Frintzilas et al v. Directv, LLC et al

Filing 23

OPINION & ORDER re: 4 MOTION to Dismiss filed by Mas Tec, Inc. For the reasons stated above, the defendants' motion to dismiss plaintiffs' N.Y.G.B.L. § 249 claim is GRANTED. The Clerk of Court is directed to terminate the motion at ECF No. 5. Plaintiffs' remaining claims for trespass remain live. (Signed by Judge Katherine B. Forrest on 11/27/2017) (mro)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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WILLIAM FRINTZILAS and ANGELO
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POZZUTO,
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Plaintiffs,
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-v:
:
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DIRECTV, LLC and MASTEC NORTH
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AMERICA, INC., erroneously named as
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MASTEC, INC.,
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Defendants.
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USDC SDNY
DOCUMENT
ELECTRONICALLY FILED
DOC #: _________________
DATE FILED: November 27, 2017

17-cv-2368 (KBF)
OPINION & ORDER

KATHERINE B. FORREST, District Judge:
On April 2, 2017, plaintiffs William Frintzilas and Angelo Pozzuto, New York
landlords, filed suit, seeking to certify a class action on behalf of themselves and
other similarly situated New York landlords (“Landlords”). They claim that
defendants, DIRECTV, a California limited liability corporation, and MasTec North
America, Inc. (“MasTec”), 1 a Florida corporation, engaged in deceptive acts and/or
practices, violating New York General Business Law § 349. In addition, plaintiffs
bring individual trespass claims. (ECF No. 1, Compl. ¶¶ 1–2.) They allege that
defendants installed DIRECTV equipment on the roof and walls of their residential
dwelling unit properties (“RDUs”) without first receiving authorization from the

MasTec North America, Inc. was erroneously named in the complaint as MasTec, Inc., which is a
holding company for MasTec North America, Inc. MasTec North America, Inc. is the actual
operational entity contracting with DIRECTV.
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Landlords. (Id. ¶ 1.) Accordingly, they seek injunctive relief; compensatory,
consequential, and punitive damages; costs; and attorneys’ fees. (Id. ¶ 2.)
On June 23, 2017, MasTec filed a motion to dismiss the § 349 claim, arguing,
inter alia, that plaintiffs lack standing under § 349 and also that they have failed to
state a claim under § 349. (ECF No. 5, Defendants’ Mem. of Law in Support,
(“Defs.’ Mem. in Supp.”)). After DIRECTV was served as a defendant, it joined in
MasTec’s motion. (ECF No. 14.) This matter was transferred to the undersigned on
September 26, 2017. The Court finds that plaintiffs fail to state a claim under
N.Y.G.B.L. § 349. Accordingly, the Court GRANTS the motion.
I.

FACTUAL BACKGROUND
The factual allegations discussed below are drawn from the complaint (ECF

No. 1) and assumed true for the purposes of this decision. 2
Plaintiffs are citizens of New York and owners and landlords of residential
dwelling unit properties (“RDUs”) in New York state. (Compl. ¶¶ 13–19.)
DIRECTV is a California limited liability company engaged in the marketing and
sales of DIRECTV satellite television service and the leasing and installation of
DIRECTV antennae, such as satellite dishes and other equipment designed for
over-the-air reception of television broadcast signals (“Equipment”) in the State of
New York. (Id. ¶ 20.) DIRECTV is a leading provider of digital television

