IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

GEORGE LAGEN, on behalf of himself and

all others similarly situated,

Plaintiff,

v.

UNITED CONTINENTAL HOLDINGS, INC.

and UNITED AIRLINES, INC.,

Defendants.

)

)

)

)

) No. 12 C 4056

)

) Judge Blanche M. Manning

)

) Magistrate Judge Young B. Kim

)

)

PLAINTIFF’S MEMORANDUM IN OPPOSITION TO

DEFENDANTS’ MOTION TO DISMISS AMENDED COMPLAINT

Plaintiff, George Lagen, on behalf of himself and all others similarly situated, by his

undersigned attorneys Plaintiff’s Memorandum in Opposition to Defendants’ Motion to Dismiss

Amended Complaint, states as follows:

I. INTRODUCTION

Seeking to avoid answering for their sudden and unilateral decision to deprive customers

of valuable, bargained-for benefits of the Mileage Plus Program, Defendants United Continental

Holdings, Inc. and United Airlines, Inc. (collectively, “Defendants”) now move to dismiss

Plaintiff George Lagen’s (“Plaintiff”) Amended Complaint under Federal Rules of Civil

Procedure 12(b)(1) and 12(b)(6). Defendants’ Motion should be denied in its entirety. The

Amended Complaint more than sufficiently establishes Plaintiff’s standing to assert his claims

and pleads causes of action for breach of contract and breach of the covenant of good faith and

fair dealing. The Amended Complaint also sufficiently states Plaintiff’s claims for recovery in

the form of damages and equitable relief, including specific performance. Defendants attach

certain brochures to their Motion but give no indication of any assent to the terms of those

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documents by Plaintiff or anyone else. Meanwhile, Plaintiff has fully pled the terms of the

contract upon which he sues. Plaintiff’s claims should certainly not be dismissed even before

discovery can be taken to fully determine the facts and circumstances surrounding Defendants’

actions. 

II. ARGUMENT

A. Plaintiff Has Standing to Pursue His Claims

To accept Defendants’ argument that Plaintiff has not sufficiently alleged facts to

establish standing would require turning a blind eye to many of the allegations of the Amended

Complaint. “In ruling on a motion to dismiss for want of standing, the district court must accept

as true all material allegations of the complaint, drawing all reasonable inferences therefrom in

the plaintiff's favor.” Lee v. City of Chicago, 330 F.3d 456, 468 (7th Cir. 2003) (internal citation

omitted). “The plaintiff, as the party invoking federal jurisdiction, bears the burden of

establishing the required elements of standing.” Id., citing, Lujan v. Defenders of Wildlife, 504

U.S. 555, 561 (1992)). “Those elements are (i) an injury in fact, which is an invasion of a legally

protected interest that is concrete and particularized and, thus, actual or imminent, not

conjectural or hypothetical; (ii) a causal relationship between the injury and the challenged

conduct, such that the injury can be fairly traced to the challenged action of the defendant; and

(iii) a likelihood that the injury will be redressed by a favorable decision. Id. Defendants’ sole

argument regarding standing is that Plaintiff has not alleged an “injury in fact,” and specifically

that he does not meet the “concrete and particularized” and “actual or imminent, not conjectural

or hypothetical” requirements.

Defendants’ statement that “Lagen has not alleged any actual injury and any future

injuries are hypothetical and not imminent” is squarely belied by the Amended Complaint, which

contains, among other allegations establishing standing, the following:

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• “Million Mile Flyers’ bargained-for benefits have been taken away in breach of

United’s contractual agreements.” Am. Complaint (Doc. 4) at ¶4.

• “[Plaintiff] has been a loyal United Airlines customer for years and, based upon

the terms of the Mileage Plus Program, has spent hundreds of thousands of dollars

in purchasing airline tickets for United flights. He, like thousands of others, did

so on the belief his loyalty and massive expenditures would result in United

standing behind its pledge to award him with the promised lifetime benefits as a

Million Mile Flyer.” Id. at ¶5.

