Case Name: Bruce Ovitz, on Behalf of Himself and All Others Similarly Situated, Appellant, v. Bloomberg L.P. et al., Respondents
Court: New York Court of Appeals
Jurisdiction: New York
Decision Date: 2012-03-27
Citations: 18 N.Y.3d 753
Docket Number: 
Parties: Bruce Ovitz, on Behalf of Himself and All Others Similarly Situated, Appellant, v Bloomberg L.P. et al., Respondents.
Judges: 
Reporter: New York Reports
Volume: 18
Pages: 753–764

Head Matter:
[967 NE2d 1170, 944 NYS2d 725]
Bruce Ovitz, on Behalf of Himself and All Others Similarly Situated, Appellant, v Bloomberg L.P. et al., Respondents.
Argued February 8, 2012;
decided March 27, 2012
POINTS OF COUNSEL
Tannenbaum Helpern Syracuse & Hirschtritt LLP, New York City (Vincent J. Syracuse and Matthew J. Sinkman of counsel), and Sperling & Slater, P.C., Chicago Illinois (Bruce S. Sperling, Mitchell H. Macknin and Greg Shinall of counsel), for appellant.
I. The applicable standard of review is de novo. (Leon v Martinez, 84 NY2d 83.) II. A private right of action is implied under the automatic renewal statutes. (Sheehy v Big Flats Community Day, 73 NY2d 629; Telephone Secretarial Serv. v Sherman, 28 AD2d 1010; Chotapeg, Inc. v Bullowa, 291 NY 70; Negrin v Norwest Mtge., 263 AD2d 39.) III. The Deceptive Practices Act applies to appellant’s claims because Bloomberg L.P.’s and Bloomberg Finance L.P.’s deceptive conduct occurred in New York. (Karlin v TVF Am., 93 NY2d 282; Oswego Laborers’ Local 214 Pension Fund v Marine Midland Bank, 85 NY2d 20; Matter of People v Telehublink Corp., 301 AD2d 1006; People v H&R Block, Inc., 16 Misc 3d 1124[A], 2007 NY Slip Op 51562[U]; People v Lipsitz, 174 Misc 2d 571.) IV Bloomberg L.P. and Bloomberg Finance L.P. cannot avoid declaratory and injunctive relief or frustrate a class action by unilaterally attempting to moot the claims of a named plaintiff. (James v Alderton Dock Yards, 256 NY 298; Deposit Guaranty Nat. Bank v Roper, 445 US 326; New York Foreign Trade Zone Operators, Inc. v State Liq. Auth., 285 NY 272; Klostermann v Cuomo, 61 NY2d 525; Andin Intl, v Matrix Funding Corp., 194 Misc 2d 719; Dime Laundry Serv. v 230 Apts. Corp., 120 Misc 2d 399; Kalisch-Jarcho, Inc. v City of New York, 72 NY2d 727; Four Times Sq. Assoc. v Cigna Invs., 306 AD2d 4; Board of Higher Educ. of City of N.Y. v Marcus, 63 Misc 2d 268.)
Willkie Farr & Gallagher LLP, New York City (Thomas H. Golden and Sameer Advani of counsel), for respondents.
