Morrissey v Nextel Partners, Inc. (2009 NY Slip Op 50260(U))

Morrissey v Nextel Partners, Inc.

2009 NY Slip Op 50260(U) [22 Misc 3d 1124(A)]

Decided on February 19, 2009

Supreme Court, Albany County

Platkin, J.

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and will not be published in the printed Official Reports.

This is a motion brought pursuant to CPLR 901 for certification of this matter as a class action and recognition of the named plaintiffs as class representatives. This action seeks relief for alleged violations of General Business Law §§ 349 (deceptive trade practices) and 350 (false advertising), as well as for alleged breaches of contract. In addition to class certification for these causes of action arising in the State of New York, plaintiffs also seek to represent individuals in as many as thirty other States in a multi-state class action that would include claims arising under the consumer protection statutes and contract laws of those States.

According to plaintiffs' complaint, as amplified by their submissions filed in support of the present motion, defendant, a provider of cellular telephone service, systematically overcharged many of its subscribers in violation of consumer protection statutes as well as principles of contract law. These alleged overcharges arose in two distinct areas: in the method of crediting so-called "bonus minutes" to customers' accounts, and in the assessment of additional fees from subscribers with poor credit ratings. Plaintiffs contend that the "bonus minutes" included in their contracts were in fact illusory, while those subscribers with low credit scores on "spending limit program" contracts were charged fees in excess of those for which they had bargained. More particularly, plaintiffs' allegations are as follows:

"BONUS MINUTES"

Plaintiff Morrissey alleges that he and others similarly situated entered into subscriber agreements with defendant by which they were provided with one primary cell phone and one or more secondary "add-on" cell phones. Their contracts provide for a base level of 1,000 minutes of monthly usage as well as 200 so-called "bonus minutes".^[FN1] The contracts were to run for a term of two years, with a two hundred dollar ($200.00) penalty to be assessed in the event the customer were to terminate the contract prior to the end of the specified period.

After signing the subscription agreement and other documents in November 2005, Morrissey retained the primary cellphone for himself and gave the "add-on" phone to his girlfriend. When the first month's bill arrived, he discovered that his account had been credited with only 1,000 minutes and that he had been charged forty cents ($.40) per minute for each additional daytime minute used by the two phones. Nowhere on the billing statement was there any credit, or even mention, of the 200 "bonus minutes".

When Morrissey inquired about this apparent discrepancy, he was told that "bonus minutes" only were available for use on the primary phone and could not be shared with any add-on phones. Moreover, he also learned that defendant only would apply "bonus minutes" to the primary phone after that phone alone had used 1,000 minutes in the billing period. Additionally, defendant only made "bonus minutes" available for the first 12 months of the subscription period. Morrissey also discovered that defendant would increase the basic service charge on his plan by ten dollars ($10.00) per month after the first year of his two-year contract. [*2]

According to the complaint, subsequent to Morrissey's November 2005 subscription, defendant modified the terms of certain contract documents to include the statement, "Bonus minutes do not share" and to inform subscribers of "the terms of any special rate plan promotions and their expiration dates." Morrissey alleges that he was never provided with updated information consistent with these changes to the subscription agreement.

THE "SPENDING LIMIT PROGRAM"

When plaintiff Ciarfello applied for a cell phone subscription with defendant, he was required to undergo a credit check. Pursuant to defendant's policies, the results of the credit check could result in the assignment of a subscriber to a program in which an additional monthly fee would be assessed. The amount of this additional charge ranged from no fee at all to a maximum of nine dollars ninety-nine cents ($9.99), depending upon defendant's assessment of the subscriber's credit worthiness. Ciarfello's fee originally was assessed at two dollars ninety-nine cents ($2.99) per month. Like Morrissey, Ciarfello entered into a two-year contract with defendant for the use of one primary and one add-on cell phone.

The language of Ciarfello's subscription agreement allowed defendant to change the terms of the contract at any time, provided that advance notice was given. In late November 2005, Ciarfello's "Spending Limit Program" fee was increased from $2.99 per month to $4.99 per month. Notice of this rate increase, alleged by Ciarfello as inadequate, was placed at the end of a series of advertisements listed under the heading "Nextel News and Notices" in the previous month's bill.