• “Mr. Lagen, like thousands of others, has seen his bargained-for benefits

unlawfully stripped away.” Id. at ¶6.

• “[Plaintiff] has flown extensively on United Airlines for years and was a member

of United Airlines’ Mileage Plus Program. Id. at ¶7.

• “United took away the promised and bargained-for lifetime benefits of Million

Mile Flyers.” Id. at ¶22.

• “When the new MileagePlus Program went into effect on January 1, 2012, it

resulted in an immediate and significant retroactive demotion of benefits to

Million Mile Flyers.” Id. at ¶23.

• “Plaintiff has been subject to “a severe cut in benefits including fewer bonus

miles for flights, a reduced chance of upgrades, and lower priorities in boarding

and seating assignments.” Id. at ¶24.

• “Million Mile Flyers no longer receive a 100% bonus on the miles they fly with

United. Instead, the percentage has been cut in half to only 50%.” Id. at ¶25.

• “[F]irst time Million Mile Flyers no longer get a one-time award of three

system-wide upgrades.” Id. at ¶26.

• “Million Mile Flyers no longer get the promised and bargained-for two regional

upgrades per year.” Id. at ¶27.

• “Million Mile Flyers paid substantial consideration for their promised lifetime

benefits in that they were required to obtain all the required miles by purchasing

tickets only for United flights.” Id. at ¶28.

• “[United] intends to continue its denial of the Class’s bargained-for benefits.” Id.

at ¶30.

• “United breached its obligations and retroactively ceased providing Plaintiff and

the Class their bargained-for benefits under the Million Mile Program.” Id. at ¶47.

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• “As a result of United’s breach, Plaintiff and the Class have been damaged.” Id. at

¶48.

These allegations, which must be accepted as true for purposes of Defendants’ Motion,

establish that Plaintiff has suffered an injury in fact due to Defendants’ actions. To satisfy this

aspect of standing, Plaintiff need only show that he has “sustained or [is] ‘immediately in danger

of sustaining some direct injury.’” New West v. City of Joliet, Nos., 2012 WL 366733 at *2

(N.D. Ill. 2012.) (internal quotation marks and citations omitted). Plaintiff’s allegations more

than sufficiently state that he was promised specific benefits by Defendants, that he paid

significant amounts of money for such benefits, and that such benefits were taken away from him

and the proposed class by Defendants, to his injury and that of the proposed class. As such, he

has thoroughly stated the basis for his claim that he “sustained. . . direct injury.” Id. Therefore,

Defendants’ Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1) is without

merit and should be denied.

B. Plaintiff Has Sufficiently Pled His Claim for Breach of Contract

Contrary to Defendants’ arguments, Plaintiff’s Amended Complaint, itself, sets forth the

terms of the contract upon which Plaintiff sues, and thus sets forth a plausible claim for

contractual relief. Plaintiff has not sued upon the brochures attached to Defendants’ Motion. 

Indeed, Defendants have produced no indication of assent by Plaintiff or anyone else to the

language of those documents or any part thereof. Plaintiff’s claims should certainly not be

dismissed based on Defendants’ unsupported allegation that documents attached to its Motion to

Dismiss somehow form a contract. Moreover, even if Plaintiff had assented to the language of

the brochures, such language cannot form the basis of a contract because, by the express terms of

the brochures, Defendants would have no obligation, whatsoever, toward Plaintiff or anyone

else, as they purportedly had the right to terminate the program or reduce benefits to zero, for

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any reason or no reason, from the outset of the relationship or at any time thereafter. The

brochure language therefore seeks to form an illusory agreement lacking contractual

consideration, or mutuality of obligation. Meanwhile, the terms set forth in the Amended

Complaint state a plausible claim for breach of contract. Defendants’ Motion should be denied.

