SANDRA QUINTANILLA, individually and on behalf of all others similarly situated, v. WW INTERNATIONAL, INC., a Virginia Corporation doing business as Weight Watchers, and DOES 1 through 50, inclusive,
20 Civ. 6261 (PAE)
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK
Filed 05/24/21
PAUL
OPINION & ORDER
PAUL A. ENGELMAYER, District Judge:
In March 2020, as the COVID-19 pandemic spread, businesses throughout the country shuttered in-person operations to protect public health and slow the spread of the virus, many at the direction of state or local governments. Defendant WW International, Inc. (“WW“)—which operates the health and fitness business “Weight Watchers“—is one such company. On March 16, 2020, WW moved its in-person services, which it had offered to subscribing members at brick-and-mortar workshops, online. Plaintiff Sandra Quintanilla, a citizen of California, was (and continues
Before the Court is WW‘s motion to dismiss Quintanilla‘s claims for lack of standing and for failure to state a claim. For the reasons below, the Court grants that motion on the latter ground. Although Quintanilla has standing to pursue her individual claims for damages, these claims fail the pleading standards of
I. Background
A. Factual Background1
WW operates a nationwide weight-loss support program through which it, at the time the TAC was filed, offered three types of subscription-based memberships: (1) the Digital Membership, which provided access only to WW‘s website and app; (2) the Workshop + Digital Membership, which provided the same electronic access as the Digital Membership plus weekly in-person group workshops led by a WW coach; and (3) the Personal Coaching + Digital Membership, which provided the same benefits as the Workshop + Digital Membership plus one-on-one personal coaching. TAC ¶ 10.
Since November 2018, Quintanilla has subscribed to the Workshop + Digital Membership, at a cost of $44.95 per month. Id. ¶ 12. She alleges that she signed up for this program, “in part, because she wanted to participate in the weekly in-person support meetings.” Id. She further alleges that “[o]n its website, [WW] touts that it holds more than 40,000 in-person Workshop meetings each week.” Id. ¶ 11. However, the webpage she cites does not promise in-person services. Compare id., with About Us, WW, https://www.weightwatchers.com/about/crp/index.aspx (“Weight Watchers holds more than 40,000 meetings each week where members receive group support and learn about
On March 16, 2021, as COVID-19 spread, WW closed its workshop locations and stopped offering in-person services. TAC ¶ 13. WW continued to charge all its Workshop + Digital members the same $44.95 monthly fee it had before the closure. Id. ¶ 14. On March 18, 2021, WW debited Quintanilla that amount; it has continued to do so since then.2 Id. ¶¶ 15–17.
Quintanilla alleges that this transition from in-person to remote meetings “unilaterally downgrad[ed]” hers and all other Workshop + Digital members’ subscriptions to what amounts to a Digital Membership, but that WW wrongfully failed to either issue a corresponding refund or to lower the price of her membership. Id. ¶ 18. She thus alleges that the transition rendered false and misleading WW‘s prior statements about the in-person aspects of the Workshop + Digital Membership. Id. ¶¶ 20–21, 39, 55, 63. She brings claims under the California Consumer Legal Remedies Act,
WW disputes whether Quintanilla has suffered an injury in fact, given that Workshop + Digital members remain able to access virtual workshops. It argues, in any event, that all her allegations fail to state a claim. Dkt. 38 (“WW Mem.“); Dkt. 40 (“Martin Decl.“) ¶ 11.
B. Procedural History
On June 10, 2020, Quintanilla filed a complaint against WW in California Superior Court. Dkt. 1 (“Notice of Removal“) ¶ 1. On June 25, 2020, she filed an amended complaint. Id.; see Dkt. 1-4 (“FAC“). On July 30, 2020, WW removed the case to federal court in the Central District of California. See Notice of Removal. On August 6, 2020, the parties stipulated to the transfer of this case from California to this District, citing a forum-selection clause in the T&C that both parties agreed governs Quintanilla‘s membership. Dkt. 10 at 2–3. The parties also jointly sought leave for Quintanilla to file a second amended complaint (“SAC“). Id. at 3. On August 7, 2021, Judge Phillips of the Central District of California ordered the case transferred and granted Quintanilla leave to file a SAC. Dkt. 11. On August 10, 2020, the case was transferred accordingly. Dkt. 12.
