WENDY BEETLESTONE, District Judge.
This dispute concerns Plaintiff Michael Jacob's purchase in December 1999 at a Sotheby's auction of a 1951 Willie Mays New York Giants signed rookie road jersey (the "Mays Jersey") and a 1950's Willie Mays New York Giants travel bag (the "Mays Travel Bag") (together, the "Mays memorabilia"), which he subsequently learned were inauthentic. Plaintiff alleges that the Defendants knew the items had not been authenticated at the time he bought them despite making written representations in the auction catalogue that they had. Plaintiff brings this lawsuit against three separate groups of Defendants: (1) Sharon Halper and Barry Halper, Inc. (collectively, "Halper"), who were alleged to be engaged in the business of buying and selling sports memorabilia, and who were the previous owner(s) of the Mays Jersey and Mays Travel Bag; (2) Sotheby's, Inc., Sotheby Parke Bernet, Inc., Sotheby Holdings, and Sotheby's (collectively, "Sotheby's"), all of which allegedly served as the auction house for the sale of the Mays Jersey and Mays Travel Bag; and, (3) Grey Flannel Auctions, Inc. ("GF Auctions") and Grey Flannel Collectibles, Inc. ("GF Collectibles") (collectively, "Grey Flannel"), which allegedly specialize in authenticating, appraising, and auctioning sports memorabilia, and who were represented by Sotheby's to have authenticated the Mays Jersey prior to the Sotheby's auction.
In or about early 1999, Sotheby's advertised an auction sale of Barry Halper's collection of baseball memorabilia, which was described as "the world's largest and most significant private collection on baseball." Am. Compl. ¶ 23. With the help of Grey Flannel, Sotheby's and Halper published a three-part auction catalogue entitled "The Barry Halper Collection of Baseball Memorabilia" (the "Halper Catalogue"). Id. ¶ 22. The Halper Catalogue stated that the auction would "establish new standards for the hobby in the areas of condition, authenticity, provenance, and historical significance." Id. ¶ 24. Further, the Halper Catalogue represented that Grey Flannel had authenticated all the uniforms and jerseys in the auction. Id. ¶ 25. Specifically, page 37 of the Halper Catalogue states, "Grey Flannel has authenticated all uniforms and apparel (excluding most baseball hats)." Id., Ex. A.
Plaintiff obtained a copy of the Halper Catalogue in or about the summer of 1999. Id. ¶ 26. The catalogue described the Mays Jersey as "one of the most important pieces of memorabilia relating to [Willie Mays'] glorious career." Id., Ex. B. On around September 29, 1999, Plaintiff bid by telephone on the Mays Travel Bag and the Mays Jersey. Id. ¶ 28. Plaintiff was the successful bidder on both items and paid $8,625.00 for the bag and $63,000 for the jersey, id. ¶ 30, by wiring the money plus the applicable sales tax to Sotheby's. Id. ¶ 31.
The Halper Catalogue included a copy of Sotheby's Conditions of Sale and Terms of Guarantee ("Conditions & Guarantee"). Sotheby's Opp'n, Ex. B.
Id. In addition, the Conditions of Sale included a New York state choice of law clause, which provides:
Id.
In or around July 2012, Plaintiff retained Leland's Collectibles of Bohemia, New York ("Leland's") to appraise the Mays Jersey for insurance purposes. Id. ¶ 33. At that time, Leland's appraised the Mays Jersey at $400,000. Id. ¶ 34.
In or around June 2013, Plaintiff entered into a written sales agreement with Leland's in which Leland's agreed to purchase the Mays Jersey from Plaintiff for $675,000, subject to the approval of the third-party to whom Leland's had agreed to sell the jersey. Id. ¶ 35. Leland's and/or its prospective buyer thereafter retained MEARS to authenticate the Mays Jersey. Id. ¶ 36. MEARS examined the Mays Jersey and concluded that it was inauthentic. Id. ¶ 37. As a result, Leland's rescinded its sales agreement with Plaintiff. Id. ¶ 39. At the same time, Leland's advised Plaintiff that the Mays Travel Bag was also inauthentic. Id. ¶ 40.
