02-9134.051-JCD June 23, 2005

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

GUSTAVO R. CALDERON, individually, )

and AIRBORNE BEEPERS & VIDEO, )

INC., an Illinois corporation, ) 

)

Plaintiffs, )

)

v. ) No. 02 C 9134

) 

SOUTHWESTERN BELL MOBILE SYSTEMS, )

LLC, d/b/a CINGULAR WIRELESS, )

)

Defendant. )

MEMORANDUM OPINION

Before the court is defendant’s motion to dismiss the Second

Amended Complaint. For the following reasons, the motion is

granted in part and denied in part.

BACKGROUND

 Plaintiff Gustavo R. Calderon is the president and majority

shareholder of plaintiff Airborne Beepers & Video, Inc.

(“Airborne”). Plaintiffs bring this suit against defendant

Southwestern Bell Mobile Systems, LLC, doing business as Cingular

Wireless (“Cingular”). Plaintiffs’ claims relate to Airborne’s

role as an authorized dealer for Cingular, a provider of wireless

communications services. We have recounted many of the facts at

issue in this case in prior memorandum opinions and will not repeat

them here. 
- 2 -

The instant motions concern plaintiffs’ Second Amended

Complaint. We previously dismissed all of the claims alleged in

the original complaint, some with prejudice and some without, and

gave plaintiffs leave to file an amended complaint. Plaintiffs did

so, resulting in another motion to dismiss. Again, we dismissed

some of the claims with prejudice and some without and gave

plaintiffs leave to file a second amended complaint. Now

defendants have moved for dismissal once more. We indicated to the

parties that briefing would not be necessary on this go-around, and

we have now reviewed the Second Amended Complaint. 

The Second Amended Complaint alleges the following claims:

violation of 42 U.S.C. § 1981 (Count I); violation of 42 U.S.C. §

1982 (Count II); common-law fraud (Count III); breach of contract

(Count IV); breach of the covenant of good faith and fair dealing

(Count V); and violation of the Illinois Franchise Disclosure Act,

815 ILCS 705/1 et seq. (Count VI). 

DISCUSSION

We must first address the state of plaintiffs’ pleadings. We

have repeatedly advised plaintiffs of the deficiencies in their

prior complaints and have given them repeated opportunities to

amend. In our previous memorandum opinions, we set forth clear and

explicit instructions and warned that failure to comply with them

could result in dismissal of all or certain claims with prejudice.
- 3 -

It appears, yet again, that plaintiffs have not followed all of our

instructions. 

For instance, as to the federal claims, we advised that

“plaintiff must describe the relevant alleged acts of

discrimination so that the court can discern whether acts were

directed against Calderon individually, as opposed to Airborne . .

. .” Calderon v. Southwestern Bell Mobile Sys., LLC, No. 02 C

9134, 2004 WL 2931321, at *3 (N.D. Ill. Dec. 13, 2004). We

instructed plaintiffs to specify exactly which conduct formed the

basis for each claim, within the relevant count. Instead,

plaintiffs have included an introductory fact section within the

Second Amended Complaint that contains a subsection with the

following heading: “The above named Cingular’s [sic] agents

discriminated against Plaintiff Gustavo Calderon from 1996 to March

15, 2003, as follows.” (Second Amended Complaint, ¶ 18.)

Paragraph 18 lists twenty-three purported instances of

discrimination. (Id. ¶ 18a-w.) Counts I and II, the federal

claims, simply incorporate those paragraphs without specifying if

all or some of them or which of them are the bases of the claims.

In addition, plaintiffs have, for the most part, failed to

fully comply with our instructions regarding their state-law

claims. We would be more than justified in dismissing the entire

Second Amended Complaint, but we will attempt to salvage what we
- 4 -

can notwithstanding plaintiffs’ failure to comply with our prior

order.

A. Counts I and II (42 U.S.C. §§ 1981 and 1982)

42 U.S.C. § 1981 prohibits discrimination on the basis of race

in the making, performing, and modifying of contracts. 42 U.S.C.