On September 23, 2020, WW moved to dismiss the SAC. Dkts. 28–31. The next day, the Court issued an order directing Quintanilla either to oppose that motion or amend her complaint, and stating that “[n]o further opportunities to amend will ordinarily be granted.” Dkt. 32. On September 29, 2020, the Court held the initial conference. Dkt. 34. On October 14, 2020, Quintanilla filed the TAC, which is now the operative pleading in this case. See TAC.
On November 4, 2020, WW moved to dismiss the TAC, Dkt. 37, and in support filed a memorandum of law, see WW Mem.; the declaration of Kristin D. Lockhart, Esq., Dkt. 39 (“Lockhart Decl.“); and the declaration of Maureen Martin, see Martin Decl., with supporting exhibits. On November 18, 2020, Quintanilla opposed that motion. Dkt. 41 (“Pl. Mem.“). On November 25, 2020, WW replied, Dkt. 42 (“WW Reply“), and filed another declaration from Ms. Lockhart, Dkt. 43 (“Second Lockhart Decl.“), with a supporting exhibit.
II. Legal Standard
A. Motion to Dismiss Under Rule 12(b)(1) for Lack of Standing
“A claim that a party lacks standing to bring suit is an attack on a court‘s subject matter jurisdiction over that party.” EMI Entm‘t World, Inc. v. Karen Recs., Inc., No. 05 Civ. 390 (LAP), 2013 WL 2480212, at *2 (S.D.N.Y. June 10, 2013) (citing Bender v. Williamsport Area Sch. Dist., 475 U.S. 534, 541–42 (1986)). Constitutional standing thus “is the threshold question in every federal case, determining the power of the court to entertain the suit.” Warth v. Seldin,
422 U.S. 490, 498 (1975). “A plaintiff asserting subject matter jurisdiction has the burden of proving by a preponderance of the evidence that it exists.” Makarova, 201 F.3d at 113. In analyzing whether subject-matter jurisdiction exists, a district court may consider evidence outside the pleadings, such as affidavits and exhibits. See id.
B. Motion to Dismiss Under Rule 12(b)(6)
To survive a motion to dismiss under
III.
WW first argues that the Court must dismiss Quintanilla‘s claims under
A. Standing
Article III standing consists of three “irreducible” elements: (1) injury-in-fact, (2) a causal connection between the injury and the conduct complained of, meaning that “the injury has to be fairly traceable to the challenged action of the defendant“; and (3) redressability. Lujan v. Defs. of Wildlife, 504 U.S. 555, 560–61 (1992) (cleaned up). To show an injury in fact, a plaintiff must allege an injury that is both “concrete and particularized” and “actual or imminent, not conjectural or hypothetical.” Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1548 (2016) (quoting Lujan, 504 U.S. at 560). A plaintiff must show “standing for each claim and form of relief sought.” Baur v. Veneman, 352 F.3d 625, 641 n.15 (2d Cir. 2003).
As to Quintanilla‘s claim for damages, the Court easily concludes that she has standing. The TAC alleges that WW advertised that it would provide certain in-person services that it failed to provide. See TAC ¶¶ 10(b) (WW advertised that the Workshop + Digital Membership provides access to “in-person coaching and community-based learning through... weekly Workshops“), 11 (WW “touts that it holds more than 40,000 in-person Workshop meetings each week“), 13–14 (WW closed all workshops amid the COVID-19 pandemic), 18. She also alleges that, had she known that such in-person services would become unavailable, she either would not have purchased WW‘s services in the first place or would not have paid as much as she did for them. See id. ¶ 12 (Quintanilla signed up for the Workshop + Digital Membership in part “because she wanted to participate in the weekly in-person support meetings“), 20 (Quintanilla relied on WW‘s statements about in-person services), 21 (“Had Plaintiff and Class Members known Defendants would charge the full monthly Workshop Membership prices for even when Plaintiff and Class Members did not have access to any Workshops, they either would not have signed up for the in-person Workshop Memberships or paid much less for those memberships.“). That establishes an Article III injury. “[W]hen, as here, ‘Plaintiffs contend that class members
paid more for [a service] than they otherwise would have paid, or bought it when they otherwise would not have done so,’ they have suffered an Article III injury in fact.” Morrow v. Ann Inc., No. 16 Civ. 3340 (JPO), 2017 WL 363001, at *3 (S.D.N.Y. Jan. 24, 2017) (quoting Hinojos v. Kohl‘s Corp., 718 F.3d 1098, 1104 n.3 (9th Cir. 2014)); see, e.g., In re Bayer Corp. Combination Aspirin Prods. Mktg. & Sales Pracs. Litig., 701 F. Supp. 2d 356, 377 (E.D.N.Y. 2010) (“[C]ourts have long held that a plaintiff is injured, suffering an ascertainable loss, when he receives less than what he was promised.“).
