Gerald D. BRODER, individually and on behalf of all others similarly situated, Plaintiff-Appellant, v. CABLEVISION SYSTEMS CORPORATION and CSC Holdings, Inc., Defendants-Appellees.
Docket No. 04-4932-CV.
United States Court of Appeals, Second Circuit.
Argued: June 13, 2005. Decided: August 11, 2005.
418 F.3d 187
Before: CABRANES and RAGGI, Circuit Judges, and SAND, District Judge.
Celia Goldwag Barenholtz, Kronish Lieb Weiner & Hellman LLP, New York, N.Y. (Ari M. Berman, Maxine Sleeper, on the brief), for Defendants-Appellees.
Before: CABRANES and RAGGI, Circuit Judges, and SAND, District Judge.*
SAND, District Judge.
Gerald D. Broder (Broder) appeals from a judgment of the United States District Court for the Southern District of New York (Denny Chin, District Judge), dismissing his putative class action against Defendants-Appellees Cablevision Systems Corporation and CSC Holdings, Inc. (collectively Cablevision) following removal of that action from state court.1 Broder alleged that by extending a reduced “Winter Season” rate to certain customers withоut offering or even disclosing it to others, Cablevision had violated the uniform rate requirement of
On this appeal, Broder challenges both the district court‘s determination that it had removal jurisdiction, and its ultimate dismissal of his complaint for failure to state a claim. Exercising jurisdiction under
Cablevision, a provider of cable television services, offers several “tiers” of service: Basic Cable, Family Cable, and further levels of premium “Optimum TV.” At the time thе complaint in this case was filed, the Basic Cable rate was $10.50 per month and the Family Cable rate was $42.48 per month.
Broder alleges that during and perhaps prior to the period beginning six years before the filing of the complaint in this action (the “Class Period“), Cablevision offered certain customers a discounted rate in the “Winter Season” running from November through April of each year. This rate was “designed to enable the owners of summer homes to maintain their cable service at a substantially reduced rate during the Winter Season ... when customers use their summer residences only sporadically at most.” Compl. ¶ 20. Customers receiving the Winter Season rates were charged only $5 per month for Basic Cable and $15 per month for Family Cable.
Section 543(d) of Title 47, Unitеd States Code, mandates that a cable operator not subject to “effective competition” as defined in the statute “shall have a rate structure, for the provision of cable service, that is uniform throughout the geographic area in which cable service is provided over its cable system.”
provide to each of its subscribers at the time of the initial subscription and at least semi-annually thereafter a written description, materially accurate as of the first day of the previous month, of all programming and other services offered on the cable television system and of the rates and charges relating to such programming and other services[.]
Broder subscribes to Cablevision‘s services at his summer residence in Suffolk County, New York. “In a number of years during the Class Period,” he alleges, “[he] was required to pay full rather than Winter Season rates” for these services. Compl. ¶ 6. He was unaware of the existence of the Winter Season rates until he found out about them from a friend who had received them.
On December 19, 2003, Broder filed a class action complaint against Cablevision in New York State Supreme Court, New York County. The members of the putative class were those persons who, during the Class Period, “subscribed to Cablevision for cable television services for their summer residences and were charged ... full rates rather than substantially reduced Winter Season rates for Basic Cable or Family Cable service,” due to Cablevision‘s allegedly wrongful failure to advise them that the Winter Season rates were available. Compl. ¶ 8. On behalf of himself and the class, Broder asserted what were styled as four distinct causes of action, all arising out of the non-uniform provision and nondisclosure of the Winter Seаson rates.
Broder‘s first listed cause of action, for breach of contract, alleges that Cablevision violated the terms of its uniform customer agreement which provides, according to Broder, that “all of [Cablevision‘s] rates and any changes in those rates will be `subject to applicable law.\‘” Compl. ¶ 27. Cablevision, the complaint asserts, breached that agreement with Broder and the other class members “by failing to provide them with the uniform rates required by
The third cause of action listed in the complaint is for common-law fraud. It is alleged that
Defendants were obligated under
PSL § 224-a(4) , but knowingly and willfully failed, to provide “materially accurate” information concerning the existence and availability of the Winter Season rates to plaintiff and the Class, and thereby materially misrepresented the rates to which plaintiff and the Class were entitled as Cablevision subscribers with summer residences.