“On a motion to dismiss under Rule 12(b)(6), the Court accepts the facts stated in the

complaint as true and draws reasonable inferences in favor of the plaintiff.” Levitt v. Southwest

Airlines Co., 2012 WL 695468 at *2 (N.D. Ill. 2012), citing, Hallinan v. Fraternal Order of

Police, 570 F.3d 811, 820 (7th Cir. 2009). “To survive the motion, the complaint must include

enough facts to state a claim for relief that is plausible on its face.” Levitt, 2012 WL 695468 at

*2, citing, Ashcroft v. Iqbal, 556 U.S. 662, 663 (2009). “A claim is plausible on its face when

the plaintiff pleads factual content that allows the court to draw the reasonable inference that the

defendant is liable for the misconduct alleged.” Levitt, 2012 WL 695468 at *2.

Defendants attach to their Motion the Declaration of Aileen Furlong and what appear to

be two brochures about the Mileage Plus Program. Doc. 10-1. This Court has previously

addressed the effect of such attachments:

As is well known, a motion to dismiss under Rule 12(b)(6) challenges only the

sufficiency of the complaint for failure to state a claim upon which relief may be granted,

General Elec. Capital Corp. v. Lease Resolution Corp., 128 F.3d 1074, 1080 (7th

Cir.1997), and the court's inquiry is generally limited to only the “pleadings.” See

Fed.R.Civ.P. 12(b)(6). If documents outside the pleadings are placed before the court on

a Rule 12(b)(6) motion, the court must either exclude such documents or convert the

motion to dismiss to a motion for summary judgment and afford the plaintiff an

opportunity to submit additional evidentiary material. Venture Assocs. Corp. v. Zenith

Data Sys. Corp., 987 F.2d 429, 431 (7th Cir.1992). The Seventh Circuit, however, has

created a narrow exception to this general rule when a defendant attaches a document to

its motion to dismiss and the document is mentioned in a plaintiff's complaint and

“central” to the plaintiff's claims. E.g., Id. (“Documents that a defendant attaches to a

motion to dismiss are considered part of the pleadings if they are referred to in the

plaintiff's complaint and are central to her claim.”); Levenstein v. Salafsky, 164 F.3d 345,

347 (7th Cir. 1998) (“[T]his is a narrow exception aimed at cases interpreting, for

example, a contract.”). In such circumstances, the documents are considered part of the

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1. If the Court allows consideration of the documents, Plaintiff asks that he be allowed to present

evidentiary material of his own after conducting sufficient discovery, consistent with Federal Rule of

Civil Procedure 12(d). See Collins, 2003 WL 21254256 at * 2.

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pleadings and may be considered in ruling on a motion to dismiss. Wright v. Associated

Ins. Cos. Inc., 29 F.3d 1244, 1248 (7th Cir. 1994).

Collins v. Sparacio, 2003 WL 21254256 at *1 (N.D. Ill. 2003) (emphasis added) (refusing to

consider documents attached to motion to dismiss even though such documents were mentioned

in the complaint, because they were not “central” to plaintiff’s claims).

The documents attached to Defendants’ Motion should be excluded from consideration.1

They do not fall within the “narrow” exception to the rule as stated by the Seventh Circuit

because they are not mentioned in the Amended Complaint and are not “central” to Plaintiff’s

claims. Plaintiff does not seek to enforce any term of the brochures Defendants attach and, in

fact, specifically rejects Defendants’ unsupported assertion that these documents form the basis

of an enforceable contract. The attachments are not signed in any manner, do not recite any

obligations of Defendants, and otherwise do not give any indication of a contractual

arrangement, as opposed to a unilateral expression of Defendants’ desire to attract customers

while not being held accountable for anything in connection with the Mileage Plus Program. 

Doc. 10-1 at 4-33. In short, the attachments are advertisements. The disclaimers in those

advertisements are certainly not contracts and, for present purposes, do not contain language

pertinent to Plaintiff’s claims. The contract Plaintiff does seek to enforce is set forth in the

Amended Complaint:

• “To become a Million Mile Flyer, customers had to actually fly 1,000,000 or

more miles solely on United flights.” Am. Complaint (Doc. 4) at ¶2.

