Airborne Beepers v. At & T Mobility LLC

Citation499 F.3d 663
Decision Date24 August 2007
Docket NumberNo. 06-2949.,06-2949.
PartiesAIRBORNE BEEPERS & VIDEO, INC., Plaintiff-Appellant, v. AT & T MOBILITY LLC, f/k/a Cingular Wireless LLC, Defendant-Appellee.
CourtU.S. Court of Appeals — Seventh Circuit

Diane M. Ainsworth (argued), Ainsworth & Associates, Chicago, IL, for Plaintiff-Appellant.

Veronica Gomez (argued), Neal, Gerber & Eisenberg, Chicago, IL, for Defendants-Appellees.

Before FLAUM, MANION, and WOOD, Circuit Judges.

WOOD, Circuit Judge.

The only question presented in this appeal is whether the district court abused its discretion in denying Airborne Beepers & Video, Inc., leave to file a fourth amended complaint. The district court decided that the plaintiff had been given enough chances and dismissed the case with prejudice. We find no abuse of discretion and thus affirm the judgment of the district court.


As this case did not advance beyond the motion-to-dismiss stage, we take the facts alleged in the plaintiffs' complaints as true. Gustavo R. Calderon is the owner and operator of Airborne, a retail store that sells among other things cellular, pager, and long-distance telephone services. On December 1, 1997, Airborne entered into an "Authorized Dealer Agreement" with Southwestern Bell Mobile Systems, Inc. ("Southwestern Bell"), which at the time did its business under the name Cellular One-Chicago. (Southwestern Bell became part of Cingular Wireless, which itself was later taken over by AT & T. We refer to the company as Southwestern Bell in this opinion, but we have modified the caption of the case to reflect the correct name of the company.) This agreement allowed Airborne to "solicit and contract on behalf of CELLULAR ONE, with Subscribers" for communications services in exchange for a commission fee based on the number of activations of new services. The parties renewed their agreement on September 9, 1999.

On January 1, 2002, when a year remained on this renewed contract, Southwestern Bell stopped paying Airborne commissions on activations for the preceding month, residuals (based on its customers' monthly bills), and commissions for sales of insurance. In addition, Southwestern Bell began taking back Airborne's commissions on accounts when the customers failed to pay their bills, directly contracted with customers who had originally signed up with Airborne and did not compensate Airborne for those accounts, and otherwise engaged in practices that Calderon considered breaches of the agreement.

Calderon responded with this lawsuit against Southwestern Bell, which he filed on December 17, 2002, as "Gustavo R. Calderon doing business as Airborne Beepers & Video, Inc." The original complaint contained eleven counts: breach of contract (Count I); a plea for an accounting (Count II); deceptive and fraudulent practices (Count III); breach of fiduciary duty (Count IV); unfair competition (Count V); tortious interference with business relationships (Count VI); unjust enrichment (Count VII); a pattern of racketeering in violation of the Racketeering Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961 et seq. (Count VIII); "illegal retaliation" (Count IX); "unlawful discrimination" (Count X); and intentional infliction of emotional distress (Count XI).

At that point, a seemingly endless round of motions all directed to the legal sufficiency of the complaint began; they were to continue for four and a half years. At the outset, the district court decided to treat Airborne as a plaintiff, after Southwestern Bell filed its first motion to dismiss the original complaint. In the next iteration, captioned the Verified Amended Complaint and filed on February 26, 2003, Calderon and Airborne were listed separately as plaintiffs. By the third amended complaint, Calderon had been dropped from the complaint and Airborne was the only plaintiff. With the exception of the first filing of the third amended complaint — which the court struck after it was submitted pro se by Calderon on Airborne's behalf but then permitted Airborne to file through an attorney — plaintiffs were represented by counsel throughout. (Airborne and Calderon have cycled through a number of attorneys; current counsel came in only to attempt the filing of the fourth amended complaint and the appeal of its denial.)

In response to each complaint, Southwestern Bell filed a motion to dismiss. (It filed a motion to strike the pro se third amended complaint.) The district court's patient and comprehensive ruling on the original complaint set the pattern for its rulings on plaintiffs' first two efforts at amendments. The court dismissed all of the claims in response to each of the four motions to dismiss. Each time, the court combed the complaint to identify the claims that could, if properly pleaded, survive another motion to dismiss. It dismissed with prejudice only those claims that had no merit and dismissed without prejudice other claims that apparently had only pleading defects.

Each time it acted, the court gave the plaintiffs detailed instructions about the pleading requirements for particular claims. For example, in its opinion on the motion to dismiss the initial complaint, the court noted that Count X, which charged unlawful discrimination in contracting in violation of 42 U.S.C. § 1981(a), "is a claim that could only be brought by an individual, not a corporation." In another portion of that opinion, the court advised plaintiffs that in order to present their RICO claim (Count VIII) properly, "plaintiff should avoid generalities and provide sufficient detail for defendant to understand the claim against it by stating the specific factual bases and identifying the alleged pattern of racketeering activity." (Apparently the court never required plaintiffs to file a more definite statement, as contemplated by Rule 12(e). Although Rule 12(e) appears to be a closer fit to the problem the court was experiencing than Rule 8, at this point the difference is unimportant.)

The court admonished the plaintiffs at the conclusion of each ruling about their responsibility to comply with the pleading requirements in order to survive a subsequent motion to dismiss. In dismissing the complaint the court advised the plaintiffs "that any amended complaint must comply with the pleading requirements outlined in this opinion." A sterner warning accompanied the dismissal of the verified amended complaint:

We advise plaintiffs' counsel to employ much greater care and precision in drafting a second amended complaint. This court has already devoted an inordinate amount of time to the pleadings in this case, which in large part have been woefully deficient. If any counts of the third amended complaint are similarly deficient, plaintiffs' counsel is warned that those counts will be dismissed with prejudice and/or could be subject to possible Rule 11 ramifications.

Finally, the court opened its opinion granting Southwestern Bell's motion to dismiss the second verified complaint by expressing its disappointment in Airborne's performance.

We have repeatedly advised plaintiffs of the deficiencies in their prior complaints and 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 claims with prejudice. It appears, yet again, that plaintiffs have not followed all of our instructions.

Nonetheless, it decided to permit Airborne to file a third amended complaint, even though it warned at the same time 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."

Throughout this series of dismissals the size of the complaint was shrinking, but the quality of what remained was not improving. By the time Southwestern Bell moved to dismiss the third amended complaint, the district court concluded that its warnings had not been heeded. "Instead of improving upon the most recent iteration of the complaint, plaintiff has confused matters once again. . . . All that is required of plaintiff is a simple, straightforward pleading, but plaintiff has failed to provide such a pleading time and time again despite repeated admonitions and guidance." Out of patience at last, the court dismissed the third amended complaint with...

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