Reyes Orellana et al v. Macy's Retail Holdings, Inc. et al
Filing
41
MEMORANDUM AND ORDER: granting in part and denying in part 28 Motion to Amend/Correct ; denying without prejudice 38 Letter Motion for Leave to File Document. In summary, leave to amend is granted with respect to (1) Orellana, Moftah, Ramirez, Perullo, Melgar, and Lema's fraud claims, to the extent they allege that Macy's misrepresented that they would be released if they paid or agreed to pay civil fines and/or sign confessions to shoplifting; (2) Orellana, Moftah, Ramirez, Peru llo, Melgar, and Ratner's GBL § 349 claims, to the extent they allege that Macy's engaged in a deceptive business practice by misrepresenting that they would be released if they paid or agreed to pay civil fines and/or sign confessions to shoplifting; and (3) Orellana, Moftah, Ramirez, Perullo, Ratner, Hoque, Nahar, Acteopan, and Osongba's "assault/battery" and false imprisonment claims. Leave to amend is also granted to the extent all claims against Palmer are with drawn. Plaintiffs' motion for leave to amend is denied with prejudice in all other respects. Plaintiffs' motion for leave to move to enforce the Supreme Court preliminary injunction, and for contempt sanctions in violation thereof, is denie d without prejudice. Plaintiffs shall file an amended class action complaint in accordance with, and within 14 days of, this Memorandum and Order. All counsel for extant parties shall thereafter appear for a status conference before this Court on Aug ust 2, 2018, in Courtroom 21A, 500 Pearl Street, New York, NY 10007, at 2:30 P.M. The Clerk of Court is directed to (1) terminate Law Officesof Palmer, Reifler and Associates, P.A. as a defendant (and amend the case caption accordingly), and (2) term inate docket numbers 28 (granted in part and denied in part) and 38 (denied without prejudice). (Signed by Judge Naomi Reice Buchwald on 7/10/2018). *** Party Law Offices of Palmer Reifler and Associates, P.A. terminated. (ama) Modified on 7/10/2018 (ama).
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
----------------------------------X
CINTHIA CAROLINA REYES ORELLANA and
SAMYA I. MOFTAH, individually and on
behalf of all similarly situated
individuals,
Plaintiffs,
MEMORANDUM AND ORDER
17 Civ. 5192 (NRB)
- against MACY’S RETAIL HOLDINGS, INC. d/b/a
MACY’S f/k/a MACY’S EAST a/k/a
MACY’S, INC.; LAW OFFICES OF PALMER,
REIFLER and ASSOCIATES, P.A.,
Defendants.
----------------------------------X
NAOMI REICE BUCHWALD
UNITED STATES DISTRICT JUDGE
Before this Court is plaintiffs’ motion for leave to amend
their first amended class action complaint against Macy’s Retail
Holdings, Inc. d/b/a Macy’s f/k/a Macy’s East a/k/a Macy’s, Inc.
(“Macy’s”).
As a mercantile establishment, Macy’s is authorized
under two separate New York statutory schemes to (1) reasonably
detain suspected shoplifters, and (2) collect civil penalties and
damages therefrom.
complaint
alleges
Plaintiffs’ proposed amended class action
that
Macy’s
has
abused
and
exceeded
authorizations by implementing them in combination.
these
According to
plaintiffs, Macy’s demands that suspected shoplifters (1) pay, or
agree to pay, civil penalties, and (2) confess to shoplifting,
while they are being detained.
Further, plaintiffs allege that
1
Macy’s falsely promises suspected shoplifters that they will be
released if they meet Macy’s demands, only to be subsequently
arrested at Macy’s behest.
Plaintiffs’ proposed amended class action complaint asserts
a variety of causes of action with respect to this conduct,
including
false
imprisonment,
consumer deception.
fraud,
abuse
of
process,
and
As we conclude that several, but not all, of
plaintiffs’ proposed causes of action state a claim for which
relief could be granted, their motion for leave to amend is granted
in part and denied in part.
