McCarthy v. Amazon.com Inc et al, No. 2:2023cv01019 - Document 61 (W.D. Wash. 2023)
Court Description: ORDER granting Defendant's 46 Motion to Dismiss for Failure to State a Claim. The First Amended Complaint, ECF No. 19 , is DISMISSED WITH PREJUDICE. Signed by Judge Barbara J. Rothstein. (SB)
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McCarthy v. Amazon.com Inc et al Doc. 61 Case 2:23-cv-01019-BJR Document 61 Filed 09/07/23 Page 1 of 9 The Honorable Barbara J. Rothstein 1 2 3 4 5 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE 6 7 8 NO. 23-cv-1019 TRACY MCCARTHY, individually and on behalf of all others similarly situated, 9 ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS Plaintiffs, 10 v. 11 AMAZON.COM, INC., et al., Defendants. 12 13 I. INTRODUCTION 14 Plaintiff Tracy McCarthy brought this putative class action against Defendants 15 Amazon.com, Inc. and its wholly-owned subsidiary, Audible, Inc., asserting claims of deceptive 16 practices, false advertising, and unjust enrichment. First. Am. Compl. ¶¶ 72-88, ECF No. 19. Ms. 17 18 McCarthy alleges that she was a member of Amazon’s Prime service and, without her consent, she became enrolled in Audible’s service when she completed a transaction on Amazon’s website. Id. 19 ¶¶ 36-40. Ms. McCarthy commenced this lawsuit in the Eastern District of New York in 2022, and 20 the case was transferred to this Court in July 2023. ECF No. 32. Currently pending before the Court 21 is Defendants’ Motion to Dismiss Plaintiff’s First Amended Complaint, ECF No. 46. Having 22 23 24 25 ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS -1 Dockets.Justia.com Case 2:23-cv-01019-BJR Document 61 Filed 09/07/23 Page 2 of 9 1 reviewed the parties’ filings,1 and the relevant legal authorities, the Court GRANTS the motion. 2 The reasoning for the Court’s decision follows. 3 II. BACKGROUND 4 In 2011, Tracy McCarthy purchased an Amazon Prime membership on an annual basis for 5 her personal use and provided a default payment method in her “Wallet,” which allows Amazon to 6 charge that payment method for any purchases she makes while a Prime member. First Am. Compl. 7 ¶¶ 14-15, 36. Ms. McCarthy alleges that Amazon promotes its Audible services on its various 8 platforms and targets Prime members for enrollment in a subscription to Audible. Id. ¶ 16. She 9 alleges that in its promotion of “Free Titles at Audible,” Amazon stated: “Prime members are 10 invited to start an Audible Premium Plus trial with 2 credits that can be used on any titles.” Id. ¶ 3.2 11 Ms. McCarthy alleges that in 2018, she attempted to purchase a book on Amazon and was offered 12 an “Audiobook” version using her “credits” as payment. Id. ¶ 37. She was not charged for the 13 audio version of the book, but she alleges that she did not realize that by using her “credits,” she 14 would be automatically enrolled in a membership to Audible. Id. Although Ms. McCarthy did not 15 capture her online experience at the time, she included a screen capture that she alleges is 16 substantially similar to what she saw when she purchased the audiobook. Id. ¶ 38. The screen 17 capture shows a clickable Audible “Conditions of Use” to which the buyer is agreeing by redeeming 18 an Audible Credit, but Ms. McCarthy alleges that she did not notice or read it. Id. ¶¶ 38-39. 19 Ms. McCarthy alleges that Amazon provided her information to Audible, she was enrolled 20 in a “free” trial membership, and after the 30-day trial period ended, she was charged $14.95 per 21 22 23 ECF Nos. 46, 53, 58, and Plaintiff’s First Amended Complaint, ECF No. 19. In her original complaint, Ms. McCarthy alleges that Amazon promotes its Audible services on its website as “free,” but actually charges a monthly, recurring fee. Compl. ¶¶ 3, 5, 16, 43, 50-51, ECF No. 1. 24 ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS 1 2 25 -2 Case 2:23-cv-01019-BJR Document 61 Filed 09/07/23 Page 3 of 9 1 month for every month from November 2018 until March 2022, when she cancelled the Audible 2 membership. Id. ¶¶ 40-41, 44. The charges, totaling $598, were charged to her Amazon default 3 credit card, but Ms. McCarthy alleges that she was not given clear notice and was unaware that she 4 was being charged monthly for the Audible membership, which she never used. Id. ¶¶ 41-45. Ms. 5 McCarthy asserts that the credit card charges for the Audible membership identify only Amazon as 6 the payee, which is misleading, and because she never affirmatively consented to a monthly 7 membership fee, she did not know she was required to take steps to cancel the Audible membership. 