Cosmetique, Inc. v. Valueclick, Inc.
753 F. Supp. 2d 716
N.D. Ill.2010Background
- Cosmetique, Inc. is an Illinois direct marketer of cosmetics and runs the Beauty Club.
- Cosmetique paid Defendants to generate internet sales leads for the Beauty Club from late 2006 to Sept. 2007.
- Defendants allegedly displayed misleading advertisements offering a free Gift contingent on Cosmetique purchases.
- Consumers joined Beauty Club seeking the Gift and later demanded refunds after learning purchases were required.
- Cosmetique asserts Illinois Consumer Fraud Act claims and alleges deceptive conduct that implicates consumer protection concerns.
- Defendants move to dismiss claims, arguing lack of standing, overbroad fraud theory, and improper disclosures.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing of non-consumer | Cosmetique standing due to consumer-protection concerns affecting market. | Non-consumer cannot plead Illinois Fraud Act absent consumer deception to plaintiff. | Cosmetique has standing under unique circumstances to pursue the claim. |
| Promotional offers named in complaint | Two offers referenced; broader fraudulent scheme alleged as illustrative. | Only claims based on attached Promotional Offers may proceed; broader scheme dismissed. | Claims premised on offers other than attached Promotional Offers dismissed. |
| Clarity and conspicuousness of disclosures | Disclosures were not clear/conspicuous about required expenses/obligations. | Promotional Offers disclose steps to receive the Gift; disclosures are clear. | At pleadings stage, factual questions remain; not decided; premature to conclude lack of clarity. |
| Nexus to Illinois | Alleged over 8,000 Illinois consumers were affected; Illinois nexus alleged. | No explicit proof that transactions occurred primarily in Illinois. | Sufficient nexus alleged to survive dismissal at pleadings stage; denial of dismissal on this basis. |
Key Cases Cited
- White v. DaimlerChrysler Corp., 368 Ill. App. 3d 278 (2006) (elements of unfair or deceptive acts under Illinois Fraud Act)
- Rao v. BP Products North America, Inc., 589 F.3d 389 (7th Cir. 2009) (fraud pleadings require who, what, when, where, how)
- Fidelity Nat. Title Ins. Co. of New York v. Intercounty Nat. Title Ins. Co., 412 F.3d 745 (7th Cir. 2005) (fraud pleading screening and pretrial investigation purpose)
- Hollander v. Brown, 457 F.3d 688 (7th Cir. 2006) (dismissal may be appropriate if plaintiff pleads herself out of court)
- Thompson v. Ill. Dep't of Prof'l Regulation, 300 F.3d 750 (7th Cir. 2002) (Iqbal standard applied to pleadings in 12(b)(6) context)