However, while the issue of class
certification has not been fully briefed, we express concern that,
for several reasons, the putative class could not be certified as
it is defined in the proposed amended class action complaint.
BACKGROUND
I.
Factual Background
Plaintiffs’ proposed amended class action complaint is most
readily understood in the context of the applicable New York
statutory
law,
so
we
begin
our
background
section
with
an
explanation of those statutes.
a. Statutory Scheme
Section 218 of the New York General Business Law (“GBL
§ 218”), which codifies the common-law “shopkeeper’s privilege,”
provides
that
“[i]n
any
action
for
false
arrest,
false
imprisonment, unlawful detention . . . assault, trespass, or
2
invasion of civil rights” brought by an individual stopped at a
retail establishment for investigation or questioning concerning
“ownership of any merchandise[,] . . . it shall be a defense to
such action that the person was detained in a reasonable manner
and
for
not
more
than
a
reasonable
time
to
permit
such
investigation or questioning[,]” and that the person detaining the
individual “had reasonable grounds to believe that the person so
detained was . . . committing or attempting to commit larceny on
such premises of such merchandise.”
N.Y. Gen. Bus. Law § 218.
The purpose of GBL § 218 is “to protect merchants from false
arrest
suits
even
where
the
criminal
actions
are
eventually
dismissed,” and to help “overcome the extreme reluctance with which
merchants . . . attempt to interfere with shop-lifters.”
Jacques
v. Sears, Roebuck & Co., 30 N.Y.2d 466, 472, 285 N.E.2d 871 (1972)
(internal quotation marks omitted); see also Guion v. Associated
Dry Goods Corp. (Lord & Taylor Div.), 56 A.D.2d 798, 798, 393
N.Y.S.2d 8 (1st Dep’t 1977) (“[A]lthough store owners may not
proceed with abandon to rectify the problem [of shoplifting], they
should
not
be
deterred
from
attempting
to
apprehend
those
responsible for the theft of merchandise.”), aff’d, 43 N.Y.2d 876,
374 N.E.2d 364 (1978).
Section 11-105 of the New York General Obligations Law (“GOL
§
11-105”)
provides,
in
relevant
part,
that
“[a]n
adult
or
emancipated minor who commits larceny against the property of a
3
mercantile establishment shall be civilly liable to the operator
[thereof] in an amount consisting of,” (a) “the retail price of
the merchandise if not recovered in a merchantable condition,” up
to $1,500, and (b) “a penalty not to exceeded the greater of five
times the retail price of the merchandise,” or $75, “provided,
however, that in no event shall such penalty exceed” $500.
Gen. Oblig. Law § 11-105(5), (6).
N.Y.
Under the statute, “[t]he fact
that an operator of a mercantile establishment may bring an action
against an individual as provided in this section shall not limit
the right of such merchant to demand, orally or in writing, that
a person who is liable for damages and penalties . . . remit the
damages and penalties prior to the commencement of any legal
action.”
Id. § 11-105(8).
The Assembly and Senate bill jackets corresponding to GOL
§ 11-105’s enactment announce its purpose as “authoriz[ing] a
merchant to institute a civil cause of action for shoplifting
violations instead of relying upon a District Attorney to institute
a criminal cause of action for petty larceny.”
N.Y. Bill Jacket,
S.B. 3916/A.B. 5783, 189th Leg., 1991 Sess., ch. 724, at 4-5
(1991).
The bill jackets go on to describe GOL § 11-105’s intended
benefits as follows:
The store owner will be authorized to recover damages
against the shoplifter instead of being forced to raise
prices against the public.
Therefore, the person
4
committing the crime will bear the expense of
enforcement and litigation as opposed to having the
public at large pay higher prices for shoplifting losses
and surveillance expenses. The criminal courts will be
relieved of prosecuting these cases.
Further, this
proposal will allow most cases to be resolved through a
civil case or [out] of court settlement. Accordingly,
teenagers and others who are caught will be allowed to
resolve their shoplifting infraction without being
saddled with a criminal record.
