849 F. Supp. 2d 395
S.D.N.Y.2012Background
- Reparata Mazzola sues Roomster Corporation and founders Shriber and Zaks, asserting breach of contract, fraud, negligent misrepresentation, conversion, CLRA, and UCL/FAL claims.
- Roomster operates Roomster.com, a roommate-matching service; users must register and accept Terms of Use and Privacy Policy.
- Members choose Basic (free) or Full membership; Full includes a private email and is billed via automatic renewals.
- Full membership fees: $5.95 (3 days) up to $29.95 (4 weeks) with automatic renewals every 30 days until canceled.
- Plaintiff became a member on Sept. 28, 2009, paid $5.95, and was subsequently charged $29.95 on several dates; she alleges cancellation procedures on the site were ineffective.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of contract viability | Plaintiff alleges improper automatic renewal and cancellation blockage breach. | Plaintiff failed to allege breach of the contract terms disclosed in the Terms of Use. | Breach claim dismissed as to renewal terms; cancellation issue survives. |
| Truthfulness of representations (fraud) | Defendants misrepresented billing or failed to disclose cancellation terms. | Billing terms were accurately disclosed in the Terms of Use. | Fraud claim dismissed regarding billing; cancellation-related misrepresentation survives to proceed. |
| Negligent misrepresentation | Defendants owed a duty and made misrepresentations about billing/cancellation. | No false misrepresentation regarding billing; duty/relied elements disputed. | Negligent misrepresentation survives for cancellation issues; no duty-related misrepresentation shown for billing. |
| CLRA claims | Defendants violated CLRA through deceptive pricing/cancellation practices. | Plaintiff failed to meet CLRA notice/damages requirements and did not allege actionable misrepresentations. | CLRA claims dismissed to the extent seeking damages or broad relief; some injunctive-focused theories discussed but limited. |
| UCL and FAL claims | Automatic billing and cancellation practices constitute unlawful/unfair/false advertising. | Billing disclosures were not deceptive; cancellation issues may support unfair practices. | UCL/FAL unlawful/false advertising claims dismissed for billing; unfair practices claim and related FAL claim grounded in cancellation are adequately stated. |
Key Cases Cited
- McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184 (2d Cir. 2007) (pleading standard for plausibility; not weighing evidence on motion to dismiss)
- Velez v. Levy, 401 F.3d 75 (2d Cir. 2005) (assess complaint for facial sufficiency on Rule 12(b)(6))
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (facial plausibility standard for pleading)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (heightened pleading standard; avoid mere conclusory statements)
- ATSI Communications, Inc. v. Shaar Fund, Ltd., 493 F.3d 87 (2d Cir. 2007) (pleading specifics for fraud claims under Rule 9(b))
- Chambers v. Time Warner, Inc., 282 F.3d 147 (2d Cir. 2002) (judicial notice and use of referenced documents on motion to dismiss)
- Kirschner v. Bennett, 648 F. Supp. 2d 525 (S.D.N.Y. 2009) (money conversion requires a specific identifiable fund)