the insurance price. She alleges the price for each travel insurance policy purchased on United's website is “based solely on the overall ticket price.” (Am. Complt. ¶ 45). Plaintiff also alleges that “[b]ecause the price of travel insurance . . . incorporates an illegal commission paid to United, ” customers pay an inflated price. (Am. Complt. ¶ 46).

         II. STANDARD ON A MOTION TO DISMISS

         The Court may dismiss a claim pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure if the plaintiff fails “to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6).[2] Under the notice-pleading requirements of the Federal Rules of Civil Procedure, a complaint must “give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). A complaint need not provide detailed factual allegations, but mere conclusions and a “formulaic recitation of the elements of a cause of action” will not suffice. Twombly, 550 U.S. at 555. To survive a motion to dismiss, a claim must be plausible. Ashcroft v. Iqbal, 556 U.S. 662 (2009). Allegations that are as consistent with lawful conduct as they are with unlawful conduct are not sufficient; rather, plaintiffs must include allegations that “nudg[e] their claims across the line from conceivable to plausible.” Twombly, 550 U.S. at 570.

         In considering a motion to dismiss, the Court accepts as true the factual allegations in the complaint and draws permissible inferences in favor of the plaintiff. Boucher v. Finance Syst. of Green Bay, Inc., 880 F.3d 362, 365 (7th Cir. 2018). Conclusory allegations “are not entitled to be assumed true, ” nor are legal conclusions. Iqbal, 556 U.S. at 680 & 681 (noting that a “legal conclusion” was “not entitled to the assumption of truth[;]” and rejecting, as conclusory, allegations that “‘petitioners ‘knew of, condoned, and willfully and maliciously agreed to subject [him]' to harsh conditions of confinement”). The notice-pleading rule “does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions.” Iqbal, 556 U.S. at 678-679.

         Pursuant to Rule 9(b) of the Federal Rules of Civil Procedure, the “circumstances constituting fraud” must be alleged with particularity. Fed.R.Civ.P. 9(b).

         III. DISCUSSION

         A. Plaintiff's claim for consumer fraud

         In Count I, plaintiff asserts that defendant violated the Illinois Consumer Fraud and Deceptive Trade Practices Act (“ICFA”), 815 ILCS 505/1 et seq. To state a claim, plaintiff must allege: “(1) a deceptive act or practice by the defendant; (2) the defendant's intent that the plaintiff rely on the deception; (3) the occurrence of the deception in the course of conduct involving trade or commerce, and (4) actual damage to the plaintiff (5) proximately caused by the deception.” Avery v. State Farm Mut. Auto. Ins. Co., 216 Ill.2d 100, 180 (Ill. 2005). “Recovery may be had for unfair as well as deceptive conduct.” Robinson v. Toyota Motor Credit Corp., 201 Ill.2d 403, 417 (Ill. 2002).

         1. Transactions outside Illinois

         Defendant argues that plaintiff cannot pursue her claim under the ICFA, because the ICFA does not apply “to fraudulent transactions which take place outside Illinois.” Avery v. State Farm Auto. Ins. Co., 216 Ill.2d 100, 185 (Ill. 2005). In Avery, the Illinois Supreme Court explained that “a fraudulent transaction may be said to take place within a state if the circumstances relating to the transaction occur primarily and substantially within that state.” Avery, 216 Ill.2d at 186. There, the Illinois Supreme Court concluded “the out-of-state plaintiffs in this case have no cognizable cause of action under the Consumer Fraud Act.” Avery, 216 Ill.2d at 188.

         Here, plaintiff alleges that she is a resident of Texas. She does not say whether she was in Texas or elsewhere when she used United's website to purchase travel insurance. She does not say whether she ever made a claim under the travel-insurance policy or, if so, where she was when she made a claim. She does not say what travel itinerary the travel insurance was meant to protect.

         Instead, in her complaint, plaintiff alleges that United is headquartered in Illinois and that the “United employees responsible for the presentation and operation of the ticketing process on United.com work in Illinois.” (Am Complt. ¶ 16). The facts that a defendant is headquartered in Illinois, that the fraudulent scheme emanated from Illinois and/or that a website was designed in Illinois, however, do not suffice to establish that a transaction occurred primarily and substantially in Illinois. Avery, 216 Ill.2d at 189 (“The appellate court's conclusion that a scheme to defraud was ‘disseminated' from [defendant's Illinois] headquarters is insufficient.”); Robinson v. DeVry Education Group, Inc., Case No. 16 CV 7447, 2018 WL 828050 at *4 (N.D. Ill. Feb. 12, 2018) (dismissing ICFA claim where defendant was headquartered in Illinois and “operate[d] its website in Illinois, where it published misrepresentations, ” because “the administration of defendant's business in Illinois is insufficient to give a nonresident plaintiff a claim under Illinois statutes.”); Sgouros v. Transunion Corp., Case No. 14 C 1850, 2016 WL 4398032 at *5 (N.D. Ill. Aug. 18, 2016) (rejecting claim that website transaction with company headquartered in Illinois occurred primarily and substantially in Illinois, because that was “outweighed by Plaintiff's residence in Missouri, his search for and purchase of Defendants' product in Missouri and his attempt to benefit from that product to acquire an auto loan in Missouri”); Bagg v. HighBeam Research, Inc., Case No. No. 12 C 9756, 2013 WL 3466846 at *5 (N.D. Ill. July 10, 2013) (“[E]ven if the Court assumes [defendant's] website is designed in Illinois and the alleged deceptive conduct was disseminated to Plaintiffs from Illinois, this is insufficient for the purposes of ICFA.”); Haught v. Motorola Mobility, Inc., Case No. 12 C 2515, 2012 WL 3643831 at *4 (N.D. Ill. Aug. 23, 2012) (rejecting plaintiff's attempt “to distinguish the instant case by emphasizing that the alleged misrepresentations were designed in Illinois and disseminated on a website registered and hosted in Illinois”). Thus, plaintiff has not plausibly alleged the transaction occurred primarily and substantially in Illinois.

         In her brief, plaintiff argues that the terms of service on United's website state that disputes arising out of the use of the website are governed by Illinois law. Plaintiff does not include any such allegations in her complaint, so the Court will not consider this argument. Plaintiff invites the Court to take judicial notice of the contents of United's website, but the contents of a website, which can be changed in mere minutes, are not an appropriate subject for judicial notice. Fed.R.Civ.P. 201(b) (“The Court may judicially notice a fact that is not subject to reasonable dispute because it: (1) is generally known within the trial court's territorial jurisdiction; or (2) can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.”).

         Plaintiff has not alleged that the transaction occurred primarily and substantially in Illinois. Accordingly, she has not stated a claim under the Illinois Consumer Fraud and Deceptive Trade Practices Act. That is not her claim's only deficiency.

         2. Unfair practice

         Next, defendant argues that plaintiff has not plausibly alleged an unfair practice within the meaning of the ICFA. In “determining whether a given course of conduct or act is unfair, ” courts must consider three factors: “(1) whether the practice offends public policy; (2) whether it is immoral, unethical, oppressive, or unscrupulous; [and] (3) whether it causes substantial injury to consumers.” Robinson, 201 Ill.2d at 417-18. The Illinois Supreme Court has concluded that a plaintiff need not establish all three. Rather, “[a] practice may be unfair because of the degree to which it meets one of the criteria or ...


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