Case Information
*1 UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
--------------------------------X
ALEX DERBAREMDIKER,
Plaintiff, MEMORANDUM AND ORDER -against- 12-CV-01058 (KAM) APPLEBEE’S INTERNATIONAL, INC.,
Defendant.
--------------------------------X
MATSUMOTO, United States District Judge:
On March 1, 2012, Alex Derbaremdiker (“plaintiff”)
commenced this putative class action against defendant Applebee’s International, Inc. (“Applebee’s” or “defendant”), asserting deceptive practices and unjust enrichment claims under New York law in connection with a sweepstakes that plaintiff participated in via defendant’s website. ( See ECF No. 1, Complaint (“Compl.”).) Presently before the court is defendant’s motion to dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). Oral argument was held on the motion on September 21, 2012. Having reviewed the parties’ submissions, the record before the court, and the relevant case law, for the reasons set forth below, defendant’s motion to dismiss is granted in its entirety.
BACKGROUND
The following facts, taken from plaintiff’s complaint, are assumed to be true for the purpose of deciding the instant *2 motion. Additionally, as discussed further below, the court has considered the exhibits accompanying the parties’ submissions [1] because they are either quoted in, incorporated in by reference in, or integral to, the complaint, and both parties agreed at oral argument that consideration of those exhibits is proper on this motion to dismiss. ( See Def. Mem. at 9-10; Pl. Opp’n at 8.)
On November 3, 2011, plaintiff dined at one of defendant’s restaurants located at 2201 Nostrand Avenue in Brooklyn, New York, and received a receipt for his meal.
(Compl. ¶ 14.) Plaintiff’s receipt contained the following text, in relevant part:
*3 ( Id. ¶¶ 10-13; ECF No. 16-1, Receipt; see ECF No. 16, Declaration of Plaintiff ¶ 2.) [2] Upon visiting
www.MyApplebeesVisit.com (the “Website”), a customer could access the “Guest Experience Survey” (the “Survey”) by entering information from his or her receipt, including a serial number. (ECF No. 13-3, Screenshot of Website (the “Screenshot”); ECF No. 13-2, Declaration of Mark Williamson (“Williamson Decl.”) ¶ 3.) Plaintiff thereafter visited the Website, entered the information from his receipt, completed the Survey, and was *4 entered into a daily drawing (the “Sweepstakes”). (Compl.
¶ 14.)
When plaintiff visited the Website to complete the
Survey, the Website stated the following information regarding the Sweepstakes:
(Screenshot.) [3] The asterisk next to “$1,000” was placed next to the following text at the bottom center of the Website: ( Id. ) [4] If a user clicked on the underlined hyperlink, “ CLICK HERE FOR OFFICIAL RULES ” (Screenshot), the user would be directed to another website with the heading “OFFICIAL RULES” (the “Official Rules”). (ECF No. 13-4, Official Rules; Williamson Decl. ¶ 4.)
*5 The Officials Rules stated: “You have been invited by Applebee’s (the ‘Client’) to participate in the following contest(s), with a chance to win the following eligible prize(s)[.]” (Official Rules.) Under the heading “Contest Name and Sponsor,” the Official Rules stated: “Empathica Inc.
Customer Satisfaction Survey Sweepstakes, sponsored by Empathica, Inc.” ( Id. ) Under the heading “Eligible Prize(s),” the Official Rules stated the following: ( Id. ) [5] Finally, the Official Rules stated that the Sweepstakes may be entered via the Website and contained the following reservation of rights and disclaimer: “The Sponsor [Empathica Inc.] reserves the right to receive entries into the contest *6 through these and any other methods, as may be determined from time to time, by the Sponsor at its sole discretion. Sponsor will pool entries received from Client’s [defendant’s] surveys with entries received from other clients of Sponsor.” ( Id. )
The website containing the Official Rules also provided a hyperlink to the “complete Empathica Inc. Customer Satisfaction Survey Sweepstakes Rules” (the “Complete Sweepstakes Rules”). ( Id .; see Williamson Decl. ¶ 5.) The Complete Sweepstakes Rules disclosed the following information: (1) a “Daily Prize” of $1,000 and an “Instant Prize” of an iPod Nano is “available to be won” each day of the Sweepstakes (ECF No. 13-5, Complete Sweepstakes Rules at 1); (2) “There will be a series of distinct and separate Sweepstakes conducted each and every day during the month of November 2011, with each Sweepstakes lasting one (1) day” during that month ( id. at 2); (3) “Each survey completed on the Website . . . shall receive (10) entries to the draw” ( id. at 3); (4) “Unselected entries will not be eligible for subsequent draws” ( id. ); and (5) “The chances of winning the prize depend on the number of eligible entries received and the number of the Sponsor’s client companies that are participating in the Sweepstakes” ( id. at 4).
