IN THE UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF ILLINOIS - EASTERN DIVISION 

LARRY HEARD, professionally known as 

“Mr. Fingers” and ROBERT OWEN, 

Plaintiffs, 

v. 

TRAX RECORDS, INC., 

PRECISION/TRAX RECORDS, an entity of 

unknown legal origins, RACHEL 

SHERMAN née RACHAEL CAIN p/k/a 

SCREAMIN’ RACHAEL, doing business as 

SCREAMING RACHAEL CAIN MUSIC 

and TRAX RECORDS, and JOHN DOES 1-

10, 

Defendants. 

Civil Action No. 1:20-cv-03678 (SJC) 

Honorable Sharon Johnson Coleman 

(Magistrate Sunil R. Harjani) 

PLAINTIFFS’ MEMORANDUM OF LAW IN 

OPPOSITION TO DEFENDANTS’ MOTION TO DISMISS 

 

MELONI & McCAFFREY, APC 

Robert S. Meloni (pro hac vice pending) 

Thomas P. McCaffrey (pro hac vice pending) 

3 Columbus Circle, 15th Floor 

New York, New York 10019 

Tel: (212) 520-6090 

Attorneys for Plaintiffs Larry Heard 

and Robert Owens

LEVENFELD PEARLSTEIN, LLC 

Christopher M Heintskill (ARDC No. 6272391) 

2 North LaSalle, 13th Floor 

Chicago, IL 60602 

Tel: (312) 346-8380 

Attorneys for Plaintiffs Larry Heard 

and Robert Owens 

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TABLE OF CONTENTS

Page

PRELIMINARY STATEMENT .................................................................................................... 1

ARGUMENT ................................................................................................................................. 1

I. APPLICABLE STANDARD UNDER FED. R. CIV. P. 12(b)(6)............................... 1

II. APPLICABLE STANDARD UNDER FED. R. CIV. P. 8(a)...................................... 3

III. APPLICABLE STANDARD UNDER FED. R. CIV. P. 9(b)...................................... 4

IV. PLAINTIFFS HAVE ADEQUATELY STATED ALL CLAIMS............................... 5

A. Count I Has Been Pleaded with Sufficient Particularity under Rule 9(b) .............. 5

B. Plaintiffs Have Stated A Claim For Counts I, II and III Under Rule 12(b)(6).........8

C. Plaintiffs Adequately Alleged A Claim under the Illinois Consumer Fraud 

Act........................................................................................................................... 9

D. Plaintiffs Have Adequately Pled Their Claim for Breach of the Warranty of 

Good Faith and Fair Dealing ................................................................................ 13

CONCLUSION............................................................................................................................. 15

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Now comes Plaintiffs Larry Heard and Robert Owens (“Plaintiffs”), by their undersigned 

attorneys, to oppose Defendants’ Motion to Dismiss the Complaint pursuant to Fed. R. Civ. P. 

12(b)(6) and Fed. R. Civ. P. 9(b), and states as follows:

PRELIMINARY STATEMENT

This motion is a sham.1 It cherry-picks allegations out of context in an attempt to misdirect 

the Court as to the facts alleged in the Amended Complaint (“Complaint”) and the law that applies

to those allegations on this motion to dismiss. 

As demonstrated below, Fraud on the Copyright Office has been clearly and particularly 

alleged in the Complaint in satisfaction of the legal requirements of Rules 12(b)(6), 8(a) and 9(b). 

Plaintiffs have also alleged a viable claim under the Illinois Consumer Fraud Act and for breach 

of the warranty of good faith and fair dealing. As a result, Defendants motion must be denied. 

ARGUMENT

I. APPLICABLE STANDARD UNDER FED. R. CIV. P. 12(b)(6).

A motion to dismiss receives careful scrutiny and is not often granted. See Conley v. 

Gibson, 355 U.S. 41, 45–46 (1957); Rothner v. Chicago, 929 F.2d 297, 302 (7th Cir.1991). The 

purpose of a motion to dismiss is not to decide the merits of the case, but, instead to test the 

sufficiency of the complainant’s allegations. See Avnet, Inc. v. Motio, Inc., Case No. 12 C 2100, 

2015 WL 5307515, *2 (N.D. Ill. Sept. 9, 2015) (citing Gibson v. City of Chicago, 910 F.2d 1510, 

1. Defendants’ instant motion is virtually identical to their prior motion to dismiss the original complaint [Dkt. 

No. 15]. In order to avoid needless motion practice and to move this case along, Plaintiffs elected to amend the 

complaint in lieu of responding to that motion, even though the original complaint had no legal infirmities. Defendants’ 

motion was stricken as moot [Dkt. No. 18]. The Amended Complaint that Defendants now seek to dismiss – consisting 

of eight claims and 168 detailed paragraphs – cured any of the purported issues already raised by Defendants. The 

original Complaint contained 144 paragraphs.

