Weider et al v. Verizon New York Inc.

Filing 20

MEMORANDUM & ORDER: Plaintiffs motion 18 is granted and this action is remanded to New York Supreme Court, Kings County. The Clerk of the Court is directed to close this case. Ordered by Judge Frederic Block on 6/2/2015. (Innelli, Michael)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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MENDEL WEIDER, YOSSI LEVITIN,
BOWLING GREEN ASSOCIATES, L.P.,
111 JOHN REALTY CORP., GEM NET
INC., and MADISON TITLE AGENCY,
LLP, on behalf of themselves and all others MEMORANDUM AND ORDER
similarly situated,
Case No. 14-CV-7378 (FB) (JO)
Plaintiffs,
-againstVERIZON NEW YORK INC.,
Defendant.
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Appearances:
For the Plaintiffs:
JOSEPH H. WEISS, ESQ.
MARK D. SMILOW, ESQ.
WeissLaw LLP
Times Square Plaza
1500 Broadway, Ste. 1600
New York, NY 10036

For the Defendant:
PHILIP R. SELLINGER, ESQ.
REBECCA GARIBOTTO, ESQ.
Greenberg Traurig, LLP
200 Park Avenue
New York, NY 10166

BLOCK, Senior District Judge:
On November 18, 2014, Plaintiffs filed this putative class action against
Defendant Verizon New York Inc. (“Verizon”) in New York Supreme Court, Kings
County. On December 18, 2014,Verizon removed this suit to this Court under the
Class Action Fairness Act (“CAFA”), 28 U.S.C. § 1332(d)(2)(A). Plaintiffs move to
remand. For the reasons that follow, Plaintiffs’ motion is granted and this action is
transferred back to New York Supreme Court, Kings County.

I.
Plaintiffs – Verizon residential and business subscribers – allege that Verizon
unlawfully assessed a “Municipal Construction Surcharge” (the “Surcharge”) on its
New York State accounts in violation of an order of the New York Public Service
Commission (the “PSC Order”). See N.Y. STATE PUB. SERV. COMM’N, Case 13-C0145, Order Denying Tariff Filing by Verizon New York Inc. to add a Municipal
Construction Surcharge (May 16, 2013). Plaintiffs further maintain that Verizon
misled them into thinking that the Surcharge was a government-mandated tax so that
they would not challenge its imposition.
Plaintiffs – on behalf of themselves and a putative class – assert nine claims
under New York law, including: (1) deceptive acts and practices under New York
General Business Law § 349; (2) false advertising under New York General Business
Law § 350; (3) fraud and deceit; (4) negligent misrepresentation; (5) breach of
warranty; (6) breach of contract; (7) breach of the implied covenant of good faith and
fair dealing; (8) promissory estoppel; and (9) unjust enrichment and imposition of a
constructive trust.
II.
Plaintiffs contend that Verizon has failed to establish federal subject-matter
jurisdiction under CAFA. In the alternative, Plaintiffs maintain that remand is

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warranted under either CAFA’s mandatory “local controversy” and “home state”
exceptions, see 28 U.S.C. § 1332(d)(4)(A) and (d)(4)(B), or CAFA’s discretionary
“interests of justice” exception, see id. § 1332(d)(3). For the following reasons, the
Court finds that discretionary remand is appropriate.1
A.

Legal Standard

CAFA’s discretionary exception provides that “[a] district court may, in the
interests of justice and looking at the totality of the circumstances,” decline to exercise
subject-matter jurisdiction over a class action in which the primary defendants and
greater than one-third – but less than two-thirds – of the members of the proposed
plaintiff class are citizens of the state where the action was originally filed. Id. The
Court considers the following statutory factors in deciding whether to exercise the
discretion to remand:
(A)

whether the claims asserted involve matters of national or interstate
interest;

(B)

whether the claims asserted will be governed by laws of the State in
which the action was originally filed or by the law of other States;

(C)

whether the class action has been pleaded in a manner that seeks to
avoid Federal jurisdiction;

(D)

whether the action was brought in a forum with a distinct nexus with
the class members, the alleged harm, or the defendants;

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The Court does not address Plaintiffs’ remaining arguments because discretionary
remand is warranted in any event.
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(E)

whether the number of citizens of the State in which the action was
originally filed in all proposed plaintiff classes in the aggregate is
substantially larger than the number of citizens from any other State,
and the citizenship of the other members of the proposed class is
dispersed among a substantial number of States; and

(F)

whether, during the 3-year period preceding the filing of that class
action, 1 or more other class actions asserting the same or similar
claims on behalf of the same or other persons have been filed.

