LAURA TAYLOR SWAIN, District Judge.
Plaintiffs Jessica Fink ("Fink") and Brett Noia ("Noia") (collectively, "Plaintiffs") bring this putative nationwide class action pursuant to 18 U.S.C. § 1030, asserting claims for violations of the Computer Fraud and Abuse Act (the "CFAA") against Defendant Time Warner Cable ("Defendant"). Plaintiffs allege principally that Defendant wrongfully limits Plaintiffs' use of certain peer-to-peer applications without authorization and thereby causes damage to Plaintiffs' computers. Plaintiffs also assert various state law claims stemming from alleged misrepresentations by Defendant concerning the nature and quality of its internet service. This Court has jurisdiction of this action pursuant to 28 U.S.C. §§ 1331, 1332 and 1367.
Defendant moves to dismiss certain of Plaintiffs' claims pursuant to Rule 12(c) of the Federal Rules of Civil Procedure and for summary judgment as to certain of Plaintiffs' claims pursuant to Federal Rule of Civil Procedure 56(a).
In their Complaint, Plaintiffs assert claims for violations of the CFAA, 18 U.S.C. § 1030(a)(5)(A)-(C) (Counts I-III); New York and California consumer protection statutes (New York General Business Law § 349 (Count IV), California Business and Professions Code §§ 17200 and 17500, and California Civil Code § 1750 (Counts IX-XI)); breach of contract (Count V); breach of implied-in-fact contract (Count VI); common law fraud (Count VII); and unjust enrichment (Count VIII). Plaintiffs sue on their own behalf and on behalf of a nationwide class of persons, which includes all people who subscribed to Defendant's Road Runner internet service from November 7, 2003 to the date of class certification, pursuant to Rules 23(a), (b)(2), and (b)(3) of the Federal Rules of Civil Procedure. (Compl. ¶ 38.) Fink also sues on behalf of a subclass of New York residents; Noia sues on behalf of a subclass of California residents. (Id.)
The following allegations are drawn from the Complaint and are assumed to be true for the purposes of adjudicating Defendant's Rule 12(c) motion.
Defendant, headquartered in New York, is one of the world's largest media and entertainment conglomerates and serves as an internet service provider ("ISP") to subscribers of its Road Runner High Speed Online internet service ("Road Runner"). (Compl. ¶ 18). Defendant provides Road Runner service to millions of subscribers in most states across the United States, including New York, Texas, Maine, Ohio, and California. (Id. ¶¶ 18, 19.)
Plaintiff Jessica Fink is a citizen of New York and resides in New York County, New York. (Id. ¶ 16.) Plaintiff Brett Noia is a citizen of California and resides in Los Angeles County, California. (Id. ¶ 17.) During the Class Period, both Plaintiffs Fink and Noia subscribed to Defendant's Road Runner service. (Id. ¶¶ 16, 17.)
Defendant used advertisements in order to sell its Road Runner service. Defendant's Road Runner service is named after a cartoon character best known for its lightening speed. (Id. ¶ 1.) Defendant purported to provide internet service with "blazing speed" and an "always on connection" that was the "fastest, easiest way to get online." (Id. ¶¶ 2, 16, 20.) Defendant advertised that "Road Runner Honors Your Need for Speed; You'll Never Get Road Rage with Road Runner." (Id. ¶ 20.) Further, Defendant advertised in its online promotional materials that it would provide premium service as compared to its competitors, stating that its service is "up to 3 times the speed of most standard DSL packages and up to 100x faster than dial-up so your family can spend their time on the computer learning, experiencing, and playing—instead of waiting." (Id.)
Defendant engaged in a network management practice that Plaintiffs refer to as "throttling" to interfere with and limit subscribers' internet communications. (Id. ¶ 3.) This practice of throttling was not authorized by Plaintiffs. (Id.) Throttling interferes with subscribers' ability to share content through peer-to-peer (P2P) transmissions. (Id. ¶ 25.) Computers exchange information on the internet by using Transmission Control Protocol ("TCP"), which delivers a stream of bytes from one program on one computer to another. (Id. ¶ 23.) TCP is often used in P2P transmissions, which tap into multiple other participating computers and exchange the data, allowing its users to share content files and real-time data with each other over the internet. (Id. ¶ 24.) When a computer finds that a P2P transmission is being blocked, it communicates TCP messages called reset packets that cause inbound internet connections to close down and abort the transmission of P2P content. One method of throttling is accomplished by sending forged reset packets to computers, which cause the computers engaged in P2P file sharing to abort file transfers and stop the relevant communication. (Id. ¶ 25.) The forged reset packets are disguised as communications from the computers themselves. (Id.)