On September 20, 2013, Plaintiff advised Sotheby's by letter that he believed the Mays Jersey was counterfeit and intended to pursue recovery of his damages. Id. ¶ 42, Ex. C. On October 7, 2013, Sotheby's sent a response letter noting the expiration of its five (5) year Guarantee of authenticity and denying Plaintiff's claim in its entirety. Id. ¶ 43, Ex. D.
On March 19, 2014, Plaintiff sent a letter to Grey Flannel advising them he had determined that the sports memorabilia he had purchased from the Halper auction was inauthentic. Id. ¶ 51. In June 2014, Plaintiff's counsel spoke with counsel for Grey Flannel by phone and requested information as to whether Grey Flannel had, in fact, authenticated the Mays Jersey. Id. ¶ 54. Grey Flannel did not respond. Id. ¶¶ 55-61.
During the course of discovery in this matter, Sotheby's produced documents showing the business relationship between Sotheby's and Grey Flannel in connection with the Halper Catalogue. Id. ¶ 63. These documents include written terms of agreement between Sotheby's and GF Collectibles for "cataloguing and condition reports" of up to 1,000 unspecified uniforms from the Halper collection for a flat fee of $50,000. Id. ¶ 64, Ex. M. The contract between the parties does not specifically provide that Grey Flannel would "authenticate" the collection. Id. ¶¶ 65-66. Similarly, the contract does not suggest that another party was hired to "authenticate" any items. Id. ¶ 67. Nevertheless, the produced documents include a March 22, 1999, letter from Grey Flannel to Sotheby's with proposed language for "inclu[sion] in the [Halper] catalogue." Id., Ex. M. Grey Flannel wrote:
Id. (emphasis added).
Plaintiff asserts a number of claims against each of the Defendants: misrepresentation and fraud (Count I); negligent misrepresentation (Count II); violation of New York General Business Law ("GBL") § 349 (Count III); Violation of Pennsylvania's Unfair Trade Practices and Consumer Protection Law ("UTPCPL"), 73 Pa. Stat. § 201-1 et seq. (Count IV); and unjust enrichment (Count V). The Grey Flannel Defendants argue that they should be dismissed for lack of jurisdiction. They also argue that GF Auctions should be dismissed because it has no relationship with Sotheby's in connection with the Halper Catalogue. All Defendants assert a number of arguments that would require dismissal of all, or most, of these claims, including arguments that: (1) the statute of limitations has run on all of Plaintiff's claims; (2) the Conditions of Sale & Terms of Guarantee in Plaintiff's contract with Sotheby's bars Plaintiff's claims because it provides the exclusive remedy for his grievance; and (3) the economic loss doctrine bars claims for economic loss resulting from a contract. In addition, the Defendants argue that Plaintiff has failed to state a claim with respect to each Count. The Court addresses each argument in turn.
The jurisdictional issue boils down to whether a federal court in Pennsylvania has jurisdiction over New York corporations with their principal place of business in New York whose only contacts with Pennsylvania are: (1) participating in the drafting of a catalogue that, Plaintiff contends, they "should have known" would be distributed to potential customers outside New York state, including potential customers in Pennsylvania; and (2) maintaining websites that could be accessed by users in Pennsylvania.
In its motion to dismiss, Grey Flannel argues that the Court does not have specific jurisdiction over the Grey Flannel Defendants because Grey Flannel lacks "minimal contacts" with Pennsylvania, and the Plaintiff's alleged injury did not "aris[e] out of or relate[ ] to" any such contacts. Grey Flannel Mot. at 11. Noting that Plaintiff's Complaint bases its specific jurisdiction on the fact that Grey Flannel participated in drafting the Halper Catalogue, which was eventually sent to Plaintiff in Pennsylvania, Grey Flannel argues that it "never sent the [Halper Catalogue] to anyone in Pennsylvania," "never directed any solicitations to anyone in Pennsylvania, including Plaintiff," and indeed was "not aware that the [Halper Catalogue] would reach Pennsylvania." Id. at 11-12. Grey Flannel attached an affidavit by the President of Grey Flannel Auctions in support of these contentions. See Grey Flannel Mot., Ex. B.