WW argues that these allegations cannot support constitutional standing because WW did not, in fact, promise in-person workshops, and because its virtual
would otherwise not have spent.” Morrow, 2017 WL 363001, at *3. That injury “is concrete, and while it may ultimately prove insufficient to justify relief under the statutes at issue, it is sufficient to confer constitutional standing.” Id. Holding otherwise would convert the mine run of routine challenges under
As to the injunctive relief Quintanilla seeks, the analysis differs. Past purchasers of deceptively marketed products or services are ill-suited, under Article III, to seek injunctive relief. See Berni v. Barilla S.p.A., 964 F.3d 141, 147–49 (2d Cir. 2020) (vacating class certification providing for injunctive relief because class lacked standing to pursue such relief). As to such remedies, “[t]he prospective-orientation of the analysis is critical: to maintain an action for injunctive relief, a plaintiff ‘cannot rely on past injury . . . but must show a likelihood that he ... will be injured in the future.‘” Id. at 147 (quoting Deshawn E. ex rel. Charlotte E. v. Safir, 156 F.3d 340, 344 (2d Cir. 1998)). Such an injury must be “actual and imminent, not conjectural or hypothetical.” Id. (quoting Summers v. Earth Island Inst., 555 U.S. 488, 493 (2009)). And, as the Circuit explained, purchasers who claim to have been deceived by a defendant‘s deceptive or misleading practices, even if they intend to purchase the good or service at issue again in the future, “will not again be under the illusion” that caused their initial harm: “instead, next time they buy [the product], they will be doing so with exactly the level of information that they claim they were owed from the beginning.” Id. at 148. In such circumstances, plaintiffs lack standing to seek injunctive relief because “[t]he requisite imminent threat of future injury [is not] present,” even “based on a representation by plaintiff of intent to purchase” the same
deceptively marketed product “in the coming months.” Id. (quoting 1 McLaughlin on Class Actions § 5:15 (15th ed. 2018)). Thus, courts have held, following Berni, that past purchasers generally lack standing to seek an injunction because it is unlikely that they, or any class they
Given the allegations in the TAC, these principles preclude Quintanilla‘s standing to seek injunctive relief, on her own behalf or on behalf of a class. Quintanilla alleges that she signed up for WW‘s Workshop + Digital Membership with the expectation that WW would keep offering in-person services at the price she opted to pay, but that she was injured when she was “forced to pay the full Workshop Membership prices” after WW canceled in-person meetings during the COVID-19 pandemic. TAC ¶ 21. She claims that, had she “known [WW] would charge the full monthly Workshop Membership prices . . . even when [she] did not have access to any
Workshops, [she] either would not have signed up for the in-person Workshop Memberships or paid much less for those memberships.” Id. Now, however, Quintanilla, by her own admission, is aware that WW‘s alleged in-person representations were not reliable, at least in the face of a global pandemic, and that WW, allegedly, was not apt to spontaneously issue refunds or lower its prices in the face of such a development. See, e.g., id. ¶ 22; Pl. Mem. at 6–7.4 Because she has now “necessarily become aware of the alleged misrepresentations, ‘there is no danger that [Quintanilla] will again be deceived by them,‘” and that she will be harmed again in the same way. Hesse v. Godiva Chocolatier, Inc., 463 F. Supp. 3d 453, 465–66 (S.D.N.Y. 2020) (citation omitted). Thus, Quintanilla lacks standing to pursue injunctive relief on her own behalf or on behalf of the class.