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1520 (7th Cir.1990)). The court must accept as true the allegations of the complaint and draw all 

reasonable inferences in favor of plaintiff, Lett v. City of Chicago, 946 F.3d 398, 399 (7th Cir. 

2020), and “offer[s] no opinion on the ultimate merits because further development of the record 

may cast the facts in a light different from the complaint.” Savory v. Cannon, 947 F.3d 409, 412 

(7th Cir. 2020). Defendant bears the burden of establishing the legal insufficiency of the 

complaint. Moriarty ex rel. Teamsters Local Union No. 727 Health & Welfare Fund v. K & M 

Plastics, Inc., No. 03 C 7295, 2004 WL 1170000, *1 (N.D. Ill. Feb. 6, 2004) (citing Yeksigian v. 

Nappi, 900 F.2d 101, 104–05 (7th Cir.1990)).

“To survive a motion to dismiss under Rule 12(b)(6), the complaint must state a claim to 

relief that is plausible on its face. Authenticom, Inc. v. CDK Global, LLC (In re Dealer Mgmt. Sys. 

Antitrust Litig.), 313 F. Supp. 3d 931, 938 (N.D. Ill. 2018). A claim has facial plausibility when 

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

defendant is liable for the misconduct alleged.” Yeftich v. Navistar, 722 F.3d 911, 915 (7th Cir. 

2013). In applying the plausibility standard, courts must accept the well-pleaded facts in the 

complaint as true. Alam v. Miller Brewing Co., 709 F.3d 662, 665–66 (7th Cir.2013). A

“heightened fact pleading of specifics” is not required. Killingsworth v. HSBC Bank Nevada, N.A., 

507 F.3d 614, 618 (7th Cir.2007). 

Because the focus of Rule 12(b)(6) motions is on the pleadings, Courts can review the 

complaint itself, documents attached to the complaint, documents that are critical to the complaint 

and referred to in it, and information that is subject to proper judicial notice. See Geinosky v. City 

of Chicago, 675 F.3d 743, 745 n. 1 (7th Cir.2012); Henson v. CSC Credit Services, 29 F.3d 280 

(7th Cir. 1994). Courts can take “[j]udicial notice of historical documents, documents contained 

in the public record, and reports of administrative bodies”. Peraica v. Village of McCook, Case 

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No. 10 C 7040, 2015 WL 5090484, *1 (N.D. Ill. Aug. 28, 2015) (quoting Menominee Indian Tribe 

of Wis. v. Thompson, 161 F.3d 449, 456 (7th Cir. 1998))2. 

II. APPLICABLE STANDARD UNDER FED. R. CIV. P. 8(a).

“To survive a Rule 12(b)(6) motion to dismiss, the complaint typically must comply with 

Rule 8(a) by providing ‘a short and plain statement of the claim showing that the pleader is entitled 

to relief,’ Fed. R. Civ. P. 8(a)(2), such that the defendant is given ‘fair notice of what the * * * 

claim is and the grounds upon which it rests.’” FDIC v. Patel, 19-cv-6917, 2020 U.S. Dist. LEXIS 

211441, *5-6 (N.D. Ill. Nov. 12, 2020) (quoting Bell Atl. Corp v. Twombly, 550 U.S. 544, 555, 

127 S. Ct. 1955 (2007)) (alteration in original)). The factual allegations in the complaint must be 

sufficient to raise the possibility of relief above the “speculative level.” EEOC v. Concentra Health 

Servs., Inc., 496 F.3d 773, 776 (7th Cir. 2007) (quoting Twombly, 550 U.S. at 555). 

However, “Rule 8(a) is ‘not so rigid that it requires a plaintiff, without the benefit of 

discovery, to connect every single alleged instance of misconduct in the complaint to every single 

specific officer.’” Gray v. City of Chicago, No. 18 C 2624, 2019 U.S. Dist. LEXIS 128198, 2019 

WL 3554239, at *5 (N.D. Ill. Aug. 1, 2019) (internal citations omitted). And “an allegation 

directed at multiple defendants can be adequate to plead personal involvement.” Rivera v. Lake 

County, 974 F. Supp. 2d 1179, 1194 (N.D. Ill. 2013) (“[A] plaintiff may not be able to attribute 

misconduct to specific individuals where the plaintiff did not know the identity of the offender at 

the time of the incident. In addition, where a plaintiff has been injured as the consequence of the 

actions of an unknown member of a collective body, identification of the responsible party may 

2. Moreover, although a “complaint may not be amended by the briefs in opposition to a motion to dismiss,” 

Agnew v. Nat’l Collegiate Athletic Ass’n, 683 F.3d 328, 348 (7th Cir. 2012), courts may “consider additional facts set 

forth in” a brief opposing dismissal “so long as those facts are consistent with the pleadings,” Phillips v. Prudential 

Ins. Co. of Am., 714 F.3d 1017, 1019-20 (7th Cir. 2013).