Id.; see also id. at 101 (Letter from Hon. Eric N. Vitaliano, The
Assembly, State of New York, to Hon. Elizabeth D. Moore, Counsel
to the Governor, State of New York (Sept. 3, 1991) (noting that
retailers in states that have enacted similar provisions “have not
felt compelled to pursue criminal process as the only way to stop
the shoplifting crime wave”)).
b. Plaintiffs’ Claims and Causes of Action
Plaintiffs seek to represent a putative class of individuals
who Macy’s detained as suspected shoplifters, pursuant to GBL
§ 218 and GOL § 11-105, in its New York stores.
Their proposed
amended class action complaint describes Macy’s “loss prevention”
scheme
as
follows.
Upon
suspicion
of
shoplifting,
a
Macy’s
employee approaches a suspect and directs him to an “in-store
jail[]” “complete with private search areas, handcuffs, and jail
cells
with
adjoining
desks.”
Proposed
Amended
Complaint (“PAC”) ¶ 4, Jan. 8, 2018, ECF No. 28-2.
Class
Action
Upon detention,
the employee “perform[s] [a] full-body search[], inspect[s] the
contents of the accused shoplifter’s wallet, [and] conduct[s an]
5
interrogation[].”
Id.
Key
to
this
litigation,
the
loss
prevention employee also promises the detained shoplifter that he
will be released so long as he (1) completes a “promissory note,”
i.e., a civil demand notice,1 agreeing to pay, either immediately
or in the future, a civil penalty, and (2) signs a confession.2
id. ¶¶ 2, 4.
complaint,
See
Yet, according to the proposed amended class action
contrary
to
the
employee’s
representation,
Macy’s
instead calls the police, and the suspect is held until he is
arrested and transferred to police custody, along with a supporting
deposition prepared by a Macy’s loss prevention employee.3
See
The “promissory note” to which plaintiffs refer is a one page document
entitled “New York Civil Demand Notice Prosecuted.” Declaration of Meir Feder
(“Feder Decl.”) Ex. A, Feb. 8, 2018, ECF No. 32. The notice, described more
fully below, advises the detained shoplifter of Macy’s statutory authority to
collect damages and civil penalties, and asks him to “signify understanding and
agreement” to the damages and penalties applicable in his case. See id. The
civil demand notice, although not attached to plaintiffs’ proposed amended class
action complaint, is properly considered on this motion as being repeatedly
referenced in, and integral to, the proposed amended class action complaint.
See Chambers v. Time Warner, Inc., 282 F.3d 147, 152-54 (2d Cir. 2002).
1
2 The signed confession, labeled “Statement of admission,” is a template
containing a list of the items the detainee allegedly attempted to steal, along
with the following language: “I, [name] living at [address], make this statement
voluntarily and of my own free will and accord, without intimidation by threats
or promises, that on [date], I did take merchandise and/or cash belonging to
Macy’s valued at [value], without consent or permission and with the intent to
permanently deprive Macy’s of their property.” Feder Decl. Ex. M; see Chambers,
282 F.3d at 152-54.
3 The “supporting deposition” that Macy’s loss prevention employees are
alleged to complete and provide to the arresting officers is a one page document
labeled “Shoplifting / Trespass Supporting Deposition.” See Feder Decl. Ex. X;
Chambers, 282 F.3d at 152-54. The declarant is instructed to answer all of the
following questions (and certain sub questions): (1) “Did you observe the
defendant remove property?” (2) “Did you observe the defendant conceal
property?” (3) “If you did NOT observe the defendant remove or conceal property,
why was the defendant stopped?” (4) “Did you observe the defendant outside the
store; attempt to leave the store; or walk past more than one open register and
6
id. ¶¶ 2, 8, 29, 36, 54.
