Koeller v. Numrich Gun Parts Corp.
| Decision Date | 23 May 2023 |
| Docket Number | 1:22-cv-675 |
| Parties | EDWARD KOELLER and KEVIN CHEEK, individually and on behalf of all others similarly situated, Plaintiffs, v. NUMRICH GUN PARTS CORPORATION, Defendant. |
| Court | U.S. District Court — Northern District of New York |
WEITZ & LUXENBERG, P.C.
JAMES J. BILSBORROW, ESQ.
Attorneys for Plaintiffs
TURKE & STRAUSS LLP
RAINA C. BORRELLI, ESQ.
Attorneys for Plaintiffs
JAMES F. MONAGLE, ESQ.
Attorneys for Defendant
SMITH SOVIK, KENDRICK & SUGNET, P.C.
KAREN G. FELTER, ESQ.
Attorneys for Defendant
DECISION AND ORDER
On June 24, 2022, Edward Koeller filed this putative class action against Numrich Gun Parts Corporation (“Numrich” or “defendant”) alleging that defendant failed to properly protect his sensitive information from disclosure arising from a data breach. Dkt. No. 1.
On October 21, 2022, Koeller filed an amended complaint as of right. Dkt. No. 20. Thereafter, the Court accepted Koeller's second amended complaint for filing. Dkt. No. 25. The second amended complaint, now the operative pleading, names Kevin Cheek as an additional plaintiff. See id.
On December 16, 2022, Numrich moved to dismiss Koeller and Cheek's (collectively “plaintiffs”) second amended complaint under Federal Rules of Civil Procedure (“Rule”) 12(b)(1) and 12(b)(6). Dkt. No. 26. In the alternative, defendant has moved to strike immaterial and impertinent allegations pursuant to Rule 12(f). Id. The motion has been fully briefed and will be considered on the basis of the submissions without oral argument.
Numrich is a well-known firearm parts and weapons retailer. Compl. ¶¶ 1, 122. Defendant sells gun parts that replace and modify the components for dangerous weapons, including bayonets, scabbards, gun magazines, stocks, suppressers, muzzle brakes and gun sights and components. Id. ¶ 5. Defendant sells these gun parts to customers through its e-commerce website, www.gunpartscorp.com. Id. ¶¶ 12, 33.
To complete a purchase on Numrich's e-commerce website, customers are required provide their name, address, payment card number, card security code, and expiration date (collectively “PCD”). Compl. ¶¶ 12, 16. Defendant collects and maintains this information pursuant to its Privacy Policy. Id. ¶ 35. Defendant's Privacy Policy promises to use reasonable measures to safeguard customers' PCD from theft and misuse. Id. ¶¶ 34-36.
On or around March 28, 2022, Numrich became aware of suspicious activity on its e-commerce website. Compl. ¶ 12. In response, defendant began an investigation into the cause of the suspicious activity. Id. The investigation revealed that a data breach occurred between January 23, 2022, and April 5, 2022. Id. After discovering the data breach, defendant did not shut down e-commerce through its website. Id. ¶ 15.
As part of the data breach, hackers gained access to at least 45,169 of Numrich's customers' PCD. Compl. ¶¶ 1, 12. Plaintiffs maintain that cybercriminals were able to breach defendant's e-commerce website because defendant failed to maintain reasonable security safeguards and protocols to protect its customers' PCD. Id. ¶ 17.
On or around June 6, 2022, over two months after discovering the breach and nearly five months after the start of the breach, Numrich began notifying breach victims that their PCD was compromised. Compl. ¶ 19. Plaintiffs, as customers of defendant, received notices that their PCD was exposed as a result of the data breach. Id. ¶¶ 21, 51, 58. According to plaintiffs, defendant's breach notice deliberately underplayed the breach's severity and misrepresented that defendant was unaware of any actual misuse of information related to the breach. Id. ¶ 20.
After being notified that their PCD was compromised, plaintiffs took efforts to remediate the effects of the data breach. Compl. ¶¶ 55, 63. In particular, plaintiffs devoted time and resources to reviewing their accounts for fraud. Id. Plaintiffs also spent time canceling the payment cards associated with their purchases from Numrich. Id.
Plaintiffs now fear for their personal safety following the data breach. Compl. ¶¶ 57, 65. As gun owners, plaintiffs maintain that they are now at risk for burglary and theft because criminals know where they live and that they possess guns. Id. As a result, plaintiffs are experiencing feelings of anxiety, sleep disruption, stress, fear, and frustration. Id.
“A case is properly dismissed for lack of subject matter jurisdiction under Rule 12(b)(1) when the district court lacks the statutory or constitutional power to adjudicate it.” Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000). “The plaintiff bears the burden of proving subject matter jurisdiction by a preponderance of the evidence.” Aurecchione v. Schoolman Transp. Sys., Inc., 426 F.3d 635, 638 (2d Cir. 2005) (citing Luckett v. Bure, 290 F.3d 493, 497 (2d Cir. 2002)).
