IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

GEORGE LAGEN,

Plaintiff,

v.

UNITED CONTINENTAL HOLDINGS,

INC. and UNITED AIRLINES,

 Defendants.

Case No. 12 C 4056

Hon. Harry D. Leinenweber

MEMORANDUM OPINION AND ORDER

Before the Court is Defendants’ Motion to Dismiss Plaintiff’s

Amended Complaint. For the reasons stated herein, the Motion is

granted in part and denied in part. 

I. FACTUAL BACKGROUND

Plaintiff George Lagen (hereinafter, “Lagen” or “Plaintiff”),

on behalf of himself and others similarly situated filed a

Complaint against Defendants United Continental Holdings, Inc. and

United Airlines (collectively, “United” or “Defendants”) alleging

breach of contract, breach of the covenant of good faith and fair

dealing, and unjust enrichment. In the Complaint, Plaintiff claims

that when United Airlines merged with Continental Airlines, United

Airlines breached contractual obligations to its Mileage Plus

customers by revising the “lifetime benefits” the customers

receive. Pl.’s Amend. Compl. at 2 (emphasis in original). 

Plaintiff’s proposed class seeks to include those Mileage Plus
customers who achieved “Million Miler status.” Id. at 5. 

Plaintiff explains that attaining such status required a customer

to actually purchase (and presumably travel) one million miles on

United Airlines. After a member attained the Million Miler status,

Plaintiff claims that each member was entitled to lifetime benefits

of: 

a. A one-time award of three system-wide upgrades; b.

Two free regional upgrades every year; c. A 100% bonus on

the miles the customer flies every year; and d. Lifetime

Premier Executive status in United’s Mileage Plus

program, providing extra benefits and priorities such as

booking availability, pre-boarding advantages, upgrade

possibilities, and seating priority.

Id. 

 

Plaintiff contends that shortly after United Airlines merged

with Continental Airlines it announced a new, post-merger frequent

flyer program which resulted in a significant retroactive demotion

of benefits to Million Milers. Specifically, the Complaint alleges

that after the merger, Million Milers were no longer guaranteed

their Lifetime Premier Executive status, and instead became members

of a Gold status group (a third tiered group as opposed to a top

tiered group) who received fewer benefits than they did prior to

the merger. Plaintiff also claims that after the merger, Million

Milers no longer received 100% bonus on the miles they flew with

United and instead only received a 50% bonus. 

Plaintiff alleges that the reduction in benefits to the

Million Milers was a breach of contract. Plaintiff claims that

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United received substantial compensation and consideration from

Million Milers in exchange for benefits which United retroactively

ceased to provide Plaintiff and Plaintiff’s proposed class. Based

on these facts, Plaintiff also alleges that United breached the

covenant of good faith and fair dealing, and was unjustly enriched. 

On July 12, 2012, Defendants filed a Motion to Dismiss

Plaintiff’s Complaint pursuant to Federal Rules of Civil

Procedure 12(b)(1) and 12(b)(6). In their Motion, Defendants claim

that Plaintiff fails to establish standing and fails to state a

claim. 

Pursuant to an Executive Committee Order, this case was

transferred to this Court on December 6, 2012, in light of the

Honorable Judge Blanche Manning’s retirement. 

II. LEGAL STANDARD

Federal Rule of Civil Procedure 12(b)(1) allows the Court to

dismiss a case for lack of jurisdiction over the subject matter. 

FED. R. CIV. P. 12(b)(1). On a 12(b)(1) motion, the Plaintiff bears

the burden of establishing subject matter jurisdiction. In ruling

on a motion to dismiss under 12(b)(1), the Court accepts “as true

all facts alleged in the well pleaded complaint and draws all

reasonable inferences in favor of the plaintiff.” Scanlan v.

Eisenberg, 669 F.3d 838, 841 (7th Cir. 2012). 

Similarly, when evaluating dismissal under Rule 12(b)(6), the

Court takes all well pleaded allegations of the complaint as true

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and views them in the light most favorable to the plaintiff. 

Appert v. Morgan Stanley Dean Witter, Inc., 673 F.3d 609, 622 (7th

Cir. 2012). Under Rule 12(b)(6), a defendant seeks to dismiss if

the plaintiff “fail[s] to state a claim upon which relief can be

granted.” Stayart v. Yahoo! Inc., 623 F.3d 436, 438 (7th Cir.

2010). To satisfy the notice-pleading standard of Federal Rule of

Civil Procedure 8, a complaint must provide a “short and plain

statement of the claim showing that the pleader is entitled to

relief,” and must provide the defendant with fair notice of the

claim and its basis. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555

(2007). A claim has facial plausibility and survives dismissal

when the plaintiff pleads factual content that allows the court to

draw the reasonable inference that the defendant is liable for the

misconduct alleged. Appert, 673 F.3d at 622.