§ 1982 prohibits discrimination on the basis of race in the sale or

rental of property. Because they have a common origin and purpose,

§§ 1981 and 1982 are usually construed together. See Morris v.

Office Max, Inc., 89 F.3d 411, 413 (7th Cir. 1996). 

Counts I and II are brought by plaintiff Calderon, who alleges

that he is member of a racial minority and that Cingular intended

to discriminate against him on the basis of his race. As an

initial matter, we ask who is the proper plaintiff. In our first

memorandum opinion, we stated that we believed that only Calderon,

an individual, could bring a § 1981 claim. (Such a claim had not

yet been asserted.) In our latest memorandum opinion, we noted: 

The parties have not discussed, and we have not found

very much case law pertaining to, the issue of whether an

individual has the right to complain about discrimination

directed at his corporate employer. A further question

would be whether a corporate entity has standing to

assert a discrimination claim. If it does not (which

appears to be the general rule), then there is a question

regarding whether a corporate employee could assert such

a claim on the basis that he suffered detriment as a

result of discriminatory acts committed against his

employer.” 

Calderon, 2004 WL 2931321, at *3 n.5. 
- 5 -

1/ Thicket Ink had also acquired a racial identity “as a matter of law”

because it was an SBA-certified minority-owned business.

In the meantime, we have become aware of the Ninth Circuit’s

opinion in Thicket Ink Information Resources, Inc. v. Sun

Microsystems, Inc., 368 F.3d 1053 (9th Cir. 2004). The Ninth

Circuit held that “[w]hen a corporation has acquired a racial

identity, either as a matter of law or by imputation, then it can

be the direct target of discrimination and has standing to pursue

a claim under § 1981.” Id. at 1059. Plaintiff Thicket Ink had

assumed an “imputed racial identity” from its shareholders, who

were all African-American.1

 Id. 

Here, plaintiff Calderon, a Mexican national, is the

“[p]resident, owner and operat[or]” of Airborne (Second Amended

Complaint, ¶ 13), a closely held corporation of which Calderon is

the majority stockholder. The alleged acts of discrimination by

Cingular all relate to Airborne’s business operations. Under

Thicket Ink, Airborne acquires an imputed racial identity from

Calderon and therefore has standing to pursue a federal claim, not

Calderon. Thus, Airborne is the proper plaintiff for any federal

claims. 

As for the substance of the allegations, as stated supra, we

previously instructed plaintiffs to specify in each count which

conduct was the basis for which claim. The Second Amended

Complaint fails to do so. The best we can do to construe Count I
- 6 -

as sufficiently stating a claim is to attribute the allegations of

discrimination in ¶¶ 8, 16, and 18a-w to Count I. As discussed

supra, this claim is properly asserted by plaintiff Airborne and

pertains to discrimination in both the making and performance of

contracts. Thus, we will dismiss the § 1981 claim with prejudice

as to plaintiff Calderon, but without prejudice as to plaintiff

Airborne, because it is properly asserted by Airborne. Plaintiffs

will be given leave to file a third amended complaint in which

Airborne alone is the plaintiff asserting the § 1981 claim.

Paragraphs 8, 16, and 18a-w will be construed as the conduct that

forms the basis of the § 1981 claim, and they should be

incorporated into Count I itself in the third amended complaint. 

The § 1982 claim that is asserted in Count II must be

dismissed. Section 1982 claims involve discrimination in the sale

or rental of property. The Second Amended Complaint vaguely

alleges that Cingular “refus[ed] [Calderon] . . . to purchase,

leases [sic], sell, hold, and convey real and personal property”

and “did not allow him to secure leases or purchase storefronts in

communities made up of mainly White citizens.” (Second Amended

Complaint, ¶¶ 9-10.) Count II alleges that Cingular “did this to

prohibit plaintiff Calderon from expanding his company into a

geographical areas [sic] where mainly White citizens reside.”