During oral argument on the motions to dismiss, counsel for Plaintiff argued that
In his letter brief, Plaintiff advanced an additional argument, for the first time, that this Court has jurisdiction over the Grey Flannel Defendants "by virtue of their online sales and activity." Pl.'s June 18, 2015, Ltr. at 3. In support of this argument, Plaintiff contends that "as early as July 11, 1997," both Grey Flannel Defendants maintained "highly active websites for many years, which permitted customers both inside and outside New York to register and bid on various items for sale." Id. Plaintiff argues that "[s]uch operations may have included business transactions with Pennsylvania residents and marketing efforts directed at Pennsylvania residents." Id. Grey Flannel maintains that these allegations are insufficient to subject Grey Flannel to either general or specific jurisdiction.
As an initial matter, it is important to note that in both Zippo and Toys "R" Us, the plaintiff conceded that there was no general jurisdiction, and thus the inquiry was limited to whether the defendant was subject to specific jurisdiction in the forum state. Moreover, several courts in this District have concluded that maintaining a website through which customers can order products does not, on its own, suffice to establish general jurisdiction. See TruePosition, Inc. v. LM Ericsson Tel. Co., 844 F.Supp.2d 571, 592 (E.D.Pa.2012) ("To hold that the possibility of ordering products from a website establishes general jurisdiction would effectively hold that any corporation with such a website is subject to general jurisdiction in every state." (quoting Molnlycke Health Care AB v. Dumex Med. Surgical Prods. Ltd., 64 F.Supp.2d 448, 451 (E.D.Pa.1999))); Wilson v. RIU Hotels & Resorts, No. 10-7144, 2011 WL 3241386, at *8 (E.D.Pa. July 29, 2011) ("Maintenance of a website which allows users to reserve accommodations at Defendant's resorts does not demonstrate that [defendant] has systematic and continuous contact with Pennsylvania"). As the Third Circuit has cautioned, "the mere operation of a commercially interactive web site should not subject the operator to jurisdiction anywhere in the world." Toys "R" Us, 318 F.3d at 454. Rather, for a defendant's website to constitute a sufficient presence subjecting it to general jurisdiction in Pennsylvania:
O'Connor v. Sandy Lane Hotel Co., No. 04-2436, 2005 WL 994617, at *3 (E.D.Pa. Apr. 28, 2005) (citations omitted), modified on reconsideration, 2005 WL 1463250 (E.D.Pa. June 20, 2005), rev'd on other grounds, 496 F.3d 312, 317 (3d Cir.2007).
