Williams v. Affinion Grp., LLC
889 F.3d 116
2d Cir.2018Background
- Plaintiffs (seven former online customers) sued Trilegiant and e-merchants alleging deceptive post-transaction marketing, “datapass” enrollment, negative-option billing, and refund-mitigation that caused recurring membership charges.
- Enrollment flow: after an e-merchant purchase an enrollment screen/link led to Trilegiant’s page; customers entered minimal data and clicked "YES," and datapass transmitted card/data from merchant to Trilegiant for recurring billing.
- Plaintiffs say they did not recall consenting or re-entering card data and contend the screens were designed to look like transaction confirmations, thus deceiving users into unwanted enrollments.
- Procedural posture: class action; district court dismissed RICO claims earlier, then on summary judgment dismissed plaintiffs’ ECPA, remaining CUTPA, and unjust enrichment claims; plaintiffs appealed.
- District court found defendants showed disclosures and that enrollment required affirmative action (entering info & clicking “YES”); plaintiffs’ lack of recollection did not create a triable issue on consent.
- Appeal result: Second Circuit AFFIRMED—ECPA claim failed for lack of dispute over consent; RICO/RICO-conspiracy claims failed for lack of particularized predicate fraud; CUTPA and unjust enrichment claims also failed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether datapass constituted unlawful interception under ECPA | Plaintiffs: datapass intercepted electronic communications without consent; screens inherently deceptive so consent vitiated | Defendants: enrollment page disclosed data transfer; affirmative steps (enter info + click YES) show consent | Court: consent exception applies; no triable fact that plaintiffs did not consent; ECPA claim dismissed |
| Whether deceptive design of post-transaction pages vitiates consent as matter of law | Plaintiffs: overall presentation (not just fine print) was deceptive; expert testimony shows intent to hide disclosures | Defendants: plaintiffs identify no specific materially misleading statements; appearance alone insufficient to negate clear disclosures and affirmative conduct | Court: plaintiffs failed to identify particular misleading statements or show confusion; theory inconsistent with plaintiffs’ testimony; no vitiation of consent |
| Whether plaintiffs sufficiently alleged mail/wire fraud predicates for RICO | Plaintiffs: scheme-wide deceptive practices (datapass, billing, refund mitigation) amount to mail/wire fraud without needing particularized statements | Defendants: transfers and billing not inherently fraudulent; plaintiffs must plead material misrepresentations with particularity under Rule 9(b) | Court: complaints lacked particularized allegations of material misrepresentations; failed to plead scheme to defraud; RICO and RICO-conspiracy dismissed |
| Whether CUTPA and unjust enrichment claims survive given consent and refunds | Plaintiffs: refund mitigation and partial refunds are unfair/deceptive; retention of fees unjust | Defendants: plaintiffs consented to memberships; partial refunds did not create entitlement to additional funds | Court: no entitlement to refunds beyond what law requires; no unfair deception proven; unjust enrichment fails |
Key Cases Cited
- N.Y. State Rifle & Pistol Ass'n v. Cuomo, 804 F.3d 242 (2d Cir.) (standard of review for summary judgment)
- Schlessinger v. Valspar Corp., 686 F.3d 81 (2d Cir. 2012) (pleading facts and reasonable inferences on appeal)
- Moss v. Morgan Stanley, Inc., 719 F.2d 5 (2d Cir. 1983) (elements required to state a RICO claim)
- United States v. Autuori, 212 F.3d 105 (2d Cir. 2000) (elements of mail/wire fraud)
- Neder v. United States, 527 U.S. 1 (1999) (material misrepresentation element in fraud)
- Salinas v. United States, 522 U.S. 52 (1997) (RICO conspiracy requires agreement to commit substantive RICO violations)
- Schmuck v. United States, 489 U.S. 705 (1989) (mail/wire communications need not themselves contain false statements)
- F.T.C. v. Sterling Drug, Inc., 317 F.2d 669 (2d Cir. 1963) (consider the "entire mosaic" in deceptive-advertising analysis)
- Time Warner Cable, Inc. v. DIRECTV, Inc., 497 F.3d 144 (2d Cir. 2007) (context crucial in assessing potentially deceptive communications)
- Fink v. Time Warner Cable, 714 F.3d 739 (2d Cir. 2013) (context matters for deceptive advertising analysis)