The complaint also alleges that Ciarfello and other subscribers were not informed that they had the right to cancel their subscriptions without penalty should they not wish to pay the increased fees. The complaint further contends that the billing practices used by defendant were intended to mislead subscribers and conceal from them notices of unilateral changes in the subscription contracts. Plaintiffs allege that defendant's business practices, taken individually and collectively, evidence a conscious and concerted evidence to cheat consumers.

ANALYSIS

Plaintiffs seek certification of two classes, each with three proposed subclasses. Morrissey seeks to represent a "Bonus Minutes Class", consisting of "all persons who subscribed to a Nextel wireless communication service plan with Bonus" minutes during the period June 1, 2005 to the present." The three subclasses would be defined as follows:^[FN2]

1. Persons who subscribed to a bonus minute plan in which bonus minutes cannot be shared by add-on phones;

2. Persons who subscribed to a two-year service agreement in which bonus minutes are only valid for 12 months; and

3. Persons who subscribed to a service plan that is subject to an increase of $10.00 per month after 12 months.

Ciarfello on the other hand seeks to represent a "Spending Limit Class" defined as "all [*3]persons who subscribed to Nextel's Spending Limit Program and were billed a new monthly charge or an increase of their monthly fee for the Spending Limit Program during the period December 1, 2004 to the present." His subclasses would be:

1. Persons charged a new monthly Spending Limit Program Fee after their enrollment in the Spending Limit Program;

2. Persons charged a Spending Limit Program Fee of $2.99 that increased to $4.99; and

3. Persons charged a Spending Limit Program Fee of $9.99 that increased to $12.99.

As noted, plaintiffs seek certification not only of a New York class action but also a multi-state class action. The proposed New York action will be discussed first; consideration of the multi-state aspect of the case follows.

The CPLR lists five prerequisites to class certification (CPLR 901 [a] [1-5]). The ultimate determination is discretionary, and the burden of proof lies with plaintiffs to show that each of the prerequisites has been met (Beller v William Penn Life Ins. Co. of New York, 37 AD3d 747, 748 [2d Dept 2007]; cf. Casey v Prudential Securities, Inc., 268 AD2d 833, 834 [3d Dept 2000]). The statutory criteria will be addressed seriatim.

NUMEROSITY

The first prerequisite to certification is that the class be "so numerous that joinder of all members . . . is impracticable" (CPLR 901 [a] [1]). With regard to the Spending Limit Class, plaintiffs have put forth information provided to them in discovery that shows more than 100,000 New York subscribers enrolled in defendant's "Spending Limit Program" between December 1, 2004 and the present. Additionally, plaintiffs have provided charts prepared by defendant demonstrating that the charges for all categories of subscribers in that program were increased during the applicable time period. The numerosity of this class is therefore manifest.

Defendant contends, however, that plaintiffs have not demonstrated the numerosity of the proposed subclasses to the Spending Limit Class. They point out that plaintiffs have not specified the number of subscribers who would be members of each of the three subclasses. Yet this objection exalts form over substance: with the total number of members of the three subclasses exceeding 100,000 it is reasonable to infer numerosity of each subclass from the present record (see Consolidated Rail Corp. v. Town of Hyde Park, 47 F3d 473, 483 [2d Cir1995] [numerosity presumed with a minimum of forty class members]).^[FN3]

With regard to the question of numerosity of the proposed Bonus Minutes Class and its three subclasses, the analysis is somewhat more complex. Plaintiffs repeatedly sought from defendant in discovery specific information regarding the number of subscribers who would fit within plaintiffs' definition of the proposed class and subclasses. The only substantive response given by defendant was that "as of June 2006 approximately 127,000 customers had price plans with add-on phones and that over 850,000 customers had price plans with bonus minutes. Defendant does not currently know how many customers with add-on phones also have price plans with bonus minutes." [*4]

