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Togut v. Forever 21, Inc.

United States District Court, S.D. New York

January 15, 2018

LAURA TOGUT, on behalf of herself and all others similarly situated, Plaintiff,
v.
FOREVER 21, INC. and FOREVER 21 RETAIL, INC., Defendants.

          Attorneys for Plaintiff MCLAUGHLIN & STERN, LLP Lee S. Shalov, Esq., Bradley J. Bartolomeo, Esq.

          Attorneys for Defendants PILLSBURY WINTHROP SHAW PITTMAN LLP David G. Keyko, Esq. Joseph D. Jean, Esq.

          OPINION

          Sweet, D.J.

         Defendants Forever 21, Inc. and Forever 21 Retail, Inc. (collectively, the "Defendants" or "Forever 21") have moved pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) to dismiss the Complaint of Plaintiff Laura Togut ("Togut" or the "Plaintiff") alleging causes of action for unjust enrichment, conversion, and money had and received which arise out of Togut's purchase of items on Defendants' website for which she alleges Defendants unlawfully charged her retail sales tax. Based upon the conclusions set forth below, Defendants' motion is granted and the Complaint is dismissed.

         Prior Proceedings

         On July 24, 2017, Plaintiff filed her putative class action Complaint alleging unjust enrichment, conversion, and money had and received. Compl. ¶¶ 49-73, Dkt. No. 1. The Complaint alleges that Defendants fraudulently added a surcharge, labeled as a "sales tax, " to online purchases shipped to sales tax exempt jurisdictions, and did not remit the collected tax to the proper New York authority, the New York State Department of Taxation and Finance (the "Department"). See id.

         On September 18, 2017, Defendants filed the instant motion to dismiss. Dkt. No. 15. The motion was heard and marked fully submitted on November 15, 2017.

         Facts

         The Complaint sets forth the following facts, which are assumed true for the purpose of this motion to dismiss. See Koch v. Christie's Int'l PLC, 699 F.3d 141, 145 (2d Cir. 2012). As part of a motion to dismiss, a "court may consider any written instrument attached to the complaint as an exhibit or incorporated in the complaint by reference, as well as documents upon which the complaint relies and which are integral to the complaint." N.Y. Life Ins. Co. v. U.S., 724 F.3d 256, 258 n.l (2d Cir. 2013) (quoting Subaru Distribs. Corp. v. Subaru of Am., Inc., 425 F.3d 119, 122 (2d Cir. 2005)).

         New York City is a jurisdiction that is exempt from retail sales tax on items priced at less than $110. Compl. ¶ 31. New York City's sales tax exception includes New York State retail sales tax, New York City local retail sales tax, and the Metropolitan Commuter Transportation District ("MCTD") tax, which combined total 8.875%. Compl. ¶¶ 3-4, 29, 31; see also Sales Tax, City of New York, http://wwwl.nyc.gov/nyc-resources/service/2389/sales-tax (last visited January 15, 2018) .

         On or about May 19, 2017, Plaintiff purchased twenty items of clothing from Defendants' website, Forever21.com, for delivery in New York City. Compl. ¶ 28. Each item was priced below $110 and, combined, totaled $283.40. Compl. ¶ 28, Ex. A. Plaintiff ultimately paid Defendants a total of $306.30 for her items, of which $22.90 was labeled a "tax." Compl. ¶ 32-33, Ex. A. The items Plaintiff ordered were order and delivered to her mailing address in New York City. Compl. ¶¶ 29-30. The monies Defendants collected from Plaintiff under the label of a "tax" were not paid to the Department. Compl. ¶ 35-36.

         The Applicable Standard

         "A case is properly dismissed for lack of subject matter jurisdiction under Rule 12(b)(1) when the district court lacks the statutory or constitutional power to adjudicate it." Makarova v. U.S., 201 F.3d 110, 113 (2d Cir. 2000). "In resolving a motion to dismiss under Rule 12(b)(1), the district court must take all uncontroverted facts in the complaint (or petition) as true, and draw all reasonable inferences in favor of the party asserting jurisdiction." Tandon v. Captain's Cove Marina of Bridgeport, Inc., 752 F.3d 239, 243 (2d Cir. 2014). However, "where jurisdictional facts are placed in dispute, the court has the power and obligation to decide issues of fact by reference to evidence outside the pleadings." Id. "A plaintiff asserting subject matter jurisdiction has the burden of proving by a preponderance of the evidence that it exists." Makarova, 201 F.3d at 113.

         On a Rule 12(b)(6) motion to dismiss, all factual allegations in the complaint are accepted as true and all inferences are drawn in favor of the pleader. Mills v. Polar Molecular Corp., 12 F.3d 1170, 1174 (2d Cir. 1993). A complaint must contain "sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 663 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). A claim is facially plausible when "the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 663 (quoting Twombly, 550 U.S. at 556). In other ...


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