Freeman v. Mam USA Corp.

528 F.Supp.3d 849

Dominique FREEMAN, individually and on behalf of all other similarly situated, Plaintiffs,

v.MAM USA CORPORATION, Defendant.

No. 1:20-cv-01834

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

Signed March 23, 2021

Joseph Charles Bourne, Lockridge Grindal Nauen P.L.L.P., Melissa Susan Weiner, Pearson, Simon & Warshaw, LLP, Minneapolis, MN, Edwin Kilpela, Jr., Kelly K. Iverson, Carlson Lynch, LLP, Pittsburgh, PA, Kyle Alan Shamberg, Katrina Carroll, Carlson Lynch, LLP, Chicago, IL, for Plaintiff Dominique Freeman.

David Scott Becker, Martin D. Syvertsen, Freeborn & Peters, Chicago, IL, for Defendant.

MEMORANDUM OPINION AND ORDER

Edmond E. Chang, United States District Judge

In an effort to do what parents do—provide comfort and care to their children—Dominique Freeman bought "orthodontic" pacifiers made by child-products company MAM USA. R. 1, Compl. ¶¶ 17–19.¹ Based on MAM's representations, Freeman believed that the pacifiers would benefit her son's dental and oral health. Id. ¶¶ 17, 20. Recently, however, Freeman learned that many studies allegedly show that extended pacifier use, including "orthodontic" pacifier use, is harmful to children's health. Id. ¶¶ 37–79. She brought this proposed class action against MAM, alleging that MAM's false advertising of its orthodontic pacifiers—especially for children over 24 months of age—violates the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1, et seq. , the Illinois Uniform Deceptive Trade Practices Act, 815 ILCS 510/1, et seq. , and many other states’ consumer protection laws. She also brings claims for breach of warranty and unjust enrichment.²

MAM now moves to dismiss the claims under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). R. 21, Defendant's Motion to Dismiss (Def.’s Mot.). MAM argues that Freeman lacks standing to sue for injunctive relief, and that she has failed to allege the fraud necessary to state a claim. As explained in this Opinion, the Court agrees that Freeman lacks standing to sue for injunctive relief. Aside from that problem with injunctive relief, however, Freeman has adequately pled the elements of each of her claims, even under the heightened-pleading standard demanded by Civil Rule 9(b). MAM's challenges are largely fact-based and premature.

MAM also argues that Freeman cannot bring claims on behalf of out-of-state class members. MAM frames this as a standing argument, though it is really a challenge to the Court's personal jurisdiction over out-of-state plaintiffs (which means it is really a dismissal motion under Civil Rule 12(b)(2) ). As detailed in the Opinion, the Court concludes that it may exercise jurisdiction over out-of-state class members in this proposed nationwide class action. It is true that Freeman's eventual class-certification motion will require close scrutiny, but that is a different problem that does not bear on personal jurisdiction.

I. Background

In evaluating this motion to dismiss, the Court accepts as true the complaint's factual allegations and draws reasonable inferences in Freeman's favor. Ashcroft v. Al–Kidd, 563 U.S. 731, 734, 131 S.Ct. 2074, 179 L.Ed.2d 1149 (2011). MAM USA manufactures, distributes, and sells several different styles and colors of pacifiers, all of which are labeled "orthodontic" and purport to have an "orthodontic" nipple. Compl. ¶¶ 23–24. MAM sells its products online and through brick-and-mortar retailers such as Wal-Mart and Target. Id. ¶ 23. MAM pacifiers are labeled for different age groups, the last of which is "16+ months" with no upper age limit given. Id. ¶ 27. MAM's packaging and advertising emphasize the "orthodontic" nature of its products and extol the following benefits:

• "Specially sized for toddlers"

• "Orthodontic nipple promotes proper oral development"

• "Nipple adapts to baby's mouth"

• "Largest nipple to ensure maximum comfort and proper oral development as baby grows"

• "16+ nipple ensures proper development of baby's palate, teeth and gums as baby grows"

• "Symmetrical nipple ideal for baby's jaw development."

Id. ¶¶ 28–29. On its website, MAM also says it "collaborates with medical experts ... to help develop and design innovative, orthodontic soothers [pacifiers] that suit baby's various developmental stages." Id. ¶ 30.

Against the backdrop of that advertising, Freeman alleges that, in September 2019—and many other times over the previous two years—she bought a two-pack of MAM orthodontic pacifiers. Compl. ¶¶ 16–18. She paid about $8.99 for the pacifiers. Id. ¶ 17. Freeman's son was about 23 months old at the time, so she bought the pacifiers labeled for children ages "16+," intending to let him use them beyond the age of 24 months. Id. She had been buying MAM orthodontic pacifiers regularly for her son since birth. Id. ¶ 18.