In plaintiffs’ opposition (ECF No. 17), they include a section entitled “Statement of Material Facts,”
in which they assert facts not previously asserted in the complaint. The Court does not rely upon
those facts in this Opinion. See, e.g., Friedl v. City of New York, 210 F.3d 79, 83 (2d Cir. 2000) (“[A]
district court errs when it . . . relies on factual allegations contained in legal briefs or memoranda in
ruling on a 12(b)(6) motion to dismiss.”).
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entertainment programming via satellite to residential and commercial subscribers,
which services it provides by means of the Equipment that it licenses/leases to
subscribers and installs upon the RDU in which subscriber resides. (Id. ¶¶ 22–23.)
Defendant MasTec is a Florida corporation that works as a specialty
contractor providing installation fulfillment services to DIRECTV; it is one of
DIRECTV’s largest installation and service companies. (Id. ¶¶ 5, 23–24.) At all
relevant times, MasTec had a contractual relationship with DIRECTV to install
equipment at plaintiffs’ properties. 3 (Id. ¶ 25.) The contract provides for
Equipment to be sold to MasTec, which it then installs. (Id. ¶¶ 27–28.) It further
provides that DIRECTV shall, inter alia, direct the technicians to specific work
sites, monitor the technicians’ locations, determine the number of customers
MasTec will serve, and determine the technicians’ daily pay rate. (Id. ¶¶ 26–32.)
The leases between plaintiffs and their tenants (the “Leases”) prohibit the
installation of satellite dishes, including DIRECTV Equipment. (Id. ¶ 38.)
Plaintiffs allege that, notwithstanding those leases, defendants installed Equipment
on their roofs and exterior walls on the “mere representation of any Tenantsubscriber and/or family member over the age of 18 years that ‘DIRECTV System
installation at [address] has been verbally approved by my landlord (or is not
required pursuant to my lease or rental agreement).’” (Id. ¶ 42.) They further

The plaintiffs’ complaint appears to contain an error in this section—where it references properties
located throughout Connecticut, and not New York. The Court assumes this is a scrivener’s error,
and proceeds to analyze as if the properties are in New York state, based upon the remainder of the
complaint.

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allege that defendants had constructive knowledge that the Leases prohibit the
installation of their Equipment. (Id. ¶ 39.)
Plaintiffs allege that this installation was a knowing and intentional
violation of FCC rules and regulations—specifically the Federal Communication
Commission’s Second Report and Order, In the Matter of Implementation of Section
207 of the Telecommunications Act of 1996, Restrictions on Over-the-Air Reception
Devices (“OTARD”), 47 C.F.R. 1.4000. (Id. ¶¶ 33, 45–46.)
Throughout the relevant period, defendants did not pay fees or monetary
consideration to plaintiffs or putative class members. (Id. ¶ 47.) Furthermore,
plaintiffs allege that, upon termination of tenant subscriptions to its satellite
television service, defendant DIRECTV abandoned its Equipment permanently,
leaving it affixed to roofs and exterior walls of the RDUs, resulting in additional
expense to plaintiffs. (Id. ¶ 48.)
II.

LEGAL STANDARDS
A. Motion To Dismiss
On a motion to dismiss, this Court accepts as true all well-pleaded factual

allegations. See Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949–50 (2009). This means
that the Court must accept plaintiff's factual allegations in its complaint as true
and draw all reasonable inferences in plaintiff's favor. See Famous Horse Inc. v.
5th Ave. Photo Inc., 624 F.3d 106, 108 (2d Cir. 2010). To withstand dismissal, “a
complaint must contain sufficient factual matter, accepted as true, to ‘state a claim