• “In exchange for Million Mile Flyers’ purchase of tickets, United provided them

with certain lifetime benefits.” Id. at ¶3.

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2. Defendants’ argument that the current program’s “Gold” status is the equivalent of the former

program’s “Premier Executive” status, because both share the threshold requirement of flying 50,000 or

more miles per year, is highly misleading. Doc. 10 at 3. First, “Premier Executive” was formerly the

second tier while, under the new program, it is now the third tier, and benefits are diminished accordingly.

Am. Complaint (Doc. 4) at ¶14; Doc. 10 at 3. Second, Plaintiff’s Amended Complaint is based not on

Defendants’ renaming of the tier structure, but rather on Defendants’ unilateral withdrawal of

contractually guaranteed benefits for those who, like Plaintiff, reached Million Mile Flyer status. 

Moreover, Defendants’ comment that Plaintiff is in the “curious position of bringing a consumer class

action by arguing that United has made the program more consumer friendly” is absurd. Doc. 10 at 3-4. 

Plaintiff seeks to represent a class of Defendants’ customers who, like Plaintiff, were members of the

Million Mile Program. Am. Complaint (Doc. 4) at ¶31. There is nothing “curious” about his allegations

in this regard, as Plaintiff does not purport to represent airline consumers, in general (which he certainly

could not do).

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• “Under [the Mileage Plus Program], frequent flyers on United Airlines would

receive valuable benefits in exchange for purchasing tickets to fly on United

flights. Id. at ¶12.

• “United awarded customers who had flown one million miles with lifetime

Premier Executive status, inclusive of all Premier Executive benefits. To obtain

this status, a United customer needed to actually fly one million or more miles on

United flights only.” Id. at ¶14.2

• “The Million Mile Program was not simply a gimmick or give-away product

under which United could change the rules any time it wanted. It was a

bargained-for program whereby consideration was given – and taken – by both

United and the Million Mile Flyer members.” Id. at ¶15.

• “Given the hundreds of thousands of dollars Million Mile Flyer members would

pay for the required airline tickets and corresponding status, United provided – in

exchange – certain lifetime benefits.” Id. at ¶16.

• “The lifetime benefits Million Mile Flyers paid consideration for included:

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

b. Two free regional upgrades every year;

c. A 100% redeemable 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. at

¶17 (emphasis added).

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• “Million Mile Flyers obtained that status only through the purchase of actual

tickets for United flights.” Id. at ¶18.

• “United received substantial compensation and consideration from Million Mile

Flyers in exchange for the benefits it now has taken away.” Id. at ¶29.

• “Plaintiff and the Class had a contractual relationship with United.” Id. at ¶42.

• “The contractual relationship was supported by consideration by and for all

parties.” Id. at ¶43.

• “Plaintiff and the Class purchased airline tickets for United flights.” Id. at ¶44.

• “In return, United provided the benefits discussed above that were associated with

membership in the Million Mile Program.” Id. at ¶45.

• “Plaintiff and the Class purchased millions of dollars of airline tickets from

United in exchange for lifetime benefits under the Million Mile Program. Id. at

¶61.

At this stage, Plaintiff is not required to definitively set forth each and every term of his

contract with Defendants or even each element of his breach of contract cause of action. “A

plaintiff is not required to ‘plead facts that, if true, establish each element of a cause of action.’”

Corbisiero v. Bank of America Corp., 2009 WL 2386141 at *2 (N.D. Ill. 2009), quoting, Sanjuan

v. Amer. Bd. of Psychiatry & Neurology, Inc., 40 F.3d 247, 251 (7th Cir. 1994) (stating that “[a]t

this stage the plaintiff receives the benefit of imagination, so long as the hypotheses are

consistent with the complaint” and “[m]atching facts against legal elements comes later”). 

