Halperin v. International Web Services, LLC

123 F. Supp. 3d 999, 2015 U.S. Dist. LEXIS 72878, 2015 WL 3561509
CourtDistrict Court, N.D. Illinois
DecidedJune 5, 2015
Docket13 C 8573
StatusPublished
Cited by22 cases

This text of 123 F. Supp. 3d 999 (Halperin v. International Web Services, LLC) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Halperin v. International Web Services, LLC, 123 F. Supp. 3d 999, 2015 U.S. Dist. LEXIS 72878, 2015 WL 3561509 (N.D. Ill. 2015).

Opinion

Memorandum Opinion and Order

Gary Feinerman, United States District Judge

Dan Halperin brings this putative class action against Affluent Ads, LLC, and In[1002]*1002ternational Web Services, LLC, the creator and distributor of I Want This!, which Halperin claims is a malicious software program that, having surreptitiously been installed on his computer, selectively underlines words displayed in his web browser and generates unwanted pop-up ads when his cursor hovers ovér the underlined text. Doc. 85 at ¶ 31. The original complaint alleged' violations of the Illinois Consumer Fraud and Deceptive Business Practices Act (“ICFA”), 815 ILCS 505/1 et seq., the Illinois' Computer Tampering Act (“IOTA”), 720 ILCS 5/17-50 et seq., and two federal statutes, the Computer Fraud and Abuse Act, 18 U.S.C. § 1030, and the Electronic Communications Privacy Act’s anti-wiretap provisions, 18 U.S.C. §§ 2510 et seq. Doc. 2. The court dismissed, without prejudice ,the federal claims under Federal Rule of Civil Procedure 12(b)(6) and, as Halperin had not adequately pleaded the minimal diversity required by the Class Action Fairness 'Act of 2005 (“CAFA”), 28 U.S.C. § 1332(d), exercised its discretion under 28 U.S.C. § 1367(c)(3) to relinquish supplemental jurisdiction over the state law claims. Docs. 76-77 (reported at 70 F.Supp.3d 893 (N.D.Ill. 2014)). The court did, however, give Halperin leave to file an amended complaint. 70 F.Supp.3d at 905.

The amended . complaint does not re-plead the federal claims, but it again raises the ICFA and ICTA claims on behalf of himself and an Illinois-only class, and it also raises, on behalf of a multi-state class; consumer fraud claims .under the laws-of nine other ,States (California, Florida, Massachusetts,. Michigan, Minnesota, Missouri, New Jersey, New York, and Washington) alleged to be similar to Illinois’s. Doc. 85. Defendants have moved to dismiss the amended complaint under Rules 12(b)(1) and 12(b)(6), Docl 90, and tó strike its class allegations under Rule 12(f). Doc. 92. The motion to dismiss is granted,- the motion to strike is denied without prejudice as moot, and Halperin is given one last chance to replead.

Background

On a Rule 12(b)(6) motion to dismiss, the court must accept the operative complaint’s well-pleaded factual allegations, with all reasonable inferences drawn in Halperin’s favor, but not its legal conclusions. See Smoke Shop, LLC v. United States, 761 F.3d 779, 785 (7th Cir.2014); Munson v. Gaetz, 673 F.3d 630, 632 (7th Cir.2012). The court must also consider “documents attached to the complaint,- documents that are critical to the complaint and referred to in it, and information that is subject' to proper judicial notice,” along with additional facts set forth in Halperin’s briefs opposing dismissal, so long as those additional facts “are consistent with the pleadings.” Phillips v. Prudential Ins. Co. of Am., 714 F.3d 1017, 1020 (7th Cir.2013) (internal quotation marks omitted) (quoting Geinosky v. City of Chicago, 675 F.3d 743, 745 n. 1 (7th Cir.2012)). The facts are set forth as favorably to Halperin as those materials permit. See Meade v. Moraine Valley Cmty. Coll., 770 F.3d 680, 682 (7th Cir.2014); Gomez v. Randle, 680 F.3d 859, 864 (7th Cir.2012).

Affluent Ads created a software program called I Want This!, which International Web Services then distributed. Doc. 85 at ¶¶ 26-27. Defendants somehow installed I Want This! on Halperin’s computer. Id. at ¶ 35. A key component of J Want This! is called “Text Enhance.” Id. at p."7, n.ll. When Halperin visits a website using his computer, Text Enhance “automatically' scans the text of the web-page” for certain keywords, and for each keyword found, it “turns the [word] blue and underlines it.” Id. at ¶ 31. If Halpe-rin’s cursor hovers over an underlined word, “an advertisement will appear over the website.” Ibid. For example, in the image below (taken from the amended [1003]*1003complaint), Text Enhance underlines the word “bet,” and when Halperin’s cursor hovers over that word, a pop-up advertisement entitled “Play Free Slots” appears:

[[Image here]]

Id. at ¶ 31, Image 1. Were Halperin to click on the pop-up ad, his browser would be directed to the website “Youplay-time.net,” which is not affiliated with the website (“April Dammann Website”) he had been viewing. Id. at ¶ 31.

Halperin alleges that “I Want This! causes computers to slow down, takes up bandwidth over an Internet connection, uses up memory, utilizes pixels and screen space on monitors, causes the loss of data, and otherwise frustrates the customary and intended uses of computers.” Id. at ¶37. To remedy these problems, “consumers are required to purchase remedial products, such as internal hard-drives or random access memory,” id. at ¶ 38, or “spend valuable time and money to investigate . how the malware can be removed,” id. at ¶40. Nowhere, however, does the amended complaint allege that Halperin has actually spent any money to remedy the problems caused by I Want This! or to remove it from his computer.

Discussion

I. Subject Matter Jurisdiction

A. CAFA Jurisdiction

Halperin alleges subject matter jurisdiction under the Class Action Fairness Act of 2005 (“CAFA”), 28 U.S.C. § 1332(d). Doc. 85 at ¶ 3. The amended complaint identifies Defendants as being citizens of New Jersey, Pennsylvania, and Canada, id. at ¶.¶ 8-10, 12-16, and because he is a citizen of Illinois, Halperin has alleged the minimal diversity necessary under CAFA. See 28 U.S.C, § 1332(d)(2)(A). As for the amount in controversy, Halperin alleges that each class member faces roughly $150 of damages (an estimate of what a professional would charge to uninstall I Want This! from a user’s computer, Doc. 85 at ¶ 4 & n.l), which means that if the class contains at least 33,334 people, CAFA’s $5 [1004]*1004million amount-in-controversy threshold is met. See 28 U.S.C. § 1332(d)(2).

The estimated population of the ten States in Halperin’s proposed multi-state class is more than 135 million, see

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123 F. Supp. 3d 999, 2015 U.S. Dist. LEXIS 72878, 2015 WL 3561509, Counsel Stack Legal Research, https://law.counselstack.com/opinion/halperin-v-international-web-services-llc-ilnd-2015.