Plaintiff makes two primary allegations underlying his claims: (1) “[i]n describing the Applebee’s Sweepstakes on its [receipts], Applebee’s implies that participants in the *7 Applebee’s Sweepstakes compete for prizes only against other Applebee’s Sweepstakes participants when, on the contrary, they compete against participants in the sweepstakes of approximately thirty businesses” (Compl. ¶ 2; see also id. ¶¶ 17-19, 22); and (2) “Applebee’s also represents that the Applebee’s Sweepstakes includes, in addition to a $1,000 prize, multiple prizes that are available to be won every day, when, on the contrary, there is, in addition to the $1,000 prize, only one other type of prize, which is a specific product [an iPod]; and only one such product is awarded each day (again, to one participant in the sweepstakes of approximately thirty businesses)” ( id. ¶ 3; see also id. ¶ 21). [6] Plaintiff further alleges that the likelihood that one of defendant’s customers won a prize in the Sweepstakes was “a fraction of the likelihood” that it would have been had defendant’s customers been competing for such prizes only against other of defendant’s customers, and not against the customers of approximately thirty other businesses. ( Id. ¶¶ 20, 23.)
LEGAL STANDARD
Defendant moves to dismiss the complaint pursuant to
Federal Rule of Civil Procedure 12(b)(6), which provides for the dismissal of a cause of action if plaintiff’s complaint fails “to state a claim upon which relief can be granted.” Fed. R.
Civ. P. 12(b)(6). To survive a motion to dismiss under Federal
Rule of Civil Procedure 12(b)(6), “a complaint must contain
sufficient factual matter, accepted as true, to ‘state a claim
to relief that is plausible on its face.’”
Ashcroft v. Iqbal
,
Exxon Corp.
,
In deciding a motion to dismiss pursuant to Rule
12(b)(6), a court must “‘accept as true all allegations in the
complaint and draw all reasonable inferences in favor of the
*9
non-moving party.’”
Vietnam Ass’n for Victims of Agent Orange
v. Dow Chem. Co.
,
2010). However, “conclusory allegations or legal conclusions
masquerading as factual conclusions will not suffice to defeat a
motion to dismiss.”
Achtman v. Kirby, McInerney & Squire, LLP
,
On a motion to dismiss, the court limits its
consideration to: (1) the factual allegations in the complaint;
(2) documents attached to the complaint as exhibits or
incorporated in it by reference; (3) matters of which judicial
notice may be taken; and (4) documents that are “integral” to
the complaint.
San Francisco Tech., Inc. v. Hi-Tech Pharmacal
Co.
, No. 10-CV-3630,
As discussed above, in deciding this motion, the court
will consider plaintiff’s receipt, which was submitted by the
plaintiff, and the screenshot of the Website, the Official Rules
of the Sweepstakes, and the Complete Sweepstakes Rules, which
were all submitted by the defendant, as these documents are
either quoted in, incorporated in by reference, or integral to,
the complaint, or alternatively, plaintiff knew about and relied
on these documents in bringing suit. (
See
Def. Mem. at 9-10);
