Van Tassell v. United Marketing Group, LLC
2011 U.S. Dist. LEXIS 72088
| N.D. Ill. | 2011Background
- Plaintiffs allege a nationwide scheme where merchant defendants transferred card data to United Marketing, which enrolled customers in unauthorized Membership Programs and billed small monthly fees.
- Van Tassell, Dunn, and Casinover each allege post-purchase charges tied to United Marketing memberships without consent.
- Plaintiffs assert ICFA, EFTA, ECPA, breach of contract, unjust enrichment, fraud, and conspiracy claims.
- Defendants move to dismiss under 12(b)(1) and 12(b)(6), join in one another’s briefs, seek arbitration, and PermissIon Interactive seeks limited 12(b)(6) relief.
- Court finds no valid arbitration agreement formed; ICFA claim dismissed for lack of Illinois connection; EFTA claim narrowed; ECPA claim survives dismissal challenges; arbitration motions denied or deferred; overall disposition affects all defendants.
- The court notes United Marketing is Illinois-based; plaintiffs reside outside Illinois; most alleged conduct occurred outside Illinois; the court applies Illinois contract/arbitration principles with Colorado choice of law noted as applicable.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Arbitration eligibility of the dispute | Plaintiffs deny a valid agreement existed guiding arbitration | Defendants contend enrollment pages and Terms bind arbitration | No valid arbitration agreement formed; referral to arbitration denied without prejudice |
| Mootness of the claims given refunds | Plaintiffs seek damages beyond refunded fees (interest, statutory, costs, fees) | Refunds moots the dispute | Not moot at this stage; complete relief not shown; tender insufficient to moot the entire case |
| ICFA applicability given Illinois connections | ICFA should apply to out-of-state consumers exchanging with Illinois-based defendant | Avery v. State Farm requires substantial Illinois connection | Count I dismissed for lack of circumstantial Illinois connection; not actionable under Avery |
| EFTA and ECPA sufficiency | EFTA/ ECPA violations occurred via unauthorized transfers and interceptions | Consent defenses and lack of direct initiation. | Count III ECPA survives; Count II EFTA dismissed as to Permission Interactive and credit-card transactions; partial dismissal affirmed |
| Pikes Peak arbitration liability | Van Tassell bound by ChefsCatalog terms | Notice of Conditions of Use inadequate; browsewrap issues | No valid arbitration agreement; denial without prejudice; cross-motions may be revisited if necessary |
Key Cases Cited
- Avery v. State Farm Mut. Auto. Ins. Co., 216 Ill.2d 100 (Ill. 2005) (ICFA requires substantial Illinois connection; out-of-state claims may be barred)
- Phillips v. Bally Total Fitness Holding Corp., 372 Ill.App.3d 53 (Ill.App. 2007) (location of conduct and damages important to ICFA applicability)
- Hubbert v. Dell Corp., 359 Ill.App.3d 976 (Ill.App. 2005) (notice and conspicuousness of online terms affect enforceability of online contracts)
- Specht v. Netscape Communications Corp., 306 F.3d 17 (2d Cir. 2002) (browsewrap notice must be conspicuous to bind assent)
- Gates v. Towery, 430 F.3d 429 (7th Cir. 2005) (tender alone may not moot putative class actions; costs and fees matter)
- Doe v. Smith, 429 F.3d 706 (7th Cir. 2005) (ECPA consent defense limits; pleading not disqualified at motion to dismiss)
- First Options of Chi., Inc. v. Kaplan, 514 U.S. 938 (U.S. 1995) (arbitration issues require court to decide formation or enforceability as threshold)
- Granite Rock Co. v. Int’l Bhd. of Teamsters, 130 S. Ct. 2847 (2010) (arbitration requires consent and enforceability; questions of arbitrability resolved by courts when contested)