Nevertheless, the above-quoted allegations of the Amended Complaint do set forth the terms

upon which Plaintiff sues and specifically allege the existence of the contract, the consideration

for such contract, and the manner in which it has been breached. Moreover, Plaintiff has also

alleged that, upon the merger of Continental and United, Defendants gave assurances to Million

Mile Program members including the following: “[y]ou will continue to receive your benefits as

you always have. Lifetime elite benefits will continue in the single, combined program, which

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3. Since filing the Amended Complaint, Plaintiff has learned of additional definitive assurances

made by Defendants that lifetime Million Mile Program benefits would not change. As stated herein,

consideration of such materials is neither appropriate nor desirable at this stage because Defendants are

merely challenging the sufficiency of the allegations of the Amended Complaint. However, should the

Court find it appropriate to consider Defendants’ exhibits, Plaintiff asks that he be allowed to submit

further evidence of course of dealings after conducting sufficient discovery.

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will be announced by the end of 2011.” Am. Complaint (Doc. 4) at ¶21.3 While Plaintiff has

stated a claim for breach of contract even without such allegations, the parties’ course of

dealings is relevant to the analysis of Defendants’ Motion. Lachmund v. ADM Investor Services,

Inc., 191 F.3d 777, 787 (7th Cir. 1999) (“In order to gain the fullest understanding possible of

the parties' agreement and their purpose, we often must consider the course of dealings between

the parties and the totality of the business relationship.”).

Even if the exhibits attached to Defendants’ Motion could be considered terms of a

purported contract with Plaintiff, such terms would be unenforceable because they set forth an

agreement which is illusory and unsupported by valid contractual consideration. “[B]oth parties

to a contract must be bound for the agreement to be a valid contract.” S.J. Groves & Sons Co. v.

State, 444 N.E.2d 131, 134 (Ill. 1982) (overruled on other grounds by Rossetti Contracting Co.,

Inc. v. Court of Claims, 485 N.E.2d 332 (Ill. 1985)). “[A]s a general proposition. . . where one

of the parties to an agreement has the right arbitrarily to terminate the contract mutuality is

lacking.” People v. Davidson, 103 N.E.2d 600, 604 (Ill. 1952). “In its most elemental sense, the

doctrine of mutuality of obligation means that unless both parties to a contract are bound by its

terms, neither is bound.” Schwinder v. Austin Bank of Chicago, 809 N.E.2d 180, 193 (Ill. App. 1

Dist. 2004) (internal citation omitted). “Mutuality of obligation in bilateral contracts is but

another way of stating that consideration is essential.” Id. (citing 25 R. Lord, Williston on

Contracts § 67:42, at 332 (4th ed. 2002)). “The absence of mutuality of obligation could render

the contract invalid and unenforceable. Such a mutuality of obligation issue arises when there is

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one party to a contract that has an unfettered right to terminate the contract.” Id. (internal

citations and quotation marks omitted). 

In Stender v. National Bank of Chicago, a contract for sale of an apartment complex

purportedly allowed the purchaser to approve or disapprove of the documents relating to the

mortgages on the property and, if purchaser disapproved, the contract could be canceled “in his

sole discretion.” Stender v. National Bank of Chicago, 449 N.E.2d 873, 878 (1st Dist. 1983). 

The court held that this term rendered the contract unenforceable for lack of mutuality of

obligation. Stender, 449 N.E.2d at 878; see also Gardiakos v. Vanguard Communications, Inc.,

350 N.E.2d 210, 212 (3rd Dist. 1976) (“Mutuality of obligation is lacking, and neither party is

bound to an executory contract where one of the parties has the right to arbitrarily terminate it.”). 