The proposed amended class action complaint asserts causes of
action against Macy’s for (1) false imprisonment, (2) abuse of
process, (3) “fraud/unjust enrichment,” (4) deceptive business
practices in contravention of New York General Business Law § 349
(“GBL § 349”), N.Y. Gen. Bus. Law § 349, (5) “assault/battery,”
and (6) deprivation of civil rights under 42 U.S.C. § 1983.
¶¶ 71-95.
PAC
Plaintiffs seek, inter alia, a “permanent injunction of
in-store demands for immediate payments, signed confessions, and
promissory notes from suspected shoplifters in Macy’s custody in
New York,” a refund of all moneys collected in custody, and money
damages “to each Plaintiff that was subjected to in-store demands.”
Id. at 12.
c. Putative Class and Lead Plaintiffs
Plaintiffs
define
the
class
they
seek
to
represent
as
consisting of “all persons who, while accused of shoplifting and
detained by Macy’s at their New York department stores, have been
or will be subjected to in-store demands for confessions of
shoplifting, and demands to pay civil penalties.”
Id. ¶ 19.
There
are eleven named plaintiffs whose interactions with Macy’s are
described below.
move to another floor in possession of concealed property without paying for
it?” (5) “Did you recover the property from the defendant?” and (6) “Is there
a prior ‘Trespass Notice’ showing that the defendant was not permitted to enter
the above-named store?” Feder Decl. Ex. X.
7
Cinthia Carolina Reyes Orellana, a 29 year old native of
Honduras, was allegedly detained at Macy’s Herald Square location
in Manhattan in July 2014, “shortly after she emerged from a
dressing room holding a few items of clothing and rode an escalator
to another floor.”
Id. ¶¶ 26-27.
Upon detention, Orellana (1)
was told “she would be released as soon as [she] signed a paper
admitting guilt and agreeing to pay Macy’s a penalty equal to five
times the price of the merchandise that was found on her,” (2)
paid $100 in cash, (3) signed a confession and civil demand notice,
but (4) was not released, and instead turned over to police
custody, supported by a deposition prepared by a Macy’s loss
prevention employee.
Id. ¶¶ 28-29; see Feder Decl. Exs. A, L.
The resulting criminal case against her was eventually dismissed.
See PAC ¶ 31.
Samya Moftah, a 53 year old native of Egypt, was allegedly
detained at Macy’s Herald Square location in July 2015, after she
was found in possession of previously purchased merchandise.
¶¶ 32-33.
Id.
Upon detention, and despite protestations of innocence,
Moftah (1) was told she would be released as soon as she paid a
$500 fine, (2) paid $500 via credit card, (3) signed a confession
and civil demand notice, but (4) was not released, and instead
turned over to police custody, supported by a deposition prepared
by a Macy’s loss prevention employee.
Decl. Exs. B, M.
Id. ¶¶ 35-36; see Feder
The resulting criminal case against her was
8
eventually dismissed.
See PAC ¶ 37.
Deyanira Ramirez, a 61 year old of Columbian descent who
speaks “very limited English,” was allegedly detained at Macy’s
Roosevelt Avenue location in Queens in April 2017, “on suspicion
of exiting the store without paying for two chemises and two girl’s
dresses.”
Id. ¶ 38.
Upon detention, Ramirez (1) was “ordered to
sign some papers in order to be released,” (2) signed a confession
and civil demand notice, (3) was not released, and instead turned
over to police custody, and (4) was told that she owed $500 to
Macy’s “and that she had to pay the full amount before making a
court appearance or that otherwise the Judge would order her to
pay three times as much.”
Q.
The
resulting
dismissed.
Id. ¶¶ 39-41; see Feder Decl. Exs. F,
criminal
case
against
her
was
eventually
See PAC ¶ 42.
Anthony Perullo, 50 years old, was allegedly detained at
Macy’s Herald Square location in January 2016 “on suspicion of
taking bags of T-shirts, socks and underwear that he did not intend
to pay for.”
Id. ¶ 43.
Upon detention, Macy’s employee Herschel
Nurse told Perullo that he would be arrested unless he paid $500
on his Macy’s credit card.
supervisor
vetoed
the
See id. ¶ 45.
proposal
and
“However, Nurse’s
Perullo,”
who
confession and civil demand notice, “was arrested.”