By letter dated April 16, 2007 defendant's counsel supplemented this discovery response with the following statement:

To date defendant has neither provided the requested information nor has it notified the Court "that the effort required to complete that task is unreasonably burdensome."^[FN4] Nonetheless, defendant seeks to defeat the present motion by asserting that plaintiffs have failed to meet their burden of proving numerosity. That plaintiffs' lack of more specific information regarding numerosity can be ascribed directly to defendant's failure to respond to discovery demands is a fact worthy of some consideration by the Court on a motion for class certification (Galdamez v Biordi Const. Corp., 13 Misc 3d 1224(A) at *2 [Sup Ct NY Cty]).^[FN5]

While the specific number of members of the proposed Bonus Minutes Class (as well as of the proposed subclasses) is not presently ascertainable with certainty, it is reasonable to infer from the large total number of subscribers with "bonus minute" plans and add-on phones that thousands of New Yorkers would fall within the proposed class and subclasses (see Friar, supra , at 100 ["Each case depends upon the particular circumstances surrounding the proposed class and the court should consider the reasonable inferences and commonsense assumptions from the facts before it."]; see also Newman v. RCN Telecom Servs., 238 FRD 57, 72 [SDNY 2006]). For present purposes, the Court is satisfied that plaintiffs have met their threshold burden on this motion of establishing numerosity.

PREDOMINANCE

The second prerequisite to class certification is that "there are questions of law or fact common to the class which predominate over any questions affecting only individual members" [*5](CPLR 901 [a] [2]). Plaintiffs must satisfy two distinct, but related, elements here: the commonality of issues and the predominance of those common issues over issues that require individualized consideration (see e.g. Freeman v Great Lakes Energy Partners, LLC, 12 AD3d 1170, 1171 [4th Dept 2004], citing Friar, supra , at 98). In order to apply this test, all four causes of action must be analyzed as to each of the proposed classes.

The first cause of action alleges deceptive acts and practices in violation of GBL § 349. The elements of this cause of action are "first, that the challenged act or practice was consumer-oriented; second, that it was misleading in a material way; and third, that the plaintiff suffered injury as a result of the deceptive act" (Stutman v Chemical Bank, 95 NY2d 24, 29 [2000] [citations omitted]).

Plaintiffs challenge numerous acts or practices of defendant relating to failures to disclose material terms, unilaterally changing terms, failing to notify subscribers of increases in fees and the like. That the acts challenged by plaintiffs were "consumer-oriented" is not in dispute. The issues surrounding this cause of action relate to whether defendant's practices, viewed objectively, were materially misleading and, if so, whether such acts and practices caused class members to sustain actual injury.

In seeking to establish the predominance of common issues, plaintiffs observe that the bulk of the GBL § 349 claim involves defendant's allegedly deceptive and misleading contracts and billing statements. With few exceptions, the language of these documents is essentially the same for members of both proposed classes (and subclasses). With respect to the Bonus Minute Class, putative class members executed Subscriber Agreements ("Agreements") with defendant setting forth the name of the cellular service plan to which they subscribed (e.g. National Action) and the number of basic minutes and bonus minutes allocated each month under such plan (e.g. 1,000 minutes of cellular service plus 200 "bonus minutes"). Likewise, plaintiffs argue that members of the proposed Spending Limit Class were notified of rate increases in the same (deceptive) manner: by the imbedding of such information in the promotional section of defendant's billing statements.

Defendant, however, argues that the predominance test is not satisfied here because extensive individualized inquiries are nonetheless required to resolve the GBL § 349 claims of class members. As to the Bonus Minute Class, defendant first contends that at issue here is whether the allegedly deceptive acts and practices caused particular customers to select a specific rate plan. Stated in other words, defendant argues that customers must demonstrate that they relied upon defendant's alleged misrepresentations and deceptive practices in choosing their particular cellular service plan.