Compl. ¶ 46. It is further аlleged that plaintiff and the class can be presumed to have reasonably relied on this misrepresentation, and were damaged thereby.
The fourth cause of action listed in the complaint is for unjust enrichment. It states that “Defendants have been unjustly enriched at the expense of and to the detriment of plaintiff and the Class by wrongfully charging and collecting cable programming fees from them in excess of the substantially reduced Winter Season rates made available to only a relative few of Cablevision‘s customers with summer residences,” and that Defendants’ retention of the monies received through this conduct “violates fundamental principles of justice, equity and good conscience.” Compl. ¶ 51.
In addition to seeking damages, Broder requеsts a declaratory judgment and an injunction. The declaratory judgment sought would declare that
Cablevision‘s actions in connection with its failure and [sic] to charge uniform Winter Season rates to plaintiff and the Class and to advise them of the existence of the Winter Season rates violates
47 U.S.C. § 543(d) andPSL § 224-a(4) and the customer agreements between Cablevision and plaintiff and the Class and the covenant of good faith and fair dealing implied thereunder, as well asGBL § 349 , and constitutes fraud and/or unjust enrichment[.]
Compl. ¶ C. The injunction sought would “[e]njoin[] defendants permanently from failing to charge Winter Season rates uniformly to plaintiff and the Class and to advise them of the availability of the Winter Season rates, or otherwise violating Cablevision‘s customer agreement and
Following Cablevision‘s removal of the action to federal court on February 23, 2004, Broder moved pursuant to
DISCUSSION
“We review de novo a district court‘s denial of a motion to remand” a removed action. Shafii v. British Airways, PLC, 83 F.3d 566, 570 (2d Cir.1996). The same is true of a dismissal pursuant to Rule 12(b)(6). Velez v. Levy, 401 F.3d 75, 84 (2d Cir.2005).
Because a holding that the district court lacked removal jurisdiction would end our inquiry, we first address the district court‘s denial of Broder‘s motion to remand the case to state court for lack of jurisdiction. Grable & Sons Metal Products, Inc., v. Darue Engineering & Manufacturing, ___ U.S. ___, ___, 125 S.Ct. 2363, 2366-67, ___ L.Ed.2d ___, ___ (2005),3 establishes that the existence of “a cause of action created by federal law” is not a necessary condition for federal-question jurisdiction under
At oral argument, Broder‘s counsel accurately described the complaint as asserting two separate contract claims and two separate GBL claims. What is styled as a single breach-of-contract claim actually has two distinct parts: (1) a claim that Cablevision breached one provision of applicable law, incorporated by reference into the contract, “by failing to provide [Broder and the class members] with the uniform rates required by
Any doubt that Broder brings distinct claims based on
The requirement that the federal issue be “actually disputed and substantial,” Grable, ___ U.S. at ___, 125 S.Ct. at 2368, is also met. Cablevision maintains that its provision of Winter Season rates did not violate the
Broder argues instead that the federal issues involved in this case must necessarily be insubstantial because his suit was dismissed on state-law grounds. He draws support from Christianson‘s statement that jurisdiction does not exist where there are reasons “`completely unrelated\‘” to the potentially jurisdiction-bestowing issue why plaintiffs “`may or may not be entitled to the relief [they] see[k].\‘” Christianson, 486 U.S. at 812, 108 S.Ct. 2166 (quoting Franchise Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 26, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983)) (alterations in original).
Yet Christianson does not stand for the proposition that any claim that could fail for a reason grounded in state law necessarily lies outside federal-question jurisdiction. In Grable itself, the district court relied on Michigan equitable principles as an alternative basis for denying the plaintiff relief. Grable & Sons Metal Prods., Inc., v. Darue Eng‘g & Mfg., Inc., 207 F.Supp.2d 694, 698 (W.D.Mich.2002) (”Grable I“). It would be unusual for a state-law claim that raised a federal issue not to be subject to some conceivable state-law defense, whether based on the statute of limitations, equitable principles such as laches and unclean hands, or some other potential defect analytically prior to the federal issue at the heart of the claim. Christianson concerned alternative theories on which a claim could succeed, not alternative ways in which a claim could fail, and its language must be read in this context.
