Den Hollander v. Metro. Transp. Auth.

Robert R. Reed, J.

For plaintiff Roy Den Hollander

McCullough Ginsberg Montano & Partners LLP

122 East 42nd Street

New York, NU 10168

By: Simon Ginsberg, Esq.

For defendant Metropolitan Transportation Authority

New York City Transit Authority

130 Livingston Street, 12th Floor

Brooklyn, NY 11201

By. Hal Blanchard, Esq.

Robert R. Reed, J. This is a purported class action brought by plaintiff Roy Den Hollander against the Metropolitan Transportation Authority (MTA) on behalf of purchasers of 7-Day and 30-Day MetroCards. Plaintiff alleges that he and other purchasers of these time-based cards have been misled by the MTA's allegedly deceptive practice of falsely advertising these unlimited ride cards, because such cards are valid for less than a full seven or 30 days. Alleging that the essential facts are not in dispute, plaintiff moves, pursuant to CPLR 3212, for partial summary judgment on liability on his claims for violations of sections 349 and 350 of the New York General Business Law, breach of contract and unjust enrichment. Defendant cross-moves for summary judgment dismissing the complaint.

There are two general types of MetroCards: the value-based pass, which is assigned a dollar value, and the time-based pass, which may be used for an unlimited number of rides during a specified time period. As of November 25, 2013, when this lawsuit was commenced, the MTA sold "7-Day Unlimited Pass" and "30-Day Unlimited Ride" MetroCards for $30 and $112 respectively. On the MTA's website, it states that the 7-Day MetroCard is "[g]ood for unlimited subway and local bus rides until midnight, 7 days from day of first use" (complaint, & 2). The verified complaint alleges that such statement is not accurate, and that the 7-Day MetroCard is actually valid for six days from first use, plus a variable number of hours up until midnight on that sixth day. Thus, a 7-Day MetroCard purchased and swiped, for example, on Thursday, January 1, 2015 at 11:00 p.m. would expire on Wednesday, January 7, 2015 at 11:59 p.m. This occurs because the MTA counts January 1st as "Day 1." The MTA likewise advertises the 30-Day MetroCard as "[g]ood for unlimited subway and local bus rides until midnight, 30 days from day of first use" (complaint, & 3). Plaintiff maintains that this statement is also inaccurate, because the 30-Day MetroCard is actually valid 29 days from first use, plus a variable number of hours up until midnight on that sixth day. Thus, a 30-Day MetroCard purchased and swiped on Thursday, January 1, 2015 at 11:00 p.m. would expire on Friday, January 30, 2015 at midnight. Again, January 1st is counted as "Day 1." Unlike the MTA's present advertising of its MetroCards, plaintiff alleges that an older MTA brochure from 1998 actually gives an example to alert consumers that the 7-Day MetroCard expires six days from first use. While maintaining the "[g]ood until Midnight, 7 days from the day you first use the card, not from the day it was purchased," language, this older brochure then adds: "If you start using your card on Monday morning, it will run out at Midnight on Sunday" (plaintiff's Ex. B at MTA070). Plaintiff submits an affidavit in support of his motion, wherein he avers that he is Aa frequent purchaser of unlimited MetroCards" (plaintiff's Ex. F: Hollander affidavit, & 3). He claims that, between October 27, 2013 and April 27, 2014, he purchased seven 30-Day MetroCards. In each instance, he claims to have received just 29 days of use, instead of the 30 days that the MTA advertises on its website and at the kiosk where he purchased the cards. Plaintiff alleges that the MTA is short-dating purchasers of unlimited-ride MetroCards by one day less than advertised, and that purchasers are not getting a full seven days (168 hours) of unlimited use for 7-Day MetroCards or 30 days (720 hours) for 30-Day MetroCards. This practice allegedly constitutes a deceptive practice in violation of General Business Law § 349, false advertising in violation of General Business Law § 350, a breach of contract and unjust enrichment by the MTA. On each cause of action, plaintiff seeks an award of damages, costs, attorney's fees, pre- and post-judgment interest, and "such other and further legal and equitable relief as the Court deems necessary, just and proper" (complaint, at 9). In opposition to plaintiff's motion and in support of its cross motion, the MTA explains the history and use of its unlimited ride MetroCards. In January 1994, the MetroCard electronic fare system was introduced as a means to cut back on the operating expenses required for the recovery, transportation, and sorting of tokens and to minimize the risk of counterfeits. On July 4, 1998, the MTA introduced the 7-Day and 30-Day unlimited ride MetroCards, at a cost of $17 materials, the MTA denies that there is anything in the current website description, i.e., "[g]ood for unlimited subway and local bus rides until midnight, 7 [or 30] days from day of first use," that is in the least bit confusing or misleading to consumers. The MTA's website, moreover, does explicitly state that the use of unlimited ride MetroCards is subject to the MTA New York City Transit tariff, and similar language to such effect appears on the back of every MetroCard. The current tariff contains the following description of the 7-Day MetroCard: "Valid for unlimited rides on NYCTA subway or NYCTA/MaBSTOA/MTABC local bus or SIRTOA, taken within 7 days of initial swipe or dip of pass. Pass valid until 11:59 pm on 7th day." (Blanchard affirmation, Ex. P at MTA068). The MTA contends that, under any standard of common usage, this language is clear and unambiguous.