Defendant's argument highlights the important distinction between reliance and causation in cases brought pursuant to GBL § 349. Reliance and causation, while "twin concepts", are not identical (Stuttman, supra , at 30). Reliance is the causal link between an alleged deceptive practice and a consumer's decision to transact business with the defendant, whereas causation refers to the link between an alleged deceptive practice and an actual injury sustained by a consumer as a result of a such a practice. It is by now well established that proof of reliance is not necessary under GBL § 349, but a plaintiff seeking an award of monetary damages under the statute must prove that he or she suffered an actual injury caused by the alleged deceptive act or practice (Stuttman, supra , at 29). [*6]

In arguing that the Court must individually adjudicate whether defendant's deceptive practices caused particular customers to select a specific rate plan, defendant mistakenly seeks to interject the element of reliance into GBL § 349. If plaintiffs can demonstrate that defendant's representations regarding bonus minutes were objectively misleading in a material way to a reasonable consumer, they will be entitled to recover damages for actual injuries sustained by reason thereof. There is no requirement that plaintiffs must demonstrate reliance, reasonable or otherwise, upon anything said or done by defendant in purchasing their cellular service plan.

As an alternative argument against a finding of predominance, defendant asserts that its customers received an individualized explanation of the terms and conditions associated with the "bonus minutes" promotion as part of a "customized" consumer transaction. This need for individualized consideration of the oral and written representations made to customers regarding the "bonus minutes" promotion demonstrates, according to defendant, that resolution of the claims of the Bonus Minute class will require the testimony of customers and sales representatives to establish what words were actually spoken and what concepts were actually conveyed to class members in connection with their purchase of cellular service from defendant.

Defendant's contentions regarding the individualized nature of the sales transaction including extensive oral representations by sales representatives and the use of in-store promotional materials find considerable support in the evidentiary record compiled to date. It is clear that each of the nominative plaintiffs participated in a lengthy, unscripted "back and forth" with the sales representative from whom they purchased cellular service, including a discussion of the "bonus minutes" promotion. One of the nominative plaintiffs testified that he was told by his sales representative that "bonus minutes" were unrestricted; the other testified that some (but not all) of the restrictions associated with "bonus minutes" were disclosed to him orally during the sales process.

It also is clear that each of nominative plaintiffs were exposed to different written promotional materials relating to the terms and conditions of defendant's "bonus minute" promotion during the sales process. Indeed, one of the nominative plaintiffs acknowledges viewing written materials at the time of his purchase setting forth restrictions associated with the use of "bonus minutes". And while both nominative plaintiffs purchased defendant's cellular service from the same retail outlet (through different sales representatives), it is apparent that the proposed Bonus Minute Class implicates the sales practices of hundreds, or even thousands, of defendant's authorized retailers.

Plaintiffs respond that defendant's argument runs afoul of both the express language of its contract documents as well as settled principles of contract interpretation. As plaintiffs correctly observe, the "Terms and Conditions" section of defendant's form Subscriber Agreements states: "This Agreement sets forth all of the agreements between the parties concerning the Service and purchase of the Equipment, and there are no oral or written agreements between them other than as set forth in this Agreement." Moreover, the parol evidence rule generally bars evidence of oral representations that would modify the unambiguous terms of a written agreement (Madison Ave Leasehold, LLC v Madison Bentley Assoc's LLC, 8 NY3d 59, 66 [2006] [citations omitted]).

While plaintiffs are correct that the Subscriber Agreement disclaims the existence of other oral or written agreements between the parties, another contemporaneously executed writing signed by both the customer and the sales representative demonstrates the centrality [*7]of extrinsic oral and written representations regarding promotional rate plans, including the "bonus minutes" promotion, to the sales process.

As part of the transaction, each plaintiff was presented with a document entitled New Customer Checklist ("the Checklist"). The purpose of the Checklist was to "ensure[] that [the customer's] Nextel representative has fully explained important information about Nextel handsets and service." The Checklist begins by directing the customer to "read the following and signify [his] understanding and acceptance by placing [his] initials in the box next to [each] statement."

