3 F. Supp. 3d 151
S.D.N.Y.2014Background
- Plaintiffs—premium members of TheLadders.com—sued TheLadders for false promises about job postings and for selling resume rewriting services.
- Plaintiffs allege breach of contract, breach of implied covenant of good faith and fair dealing, rescission, money had and received, common-law fraud, unjust enrichment, and violations of NY GBL §349 plus Washington and California consumer laws.
- TheLadders moves to dismiss under Rule 12(b)(6); the court grants in part and denies in part.
- TheLadders operated a job-matching site with free and premium memberships; premium allowed applying to jobs for a fee ($30/month or $180/year).
- June 2010 Terms of Use stated that TheLadders reviews each job listing to ensure it meets a $100K+ criterion; this term postdates some plaintiffs’ membership periods.
- Plaintiffs allege listings were scraped, not all were $100K+, and many postings were no longer open; some paid substantially less than $100K.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of contract—existence/terms. | Morris relied on June 2010 term. | Most plaintiffs lacked standing to that term; Morris’ assent to June 2010 terms is disputed. | Morris may rely on June 2010 Terms; others lack standing; dispute on interpretation remains. |
| Effect of Limitation of Liability/Disclaimer of Warranties. | Promises creates enforceable duties despite disclaimers. | Clauses bar some claims. | Disclaimers cannot completely negate an express promise; could not resolve all contradictions on motion. |
| Rescission, money had and received, unjust enrichment. | Remedies available for contract breach. | Contract governs; equity relief unavailable. | Counts II, IV, VII dismissed. |
| Fraud via resume critiques. | Critiques misled investors to buy resume rewriting services. | Claims fail for lack of reasonable reliance. | Fraud claim (Count V) dismissed for lack of reasonable reliance. |
| GBL §349 standing and elements. | Out-of-state plaintiffs suffered deception in NY; standing to sue under §349. | Potentially lacked injury/territorial nexus for some plaintiffs. | GBL §349 claim upheld for out-of-state plaintiffs; dismissed for Lynn. |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (pleading must show plausible claim)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (plausibility standard for complaints)
- McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184 (2d Cir. 2007) (standard on Rule 12(b)(6) and facial plausibility)
- Chambers v. Time Warner, Inc., 282 F.3d 147 (2d Cir. 2002) (court may consider referenced documents on motion to dismiss)
- Goshen v. Mut. Life Ins. Co. of N.Y., 98 N.Y.2d 314 (2002) (GBL §349 territorial interpretation; disclaimers insufficient defense)
- Cruz v. FXDirectDealer, LLC, 720 F.3d 115 (2d Cir. 2013) (transaction-based territorial test for §349 standing)
- Stutman v. Chem. Bank, 95 N.Y.2d 24 (2000) (elements of NY §349; deception need not reach common-law fraud)
- Arista Records LLC v. Lime Grp. LLC, 532 F.Supp.2d 556 (S.D.N.Y. 2007) (antitrust-like pleadings; incorporation by reference standards)