Osborn Law, P.C., for plaintiffs.
Kramer Levin Naftalis & Frankel LLP, for defendant.
Shirley Werner Kornreich, J.
Defendant Sirius XM Radio, Inc. (Sirius) moves to dismiss the Complaint pursuant to CPLR 3211 (a)(1), (5), & (7). Defendant's motion is granted for the reasons that follow.
Factual Background & Procedural History
The court assumes familiarity with the allegations in this putative class action, which are set forth at length in the federal court decisions discussed below. In short, plaintiffs accuse Sirius, a satellite radio provider, of improperly charging customers a $2 Invoice Administration Fee (the Fee) for processing subscription payments made by credit card.
On November 18, 2009, plaintiff Alvin Kaufman filed a Class Action Complaint in the United States District Court for the Southern District of New York (the District Court). Kaufman asserted claims (1) under GBL § 349; (2) for unjust enrichment; and (3) for a declaratory judgment that the class members are not subject to arbitration. After Sirius moved to dismiss, an Amended Class Action Complaint was filed on February 22, 2010, which added plaintiff Richard LaLuna, who asserted a new breach of contract claim, and omitted plaintiff's original claim for unjust enrichment. LaLuna, a New York resident, was added to the case due to the concern that Kaufman, a Nevada resident, might not be able to maintain a claim under GBL § 349. After Sirius moved to dismiss for a second time, plaintiffs filed a Second Amended Complaint on April 27, 2010. Before Sirius had an opportunity to file a motion to dismiss, plaintiffs were granted leave to file another amended pleading. On May 28, 2010, plaintiffs filed a Third Amended Complaint (the TAC), alleging GBL § 349, breach of contract, and declaratory judgment claims. Sirius then submitted a letter to the District Court, dated June 11, 2010, requesting leave to file a motion to dismiss the TAC. On August 20, 2010, the District Court held a pre-motion conference during which the parties were directed to submit letter-briefs on the two issues to be decided on Sirius' motion: "(1) whether non-New York resident Kaufman (and those similarly situated) adequately pled deception that occurred in New York sufficient to state a GBL § 349 claim and (2) whether Plaintiffs sufficiently pled facts to support a viable breach of contract claim." The parties were explicitly directed to limit their letters to these two issues and not to "include arguments relating to the merits of the GBL § 349 claim." The parties each submitted letter-briefs.
In an order dated November 10, 2010, the District Court (1) dismissed the breach of contract claim; and (2) held that Kaufman and "any similarly-situated non-New York residents" cannot maintain a claim under GBL § 349. See Kaufman v Sirius XM Radio, Inc., 751 F.Supp.2d 681 (SDNY 2010) (Marrero, J.). The District Court provided the following explanation for why it dismissed the breach of contract claim:
The Court provided clear instructions to Plaintiffs at the Telephone Conference, directing them to set forth in their contemplated letter-brief the language in the contract that they assert has been breached, what their interpretation of that clause is, and how the facts pled in the [TAC] support a breach of that provision. However, Plaintiffs' brief focuses exclusively on the GBL § 349 claim (and mostly on the merits of that count which the Court stated repeatedly would not be susceptible to dismissal at the pleading stage) and does not even mention the contractual cause of action. Indeed, Plaintiffs' September 3 Letter-Brief and Plaintiffs' September 21 Letter-Brief fail to point the Court to any contractual obligation on the part of Sirius to refrain from charging [the Fee]. Accordingly, the Court rules that the Plaintiffs have abandoned their breach of contract cause of action.
Even had Plaintiffs attempted to justify their contractual claim, the Court agrees with Sirius that there is no factual basis in the [TAC] upon which to plausibly ground that count. That Sirius charged [the Fee] to Plaintiffs without having language in the Payment Terms that unambiguously permitted it to do so does not mean that it breached its contract with Subscribers by sending them invoices with the [the Fee] and then collecting that $2.00 charge. Accordingly, the Court dismisses Plaintiffs breach of contract cause of action. Whether or not Sirius has deceived, as that term is defined under GBL § 349, certain of its Subscribers — despite language in its Payment Terms that unambiguously calls for at least those who receive an invoice and also pay by check or money order to pay a [the Fee] — is a question for another day.
Kaufman, 751 F.Supp.2d at 685-86 (footnotes omitted).
As for why the proposed non-New York class could not maintain a claim under GBL § 349, the District Court held that such claim was not viable because members of that class were not deceived in New York. Id. at 686-88, accord Goshen v Mutual Life Ins. Co. of NY, 98 N.Y.2d 314, 324 (2002) ("the transactions where the consumer is deceived must occur in New York.").On November 16, 2010, Sirius sought dismissal for lack of subject matter jurisdiction since the District Court's decision on the GBL § 349 claim eliminated diversity jurisdiction under the Class Action Fairness Act. On November 17, 2010, plaintiffs moved for reconsideration of the District Court's decision and for leave to file another amended complaint to add an unjust enrichment claim. In an order dated November 23, 2010, the District Court (1) adhered to its decision; (2) denied plaintiff's motion to amend the TAC; and (3) dismissed the remaining claims in the TAC (the New York class' § 349 claim and the declaratory judgment claim) for lack of subject matter jurisdiction. See Kaufman v Sirius XM Radio, Inc., 2010 WL 4968049 (SDNY 2010). Judgment was entered on December 13, 2010.
Plaintiffs appealed the District Court's decisions to the United States Court of Appeals for the Second Circuit. Plaintiffs argued "that the district court (1) erred in concluding that non-New York resident Kaufman (and those similarly situated) failed adequately to state a claim under GBL § 349, and (2) abused its discretion in denying plaintiffs leave to file a fourth amended complaint." Plaintiffs did not appeal the dismissal of their breach of contract claim. In an order dated April 4, 2012, the Second Circuit affirmed the District Court's decisions. Kaufman v Sirius XM Radio, Inc., 474 Fed.Appx 5 (2d Cir 2012). 
Approximately ten months later, on February 6, 2013, plaintiffs filed the Complaint in the instant action, which lists four claims: (1) a claim under GBL § 349; (2) breach of contract; (3) unjust enrichment; and (4) a declaratory judgment.  The Complaint's allegations are virtually identical to the allegations in the TAC. The Complaint is essentially the proposed fourth amended complaint (plaintiffs' fifth overall pleading). Though the District Court specifically allowed plaintiffs to file its surviving claims in state court, the Complaint includes the claims dismissed by the District Court. Sirius contends that the claims dismissed by the ...