7th Circuit Dismisses Claims of Unfair and Deceptive Business Practices

In a recent case, the Seventh Circuit examined what constitutes unfair and deceptive business practices under the Illinois Consumer Fraud and Deceptive Business Practices Act and the Missouri Merchandising Practices Act.  The claims of unfair and deceptive business practices arose in the context of allegations by two appellants that a massage chain was advertising and selling one hour massages that only lasted for 50 minutes.

The court analyzed the issues of unfair and deceptive practices according to the elements of fraud under the heightened pleading standard required by the Federal Rule of Civil Procedure Rule 9(b) because, according to the court, the claims were based on an allegation that the massage chain intentionally misled consumers by hiding information on the length of massages.  The court further stated that unfairness claims that “sound in fraud” can implicate the heightened standards of Rule 9(b), that require complaints to state with particularity the circumstances constituting fraud, including specific allegations of the “who, what, when, where, and how” of the alleged fraud.

The court found that both appellants failed to adequately plead damages as required under both the Illinois Consumer Fraud and Deceptive Business Practices Act and the Missouri Merchandising Act.

The court also found that for one of the appellants, even if damages had been plead adequately, the allegations would still have failed to establish a requisite causation under Illinois law because the alleged deception was not the “but-for” cause of the injury, and a damages claim under the Illinois Consumer Fraud and Deceptive Business Practices Act requires that the plaintiff was deceived in some manner and damaged by the deception.  Additionally, the court found that the second appellant did not provide the “what” or the “how” of fraud, as required by Rule 9(b).  For the foregoing reasons, the claims were dismissed with prejudice.