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be impossible without pretrial discovery.”) (citing Rodriguez v. Plymouth Ambulance Serv., 577 

F.3d 816, 821 (7th Cir. 2009)).

III. APPLICABLE STANDARD UNDER FED. R. CIV. P. 9(b).

When a complaint alleges fraud, the heightened Rule 9(b) standard applies, requiring the 

pleading to “‘state with particularity the circumstances constituting fraud.’” Camasta v. Jos. A. 

Bank Clothiers, Inc., 761 F.3d 732, 737 (7th Cir. 2014) (quoting Fed. R. Civ. P. 9(b)). “While the 

precise level of particularity required under Rule 9(b) depends upon the facts of the case, the 

pleading ordinarily requires describing the who, what, when, where, and how of the fraud.”

Camasta, 761 F.3d at 737 (internal citation and quotations omitted).

Rule 9(b)’s particularity requirement, however, is not inflexible and the “precise details 

that must be included in a complaint ‘may vary on the facts of a given case.’” Quitno v. General 

Motors, LLC, 1:18-cv-07598, 2020 U.S. Dist. LEXIS 26904 * 6-7 (N.D. Ill. Feb. 18, 2002) 

(internal quotations omitted). Moreover, the particularity requirement of Rule 9(b) remains 

tempered by the “short and plain” pleading requirement under Rule 8(a):

“The particularity requirement of Rule 9(b) should be read in conjunction with Rule 

8(a)’s ‘short and plain statement’ pleading requirement. Thus, it is not necessary 

that a plaintiff plead each fraudulent detail, so long as the circumstances 

constituting fraud have been set forth adequately. ‘[T]he who, what, when, and 

where aspects of the fraud need not be related with exact details in the complaint 

as a journalist would hope to relate them to general public.’ That is, it is only 

necessary to set forth a basic outline of fraud in order to alert the defendant of the 

purported fraud he is defending against.”

Handler v. Moore (In re Moore), 19bk31162, 2020 Bankr. LEXIS 2348 *17-18 (Bankr. N.D. 

Sept. 20, 2020) (citations omitted). Taken together, the result is clear, that if the Complaint states 

a plausible claim by setting forth the who, what, when and where of the misrepresentation, while 

at the same time pleading intent generally, and sets these forth in a plain statement, the Complaint 

meets the standards of Civil Rule 12(b)(6). Id. at *18. 

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IV. PLAINTIFFS HAVE ADEQUATELY STATED ALL CLAIMS.

As demonstrated below, Plaintiffs have satisfied the Rule 9(b) requirements in pleading 

their fraud on the copyright office by sufficiently alleging the who, what where and how the fraud 

at issue occurred. 

A. Count I For Fraud on the Copyright Office Has Been Pleaded with Sufficient 

Particularity under Rule 9(b).

Plaintiffs’ Complaint adequately describes the particularities of the fraud committed by 

Defendants on the Copyright Office by their application to register the copyrights in the sound 

recordings Can You Feel It, Washing Machine, Beyond the Clouds and Bring Down the Walls. See 

Complaint ¶¶93-115. 

1. Who: “Sherman and/or Cain, acting through their alter ego ‘Trax Records’” 

Complaint ¶99. “Cain, Sherman and Trax Records” Complaint ¶101.

2. What: “Trax Records submitted ‘Form SR’ applications to the Copyright 

Office when it applied for copyright registrations for the musical compositions 

and sound recordings entitled Can You Feel It, Washing Machine, Beyond the 

Clouds and Bring Down the Walls (the ‘Trax Applications’)” Id., ¶95. “By 

filing a combined copyright registration application using Form SR for the 

“sound recording and music” in the name of Trax Records for Can You Feel It, 

Washing Machine, Beyond the Clouds and Bring Down the Walls, Sherman 

and/or Cain, acting through their alter ego “Trax Records,” thus falsely asserted 

that they owned the copyrights for those Recordings.” Id., ¶104. “Neither “Trax 

Records” nor any of the other Defendants, including Cain, were ever assigned 

or transferred any copyright ownership interests in the Recordings. Thus, they 

were not – at any time since the date of creation of those Recordings – the 

copyright owner(s) thereof, including as of the date of filing of the Trax 

Applications.” Id., ¶107. 

3. When: “In or about 1986 and 1987” [on the date Tax submitted the Form SR 

Applications]. Id., ¶95. “February 26, 1987” Id., ¶99. 

4. Where: “the Copyright Office”. Id., ¶95.

5. How: “Cain, Sherman and Trax Records thus made knowingly false statements 

that they, or either of them, were assigned the copyrights in such Recordings 

‘by written contract’ or ‘transfer of all rights by author’ by Heard and/or Owens. 

