751 F. Supp. 2d 681
S.D.N.Y.2010Background
- Plaintiffs Kaufman (Nevada resident) and LaLuna (New York resident) sue Sirius XM on behalf of a purported class under Rule 23 for GBL § 349 deception and breach of contract.
- Plaintiffs allege Sirius charged a $2.00 Invoice Administration Fee when payment was not by check or money order, under the Payment Terms existing before a 2010 modification.
- Payment Terms from 2007 and 2009 allowed a $2.00 fee for check/money-order payments; the 2010 modification changed the fee description for non-electronic invoices.
- Plaintiffs claim Sirius knew of the improper charge and failed to inform subscribers or offer refunds after recognizing payment-method variations.
- Sirius moves to dismiss the Third Amended Complaint on (i) GBL § 349 deception hinging on New York deception, and (ii) breach of contract; the court grants in part.
- Court later limits GBL § 349 to deception occurring in New York and dismisses the breach of contract claim for lack of pleading.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether GBL § 349 claim can be nationwide or limited to New York-deceptive acts | Kaufman asserts nationwide class; deception occurred in New York. | GBL § 349 requires deception in New York; out-of-state plaintiffs cannot recover. | GBL § 349 claim must be limited to deception occurring in New York. |
| Whether plaintiffs adequately pleaded deception occurred in New York | Complaint states New York-based conduct and NY connections. | Threadbare, conclusory § 349 claim; no specific New York-deception facts pled. | Plaintiffs fail to plead facts showing deceptions occurred in New York; § 349 claim dismissed. |
| Whether breach of contract claim is viable or abandoned | Payment Terms contained a promise not to charge improper fees; breach evident. | Terms ambiguously address fees; plaintiffs abandoned contract claim in briefing. | Breach of contract claim abandoned and dismissed; no plausible contractual obligation shown. |
| Procedural viability of the ruling on Rule 12(b)(6) standards and scope | Claims should be evaluated on merits under Twombly/Iqbal standard. | Court should dismiss for failure to state a claim at pleading stage. | Court applies Iqbal/Twombly standard; grants partial dismissal consistent with rule-14. |
Key Cases Cited
- Goshen v. Mutual Life Insurance Co. of New York, 98 N.Y.2d 316 (N.Y. 2002) (deception must occur in New York; limits § 349 reach to intra-state transactions)
- Iqbal v. Ashcroft, 129 S. Ct. 1937 (U.S. 2009) (plausibility standard; allegations must raise right to relief above speculative level)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (fact-specific alleging required to state plausible claim)
- SimplexGrinnell LP v. Integrated Sys. & Power, Inc., 642 F. Supp. 2d 167 (S.D.N.Y. 2009) (GBL § 349 reach and pleading standards in district court)
- Spool v. World Child Int'l Adoption Agency, 520 F.3d 178 (2d Cir. 2008) (pleading with factual allegations required on appeal)