Court Opinion

ID: 2747301
Source: CourtListenerOpinion
Date Created: 2014-10-31 15:00:42.670735+00
Date Added: 2024-06-11T11:25:43.477048
License: Public Domain

14-899-cv
    Sigall v. Zipcar, Inc.

                                 UNITED STATES COURT OF APPEALS
                                     FOR THE SECOND CIRCUIT

                                            SUMMARY ORDER
Rulings by summary order do not have precedential effect. Citation to a summary order filed on or after January 1, 2007,
is permitted and is governed by Federal Rule of Appellate Procedure 32.1 and this court’s Local Rule 32.1.1. When citing
a summary order in a document filed with this court, a party must cite either the Federal Appendix or an electronic
database (with the notation “summary order”). A party citing a summary order must serve a copy of it on any party not
represented by counsel.

            At a stated term of the United States Court of Appeals for the Second Circuit, held at the
    Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the
    31st day of October, two thousand fourteen.

    PRESENT:
                ROBERT D. SACK,
                DEBRA ANN LIVINGSTON,
                RAYMOND J. LOHIER, JR.,
                            Circuit Judges.
    _______________________________________________

    MICHAEL SIGALL, on behalf of plaintiffs and the class
    members described herein, JESSICA SIGALL, on behalf of
    plaintiffs and the class members described herein,

                                      Plaintiffs-Appellants,

                       - v. -                                                    No. 14-899-cv

    ZIPCAR, INC., ZIPCAR NEW YORK, INC.,

                            Defendants-Appellees.
    _______________________________________________

                                               LAWRENCE KATZ (Daniel A. Edelman and Cathleen M.
                                               Combs, on the brief), Edelman, Combs, Latturner &
                                               Goodwin, LLC, for Plaintiffs-Appellants.

                                               DENNIS R. LAFIURA (Paul J. Halasz and Elizabeth J. Sher, on
                                               the brief), Day Pitney LLP, Parsippany, NJ, for Defendants-
                                               Appellees.

                                                           1
         UPON DUE CONSIDERATION, it is hereby ORDERED, ADJUDGED, and DECREED

that the judgment of the district court is AFFIRMED.

         Plaintiffs-Appellants Jessica and Michael Sigall, on behalf of themselves and others similarly

situated (“Appellants”), filed a complaint on July 1, 2013 in the Southern District of New York

against Defendants-Appellees Zipcar, Inc. and Zipcar New York, Inc. (“Appellees”). On February

24, 2014, the district court (Oetken, J.) granted Appellees’ motion to dismiss the complaint. We

review the district court’s grant of a motion to dismiss de novo. Fahs Constr. Grp., Inc. v. Gray, 725
F.3d 289, 290 (2d Cir. 2013) (per curiam). We assume the parties’ familiarity with the underlying

facts and procedural history of the case, and with the issues on appeal.

         Appellants’ complaint asserted three claims against Appellees.1 Each claim relates to

Appellees’ alleged violation of New York General Business Law (“GBL”) § 396-z, which regulates

rental car companies. In Count I of the complaint, Appellants sought, inter alia, a declaratory

judgment that certain vehicle damage charges debited by Appellees are void pursuant to GBL § 396-

z, along with injunctive relief barring the collection of such charges in the future, and damages equal

to all amounts obtained by Appellees for such charges. Count II of the complaint alleges that

Appellees engaged in deceptive acts and practices in violation of GBL § 349 by representing to

consumers that they are liable for such damages even though GBL § 396-z provides that they are

not liable for such damages, by representing to credit card issuers that charges related to such

damages were authorized, and by selling waivers to waive such damage charges even though the

charges are not valid. Count III of the complaint alleges that Appellees committed common law

fraud.

         1
        A fourth claim, which alleged a violation of the Truth in Lending Act, applied only to a
different defendant not subject to this appeal, Citibank, N.A. Appellants voluntarily dismissed their
claims against Citibank, N.A. on January 30, 2014.

                                                   2
       Appellants have failed to state a claim because GBL § 396-z does not provide a private right

of action, and each of Appellants’ claims relies solely on the fact that Appellees allegedly violated

GBL § 396-z.2 Appellants’ claim for declaratory and injunctive relief is squarely barred by the

decisions of the New York Appellate Division, First Department, in Han v. Hertz Corp., 784
N.Y.S.2d 106 (App. Div. 2004), and Goldberg v. Enterprise Rent-A-Car Co., 789 N.Y.S.2d 114

(App. Div. 2005), abrogated on other grounds by Rhodes v. Herz, 920 N.Y.S.2d 11 (App. Div.

