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Express Gold Cash, Inc. v. Beyond 79, LLC

United States District Court, W.D. New York

September 13, 2019

BEYOND 79, LLC, d/b/a,, Defendant.




         Plaintiff Express Gold Cash, Inc. ("Plaintiff) commenced the instant action on July 31, 2018, alleging claims of false advertising, deceptive business practices, unfair competition, and unjust enrichment against Defendant Beyond 79, LLC ("Defendant"). (Dkt. 1). Currently before the Court is Defendant's motion to dismiss the Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. (Dkt. 6). For the reasons set forth below, the Court grants Defendant's motion in part and denies it in part.


         The following facts are taken from Plaintiffs Complaint. As required at this stage of the proceedings, the Court treats Plaintiffs allegations as true.

         Defendant is a "nationwide mail-in precious metals dealer," and conducts its business via the interactive website (Dkt. 1 at ¶¶ 18-19). The mail-in precious metals industry operates as follows: (1) a customer requests a free appraisal kit from a dealer; (2) the dealer mails the appraisal kit to the customer, who then uses the enclosed prepaid shipping label to mail items to the dealer for appraisal; (3) the customer receives an offer for the items, which he or she can either accept or decline; and (4) if the customer declines the offer, the items are returned free of charge. (Id. at ¶ 26). Plaintiff and Defendant are "two of the top ... competitors" in the mail-in precious metals industry. (Id. at ¶ 27).

         In 2010, the Today Show, a nationally televised morning show on the NBC network, aired a segment in which it "claimed to have compared the prices offered by ten different mail-in precious metals dealers by mailing a single item of gold to each one," and further claimed that it received the highest offer from Defendant, which "offered 90% of market value." (Id. at ¶¶ 29-30).

         "Beginning in 2011 and continuing into the present," Defendant has "published variations of an advertisement that it is 'ranked [or rated] #1 on [or by] NBC's Today Show." (Id. at ¶¶ 24, 32 (alterations in original)). Plaintiff alleges that this amounts to deceptive advertising, and that Defendant has:

concealed and fabricated the original broadcast date, and exploited NBC's goodwill to convey the false impression that Defendant is currently and actually "ranked #1" by Today; that Today and NBC currently endorse, or have ever endorsed Defendant; that Today's findings were based on a comprehensive and rigorous evaluation of multiple factors rather than price offered for a single sale; that Today's findings were based on a larger than actual sample size; and Today's findings relate to all types of precious metals and jewelry-not just gold.

(Id. at ¶ 34). Defendant has disseminated this allegedly deceptive advertising on its website, where it has also used "the sound of three tones that are reasonably identical to the famous three tones used by NBC to identify its broadcasting service." (Id. at ¶ 39). Defendant has further displayed the allegedly deceptive advertising on its YouTube page, in paid internet advertisements, on its social media accounts, and on consumer review websites. (Id. at ¶¶ 36-46). Defendant has also used the allegedly deceptive advertising in direct communications with customers, such as appraisal kits and emails, and in newspapers and classified advertisements. (Id. at ¶¶ 48-56).

         Distinct from its allegations regarding Defendant's Today Show-related advertising, Plaintiff also alleges that Defendant's website makes misleading representations about recently purchased items. In particular, Plaintiff alleges that "Defendant's website displays stock photographs allegedly depicting its 'latest payouts' to customers," and that these "stock photographs are false and misleading because they grossly exaggerate the kind, quality and quantity of recently purchased items[.]" (Dkt. 1 at ¶¶ 57-58). The stock photographs in question have captions stating that "photos are illustrative and depict items of similar kind, quality and quantity to actual items purchased." (Dkt. 1-1 at 62).

         Based on these allegations, Plaintiff asserts five claims against Defendant: (1) false advertising under the Lanham Act, 15 U.S.C. § 1125(a); (2) deceptive acts and practices under New York General Business Law § 349; (3) false advertising under New York General Business Law § 350; (4) common law unfair competition; and (5) unjust enrichment. (Dkt. 1 at ¶¶ 67-96).


         Plaintiff commenced the instant action on July 31, 2018. (Dkt. 1). Defendant filed its motion to dismiss on September 17, 2018. (Dkt. 6). Plaintiff filed its response on October 26, 2018 (Dkt. 10), and Defendant filed its reply on November 16, 2018 (Dkt. 11).


         I. Legal Standard

         "In considering a motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6), a district court may consider the facts alleged in the complaint, documents attached to the complaint as exhibits, and documents incorporated by reference in the complaint." DiFolco v. MSNBC Cable L.L.C., 622 F.3d 104, 111 (2d Cir. 2010). A court should consider the motion by "accepting all factual allegations as true and drawing all reasonable inferences in favor of the plaintiff." Trs. of Upstate N.Y.Eng'rs Pension Fund v. Ivy Asset Mgmt., 843 F.3d 561, 566 (2d Cir. 2016), cert, denied, 137 S.Ct. 2279 (2017). To withstand dismissal, a claimant must set forth "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Turkmen v. Ashcroft, 589 F.3d 542, 546 (2d Cir. 2009) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)).

         "While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiffs obligation to provide the grounds of his entitle[ment] to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555 (internal quotations and citations omitted). "To state a plausible claim, the complaint's '[f]actual allegations must be enough to raise a right to relief above the speculative level.'" Nielsen v. AECOM Tech. Corp., 762 F.3d 214, 218 (2d Cir. 2014) (quoting Twombly, 550 U.S. at 555).

         II. Timeliness of Plaintiffs Claims

         As a threshold matter, Defendant argues that Plaintiffs claims are barred by the applicable statutes of limitations, or by the doctrine of laches. (See Dkt. 6-1 at 29-32). The Court denies the motion on these grounds, for the reasons that follow.

         A. Lanham Act False Advertising Claim

         "[T]he Lanham Act. . . contains no statute of limitations," but instead "expressly provides for defensive use of equitable principles, including laches." Petrella v. Metro-Goldwyn-Mayer, Inc.,572 U.S. 663, 678 n. 15 (2014) (quotation omitted); see alsoConopco, Inc. v. Campbell Soup Co.,95 F.3d 187, 191 (2d Cir. 1996) ("[L]aches is an equitable defense, employed instead of a statutory time-bar[.]"). Nonetheless, "analogous statutes of limitation remain an important determinant in the application of a laches defense," and "determine[] which party possesses the ...

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