General Business Law § § 349 and 350 "General Business Law §§ 349 and 350 are consumer protection statutes that prohibit deceptive acts and practices and false advertising, respectively, in the conduct of any business, trade or commerce or in the furnishing of any service in this state . . ." (Scott v Bell Atl. Corp., 282 AD2d 180, 183 [1st Dept 2001], affd as mod sub nom Goshen v Mutual Life Ins. Co. of NY, 98 NY2d 314 [2002] [internal quotation marks and citations omitted]). To plead a claim under either General Business Law §§ 349 or 350, a plaintiff must allege: (1) consumer-oriented conduct; (2) that is materially misleading; and (3) that plaintiff suffered injury as a result of the allegedly deceptive act, practice or advertising (Stutman v Chemical Bank, 95 NY2d 24, 29 [2000]; see also Lucker v Bayside Cemetery, 114 AD3d 162, 174 [1st Dept 2013]). Justifiable reliance is not an element of a claim under either section; a plaintiff need only show that the defendant's materially deceptive act, practice or advertisement caused actual injury, though not necessarily pecuniary harm (Koch v Acker, Merrall & Condit Co., 18 NY3d 940, 941B42 [2012]; Stutman v Chemical Bank, 95 NY2d at 29). However, the deceptive conduct must "mislead a reasonable consumer acting reasonably under the circumstances" (Oswego Laborers' Local 214 Pension Fund v Marine Midland Bank, 85 NY2d 20, 26 [1995]; see also Gaidon v Mutual Life Ins. Co. of Am., 94 NY2d 330, 353 [1999]; Lucker v Bayside Cemetery, 114 AD3d at 174). In this case, there is no dispute that the challenged practices are consumer-oriented (see allowed to enrich himself unjustly at the expense of another" ( Miller v Schloss, 218 NY 400, 407 [1916]). To plead such a claim, plaintiff must allege "that (1) the other party was enriched, (2) at that party's expense, and (3) that it is against equity and good conscience to permit the other party to retain what is sought to be recovered" ( Mandarin Trading Ltd. v Wildenstein, 16 NY3d 173, 182 [2011] [brackets and internal quotation marks omitted]). Such a claim "is undoubtedly equitable and depends upon broad considerations of equity and justice" ( Paramount Film Distrib. Corp. v State of New York, 30 NY2d 415, 421 [1972], cert denied 414 US 829 [1973]). Plaintiff argues that "[i]n not giving consumers what they are paying for, Defendant receives an enormous financial windfall every time a person buys one of these MetroCards" (plaintiff's mem. of law at 9). The record is devoid of any evidence that could lead the court to conclude that the MTA is being unjustly enriched at the expense of plaintiff or other purchasers of unlimited ride MetroCards or that, in equity and good conscience, restitution should be awarded. Significantly, plaintiff does not challenge the MTA's evidence that the transportation services provided by the MTA are heavily subsidized by the State of New York, with transit customers paying only a portion of the actual cost of transportation ( see Blancard affirmation, Ex. O: Hickey affidavit, & 11; id., Ex. Q). Indeed, there is nothing to prevent the MTA from discontinuing the use of unlimited ride cards altogether as part of some future tariff.

For the foregoing reasons, it is hereby ORDERED that plaintiff's motion for partial summary judgment on liability is denied; and it is further ORDERED that defendant's cross motion for summary judgment dismissing the complaint is granted and the complaint is dismissed in its entirety as against defendant, with costs and disbursements to said defendant as taxed by the Clerk of the Court, and the Clerk is directed to enter judgment accordingly. Dated: June 25, 2015 ENTER: ______________________________ J.S.C.