418 F.3d 187 (2nd Cir. 2005), 04-4932, Broder v. Cablevision Systems Corp.

Docket Nº:Docket No. 04-4932-CV.
Citation:418 F.3d 187
Party Name:Gerald D. BRODER, individually and on behalf of all others similarly situated, Plaintiff-Appellant, v. CABLEVISION SYSTEMS CORPORATION and CSC Holdings, Inc., Defendants-Appellees.
Case Date:August 11, 2005
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit
 
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418 F.3d 187 (2nd Cir. 2005)

Gerald D. BRODER, individually and on behalf of all others similarly situated, Plaintiff-Appellant,

v.

CABLEVISION SYSTEMS CORPORATION and CSC Holdings, Inc., Defendants-Appellees.

Docket No. 04-4932-CV.

United States Court of Appeals, Second Circuit.

Aug. 11, 2005

Argued: June 13, 2005.

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William R. Weinstein, Wechsler Harwood LLP, New York, N.Y. (Robert I. Harwood, on the brief), for Plaintiff-Appellant.

Celia Goldwag Barenholtz, Kronish Lieb Weiner & Hellman LLP, New York, N.Y. (Ari M. Berman, Maxine Sleeper, on the brief), for Defendants-Appellees.

Before: CABRANES and RAGGI, Circuit Judges, and SAND, District Judge. [*]

SAND, District Judge.

Gerald D. Broder ("Broder") appeals from a judgment of the United States District Court for the Southern District of New York (Denny Chin, District Judge), dismissing his putative class action against Defendants-Appellees Cablevision Systems Corporation and CSC Holdings, Inc. (collectively "Cablevision") following removal of that action from state court. 1 Broder alleged that by extending a reduced "Winter Season" rate to certain customers without offering or even disclosing it to others, Cablevision had violated the uniform rate requirement of 47 U.S.C. § 543(d) 2 and the disclosure requirement of Section 224-a(4) of the New York Public Service Law, and thereby incurred liability pursuant to various state-law causes of action. Cablevision removed the action on the ground that Broder's claims raised a federal question, to wit, whether Cablevision had violated 47 U.S.C. § 543(d).

On this appeal, Broder challenges both the district court's determination that it had removal jurisdiction, and its ultimate dismissal of his complaint for failure to state a claim. Exercising jurisdiction under 28 U.S.C. § 1291, we conclude that both removal and dismissal were proper, and we affirm the judgment of the district court.

BACKGROUND

Cablevision, a provider of cable television services, offers several "tiers" of service: Basic Cable, Family Cable, and further levels of premium "Optimum TV." At the time the complaint in this case was filed, the Basic Cable rate was $10.50 per month and the Family Cable rate was $42.48 per month.

Broder alleges that during and perhaps prior to the period beginning six years before the filing of the complaint in this action (the "Class Period"), Cablevision offered certain customers a discounted rate in the "Winter Season" running from November through April of each year. This rate was "designed to enable the owners of summer homes to maintain their cable service at a substantially reduced rate during the Winter Season ... when customers use their summer residences only sporadically at most." Compl. ¶ 20. Customers

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receiving the Winter Season rates were charged only $5 per month for Basic Cable and $15 per month for Family Cable.

Section 543(d) of Title 47, United States Code, mandates that a cable operator not subject to "effective competition" as defined in the statute "shall have a rate structure, for the provision of cable service, that is uniform throughout the geographic area in which cable service is provided over its cable system." 47 U.S.C. § 543(d); see 47 U.S.C. § 543( l ) (1) (defining "effective competition"). Section 224-a(4) of the New York Public Service Law ("PSL") requires that a cable television company such as Cablevision

provide to each of its subscribers at the time of the initial subscription and at least semi-annually thereafter a written description, materially accurate as of the first day of the previous month, of all programming and other services offered on the cable television system and of the rates and charges relating to such programming and other services[.]

N.Y. Pub. Serv. Law § 224-a(4)(a) (Consol.2005). Cablevision, it is alleged, has never included its Winter Season rates in the brochure it distributes pursuant to PSL § 224-a(4). Nor has it uniformly notified customers with summer residences of the existence of the Winter Season rates in any other fashion. Instead, Cablevision has instructed its employees "to advise customers about the existence of the Winter Season rates for their summer residences only if the customers request that their cable service be turned off completely during the Winter Season." Compl. ¶ 31.