Quintanilla‘s arguments to the contrary are unpersuasive. First, she cites California cases assessing standing under the UCL and CLRA—many of which do not specifically concern standing to seek injunctive relief. See Pl. Mem. at 9–10 (collecting cases). But “the Court begins not with out-of-circuit caselaw, but with binding Supreme Court and Second Circuit precedent.” Hesse, 463 F. Supp. 3d at 465 (holding that plaintiffs lacked standing to pursue injunctive relief in false-advertising
Second, she argues that the fact that she has continued to subscribe to WW—and has therefore continued to suffer injuries—establishes a likelihood of imminent future injury. See Pl. Mem. at 10. Plaintiffs, however, “cannot manufacture standing merely by inflicting harm on themselves.” Steven v. Carlos Lopez & Assocs., LLC, 422 F. Supp. 3d 801, 807 (S.D.N.Y. 2019)
(quoting Clapper v. Amnesty Int‘l USA, 568 U.S. 398, 416 (2013)), aff‘d sub nom. McMorris v. Carlos Lopez & Assocs., LLC, No. 19-4310, 2021 WL 1603808 (2d Cir. Apr. 26, 2021); see Pennsylvania v. New Jersey, 426 U.S. 660, 664 (1976) (“No [party] can be heard to complain about damage inflicted by its own hand.“). In any event, given Quintanilla‘s choice to continue subscribing to WW, she cannot viably claim that she stands to be injured in the same way as she claims to have been by WW‘s purportedly false promises of in-person workshops. Even if she continues to subscribe to WW, “there is no reason to believe that [she] will incur a harm anew.” Berni, 964 F.3d at 148. That is because, once deceived by WW‘s conduct, she “will not again be under the illusion” that WW would maintain in-person workshops, else sua sponte reduce prices or issue refunds, during this, or a future, pandemic. Id. Instead, in continuing to subscribe to WW since the pandemic began, despite WW‘s lack of in-person services, she has acted “with exactly the level of information that [she] claim[s] [she was] owed from the beginning.” Id. Thus, Quintanilla has not established a future injury, arising from WW‘s conduct, that is “actual and imminent,” “real and immediate,” “certainly impending,” and “likely.” Hesse, 464 F. Supp. 3d at 465–66 (collecting cases).
Last, Quintanilla raises policy concerns with the implications of the holding in Berni. Pl. Mem. at 11 (collecting California cases). But the Circuit expressly considered those concerns, yet “went on to reject the policy-based rationale that underpins most of the cases on which Plaintiff relies.” Campbell, 2021 WL 355405, at *15 n.16; see Berni, 964 F.3d at 148 (rejecting notion that policy concerns about a “Catch-22” for consumer plaintiffs seeking injunctive relief permit courts to “create[e] an exception to the” ordinary rules of standing and class certification). The Court rejects Quintanilla‘s second-guessing of the Circuit‘s assessment of the implications of its holding.
Thus, Quintanilla lacks standing to pursue injunctive relief, on her own behalf or on behalf of a class. The Court dismisses her claims for injunctive relief under
1. CLRA, UCL, and FAL
Quintanilla brings claims under three California consumer-protection statutes: the CLRA, the UCL, and the FAL. See TAC ¶¶ 34–67.
The CLRA proscribes specified “unfair methods of competition and unfair or deceptive acts or practices,” including: “representing that goods or services have characteristics, uses, or benefits that they do not have“; “representing that goods or services are of a particular standard, quality, or grade, if they are of another“; “advertising goods or services with intent not to sell them as advertised“; and “representing that the subject of a transaction has been supplied in accordance with a previous representation when it has not.” TAC ¶ 38 (quoting
The UCL prohibits any “unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising.”
Finally, the FAL, as relevant here, makes it unlawful for any person or entity make any public advertisement “which is untrue or misleading, and which is known, or which by the exercise of reasonable care should be known, to be untrue or misleading,” or to make any such statement “as part of a plan or scheme with the intent not to sell” the advertised property or services “as so advertised.”
“Courts often analyze these statutes together because they share similar attributes.” In re Sony Gaming Networks & Customer Data Sec. Breach Litig., 996 F. Supp. 2d 942, 985 (S.D. Cal. 2014) (collecting cases). Two such attributes are relevant here. First, all three laws require plaintiffs to meet the pleading standards of
under the CLRA pursuant to § 1782(d) of the Act.“). The Court has held that Quintanilla lacks standing to pursue such relief. Thus, she lacks standing to pursue the relief sought in the TAC under the CLRA. The Court‘s reasoning below as to the UCL and FLA, however, applies equally to the CLRA such that, had the Court jurisdiction to address that claim, it similarly would have required dismissal.
are subject to
Quintanilla‘s theory of liability under each statute is essentially the same: WW violated each by falsely representing that its monthly membership programs included in-person meetings, whereas in fact, WW canceled such in-person services during the COVID-19 pandemic and did not issue unilateral refunds or reduce the costs of its membership services. See TAC ¶¶ 37 (WW‘s “retention of [Quintanilla‘s] monthly membership fees without providing all promised benefits of the membership, including full in-person access to services at Workshop locations, is an unfair business practice in violation of CLRA“), 39 (WW “violated the CLRA by representing and failing to disclose material facts regarding its monthly membership program, as described above, when they knew, or should have known, that the representations were false and misleading“), 50 (WW‘s “retention of the monthly fees without providing the full services promised” violates the UCL), 55 (WW misled “consumers into believing they will have full access to all of the program benefits by paying the monthly fee,” in violation of the UCL), 64 (WW violated the FAL because its “advertising that the WEIGHT WATCHERS programs are accessible, and that its customers would have access to its various Workshop locations and
services upon paying a monthly membership fee is false and misleading to reasonable consumers, including Plaintiff, because Defendants in fact closed its Workshop locations while continuing to charge customers for full access.“).
