The only question of any substance is whether the sales leads and training properly are so characterized.
In approaching this question, it is important to bear in mind the statute's object in defining its reach by use of the term "consumer." The Court certainly agrees with defendants that the New York City Consumer Protection Law is intended to distinguish between goods or services offered to businesses and those offered to at least certain types of individuals. The reason is plain. Business people are deemed sophisticated in their commercial dealings and thus to require less protection than others. This distinction is well known in the law. See, e.g., N.Y. UNIF. COMM. CODE § 2-201(1)-(2) (McKinney 1993) (distinguishing between merchants and others). In consequence, both the language and manifest purpose of the statute quite plainly reach the sale of goods or services intended to appeal primarily to relatively unsophisticated individuals. This view is supported by Grant v. Mother Goose Personal Management Corp., 115 N.Y.L.J. 19, col. 3 (Sup. Ct. N.Y. Co. June 16, 1971), which held that the statute reaches the allegedly misleading offering of the services of a photo modeling agency.
The nature of the services offered here demonstrates that they come within the core of the statute. The defendants in substance were seeking to obtain money from individuals for providing services which supposedly would have enabled their customers to set themselves up in business as entrepreneurs in the sports collectibles business. It is difficult to imagine a scheme more likely to appeal to the most unsophisticated audience to the exclusion of those better able to fend for themselves. In any case, this is a motion to dismiss for failure to state a claim upon which relief may be granted. The motion must be denied unless it is clear that the DCA can prove no facts that would entitle it to relief. Surely that cannot be said at this stage.
The Court reaches the same conclusion with regard to the training defendants offered. Prospective clients were informed that they would become conversant in the skills necessary to sell sports collectibles. It is axiomatic that people willing to pay money to acquire basic business skills lack those skills and are the sort of individuals that the Consumer Protection Act aims to protect. This analysis is consistent with the interpretation of similar provisions in other statutes, under which education has been regarded as a personal, family or household service. See Gombosi v. Carteret Mortgage Corp., 894 F. Supp. 176, 181 (E.D.Pa. 1995) ("payment of a child's college expenses is properly classified as a "personal" or "family" expense . . ." under Truth In Lending Act, 15 U.S.C. § 1601). Further, the Federal Trade Commission has defined "consumer goods and services" in one regulation as "goods or services purchased, leased, or rented primarily for personal, family, or household purposes, including courses of instruction or training regardless of the purpose for which they are taken." 16 C.F.R. § 429.0(b).
The Court therefore concludes that the vocational training at issue properly is characterized as a consumer service.
Both sports cards and training are clearly consumer goods and services under the statute's definition. The Consumer Protection Law defines "deceptive trade practice" as "any false . . . or misleading oral or written statement . . . made in connection with the sale, lease, rental or loan . . . of consumer goods or services . . ." N.Y.C. ADMIN. CODE § 20-701 (emphasis added). Thus, even if one assumes that the business leads were neither goods nor services, they would fall within the Consumer Protection Law because they were offered "in connection with" the sale of educational opportunities and sports cards.
The motion to dismiss is denied.
Dated: July 7, 1997
Lewis A. Kaplan
United States District Judge