Schlessinger v. Valspar Corp., 723 F.3d 396

Plaintiffs Lori Schlessinger and Brenda Pianko bought furniture protection plans (the "Plan") issued by Valspar; the Plan promised repair or replacement for covered damage.
The Plan included a "store closure provision" that, if the purchasing store closed, limited Valspar's obligation to refund the Plan purchase price rather than continue service.
Fortunoff (the retailer) later went bankrupt; Valspar refunded Pianko the Plan purchase price and declined to perform repairs, while Schlessinger made no claim.
Plaintiffs contended the store-closure clause violated N.Y. Gen. Bus. Law § 395-a, which restricts termination of maintenance agreements and grants enforcement to government officials.
Plaintiffs sued for (1) breach of contract, arguing the offending clause should be void as against public policy, and (2) statutory consumer-fraud under GBL § 349, alleging deception by selling and enforcing a clause that violates § 395-a.
The District Court dismissed both claims; the Second Circuit certified two questions to the New York Court of Appeals, which answered both in the negative, leading the Second Circuit to affirm dismissal.

Issue	Plaintiff's Argument	Defendant's Argument	Held
May a contract clause that contradicts GBL § 395-a be declared void as against public policy?	The store-closure clause violates § 395-a and should be severed/voided, leaving Valspar liable for breach when it refused service.	§ 395-a contains no private right of action and does not expressly invalidate inconsistent contract terms; enforcement is for government officials.	No. Parties may not seek to void contract provisions on that basis; no private cause of action exists to enforce § 395-a.
May plaintiffs proceed under GBL § 349 alleging deception because defendant sold a Plan containing a clause that violates § 395-a and later enforced it?	Selling and later enforcing a clause that violates § 395-a is deceptive and actionable under § 349.	Violations of § 395-a alone are not inherently deceptive; § 349 is reserved for practices that tend to deceive consumers, not all statutory violations enforced only by the Attorney General.	No. Violation of § 395-a, standing alone, is too attenuated to constitute a § 349 deceptive practice.

Schlessinger v. Valspar Corp., 686 F.3d 81 (2d Cir. 2012) (prior appellate opinion, certification to NY Court of Appeals)
Schlessinger v. Valspar Corp., 817 F. Supp. 2d 100 (E.D.N.Y. 2011) (district-court dismissal of plaintiffs' claims)
Kerusa Co. LLC v. W10Z/515 Real Estate Ltd. P’ship, 906 N.E.2d 1049 (N.Y. 2009) (courts should not create backdoor private causes of action to enforce statutes that confer enforcement on public officials)