Defendant uses the practice of throttling to frustrate its subscribers' efforts to share online content via P2P networks. (Id. ¶ 27.) In particular, Defendant's practices affect BitTorrent peer-to-peer file sharing communications, Gnutella, Skype, and other protocols or applications that communicate audio, video, voice, and other data content online. (Id. ¶ 22.) The types of information whose availability is affected include information about other computers around the world participating in a P2P network; information about query terms and results of searches across P2P networks; data contents of files; and data encapsulating the content of text and voice communications. (Id. ¶ 28.)
Defendant's conduct was motivated by a desire to maximize its profit. (Id. ¶¶ 7, 29.) Defendant misrepresented the qualities of its service in order to lure subscribers into paying a premium price, steer consumers to its added-price content by throttling access to similar content available for free elsewhere on the Internet, and avoid the costs of infrastructure upgrades by throttling transmissions while recruiting additional customers. (Id.)
Plaintiffs have sustained the following damages and losses as a result of Defendant's conduct. (Id. ¶ 30.) First, Plaintiff Noia relied on the Road Runner service to upload large image and vector files for his work as a freelance designer; to download files; and to watch licensed media. (Id. ¶ 31.) However, he consistently found that uploads from his internet connection would drop to extremely low speeds: he should have been able to upload at up to 300 kB/s, but instead he could not usually upload faster than 10kB/s and never faster than 30 kB/s. (Id.) For this reason, he regularly rented a computer at Kinkos using his own money. (Id. ¶ 32.) Noia lost work opportunities
The following facts are undisputed
Defendant contends that detailed service terms and agreements that included express provisions permitting the network management practices at issue here were delivered to Plaintiffs in connection with installations and at other times, and Plaintiffs dispute certain allegations concerning the content and delivery of these documents. In light of Defendant's withdrawal of the aspects of its motions that were premised on the content of these documents, the disputes are not material.
Defendant moves for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c) on Counts I-VI (Plaintiffs' claims under the CFAA and New York General Business Law § 349, as well as Plaintiff's claims for breach of contract and breach of implied-in-fact contract) and Counts VIII-XI (unjust enrichment, claims under California Business and Professions Code §§ 17200 and 17500, and California Civil Code § 1750).
The standard governing a Rule 12(c) motion is equivalent to that governing motions under Rule 12(b)(6) of the Federal Rules of Civil Procedure. Patel v. Contemporary
Defendant seeks the dismissal of Counts I-III of pursuant to Federal Rule of Civil Procedure 12(c), for failure to allege facts sufficient plausibly to frame violations of 18 U.S.C. § 1030(a)(5)(A)-(C).
Under the CFAA, an individual commits computer fraud when she:
18 U.S.C.A. § 1030(a)(5) (West 2008).
In order to bring a civil action under the CFAA, a person must have "suffer[ed] damage or loss by reason of a violation of this section ..." 18 U.S.C.A. § 1030(g) (West 2008). For subsection (C), both "loss" and "damage" are required. For subsections (B) and (C), "access" is also required. Plaintiffs allege that Defendant knowingly caused the transmission of a program, information, code, or command and, as a result of such conduct, intentionally caused damage to their computers and loss by knowingly transmitting reset packets to their computers with the intention of impeding or preventing Plaintiffs' P2P transmissions. (Compl. ¶ 51.) Plaintiffs also allege that Defendant intentionally accessed their computers and as a result recklessly caused damage and loss, by knowingly transmitting the reset packets to their computers to impede data receipt and transmission. (Id. ¶¶ 60, 68) Defendant contends that Plaintiffs have failed sufficiently to allege the requisite loss, damage and access.