In accordance with these authorities, the documents attached to Defendants’ Motion set

forth terms which, even if ostensibly agreed to by Plaintiff, would constitute an utterly illusory

agreement, lacking in mutuality of obligation. The January 1993 “Program Rules” include the

following as part of the “General Conditions”:

Mileage Plus membership and its benefits are offered at the discretion of United

Airlines, and United has the right to terminate the Program, or to change the Program

Rules, regulations, benefits, conditions of participation, or mileage levels, in whole or

in part, at any time with or without notice, even though changes may affect the value of

the mileage or Certificates already accumulated. United may, among other things,

withdraw, limit, modify or cancel any award; increase the mileage or number of

blackout days; or limit the number of seats available to any or all destinations. Members,

in accumulating mileage or certificates, may not be able to obtain all offered awards or

use awards to all destinations or on all flights. 

Doc. 10-1 at 16 (emphasis added). The March 2006 brochure contains nearly identical language.

(Doc. 10-1 at 32, under “General Conditions” and under “Award Redemption,” item 37.) 

According to this language, Defendants have effectively made no enforceable promise or

commitment to do anything at all. Instead, they have purportedly awarded themselves complete

“discretion” to do as they please with respect to Mileage Plus members “at any time with or

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without notice,” including cancelling any and all awards for any reason or no reason. This is the

antithesis of a contractual obligation supported by valid consideration. S.J. Groves & Sons Co.,

444 N.E.2d at 134; Schwinder, 809 N.E.2d at 193; Gardiakos, 350 N.E.2d at 212. Therefore, the

brochures Defendants attach to their Motion cannot form the basis of an enforceable contract

which would render Plaintiff’s contractual claims implausible. However, the fact that

Defendants’ exhibits do not form the basis of an enforceable contract does not mean there is no

contract between Plaintiff and Defendants entitling Plaintiff to relief. As discussed above, the

terms of the contract upon which Plaintiff sues are stated in the Amended Complaint, itself. 

Those allegations form a basis for contractual relief which is, for present purposes, more than

merely plausible. Defendants’ Motion should therefore be denied.

C. Plaintiff’s Claim for Breach of the Covenant of Good Faith and Fair

Dealing Has Not Been Preempted by the Federal Airline Deregulation Act

Defendants argue Plaintiff’s claim for breach of the covenant of good faith and fair

dealing is an effort to impose a state-imposed regulation upon Defendants, and therefore, argue

Defendants, the claim has been preempted by the Airline Deregulation Act (“ADA”), 49 U.S.C.

§41713. In this regard, Defendants are inconsistent in claiming that the covenant of good faith

and fair dealing is simultaneously “extra contractual” and “not an independent source of duties

for the parties to a contract.” Doc. 10 at 10, 12. Plaintiff is entitled to relief for breach of this

implied covenant precisely because it is a term of the parties’ contract, and therefore the basis for

Plaintiff’s additional claim for breach of contract. See F.D.I.C. v. Rayman, 117 F.3d 994, 1000

(7th Cir. 1997) (“[A]bsent express disavowal, a covenant of good faith and fair dealing is

implied in every Illinois contract.”) Moreover, the United States Supreme Court has made clear

that such claims do not fall within the purview of the FAA’s preemption clause. Defendants’

Motion should therefore be denied in this respect.

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While observing that the ADA’s preemption clause has the purpose of preventing states

from nullifying the effects of the ADA “through the application of restrictive state laws,” the

Supreme Court found as follows:

We do not read the ADA's preemption clause, however, to shelter airlines from

suits alleging no violation of state-imposed obligations, but seeking recovery

solely for the airline's alleged breach of its own, self-imposed undertakings. As

persuasively argued by the United States, terms and conditions airlines offer and

passengers accept are privately ordered obligations “and thus do not amount to a

State's ‘enact[ment] or enforce[ment] [of] any law, rule, regulation, standard, or

other provision having the force and effect of law’ within the meaning of [§]

1305(a)(1).” Brief for United States as Amicus Curiae 9. Cf. Cipollone v. Liggett

Group, Inc., 505 U.S. 504, 526, 112 S.Ct. 2608, 2612, 120 L.Ed.2d 407 (1992)

(plurality opinion) (“[A] common-law remedy for a contractual commitment

voluntarily undertaken should not be regarded as a ‘requirement ... imposed under

State law’ within the meaning of [Federal Cigarette Labeling and Advertising

Act] § 5(b).”). A remedy confined to a contract's terms simply holds parties to

their agreements-in this instance, to business judgments an airline made public

about its rates and services.