Here, Plaintiff contends that Grey Flannel's websites subject it to general jurisdiction here because residents of Pennsylvania were able to access those cites to register and bid on items. See Pl.'s Jun. 18, 2015, Ltr. Brief at 3. However, Plaintiff has not presented any evidence or argument that the websites were "highly interactive" or "engage[d] in significant commerce or otherwise intentionally target consumers in Pennsylvania through their websites." Id.; see also Streamline Bus. Servs., LLC v. Vidible, Inc., No. 14-1433, 2014 WL 4209550, at *6 (E.D.Pa. Aug. 26, 2014). In fact, Plaintiff has not pointed to a single interaction between Grey Flannel and a Pennsylvania resident via Grey Flannel's websites. Even if he could, the Court emphasizes that the burden for establishing general jurisdiction is high. Under recent Supreme Court case law, the relevant inquiry for general jurisdiction is not whether the defendant has "continuous and systematic" contacts with the forum state, but whether its "consistent and systematic contacts" were so great as to render it "essentially at home" in that state. Farber v. Tennant Truck Lines, Inc., 84 F.Supp.3d 421, 431, 2015 WL 518254, at *7 (E.D.Pa. Feb. 9, 2015) (quoting Daimler AG v. Bauman, ___ U.S. ___, 134 S.Ct. 746, 761, 187 L.Ed.2d 624 (2014) and Goodyear Dunlop Tires Operations, S.A. v. Brown, ___ U.S. ___, 131 S.Ct. 2846, 2851, 180 L.Ed.2d 796 (2011)). As the Supreme Court explained in Daimler, the "at home" inquiry will, in all but the most exceptional circumstances, subject a corporation to general jurisdiction only in the two paradigmatic bases for such jurisdiction: i.e., its state of incorporation
Defendants argue that Plaintiff's Amended Complaint should be dismissed because each of the counts is time-barred by the applicable statutes of limitations. Notwithstanding the forum selection clause in Sotheby's Conditions of Sale, Pennsylvania law applies for purposes of determining the statutes of limitations. See Guar. Trust Co. v. York, 326 U.S. 99, 65 S.Ct. 1464, 89 L.Ed. 2079 (1945) (holding that a federal district court sitting in diversity must follow the forum's choice of law rules to determine the applicable statute of limitations period); Gluck v. Unisys Corp., 960 F.2d 1168, 1179 (3d Cir.1992) ("Choice of law provisions in contracts do not apply to statutes of limitations, unless the reference is express").
The general rule is that Pennsylvania courts ordinarily apply the Pennsylvania statute of limitations. See Freeman v. Lawton, 353 Pa. 613, 46 A.2d 205 (1946). However, Pennsylvania's "borrowing statute" creates an exception to that rule when the cause of action accrues in another state. 42 Pa. Cons.Stat. § 5521; Mack Trucks, Inc. v. Bendix-Westinghouse Auto. Air Brake Co., 372 F.2d 18, 20 (3d Cir.1966). The "borrowing statute" provides that the statute of limitations "shall be either that provided or prescribed by the law of the place where the claim accrued or by the law of this Commonwealth, whichever first bars the claim." 42 Pa. Cons.Stat. § 5521(b) (emphasis added). Thus, the borrowing statute operates to bar the claim when two conditions are met: (1) the claim accrues in another state, and (2) the law of that state bars the claim before the Pennsylvania statute of limitations. Ross v. Johns-Manville Corp., 766 F.2d 823, 828 (3d Cir.1985).
The first step in determining the effect of Pennsylvania's borrowing statute on this case, therefore, requires the Court to determine whether the plaintiff's claims accrued in Pennsylvania or another state. A claim "accrues" for purposes of the Pennsylvania borrowing statute where the "final significant event that is essential to a suable claim occurs." Mack Trucks, 372 F.2d at 20 (citations omitted). Unlike in Mack Trucks, in which it was clear under both Pennsylvania and Florida law that the Plaintiff's claim accrued in Florida, it
However, the Court need not wrestle with the issue for the purposes of this motion to dismiss because in his opposition brief, Plaintiff contends that the Pennsylvania borrowing statute applies (thus implicitly accepting that Plaintiff's claims accrued in New York), Opp'n to Sotheby's Mot. at 12, and Sotheby's, in its briefing, provides no argument to the contrary. Sotheby's Mot. at 9 n. 2. The Court is also persuaded by the similarities between this case and Foley v. Juron Associates, a securities fraud case in which a sister court concluded for purposes of determining whether or not to apply Pennsylvania's borrowing statute that the "final significant event" in securities transactions involving plaintiffs in multiple states occurred in New York, where the defendant transacted its business, not where the individual plaintiffs resided. No. 82-0519, 1986 WL 12454, at *8 (E.D.Pa. Nov. 5, 1986).