The CFAA defines "loss" as "any reasonable cost to any victim, including the cost of responding to an offense, conducting a damage assessment, and restoring the data, program, system, or information to its condition prior to the offense, and any revenue lost, cost incurred, or other consequential damages incurred because of interruption of service." 18 U.S.C.A. § 1030(e)(11) (West 2008). Consistent with this statutory definition, courts have interpreted such "loss" to include "any remedial costs of investigating the computer for damage, remedying the damage and any costs incurred because the computer cannot function while or until repairs are made." See, e.g., Nexans Wires S.A. v.
Plaintiffs plead monetary losses consisting of their payments for high-speed internet services allegedly not received, costs to prevent the Defendant's throttling practice and the costs of obtaining information elsewhere when they were unable to use their computers for this purpose. Plaintiffs also plead losses relating to time and effort in assessing "damage" to each computer whose transmissions were interrupted. These alleged losses are outside of the scope of those contemplated by the CFAA. Plaintiffs do not allege that they needed to "restore[ ] . . . data, [a] program, [a] system, or information to its condition prior to" Defendant's conduct. See 18 U.S.C.A. § 1030(e)(11) (West 2008). Plaintiffs alleged losses are simply not of the type contemplated by the statute and recognized in case law. See, e.g., Nexans Wires., 319 F.Supp.2d at 475-76 (emphasizing that costs have to relate to "remedying damage to the computer"). Plaintiffs' pleadings as to loss, while sufficiently specific, nevertheless fall outside the kind of loss that the statutory definition requires—loss relating to damaged "data" or "information," or a damaged "program" or "system." Plaintiffs' allegations of loss, therefore, fail to satisfy the applicable plausibility requirement in light of the statutory definition.
The CFAA defines damage as "any impairment to the integrity or availability of data, a system, or information." 18 U.S.C.A. § 1030(e)(8) (West 2008). Plaintiffs allege that Defendant impaired their ability to obtain data and utilize their computer systems by knowingly transmitting "reset packets to Plaintiffs' and Class members' computers with the intention of impeding or preventing Plaintiffs' and Class members' peer-to-peer transmissions" and that damage was caused because the reset packets "compromis[ed] the internal software of Plaintiffs' computers and impair[ed] their ability to receive and transmit data." (Compl. ¶¶ 51-52). The Complaint also explains how the throttling process prevents data exchange and inhibits certain use of computers. (Id. ¶¶ 23-26.) In addition, the Complaint identifies the specific types of information whose availability is "impeded" and identifies a particular program, Skype, that is rendered unusable by Defendant's alleged throttling. (Id. ¶¶ 28, 34).
Defendant argues, however, that the statutory meaning of "damage" is limited to damage actually done "on the plaintiffs computer." See, e.g., Motorola, Inc. v. Lemko Corp., 609 F.Supp.2d 760 (N.D.Ill. 2009) (holding that disclosing trade secrets did not qualify as "damage" under the CFAA and stating that "[t]he plain language of the statutory definition refers to situations in which data is lost or impaired because it was erased or because (for example) a defendant smashed a hard drive with a hammer."); Del Monte Fresh Produce, N.A., Inc. v. Chiquita Brands Int'l., Inc., 616 F.Supp.2d 805 (N.D.Ill.2009) (stating that "an employee causes `damage' when she destroys company data" and holding that utilizing confidential information in violation of a non-competition
There is no case law to indicate that the Second Circuit itself or any courts in this Circuit have adopted Defendant's restrictive reading of the concept of "damage." The literal language of the CFAA indicates that any impairment of an individual's access to data, systems or information via their computer because of another's party's interference qualifies as damage. See 18 U.S.C. § 1030(e)(8) ("the term `damage' means any impairment to the integrity or availability of data, a program, a system, or information" (emphasis supplied)). Plaintiffs' pleaded facts are consistent with the literally terms of the statutory definition. Their specific allegations include "enough facts to state a claim to relief that is plausible on its face" insofar as "damage" is required. Twombly, 550 U.S. at 570, 127 S.Ct. 1955.
