851 F. Supp. 2d 734
S.D.N.Y.2012Background
- Plaintiffs Tasini, Secours, Dublin, Laermer, and Altman sue AOL, TheHuffingtonPost.com, Huffington, and Lerer as a putative class alleging unjust enrichment and NYGBL § 349.
- Plaintiffs are unpaid content providers who submitted material to The Huffington Post in exchange for exposure, not monetary compensation.
- AOL purchased The Huffington Post in 2011 for about $315 million; plaintiffs contend at least $105 million of that value is attributable to their contributed content and promotion.
- The Huffington Post generates revenue primarily from advertising; page-view data purportedly supports revenue but has not been disclosed to plaintiffs.
- Court evaluates Rule 12(b)(6) dismissal; accepts plaintiffs’ factual allegations as true for purposes of the motion and considers whether the complaint states plausible claims.
- Court ultimately grants dismissal with prejudice, holding both unjust enrichment and § 349 claims fail as a matter of law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Unjust enrichment requires equity and good conscience | Plaintiffs claim defendants benefited from unpaid content and profits from exposure. | Defendants contend plaintiffs had no expectation of monetary compensation; exposure was the sole agreed consideration. | Dismissed; no denyable expectation of compensation shown; equity does not require restitution. |
| § 349 consumer-oriented and materially misleading | Conduct directed at plaintiffs as consumers of exposure; misleading about revenue and data. | Huffington Post not consumer-focused; data withholding not material; for-profit status disclosed. | Dismissed; plaintiffs not consumers; any alleged omissions not material. |
Key Cases Cited
- Leibowitz v. Cornell Univ., 584 F.3d 487 (2d Cir. 2009) (requires some expectation of compensation to support unjust enrichment)
- Oswego Laborers’ Local 214 Pension Fund v. Marine Midland Bank, 85 N.Y.2d 20 (NY) (private contracts not within § 349 scope)
- Spirit Locker, Inc. v. EVO Direct, LLC, 696 F.Supp.2d 296 (E.D.N.Y. 2010) (§ 349 requires consumer-oriented acts with broader impact)
- Securitron Magnalock Corp. v. Schnabolk, 65 F.3d 256 (2d Cir. 1995) (section 349 is a consumer-protection device)
- Stutman v. Chem. Bank, STUTMAN v. Chem. Bank (NY) (§ 349 can be actionable without actual reliance)