The fifth item on the checklist reads as follows: "My rate plan has been fully explained to me and I understand the terms of any special rate plan promotions and their expiration dates." Following this statement is hand-written information regarding the specific promotional plan promised to the customer (regular text is pre-printed material; italics is handwritten):

Plaintiffs initialed each item of the Checklist, including the acknowledgment that they received a full explanation of the terms of any promotional rate plans, such as the bonus minute plan. In addition, plaintiffs signed the Checklist, as did a sales representative.

This contemporaneously signed writing acknowledging that customers had received an explanation of the "bonus minutes" promotion and understood its terms and conditions is sufficient to negate plaintiffs' reliance on the merger clause set forth in the Subscriber Agreement. "Where several instruments constitute part of the same transaction, they must be interpreted together. In the absence of anything to indicate a contrary intention, instruments executed at the same time, by the same parties, for the same purpose, and in the course of the same transaction will be read and interpreted together, it being said that they are, in the eye of the law, one instrument" (BWA Corp. v. Alltrans Express U.S.A., Inc., 112 AD2d 850, 852 [1st Dept 1985]). Thus, through the contemporaneously executed Checklist, the parties agreed and acknowledged as part of single integrated transaction that the terms and conditions of the "bonus minutes" promotion were explained to customers through oral representations and written materials.

This conclusion is consistent with the fact that the Subscriber Agreement does not define the term "bonus minutes" or otherwise set forth the terms and conditions associated the "bonus minutes" promotion. While plaintiffs argue that the absence of such language from the Subscriber Agreement makes "bonus minutes" the equivalent of the customer's basic allotment of unrestricted minutes (i.e. the plaintiffs would receive a total of 1,200 unrestricted minutes), the Court is not persuaded that this construction is, as a matter of law, the only reasonable understanding of the term "bonus minutes". In fact, one of the nominative plaintiffs testified during his deposition that he understood at the time of his purchase that "bonus minutes" were subject to restrictions not applicable to his basic allotment of minutes.

Thus, even confining itself to the four corners of the Subscriber Agreement, the Court would conclude that the parties' Agreement is ambiguous with respect to the meaning of "bonus minutes" (see Van Wagner Adv. Corp. v S & M Enters., 67 NY2d 186, 191 [1986]). Therefore, parol evidence could in any event be received with respect to parties' intended meaning of such [*8]term, notwithstanding the merger clause set forth in the Agreement (see County of Broome v. Travelers Indem. Co., 58 NY2d 753, 762 [1982]).

Accordingly, the Court concludes that individualized consideration of the representations made to members of the proposed Bonus Minute Class during the sales process is necessary to determine whether such customers were subject to deceptive representations regarding "bonus minutes" and, if so, whether such representations caused such customers to sustain actual injury. After all, if the terms and conditions associated with the use of "bonus minutes" were fully disclosed to customers prior to their purchase, it cannot be said that such customers sustained an injury caused by the alleged deceptive practices (Gale v. IBM, 9 AD3d 446 [2d Dept 2004]; Sands v. Ticketmaster-New York, 207 AD2d 687 [1st Dept 1994] lv dism. in part and den in part, 85 NY2d 904 [1995]; Deen v. New Sch. Univ., 2007 US Dist LEXIS 25295 [SDNY 2007] ["A claim under Section 349 cannot be maintained where the defendant fully disclosed the allegedly deceptive practice."]). To hold otherwise would allow deception to serve both as act and injury, which it may not (Small v. Lorillard Tobacco Co., 94 NY2d 43, 56 [1999]; see Donahue v. Ferolito, Vultaggio & Sons, 13 AD3d 77 [1st Dept 2004]).^[FN6]

Similar individualized inquiries as to the causal connection between defendant's alleged deceptive practices and actual injury on the part of class members are necessary to resolve the GBL § 349 claim of the Spending Limit Class. This claim is premised on the contention that defendant's practice of imbedding notification of rate increases in the promotional section of the customer's bill constitutes a deceptive practice. Plaintiffs correctly observe that the inquiry as to whether this practice is deceptive is an objective one: whether the method chosen by defendants is misleading to a reasonable consumer acting in a reasonable manner (see Samuel v Time Warner, Inc., 10 Misc 3d 537, 540 [Sup Ct, NY Cty 2005]). As part of this cause of action, [*9]plaintiffs will need to establish, inter alia, that the form of notice provided by defendant would not have alerted a reasonable person that his Spending Limit Plan rates were about to increase.