(Id., ¶ 32.) Reading the complaint as a whole, it is evident that

Cingular purportedly refused to approve Calderon’s requests to
- 7 -

operate as a Cingular dealer at other locations. It does not

appear that plaintiffs are alleging that Cingular itself refused to

lease or sell any property to plaintiffs. The factual allegations

amount to another instance of refusal to enter into a “Sales and

Service” contract with Airborne, but not a refusal to sell or lease

property. Accordingly, plaintiffs do not state a § 1982 claim, and

Count II will be dismissed with prejudice.

B. Count III (Common-Law Fraud)

Plaintiffs appear to be asserting a fraudulent inducement

claim in Count III. We have previously dismissed the prior

incarnations of plaintiffs’ fraud claim for failure to meet the

particularity requirements of Federal Rule of Civil Procedure 9(b).

The Second Amended Complaint is not an improvement. The fraud

allegations are still hopelessly vague and far too imprecise.

Accordingly, Count III will be dismissed with prejudice. 

C. Count IV (Breach of Contract)

Count IV for breach of contract is brought by plaintiff

Airborne. When we previously dismissed the breach of contract

claim, we gave plaintiffs leave to amend the complaint and

instructed them to “specify exactly which alleged actions . . .

form the basis for the breach of contract claim; how those actions

constitute breach of contract; [and] which purported contract or

contracts were allegedly breached . . . .” Calderon, 2004 WL

2931321, at *5. 
- 8 -

Plaintiffs have again failed, in part, to follow our explicit

directions, in particular to specify which purported contract or

contracts were allegedly breached. Paragraph 6 of the Second

Amended Complaint sets forth the alleged contracts and states as

follows:

There were two contracts signed in 1996, the first was

known as “Access card” and the second was known as the

“Collection Center Agreement.” The contracts allowed

plaintiff Calderon to sell prepaid services only; he was

required to cancel all other contracts that he had with

other cellular carriers to become an exclusive agent for

Cingular. The other two contracts offered by Cingular to

plaintiff Calderon were known as Authorized Dealer

Agreement (Agreement). Plaintiff Calderon signed all

contracts herein on behalf of, and as owner of, Airborne.

He was required to be personal [sic] liable and a

guarantor of all the contracts that he signed. In

addition to these written contracts there were subsequent

oral contracts made with Cingular’s managers as

specifically set forth herein. 

(Second Amended Complaint, ¶ 6.) Paragraph 12 then alleges:

12. On January 17, 1996, Plaintiff Gustavo R. Calderon,

entered into the first contracts offered by Cingular

Known as “Access card” and later he entered into another

contract called: “Collection Service Agreement.”

Plaintiff Calderon, as President and majority stockholder

(owner) and operator, and the only decision maker, of a

closely held corporation, Airborne, entered into several

other contracts with Cingular.

13. On May 1, 1997, and on September 2, 1999, in the

State of Illinois, Plaintiff Gustavo R. Calderon as owner

and operator of Airborne entered into contracts with

Cingular. The contracts were known as the “Authorized

Dealer Agreement” (Agreement). . . . 

(Id., ¶¶ 12, 13.) Another section of the complaint, paragraphs 19-

24, is entitled “Breach of Contract” and sets forth purported
- 9 -

breaches of the Authorized Dealer Agreement. Then, in Count IV,

plaintiffs muddy the waters again by stating that “[i]n 1996, and

on May 2, 1997, and on September 2, 1999, in the State of Illinois,

plaintiff [Calderon], who is owner and operator of Airborne,

entered into a series of contracts with Cingular known as the

Authorized Dealer Agreement (Agreement) . . . .” (Id., ¶ 47.)

Various paragraphs of Count IV refer to breach of “all of the

contracts,” “said Agreements/contracts,” “the Agreement,” and “the

Agreements.” Which written agreements, then, are plaintiffs saying

were breached by what conduct? It is still unclear. 