WW argues that these claims must be dismissed for two reasons. First, it contends that Quintanilla has failed to plausibly allege that any reasonable consumer would have taken any statements by WW about its in-person workshops to mean that WW would never, even faced with a once-in-a-century pandemic, modify the in-person aspect of those workshops. See WW Mem. at 16–18. That is especially so, WW argues, because the T&C—to which Quintanilla undisputedly consented when she became a WW subscriber, see, e.g., TAC ¶ 5—put all WW subscribers on notice that WW retains discretion to “discontinue or modify any aspect of the Offerings,” T&C ¶ 3 (“Your Membership“). Second, WW argues that Quintanilla has failed to plead these claims with the particularity required by
The Court holds with WW. Beginning in March 2020, a deadly, novel, and unforeseen pandemic forced businesses, schools, and institutions of all kinds, across the globe,
to close their doors to protect the public. As relevant here, California‘s governor, on March 19, 2020, signed an executive order which ordered “all individuals living in the State of California to stay at home” with limited exceptions. See Cal. Exec. Order No. N-33-20 (Mar. 19, 2020). Soon after, municipalities across the state (and, of course, country) issued orders requiring the closure of certain non-essential businesses. See, e.g., Brandy v. Villanueva, No. 20 Civ. 2874 (AB), 2020 WL 3628709, at *1 (C.D. Cal. Apr. 6, 2020) (discussing Los Angeles closure laws); Tralom, Inc. v. Beazley USA Servs., Inc., No. 20 Civ. 8344 (JFW), 2020 WL 8620224, at *2 (C.D. Cal. Dec. 29, 2020) (discussing similar orders in Ventura County, where Quintanilla resides). Even assuming that Quintanilla has pled her claims—i.e., that WW, at times, marketed its membership services as including in-person aspects—with particularity under
does Quintanilla allege that WW represented it would continue to offer uninterrupted access to in-person meetings, regardless of the circumstances and without taking heed of the fast-emerging public-health emergency presented by the COVID-19 pandemic.
In this respect, recent decisions addressing consumer-protection claims in the educational context—although under other states’ laws—present a helpful analogy. Across the board, courts in recent months have dismissed claims under such laws even where colleges and universities had advertised in-person educational opportunities. See, e.g., Crawford v. Presidents & Dirs. of Georgetown Coll., No. 20 Civ. 1141 (CRC), 2021 WL 1840410, at *14 (D.D.C. May 7, 2021) (dismissing claims for tuition refund under the D.C. Consumer Protection Act because “[a] reasonable student would have understood that, even if American expected to offer campus-based programs and facilities throughout the semester, the university had not bound itself to
2021 WL 790638, at *10 (S.D.N.Y. Feb. 26, 2021) (same where defendants did not know “in advance that a pandemic would necessitate fundamental changes to its services and operations beginning in mid-March 2020“); Bergeron v. Rochester Inst. of Tech., No. 20 Civ. 6283 (CJS), 2020 WL 7486682, at *11 (W.D.N.Y. Dec. 18, 2020) (same because “no reasonable prospective student could consider him- or herself ‘deceived’ or ‘misled’ where the school‘s normal course of on-campus instruction was altered mid-semester by an unforeseen global pandemic that prompted the Governor of New York to issue an unprecedented executive order prohibiting on-campus, in-person instruction“); Ford v. Rensselaer Polytechnic Inst., No. 20 Civ. 470 (DNH), 2020 WL 7389155, at *10 (N.D.N.Y. Dec. 16, 2020) (same because “[n]o reasonable consumer would expect a university to remain open for in-class instruction in the face of a pandemic and a state-mandated shutdown, regardless of whether the school advertised on-campus learning as a strength.“); see also Ashton v. J.M. Smucker Co., No. 20 Civ. 992 (JGB), 2020 WL 8575140, at *9 (C.D. Cal. Dec. 16, 2020) (noting similarity between “reasonable consumer” standard under the GBL and California statutes). So too here. Even if, at points, WW advertised in-person elements of its membership services, the TAC fails to plausibly allege any representation that such marketing would have led a reasonable consumer to believe that WW would never, even under dire public-health circumstances, modify or discontinue those elements.8
That conclusion is bolstered by two aspects of Quintanilla‘s subscription. The first, at paragraph 3 of the T&C, put Quintanilla on notice of the fact that WW retained
Thus, the Court dismisses Quintanilla‘s claims under the CLRA, UCL, and FAL.