III. ANALYSIS

A. Motion to Dismiss Based on 12(b)(1)

Defendants argue dismissal is warranted pursuant to 12 (b)(1)

because Plaintiff lacks standing. Specifically, Defendants argue

that Plaintiff failed to allege that he has sustained an injury-infact. Plaintiff disputes this citing various paragraphs in his

Complaint. 

When a party challenges standing they are in effect

challenging the court’s subject-matter jurisdiction. Johnson v.

Merrill Lynch, Pierce, Fenner, & Smith Inc., No. 12-CV-2545, 2012

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WL 5989345, at *3 (N.D. Ill. Nov. 28, 2012). In order to establish

standing, a plaintiff must show a violation of a concrete,

particular legally protected interest, a causal relationship

between the defendant’s conduct and the plaintiff’s injury, and the

ability for the court to redress the plaintiff’s injury if the

court finds in the plaintiff’s favor. Lujan v. Defenders of

Wildlife, 504 U.S. 555, 559 (1992). 

Defendants admit that Plaintiff has alleged that he has lost

certain benefits as a result of the new Mileage Plus program.

However, Defendants claim that Plaintiff fails to establish a

“concrete and particularized” injury because Plaintiff fails to

state that he has flown or will fly on United in the future or that

he has actually been denied any of the lost benefits. Id. 

Defendants equate the Plaintiff’s claimed injury with the injury

the plaintiffs in Lujan v. Defenders of Wildlife alleged, which the

Supreme Court held to be insufficient for the purposes of

Article III standing. See, Lujan, 504 U.S. at 567. The Court

disagrees with Defendants’ analogy. 

In Lujan, a plaintiff filed a complaint challenging a rule

promulgated by the Secretary of Interior which interpreted the

Endangered Species Act of 1973. Id. at 558. The plaintiff in

Lujan claimed that his injury was the increase in rate of

extinction to endangered species. Id. at 562. In finding this

injury insufficient for the purposes of Article III standing, the

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Supreme Court held that while the desire to observe or use

endangered species “even for purely esthetic purposes, is

undeniably a cognizable interest for the purpose of standing . . .

the injury in fact test requires that the party seeking review must

be himself among the injured.” Id. at 563. 

Here, Plaintiff’s Complaint states that prior to the merger,

he enjoyed the benefits as a Million Miler. He further claims that

he “like thousands of others, has seen his bargained for benefits

unlawfully stripped away.” Pl.’s Amend. Comp. at 2. The Court

finds this allegation combined with the others Plaintiff references

in his response brief distinguishable from the injury alleged in

Lujan. 

As further support, the Court finds Greenburg v. United

Airlines, 563 N.E.2d 1031 (Ill. App. Ct. 1990), instructive. In

Greenburg, two plaintiffs sued United Airlines claiming that

changes to the company’s Mileage Plus frequent flier program

breached a prior contract between the parties. Id. at 1034. In

affirming a trial court’s dismissal of the plaintiffs’ complaint,

the Illinois Appellate Court found that the plaintiffs failed to

allege an injury. The complaint in Greenburg alleged that

plaintiffs suffered the injury of not being able to use or receive

benefits from their previously accrued miles. In finding this

claim insufficient, the Appellate Court noted that the plaintiffs

failed to allege “an intention to use mileage after 1994” which was

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the time limit United had set under the rule change. Id. at 1035. 

In fact, in Greenburg, the plaintiffs admitted that they had

redeemed accrued miles since the change in the Mileage Plus Program

became effective. Thus, the court determined that plaintiff failed

to allege “a present actual loss” and instead based their claims

upon “vested rights [that] would be terminated by 1994.” Id. at

1036 (emphasis in original).

The Court finds Greenburg factually similar to the case at

bar, but in the same breath finds the Plaintiff’s allegations with

respect to his injury different from those asserted in Greenburg. 

Here, it is undeniable that Plaintiff claims he has and continues

to suffer an injury based upon his lost benefits. Specifically,

Plaintiff contends that Million Milers “were guaranteed Lifetime

Premier Executive status for life” and under the new program are

denied such benefits. Pl.’s Amend. Compl. at 6. Plaintiff does

not base his claims on the fact that his benefits are going to be

terminated at some future date. Plaintiff claims the termination

of benefits has already occurred. Taking these allegations as

true, the Court finds that Plaintiff sets forth an Article III

injury sufficiently. As such, the Court denies Defendants Motion

to Dismiss Pursuant to Rule 12(b)(1). 

B. Motion to Dismiss Based Upon 12(b)(6)

Defendants argue in the alternative that dismissal is

warranted because Plaintiff’s Complaint fails to state a claim. 