I. Meyer Pincus & Assocs., P.C. v. Oppenheimer & Co.
, 936 F.2d
759, 762 (2d Cir. 1991) (finding a prospectus that was not
attached to or incorporated by reference to a complaint to be
integral to the complaint because “[t]he claims pleaded therein
are based
only
on an alleged written misrepresentation appearing
within the prospectus”);
Druyan v. Jagger
,
DISCUSSION
In his complaint, plaintiff asserts three claims against the defendant: (1) a violation of New York General Business Law § 349 for deceptive acts and practices; (2) a violation of New York General Business Law § 350 for false advertising; and (3) a claim for unjust enrichment. In his opposition to the motion to dismiss, plaintiff withdrew his claim under New York General Business Law § 350 (Pl. Opp’n at 1 n.1), and the court so orders the dismissal of that claim. The court will now address plaintiff’s deceptive practices and unjust enrichment claims in turn.
I. The Deceptive Practices Claim
New York General Business Law § 349 (“Section 349”)
prohibits “[d]eceptive acts or practices in the conduct of any
business, trade or commerce or in the furnishing of any
service,” and allows any person injured by a violation of the
section to recover “actual damages or fifty dollars, whichever
is greater,” permitting the court to treble the damages up to
$1,000. N.Y. Gen. Bus. Law § 349(a),(h). To successfully
assert a claim under Section 349, “a plaintiff must allege that
a defendant has engaged in (1) consumer-oriented conduct that is
(2) materially misleading and that (3) plaintiff suffered injury
as a result of the allegedly deceptive act or practice.”
Koch
v. Acker, Merrall & Condit Co.
,
Without reaching the “consumer-oriented conduct” issue, the court finds that plaintiff fails to allege facts sufficient to satisfy the other two elements of Section 349: (1) that defendant’s representations regarding the Sweepstakes were materially misleading and (2) that plaintiff suffered any legally cognizable actual injury. These two elements will be discussed in turn.
A. Materially Misleading
In order for defendant’s conduct to be “materially
misleading” under Section 349, the alleged representations must
satisfy the objective test of being “likely to mislead a
reasonable consumer acting reasonably under the circumstances.”
Gaidon v. Guardian Life Ins. Co. of Am.
,
Here, the gravamen of plaintiff’s Section 349 claim is that his receipt was materially misleading regarding the terms and conditions of the Sweepstakes because it implied that (1) every day one of defendant’s customer’s would win a prize, when in fact other businesses’ customers could win the daily prizes instead of defendant’s customers (Compl. ¶¶ 2, 16, 18-19); (2) only defendant’s customers were eligible to win daily prizes in the Sweepstakes, when in fact customers of several other businesses were eligible for and could win the daily prizes ( id. ¶¶ 2, 17-18); and (3) there were “multiple” prizes awarded daily in the Sweepstakes, when in fact there were only two daily *14 prizes - $1,000 cash and an iPod ( id. ¶¶ 3, 21). Whether the receipt is considered by itself or together with the full disclosures on the Website and the Official Rules, the receipt was not materially misleading to a reasonable consumer acting reasonably.
First, the statements on the receipt were not misleading or false, and contrary to plaintiff’s contention, they did not contradict and were not inconsistent with the statements on the Website and in the Official Rules. ( See Pl.
Opp’n at 2.) Indeed, the statements on the receipt were consistent with the terms and conditions of the Sweepstakes insofar as there was “A WINNER EVERY DAY,” plaintiff “COULD WIN $1,000,” and there were “Other great prizes also available daily,” namely iPods (or equivalent $200 Apple gift certificates). [7] In other words, the plaintiff received exactly what was represented to him on the receipt by completing the *15 Survey – the chance to win $1,000 or “Other great prizes,” either an iPod or a gift certificate. Assuming as true plaintiff’s assertion that the universe of all individuals eligible for the Sweepstakes was not disclosed on the receipt, the receipt is not materially misleading on its face.
