Calabrese v. Csc Holdings, Inc.
| Citation | 283 F.Supp.2d 797 |
| Decision Date | 13 August 2003 |
| Docket Number | No. 2:02-CV-05171-JS-ARL.,2:02-CV-05171-JS-ARL. |
| Parties | Cira CALABRESE, Mel Gevanter, Anthony Fiore, Stewart Kalter, Ralph Reel, Sylvia Howell-Fridie, Steven Schiff and those similarly situated, Plaintiffs, v. CSC HOLDINGS, INC., a/k/a Cablevision, Shaun K. Hogan, Daniel J. Lefkowitz, Wayne R. Louis, Patrick J. Sullivan, James F. Magee, Robert Astarita, Amy Groveman, and Lefkowitz, Louis & Sullivan, L.L.P., Defendants. |
| Court | U.S. District Court — Eastern District of New York |
Harry J. Binder, Binder & Binder P.C., Ronkonkama, NY, for Plaintiffs.
George C. Pratt, James M. Wicks, Jennifer M. Mone, Farrell Fritz, P.C., Uniondale, NY, for Defendants, CSC Holdings, Inc., James F. Magee, Robert Astarita and Amy Groveman.
Marian C. Rice, Matthew K. Flanagan, L'Abbate Balkan Colavita & Contini, L.L.P., Garden City, NY, for Defendants, Shaun Hogan, Daniel Lefkowitz, Wayne Louis, Patrick Sullivan and Lefkowitz, Louis & Sullivan, L.L.P.
Plaintiffs Cira Calabrese ("Calabrese"), Mel Gevanter ("Gevanter"), Anthony Fiore ("Fiore"), Stewart Kalter ("Kalter"), Ralph Reel ("Reel"), Sylvia Howell-Fridie ("Howell-Fridie") and Steven Schiff ("Schiff") (collectively, "Plaintiffs") commenced this putative class-action against the Defendants on October 23, 2002. The Defendants are: CSC Holdings, Inc., a/k/a Cablevision ("CSC"), James F. Magee ("Magee"), Robert Astarita ("Astarita") and Amy Groveman ("Groveman"), (collectively the "CSC Defendants"), and Shaun K. Hogan ("Hogan"), Daniel J. Lefkowitz ("Daniel Lefkowitz"), Wayne R. Louis ("Louis"), Patrick J. Sullivan ("Sullivan") and Lefkowitz, Louis & Sullivan, L.L.P. ("Lefkowitz Firm"), (collectively the "Lefkowitz Defendants") (the CSC Defendants and the Lefkowitz Defendants will be referred to collectively as the "Defendants"). Plaintiffs allege violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1962, as well as state law claims of fraud, unjust enrichment and deceptive business practices under New York General Business Law § 349. Plaintiffs seek compensatory and punitive damages, attorney's fees and injunctive relief.
Pending before this Court are Defendants' motions to dismiss the action on the pleadings pursuant to Federal Rules of Civil Procedure 12(b)(6). For the reasons set forth herein, Defendants' motions are GRANTED, in part, and DENIED, in part.
The facts, as alleged by Plaintiffs, and regarded as true for the purposes of this motion, are as follows.
Plaintiffs are individuals residing in New York who subscribe to cable television service provided by Defendant CSC. Defendant CSC is a corporation organized and existing under the laws of the state of Delaware, is registered to do business in the state of New York and has its principal place of business in Bethpage, New York. Defendant Astarita is the head of CSC's security operations. Defendant Magee is Vice President of Security for the New York Metropolitan area for CSC. Defendant Groveman is Senior Counsel for Cablevision Systems. Defendant the Lefkowitz Firm is a limited liability partnership organized under the state of New York, and is located in Jericho, New York. Defendants Hogan, Daniel Lefkowitz, Louis and Sullivan are partners of the Lefkowitz Firm.
CSC operates cable television systems pursuant to franchises awarded to it by various municipalities. CSC's security department is responsible for curbing cable theft. CSC employs former law enforcement officers to manage its security operations, including Astarita and Magee. CSC also hires outside private investigators to help conduct security operations. CSC's investigators are directed to purchase "pirate" cable boxes from businesses. Pirate boxes enable users to intercept and watch CSC's cable programming without having to pay the company. CSC conducts surveillance of these businesses in the hopes of identifying the purchasers of the pirate boxes. Plaintiffs allege that CSC then uses its law enforcement connections to persuade the authorities to "bust" the businesses that distribute the pirate boxes. Plaintiffs further claim that once the law enforcement authorities conclude their investigation, the businesses are turned over to CSC for civil prosecution. At that time, CSC obtains a list of subscribers that ordered pirate boxes from the "busted" business.