18 U.S.C. § 1030(a)(5)(B) and (a)(5)(C) require a defendant to have "accessed" a plaintiff's computer(s). Plaintiffs' allege that Defendant accessed their computers in violation of the statute by "knowingly transmitting `reset' packets to Plaintiffs' and the Class members' computers and otherwise accessed their computers to impede data receipt and transmission." (Compl. ¶ 60.) Plaintiffs' explain the workings of the `reset' packets in various parts of their Complaint.
Unlike "loss" and "damage," the term "access" is not explicitly defined in the statute.
An interpretation of the term "access" that is consistent with the term's standard dictionary definition and common usage is also appropriate in light of the continually changing nature of computer technology and fraud.
For the foregoing reasons, Plaintiffs have satisfied the damage and access elements of their claims under the CFAA and have plead sufficiently these claims. Plaintiffs, however, have failed to plead loss adequately. Accordingly, Defendant's motion for judgment on the pleadings is denied as to Counts I and II and granted as to Count III.
Plaintiffs assert that Defendant violated New York General Business Law Section 349 by misrepresenting the nature and quality of the high-speed internet service it sells to consumers, causing Plaintiffs and other consumers to suffer injuries by paying for products different from and of a lesser quality than those advertised. Specifically, Plaintiffs argue that Defendant falsely represented that its high-speed internet service provides, inter alia, an "always-on connection" that is "blazing fast" and is the "fastest, easiest way to get online," when in fact the Defendant intentionally interferes with its subscribers' connections to the internet by delaying and/or blocking certain communications, thereby injuring Plaintiffs and all others similarly situated. (Compl. ¶ 74.) As a result, Plaintiffs allege, they had to take measures and incur expenses that would have been unnecessary had Defendant's internet service performed as advertised. Defendant seeks the dismissal of this claim, arguing that these allegedly false representations are not actionable because they are mere puffery and thus unlikely to mislead a reasonable consumer acting reasonably under the circumstances.
In order to establish a violation of Section 349 of New York's General Business Law, "(1) the defendant's challenged acts or practices must have been directed at consumers, (2) the acts or practices must have been misleading in a material way, and (3) the plaintiff must have sustained injury as a result." Cohen v. JP Morgan Chase & Co., 498 F.3d 111, 126 (2d Cir.2007). For the purpose of Section 349, "deceptive acts and practices" are "those likely to mislead a reasonable consumer acting reasonably under the circumstances." See Oswego Laborers' Local 214 Pension Fund v. Marine Midland Bank, 85 N.Y.2d 20, 623 N.Y.S.2d 529, 647 N.E.2d 741, 745 (1995).
Defendant does not challenge the sufficiency of Plaintiffs' allegations with respect to the first and third elements of a claim under Section 349. Disputed is whether Plaintiffs have adequately alleged the second element: deceptive acts or practices likely to mislead a reasonable consumer acting reasonably under the circumstances. Plaintiffs point to four allegedly deceptive advertising representations made by Defendant about its Road Runner service: (1) its "always-on connection," (2) its "blazing fast speed," (3) it is the "fastest, easiest way to get online," and (4) its service being "up to 3 times the speed of
Statements and practices that are mere puffery are not actionable. Puffery includes generalized or exaggerated statements which a reasonable consumer would not interpret as a factual claim upon which he could rely. See Pelman v. McDonald's Corp., 237 F.Supp.2d 512, 528 n. 14 (S.D.N.Y.2003); Hubbard v. General Motors Corp., No. 95 Civ. 4362(AGS), 1996 WL 274018, at *6 (S.D.N.Y. May 22, 1996). Regarding puffery, the Second Circuit has stated that "[s]ubjective claims about products, which cannot be proven either true or false, are not actionable." Lipton v. Nature Co., 71 F.3d 464, 474 (2d Cir.1995). Puffery can also take the form of "an exaggeration or overstatement expressed in broad, vague, and commendatory language[, as distinguished] from misdescriptions or false representations of specific characteristics of a product." Castrol Inc. v. Pennzoil Co., 987 F.2d 939, 945 (3d Cir.1993). "Courts have found statements to be puffery as a matter of law when the statements do not provide any concrete representations." Basquiat ex rel. Estate of Basquiat v. Sakura International, No. 04 Civ. 1369(GEL), 2005 WL 1639413, at *5 (S.D.N.Y. July 5, 2005). Some of Defendant's advertising terms fall squarely within the category of non-actionable puffery. Indeed, terms like "blazing fast" and "fastest, easiest" are classic examples of generalized puffery. See Educational Sales Programs, Inc. v. Dreyfus Corp., 65 Misc.2d 412, 417, 317 N.Y.S.2d 840 (Sup. Ct.N.Y.Co.1970). The first and fourth statements relied upon by Plaintiffs—"always-on connection" and speeds "up to" specified multiples of DSL and dial up connections—are somewhat more specific. Plaintiffs nonetheless fail to state Section 349 causes of action with respect to these claims, because they have not alleged a failure to provide a connection that is always available, and because they proffer no facts that would show that the speed of Defendant's service is not "up to" the cited multiples of the speed of competing services. Cf. Jernow v. Wendy's Int'l Inc., No. 07 Civ. 3971(LTS)(THK), 2007 WL 4116241, at *3 (S.D.N.Y.2007) (misrepresentations of transfat content of food alleged sufficiently).