Such false representations were made to the Registrar of Copyright under oath, 

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pursuant to 18 U.S.C. §1001, that they, or either of them, had obtained 

ownership of the copyrights in those Recordings through written transfers 

signed by Heard and/or Owens, when in fact they had never been assigned any 

such copyrights.” Id., ¶¶101-102. 

Thus, the above referenced factual allegations are stated with sufficient particularity to 

satisfy the requirements of Fed. R. Civ. P. 9(b). See Towada Audio Co. v. Aiwa Corp., 18-cv-4397, 

2019 U.S. Dist. LEXIS 41348, *21 (N.D. Ill. Mar. 19, 2019).

Defendants argument that Plaintiffs have not specified which of the Defendants committed 

the fraudulent acts is equally unavailing. “Where the defendants are corporate insiders or control 

the actions of an entity, this requirement is subject to some modification, especially in situations 

where defendants are in a better position to know the extent of each defendant’s participation in 

the complained of conduct.” P & P Marketing, Inc. v. Ditton, 746 F. Supp. 1354, 1362 ( N.D. Ill. 

1990) (citing Banowitz v. State Exchange Bank, 600 F. Supp. 1466 (N.D. Ill. 1985)) The key 

question is whether each defendant is given sufficient notice of their respective roles in order that 

they may answer the complaint. 746 F. Supp. at 1362.

Defendants have been given sufficient notice of their respective roles in the fraudulent 

activity to allow them to answer the Complaint:

A. Defendants, including Cain, at all relevant times acted in concert to improperly 

gain control and/or ownership of Heard’s and Owens’ intellectual property 

rights for their music and exploit that ownership and control to the Defendants’

individual and common benefit. Complaint ¶85; 

B. Among the unlawful acts they committed included falsely claiming copyright 

ownership of the four most popular recordings in the Form SR copyright 

applications for the recordings Can You Feel It, Washing Machine, Beyond the 

Clouds, and Bring Down the Walls by asserting under oath in those applications 

that “Trax Records” had been assigned the copyright ownership interest therein 

pursuant to a non-existent written copyright assignment. Id., ¶86;

C. Since 1986, the Recordings and the Compositions have been sold, distributed, 

or exploited either directly by the Defendants, or any one of them, or licensed 

by Defendants many times over to licensees throughout the world. Id., ¶87;

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D. Furthermore, some of the Recordings have been materially edited, remixed, and 

otherwise altered, without Heard’s and/or Owen’s knowledge or permission, 

including making derivative versions through the addition of other writers 

(including Cain). Id., ¶88. 

E. On February 26, 1987, Sherman and/or Cain, acting through their alter ego 

“Trax Records,” caused to be filed Form SR copyright applications with the 

Registrar of Copyrights seeking registrations in the name of “Trax Records” of 

the Sound Recording copyrights for Can You Feel It, Washing Machine and 

Beyond the Clouds and Bring Down the Walls, which Recordings were created 

and then owned by Heard and/or Owens. Id., ¶99; 

F. At the time such Form SR applications were filed, neither Cain, Sherman nor 

Trax Records owned ‒ at that time or any time thereafter ‒ any copyrights in 

and to the Recordings Can You Feel It, Washing Machine and Beyond the 

Clouds and Bring Down the Walls. Id., ¶100;

G. Cain, Sherman and Trax Records thus made knowingly false statements that 

they, or either of them, were assigned the copyrights in such Recordings “by 

written contract” or “transfer of all rights by author” by Heard and/or Owens.

Id., ¶101;

H. The Trax Registrations were procured by fraud by Sherman and/or Cain, based 

on the fraudulent representations of copyright ownership of the Recordings. Id., 

¶108;

I. Those false representations were made by Cain and/or Sherman knowingly and 

with the intent to defraud the Copyright Office into approving and then issuing 

the Trax Registrations. Id., ¶109;

J. Ownership of the copyright at issue is a material representation on an 

application for Copyright Registration. Id., ¶110;

K. The Registrar of Copyrights, had it known the truth ‒ that Heard and/or Owens 

were at the time the sole and exclusive owners of those copyrights ‒ would have 

refused the registration. Id., ¶111; and

L. As a result, the Trax Registrations must be invalidated since the information as 

to ownership and “transfer” were both knowingly false and material. Id., ¶112. 

Greater details as to each defendant’s individual involvement beyond this level of 

specificity is clearly within the exclusive knowledge of the Defendants and will be divulged in 

detail during the discovery phase of this litigation. 

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B. Plaintiffs Have Stated A Claim For Counts I, II and III Under Rule 12(b)(6).

Defendants argument that their copyright application constituted at most a non-actionable 

representation of the legal effect of the documents at issue rather than an actionable 

misrepresentation of fact intentionally conflates the allegations to purposely confuse the Court.3 

In so arguing, Defendants misstate the facts and the law to this Court.