2. Weight Loss Contracts Act
Quintanilla also brings claims under a separate California law, the WLCA. See
First, Quintanilla‘s allegation as to the notice required by section 1694.7(b) is refuted by the T&C. That section of the WLCA requires that every weight-loss contract include “in close proximity to the space reserved for” the buyer‘s signature and “in a size equal to at least 10-point boldface type,” the following notice:
You, the buyer, may cancel this agreement, without any penalty or obligation, at any time prior to midnight of the original contract seller‘s third business day following the date of this contract, excluding Sundays and holidays. To cancel this agreement, mail or deliver a signed and dated notice, or send a telegram which states that you, the buyer, are canceling this agreement, or words of similar effect. This notice shall be sent to: [company address].
Second, Quintanilla‘s charge that WW refused her refund request is similarly belied by her own allegations and the documents incorporated by reference into the TAC. The provision of the WLCA that Quintanilla cites for this allegation requires that any buyer of a weight-loss contract be permitted “to cancel a weight loss contract or offer until midnight of the third business day after the day on which the buyer signs an agreement or offer to purchase those services.”
Last, Quintanilla claims that WW violated
C. Breach of Contract
Quintanilla also brings a claim for breach of contract, under New York
Quintanilla‘s breach-of-contract claim fails for the straightforward reason that her contract with WW does not mention, let alone promise, in-person workshops. The TAC does not identify which provision of the T&C (which Quintanilla does not dispute governs her WW subscription) created such a contractual obligation. See TAC ¶¶ 81–88. Even after receiving WW‘s motion to dismiss, she did not identify any specific term in the T&C which even potentially obliged WW to provide in-person workshops. Pl. Mem. at 19–20. Instead, responding to that motion, Quintanilla cites only her own allegations of WW‘s “duties and obligations to Plaintiff including the duty to only charge . . . Workshop Membership fees if [WW] provided the Workshop Membership benefits.” Id. at 20; see also T&C ¶ 1 (discussing “attendance” at workshops without specifying location, as well as “one on one phone sessions, emails and/or texts“). She also notes that she “originally expected to receive” access to in-person services. Pl. Mem. at 20. But such extrinsic expectations do not define the terms of the parties’ agreement; absent a contractual ambiguity—which Quintanilla does not allege—the parties’ intent must instead “be construed from the four corners of the agreement.” Fleming v. Fleming, 137 A.D.3d 1206, 1207 (1st Dep‘t 2016) (citation omitted); see LaSalle Bank Nat‘l Ass‘n v. Nomura Asset Cap. Corp., 424 F.3d 195, 208 n.10 (2d Cir. 2005).
WW, on the other hand, identifies a clear grant of contractual discretion in the T&C, authorizing it to “discontinue or modify any aspect of the Offerings or the Website and/or Apps, including, but not limited to . . . restricting the amount of use and/or access permitted, and . . . restricting or terminating anyone‘s right to use and/or access the Offerings, the Website and/or Apps.” T&C ¶ 3 (emphasis added). The T&C also states that WW may to do so “in [its] sole discretion and without prior notice or liability,” and that Quintanilla
In sum, Quintanilla does not identify any term in the parties’ contract that WW breached by switching from in-person to remote workshops during the pandemic, without issuing refunds or lowering prices; and WW identifies contractual language expressly authorizing it to modify or discontinue its offerings without liability. The Court therefore dismisses Quintanilla‘s claim for breach of contract.
D. Breach of the Implied Duty of Good Faith and Fair Dealing
As part of her cause of action for breach of contract, Quintanilla also alleges that WW breached the implied covenant of good faith and fair dealing (the “implied covenant“) because, even absent an express contract term requiring in-person meetings, WW‘s “discretion was sufficiently constrained under the terms of the contract to support an implied obligation of good faith and fair dealing.” TAC ¶ 86; see id. ¶ 87 (alleging that defendants breached the implied covenant by closing workshops and continuing to charge full membership fees without issuing refunds). WW argues that Quintanilla‘s claim for breach of the implied covenant is conclusory, duplicative of her breach-of-contract claim, and foreclosed by the parties’ contract. The Court agrees.