To survive a Rule 12(b)(6) motion to dismiss, the complaint's factual allegations must be enough to elevate the plaintiff's right to relief above the level of speculation. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). So while legal conclusions can provide a framework for the complaint, they must be supported with meaningful allegations of fact. Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). In short, a complaint must contain “enough facts to state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570.
To assess this plausibility requirement, the court must accept as true all of the factual allegations contained in the complaint and draw all reasonable inferences in the non-movant's favor. Erickson v. Pardus, 551 U.S. 89, 94 (2007). In doing so, the court generally confines itself to the facts alleged in the pleading, any documents attached to the complaint or incorporated into it by reference, and matters of which judicial notice may be taken. Goel v. Bunge, Ltd., 820 F.3d 554, 559 (2d Cir. 2016) (quoting Concord Assocs., L.P. v. Ent. Props. Tr., 817 F.3d 46, 51 n.2 (2d Cir. 2016)).
Numrich seeks dismissal of plaintiffs' second amended complaint under Rules 12(b)(1) and 12(b)(6). See Def.'s Mem., Dkt. No 26-1 at 6.[1] “When a defendant seeks dismissal under Rule 12(b)(1) ‘as well as on other grounds, the court should consider the Rule 12(b)(1) challenge first since if it must dismiss the complaint for lack of subject matter jurisdiction, the accompanying defenses and objections become moot and do not need to be determined.'” Rosenberg v. LoanDepot, Inc., 2023 WL 1866871, at *2 (S.D.N.Y. Feb. 9, 2023) (quoting Saint-Amour v. Richmond Org., Inc., 388 F.Supp.3d 277, 286 (S.D.N.Y. 2019)); see also Kumpf v. N.Y. State United Tchrs., --F.Supp.3d--, 2022 WL 17155847, at *4 (N.D.N.Y. Nov. 22, 2022). As such, defendant's 12(b)(1) motion will be addressed first.
First, Numrich seeks dismissal of plaintiffs' claims under Rule 12(b)(1). Def.'s Mem. at 9-19. Defendant asserts that “[w]ithout standing to bring their claims, [p]laintiffs are unable to invoke the subject matter jurisdiction of this Court.” Id. at 7.
“Article III, Section 2 of the Constitution limits the subject-matter jurisdiction of the federal courts to ‘Cases' and ‘Controversies.'” SM Kids, LLC v. Google LLC, 963 F.3d 206, 211 (2d Cir. 2020) (citing Dhinsa v. Krueger, 917 F.3d 70, 77 (2d Cir. 2019)). “The standing doctrine, which emerges from Article III, is designed ‘to ensure that federal courts do not exceed their authority as it has been traditionally understood.'” Id. (quoting Spokeo, Inc. v. Robins, 578 U.S. 330, 338 (2016)).
“Given that standing is an essential element of federal subject matter jurisdiction, it follows that if a plaintiff lacks standing to bring a suit, a court has no subject matter jurisdiction over the case.” Miller v. Syracuse Univ., --F.Supp.3d--, 2023 WL 2572937, at *6 (N.D.N.Y. Mar. 20, 2023) (cleaned up). “In a class action, ‘federal courts lack jurisdiction if no named plaintiff has standing.'” McMorris v. Carlos Lopez & Assocs., LLC, 995 F.3d 295, 299 (2d Cir. 2021) (quoting Frank v. Gaos, 139 S.Ct. 1041, 1046 (2019)). A plaintiff “must demonstrate standing for each claim that they press and for each form of relief that they seek (for example, injunctive relief and damages).” TransUnion LLC v. Ramirez, 141 S.Ct. 2190, 2208 (2021) (citations omitted).
“The Supreme Court has established that the irreducible constitutional minimum of standing consists of three elements.” N.Y. State Corr. Officers & Police Benevolent Assn, Inc. v. Hochul, 607 F.Supp.3d 231, 238 (N.D.N.Y. 2022) (cleaned up). “[T]he plaintiff must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.” SM Kids, LLC, 963 F.3d at 211 (cleaned up).
Numrich challenges only the injury-in-fact component of standing. See Def.'s Mem. at 11. The injury-in-fact requirement “is ‘a low threshold which helps to ensure that the plaintiff has a personal stake in the outcome of the controversy.'” Miller, 2023 WL 2572937, at *6 (quoting John v. Whole Foods Mkt. Grp., Inc., 858 F.3d 732, 736 (2d Cir. 2017)). “At the pleading stage, general factual allegations of injury resulting from the defendant's conduct may suffice, for on a motion to dismiss we presume that general allegations embrace those specific facts that are necessary to support a claim.” Lujan v. Defs. of Wildlife, 504 U.S. 555, 561 (1992) (cleaned up).
To establish an injury in fact, a plaintiff “must show that he or she suffered ‘an invasion of a legally protected interest' that is ‘concrete...
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