To rescue what we can of this claim, we will construe Count IV

as stating a claim for breach of only the 1997 and 1999 Authorized

Dealer Agreements. Because the allegations as to other purported

agreements are indecipherable and do not conform with our prior

directions, the breach of contract claim is dismissed with

prejudice as to any other alleged breaches of any other purported

agreements, written or oral. Count IV is dismissed without

prejudice as to the 1997 and 1999 Authorized Dealer Agreements. In

the third amended complaint, Airborne should confine its breach of

contract allegations to those Agreements only, and should specify,

again, which provisions of these Agreements it claims were breached

and how they were breached. 
- 10 -

 

D. Count V (Breach of the Covenant 

of Good Faith and Fair Dealing)

We previously dismissed plaintiffs’ claim for breach of the

covenant of good faith and fair dealing and noted that under

Illinois law, it does not form the basis for an independent tort.

The dismissal was with prejudice, but plaintiffs reassert the claim

in the Second Amended Complaint. Even if plaintiffs are realleging the claim under a contractual theory, which does exist in

Illinois, see, e.g., Puthusserill v. Shell Oil Co., No. 02 C 2289,

2003 WL 22494790, at *2-3 (N.D. Ill. Nov. 4, 2003), the claim boils

down to breach of contract, which is already alleged in the Second

Amended Complaint. The claim for breach of the implied covenant of

good faith and fair dealing, then, is superfluous. Count V will be

dismissed with prejudice. 

E. Count VI (Franchise Disclosure Act)

Count VI alleges that Cingular violated the Illinois Franchise

Disclosure Act (the “Act”). The Act applies only to franchises; a

franchise is defined as “a contract or agreement . . . by which:

(a) a franchisee is granted the right to engage in the business of

offering, selling, or distributing goods or services, under a

marketing plan . . . prescribed . . . by a franchisor; and (b) the

operation of the franchisee’s business pursuant to such plan . . .

is substantially associated with the franchisor’s trademark . . .;
- 11 -

and (c) the person granted the right to engage in such business is

required to pay, directly, or indirectly, a franchise fee of $500

or more.” 815 ILCS 705/3(1). 

As we noted in a previous opinion, the 1999 Agreement

specifically states that Cingular and Airborne “acknowledge and

agree that their agency relationship arising from this Agreement

does not constitute or create a general agency, joint venture,

partnership, employment relationship or franchise between them.”

The Second Amended Complaint, however, alleges that the Agreement

(presumably referring to the 1997 and 1999 Agreements) did in fact

constitute a franchise agreement. Plaintiffs allege that by virtue

of the Agreement, Airborne was granted the right to sell Cingular’s

products and services; the operation of Airborne was substantially

associated with Cingular’s trademark; and that Airborne was

required to directly pay Cingular a $1000 franchise fee for the

right to sell Cingular’s products and services. Accordingly, Count

VI states a claim for violation of the Act and will not be

dismissed. See generally Brenkman v. Belmont Mktg., Inc., 410

N.E.2d 500, 503 (Ill. App. Ct. 1980) (“None of the criteria set

forth in the [Act] make the subjective intent of the parties a

determinative factor in identifying a franchise relation. Rather,

by statutory definition, a franchise exists where an agreement

meets three objective criteria.”). 
- 12 -

 

CONCLUSION

The motion of defendant Southwestern Bell Mobile Systems, LLC

d/b/a Cingular Wireless to dismiss the Second Amended Complaint is

granted in part and denied in part. Count I is dismissed with

prejudice as to plaintiff Calderon, but without prejudice as to

plaintiff Airborne. Count IV is dismissed without prejudice as to

the allegations concerning the 1997 and 1999 Authorized Dealer

Agreements, but is dismissed with prejudice as to any other

purported breaches of contract. Counts II, III, and V are

dismissed with prejudice. The motion is denied as to Count VI. 

Plaintiffs may file a third amended complaint by July 15,

2005, and are once again advised that the amendment must comply

with the pleading requirements outlined in this opinion. If the

third amended complaint does not do so, it will be dismissed

summarily with prejudice. 

DATE: June 23, 2005

ENTER: _____________________________________________

John F. Grady, United States District Judge