Broder subscribes to Cablevision's services at his summer residence in Suffolk County, New York. "In a number of years during the Class Period," he alleges, "[he] was required to pay full rather than Winter Season rates" for these services. Compl. ¶ 6. He was unaware of the existence of the Winter Season rates until he found out about them from a friend who had received them.

On December 19, 2003, Broder filed a class action complaint against Cablevision in New York State Supreme Court, New York County. The members of the putative class were those persons who, during the Class Period, "subscribed to Cablevision for cable television services for their summer residences and were charged ... full rates rather than substantially reduced Winter Season rates for Basic Cable or Family Cable service," due to Cablevision's allegedly wrongful failure to advise them that the Winter Season rates were available. Compl. ¶ 8. On behalf of himself and the class, Broder asserted what were styled as four distinct causes of action, all arising out of the non-uniform provision and nondisclosure of the Winter Season rates.

Broder's first listed cause of action, for breach of contract, alleges that Cablevision violated the terms of its uniform customer agreement which provides, according to Broder, that "all of [Cablevision's] rates and any changes in those rates will be 'subject to applicable law.' " Compl. ¶ 27. Cablevision, the complaint asserts, breached that agreement with Broder and the other class members "by failing to provide them with the uniform rates required by 47 U.S.C. § 543(d) and by failing to provide them with the notice of the Winter Season rates as required under PSL § 224-a(4)." Compl. ¶ 36. These failures are also said to have breached the implied covenant of good faith and fair dealing.

Broder's second listed cause of action asserts violations of Section 349 of the New York General Business Law ("GBL"). Specifically, Broder alleges that "Defendants' conduct in failing to provide plaintiff and the Class with the uniform rates required

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by 47 U.S.C. § 543(d) and/or with the notice of the Winter Season rates as required under PSL § 224-a(4) constitutes materially deceptive acts or practices" which occur in New York commerce and affect the public interest so as to fall under GBL § 349. Compl. ¶ 41.

The third cause of action listed in the complaint is for common-law fraud. It is alleged that

Defendants were obligated under PSL § 224-a(4), but knowingly and willfully failed, to provide "materially accurate" information concerning the existence and availability of the Winter Season rates to plaintiff and the Class, and thereby materially misrepresented the rates to which plaintiff and the Class were entitled as Cablevision subscribers with summer residences.

Compl. ¶ 46. It is further alleged that plaintiff and the class can be presumed to have reasonably relied on this misrepresentation, and were damaged thereby.

The fourth cause of action listed in the complaint is for unjust enrichment. It states that "Defendants have been unjustly enriched at the expense of and to the detriment of plaintiff and the Class by wrongfully charging and collecting cable programming fees from them in excess of the substantially reduced Winter Season rates made available to only a relative few of Cablevision's customers with summer residences," and that Defendants' retention of the monies received through this conduct "violates fundamental principles of justice, equity and good conscience." Compl. ¶ 51.

In addition to seeking damages, Broder requests a declaratory judgment and an injunction. The declaratory judgment sought would declare that

Cablevision's actions in connection with its failure and [sic] to charge uniform Winter Season rates to plaintiff and the Class and to advise them of the existence of the Winter Season rates violates 47 U.S.C. § 543(d) and PSL § 224-a(4) and the customer agreements between Cablevision and plaintiff and the Class and the covenant of good faith and fair dealing implied thereunder, as well as GBL § 349, and constitutes fraud and/or unjust enrichment[.]

Compl. ¶ C. The injunction sought would "[e]njoin[ ] defendants permanently from failing to charge Winter Season rates uniformly to plaintiff and the Class and to advise them of the availability of the Winter Season rates, or otherwise violating Cablevision's customer agreement and GBL § 349." Compl. ¶ D.

Following Cablevision's removal of the action to federal court on February 23, 2004, Broder moved pursuant to 28 U.S.C. § 1447(c) to remand the case to state court for lack of subject-matter jurisdiction. In an oral decision on April 2, 2004, the district court denied the motion, holding that federal law was an essential part of the complaint and thus federal subject-matter jurisdiction was proper. Broder then moved for an order pursuant to 28 U.S.C. § 1292(b) certifying the denial of remand for interlocutory appeal. Cablevision moved to dismiss the action under Rules 9(b) and 12(b)(6) of the Federal Rules of Civil Procedure. By an unpublished memorandum decision filed August 12, 2004, the district court granted the motion to dismiss, finding that no valid claim was stated, and denied Broder's motion for certification under § 1292(b) as moot. A judgment...

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