Plaintiffs allege that Defendants misrepresented the fact that they owned the sound 

recording copyrights in their application to the Copyright Office. Complaint ¶86. The question of 

“ownership is a pure question of fact”. Niccum v. Meyer (In re Meyer), 97-2318, 97-2492/98-

2090. 1998 U.S. App. LEXIS 20886, *13 (7th Cir. Aug. 21, 1998). Defendants statement was a 

material misstatement of fact that fully supports Plaintiffs’ claim of Fraud on the Copyright Office. 

Moreover, the Complaint specifically alleges that the documents at issue only apply to the 

four musical compositions covered by the copyright registrations at issue and that “[when the] 

Form SR applications were filed, neither Cain, Sherman nor Trax Records owned ‒ at that time or 

any time thereafter ‒ any copyrights in and to the Recordings.” Complaint ¶¶70-73, 100. More 

specifically, the allegations expressly provide that the rights to any of the sound recordings made 

by Heard and/or Owens of those same compositions were not included in the documents at issue. 

Id., ¶¶74-75.4 Defendants’ false representations to the Copyright Office that it owned the 

copyrights to those sound recordings through assignments is a misrepresentation since no such 

3. Defendants blatantly misrepresent the allegations in the Complaint as follows: “the Plaintiffs admit entering 

into written agreements with Trax Records that transferred or assigned specific rights to the Sound Recordings and 

Compositions.” Defs. Memo, p. 10. That is false. See Complaint passim. 

4. A “sound recording” copyright protects rights in a specific recording of a musical work. A sound recording 

copyright is distinct from a “composition” copyright, which protects rights in the underlying work, i.e., the music and, 

if applicable, lyrics. 17 U.S.C. § 102(a)(2), (7).

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grants were ever made by Plaintiffs.

5

 This is another misrepresentation of existing fact -- i.e., the 

contents of the documents at issue – assigning the musical compositions only and non-exclusive 

mechanical licenses – as of the date the copyright applications were filed.6 See McVay v. Store 

House Co., 1:16-cv-00644-SEB-MJD, 2017 U.S. Dist. LEXIS 23688, *14 (S.D. Ind. Feb. 21, 

2017)(“Plaintiffs have identified an alleged misrepresentation of existing fact (i.e., the contents of 

the Agreement as of August 3, 2007)”). Thus, under Count I, Plaintiffs have stated an actionable 

claim for Fraud Against the Copyright Office under Rule 12(b)(6).7

C. Plaintiffs Adequately Alleged A Claim under the Illinois Consumer Fraud Act. 

While some courts analyze ICFA claims “under the heightened standard set forth in Federal 

Rule of Civil Procedure 9(b)” (Camasta v. Jos. A. Bank Clothiers, Inc., 761 F.3d 732, 736 (7th 

Cir. 2014)), allegations that a defendant violated the ICFA’s “unfair practices” prohibition, need 

not satisfy Rule 9(b)’s particularity requirement. Pirelli Armstrong Tire Corp. Retiree Med. 

Benefits Tr. v. Walgreen Co., 631 F.3d 436, 446 (7th Cir. 2011).Under the Rule 9(b) standard, the 

who, what, where, when and how are clearly stated in the Complaint: Who, is Defendants Trax 

Records, Inc., Cain doing business as “Trax Records” and Cain acting through her alter ego, Trax 

Records, Inc. 8 Complaint ¶¶99, 104, 106, 135, 145, 165-167; What, is Cain’s false claim that 

5. In section 4a of Form SR – the application for registration of a sound recording – a claimant who is not the 

author of the work being registered must include “a brief statement of how the claimant obtained ownership of the 

copyright.” For example: ‘By written contract’; ‘Transfer of all rights by author’; ‘Assignment’; ‘By will’”. The 

Complaint alleges that Trax Records, as the claimant of the sound recording copyrights, inserted the words “by written 

contract” or “transfer of all rights by author.” Complaint ¶98.

6. When the clear terms of a contract conflict with the party’s allegations, the contract controls. See Appert v. 

Morgan Stanley Dean Witter, Inc., No. 08–CV–7130, 2010 WL 5186765, *1 (N.D. Ill. Dec. 9, 2010).

7. Given that Defendants sole argument to support dismissal of Counts II and III is that Count I must be dismissed, 

the success of Count I disposes of their argument for Count II and III. 