The next question is, thus, whether the limitations period for each of Plaintiff's claims would be shorter under New York or Pennsylvania law. In answering this question, the Court takes into account both states' limitations periods, including each state's laws on accrual and tolling. See Frankentek Residential Sys., LLC v. Buerger, 15 F.Supp.3d 574, 581 (E.D.Pa. 2014) (citing Gwaltney v. Stone, 564 A.2d 498, 503 (Pa.Super.Ct.1989) ("The provisions of Pennsylvania's borrowing statute unequivocally evince the legislative intent to prevent a plaintiff who sues in Pennsylvania from obtaining greater rights than those available in the state where the cause of action arose.")).
Here, Plaintiff asserts causes of action for: (1) fraud and misrepresentation; (2) negligent misrepresentation; (3) violation of GBL Section 349; (4) violation of the UTPCPL; and (5) unjust enrichment. Under Pennsylvania law, fraud and negligent misrepresentation have a two-year limitations period, see 42 Pa. Cons.Stat. § 5524(7); in New York, the statutory limitations period for both claims is six years, see N.Y. C.P.L.R. § 213. Under Pennsylvania law, Plaintiff's claim for unjust enrichment has a four-year limitations period, see 42 Pa. Cons.Stat. § 5525(a)(4); under New York law, it is six years, see N.Y. C.P.L.R. § 213. The limitations period for Plaintiff's UTPCPL claim is six years, see 42 Pa. Cons.Stat. § 5527; the limitations period for a violation of New York's General Business Law Section 349 is three years, see N.Y. C.P.L.R. § 214(2). The respective limitations periods are represented in the below chart:
Fraud Negligent Unjust UTPCPL GBL § 349
Misrepresentation Enrichment
Pennsylvania 2 years 2 years 4 years 6 years N/A
New York 6 years 6 years 6 years N/A 3 years
Under both Pennsylvania and New York law, the statute of limitations begins to run on the date that "the cause of action accrued." 42 Pa. Cons.Stat. § 5502(a); N.Y. C.P.L.R. § 203(a). In Pennsylvania, a cause of action accrues when "the plaintiff could have first maintained the action to a successful conclusion." Fine v. Checcio, 582 Pa. 253, 870 A.2d 850, 857 (2005) (citing Kapil v. Assoc. of Pa. State College & Univ. Faculties, 504 Pa. 92, 470 A.2d 482, 485 (1983)). Similarly, under New York law, "[i]n general, a cause of action accrues, triggering commencement of the limitations period, when all of the factual circumstances necessary to establish a right of action have occurred, so that the plaintiff would be entitled to relief." Gaidon v. Guardian Life Ins. Co. of Am., 96 N.Y.2d 201, 727 N.Y.S.2d 30, 750 N.E.2d 1078, 1083 (2001).
Accordingly, under either Pennsylvania or New York law, Plaintiff's causes of action accrued in 1999, when he purchased the Mays Jersey and Mays Travel Bag. Thus, under Pennsylvania's borrowing statute, all of Plaintiff's claims expired long before Plaintiff filed his complaint in 2014, unless the limitations period is tolled.
In Pennsylvania, each of Plaintiff's causes of action is subject to the discovery rule. See Beauty Time, Inc. v. VU Skin Sys., Inc., 118 F.3d 140, 148 (3d Cir.1997) (fraud); Dilworth v. Metro. Life Ins. Co., 418 F.3d 345, 351 (3d Cir.2005) (UTPCPL); White v. PNC Fin. Servs. Grp., Inc., No. 11-7928, 2014 WL 4063344, at *9 (E.D.Pa. Aug. 18, 2014) (unjust enrichment); Freedman v. Haydinger, No. 98-3045, 2002 WL 32364522, at *3 (E.D.Pa. Oct. 28, 2002) (intentional and negligent misrepresentation). New York's application of its discovery rule is more limited. It allows fraud and negligent misrepresentation sounding in fraud to be tolled for two years after the Plaintiff discovers the injury, Cohen v. S.A.C. Trading Corp., 711 F.3d 353, 361 n. 3 (2d Cir.2013) (internal quotation marks omitted) (citing N.Y. C.P.L.R. § 213(8)); however, New York's discovery rule does not apply to GBL Section 349 or unjust enrichment claims. See Wender v. Gilberg Agency, 276 A.D.2d 311, 716 N.Y.S.2d 40, 41-42 (2000); Cohen v. Cohen, 773 F.Supp.2d 373, 397 (S.D.N.Y. 2011), aff'd in relevant part, vacated on other grounds sub nom. Cohen, 711 F.3d 353. Thus, the application of New York law requires dismissal of Plaintiff's Section 349 claims, which accrued in December 1999 and cannot, as a matter of New York law, be tolled. Further, because Plaintiff's unjust enrichment claim cannot be tolled in New York, it too was brought outside the New York limitations period and is thus barred under Pennsylvania's borrowing statute.
