Rhodes v. Herz
84 A.D.3d 1
| N.Y. App. Div. | 2011Background
- Plaintiff, a nationally syndicated radio host, entered a comprehensive employment agent/managerial contract with IF Management, Inc.
- Defendants, including Herz and Perry, allegedly acted as plaintiff’s employment agents, managers, and attorneys during the contract term.
- Plaintiff contends defendants procured employment opportunities and negotiated deals (publishing with Miramax, salary with Air America, potential roles with Westwood One and Sirius).
- Plaintiff sought to void the contract and recover monies on grounds that defendants were unlicensed employment agents violating General Business Law Article 11 and breached fiduciary duties; related unjust enrichment claims were also pleaded.
- Defendants moved to dismiss several Article 11-based claims, arguing no express or implied private right of action exists; the motion court found no private action for unlicensed agents and denied enjoining use of Article 11 as a defense.
- Supreme Court, New York County, granted the motion to dismiss; the Appellate Division affirmed, holding Article 11 does not create an express or implied private right of action.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Article 11 provides an express private right of action | Plaintiff asserts an implied or express private remedy exists | Article 11 contains no private right of action (express or implied) | No express or implied private right of action exists |
| Whether an implied private right of action should be inferred for Article 11 | Implied right would promote legislative purpose | Implied action would be inconsistent with enforcement scheme and legislative history | Implied private right of action is not implied; enforcement is exclusively administrative |
| Whether the extensive enforcement scheme of Article 11 precludes any private action | Despite enforcement scheme, private action should be available | Potent enforcement by Commissioner indicates exclusive private-right preclusion | Exclusive enforcement scheme exists; no private right is implied or express |
| Whether prior decisions recognizing private rights under similar statutes control | Some cases show private rights for Article 11 violations | Those cases are distinguishable and not controlling here | Prevailing authority supports no private right for Article 11 |
Key Cases Cited
- Morin v Curtis Assoc. Personnel, 56 A.D.2d 817 (1977) (Article 11 has no private right of action)
- Greater N.Y. Mut. Ins. Co. v Wehinger Serv., Inc., 47 A.D.2d 604 (1975) (enforcement delegated; no private action for Article 11 violations)
- Uhr v East Greenbush Cent. School Dist., 94 N.Y.2d 32 (1999) (implicit private rights depend on legislative intent and enforcement scheme)
- Burns Jackson Miller Summit & Spitzer v Lindner, 59 N.Y.2d 314 (1983) (consistency with legislative scheme critical in implying private rights)
- Sheehy v. Big Flats Community Day, 73 N.Y.2d 629 (1989) (implication of private rights depends on statutory purpose and history)
- P. & T. Iron Works v Talisman Contr. Co., Inc., 18 A.D.3d 527 (2005) (illustrates limits of implying private rights in regulatory schemes)