Accordingly, Defendant's motion for judgment on the pleadings as to Count IV is granted.
Plaintiffs claim that they entered into a contract with Defendant to pay monthly fees in exchange for its high-speed internet service, that they performed their obligations under the contract by paying their monthly fees, and that Defendant breached the contract by intentionally interfering with their access to and use of the high-speed internet service. (Compl. ¶¶ 78-80) Defendants argue that the breach of contract claim must be dismissed because Plaintiffs have neither attached what they consider to be the contract to the Complaint nor referred to or cited the specific contract terms at issue.
To properly plead a breach of contract claim under New York law, a party must identify (1) the existence of a contract; (2) performance by one party; (3) breach of the contract by the other party; and (4) resulting damages. Rexnord Holdings, Inc. v. Bidermann, 21 F.3d 522, 525 (2d Cir.1994). The plaintiff does not need to attach a copy of the alleged contract to his complaint or quote directly from the contract alleged to have been breached. See Griffin Bros., Inc. v. Yatto, 68 A.D.2d 1009, 415 N.Y.S.2d 114 (3rd Dept.1979). However, a breach of contract claim will be dismissed where a plaintiff fails to allege "the essential terms
Here, Plaintiffs have not set forth with specificity the essential terms of the contract that they allege Defendant has breached with requisite specificity. Plaintiffs claim that they entered into a contract with Defendant to pay monthly fees in exchange for "high-speed" internet service. (Compl. ¶ 78.) This simple characterization of the nature of the promise, and the equally simplistic allegations that Defendant failed to perform, are insufficient to make the requisite plausible factual demonstration of the basis of Plaintiffs' claim. See Twombly, 550 U.S. at 570, 127 S.Ct. 1955.
Defendant's motion for judgment on the pleadings as to Count V is therefore granted.
In its reply papers, Defendant seeks judgment on the pleadings as to Plaintiffs' breach of an implied-in-fact contract and breach of the implied covenant of good faith and fair dealing causes of action, Count VI.
However, Plaintiffs' claim relies on advertisements to supply the terms of the alleged implied-in-fact contract. Plaintiffs assert that the implied-in-fact contract was breached because the "Defendant's practice of offering `low-speed' internet service" was in conflict with "Defendant's promises regarding the quality of its high-speed internet service," which they allege were the basis of the implied in fact contract. (Compl. ¶¶ 82-83.) Because the advertisements referred to by Plaintiffs do not contain sufficient specific, concrete, factual representations such that they could be interpreted to supply the terms of an implied contract, Plaintiffs have failed to state a cause of action in this regard. Cf. Jernow, 2007 WL 4116241, *4 (finding that fast food advertisements, by including specific, measurable, concrete claims about transfat contents that plaintiff alleged were inaccurate, were of a kind sufficient to form the basis for an implied-in-fact contract.)
Defendant's motion for judgment on the pleadings as to Count VI is therefore granted.