But proof of deception is only part of the necessary inquiry. For members of the Spending Limit class to recover an award of monetary damages, they must prove that they sustained an actual injury caused by defendant's allegedly deceptive form of notification. The theory of injury put forward by plaintiffs is that the manner in which they were notified of the proposed rate increases denied them the opportunity to cancel their service without penalty, thereby subjecting them to increased fees of which they lacked prior notice.

For class members who were, in fact, misled by the imbedded form of notice, such a claim will lie (cf. Dupler v. Costco Wholesale Corp., 249 FRD. 29, 36-37 [EDNY 2008] [actionable omissions]). However, class members who read the entire bill statement (including the notification of rate increases) and nonetheless decided to continue cellular service with defendant pursuant to the Spending Limit Plan cannot be said to have suffered an actual injury caused by the alleged deceptive form of notice (see Whalen v. Pfizer, Inc., 2005 NY Slip Op 51779U, 3 (NY Sup Ct 2005]). Such customers are in no different position than if they had received "perfect" notice. And any increase in subscriber fees imposed upon them was caused solely by their voluntary decision to continue service with defendant, notwithstanding the rate increase. This need for numerous individualized inquiries is fatal to plaintiffs' predominance argument.

The second cause of action alleges violations of GBL § 350. Here the essential elements require proof of false advertising, knowing reliance by the plaintiff on that false advertising and injury caused by that reliance (see Klein, supra , at 72, and cases cited therein). Plaintiffs' burden of proving that class members knew of the allegedly false advertising and relied upon it in choosing to purchase their service contracts will entail individualized proof (id.). As seen above, this militates against class certification on this cause of action (cf. Strauss v Long Island Sports, Inc., 60 AD2d 501, 506 [2d Dept 1978]).^[FN8]

The third cause of action alleges a breach of the implied covenant of good faith and fair dealing. Where, as here, such a cause of action merely reiterates claims brought under a separate cause of action for breach of contract, it is subject to dismissal as duplicative (see id., citing Jacobs Private Property LLC v 450 Park LLC, 22 AD3d 347 [1st Dept 2005], Cerberus Int'l Ltd. v Banctec, Inc., 16 AD3d 126 [1st Dept 2005], and Parker East 67th Assocs. v Ministers, Elders and Deacons of the Reformed Protestant Dutch Church of the City of New York, 301 AD2d 453 [1st Dept 2003]). Accordingly, in the interest of judicial economy, this cause of action is dismissed sua sponte.

Finally, plaintiffs have failed to demonstrate predominance with respect to their fourth cause of action, alleging breach of contract. As explained, supra , resolution of the claims of members of the proposed Bonus Minute Class will require the Court to delve into the oral and written representations provided to customers during the sales process. Similarly, the issue of [*10]whether members of the proposed Spending Limit class have viable claims for monetary damages based on defendant's alleged failure to provide adequate notice of rate increases also requires considerable individualized consideration (see Dillon v. U-A Columbia Cablevision of Westchester, Inc., 100 NY2d 525, 526 [2003] [voluntary payment document "bars recovery of payments voluntarily made with full knowledge of the facts"]).

In reaching the foregoing conclusions, the Court recognizes that the need for some individualized treatment of damages generally does not bar class certification (see e.g. Englade v Harper Collins Publishers. Inc., 289 AD2d 159, 160 [1st Dept 2001] and cases cited therein; cf. In re Nassau County Strip Search Cases, 461 F3d 219 [2d Cir 2006]). However, at issue here is more than determining the amount owed to particular class members. Rather, the issue is whether members of the proposed classes can legitimately claim to have suffered injury caused by defendant's allegedly deceptive practices. Accordingly, the Court concludes that plaintiffs have failed to demonstrate that questions of law or fact common to the class predominate over issues affecting only individual members.