I. No implied private right of action exists under General Obligations Law §§ 5-901 and 5-903. (Sheehy v Big Flats Community Day, 73 NY2d 629; Kaminsky v Abrams, 51 Misc 2d 5; Super Glue Corp. v Avis Rent A Car Sys., 132 AD2d 604; Brian Hoxie’s Painting Co. v Cato-Meridian Cent. School Dist., 76 NY2d 207; Concourse Nursing Home v Axiom Funding Group, 279 AD2d 271; Ludl Elecs. Prods, v Wells Fargo Fin. Leasing, 6 AD3d 397; Telephone Secretarial Serv. v Sherman, 28 AD2d 1010; Negrin v Norwest Mtge., 263 AD2d 39; Andin Intl., v Matrix Funding Corp., 194 Misc 2d 719; Chotapeg, Inc. v Bullowa, 291 NY 70.) II. Bruce Ovitz fails to state a cause of action for violation of General Business Law § 349. (Scott v Bell Atl. Corp., 282 AD2d 180; Goshen v Mutual Life Ins. Co. of N.Y., 286 AD2d 229, 98 NY2d 314; People v Lipsitz, 174 Misc 2d 571; Morrissey v Nextel Partners, Inc., 72 AD3d 209; Drizin v Sprint Corp., 12 AD3d 245; Gavin v AT&T Corp., 543 F Supp 2d 885; Chiste v Hotels.com L.P., 756 F Supp 2d 382; SimplexGrinnell LP v Integrated Sys. & Power, Inc., 642 F Supp 2d 167; Kaufman v Sirius XM Radio, Inc., 751 F Supp 2d 681; Sheth v New York Life Ins. Co., 273 AD2d 72.) III. Bruce Ovitz has not alleged any injury resulting from Bloomberg L.P.’s and Bloomberg Finance L.P.’s alleged conduct. (Di Mascio v General Elec. Co., 27 AD3d 854; Concourse Nursing Home v Axiom Funding Group, 279 AD2d 271; Ludl Elecs. Prods, v Wells Fargo Fin. Leasing, 6 AD3d 397; Matter of Acme Bus Corp. v Board of Educ. of Roosevelt Union Free School Dist., 91 NY2d 51; Walker v City of New York, 46 AD3d 278; City of New York v Smokes-Spirits.Com, Inc., 12 NY3d 616; Medical Socy. of State of N.Y. v Oxford Health Plans, Inc., 15 AD3d 206; Cherny v Emigrant Bank, 604 F Supp 2d 605; Lincoln First Bank of Rochester v Barstro & Assoc. Contr., 49 AD2d 1025.) IV Declaratory and injunctive relief are not warranted in this case. (Rapp v Dime Sav. Bank of N.Y., 64 AD2d 964; Lewis v Hertz Corp., 212 AD2d 476; Deposit Guaranty Nat. Bank v Roper, 445 US 326; Murray v Empire Ins. Co., 175 AD2d 693; Lusardi v Xerox Corp., 975 F2d 964; Greif v Wilson, Elser, Moskowitz, Edelman & Dicker LLP, 258 F Supp 2d 157; James v Alderton Dock Yards, 256 NY 298; Spitzer v Schussel, 48 AD3d 233; Klostermann v Cuomo, 61 NY2d 525; Andin Intl, v Matrix Funding Corp., 194 Misc 2d 719.)
Skadden, Alps, Slate, Meagher & Flom LLP, New York City (<Jeffrey A. Mishkin, Anthony J. Dreyer and Jamie Stockton of counsel), for Sirius XM Radio Inc., amicus curiae.
I. Automatic renewal of subscriptions or service contracts is beneficial to consumers. II. General Obligations Law § 5-903 is merely a defense to continued enforcement of a contract, and does not support a claim for damages or an injunction. (Johnson v Uni-First Corp., 67 AD3d 1442; Ludl Elecs. Prods, v Wells Fargo Fin. Leasing, 6 AD3d 397; Concourse Nursing Home v Axiom Funding Group, 279 AD2d 271; Eurofactors Intl., Inc. v Jacobowitz, 21 AD3d 443; Holender v Cammann Prods., 78 AD2d 233; Kaminsky v Abrams, 51 Misc 2d 5; Hawa Const., LLC v Pollock, 674 F Supp 2d 256; Fortune Limousine Serv., Inc. v Nextel Communications, 35 AD3d 350; Enrico & Sons Contr. v Bridgemarket Assoc., 252 AD2d 429.)

Opinion:
OPINION OF THE COURT
Jones, J.
In June 2000, plaintiff Bruce Ovitz, an Illinois resident, entered into a two-year subscription agreement with defendant Bloomberg L.P. (Bloomberg) to lease a desktop terminal, software and other equipment to access real-time financial information services offered by the company. The contract provided that it "shall be automatically renewed for successive two-year periods" unless either the lessee (plaintiff) or lessor (Bloomberg) decided to terminate prior to renewal "by giving not less than 60 days' prior written notice to the other."