8. Defendants’ contention that Plaintiffs have “impermissibly group[ed] all of the Defendants together” is a 

mischaracterization. Defs. Memo, p. 13; Complaint passim. Cain’s use of similar sounding legal entities for over 20 

years such as “Trax Records, Inc”, “Precision/Trax” and “Trax Records, Ltd.”, individually using the same corporate 

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Trax Records was the sole copyright owner of Plaintiffs most famous sound recordings; unlawfully 

licensing the Infringing Sound Recordings to Casablanca Trax, Inc.; improperly leveraging that 

fictitious ownership claim in order issue valuable sound recording copyright licenses to third 

parties; and deceiving collectors and consumers into purchasing their poor quality sound 

recordings. Id., ¶¶52-53, 135-138, 166-167; When, is “[s]ince early 2007”. Id., ¶165; Where, is 

Defendants’ office in Chicago. Id., ¶160; and the How, is “using the enormous goodwill and brand 

identifications of Hear and Owens – both of whom have been legends in the field of house music 

– to market and promote those recordings.” Id., ¶160. See Towada Audio Co. v. Aiwa Corp., 18-

cv-4397, 2019 U.S. Dist. LEXIS 41348, *21 (N.D. Ill. Mar. 19, 2019). 

Assuming arguendo, that Plaintiffs failed to satisfy Rule 9(b) pleading requirements, it is 

not required for an unfair practice claim under the ICFA that hinges upon a defendant’s allegedly 

“unfair or unscrupulous” behavior rather than deceptive behavior. Stavropoulos v. HewlettPackard Co., No. 13 C 5084, 2014 U.S. Dist. LEXIS 173964, 2014 WL 7190809, *3 (N.D. Ill. 

Dec. 17, 2014). Thus, an ICFA unfair practices claim does not have to meet the Rule 9(b) higher 

standard because it is not fraud-based. See Camasta, 761 F.3d at 737.9

A commercial practice is unfair under ICFA if it: (1) violates public policy, (2) is “so 

oppressive that the consumer has little choice but to submit,” and (3) causes substantial injury to 

name as a trade name, and the fact that the corporate defendants are all owned by Cain, requires that Plaintiffs refer 

to Cain and those entities as a group acting interchangeably and/or in concert over the years. The details as to each 

defendant’s individual involvement is within the exclusive knowledge of the Defendants and will be divulged in detail 

during the discovery phase of this litigation. See Complaint ¶¶55-66.

9. Plaintiffs need not plead legal theories. Vidimos, Inc. v Laser Lab, Ltd., 99 F.3d 217, 222 (7th Cir. 1996); see 

also Hall v. Nalco, 534 F.3d 644, 649 n.3 (7th Cir. 2008) (noting that even an incorrect legal theory is not fatal to a 

plaintiff’s claim). Thus, “[w]hile it may impose a heavy burden on the trial court to require it to search a complaint 

for any claim which may be stated therein, it is a burden that must be undertaken.” Rohler v. TRW, Inc., 576 F.2d 

1260, 1264 (7th Cir. 1978). In doing so, the Court construes the complaint liberally, treating well-pled allegations as 

true, and drawing all reasonable inferences in the plaintiff’s favor. Disability Rights Wis., Inc. v. Walworth County 

Bd. of Supervisors, 522 F.3d 796, 799 (7th Cir. 2008).

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the consumer. See Siegel v. Shell Oil Co., 612 F.3d 932, 935 (7th Cir. 2010). However, the claimed 

unfair practice need not meet all three criteria. Id. With respect to the first element, “there is a 

strong public policy interest in protecting copyrights.” See Erickson v. Trinity Theatre, Inc., 13 

F.3d 1061, 1066 (7th Cir. 1994). Defendants’ alleged conduct clearly violates that “strong public 

policy” interest in protecting Plaintiffs’ copyrights, through their sale of sound recordings, in 

which Defendants knew they had no copyright interest, to an unsuspecting public who were 

purchasing these recordings based upon their own strong associations between the recordings and 

Plaintiffs, as well as the consumer harm caused by Defendants sale of inferior recordings under 

the brand names of Heard and Owens. 

Despite Defendants’ disingenuous efforts to mischaracterize Plaintiffs’ ICFA claim, 

Plaintiffs pleading satisfies the pleading standard under Fed. R. Civ. P. 12(b)(6):

(1) Defendants have committed deceptive acts or practices, including, but not 

limited to, selling and distributing to the public from their offices in Chicago, 

Illinois, physical recordings and digital distribution (through streaming services 

or otherwise) of the Recordings under the representation that they owned and 

controlled such works, while using the enormous goodwill and brand 

identifications of Heard and/or Owens ‒ both of whom have been legends in 

the field of house music ‒ to market and promote those recordings. 

Complaint ¶160; and 

(2) Defendants have committed deceptive acts or practices, including, but not 

limited to, selling and distributing to the public from their offices in Chicago, 

Illinois, physical recordings and digital distribution (through streaming services 

or otherwise) of the Recordings under the representation that they owned and 

controlled such works, while using the enormous goodwill and brand 

identifications of Heard and/or Owens ‒ both of whom have been legends in 

the field of house music ‒ to market and promote those recordings. 

Id., ¶164.