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to relief that is plausible on its face.’” Iqbal, 129 S. Ct. at 1949 (quoting Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
When ruling on a motion to dismiss under 12(b)(6), a district court errs if it
relies on additional materials not included in the pleadings or relies on “factual
allegations contained in legal briefs or memoranda.” Friedl v. City of New York,
210 F.3d 79, 83–84 (2d Cir. 2000).
B. New York General Business Law Section 349
New York General Business Law § 349 falls under Article 22-a, New York
General Business Law, “Consumer Protection from Deceptive Acts and Practices,”
and declares unlawful “deceptive acts or practices in the conduct of any business,
trade or commerce or in the furnishing of any service” in New York State.
N.Y.G.B.L. § 349(a). Though originally intended to be enforced by the Attorney
General, the statute was amended in 1980 to give a private right of action,
“intended to afford additional protection for consumers” so that they could “bring
suit on their own behalf.” Blue Cross & Blue Shield of N.J., Inc. v. Phillip Morris
USA Inc., 818 N.E. 2d 1140, 1143 (N.Y. 2004).
a. Standing
GBL § 349, is, “at its core, a consumer protection device.” Securitron
Magnalock Corp. v. Schnalbolk¸ 65 F.3d 256, 264 (2d Cir. 1995). While the plain
language for the private right of action under § 349 is expansive (“any person who
has been injured by reason of any violation of this section may bring an action in his
or her own name”), New York courts have interpreted § 349 more narrowly as a
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consumer protection statute. See, e.g., id.; see also Genesco Entertainment v. Koch,
593 F. Supp. 743, 751 (S.D.N.Y. 1984) (recognizing that “Section 349 is a powerful
remedy for consumer fraud”).
Since the “gravamen of the complaint must be consumer injury or harm to
the public interest,” Securitron, 65 F.3d at 264 (internal quotation marks omitted),
courts in New York have declined to find standing where the plaintiff is neither a
consumer nor a competitor. See City of New York v. Smokes-Spirits.com, Inc., 911
N.E.2d 834, 836 (N.Y. 2009) (finding no standing under § 349 for parties who are
neither consumers nor competitors where the plaintiff, the City, alleged harms
under § 349 when it lost tax revenue due to defendant’s allegedly deceptive
marketing of cigarettes to New York consumers). See also SMJ Group, Inc. v. 417
Lafayette Restaurant LLC, No. 06-cv-1774, 2006 WL 2516519, at *5 (S.D.N.Y. Aug.
30, 2006) (no standing where the plaintiff restaurant owners sued defendants under
§ 349 for leafleting they claimed was deceptive outside of their restaurants, and
plaintiffs claimed they subsequently lost business); Vitolo v. Mentor H/S, Inc., 426
F. Supp. 2d 28, 34 (E.D.N.Y. 2006) (no standing under § 349 where the complaint
focused on the losses suffered by plaintiff (a physician) as a result of the fact that he
sustained damages removing saline breast implants since the complaint focused
“almost entirely on the losses suffered by Plaintiff and his business, rather than to
consumers or Plaintiff’s patients”).

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b. Elements Required to State a Claim
In order to state a claim under § 349, plaintiffs must prove three elements:
“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. Chem. Bank, 731 N.E.2d 608, 611(N.Y. 2000)
(finding no claim under § 349 where defendants allegedly charged excessive fees
since they were not misleading); see also Merck Eprova AG v. Gnosis S.P.A., 901 F.
Supp. 2d 436, 456 (S.D.N.Y. 2012).
As a threshold matter, the act or practice engaged in must be considered
deceptive. “Section 349 does not grant a private remedy for every improper or
illegal business practice, but only for conduct that tends to deceive consumers . . . .
It cannot fairly be understood to mean that everyone who acts unlawfully, and does
not admit the transgression, is being deceptive. Such an interpretation would
stretch the statute beyond its natural bounds to cover virtually all misconduct by
businesses that deal with consumers.” Schlessinger v. Valspar Corp., 991 N.E. 2d
190, 193 (N.Y. 2013) (finding that including a termination provision in a
maintenance contract did not tend, in itself, to deceive consumers, despite the fact
that such a provision was forbidden by another General Business Law).
Deceptive practices are considered those “likely to mislead a reasonable
consumer acting reasonably under the circumstances.” Stutman, 731 N.E.2d at
611–12 (internal quotations marks and citations omitted).