We therefore come to the final Grable requirement: the claim must be one “which a federal forum may entertain without disturbing any congressionally approved balance of federal and state judicial responsibilities.” Grable, ___ U.S. at ___, 125 S.Ct. at 2368. Here, Broder emphasizes the lack of a private right of action under
The complaint in this case therefore satisfies all three prongs оf the Grable test for federal-question removal jurisdiction. We hold that the district court correctly denied Broder‘s motion to remand the case to state court for lack of jurisdiction.
II. Dismissal for Failure to State a Claim
On review of a Rule 12(b)(6) dismissal, we accept the facts alleged in the complaint as true, and draw all reasonable inferences in favor of the plaintiff. Freedom Holdings, Inc. v. Spitzer, 357 F.3d 205, 216 (2d Cir.2004). We are not limited solely to the allegations in the complaint, however. Where a plaintiff has “reli[ed] on the terms and effect of a document in drafting the complaint,” and that document is thus “integral to the complaint,” we may consider its contents even if it is not formally incorporated by reference. Chambers v. Time Warner, Inc., 282 F.3d 147, 153 (2d Cir.2002) (internal quotation marks omitted). Insofar as the complaint relies on the terms of Cablevision‘s customer agreement, therefore, we need not accept its description of those terms, but may look to the agreement itself.
A. Breach of Contract Claims
The contract language relied upon in both of Broder‘s breach-of-contract claims, as it exists in the actual customer agreement, differs from the language alleged in the complaint. The complaint states that “[u]nder Paragraph 16 of the uniform terms of its customer agreement with each Cablevision subscriber during the Class Period, Cablevision agreed that all of its rates and any changes in those rates will be `subject to applicable law.\‘” Compl. ¶ 27. Paragraph 16 of the customer agreement actually provides that “[r]ates for the installation of service or equipment and rates for programming or other services are subject to change in accordance with applicable law.”5 That is, Paragraph 16 states not that rates are subject to applicable law, but that rates are subject to change in accordance with applicable law.
This difference is fatal to both of Broder‘s breach-of-contract claims. “Whether contract language is ambiguous is a question of law, which we review de novo.” Haber v. St. Paul Guardian Ins. Co., 137 F.3d 691, 695 (2d Cir.1998). The general rule is that “ambiguity exists where a contract term `could suggest more than one meaning when viewed objectively by a reasonably intelligent person who has examined the context of the entire integrated agreement and ... is cognizant of the customs, practices, usages and terminology as generally understood in the particular trade or business.\‘” World Trade Ctr. Props., L.L.C. v. Hartford Fire Ins. Co., 345 F.3d 154, 184 (2d Cir.2003) (quoting Morgan Stanley Group, Inc. v. New England Ins. Co., 225 F.3d 270, 275 (2d Cir.2000) (internal quotations omitted)). But “`ambiguity is detected claim by claim,\‘” because “`a contract may be ambiguous when applied to one set of facts but not anothеr.\‘” Id. (quoting Morgan Stanley Group, 225 F.3d at 278). Even if we assume arguendo that, as Broder suggests, the district court‘s interpretation of Paragraph 16 to protect only Cablevision was inappropriate because a symmetric interpretation was more consistent with New York law governing contracts of adhesion, the contract language would still unambiguously foreclose his claims.
Broder does not complain of a change in rates. Rather, Broder complains that Cablevision did not provide uniform rates and did not disclose the availability of certain rates. So far as appears from the complaint, the Winter Season rates might already have been in place for some customers when Broder and the other members of the putative class signed their customer agreements. The continued existence of the Winter Season rates may have involved no change in the overall rate structure. Even if the actions and omissions of which Broder complains violated “applicable law,” therefore, it is not alleged that they necessarily constituted a change in rates contrary to that law.
