The opinion of the court was delivered by: DENNY CHIN, District Judge
This is an appeal from a decision and order of the United
States Bankruptcy Court for the Southern District of New York (Gerber, B.J.), dated May 3, 2005 (the "Order"), granting
the motion of defendant-appellee Adelphia Communications
Corporation ("Adelphia") to dismiss the amended complaint
pursuant to Fed.R.Civ.P. 12(b)(6). For the reasons that
follow, the Order is affirmed in part and reversed in part.
As alleged in the amended complaint, the facts are as follows:
Plaintiff-appellant Gerald Dibbern is a resident of
Massachusetts. (Am. Compl. ¶ 9). In approximately 1996,*fn1
he contacted Harron Communications Corp. ("Harron") to obtain
cable television service for his home. (Id. ¶ 79). He signed up
for the "basic service tier" ("BST"), which consisted of basic
service only, without any premium channels. He began renting two
cable converter boxes, which were necessary to view even basic
programming. (Id. ¶¶ 9, 79). To the extent Dibbern received any
contract documents or installation materials or other documents
at the time, he no longer has them. (Id. ¶ 80). Dibbern has
been paying a rental fee for the converter boxes of between $1.60
and $3.25 per month per box. (Id. ¶ 16).
In April 1999, Adelphia announced that it was acquiring Harron.
The transaction closed in October 1999. (Id. ¶ 21). The Harron acquisition added subscribers in Pennsylvania,
Michigan, Massachusetts, and New Hampshire to Adelphia's customer
base. (Id. ¶ 24).
At some point after the acquisition, as it had been doing with
respect to its acquisitions of other cable systems, Adelphia
upgraded the system it acquired from Harron. (Id. ¶¶ 20, 25,
28, 30). Previously, Harron's BST customers, including Dibbern,
had to rent converter boxes to be able to view basic programming.
(Id. ¶ 26). After the upgrade, however, BST customers no longer
needed converter boxes to view basic programming, if they had a
cable-ready television or VCR (as most people do) and did not
want to subscribe to premium channels or use pay-per-view
services. (Id. ¶¶ 2, 28, 43).
Adelphia did not advise Dibbern or its other BST customers that
the converter boxes were no longer required to view basic
programming. Instead, Adelphia continued to charge monthly rental
fees for the boxes, even though they were no longer necessary for
BST customers who were not interested in viewing premium channels
or pay-per-view programs. (Id. ¶¶ 3, 32, 35).
In May 2001, Adelphia finally advised its customers that they
no longer needed to rent converter boxes for BST-only service.
(Id. ¶ 36). The notice appeared on the May bill as follows:
CUSTOMERS WHO DO NOT SUBSCRIBE TO ANALOG PREMIUM
CHANNELS (HBO, CINEMAX, SHOWTIME OR NESN), OR ENJOY ORDERING PAY-PER-VIEW, NO LONGER NEED
A CONVERTER BOX, PROVIDED THAT THEIR TELEVISION IS
CABLE-READY. CONVERTERS MAY BE RETURNED TO YOUR
LOCAL ADELPHIA OFFICE.
(Order at 3-4 n. 4). A majority of the BST subscribers returned
their cable boxes, and thus they were no longer subject to the
cable box rental fee. (Am Compl. ¶ 37). A follow-up notice was
included in the September 2001 bill, reminding BST customers that
the converter boxes were no longer necessary. (Id. ¶ 41; Order
at 3-4 n. 4).
Adelphia is and was at all relevant times a Delaware
corporation with its principal place of business in Pennsylvania.
(Am. Compl. ¶ 10). The amended complaint does not allege where
Harron was incorporated or where its principal place of business
On April 14, 2002, Dibbern filed an action in state court in
Pennsylvania against Adelphia, raising the claims asserted
herein. On June 25, 2002, for unrelated reasons, Adelphia and
many of its subsidiaries filed for Chapter 11 protection. On July
8, 2002, Dibbern filed a "class" proof of claim in the Bankruptcy
Court on behalf of a nationwide class of similarly situated
subscribers, alleging that Adelphia had improperly billed him for
the rental of the two converter boxes. Thereafter, Dibbern filed
this adversary proceeding, as a nationwide class action.
The amended complaint asserts claims for: (1) violations of the Pennsylvania Unfair Trade Practices and
Consumer Protection Law, 73 P.S. § 201-1 et seq. (the
"UTPCPL"); (2) breach of contract; (3) fraud; (4) unjust
enrichment; (5) an ...