Id. § 1332(d)(3)(A)-(F).
The party seeking remand bears the burden of establishing that a CAFA
exception applies.

Greenwich Fin. Servs. Distressed Mortg. Fund 3 LLC v.

Countrywide Fin. Corp., 603 F.3d 23, 26 (2d Cir. 2010). To obtain discretionary
remand, the moving party “need not satisfy all factors, [but] rather a balancing test
should be applied taking into consideration the totality of the circumstances.”
Sorrentino v. ASN Roosevelt Ctr., LLC, 588 F. Supp. 2d 350, 359 (E.D.N.Y. 2008)
(internal quotations omitted).
B.

Analysis

Because it is undisputed that Verizon – a corporation headquartered in New York
– is a citizen of New York, at least one-third of the putative class members must be
New York citizens for discretionary remand to be warranted. A court may “make
reasonable assumptions about the makeup of the putative class.” Commisso v.
PricewaterhouseCoopers LLP, No. 11-CV-5713, 2012 WL 3070217, at *4 (S.D.N.Y.
July 27, 2012). It is eminently reasonable to assume that at least one-third of the
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members of the putative class – which is comprised solely of Verizon customers with
New York State accounts – have New York citizenship. See Lucker v. Bayside
Cemetery, 262 F.R.D. 185, 189 (E.D.N.Y. 2009) (making the “eminently reasonable
assumption that the majority – and certainly one-third – of those buried, or desiring to
be buried, in a Queens cemetery are New York residents”); see also Mattera v. Clear
Channel Commc’ns, Inc., 239 F.R.D. 70, 81 (S.D.N.Y. 2006) (assuming that the
discretionary exception’s citizenship threshold criteria were met because “all of the
putative class members work in New York”). Accordingly, the Court finds that the
discretionary exception’s citizenship requirement is satisfied.
The statutory factors also weigh heavily in favor of discretionary remand.
Plaintiffs’ claims – which are governed by New York law – allege that Verizon
assessed the Surcharge in violation of the PSC Order, the enforcement of which is a
matter of local interest. See Sorrentino, 588 F. Supp. 2d at 359 (“[T]he plaintiffs’
claims do not involve matters of national or interstate interest, but are of local interest
and are governed by the laws of the State of New York.”). Moreover, Verizon is a New
York defendant and the Surcharge was only imposed on New York State accounts. As
such, New York has a “distinct nexus” to both the defendant and the alleged harm. 28
U.S.C. § 1332(d)(3)(D). Additionally, as discussed above, it is highly likely that New
York citizens will comprise a “substantially larger” portion of the putative class than
citizens from other states. Id. § 1332(d)(3)(E).
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There is also no evidence that this action was pleaded to avoid federal
jurisdiction. Furthermore, neither party has identified a class action filed during the
three years preceding the filing of this action that asserts “the same or similar claims
on behalf of the same or other persons.” Id. § 1332(d)(3)(F); see also Mattera, 239
F.R.D. at 80 (finding that the inability of the parties and the court to identify a similar
class action was sufficient to establish the absence thereof). On a balance of the
statutory factors, the Court finds that discretionary remand is warranted under §
1332(d)(3).
III.
For the foregoing reasons, Plaintiffs’ motion is granted and this action is
remanded to New York Supreme Court, Kings County. The Clerk of the Court is
directed to close this case.
SO ORDERED.
/S/ Frederic Block_____________
FREDERIC BLOCK
Senior United States District Judge
Brooklyn, New York
June 2, 2015

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