Decl. Exs. E, O.
signed
a
Id.; Feder
The resulting criminal case against him was
eventually dismissed.
See PAC ¶ 46.
9
Dean Melgar, 69 years old, was allegedly detained at Macy’s
Avenue U location in Brooklyn in October 2013 “on suspicion of
possessing several neckties that he did not intend to pay for.”
Id. ¶ 47.
Upon detention, Melgar, “despite vigorous protests that
he did not intend to steal the neckties,” (1) “was told that if he
signed a paper which admitted to ‘making a mistake,’ and paid
[Macy’s] $500 with his Macy’s credit card, he would be released,
and that his money would eventually be refunded after his court
appearance,” (2) signed a confession and civil demand notice, (3)
paid $500, but (4) was arrested.
Exs. C, N.
See id. ¶¶ 48-49; Feder Decl.
The resulting criminal case against him was eventually
dismissed, but his money was not refunded.
See PAC ¶ 49.
Maria Lema, a 57 year old native of Ecuador, was employed as
a custodian at Macy’s Fulton Street location in Brooklyn when she
was allegedly detained by security manager Chance Linden, in
December
2012,
“after
being
observed
putting
inexpensive items, into her apron pocket.”
three
small,
Id. ¶¶ 51-52.
Upon
detention, Lema (1) was instructed, through an interpreter, that
she would be released if she signed a confession to stealing from
Macy’s, (2) signed a civil demand notice and confession, (3) paid
$415, but (4) was arrested “despite her protests that she had been
lied to.”
Id. ¶¶ 52-53; see Feder Decl. Exs. K, V.
subsequent
arraignment,
“her
prosecutor
served
a
At her
supporting
deposition prepared and executed by Mr. Linden, and declared that
10
the case was ready to proceed to trial.”
PAC ¶ 54.
Ann Ratner, 68 years old, was allegedly detained at Macy’s
Herald Square location in November 2014 after she was found “in
possession of a small, costly bottle of perfume.”
Id. ¶ 55.
Upon
detention, Ratner (1) was told, “It will be easier for you if you
pay us $500 right now,” (2) signed a civil demand notice and
confession, (3) paid $500 as she “didn’t want to rock the boat,”
and (4) was arrested.
She
eventually
Id. ¶¶ 56-57; see Feder Decl. Exs. D, P.
pleaded
guilty
to
sentenced to conditional discharge.
disorderly
conduct
and
was
See PAC ¶ 58.
Shamsun Nahar and her husband, Mohammad Hoque, were allegedly
detained in January 2017 after they were observed “placing gloves
and jewelry into shopping bags and attempting to leave the store
without paying for them.”
Id. ¶¶ 59-60.
Upon separate detention,
each (1) was subjected to demands to sign confessions and agree to
make $500 payments (and, in Nahar’s case, was told “that the
penalty would increase if it was not paid before her appearance in
Criminal Court”), (2) signed a civil demand notice and confession,
and (3) was arrested.
H, R, S.
Id. ¶¶ 59, 61-62; see Feder Decl. Exs. G,
Later that same month, Nahar’s case was adjourned in
contemplation of dismissal, and Hoque pleaded guilty to disorderly
conduct and was sentenced to a conditional discharge, a $120 fine,
and community service.
See PAC ¶¶ 63-64.
Margarita Acteopan, 36 years old, was allegedly detained at
11
Macy’s Herald Square location in April 2016 “while wearing a blouse
and sweater she had tried on.” Id. ¶ 65. Upon detention, Acteopan,
who speaks limited English, was required to sign a civil demand
notice and confession.
Id. ¶ 66; see Feder Decl. Exs. I, T.
Upon
release, Macy’s contacted Acteopan at home, and told her “that if
she did not pay Macy’s $500, the amount would increase by $500
every week, and that if she didn’t pay, they would come to her
home and arrest her.”