At oral argument, plaintiff argued that the following
facts taken together imply to a reasonable consumer that only defendant’s customers were eligible to enter the Sweepstakes: (1) that defendant issued the receipt; (2) defendant’s use of the word “our” on the receipt when stating “WE LOVE TO HEAR FROM OUR GUESTS” and inviting customers to “complete our GUEST EXPERIENCE SURVEY”; and (3) the instruction on the receipt directing customers to “[g]o online to:
www.MyApplebeesVisit.com” rather than a third-party website, such as the website of the sponsor of the Sweepstakes, Empathica, Inc. Nowhere on the receipt, however, does it state that only defendant’s customers were eligible to win prizes by completing the Survey, and the fact that defendant issued the receipt and references its own customer survey does not necessarily imply the same. In fact, the receipt explicitly stated “No purchase necessary” and that the only requirement is that the entrant be 18 years or older. Thus the receipt specifically advised consumers that individuals who were not defendant’s customers were also eligible to enter the *16 Sweepstakes and win the daily prizes. Although the facts described by the plaintiff – particularly the fact that the receipt directs entrants to visit defendant’s website to enter the Sweepstakes - could imply to a reasonable consumer that defendant is managing the Sweepstakes, such an implication, by itself, is insufficient to satisfy the materiality element of Section 349 after the full disclosures on the Website and the Official Rules are considered, as discussed below.
Second, the receipt clearly stated, in the same size
text as all the other text on the receipt, that a Sweepstakes entrant should “See Website for rules/details” regarding the Sweepstakes. Upon proceeding to the Website, an entrant would see the following in prominent white text next to the entry form for the Survey: “To thank you for your thoughts, you’ll have the opportunity to enter our daily drawing for $1,000.* Plus, you could instantly win an iPod®[] at the end of this survey.” This language clearly indicated that there were only two prizes available to be won - $1,000 or an iPod - by completing the Survey and entering the Sweepstakes. A reasonable consumer acting reasonably would therefore not be misled that there were multiple prizes in addition to $1,000 and an iPod that were available to be won by completing the Survey.
Third, displayed at the bottom of the Website in capitalized and underlined text is a hyperlink to the Official *17 Rules stating “CLICK HERE FOR OFFICAL RULES.” As previously discussed, the Official Rules clearly stated that the Sweepstakes entries of defendant’s customers were “pooled” together with the entries of other clients of the sponsor of the Sweepstakes, and also stated again that there were only two prizes - $1,000 or an iPod (or, alternatively, a $200 Apple gift certificate) – available to be won on a daily basis.
Furthermore, the Complete Sweepstakes Rules stated that the “chances of winning the prize depend on the number of eligible entries received and the number of the Sponsor’s client companies that are participating in the Sweepstakes.” (Complete Sweepstakes Rules at 4.)
Because the terms and conditions of the Sweepstakes
were fully disclosed in the Official Rules, which consumers were directed to review by both the receipts given to customers and the Website, a reasonable consumer that read the Official Rules as directed would not have been misled by the statements on the receipt, which, as discussed previously, were not themselves materially misleading or contrary to the Official Rules. In other words, the defendant here was not deceptive in failing to fully disclose the terms and conditions on its receipts when those receipts were simply the means for informing its customers of the Sweepstakes and directing them to “See Website for rules/details.” Nor should the defendant be required to make *18 such a full disclosure on the receipt so long as the statements on the receipt were consistent with the Website and the Official Rules, which they were.
Plaintiff argued at oral argument that defendant should have required an entrant to review the Official Rules and accept its terms and conditions prior to entering the Sweepstakes (e.g., by clicking a box), but plaintiff failed to point to any legal obligation requiring such a burden on a Sweepstakes sponsor or entrant, particularly when it was not necessary because there were no materially misleading statements in either the initial disclosure (the receipt) or subsequent disclosures (the Website and the Official Rules). Accordingly, plaintiff fails to allege facts sufficient to satisfy the “materially misleading” standard under Section 349. [8]
B. Actual Injury
Although Section 349 “does not require proof of
justifiable reliance, a plaintiff seeking compensatory damages
must show that the defendant engaged in a material deceptive act
or practice that caused actual, although not necessarily
pecuniary, harm.”
Oswego
,
Plaintiff’s alleged injury is not legally cognizable
under Section 349 because he “sets forth deception as both act
and injury.”
Small v. Lorillard Tobacco Co.