2011). In Han, plaintiffs sought a declaration that defendants’ rental car contracts were void for

failure to abide by the requirements of GBL § 396-z and restitution for monies paid under those

contracts. 784 N.Y.S.2d at 107. There, the Appellate Division held that plaintiffs’ claims were

barred because GBL § 396-z does not provide for a private right of action. Id. The court stated that

“[s]ince no private right of action exists [under GBL § 396-z], the claims for money had and

received and unjust enrichment were properly dismissed as an effort to circumvent the legislative

preclusion of private lawsuits.” Id. Goldberg similarly involved quasi-contractual claims for

restitution which were dismissed “as an effort to circumvent the legislative preclusion of private

lawsuits for violation of [GBL § 396-z].” 789 N.Y.S.2d at 115.

       Appellants now attempt to distinguish Han and Goldberg on the basis that in those cases

plaintiffs sought to void entire rental contracts, whereas Appellants seek only to invalidate the

portions of Zipcar’s membership contract that violate GBL § 396-z. Appellants argue that the

plaintiffs in Han and Goldberg needed a separate private right of action beyond the declaratory relief

       2
         In addition to arguing that the judgment of the district court should be affirmed because
Appellants failed to state a claim, Appellees alternatively argue that the judgment should be affirmed
on the ground that GBL § 396-z does not apply to them. We need not reach this alternative
argument. Appellees have filed a motion to file a sur-reply brief pertaining to it, which we dismiss
as moot.

                                                  3
that they sought because, unlike Appellants, those plaintiffs would not have been entitled to

restitution if only the provisions of their rental agreements that violated GBL § 396-z were declared

to be void. Appellants’ argument ignores the explicit holdings of Han and Goldberg. Han and

Goldberg held that plaintiffs’ claims were barred not because declaratory relief would be insufficient

to permit them to obtain restitution or because GBL § 396-z did not provide them a basis for voiding

plaintiffs’ rental agreements, but rather because plaintiffs’ claims relied solely on a violation of GBL

§ 396-z, which does not provide for a private right of action. Han, 784 N.Y.S.2d at 107; Goldberg,
789 N.Y.S.2d at 115. “As a federal court applying state law,” we are obliged to follow Han and

Goldberg because there is no “contrary New York authority” and no “other persuasive data

establish[es] that the highest court of the state would decide otherwise.” Broder v. Cablevision Sys.

Corp., 418 F.3d 187, 199-200 (2d Cir. 2005) (internal quotation marks omitted).

       Appellants’ claims alleging violations of GBL § 349 and common law fraud are barred

because they merely repackage Appellants’ GBL § 396-z claim. The Court of Appeals of New York

held in Schlessinger v. Valspar Corp., 991 N.E.2d 190, 193-94 (N.Y. 2013), that a plaintiff could

not allege a violation of GBL § 349 where the alleged violation was premised solely on the fact that

the alleged conduct violated another statute for which the plaintiff did not have a private right of

action. This holding bars Appellants’ claim under GBL § 349 because Appellants also have not

alleged facts that if found to be true would demonstrate a free-standing GBL § 349 violation.3

Appellants’ claim for common law fraud is also barred because it likewise cannot stand on its own

       3
         Appellants now attempt to argue that they have a free-standing claim under GBL § 349
because Zipcar’s membership contract does not clearly provide Appellees with authorization to debit
Zipcar members’ credit cards for damage fees. This argument is belied, however, by the language
of the membership contract, which is attached as an exhibit to Appellants’ complaint and clearly
authorizes Zipcar to debit such charges.

                                                   4
absent the alleged violations of GBL § 396-z. See Assured Guar. (U.K.) Ltd. v. J.P. Morgan Inv.

Mgmt. Inc., 962 N.E.2d 765, 770 (N.Y. 2011).

       We have reviewed Appellants’ remaining arguments and find them to be without merit. For

the foregoing reasons, the judgment of the district court is AFFIRMED.

                                                   FOR THE COURT:
                                                   Catherine O’Hagan Wolfe, Clerk

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