TYPICALITY

The third prerequisite to class certification is that "the claims or defenses of the representative parties are typical of the claims or defenses of the class" (CPLR 901 [a] [3]). In order to satisfy this requirement, plaintiffs need not share every claim asserted on behalf of every member of every class (see Pruitt v Rockefeller Center Properties, Inc., 167 AD2d 14, 22 [1st Dept 1991]). Further, "it is not necessary that the claims of the named plaintiffs be identical to those of the class" (id, quoting Super Glue Corp. v Avis Rent-A-Car Systems, 132 AD2d 604, 607 [2d Dept 1987]). Typicality is satisfied so long as the named plaintiffs' claims "arise[] out of the same course of conduct as the class members' claims and [are] based on the same cause[s] of action" (id. at 22).

Here plaintiffs' claims are typical of the claims of the classes they seek to represent. Morrissey entered into a subscription agreement with defendant by which he purchased two cell phones on a "shared" plan only to learn that the bonus minutes for which he had contracted were allegedly not credited to him in accordance with the terms of his contract. Likewise, Ciarfello subscribed to a two-year "Spending Limit" plan and learned that the monthly fee for that plan was unilaterally increased by defendant, allegedly without adequate notice to him. While these claims do not encompass every single situation experienced by every member of each class, plaintiffs' claims are "typical" in that they "arise out of the same course of conduct" and are "based on the same cause[s] of action." The typicality prerequisite to class certification is therefore satisfied.

ADEQUACY OF REPRESENTATION

The fourth prerequisite to class certification is that "the representative parties will fairly and adequately protect the interest of the class" (CPLR 901 [a] [4]). To meet this requirement plaintiffs must show both that class counsel is qualified and capable of seeing this litigation through to its ultimate conclusion and that no conflict of interest exists that would pit the nominative plaintiffs against other members of the classes or subclasses (see In re Drexel Burnham Lambert Group, Inc., 960 F2d 285, 291 [2d Cir 1992], citing Eisen v Carlisle and Jacquelin, 391 F2d 555, 562 [2d Cir 1968]). Both prongs of this test have been met here.

Plaintiffs' counsel has considerable experience with complex litigation in general and [*11]class actions in particular. Their professional adequacy is therefore apparent. In addition, in plaintiffs' counsel's reply affidavit, counsel asserts that the firm has agreed to advance the funds necessary to finance the litigation. This obviates any necessity for a detailed analysis of plaintiffs' personal financial status as a factor to be used in determining plaintiffs' own adequacy to represent the classes zealously (see Wilder v May Department Stores Co., 23 AD3d 646, 648 [2d Dept 2005]) .

Defendant contends, however, that plaintiffs' counsel are not fit to represent the class members. Specifically, defendant questions the means by which counsel was retained by the two nominative plaintiffs and alleges some impropriety. A review of the record shows that Ciarfello found counsel through an advertisement in a telephone book. This is hardly evidence of improper conduct. Morrissey, on the other hand, testified to having been contacted by counsel through a letter. Absent more, this does not establish wrongdoing. Moreover, it is only where egregious unethical behavior is demonstrated on the part of counsel that a court may use this as grounds for denying class certification (see e.g. Meachum v Outdoor World Corp., 171 Misc 2d 354, 359 [Sup Ct Queens Cty 1996] and cases cited therein). Defendant's proof falls well short of meeting this standard.

Defendant also contends that Morrissey and Ciarfello are not fit to represent class members due to their perceived lack of intimate knowledge of the procedural and legal details of the litigation. This is not the standard, however. It is sufficient that a nominative plaintiff have, "at the very least, a general awareness of the nature of the underlying dispute, the ongoing litigation, and the relief sought on behalf of the class" (Wilder, supra , at 648 [citations omitted]). As is clear not only from the supporting affidavits of plaintiffs but from their deposition testimony, both Morrissey and Ciarfello clearly understand what factual issues are at the center of this controversy, what the nature of class litigation is and what ultimate relief is sought on behalf of the class members. The adequacy requirement has therefore been met.