Plaintiffs admit that CSC conducts a thorough investigation when dealing with businesses, but contend that such an investigation does not occur when allegations are made against individuals. Plaintiffs argue that CSC does not conduct an investigation when accusing individuals because CSC believes that these individuals cannot afford to defend the lawsuits and that the cost of retaining counsel would most likely exceed the settlement demands.
Having obtained the customer lists from the "busted" business, CSC mails letters to the list of individuals that ordered pirate boxes. The letters accuse the individuals of buying pirate boxes and threaten to sue them unless they pay CSC's settlement demands. CSC also telephones the subscribers making similar demands for money. The letters state that the subscriber has purchased a pirate box and that "[u]se of a cable television decoder(s) [pirate box] on Cablevision's television system without Cablevision's authorization is a violation of both federal and state law." Plaintiffs argue that the letters are intentionally ambiguous as to whether or not the mere order or purchase of a pirate box is sufficient to constitute a violation of the Communications Act. The letters also threaten that unless payment is made, the subscriber's cable service will be disconnected. Therefore, since it is not economically advantageous for individuals to contest CSC's accusations, Plaintiffs claim that individuals are forced to pay the demands whether or not they are guilty.
If the subscribers refuse to pay CSC, the company turns the matter over to the Lefkowitz Defendants. Plaintiffs allege that CSC's in-house attorneys, including Defendant Groveman, authorize the Lefkowitz Defendants to pursue legal action against the subscribers. The Lefkowitz Defendants then mail letters to the subscribers similar to those initially mailed by CSC. These letters are accompanied by "Settlement Agreements." The Settlement Agreements state: "WHEREAS, [the subscriber] without making any admissions and specifically denying Cablevision's allegations, has determined that future litigation of any and all of Cablevision's claims are not in his/ her interests, and instead desires to enter into this Agreement." In addition, the Settlement Agreements require subscribers to release CSC from any liability that could arise from their allegations. If a subscriber refuses to pay these demands, the Lefkowitz Defendants file suit without conducting an investigation.
The relevant facts pertaining to each of the individual Plaintiffs are similar. Calabrese was accused of cable theft by CSC. Without conducting an investigation as to whether she used a decoder, CSC mailed her a letter demanding $3,000 for using an unauthorized decoder. When Calabrese refused to pay CSC, the matter was turned over to the Lefkowitz Defendants. The Lefkowitz Defendants mailed a similar letter to Calabrese, accompanied by a Settlement Agreement. When Calabrese continued to refuse to pay, the Lefkowitz Defendants filed suit against her.
Plaintiffs claim that CSC admitted that it failed to conduct any investigation of Calabrese before accusing her of stealing cable programming and that its investigators made no attempts to learn if she was actually intercepting cable programming or even possessed a pirate box. Plaintiffs further allege that the Lefkowtiz Defendants did not determine whether there was a factual basis to support the allegations against Calabrese before filing a complaint. During the discovery period, Plaintiffs contend, the Lefkowitz Defendants committed numerous bad faith litigation tactics to drive up Calabrese's legal fees. Eventually, CSC agreed to drop the action against Calabrese.
Without conducting an investigation as to whether Gevanter used a decoder to intercept its cable programming, CSC accused him of stealing cable programming and demanded that he either pay $10,500 or face a lawsuit. When Gevanter refused to pay, the Lefkowitz Defendants sent him a letter threatening to file a lawsuit if he did not meet their settlement demands. Gevanter was advised by his legal counsel, Gary Ruff, Esq., to settle the action for $6,000 in order to avoid having his legal expenses driven up further by the Lefkowitz Defendants. Gevanter agreed to pay the $6,000 settlement demand.
Plaintiffs claim that neither CSC nor the Lefkowitz Defendants made any attempts to ascertain the truth concerning his use of a decoder. In actuality, Gevanter did possess decoders, but they were allegedly used to descramble wedding videos in connection with his job as a photographer. Without any proof, Defendants accused him of stealing cable and commenced an action against him.
Without conducting an investigation to ascertain whether Fiore used a pirate box, CSC accused him of intercepting cable programming and threatened to sue him unless he paid them $5,000 for each box. Again, when he refused to pay, the matter was turned over to the Lefkowitz Defendants. Plaintiffs claim that he was compelled to pay the $5,000 settlement demand, despite his continuing denial that he stole cable.
CSC accused Kalter of stealing cable programming without conducting an initial investigation and demanded that he pay them $3,500. Kalter asserts that he did purchase a pirate box, but only to enhance his cable reception, not to gain any...
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