,
Plaintiff claims that his injury is that he believed his odds of winning a prize in the Sweepstakes was higher than his actual *20 odds. Plaintiff, however, must allege actual or pecuniary harm that is separate and apart from the alleged deception itself.
Moreover, as stated above, plaintiff received exactly
what was represented to him on the receipt and the Website by entering the Sweepstakes – the chance to win $1,000 or an iPod (or an equivalent gift certificate) – and no specific odds of winning were ever represented to him, whether on the receipt, the Website, or the Official Rules. Indeed, the Complete Sweepstakes Rules explicitly stated that the “chances of winning the prize depend on the number of eligible entries received and the number of the Sponsor’s client companies that are participating in the Sweepstakes.” (Complete Sweepstakes Rules at 4.) Accordingly, because plaintiff fails to allege any legally cognizable actual harm – let alone any harm – from defendant’s conduct, he cannot establish actual injury under Section 349.
As plaintiff fails to allege facts sufficient to satisfy either the materiality or actual injury requirements of a Section 349 claim, this claim must be dismissed.
II. Unjust Enrichment
“An unjust enrichment claim is rooted in the
‘equitable principle that a person shall not be allowed to
enrich himself unjustly at the expense of another.’”
Georgia
Malone & Co. v. Rieder
,
According to the New York Court of Appeals, “unjust enrichment
is not a catchall cause of action to be used when others fail.
It is available only in unusual situations when, though the
defendant has not breached a contract nor committed a recognized
tort, circumstances create an equitable obligation running from
the defendant to the plaintiff. Typical cases are those in
which the defendant, though guilty of no wrongdoing, has
received money to which he or she is not entitled.”
Corsello v.
Verizon N.Y., Inc.
,
2005) (“When a plaintiff does not possess a private right of action under a particular statute, and does not allege any actionable wrongs independent of the requirements of the statute, a claim[] for . . . unjust enrichment [is] properly dismissed as an effort to circumvent the legislative preclusion of private lawsuits for violation of the statute.” (internal quotation marks omitted)).
In order to adequately plead an unjust enrichment
claim, the plaintiff must allege that “(1) the other party was
enriched, (2) at that party’s expense, and (3) that it is
against equity and good conscience to permit the other party to
retain what is sought to be recovered.”
Georgia Malone & Co.
,
ha[s] conferred upon Defendant by completing a survey in the course of participating in the [Sweepstakes]” ( id. ¶ 27).
Such “[t]hreadbare recitals of the elements of the
cause of action, supported by mere conclusory statements, do not suffice” to withstand a motion to dismiss. Iqbal , 556 U.S. at 678. Indeed, plaintiff does not allege any facts whatsoever to establish how defendant was unjustly enriched or received benefits to which it was not entitled. Additionally, as discussed previously, because plaintiff received exactly what was represented to him in exchange for completing the Survey, it does not appear that plaintiff could allege any basis for finding the defendant unjustly enriched. Finally, to the extent plaintiff’s unjust enrichment claim merely duplicates his claim under Section 349, it is dismissed for the same reasons.
CONCLUSION
For the reasons stated above, defendant’s motion to
dismiss is granted in its entirety, and plaintiff’s deceptive practices and unjust enrichment claims are hereby dismissed.
During the court’s pre-motion conference on June 12, 2012, the court gave plaintiff an opportunity to amend the complaint in response to defendant’s proposed motion to dismiss and he declined to do so. In any event, because “‘it appears beyond *23 doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief,’” Ricciuti v.
N.Y.C. Transit Auth.
,
As there are no other parties or claims remaining in
this action [9] , the Clerk of the Court is respectfully requested to enter judgment in this case in favor of the defendant and against the plaintiff and to close this case.
SO ORDERED
Dated: September 26, 2012
Brooklyn, New York
_________/s/_________________ KIYO A. MATSUMOTO United States District Judge Eastern District of New York
Notes
[1] ( See ECF No. 13-1, Defendant’s Memorandum of Law in Support of Motion to Dismiss Complaint with Prejudice (“Def. Mem.”); ECF No. 18, Plaintiff’s Memorandum of Law in Opposition to Defendant’s Motion to Dismiss the Complaint (“Pl. Opp’n”); ECF No. 14, Defendant’s Reply in Support of Motion to Dismiss Complaint with Prejudice (“Def. Reply”).)