American Airlines, Inc. v. Wolens, 513 U.S. 219, 228-29 (1995). Thus, contractually-centered

“common law” claims, as opposed to state regulatory enactments directed at those areas

governed by the ADA, are not preempted. Based on the Supreme Court’s ruling in Wolens and

the structure of the ADA itself, the Ninth Circuit has recently expressly held that claims for

breach of the covenant of good faith and fair dealing are not preempted by the ADA. Ginsberg

v. Northwest, Inc., 2012 WL 2869981 (9th Cir. 2012). That court noted that the preemption

clause, 49 U.S.C. Section 41713(b), cannot be read in isolation but rather must be viewed in light

of the ADA’s “savings clause,” 49 U.S.C. Section 40120(c), providing that “[a] remedy under

this part [the ADA] is in addition to any other remedies provided by law.” Ginsberg, 2012 WL

2869981 *3, 6-7. The court found as follows:

In Charas [160 F.3d 1259 (9th Cir. 1998)] we concluded that, taken together, the

savings clause and preemption clause “evidence congressional intent to prohibit

states from regulating the airlines while preserving state tort remedies that already

existed at common law, providing that such remedies do not significantly impact

federal deregulation.” Id. at 1265. Similar logic would apply to state contract

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remedies that already existed at common law, such as the implied covenant of

good faith and fair dealing. See Wolens, 513 U.S. at 232–33 (explaining that the

preemption clause, “read together with the ... savings clause,” would permit

“state-law-based court adjudication of routine breach-of-contract claims”).

Ginsberg, 2012 WL 2869981 *6 (emphasis added). Therefore, concluded the Ninth Circuit, “[a]

claim for breach of the implied covenant of good faith and fair dealing does not interfere with the

deregulatory mandate.” Ginsberg, 2012 WL 2869981 *7. The court summarized the analysis in

that case as follows: “Northwest is free to invest in a frequent flier program; however, that

economic decision means that the airline has to abide by its contractual obligations, within this

deregulated context, pursuant to the covenant of good faith and fair dealing.” Ginsberg, 2012

WL 2869981. The facts of Ginsberg cannot be distinguished from those of this case and no

Seventh Circuit opinion conflicts with its holding. The Ninth Circuit’s reasoning is sound and

should therefore be applied here.

Contrary to Defendants’ suggestion, Plaintiff does not argue that the covenant of good

faith and fair dealing is an “independent source of duties” for the parties to the contract. Doc. 10

at 12. To read the Illinois cases on this point in the manner urged by Defendants would be to

eliminate the covenant from consideration entirely, which is not the state of Illinois law. See Fox

v. Heimann, 872 N.E.2d 126, 134 (1st Dist. 2007) (“Where a contract specifically vests one of the

parties with broad discretion in performing a term of the contract, the covenant of good faith and

fair dealing requires that the discretion be exercised reasonably and with proper motive, not

arbitrarily, capriciously, or in a manner inconsistent with the reasonable expectations of the

parties.”). Rather, the cases cited by Defendants stand for the proposition that the covenant of

good faith and fair dealing cannot be viewed as an independent tort action, separate and apart

from the parties’ contractual duties and rights. Fox v. Heimann, 872 N.E.2d at 134; Voyles v.

Sandia Mortg. Corp., 751 N.E.2d 1126 (Ill. 2001) (“[T]his court refused to recognize an

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independent action in tort for breach of an implied covenant of good faith and fair dealing.”). 

Defendants’ additional argument that “there can be no violation of the covenant of good faith

and fair dealing when a party acts in accord with the parties’ agreement” simply puts forth the

evidentiary and factual disputes in this case as a reason for dismissal of Plaintiff’s claim. Of

course, the question before the Court is not whether Plaintiff or Defendants should prevail on the

merits, but instead whether Plaintiff has stated a plausible claim for relief. Plaintiff has done so. 