"Under New York law, for a plaintiff to prevail on a claim of unjust
Accordingly, Defendant's motion for judgment on the pleadings as to Plaintiffs' unjust enrichment claim, Count VIII, is granted.
California's unfair competition law (CUCL) prohibits any "unlawful, unfair or fraudulent business act or practice." Cel—Tech Commc'ns Inc. v. Los Angeles Cellular Tel. Co., 20 Cal.4th 163, 83 Cal.Rptr.2d 548, 973 P.2d 527, 539 (1999); Cal. Bus. & Prof.Code § 17200 et seq. "By proscribing `any unlawful' business practice, section 17200 `borrows' violations of other laws and treats them as unlawful practices that the unfair competition law makes independently actionable." Cel-Tech Commc'ns, 83 Cal.Rptr.2d 548, 973 P.2d at 539-40 (internal quotation marks and citations omitted). Defendant seeks dismissal of these claims, asserting that Plaintiffs have failed to state valid causes of action.
Plaintiffs contend that Defendant knowingly and intentionally misled consumers with its false misrepresentations to increase its profits. Defendant's conduct is alleged to be actionable under the CUCL because it violates two other laws: (1) the California False Advertising Law (the "CFAL"), § 17500 et seq., and (2) the California Consumer Legal Remedies Act (the "CLRA"), § 1750 et seq. Under these California statutes, conduct is "deceptive" or "misleading" if it is likely to deceive an ordinary consumer. Williams v. Gerber Products Co., 552 F.3d 934, 938 (9th Cir. 2008).
The CFAL prohibits any "unfair, deceptive, untrue or misleading advertising." Cal. Bus. & Prof.Code § 17500. For the same reasons that Plaintiffs' claim under New York General Business Law Section 349 fails (that is, Defendant's representations are nonactionable puffery and/or lacked sufficient specificity to be of a kind that would deceive an ordinary consumer), Plaintiffs' attempt to state a claim under the analogous California statute must also fail. Plaintiffs' CUCL claim will therefore be dismissed to the extent it is premised on alleged violations of California Business and Professions Code § 17500.
California's CLRA prohibits "unfair methods of competition and unfair or deceptive acts or practices." Cal. Civ.Code § 1770. Plaintiffs contend that Defendant's actions and representations violated § 1770(a)(5) ("Representing that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities which they do not have or that a person has a sponsorship, approval, status, affiliation, or connection which he or she does not have."), (a)(7) ("Representing that goods or services are of a particular standard, quality, or grade, or that goods are of a particular style or model, if they are of
For the reasons previously stated with respect to the claims under New York General Business Law § 349 and California Business and Professions Code § 17500, Plaintiffs' claims under California Civil Code § 1770 targeting alleged misrepresentations and deception contained in Defendant's advertisements must also fail. Moreover, the injunctive relief sought under CLRA, § 1780(a)(2) is unavailable because Plaintiff Noia indisputably no longer subscribes to Defendant's services and therefore lacks standing to seek injunctive relief against Defendant.
In order for a plaintiff to obtain prospective injunctive relief, he must establish that there is a "likelihood of future injury." See, e.g., White v. Lee, 227 F.3d 1214, 1242 (9th Cir.2000). "Past exposure to illegal conduct does not in itself show a present case or controversy regarding injunctive relief if unaccompanied by any continuing, present adverse effects." Lujan v. Defenders of Wildlife, 504 U.S. 555, 564, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). Indeed, "[p]ast exposure to harmful or illegal conduct does not necessarily confer standing to seek injunctive relief if the plaintiff does not continue to suffer adverse effects." Mayfield v. United States, 599 F.3d 964, 970 (9th Cir. 2010). Once a plaintiff has demonstrated an injury-in-fact, he is "entitled to injunctive relief only if he can show that he faces a real or immediate threat . . . that he will again be wronged in a similar way." Id. Because Plaintiffs have not alleged that Noia faces such a threat or will again be wronged in a similar way, Plaintiffs lack standing to seek injunctive relief.