After the term of the original agreement expired in June 2002, plaintiff continued to use the equipment and financial services, without complaint, until September 15, 2008 when he contacted a Bloomberg sales representative to apprise the company that he "no longer wished to subscribe to [Bloomberg's] services, and wanted to terminate as of the end of the month." According to plaintiffs complaint, he was informed by the Bloomberg representative that the agreement had automatically renewed until June 15, 2010 and plaintiff would be obligated to remit periodic payments through the termination date, or pay an early termination fee equivalent to a year's worth of service ($18,720). Plaintiff also alleges that Bloomberg declared that it was their "standard policy not to give its subscribers any advance notice of the automatic renewal provision or deadline."
Plaintiff sent written notice to Bloomberg on October 7, 2008, reiterating his desire to terminate the agreement. Bloomberg, in turn, did not terminate the subscription service or remove the equipment, but instead, reaffirmed its view that the agreement had automatically renewed and sent an invoice on October 23, 2008 requesting payment for the next three months of service.
In an ensuing exchange of e-mails, Bloomberg sent plaintiff an invoice for past due payments in the sum of $5,699.70. Plaintiff replied "as [I] have said repeatedly since [S]ept 08,[ I] no longer want to subscribe[ ] please disconnect my software and pick up your keyboard." Bloomberg transmitted a subsequent e-mail demanding immediate payment for past due amounts, including an additional $16,470 charge for termination of the contract. Due to plaintiffs nonpayment, Bloomberg claimed that he had breached the terms of the contract and sent a notice of termination, advising that the nonpayment violated paragraph 3 (a) of the agreement and as such, "unless Bloomberg L.P. Accounting receives payment in full of all past due invoices by no later than 5:00 PM on 12/15/2008 the Agreement will be terminated and your Bloomberg equipment will be removed and returned."
On December 16, 2008, plaintiff commenced the instant putative class action, alleging a violation of General Obligations Law § 5-901 and 5-903; breach of contract; unjust enrichment; negligent misrepresentation; violation of General Business Law § 349; and seeking declaratory and injunctive relief. Two weeks after plaintiff filed suit, Bloomberg "as an accommodation] . . . waive [d] the early termination buy-out" and "waiv[ed] collection of fees."
Supreme Court granted, in part, Bloomberg's pre-answer motion to dismiss pursuant to CPLR 3211 (a) (7), dismissing plaintiffs breach of contract, unjust enrichment and negligent misrepresentation claims (2009 NY Slip Op 32397[U] [2009]). The court, however, found an implied private right of action under General Obligations Law § 5-901 and 5-903 that "supported] a claim that the agreement was not properly renewed beyond the expiration date of the initial term, even if plaintiff accepted Bloomberg services" (id. at *11). Moreover, although acknowledging plaintiff's out-of-state residence, the court permitted his General Business Law § 349 cause of action to survive on the ground that the complaint contained sufficient factual allegations to support a claim of deceptive business acts by Bloomberg within the State of New York. Finally, the court concluded that plaintiffs claims for declaratory judgment and a permanent injunction, enjoining Bloomberg from engaging in the alleged conduct, were supported by the existence of a justiciable controversy and irreparable harm, respectively.
The Appellate Division unanimously reversed, granting Bloomberg's motion in its entirety and dismissing plaintiffs complaint (77 AD3d 515 [1st Dept 2010]). The court remarked that Bloomberg's failure to comply with the mandates of sections 5-901 and 5-903 rendered its automatic renewal provision inoperative and unenforceable, but observed that this alone did not warrant the maintenance of plaintiffs complaint as he failed to allege "that he paid for services he did not receive" (id. at 516). Plaintiffs General Business Law § 349 claim was deemed meritless because he was not deceived in New York State and failed to plead actual injury suffered as a result of the alleged deceptive practices. Finally, as Bloomberg did not commence enforcement proceedings against plaintiff and waived its collection of payments and fees, there was no justiciable controversy or irreparable harm supporting equitable relief.
This Court granted plaintiff leave to appeal (16 NY3d 705 [2011]), and we now affirm.