Defendants’ Motion should therefore be denied.

D. Plaintiff Is Entitled to Specific Performance

as a Remedy for Defendants’ Breach of Contract

Plaintiff has pled specific performance in a separate count not as an “independent cause

of action” (Doc. 10 at 13), but to clarify and emphasize that he seeks this form of equitable,

contractual relief in addition to damages. Am. Complaint (Doc. 4) at ¶¶60-64. Defendants cite

no authority for the proposition that Plaintiff’s designation of specific performance as a separate

count must correlate with an independent cause of action. There is no such requirement in the

Federal Rules of Civil Procedure. Moreover, Rule 10(b) expressly allows the use of separate

counts to “promote clarity.” The remedy of specific performance is fundamentally different than

the remedy of monetary damages. Rothner v. Mermelstein, 579 N.E.2d 1022, 1026 (1st Dist.

1991) (“Specific performance refers to the performance of the very (specific) thing called for by

the contract. This equitable remedy stands in contrast to the payment of money as a substitute

for performance. The remedy is based on the desire to do more perfect and complete justice,

which the remedy at law would fail to give.”). Plaintiff’s pleading of such remedy in a separate

count therefore promotes clarity, particularly in light of the fact that Plaintiff seeks relief on

behalf of himself and a large class of Defendants’ customers. Defendants therefore fail to state a

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legal reason why paragraphs 60 through 64 of the Amended Complaint, pertaining to specific

performance, should be dismissed.

III. CONCLUSION

Defendants’ Motion to Dismiss fails to establish why any of Plaintiff’s claims should be

dismissed. The Amended Complaint more than sufficiently establishes Plaintiff’s standing to

bring his claims. Plaintiff has pled the terms of the contract breached by Defendants with

substantial detail, and the documents attached to Defendants’ Motion are simply not related to

Plaintiff’s claims; nor do they constitute terms of any enforceable contract. Plaintiff is therefore

entitled to pursue his claims for relief in the form of monetary damages and specific

performance. Plaintiff respectfully asks that Defendants’ Motion to Dismiss be denied, and such

other relief as the Court deems just and proper. Should the Court be inclined to dismiss the

Amended Complaint or any portion thereof, Plaintiff respectfully requests leave for a reasonable

amount of time to amend the Amended Complaint to correct any deficiencies. See Holladay v.

CME Group, 2012 WL 3096698 at *5 (N.D. Ill. 2012) (granting motion to dismiss without

prejudice and granting leave to amend complaint).

GEORGE LAGEN, on behalf of himself and

all others similarly situated,

/s/ David H. Latham

By: 

One of His Attorneys

David H. Latham (#6198792)

Law Offices of David H. Latham

Suite 1400

150 North Wacker Drive

Chicago, Illinois 60606

(312) 782-1910

dhlatham@lathamlaw.net

John F. Edgar

Michael D. Pospisil

Edgar Law Firm LLC

1032 Pennsylvania Ave.

Kansas City, Missouri 64105

(816) 531-0033

jfe@edgarlawfirm.com 

mdp@edgarlawfirm.com

Case: 1:12-cv-04056 Document #: 23 Filed: 08/22/12 Page 15 of 16 PageID #:139
CERTIFICATE OF SERVICE

David H. Latham certifies that a copy of Plaintiff’s Memorandum in Opposition to

Defendants’ Motion to Dismiss Amended Complaint was served upon:

Patricia Brown Holmes

Sondra A. Hemeryck

Ayad P. Jacob

Schiff Hardin LLP

233 South Wacker Drive

Suite 6600

Chicago, Illinois 60606

by electronic means on this 22nd day of August 2012.

/s/ David H. Latham

David H. Latham

Case: 1:12-cv-04056 Document #: 23 Filed: 08/22/12 Page 16 of 16 PageID #:140