Sotelo v. DIRECTREVENUE, LLC

Majority - Gettleman, District Judge

No, DR Holdings is not subject to personal jurisdiction in Illinois. The court found that DR Holdings, as a holding company, did not have the "minimum contacts" with Illinois required for jurisdiction. It did not engage in the alleged Internet-related business activities, was not registered to do business in Illinois, and maintained no offices, facilities, bank accounts, or personnel there. The court emphasized that a subsidiary's jurisdictional contacts are not automatically imputed to a parent company unless corporate formalities are disregarded or the subsidiary acts as the parent's agent, neither of which the plaintiff alleged. No, the litigation will not be stayed in favor of arbitration because the plaintiff has raised a triable issue of fact regarding whether he ever agreed to the EULA containing the arbitration clause. The court distinguished this case from `Tinder v. Pinkerton Security` by noting that while defendants claimed users had an opportunity to view the EULA via a hyperlink, plaintiff stated he downloaded software from a third-party, not DirectRevenue's website, and never saw the EULA. The court also rejected the argument that pop-up ad links to the EULA constituted notice, as Spyware was already installed and causing damage at that point. Yes, the plaintiff has sufficiently stated a claim for trespass to personal property. The court clarified that trespass to chattels only requires interference and damage, not full dispossession as in conversion. It analogized to "spam e-mail" cases (`CompuServe Inc. v. Cyber Promotions, Inc.`) where unsolicited electronic contact that overburdens computer systems and diminishes functioning constitutes actionable harm. Plaintiff's allegations that Spyware slowed his computer, depleted memory, used bandwidth, and caused pop-ups interfering with use were sufficient to plead damage and interference. For AccuQuote and aQuantive, the court found the allegations of intentional placement of advertisements through Spyware sufficient to satisfy the intent element, even without specific knowledge of DirectRevenue's unlawful activities. Yes, the plaintiff has sufficiently stated a claim for consumer fraud. The court noted that the Illinois Consumer Fraud Act covers deceptive business practices, not just fraud, and does not require heightened pleading standards under Fed.R.Civ.P. 9(b) if the claim is based on deceptive practices rather than fraud. Plaintiff clarified his claim was under the Deceptive Trade Practices Act, incorporated into the Consumer Fraud Act, thus meeting liberal federal notice pleading standards. No, the plaintiff has not sufficiently stated a claim for unjust enrichment. The court held that where a benefit flows from a third party to the defendant, the plaintiff must show the benefit should have gone to them (mistake, wrongful procurement, or better claim). Plaintiff failed to allege entitlement to the advertising fees or increased revenues earned by defendants, nor did he allege he paid money to any defendant. Yes, the plaintiff has sufficiently stated a claim for negligence. The court allowed alternative pleading (intentional acts vs. negligently caused damages). Plaintiff alleged DirectRevenue had a duty not to harm computers and that Spyware proximately caused damage. Allegations regarding distributor negligence were also sufficient at the motion to dismiss stage, as the relationship (independent contractor vs. agent) was a question of fact not to be decided based on outside documents. Yes, the plaintiff has sufficiently stated a claim for computer tampering under Illinois' Computer Crime Prevention Law (CPPL). The statute applies to knowingly inserting a program without authorization that may damage a computer. Plaintiff sufficiently alleged the installation of Spyware was unauthorized.