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III. DISCUSSION
Defendants argue that plaintiffs’ § 349 claims fail for four reasons: 1)
plaintiffs lack standing under § 349; 2) plaintiffs fail to state a cognizable § 349
claim as they have not alleged any “misrepresentation” by defendants; 3) plaintiffs
incorrectly interpreted the FCC regulation and order to require Equipment
providers, such as defendants, to obtain direct permission from landlords before
installation; and 4) plaintiffs cannot use § 349 as an end-run around regulations
that do not, in and of themselves, create a private right of action.
In opposition, plaintiffs gloss over the lack of standing, briefly stating that
§ 349 is not strictly confined to consumer claims; they further assert that
defendants’ contracts with consumers are intentionally misleading and therefore
fall under § 349’s ambit.
Because the Court agrees with defendants that plaintiffs’ claims are not
cognizable under § 349, it GRANTS defendants’ motion. 4
A. Plaintiffs Lack Standing
On the facts alleged, plaintiffs are not “consumers” under § 349. Nor are they
competitors in the business of providing Equipment for satellite television service.
Rather, their claim is that defendants deceived consumers (their tenants), and that
this deception in turn caused damage to the Landlords. Thus far, New York courts

The Court further agrees with defendants that plaintiffs have misstated the OTARD Regulation
and FCC Order interpreting it; there is no reference in either to the obligation of a third-party
installer to obtain permission from a landlord directly. See 47 C.F.R. § 1.4000(a)(1); 63 FR 71027-01,
1998 WL 888546. Since plaintiffs concede that they do not bring a claim under OTARD, and because
the Court finds sufficient basis for dismissal on the bases listed above, it does not engage further
with plaintiffs’ misapprehension.
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have found standing under § 349 for “consumers and competitors” and have
extended standing no further. Smokes-Spirits.Com, Inc., 911 N.E.2d at 837 (noting
that while § 349 had been extended both to consumers and competitors, “the statute
ha[s] not yet been interpreted to grant a right of action to parties not suing in either
of those capacities”) (denying standing for the City of New York based on lost tax
revenue it alleged was caused by defendant’s deceptive marketing practices). New
York courts have further clearly stated that they would “not presume an intent to
include recovery for derivative injuries within the scope of the statute in the
absence of a clear indication of such intent from the Legislature.” Blue Cross, 818
N.E.2d at 1144 (denying standing to insurance company for its derivative injury).
Here, the Landlords’ injuries are derivative to the tenants’ injuries (if any).
They claim that by virtue of defendants’ alleged deception, their tenants agreed to
installation of Equipment, and that this installation in turn injured their property.
The Court declines to adopt plaintiffs’ expansive reading of § 349 and agrees with
defendants—standing is lacking.
B. Plaintiffs Fail to State a Claim
Moreover, plaintiffs fail to state a claim under § 349. The nub of their claim
is that the contracts that tenants sign authorizing the Equipment to be installed are
materially deceptive. However, the contractual language that plaintiffs cite in their
complaint is straight-forward: the Tenant-subscriber must represent that
“DIRECTV System installation at [address] has been verbally approved by my

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landlord (or is not required pursuant to my lease or rental agreement).” (Compl.,
¶¶ 42–43.)5
The Court finds it implausible that such a contract, clearly requiring
Landlord permission, would be misleading to a “reasonable consumer.” Stutman,
731 N.E.2d at 611. Moreover, the Court concurs with defendants’ analysis that the
only potentially materially misleading statements here are those from the
Subscriber-tenants to the defendants, and not the other way around. Since a
“Section 349 violation requires a defendant to mislead [a] plaintiff in some material
way,” plaintiffs’ claim must fail. Conboy v. AT&T Corp., 241 F.3d 242, 258 (2d Cir.
2001) (emphasis added).
IV. CONCLUSION
For the reasons stated above, the defendants’ motion to dismiss plaintiffs’
N.Y.G.B.L. § 249 claim is GRANTED. The Clerk of Court is directed to terminate
the motion at ECF No. 5. Plaintiffs’ remaining claims for trespass remain live.

SO ORDERED.
Dated:

New York, New York
November 27, 2017
____________________________________
KATHERINE B. FORREST
United States District Judge

5 In their opposition, plaintiffs allege that, in fact, for the past four years defendants have used a
different and more ambiguous electronic contract; however, as this contract was neither cited nor
referenced in the original complaint, the Court does not consider it here.

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