8 Id. ¶¶ 51-52. 9 Ms. McCarthy filed this lawsuit in April 2022 in the Eastern District of New York, alleging 10 violations of the New York General Business Law (“GBL”) Sections 349 and 350. Compl., ECF 11 No. 1. The parties participated in a pre-motion conference to discuss Defendants’ planned motion 12 to dismiss, and Ms. McCarthy was given an opportunity to amend her complaint in response to the 13 identified deficiencies if the parties could not reach settlement at a mediation conference. See ECF 14 Nos. 10, 46-4 (transcript). After Ms. McCarthy’s amended complaint was filed in March 2023, the 15 parties stipulated to a transfer of the case to this Court. ECF Nos. 31-32. In her amended complaint, 16 Ms. McCarthy pleads three causes of action: 17 • First Cause of Action – Violation of GBL § 349 (deceptive acts or practices) 18 • Second Cause of Action – Violation of GBL § 350 (false advertising) 19 • Third Cause of Action – Unjust Enrichment 20 Defendants’ pending motion seeks to dismiss the amended complaint with prejudice, 21 arguing that Ms. McCarthy fails to state a plausible claim, her GBL claims are time-barred, her 22 23 24 25 ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS -3 Case 2:23-cv-01019-BJR Document 61 Filed 09/07/23 Page 4 of 9 1 newly pleaded unjust enrichment claim is duplicative, and she lacks standing to seek injunctive 2 relief. Mot., ECF No. 46. 3 III. LEGAL STANDARD 4 A motion to dismiss for failure to state a claim under Rule 12(b)(6) is properly granted if 5 the complaint does not “contain sufficient factual matter, accepted as true, to ‘state a claim to relief 6 that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. 7 v. Twombly, 550 U.S. 544, 570 (2007)). The plaintiff must plead “factual content that allows the 8 court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. 9 “A complaint may fail to show a right to relief either by lacking a cognizable legal theory or by 10 lacking sufficient facts alleged under a cognizable legal theory.” Woods v. U.S. Bank N.A., 831 11 F.3d 1159, 1162 (9th Cir. 2016). When considering a motion to dismiss under Rule 12(b)(6), courts 12 must accept the factual allegations in the complaint as true and construe such allegations in the 13 light most favorable to the plaintiff. Interpipe Contracting, Inc. v. Becerra, 898 F.3d 879, 886-87 14 (9th Cir. 2018). But a court is not required to accept legal conclusions couched as facts, 15 unwarranted deductions, or unreasonable inferences. See Papasan v. Allain, 478 U.S. 265, 286 16 (1986); Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001), opinion amended 17 on denial of reh’g, 275 F.3d 1187 (9th Cir. 2001). 18 While a court generally does not consider any material beyond the pleadings in ruling on a 19 Rule 12(b)(6) motion to dismiss, there are certain exceptions. The Court is limited to reviewing 20 materials that are submitted with, and attached to, the complaint; matters appropriate for judicial 21 notice; and unattached evidence on which the complaint “necessarily relies,” provided the 22 authenticity of the document is not questioned. Beverly Oaks Physicians Surgical Ctr., LLC v. Blue 23 Cross & Blue Shield of Ill., 983 F.3d 435, 439 (9th Cir. 2020); see also Amazon.com Servs. LLC v. 24 ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS 25 -4 Case 2:23-cv-01019-BJR Document 61 Filed 09/07/23 Page 5 of 9 1 Paradigm Clinical Research Inst., Inc., 631 F. Supp. 3d 950, 961 (W.D. Wash. 2022) (“The purpose 2 of this rule is to ‘prevent plaintiffs from surviving a Rule 12(b)(6) motion by deliberately omitting 3 documents upon which their claims are based.’” (quoting Swartz v. KPMG LLP, 476 F.3d 756, 763 4 (9th Cir. 2007))).3 If such exhibits conflict with allegations in the complaint, the Court need not 5 accept those allegations as true. See Gonzalez v. Planned Parenthood of Los Angeles, 759 F.3d 6 1112, 1115 (9th Cir. 2014) (citing cases). 7 IV. DISCUSSION 8 A. Plaintiff’s GBL Claims are Time-barred 9 Claims alleging violations of GBL §§ 349 and 350 are governed by a three-year statute of 10 limitations. See, e.g., Gristede’s Foods, Inc. v. Unkechauge Nation, 532 F. Supp. 2d 439, 452-53 11 (E.D.N.Y. 2007). The cause of action accrues “upon injury by the deceptive act or practice, i.e., 12 ‘when all of the factual circumstances necessary to establish a right of action have occurred, so that 13 the plaintiff would be entitled to relief.’” Id. at 253 (quoting Gaidon v. Guardian Life Ins. Co. of 14 Am., 750 N.E.2d 1078, 1083, (N.Y. 2001). Ms. McCarthy alleges that the statute of limitations was 15 equitably tolled by Defendants’ fraudulent concealment of the facts giving rise to her claim. Opp’n 16 7-8, ECF No. 53; First Am. Compl. ¶¶ 58-60. She also argues that the continuing violations doctrine 17 applies. Opp’n 8. 