Under New York law, a duty of good faith and fair dealing is implied in every contract, to the effect that neither party “shall do anything which has the effect of destroying or injuring the right of the other party to receive the fruits of the contract.” Thyroff v. Nationwide Mut. Ins. Co., 460 F.3d 400, 407 (2d Cir. 2006) (quoting M/A–COM Sec. Corp. v. Galesi, 904 F.2d 134, 136 (2d Cir. 1990) (per curiam)). The implied covenant does not include any term inconsistent with the terms of the contractual relationship, or “create duties which are not fairly inferable from the express terms of that contract.” Interallianz Bank AG v. Nycal Corp., No. 93 Civ. 5024 (RPP), 1994 WL 177745, at *8 (S.D.N.Y. May 6, 1994) (citing Fasolino Foods Co. v. Banco Nazionale del Lavoro, 961 F.2d 1052, 1056 (2d Cir. 1992)). Nor can it “be construed so broadly as effectively to nullify other express terms of a contract, or to create independent contractual rights.” Nasdaq, Inc. v. Exch. Traded Managers Grp., 431 F. Supp. 3d 176, 252 (S.D.N.Y. 2019) (quoting Peter R. Friedman, Ltd. v. Tishman Speyer Hudson L.P., 107 A.D.3d 569, 570 (1st Dep‘t 2013)). But it includes promises that a “reasonable person in the position of the promisee would be justified in understanding were included” in the contract and, when the contract involves the exercise of discretion, a promise “not to act arbitrarily or irrationally in exercising that discretion.” Dalton v. Educ. Testing Serv., 87 N.Y.2d 384, 389 (1995) (citation omitted). “[S]ince there is a presumption that all parties act in good faith, the burden of proving a breach of the covenant of good faith and fair dealing is on the person asserting the absence of good faith.” Tractebel Energy Mktg., Inc. v. AEP Power Mktg., Inc., 487 F.3d 89, 98 (2d Cir. 2007) (quoting 23 Williston on Contracts § 63:22 (4th ed. 2006)).
Quintanilla fails to state a claim for breach of the implied covenant. First, Quintanilla‘s claims of the existence of such a duty and WW‘s breach of it are conclusory, merely reciting the elements of the cause of action without explaining how WW‘s actions or obligations measure against the applicable legal standards. For example, Quintanilla states, without explanation, that WW‘s “discretion was sufficiently constrained under the terms of the contract to support an implied obligation of good faith and fair dealing.” TAC ¶ 86. She also alleges that WW breached that duty by “charging Plaintiff and the Class Workshop Membership and usage fees even after [WW] closed its physical Workshop locations and by not refunding the full amount of the charges.” Id. ¶ 87. But she does not explain, in the face of the actual terms of the parties’ contract, the nature of WW‘s duty, how WW‘s cancellation of in-person workshop meetings breached it, or how that cancellation, in response to the pandemic, was an arbitrary or irrational exercise of discretion granted under the contract. See, e.g., Iqbal, 556 U.S. at 678 (
Second, implying a duty in the T&C that precluded WW from modifying or discontinuing in-person services without facing contractual liability would conflict with the provision, discussed above, authorizing WW to do just that. See T&C ¶ 3. It would thus impermissibly “nullify other express terms of a contract” and “create independent contractual rights.” See, e.g., Nasdaq, 431 F. Supp. 3d at 252 (quoting Peter R. Friedman, 107 A.D.3d at 570).
Last, even were the allegations in the TAC plausibly pled and consistent with the parties’ express contract, they are duplicative of Quintanilla‘s claim for breach of contract, which rests on the same factual allegations: that WW continued charging full freight after transitioning its workshops online during the COVID-19 pandemic, but did not unilaterally issue refunds. TAC ¶¶ 81–87; see Harris v. Provident Life & Accident Ins. Co., 310 F.3d 73, 81 (2d Cir. 2002) (“New York law . . . does not recognize a separate cause of action for breach of the implied covenant of good faith and fair dealing when a breach of contract claim, based upon the same facts, is also pled.“). Quintanilla also seeks precisely the same damages on her claims for breach of contract and breach of the implied duty, which appear to be the
E. Quasi-Contract Claims
Last, Quintanilla brings two quasi-contract claims: one for unjust enrichment and the other for money had and received. To establish unjust enrichment, a plaintiff must show that (1) “defendant was enriched“; (2) “at plaintiff‘s expense“; and (3) “equity and good conscience militate against permitting defendant to retain what plaintiff is seeking to recover.” Briarpatch Ltd, L.P v. Phoenix Pictures, Inc., 373 F.3d 296, 306 (2d Cir. 2004) (citing Clark v. Daby, 300 A.D.2d 732, 732 (3d Dep‘t 2002)). Similarly, the elements of a claim of money had and received are that “(1) defendant received money belonging to plaintiff; (2) defendant benefitted from the receipt of money; and (3) under principles of equity and good conscience, defendant should not be permitted to keep the money.” Aaron Ferer & Sons Ltd. v. Chase Manhattan Bank, Nat‘l Ass‘n, 731 F.2d 112, 125 (2d Cir. 1984).