In the context of a CPLR 3211 motion to dismiss, even affording plaintiff every favorable inference, as we must, when reviewing the pleadings and factual allegations of his complaint (see Mandarin Trading Ltd. v Wildenstein, 16 NY3d 173, 178 [2011]; Leon v Martinez, 84 NY2d 83, 87-88 [1994]; Morone v Morone, 50 NY2d 481, 484 [1980]), plaintiffs failure to identify a cognizable injury proves fatal to his action against Bloomberg.
Assuming, without deciding, that an implied private right of action lies pursuant to General Obligations Law § 5-901 and 5-903, plaintiffs claim was rightly dismissed because he has not suffered any harm as a result of Bloomberg's alleged practices. Plaintiff did not pay any service termination fees and, as the Appellate Division noted, he did not pay for services he did not receive; thus, no monetary damages were incurred (see Ludl Elecs. Prods, v Wells Fargo Fin. Leasing, 6 AD3d 397 [2d Dept 2004]; Concourse Nursing Home v Axiom Funding Group, 279 AD2d 271 [1st Dept 2001]). Plaintiff contends that he suffered damages because he sought to cancel his agreement as of September 15, 2008, but had prepaid for services through September 30, 2008. However, his complaint belies this argument as it pleads that plaintiff had notified Bloomberg that he "wanted to terminate [services] as of the end of the month." Further, despite the complaint's allegation that plaintiff s credit rating was impaired, Bloomberg's concession that the automatic renewal provision clause was rendered unenforceable and waiver of its claims to termination fees ceased any threat of injury.
Plaintiff's General Business Law § 349 claim must be similarly dismissed for lack of injury. It is well settled that a prima facie showing requires allegations that a "defendant is engaging in an act or practice that is deceptive or misleading in a material way and that plaintiff has been injured by reason thereof ' (Oswego Laborers' Local 214 Pension Fund v Marine Midland Bank, 85 NY2d 20, 25 [1995] [emphasis added]; see also City of New York v Smokes-Spirits.Com, Inc., 12 NY3d 616, 623 [2009]; Varela v Investors Ins. Holding Corp., 81 NY2d 958, 961 [1993]).
Finally, the Appellate Division properly dismissed plaintiffs claims for equitable relief. In light of the absence of actual injury and Bloomberg's waiver of its claims, there is neither a justiciable controversy upon which a declaratory judgment can be rendered, nor the irreparable harm necessary for injunctive relief (see American Ins. Assn. v Chu, 64 NY2d 379, 383 [1985]; Cuomo v Long Is. Light. Co., 71 NY2d 349, 354 [1988]; CPLR 6301; Kane v Walsh, 295 NY 198, 205-206 [1946]; Parry v Murphy, 79 AD3d 713, 715-716 [2d Dept 2010]).
Accordingly, the order of the Appellate Division should be affirmed, with costs.
. General Obligations Law § 5-901 provides, in relevant part:
"No provision of a lease of any personal property which states that the term thereof shall be deemed renewed for a specified ad ditional period unless the lessee gives notice to the lessor of his intention to release the property at the expiration of such term, shall be operative unless the lessor, at least fifteen days and not more than thirty days previous to the time specified for the furnishing of such notice to him, shall give to the lessee written notice, served personally or by mail, calling the attention of the lessee to the existence of such provision in the lease."
General Obligations Law § 5-903 (2) similarly provides:
"No provision of a contract for service, maintenance or repair to or for any real or personal property which states that the term of the contract shall be deemed renewed for a specified additional period unless the person receiving the service, maintenance or repair gives notice to the person furnishing such contract service, maintenance or repair of his intention to terminate the contract at the expiration of such term, shall be enforceable against the person receiving the service, maintenance or repair, unless the person furnishing the service, maintenance or repair, at least fifteen days and not more than thirty days previous to the time specified for serving such notice upon him, shall give to the person receiving the service, maintenance or repair written notice, served personally or by certified mail, calling the attention of that person to the existence of such provision in the contract."
. General Business Law § 349 (a) provides that "[deceptive acts or practices in the conduct of any business, trade or commerce or in the furnishing of any service in this state are hereby declared unlawful."