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Defendants argue that the Court should dismiss Plaintiff’s breach

of contract, breach of covenant of good faith and fair dealing and

unjust enrichment claims. 

1. Count I: Breach of Contract 

Attached to their Motion to Dismiss, Defendants provide what

they contend is the contract Plaintiff claims Defendants breached. 

Defendants assert that the Court is permitted to consider this

contract without transforming their motion to one for summary

judgment since the alleged contract is mentioned in Plaintiff’s

complaint and central to Plaintiff’s claims. Defendants also state

that a plain reading of the contract illustrates that Defendants

are not in breach. Plaintiff disputes these contentions, arguing

that the Court should exclude from its consideration the

aforementioned documents, and that those documents are not the

contract pertinent to Plaintiff’s claims.

As a preliminary matter, the Court agrees with Defendants with

respect to its ability to consider the document which Defendants

argue is the contract which Plaintiff claimed they breached. The

Court recognizes that as a general rule, when reviewing a motion to

dismiss pursuant to Rule 12(b)(6), the Court should only consider

the pleadings. However, Rule 10(c) instructs, “[a] copy of any

written instrument which is an exhibit to a pleading is a part

thereof for all purposes.” FED. R. CIV. P. 10(c). Moreover, the

Seventh Circuit has held that “[d]ocuments attached to a motion to

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dismiss are considered part of the pleadings if they are referred

to in the plaintiff’s complaint and are central to his claim.” 

Wright v. Assoc. Ins. Cos. Inc., 29 F.3d 1244, 1248 (7th Cir.

1994). Indeed, the Seventh Circuit has reasoned such a rule is

intended to apply for cases like this which involve the

interpretation of a contract. Levenstein v. Salafsky, 164 F.3d

345, 347 (7th Cir. 1998). 

The Court’s consideration of such documents (ECF 10-1, Ex. 1

& Ex. 2), does not however, mean that the Court is required to

adopt Defendant’s allegations regarding the effect of such

documents – namely, that exhibits 1 and 2 are the contract which

Plaintiff claims Defendants breached. See Rosenblum v.

Travelbyus.com Ltd., 299 F.3d 657, 661 (7th Cir. 2002) (stating

that a court can “form its own conclusion as to the proper

construction and meaning to be given” to such documents). In fact,

the Court disagrees with Defendants’ contentions. The Court does

not deny that exhibits 1 and 2 appear to be the terms and

conditions of the Mileage Plus program United had in effect at the

time Plaintiff was a member. However, after examining the

exhibits, the Court does not find any mention of Million Miler

membership or the benefits a member receives after flying 1,000,000

miles. ECF No. 10-1, Ex. 1 & Ex. 2. While Plaintiff’s Complaint

states explicitly that the Million Miler Program was part of the

Mileage Plus Program, Plaintiff and his proposed class are not mere

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Mileage Plus members. Instead, the Complaint is clear that

Plaintiff and his proposed class are Million Miler Program members. 

Therefore, at this stage of the litigation, the Court finds it

plausible that Defendants had a contract with Million Miler members

which differed from the contract they had with other Mileage Plus

members. 

In his response opposing Defendant’s Motion, Plaintiff argues

that exhibits 1 and 2 are not the contract Plaintiff seeks to

enforce and points out that these documents do not contain the

terms Plaintiff alleges Defendants breached. Plaintiff lists the

denial of lifetime benefits which Defendants allegedly promised him

in exchange for his purchase of airline tickets as the breach. 

Again, these benefits do not appear in exhibits 1 and 2. Thus, the

Court rejects Defendants’ argument that exhibit 1 and 2 illustrate

that Plaintiff cannot establish breach. 

In addition to finding that Plaintiff has alleged a breach,

the Court also finds Plaintiff has pled sufficiently the other

elements required for a breach of contract claim – namely, the

existence of a valid contract, substantial performance by the

plaintiff and resulting damages. See Reger Development LLC v.

National City Bank, 592 F.3d 759, 764 (7th Cir. 2010); see also

Petri v. Gatlin, 997 F.Supp. 956, 965 (N.D. Ill. 1997) (denying a

motion to dismiss a breach of contract claim because the plaintiff

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generally alleged the existence of a contract, a defendant’s

breach, and resulting damages). 

Of course, as this case proceeds, it will be Plaintiff’s

burden to prove (not plead) that a contract exists between

Plaintiff’s proposed Million Miler class and United that differs

from the Mileage Plus contract United argues is the contract

Plaintiff seeks to enforce. In order to make this showing,

Plaintiff will need to provide the Court more than mere

allegations. However, given this is only the pleading stage, the

Court finds Plaintiff’s allegations sufficient to survive

dismissal. See Tibor Mach. Products, Inc. v. Freudenberg-NOK

General Partnership, 976 F.Supp. 1006, 1011 (N.D. Ill. 1997)

(“. . . at the pleading stage, Tibor [the plaintiff] need only

allege rather than prove - the existence of a valid contract.”). 