[2] In the event the text of the receipt does not appear in electronic publications of this decision, the receipt states in relevant part as follows: (1) “WE LOVE TO HEAR FROM OUR GUESTS!”; (2) “We invite you to complete our GUEST EXPERIENCE SURVEY”; (3) “YOU COULD WIN $1,000”; (4) “A WINNER EVERY DAY!”; (5) “Other great prizes also available daily”; (6) “Go online to: www.MyApplebeesVisit.com”; and (7) “No purchase necessary. Must be 18 or older. Void where prohibited. See Website for rules/details.” The receipt also contained a serial number and expiration date.
[3] In the event the text of the Screenshot does not does not appear in electronic publications of this decision, the Screenshot states in relevant part as follows: “To thank you for your thoughts, you’ll have the opportunity to enter our daily drawing for $1,000* Plus, you could instantly win an iPod®[] at the end of this survey.”
[4] In the event the text of the Screenshot does not does not appear in electronic publications of this decision, the Screenshot states in relevant part as follows: (1) “* CLICK HERE FOR OFFICAL RULES ”; (2) “NO PURCHASE NECESSARY. *MUST BE OF LEGAL AGE TO PARTICIPATE. Void where prohibited.”; and (3) “Cash prize value of $1,000 per day. Apple iPod® prize value of $200 per day.” (emphasis in original).
[5] In the event the text of the Official Rules does not appear in electronic publications of this decision, the Official Rules state in relevant part: Eligible Prize(s) One (1) prize per day of either USD$1,000, CAD$1,000, £1,000, or 1,000 Euros (“Daily Prize”). Web (and mail-in) entries only: One (1) prize per day of a 4GB iPod Nano (“Instant Prize”). The sponsor reserves the right to substitute this prize for a USD $200 gift certificate redeemable for this prize through Apple.com or at any participating Apple store location.
[6] In his complaint, plaintiff attempts to distinguish between the “Applebee’s Sweepstakes,” which he defines as the sweepstakes that defendant’s customers are entered into once they complete the Survey on the Website, and the sweepstakes of other businesses. ( See Compl. ¶ 1) There is, however, as alleged by the plaintiff, only one sweepstakes in which the customers of several businesses, including defendant’s customers, compete for the same two daily prizes, $1,000 cash and an iPod (or an equivalent gift certificate). ( See id. ¶ 21.) The court has been referring and will continue to refer to this collective sweepstakes as the defined term “Sweepstakes.”
[7] Defendant conceded at oral argument that the statement “Other great prizes also available daily” was arguably ambiguous. This statement, which follows the phrase “YOU COULD WIN $1,000,” could imply that there were at least two other prizes besides $1,000 available to be won on a daily basis, and not just one other prize - an iPod or an equivalent $200 Apple gift certificate. On the other hand, “Other great prizes” could also reasonably be interpreted to refer collectively to the numerous iPods (or gift certificates) that could be won throughout the duration of the Sweepstakes, or to the fact that a customer may receive an equivalent $200 Apple gift certificate instead of an iPod. As discussed further below, when this statement is considered together with the full disclosures on the Website and the Official Rules, no reasonable consumer could believe that there were prizes other than $1,000 and an iPod (or a gift certificate) that could be won on a daily basis. At best, the court agrees with the defendant that the statement “Other great prizes also available daily” is ambiguous, and this ambiguity cannot by itself satisfy the materiality element of Section 349.
[8] The same holding applies regardless of whether plaintiff
reviewed the Official Rules. The standard established by the New York Court
of Appeals for determining whether conduct is materially misleading is that
of a reasonable consumer,
Gaidon
,
[9] Plaintiff has not moved to certify this case as a class action,
nor has he been designated a class representative.
See
Fed. R. Civ. P.
23(a)-(b);
Rittmaster v. PaineWebber Group (In re PaineWebber Ltd. P’ships
Litig.)
,