18 To plead tolling of a statute of limitation because of fraudulent concealment, a plaintiff must 19 show: “(1) the defendant wrongfully concealed material facts relating to defendant’s wrongdoing; 20 23 Defendants attached to their motion two exhibits that describe Amazon’s Prime membership benefits. Exs. 2, 3, ECF Nos. 46-2, 46-3. Plaintiff’s complaint either references or necessarily relies upon these documents, and she does not dispute their authenticity nor object to the Court’s consideration of the documents. The Court notes, however, that its consideration of the documents is limited by the principle that it may not draw inferences or take notice of facts that might reasonably be disputed on the basis of those documents. United States v. Corinthian Colls., 655 F.3d 984, 999 (9th Cir. 2011). 24 ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS 21 22 25 3 -5 Case 2:23-cv-01019-BJR Document 61 Filed 09/07/23 Page 6 of 9 1 (2) the concealment prevented plaintiff’s discovery of the nature of the claim within the limitations 2 period; and (3) plaintiff exercised due diligence in pursuing the discovery of the claim during the 3 period plaintiff seeks to have tolled.” Kyszenia v. Ricoh USA, Inc., 583 F. Supp. 3d 350, 361 4 (E.D.N.Y. 2022) (quoting Koch v. Christie’s Int’l PLC, 699 F.3d 141, 157 (2d Cir. 2012)). Ms. 5 McCarthy has failed to plead the necessary “rare and exceptional circumstances in which a party is 6 prevented in some extraordinary way from exercising [her] rights.” Id. (quoting Zerilli-Edelglass 7 v. N.Y.C. Transit Auth., 333 F.3d 74, 80 (2d Cir. 2003)). Although Ms. McCarthy pleads that 8 Amazon “tricked” her into paying for an unwanted membership, she does not plead facts to show 9 that Defendants wrongfully concealed the monthly charges for Audible, only that the charge 10 appeared on her monthly statement as an “Amazon” charge. See First. Am. Compl. ¶¶ 4, 18, 51. 11 Nor does Ms. McCarthy plead that she made any effort to determine the source of the monthly 12 charges. “Equitable tolling does not apply ‘[i]f a plaintiff is on notice of potential wrongdoing but 13 takes no steps to investigate further.’” DuBuisson v. Nat’l Union Fire Ins. of Pittsburgh, P.A., 15 14 CIV. 2259 (PGG), 2021 WL 3141672, at *11 (S.D.N.Y. July 26, 2021) (citing cases). 15 Ms. McCarthy also argues that the continuing violations doctrine tolled the limitations 16 period. The continuing violations doctrine, also known as the continuing wrong doctrine, tolls a 17 limitations period up to the date of the commission of the last wrongful act, which Ms. McCarthy 18 alleges was the last monthly charge in March 2022. “New York courts have explained that tolling 19 based on the doctrine ‘may only be predicated on continuing unlawful acts and not on the continuing 20 effects of earlier unlawful conduct[.]’” Miller v. Metro. Life Ins. Co., 979 F.3d 118, 122 (2d Cir. 21 2020) (quoting Salomon v. Town of Wallkill, 174 A.D.3d 720, 107 N.Y.S.3d 420, 422 (N.Y. 2d 22 Dep’t 2019)). Here, the monthly charges do not have a tolling effect because the charges reflect 23 the continuing effects of the alleged unlawful conduct—being tricked into enrolling in the Audible 24 ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS 25 -6 Case 2:23-cv-01019-BJR Document 61 Filed 09/07/23 Page 7 of 9 1 service. See, e.g., DuBuisson, 2021 WL 3141672, at *7-9 (finding that the alleged wrong occurred 2 only on the initial sale through misleading advertising but that defendants did not take new action 3 each time premiums were paid); Pike v. New York Life Insurance Co., 72 A.D.3d 1043 (N.Y. 2d 4 Dep’t 2010) (“[A]ny wrong accrued at the time of purchase of the policies, not at the time of 5 payment of each premium[.]”); Henry v. Bank of Am., 147 A.D.3d 599, 602, 48 N.Y.S.3d 67, 70 6 (N.Y. App. Div. 2017) (continuing wrong doctrine not applicable to the fraud, GBL, and other 7 claims where plaintiff alleged that he was improperly enrolled in credit programs and then charged 8 monthly program fees; “the alleged wrongs [were] the enrollment of plaintiff in the . . . programs,” 9 and the monthly fees “represent[ed] the consequences of those wrongful acts in the form of 10 continuing damages, not the wrongs themselves.”). 