Halperin v. International Web Services, LLC
123 F. Supp. 3d 999
N.D. Ill.2015Background
- Plaintiff Dan Halperin alleges that software called “I Want This!” (created by Affluent Ads and distributed by International Web Services) was installed on his computer and generates underlined keywords and pop‑up ads when the cursor hovers over them.
- Halperin’s amended complaint brought an Illinois Consumer Fraud Act (ICFA) claim, an Illinois Computer Tampering Act (ICTA) claim, and consumer‑fraud claims under nine other states on behalf of a proposed multi‑state class; federal claims from the original complaint were not re‑pled.
- Defendants moved to dismiss under Rules 12(b)(1) and 12(b)(6) and to strike class allegations under Rule 12(f); court granted dismissal, denied motion to strike as moot, and gave one final chance to amend.
- Court found CAFA minimal diversity and amount‑in‑controversy plausibly alleged for federal jurisdiction but addressed mootness/pick‑off doctrine: Halperin’s earlier Damasco class‑certification filing insulated him from defendant’s Rule 68 offer.
- On the merits, the court dismissed the ICFA deceptive‑practices claims for failing Rule 9(b) particularity and questioned whether Halperin alleged actual pecuniary loss; ICTA claim dismissed without prejudice for failure to plead whether installation was unauthorized (or exceeded consent) with sufficient factual detail.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| CAFA jurisdiction | Multi‑state class plausibly meets minimal diversity and $5M amount based on $150 per claimant estimate | Offer that plaintiff’s demand is satisfied moots case; Damasco motion irrelevant because amended complaint changed claims | CAFA jurisdiction plausibly alleged; Damasco motion pending insulated plaintiff from pick‑off (no mootness) |
| Mootness / Rule 68 pick‑off | Halperin had a pending Damasco class‑certification motion protecting him from being picked off | Defendants’ $10,000 offer of judgment moots his individual claim and thus the suit | Court follows Seventh Circuit: pending Damasco motion prevented pick‑off; case not mooted by offer |
| ICFA deceptive‑practices claim | I Want This! misleads users into thinking visited sites are affiliated with ads and is hard to uninstall; class members relied and suffered damages | Pop‑ups identify their origin (Text Enhance/URL); allegations rely on anonymous forum posts; no alleged out‑of‑pocket loss by Halperin | ICFA deceptive claim dismissed for failing Rule 9(b) particularity; court questions absence of actual pecuniary loss |
| ICTA (computer tampering) | I Want This! was inserted into browsers without authorization and altered webpage data | Defendants point to evidence of plaintiff’s consent to download bundled software | ICTA claim dismissed without prejudice for failure to plead whether installation was unauthorized or exceeded consent with sufficient factual detail; leave to amend granted |
Key Cases Cited
- Blomberg v. Serv. Corp. Int’l, 639 F.3d 761 (7th Cir. 2011) (plausible amount‑in‑controversy supports CAFA jurisdiction)
- Damasco v. Clearwire Corp., 662 F.3d 891 (7th Cir. 2011) (advises filing class‑certification motion with complaint to prevent pick‑off)
- McMahon v. LVNV Funding, LLC, 744 F.3d 1010 (7th Cir. 2014) (pending class claims and leave to amend can insulate plaintiff from a pre‑certification Rule 68 pick‑off)
- Camasta v. Jos. A. Bank Clothiers, Inc., 761 F.3d 732 (7th Cir. 2014) (ICFA deceptive‑practice allegations sound in fraud and must meet Rule 9(b))
- Pirelli Armstrong Tire Corp. Retiree Med. Benefits Trust v. Walgreen Co., 631 F.3d 436 (7th Cir. 2011) (distinguishing unfair vs deceptive ICFA claims and applying Rule 9(b) to deceptive claims)
- Twombly v. Bell Atlantic Corp., 550 U.S. 544 (2007) (complaint must contain sufficient factual matter to state a plausible claim)
- Robinson v. Toyota Motor Credit Corp., 201 Ill.2d 403 (Ill. 2002) (elements and purpose of ICFA)