Accordingly, the Court denies Defendants’ Motion to Dismiss

Plaintiff’s breach of contract claim. 

2. Count II: Breach of Covenant of 

Good Faith and Fair Dealing

Defendants also move for dismissal of Count II of Plaintiff’s

Complaint, which alleges that Defendants are liable for their

breach of the covenant of good faith and fair dealing. Defendants

argue that dismissal is appropriate because Illinois courts do not

recognize an independent cause of action for breach of the covenant

of good faith and fair dealing and the Airline Deregulation Act

preempts such claims.

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The duty of good faith and fair dealing is an interpretative

tool that assists the Court in interpreting the terms of the

contract and the intent of the parties. See Cromeens, Holloman,

Sibert, Inc. v. AB Volvo, 349 F.3d 376, 395 (7th Cir. 2003). While

under Illinois law every contract contains the implied covenant of

good faith and fair dealing, it is “not generally recognized as an

independent source of duties giving rise to a cause of action.” 

Voyles v. Sandia Mortg. Corp., 751 N.E.2d 1126, 1131 (Ill. 2001);

see also, APS Sports Collectibles, Inc. v. Sports Time, Inc., 299

F.3d 624, 628 (7th Cir. 2002). As an aside, the Court finds

Illinois law applicable in this case as neither party has raised a

conflict of law issue and Plaintiff had every opportunity to do so

in his response. See RLI Insurance Co. v. Conseco, Inc., 543 F.3d

384, 390 (7th Cir. 2008) (instructing federal courts to apply the

law of the state in which they sit when neither party raises a

conflict of law issue in a diversity case). 

Thus, the Court finds Count II of Plaintiff’s Complaint fails

to state a claim and dismisses it with prejudice. 

3. Count III: Unjust Enrichment

Defendants argue that Plaintiff’s unjust enrichment claim must

be dismissed because the Airline Deregulation Act preempts such a

claim and because Illinois law does not permit a plaintiff to bring

a claim for both breach of contract and unjust enrichment. 

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The Airline Deregulation Act provides that “a State . . . may

not enact or enforce a law, regulation, or other provision having

the force and effect of law related to price, route, or service of

an air carrier that may provide air transportation under this

subpart.” 49 U.S.C. § 41713 (b)(1). The Airline Deregulation Act

incorporated this preemption provision so “[s]tates would not undo

federal deregulation with regulation of their own.” Travel All

Over the World, Inc. v. Kingdom of Saudi Arabia, 73 F.3d 1423, 1430

(7th Cir. 1996). In determining whether the preemption provision

applies to a state law claim, the Seventh Circuit determined that

the proper inquiry is “. . . whether the claims at issue either

expressly refer to the airline’s services . . . or would have a

significant economic effect on the airlines services.” Id. at

1434. 

Relying on this instruction, the district court in Levitt v.

Southwest Airlines Company, 846 F.Supp.2d 956, 959-60 (N.D. Ill.

2012), found a plaintiff’s unjust enrichment claim based on

unredeemed drink vouchers preempted. The Court finds Levitt

analogous with the instant case and accordingly dismisses

Plaintiff’s unjust enrichment claim. See also United Airlines,

Inc. v. Mesa Airlines, Inc., 219 F.3d 605, 607 (7th Cir. 2000)

(finding state common law claims count as an “other provision

having the force and effect of law” for the purposes of the

preemption provision of the Airline Deregulation Act.). 

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Count IV of Plaintiff’s Complaint purports to state a claim

for specific performance. In their Motion to Dismiss, Defendants

argue that this claim must be dismissed because specific

performance is not an independent cause of action. Plaintiff

responds, clarifying that Count IV is not intended to be an

independent cause of action, but instead is only an equitable

remedy sought for Plaintiff’s breach of contract claim. The Court

accepts Plaintiff’s explanation and finds Plaintiff’s request for

specific performance as a form of relief permissible. However, the

Court points out that Defendants are correct in their contention

that specific performance is not an independent cause of action,

and thus construes Plaintiff’s Amended Complaint to consist of only

three causes of action, two of which the Court is dismissing,

leaving only Plaintiff’s breach of contract claim. 

IV. CONCLUSION

For the reasons stated herein the Court denies Defendants’

Motion to Dismiss Count I; and grants Defendants’ Motion to Dismiss

Counts II and III. 

IT IS SO ORDERED.

Harry D. Leinenweber, Judge

United States District Court

DATE: 1/31/2013

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