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July 28, 2004.

BERND BILDSTEIN, on behalf of himself and others similarly situated, Plaintiffs,

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, ...

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