Plaintiffs contend only in passing and in conclusory fashion that Defendant's conduct is "unfair" within the meaning of the CUCL. California courts define an "unfair business practice" as either: (1) a practice that undermines a legislatively declared policy or threatens competition, or (2) a practice that has an impact on its alleged victim that outweighs the reasons, justifications, and motives of the alleged wrongdoer. See Lozano v. AT & T Wireless Servs., Inc., 504 F.3d 718, 736 (9th Cir.2007). The Ninth Circuit has concluded that "an `unfair' business practice occurs when [such practice] offends an established public policy or when the practice is immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers." Id.
Plaintiffs allege that Defendant is motivated by its desire to maximize profits. However, it is well settled that business enterprises have a legitimate interest in seeking a profit. Kunert v. Mission Financial Services Corp., 110 Cal.App.4th 242, 265, 1 Cal.Rptr.3d 589 (2003). Plaintiffs have not pleaded facts regarding any legislatively declared policy that Defendant's conduct allegedly violates, nor does the Complaint provide factual allegations that would enable a reasonable fact finder to determine that either standard of "unfair" conduct has been satisfied.
The CUCL can also be violated by a fraudulent business act or practice. "Fraudulent" as used in section 17200 is "not predicated upon proof of the common law tort of deceit or deception but simply means whether the public is likely to be deceived." Countrywide Financial Corp.
Because there is no violation of the CFAL or the CLRA as explained above, it is not alleged adequately that Defendant's practices are "unfair," and Plaintiffs have failed to allege adequately that Defendant's business acts or practices are fraudulent, Plaintiffs fail to state a claim under the CUCL.
Accordingly, Defendant's motion for judgment on the pleadings as to Counts IX-XI is granted.
The Court need not address Defendant's motion for summary judgment as to the Counts on which Defendant's motion for judgment on the pleadings has been granted (Counts III, IV, V, VI, VIII, IX, X, and XI). The Court will, however, consider Plaintiffs' motion to strike because Defendant seeks summary judgment as to Plaintiffs' fraud claim, Count VII.
Plaintiffs' move to strike portions of Defendant's submitted affidavits from Frank McKeon ("McKeon") and Satenik Abeshyan ("Abeshyan") pursuant to Federal Rule of Civil Procedure 56(e). Defendants have not opposed this motion. In light of Defendant's consent to Plaintiffs' motion to strike (see docket entry no. 59, Def.'s Reply Mem. of Law at 2, note 4), Plaintiffs' motion to strike is granted in its entirety.
Defendant seeks summary judgment as to Plaintiffs' fraud claim based on the legal doctrine of voluntary payment.
The voluntary payment doctrine is a common law doctrine that "bars recovery of payments voluntarily made with full
However, the voluntary payment doctrine does not apply when a plaintiffs claim is predicated on a lack of full disclosure by defendant. See Spagnola v. Chubb Corp., 574 F.3d 64, 73 (2d Cir.2009); see also Samuel v. Time Warner, Inc., 10 Misc.3d 537, 809 N.Y.S.2d 408, 418 (Sup. Ct.N.Y.2005) (the voluntary payment doctrine did not apply to claims "predicated on the absence of full disclosure at the time of installation"). Issues of disclosure, notice, and authorization are very much contested in the instant action. In addition to the misrepresentation allegations discussed above, Plaintiffs proffer that Defendant's policy was to misrepresent to customers the reasons for slow service. Because Defendant has failed to establish the absence of a genuine issue of material fact as to the disclosures given to Plaintiffs and Plaintiffs' knowledge of Defendant's practices when Plaintiffs made payments, summary judgment is inappropriate.
Accordingly, Defendant's motion for summary judgment is denied as to Count VII.
For the foregoing reasons, Plaintiffs' motion to strike is granted in its entirety; Defendant's motion for judgment on the pleadings is denied as to Counts I and II, and granted as to Counts III-VI and VIII-XI; and Defendant's motion for summary judgment is denied in its entirety.
Plaintiffs' request for leave to replead Counts IV, V, VI, VIII, IX, X, and XI is granted. Any second amended complaint must be filed by
This Memorandum Opinion and Order resolves docket entry nos. 38 and 50.
This case remains referred to Judge Fox for general pretrial management, including discovery disputes and settlement discussions.
SO ORDERED.