11 Ms. McCarthy alleges that the wrongful act occurred “on or about October 13, 2018,” and 12 the monthly charges started “on November 13, 2018 and continuing every month thereafter.” First. 13 Am. Compl. ¶¶ 37, 41. She did not file her complaint until April 26, 2022, which was more than 14 three years and six months later. Therefore, Ms. McCarthy’s GBL claims are barred by the three- 15 year statute of limitations and will be dismissed with prejudice. 16 B. Plaintiff Fails to State a Plausible Claim 17 Defendants contend that Ms. McCarthy fails to allege a misleading statement or practice, 18 which not only defeats her GBL claims, but also her unjust enrichment claim. Mot. 9, 13. To state 19 a plausible claim under either GBL § 349 or § 350, Ms. McCarthy must allege: “[i] that the 20 defendant . . . engaged in consumer-oriented conduct; [ii] that the conduct was materially 21 misleading; and [iii] that the plaintiff suffered injury as a result of the allegedly deceptive act or 22 practice.” Cosgrove v. Oregon Chai, Inc., 520 F. Supp. 3d 562, 575 (S.D.N.Y. 2021) (quoting 23 Weisblum v. Prophase Labs, Inc., 88 F. Supp. 3d 283, 292 (S.D.N.Y. 2015)). “Where a deceptive 24 ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS 25 -7 Case 2:23-cv-01019-BJR Document 61 Filed 09/07/23 Page 8 of 9 1 trade practices claim fails for failure to allege deception, an unjust enrichment claim fails, too.” Id. 2 at 587. 3 “‘[I]n determining whether a reasonable consumer would have been misled by a particular 4 advertisement, context is crucial’ and, ‘under certain circumstances, the presence of a disclaimer or 5 similar clarifying language may defeat a claim of deception.’” Chung v. Igloo Products Corp., 20- 6 CV-4926 (MKB), 2022 WL 2657350, at *8 (E.D.N.Y. July 8, 2022) (quoting Fink v. Time Warner 7 Cable, 714 F.3d 739, 742 (2d Cir. 2013)). Here, Ms. McCarthy alleges that she was deceived by 8 Amazon’s provision of “credits” as a so-called “benefit.” First Am. Compl. ¶¶ 3-4. Specifically, 9 “[o]ne of the ‘benefits’ that Amazon touted as included in a Prime membership was ‘Free Titles at 10 Audible.’ Amazon stated: ‘Prime members are invited to start an Audible Premium Plus trial with 11 2 credits that can be used on any title.’” Id. ¶ 3. According to her complaint, this is exactly what 12 Ms. McCarthy experienced. She used her “credit” to purchase an audiobook, and she was charged 13 $0.00. Id. ¶ 37. Furthermore, she provides a representative screen capture showing that by using 14 the Audible credit she was agreeing to the Audible “Conditions of Use,” although she admits to not 15 noticing or reading the conditions. Id. ¶¶ 38-39. She adds that she was enrolled in a “free” trial 16 membership, which lasted 30 days. Id. ¶¶ 40-41. 17 In sum, Ms. McCarthy alleges that Amazon “touted” free titles and an invitation to start an 18 Audible trial membership, and she received a free title4 and a trial membership—exactly as 19 “touted.” Therefore, she fails to allege deception in Amazon’s promotional language. She 20 complains that she was not adequately informed regarding the details of the membership, but she 21 22 4 23 Her example purchase shows that her credit provided her with a book for $0.00 rather than paying $17.14. First Am. Compl. ¶¶ 38, 48. Her example also shows that she had two credits, which is consistent with the promotional language, although she does not allege redeeming a second credit. 24 ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS 25 -8 Case 2:23-cv-01019-BJR Document 61 Filed 09/07/23 Page 9 of 9 1 admits that she did not read the conditions. Ms. McCarthy’s arguments are unpersuasive, and her 2 allegations are insufficient to establish deception in Amazon’s promotional material or during the 3 purchase transaction. 4 Accordingly, Ms. McCarthy fails to plead a plausible deceptive practice or false advertising 5 claim, which also results in a failure to plead an unjust enrichment claim. Because the GBL claims 6 are time-barred, and the amended complaint has failed to address the pleading insufficiencies in the 7 original complaint, Ms. McCarthy’s amended complaint will be dismissed with prejudice. 8 V. CONCLUSION For the foregoing reasons, the Court GRANTS Defendants’ Motion to Dismiss Plaintiff’s 9 10 First Amended Complaint, ECF No. 46. 11 DISMISSED WITH PREJUDICE. 12 The First Amended Complaint, ECF No. 19, is DATED this 7th day of September 2023. 13 A 14 Barbara Jacobs Rothstein U.S. District Court Judge 15 16 17 18 19 20 21 22 23 24 25 ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS -9
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