The opinion of the court was delivered by: WILLIAM PAULEY, District Judge
This putative class action challenges certain foreign currency
conversion policies by MasterCard International Incorporated
("MasterCard"). Specifically, Bernd Bildstein ("Bildstein")
alleges that MasterCard charges its customers an undisclosed
Foreign Currency Transaction Fee ("FCTF") in violation of Section
349 of the N.Y. General Business Law.
Presently before this Court is MasterCard's motion to dismiss
the Amended Complaint pursuant to Fed.R.Civ.P. 12(b)(6).
MasterCard argues that Bildstein fails to allege the elements of
a Section 349 claim. For the reasons set forth below,
MasterCard's motion to dismiss is granted. BACKGROUND
MasterCard is one of the largest general purpose card networks
in the world and is a joint venture or membership association
owned and operated by its member banks. (Amended Complaint, dated
July 8, 2003 ("Am. Comp.") ¶ 4); see also In re Currency
Conversion Fee Antitrust Litig., 265 F. Supp.2d 385, 391
(S.D.N.Y. 2003); United States v. Visa U.S.A., Inc.,
163 F. Supp.2d 322, 332 (S.D.N.Y. 2001). There are approximately 1500
member banks and 13,500 affiliate members in the MasterCard
operational network. (Am. Comp. ¶ 3.) They compete with each
other to issue MasterCard-branded general purpose cards. (Am.
Comp. ¶ 3.)
The MasterCard network executes transactions for member banks
and affiliates under a set of uniform operating rules. (Am. Comp.
¶ 5.) All participating banks must comply with the bylaws, rules,
regulations published by MasterCard, including payment of fees,
dues and assessments. (Am. Comp. ¶ 5.)
MasterCard implemented a policy of imposing a service charge
(i.e., FCTF) equal to one percent of the value of transactions
made in foreign currencies. (Am. Comp. ¶ 8.) The FCTF was
embedded in the currency conversion rate paid by cardholders.
(Am. Comp. ¶ 10.) While encouraging cardholders to use their
MasterCard general purpose card for foreign transactions,
Defendant did not disclose the embedded FCTF. (Am. Comp. ¶¶ 10-11.) As a result, cardholders "unknowingly paid
millions of dollars for the FCTF." (Am. Comp. ¶ 13.)
Plaintiff alleges that he has been a MasterCard general purpose
card holder since September 1997 and that he used his card in
Mexico between 2000 and July 2003 to make purchases in Mexican
Pesos. (Am. Comp. ¶¶ 1, 13.) According to the Amended Complaint,
MasterCard converted the Mexican Peso charges into U.S. Dollars
and embedded the FCTF in the conversion rate, without disclosing
it. (Am. Comp. ¶ 13.)
I. Motion to Dismiss Standard
On a motion to dismiss pursuant to Rule 12(b)(6), a court
typically must accept the material facts alleged in the complaint
as true and construe all reasonable inferences in a plaintiff's
favor. Grandon v. Merrill Lynch & Co., 147 F.3d 184, 188 (2d
Cir. 1998). A court should not dismiss a complaint for failure to
state a claim unless "it appears beyond doubt that the plaintiff
can prove no set of facts in support of his claim which would
entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46
(1957); accord Gant v. Wallingford Bd. of Educ., 69 F.3d 669,
673 (2d Cir. 1995). Dismissal is proper when the plaintiff fails
to plead the basic elements of a cause of action. Corcoran v.
New York Power Authority, 935 F. Supp. 376, 382 (S.D.N.Y. 1996) ("The Court can dismiss the claim only if, assuming all
facts alleged to be true, plaintiff still fails to plead the
basic elements of a cause of action."); accord Wright v.
Giuliani, No. 99 Civ. 10091 (WHP), 2000 WL 777940, at *4
(S.D.N.Y.), aff'd, 230 F.3d 543 (2d Cir. 2000). The issue on a
motion to dismiss "is not whether plaintiff will ultimately
prevail, but whether claimant is entitled to offer evidence to
support claims." Villager Pond, Inc. v. Town of Darien,
56 F.3d 375, 378 (2d Cir. 1995) (citation omitted).
II. N.Y. General Business Law § 349
Section 349 "`was designed to protect consumers from various
forms of consumer fraud and deception.'" Twentieth Century Fox
Film Corp. v. Marvel Enterprises, Inc., 155 F. Supp.2d 1, 25
(S.D.N.Y. 2001) (quoting Smith v. Triad Mfg. Group, Inc.,
255 A.D.2d 962, 681 N.Y.S.2d 710, 712 (4th Dep't 1998)). Section 349
"declares unlawful `deceptive acts or practices in the conduct of
any business, trade or commerce or in the furnishing of any
service.'" Riordan v. Nationwide Mut. Fire Ins. Co.,
977 F.2d 47, 51 (2d Cir. 1992) (internal brackets omitted) (quoting
General Business Law § 349(a)); accord Highlands Ins. Co. v.
PRG Brokerage, Inc., No. 01 Civ. 2272 (GBD), 2004 WL 35439, at
*9 (S.D.N.Y. Jan. 6, 2004); Kforce, Inc. v. Alden Personnel,
Inc., 288 F. Supp.2d 513, 518 (S.D.N.Y. 2003). The statute provides a private right of action to any
person injured by a business' deceptive act or practice.
Riordan, 977 F.2d at 51 (citing General Business Law § 349(h));
accord Am. Med. Ass'n v. United Healthcare Corp., No. 00 Civ.
2800 (LMM) (GWG), 2003 WL 22004877, at *6 (S.D.N.Y. Aug. 22,
2003); Gucci Am., Inc. v. Duty Free Apparel, Ltd., 277 F. Supp.2d 269,
272 (S.D.N.Y. 2003).
"A plaintiff under section 349 must prove three elements:
first, that the challenged act or practice was consumer-oriented;
second, that it was misleading in a material way; and third, that
the plaintiff suffered injury as a result of the deceptive act."
Stutman v. Chem. Bank, 95 N.Y.2d 24, 29 (2000) (citations
omitted); accord Maurizio v. Goldsmith, 230 F.3d 518, 521-22
(2d Cir. 2000); Lava Trading Inc. v. Hartford Fire Ins. Co.,
No. 03 Civ. 7037 (PKC), 2004 WL 555723, at *3 (S.D.N.Y. March 19,
2004); Smith v. Chase Manhattan Bank, USA, N.A., 741 N.Y.S.2d 100,
102 (2d Dep't 2002). "In addition, a plaintiff must prove
`actual' injury to recover under the statute, though not
necessarily pecuniary harm." Stutman, 95 N.Y.2d at 29.
MasterCard contends that Bildstein fails to plead the elements
of Section 349, because he does not allege facts establishing
materiality, actual injury, consumer-oriented conduct, ...