Under New York law, a plaintiff may not recover under quasi-contract claims such as unjust enrichment or money had and received where an enforceable contract governs the same subject matter. See Mid-Hudson Catskill Rural Migrant Ministry, Inc. v. Fine Host Corp., 418 F.3d 168, 175 (2d Cir. 2005) (citing Clark-Fitzpatrick, Inc. v. Long Island R.R., 70 N.Y.2d 382, 388 (1987)); Goldemberg v. Johnson & Johnson Consumer Cos., Inc., 8 F. Supp. 3d 467, 483 (S.D.N.Y. 2014) (unjust enrichment claim “not available where it simply duplicates, or replaces, a conventional contract or tort claim” (citation omitted)); Kalimantano GmbH v. Motion in Time, Inc., 939 F. Supp. 2d 392, 416 (S.D.N.Y. 2013) (“A claim for money had and received is similarly precluded where there is an express contract between the parties addressing the same subject matter.“); Singer v. Xipto Inc., 852 F. Supp. 2d 416, 426 (S.D.N.Y. 2012) (If it is “settled that an enforceable contract exists,” that contract “preclude[s] equitable remedies such as unjust enrichment.“). But where the quasi-contract claim involves subject matter “not covered by a valid, enforceable contractual obligation,” that claim is not duplicative of a contract breach claim and need not be dismissed. Spirit Locker, Inc. v. EVO Direct, LLC, 696 F. Supp. 2d 296, 305 (E.D.N.Y. 2010) (declining to dismiss unjust enrichment claim where subject matter was not covered by an enforceable contractual obligation). Although such claims “may be plead in the alternative where the plaintiff challenges the validity of the contract; [they] may not be plead in
These principles require dismissal here. WW argues that both of Quintanilla‘s quasi-contract claims are precluded by the existence of an undisputedly enforceable contract which governs the services that WW agreed to provide to Quintanilla and the proposed class: the T&C. WW Mem. at 19–20. Quintanilla responds that, under
The Court today dismisses Quintanilla‘s fourth effort at pleading claims against WW. In filing the TAC, Quintanilla had the benefit of reviewing the motion to dismiss the SAC filed by WW, which made essentially the same arguments that today have proven fatal to her claims. Dkts. 28–31. After that motion was filed, the Court gave Quintanilla the choice either to oppose it or to amend the SAC to fortify her claims, and informed her that this would likely be her final opportunity to amend. Dkt. 32. Quintanilla chose to amend, but has again failed to plead any plausible claims against WW. And although she has, perfunctorily, sought leave to amend yet again, see Pl. Mem. at 22 (“Should the Court grant any portion of Defendant‘s Motion, leave to amend is appropriate.“), she has not suggested that she is aware of additional unpled facts that could salvage her claims. The Court‘s dismissal of Quintanilla‘s claims for damages today is therefore with prejudice, and without leave to amend. See TechnoMarine SA v. Giftports, Inc., 758 F.3d 493, 506 (2d Cir. 2014) (upholding dismissal of amended complaint with prejudice where, “following Defendant‘s first motion to dismiss for failure to state a claim,” plaintiff had amended its complaint once and failed to “resolve its pleading deficiencies in its First Amended Complaint“).
CONCLUSION
For the foregoing reasons, the Court dismisses the TAC in full, with prejudice as to Quintanilla‘s claim for damages and without prejudice, for lack of subject-matter jurisdiction, as to her claims for injunctive relief.
The Clerk of Court is respectfully directed to terminate the motions pending at dockets 28 and 37 and to close this case.
SO ORDERED.
Paul A. Engelmayer
PAUL A. ENGELMAYER
United States District Judge
Dated: May 24, 2021
New York, New York