The remaining question before the Court, therefore, is the impact of New York and Pennsylvania's discovery rule on Plaintiff's fraud claim.
Looking first to New York law, the limitations period for fraud begins to run either when the claim accrues or when the facts constituting the fraud are discovered. Cohen, 711 F.3d at 361 n. 3 (citing N.Y. C.P.L.R. § 213(8)). New York courts applying similar facts to the instant case have found that the plaintiff's claims for fraud were tolled until the discovery of the alleged fraud. See, e.g., Rosen v. Spanierman, 894 F.2d 28 (2d Cir.1990); Fertitta v. Knoedler Gallery, LLC, No. 14-2259, 2015 WL 374968, at *5 (S.D.N.Y. Jan. 29, 2015); De Sole v. Knoedler Gallery, LLC, 974 F.Supp.2d 274 (S.D.N.Y.2013).
In Rosen, cited by both Plaintiff and Sotheby's in their briefs, the plaintiffs brought suit against an art gallery after learning that the painting they purchased nineteen years before was counterfeit. The plaintiffs sued under a variety of rubrics, including, inter alia, fraud and breach of warranty. Like Sotheby's here, the defendant in Rosen argued the plaintiffs could have determined that their painting was inauthentic as early as the date of purchase. Although the Second Circuit agreed that the statute of limitations barred the plaintiffs' breach of warranty claim, it held that the discovery rule tolled the plaintiffs' fraud claim, reasoning that "New York courts have exhibited a reluctance to impute discovery to a plaintiff maintaining a claim of fraud who has no reason to suspect that he has been defrauded" and that "[o]n the facts as alleged, the Rosens had no reason to suspect the authenticity of their painting until they tried to sell it." Rosen, 894 F.2d at 36 n. 2.
In De Sole, a Southern District of New York court concluded that the discovery rule applied to toll a plaintiff's claims for fraud against an auction house in connection with the Plaintiff's purchase of wine. 974 F.Supp.2d at 298-99. Similar to the defendant in DeSole: (1) Sotheby's is an old and deeply respected auctioneer; (2) the Halper Catalogue specifically stated that the auctions of the items therein would "establish new standards in the areas of ... authenticity"; and, (3) the Halper Catalogue provided written assurances concerning the authenticity of the memorabilia prior to the purchase in that it explicitly stated that "Grey Flannel has authenticated all uniforms and apparel (excluding most baseball hats.").
Turning to Pennsylvania law, the Pennsylvania discovery rule "toll[s] the statute of limitations in any case where a party neither knows nor reasonably should have known of his injury and its cause at the time his right to institute suit arises." Cole v. Ferranti, 532 Fed.Appx. 205, 206 (3d Cir.2013) (quoting Fine, 870 A.2d at 859). Under the rule, the limitations period begins to run when the complaining party "knows, or reasonably should know, (1) that he has been injured, and (2) that his injury has been caused by another party's conduct." Id. (quoting Bohus v. Beloff, 950 F.2d 919, 924 (3d Cir.1991)). It is reasonable to infer at the motion to dismiss stage, given Plaintiff's status as an amateur collector who had relied on an apparent guarantee of authenticity from a well-respected seller, that he could not have known or reasonably should have known that he had been injured. While theoretically Plaintiff here could have arranged for an independent authentication at the time of purchase, he had no reason to suspect the authenticity of his purchase that time.