SUPERIORITY

The final prerequisite to class certification is that plaintiffs must prove that "a class action is superior to other available methods for the fair and efficient adjudication of the controversy" (CPLR 901 [a] [5]). In the present case the only alternative "available method" for the adjudication of class members' claims, as conceded, would be the prosecution of individual actions. Plaintiffs argue, with some force, that the prosecution of hundreds or thousands of separate actions can hardly be deemed "superior" to a single class action, particularly given the limited amount of damages alleged sustained by each customer.

However, it must be noted that in enacting GBL § 349, the State Legislature specifically crafted remedies targeted to the needs of consumers who possess claims of modest dollar value. Thus, the statute authorizes both a minimum level of statutory damages and an award of treble damages (up to $1,000) upon proof of scienter (see id. [h]). Neither such remedy is available in a class action lawsuit (see CPLR 901 [b]; Ridge Meadows Homeowners' Ass'n v. Tara Dev. Co., 242 AD2d 947 [4th Dept 1997]). Notably, the statute also authorizes a prevailing consumer to obtain an award of attorney's fees from the defendant, an extraordinary remedy designed to assist victims of deceptive trade practices in obtaining the representation of counsel.

And even more fundamentally, "the necessity of conducting the above-discussed individual inquiries would render the litigation extremely difficult if not impossible to manage, [*12]and an inefficacious means of adjudicating any underlying common issue" (Solomon v. Bell Atlantic, supra , at 56).

Under these circumstances, the Court is not persuaded that a class action would be a superior means of resolving the claims of class members.

OUT OF STATE CLAIMS

In view of the foregoing, the Court need not delve into plaintiff's request to concentrate the litigation of claims arising in thirty other states in this forum. The undesirability of this is, in any event, manifest: precluded from applying New York consumer protection laws to claims arising out-of-state, (see e.g. Montgomery v New Piper Aircraft, Inc., 209 FRD 221, 228 [SD FL 2002], citing Healy v Beer Institute, 491 US 324 [1989]), the Court would be required to apply the law of the particular state in which a given claim arose. Moreover, it would be a New York fact-finder who would ultimately determine the rights of out-of-state class members based upon its particular interpretation of the other state's laws. As the United States Supreme Court has recognized, "State power may be exercised as much by a jury's application of a state rule of law in a civil lawsuit as by a statute" (BMW, Inc. of North America v Gore, 517 US 559, 572 n 17 [1996]). A New York court or jury forcing its interpretation of a sister State's laws upon out-of-state class members would not be a superior remedy.

Furthermore, if this matter were to proceed to trial as a multi-state class action the difficulties to be encountered would be virtually insurmountable. Would one jury be instructed to consider each of the two causes of action under the laws of thirty-one different States? Would up to thirty-one separate trials be required instead? Or would the Court be required to engage in the Herculean task of reviewing the consumer protection statutes of the various States and the common law of contracts in those States and then segregating claims into groups based upon legal similarities? Whatever the answers to these questions, it is obvious that a multi-state class action lawsuit prosecuted in New York under the laws of more than two dozen different jurisdictions would not be superior to other available methods for the fair and efficient adjudication of the controversy.

CONCLUSION

The Court concludes that plaintiffs have failed to meet their burden of demonstrating that each of the prerequisites to class certification has been satisfied (see CPLR 901 [a] [1-5]). Had these prerequisites been satisfied, consideration of the additional factors enumerated in CPLR 902 would also have been necessary (Fleming v Barnwell Nursing Home & Health Facilities, 309 AD2d 1132, 1134, 766 NYS2d 241 [3d Dept 2003]). However, this analysis is obviated by plaintiffs' failure to have established the basic criteria of CPLR 901.

ORDERED that plaintiffs' motion for class certification is denied in all respects.

This constitutes the Decision and Order of the Court. All papers including this Decision and Order are returned to defendant's counsel. The signing of this Decision and Order shall not constitute entry or filing under CPLR Rule 2220. Counsel is not relieved from the applicable provisions of that Rule respecting filing, entry and Notice of Entry.

Dated: Albany, New York