Freeman now asserts that MAM's pacifiers in fact do not promote proper oral development or provide any other benefit to children. Compl. ¶¶ 17–20, 26, 35–79. She cites numerous studies allegedly showing that orthodontic pacifiers are no better than conventional pacifiers; extended use of any pacifier can harm children's orofacial development; and pacifier use past the age of 24 months is particularly harmful.

Id. ¶¶ 35–79. According to Freeman, MAM knew of the risks that the pacifiers pose to children but failed to disclose those risks to her and other consumers. Id. ¶ 33. She also alleges that she paid a premium price for MAM pacifiers because of their purported orthodontic benefits. Id. ¶¶ 8, 86. If Freeman had known that these benefits did not exist, she says, then she would either not have bought MAM pacifiers or would not have paid a premium for them. Id. ¶¶ 86–87.

As a result, Freeman filed this lawsuit against MAM, claiming that its pacifier advertisements are fraudulent, misleading, and deceptive in violation of the Illinois Consumer Fraud and Deceptive Businesses Practices Act (the Fraud Act), 815 ILCS 505/1, et seq. , the Illinois Uniform Deceptive Trade Practices Act (IDTPA), 815 ILCS 510/1, et seq. , and the consumer-protection laws of 30 other States. Compl. ¶¶ 110–146. She also brings claims for breach of warranty and unjust enrichment. Id. ¶¶ 147–162. Along with the claims on her own behalf, Freeman also seeks certification of nationwide, multi-state, and Illinois subclasses. Id. ¶¶ 95–103. In seeking dismissal of the Complaint, MAM's arguments present issues of standing, personal jurisdiction, and the adequacy of the pleading. Before evaluating the merits of each argument, the Court sets forth the governing standards of review.

II. Standards of Review

A. Standing / Rule 12(b)(1)

"Standing is an essential component of Article III's case-or-controversy requirement." Apex Digital, Inc. v. Sears, Roebuck & Co. , 572 F.3d 440, 443 (7th Cir. 2009). The plaintiff bears the burden of establishing subject matter jurisdiction, which includes the requirement of standing. Id. ; Ctr. for Dermatology & Skin Cancer, Ltd. v. Burwell , 770 F.3d 586, 588–89 (7th Cir. 2014). Civil Rule 12(b)(1) is the vehicle by which a defendant can challenge subject matter jurisdiction in a motion to dismiss. When evaluating a dismissal motion under this Rule, the district court "must accept as true all well-pleaded factual allegations and draw reasonable inferences in favor of the plaintiff." Ezekiel v. Michel , 66 F.3d 894, 897 (7th Cir. 1995). Having said that, when a key jurisdictional fact is disputed, the Court can also examine the record, beyond the allegations contained in the pleadings, to determine whether jurisdiction is proper. Long v. Shorebank Dev. Corp. , 182 F.3d 548, 554 (7th Cir. 1999).

B. Personal Jurisdiction / Rule 12(b)(2)

The plaintiff bears the burden of establishing that personal jurisdiction is proper when jurisdiction is challenged by the defendant. Purdue Research Foundation v. Sanofi-Synthelabo, S.A. , 338 F.3d 773, 782 (7th Cir. 2003). For personal-jurisdiction challenges, the operative rule is Federal Rule of Civil Procedure 12(b)(2). If material facts are disputed, then the Court must consider the need for discovery and perhaps an evidentiary hearing to resolve the disputes. Hyatt Int'l Corp. v. Coco , 302 F.3d 707, 713 (7th Cir. 2002). Then, "the plaintiff must establish jurisdiction by a preponderance of the evidence," Purdue Research Found. , 338 F.3d at 782, and "prove what it alleged," Hyatt Int'l Corp. , 302 F.3d at 713. This is in contrast to the normal rule for a motion to dismiss, under which "a judge must accept as true all of the factual allegations contained in the complaint." Erickson v. Pardus , 551 U.S. 89, 94, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007)

C. Adequacy of Claim: Rule 12(b)(6) and Rule 9(b)

"A motion under Rule 12(b)(6) challenges the sufficiency of the complaint to state a claim upon which relief may be granted." Hallinan v. Fraternal Order of Police Chicago Lodge No. 7 , 570 F.3d 811, 820 (7th Cir. 2009). "[W]hen ruling on a defendant's motion to dismiss, a judge must accept as true all of the factual allegations contained in the complaint." Erickson , 551 U.S. at 94, 127 S.Ct. 2197. A "complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). These allegations "must be enough to raise a right to relief above the speculative level." Twombly , 550 U.S. at 555, 127 S.Ct. 1955. And the allegations that are entitled to the assumption of truth are those that are factual, rather than mere legal conclusions. Iqbal , 556 U.S. at 679, 129 S.Ct. 1937.

Ordinarily, under Federal Rule of Civil Procedure 8(a)(2), a complaint generally need only include "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). But claims alleging fraud must also satisfy the...