Defendants‘ contention that Plaintiffs have not alleged that they suffered harm because of 

Defendants’ representations to the public ignore both the allegations of the Complaint and the law. 

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The Complaint alleges Plaintiffs “had independently carved out their own musical 

reputations as leaders in the house music movement” and that:

As a result of this historic, enduring cultivation of a loyal fan following of Heard 

and Owens (and Knuckles and Smith), each has risen to such prominence in the 

pantheon of House Music artists, that their music, including the songs at issue in 

this action, are associated with them by the public. 

Complaint ¶¶46, 48. It also clearly alleges that Defendants leveraged the enormous popularity, 

goodwill and brand identification between the public and Plaintiffs most popular songs to sell those 

sound recordings to the public as the owner of those sound recordings. Complaint ¶¶ 160-167.

Finally, the Complaint alleges that the sound recordings created by Plaintiffs, and 

unlawfully reproduced and sold by Defendants, are known to be of “cheap, poor quality vinyl” and 

that [l]isteners and [ ] collectors often complain about poor pressings with ‘pops’ and 

imperfections, reputedly from the use of cheap or recycled vinyl,”, which caused harm to the 

Plaintiffs’ reputation and professional brand. Complaint ¶¶52-53.

Under the standing requirements established by this Court in Pritikin v. Liberation Publs., 

Inc., 83 F. Supp. 2d 920 (N.D. Ill. 1999), Plaintiffs have stated their ICFA claim. In Pritiken, 

plaintiff photographer’s photograph was published without attribution or plaintiff’s permission in 

Defendants’ survey. The Court rejected Defendants’ argument that the IFCA claim was preempted, but nonetheless dismissed the claim on standing grounds:

But while Pritikin may be “a professional photographer, nationally recognized for 

having captured on film some of the most important people and events in recent 

history,” which I must assume to be true for the purposes of the motion, he does 

not allege that he has the appropriate sort of prominence or that the photograph is 

associated with him in the public mind. The requisite causal link is therefore 

lacking. Pritikin accordingly has no standing to bring the Consumer Fraud Act 

claim.

Pritikin, 83 F. Supp. 2d at 924. However, Plaintiffs here have alleged both Plaintiffs’ success and 

prominence as house music artists and the determinant missing causal link: that the sound 

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recordings exploited by Defendants to the public are associated with Plaintiffs in the public’s mind. 

Complaint ¶48. Plaintiffs were damaged because the poor quality of the product sold through the 

association the public had made between those songs and Plaintiffs, which negatively impacted 

Plaintiffs. In that way, the Complaint states that the public was deceived, and the Plaintiffs were 

directly damaged thereby, as required by the IFCA. 

D. Plaintiffs Have Adequately Pled Their Claim for Breach of the Warranty of Good 

Faith and Fair Dealing. 10

“The covenant [of good faith and fair dealing] requires a party vested with broad discretion 

to act reasonably and not arbitrarily or in a manner inconsistent with the reasonable expectations 

of the parties.” Cromeens, Holloman, Sibert, Inc. v. AB Volvo, 349 F.3d 376, 395 (7th Cir. 2003).

See also Beraha, 956 F.2d at 1444 (citing Dayan v. McDonald’s Corp., 466 N.E.2d 958, 972 (Ill. 

App. 1984). Thus, a more common use of the duty is to check the exercise of a party’s discretion 

under a contract. Bane v. Ferguson, 707 F. Supp. 988, 994 (N.D. Ill. 1989). 

“‘Good faith’ is a compact reference to an implied undertaking not to take opportunistic 

advantage in a way that could not have been contemplated at the time of drafting, and which 

therefore was not resolved by the parties.” Kham & Nate’s Shoes No. 2 v. First Bank, 908 F.2d 

1351, 1357 (7th Cir. 1990). It requires that a party vested with contractual discretion must exercise 

his discretion reasonably and may not do so arbitrarily or capriciously. Foster Enterprises, Inc. v. 

Germania Federal Sav. & Loan Assoc., 97 Ill. App. 3d 22, 30, 1981 Ill. App. LEXIS 2754, *16-

17 (June 4, 1981).

11 The dependent party, in turn, must rely on the party in control to exercise its 

10. Illinois courts have declared that every contract implies good faith and fair dealing between its parties. Beraha 

v. Baxter Health Care Corp., 956 F.2d 1436, 1443 (7th Cir. 1992). However, the covenant is not an independent 

source of contractual duties; rather, it “guides the construction of explicit terms in the agreement.” Id. 

11. See Wilson v. Career Educ. Corp., 729 F.3d 665, 675 (7th Cir. 2013) (“when one party’s contractual obligation 

is ‘contingent upon a condition particularly within the power of that party,’ the controlling party’s discretion in 

bringing about the condition is limited by the implied covenant of good faith.”).