Moreover, even if we assume that the Winter Sеason rates were created while Paragraph 16 of the customer agreement was operative, the fact that certain customers received the Winter Season rates would not have constituted a change in Broder‘s rates or the rates of the other class members. As to his own rates, which are the subject of the agreement between him and Cablevision, Broder complains not of a change but of a lack of change.7 To say that something is “subject to change” in accordance with certain rules is to say that it may change, not that it definitely will. Contract language describing the circumstances under which rates are subject to change does not indicate that change is obligatory. At most, Paragraph 16 addresses circumstances under which the customer may be entitled to keep his old rates, not circumstances under which he may be entitled to have his old rates replaced by new ones.
The district court considered this case analogous to Grochowski v. Phoenix Construction, 318 F.3d 80, 85 (2d Cir.2003), which held that a state-law suit for breach of a construction contract referencing prevailing wage schedules under the Davis-Bacon Act could not avoid that Act‘s lack of a private right of action to enforce those wage schedules. So too here, the district court held as an alternative ground of decision, the lack of a private right of action under
The contract claim founded on
B. GBL § 349 Claims
In Conboy v. AT & T Corp., 241 F.3d 242, 258 (2d Cir.2001), we established that a plaintiff cannot circumvent the lack of a private right of action for violation of a New York state law by pleading his claim under
Were we to hold, despite Conboy, that
Neither the text of
The
In applying Conboy, the district court did not impair, abrogate, or restrict any right that Broder would have had in the absence of
C. Common Law Fraud
Generally, New York law requires that “[t]o establish a common-law cause of action [a] plaintiff[] must identify to the court a common-law duty owed by the defendants to the plaintiff[] that did not arise out of the applicable statute.” HANYS Servs., Inc. v. Empire Blue Cross & Blue Shield, 187 Misc.2d 253, 721 N.Y.S.2d 750, 753 (Sup.Ct.2001), aff‘d, 292 A.D.2d 61, 737 N.Y.S.2d 140 (3d Dep‘t 2002). The putative misrepresentation that Broder alleges in his fraud claim consists solely of Cablevision‘s purported knowing and willful failure to comply with the disclosure requirements of
For Broder to succeed on his fraud claim, we would have to hold thаt knowing and willful failure to comply with
Rego Park Gardens Owners, Inc. v. Rego Park Gardens Associates, 191 A.D.2d 621, 595 N.Y.S.2d 492 (2d Dep‘t 1993), is instructive. There, the plaintiff asserted a cause of action for fraudulent nondisclosure based on defendant‘s failure to disclose information that it was required to disclose under a regulation promulgated pursuant to New York‘s Martin Act. Like
Broder is also not aided by
In his reply brief, Broder advances a subtler argument in support of his fraud claim. Given that “defendants affirmatively represented what their rates were in their semi-annual brochures,” he says, they were under a common-law duty not to mislead by “omitting to disclose the Winter Season rates, and ... implicitly representing that there were no rates other than those disclosed.” Reply Br. for Pl.-Appellant at 26. This argument suggests that Broder may have a common-law fraud claim that does not rely on
The theory put forward in Broder‘s reply is at least less obviously in tension with HANYS, Conboy, Rego Park, and
D. Unjust Enrichment
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.” Han v. Hertz Corp., 12 A.D.3d 195, 784 N.Y.S.2d 106, 107 (1st Dep‘t 2004); accord HANYS Servs., 721 N.Y.S.2d at 753. The parties agree that there is no private right of action under
CONCLUSION
We have considered Broder‘s other arguments and find them to be without merit. For the reasons set forth above, the judgment of the district court is affirmed.
This conclusion does not mean that Broder and the putative class he seeks to represent are without a forum for their claims. It means only that they are without a judicial forum. As the district court noted, both Congress and the New York State legislature have provided administrative agency oversight for the sorts of claims asserted here. Broder and the other members of the putative class may seek relief from the New York Public Service Commission or the Federal Communications Commission.