Sotheby's further moves to dismiss Plaintiff's claims on the basis of the economic loss doctrine. New York's economic loss doctrine denies the purchaser of a defective product a tort action against sellers for purely economic losses sustained as a result of the defective product.
However, New York courts have routinely permitted intentional fraud claims to proceed, notwithstanding the economic loss doctrine. See Weisblum, 88 F.Supp.3d at 297, 2015 WL 738112, at *12; EED Holdings v. Palmer Johnson Acquisition Corp., 387 F.Supp.2d 265, 278 (S.D.N.Y.2004) (citing Deerfield Comm. Corp. v. Chesebrough-Ponds, Inc., 68 N.Y.2d 954, 510 N.Y.S.2d 88, 502 N.E.2d 1003, 1004 (1986)); Computech Int'l, Inc. v. Compaq Computer Corp., No. 02-2628, 2004 WL 1126320, at *10 (S.D.N.Y. May 21, 2004) ("In the absence of any articulation to the contrary by the New York courts, the economic loss doctrine will not be presumed to extend to fraud claims."). In light of these cases, the Court declines to dismiss Plaintiff's fraud claim on the basis of the economic loss doctrine. See
As for Plaintiff's UTPCPL claim, it is barred by the economic loss doctrine under Pennsylvania law. In Werwinski v. Ford Motor Co., the Third Circuit predicted that the Pennsylvania Supreme Court would find UTPCPL claims barred by the economic loss doctrine where they are "intertwined with contract claims and the resulting loss has been economic."
Sotheby's argues that Plaintiff's fraud claim fails because he has not alleged facts sufficient to support an inference of two elements of a fraud claim: (1) knowledge of a false statement, and (2) intent to induce reliance.
In his Complaint, Plaintiff alleges that Sotheby's included language in the Halper Catalogue that it knew to be false with the intent to induce Plaintiff to bid on items in the Halper Collection. Am. Compl. ¶¶ 73-75. Specifically, Plaintiff alleges that Sotheby's included language stating that Grey Flannel had authenticated the jerseys in the Halper collection when it knew that it had not contracted Grey Flannel to
For the reasons stated herein, the Grey Flannel Defendants' motion to dismiss is granted, and the Sotheby's and Halper Defendants' motions to dismiss are granted in part and denied in part. With the exception of his fraud claim, all of Plaintiff's claims are dismissed. An order shall follow consistent with this Opinion.
Sotheby's has fundamentally misunderstood the Plaintiff's allegations. Plaintiff has not brought a claim for breach of warranty; he has brought claims for fraud. If Plaintiff had merely brought a breach of warranty claim, Sotheby's argument that the five-year guarantee should have triggered Plaintiff to take independent action to authenticate the Mays memorabilia might be persuasive. But that is not Plaintiff's claim. Plaintiff has not alleged that Sotheby's arranged the sale of the Halper collection believing it had obtained Grey Flannel's authentication services but, due to inherent risks in the authenticity of sports memorabilia, it offered a limited five-year warranty to protect customers while also limiting its own risk. Rather, Plaintiff alleges that, as early as the time Sotheby's contracted with Grey Flannel to catalogue the Halper collection, Sotheby's knew it had not in fact hired Grey Flannel to authenticate the items in the collection and fraudulently represented that such authentication had taken place in order to induce customers to bid on the collection: Nothing about the five-year warranty could have alerted Plaintiff to that fact.
For the same reasons, Sotheby's arguments concerning the news articles are irrelevant. Even assuming Plaintiff knew or should have known that those articles were published, the articles stated only that there was some concern regarding the authenticity of the Halper collection; nothing in the articles would have put Plaintiff on notice that Sotheby's fraudulently stated that Grey Flannel had authenticated the Halper collection when it knew Grey Flannel had not done such work.