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14

discretion fairly. Dayan v. McDonald’s Corporation, 125 Ill. App. 3d 972, 990, 466 N.E.2d 958, 

971, 81 Ill. Dec. 156, 169 (lst Dist. 1984). When a party fails to act in good faith, it acts in a manner 

inconsistent with the reasonable expectations of the parties. 125 Ill. App. 3d at 991.

Defendants argument for dismissing this claim boils down to one sentence: “Here, 

Plaintiffs does not identify any contractual term of any agreement granting Defendants with 

discretion.” Defs Memo. P. 11. This willfully ignores specific allegations regarding the 

agreements at issue: (a) with respect to the second document [the “Assignment of Copyright 

(Musical Composition)”] dated December 30, 1986, Plaintiffs allege that “[i]n exchange for this 

purported mechanical license, Precision/Trax promised to pay Heard a fixed amount of $3,000 

plus 15% ‘based on the sale of these records.’” Complaint, ¶72; and (b) with respect to the third 

document [the “Assignment of Copyright (Musical Composition)” dated November 30, 1986], 

Plaintiffs allege that in exchange for this purported mechanical license, Precision/Trax promised 

to pay Heard a fixed amount of $3,000 plus 15% “based on the sale of these records.” Id., ¶73.

Since the two documents are silent on the point of the manner and frequency of such royalty 

accountings, those duties were left to the reasonable discretion of Precision/Trax (and its 

successors) who was “granted implied, reasonable discretion as to when they should account and 

pay the royalties otherwise due and owing to Heard despite the contractual obligation to do so and 

have improperly exercised this discretion arbitrarily, capriciously and in bad faith by not 

accounting and paying anything to Heard” but abused that discretion by failing to ever account to 

or pay Plaintiffs. Id., ¶¶89-91, 152-156.

Where, as here, a time for performance is not specified in a contract, a reasonable amount 

of time will be implied. Prime Leasing, Inc. v. Vanderbilt University, No. 90 C 6828, 1991 U.S. 

Dist. LEXIS 19650, *17 (N.D. Ill. Dec. 17, 1991) (citing O’Brien v. Board of Education, 70 Ill. 

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15

App. 3d 604, 388 N.E.2d 1104, 1106 (5th Dist. 1979)). See Nelson v. Sotheby’s, Inc., 128 F. Supp. 

2d 1172, 1176 (N.D. Ill. 2001) (“in Illinois, where a contract does not specify a time for 

performance of a particular obligation, a ‘reasonable’ time is implied”).12 The reasonableness of 

Defendants exercise of their discretion to pay Heard the $3,000 and royalties due under these three 

documents will be measured against their general accounting practices. Thus, Defendants alleged 

complete failure to make any payments for thirty-five years is an abuse of Defendants’ discretion 

which supports Plaintiffs’ claim for Breach of Warranty of Good Faith and Fair Dealing. 

CONCLUSION

WHEREFORE, Plaintiffs respectfully request that the Court deny Defendants’ motion to 

dismiss under Rule 12(b)(6) in its entirety or in individual parts and request any such further relief 

that the Court may deem just and proper.

Dated: February 26, 2021

MELONI & McCAFFREY APC 

By: /s/Robert S. Meloni

 Robert S. Meloni, pro hac vice pending

 Thomas P. McCaffrey, pro hac vice pending

3 Columbus Circle, 15th Floor

New York, New York 10019

Tel: (212) 520-6090

Attorneys for Plaintiffs

LEVENFELD PEARLSTEIN, LLC

Christopher M Heintskill 

ARDC No. 6272391

2 North LaSalle, 13th Floor

Chicago, IL 60602

Tel: (312) 346-8380

Attorneys for Plaintiffs

12. Otherwise, the promise would be indefinite, and the contract would lack consideration. See Dasenbrock v. 

Interstate Restaurant Corp., 7 Ill. App. 3d 295, 1972 Ill. App. LEXIS 2258 *11-12 (5th Dist. 1972) (“Words of 

promise do not constitute a promise if they make performance entirely optional with the purported promisor. Such 

words, often referred to as forming an illusory promise, do not constitute consideration for a return promise” citing 

Restatement, Contracts, Tent. Draft No. 2 sec. 78, comment d, p. 47 (1965).). If that were the case, then Defendants 

would have no contractual right to exploit even the four musical compositions under these three documents.

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CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on February 26, 2021, the foregoing document is being served 

this day on all counsel of record or pro se parties identified on the attached Service List in the 

manner specified, either via transmission of Notices of Electronic Filing generated by CM/ECF or 

in some other authorized manner for those counsel or parties who are not authorized to receive 

electronically Notices of Electronic Filing. 

Richard P. Darke

Duane Morris LLP

190 S. LaSalle Street, Suite 3700

Chicago, IL 60601

(312) 499-6700

rpdarke@duanemorris.com

 

Dated: February 26, 2021

By: /s/ Robert S. Meloni

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