PAC ¶ 67.
Atchade Osongba, 50 years old, was allegedly detained at
Macy’s Herald Square location in February 2016, “in possession of
a suit.”
Id. ¶ 68.
English well,
Upon detention, Osongba, who does not read
(1) was presented with a civil demand notice and
confession, and told that “if he signed he would be let go,” but
(2) declined to sign, and (3) was arrested.
Feder Decl. Exs. J, U.4
dismissed.
II.
Id. ¶¶ 69-70; see
His resulting criminal case was eventually
PAC ¶ 70.
Procedural Background
a. Original State Court Action
Orellana commenced this action by filing a notice and summons
in New York State Supreme Court in July 2015.
See ECF No. 1-1.
She thereafter filed her class action complaint in November 2015,
4 Osongba’s unsigned confession and civil demand notice spell his last
name “Assongba.” See Feder Decl. Exs. J, U.
12
naming as defendants Macy’s and the Law Offices of Palmer, Reifler
and Associates, P.A. (“Palmer”).
Orellana
initially
imprisonment/arrest”
asserted
and
See Compl. at 1, ECF No. 1-2.
causes
unjust
of
action
enrichment
for
against
“false
both
defendants, and abuse of process and “assault/battery” against
Macy’s alone.
See id. ¶¶ 144-60.
The complaint also sought a
declaration that GOL § 11-105 was “void for vagueness” under the
New York State and Federal Constitutions.5
See id. ¶¶ 161-62.
Macy’s moved to dismiss the class action complaint, which the
Supreme Court in a June 2016 Order denied in all but one respect;
Orellana’s claim challenging the constitutionality of GOL § 11105 was “severed and dismissed.”
See Order at 3-4, Orellana v.
Macy’s Retail Holdings, Inc., No. 453060/2015 (N.Y. Sup. Ct. June
24, 2016), ECF No. 1-7.
The Supreme Court concluded that “the
plain language of GOL § 11-105” is not “vague and is valid on its
face, and does not violate an individual’s rights who is subject
to the penalties enumerated therein.”
Id. at 4.
Although finding the statute constitutional,
the Supreme
Court two weeks later granted Orellana’s motion to preliminarily
The initial class action complaint alleged that Orellana sought to
“represent a certified . . . class consisting of”: (1) “All Macy’s customers
residing within the NY State who were detained by Macy’s loss prevention
employees and subsequently have paid monetary civil penalties either directly
to defendant Macy’s, and/or to defendant Palmer upon receiving a demand letter
from Palmer[;]” and (2) “All Macy’s customers residing within the NY State who
were detained by Macy’s loss prevention employees in an unreasonable time and
manner in violation of GBL § 218.” Compl. ¶ 12.
5
13
enjoin Macy’s from “demanding, requesting, collecting, receiving,
or accepting any payments in connection with GOL § 11-105, from
suspected shoplifters while they are detained under Macy’s custody
pursuant to GBL § 218.”
Orellana v. Macy’s Retail Holdings, Inc.,
36 N.Y.S.3d 547, 556 (Sup. Ct. 2016).
The Supreme Court explained that Macy’s is “empowered” to use
GBL § 218 and GOL § 11-105 “as a shield, and as a form of protection
of its establishment and merchandise.”
Id. at 549-50.
However,
Macy’s had “taken the authority granted to it under GBL § 218 to
detain an individual for shoplifting, and ha[d] combined that with
the authority it is given under GOL § 11-105 to collect civil
penalties from an individual suspected of shoplifting.
These
statutes as allegedly applied by [Macy we]re being used as a double
edged sword, instead of a shield.”
Id. at 552.
“It appears that
Macy’s is detaining, investigating, eliciting a confession and
recovering civil penalties at the time the suspected shoplifter is
in Macy’s custody, and then instead of releasing the individual,
continuing to detain them and pursue criminal punishment.”
553.
Id. at
The Supreme Court expressed particular concern that, under
Macy’s exercise of GBL § 218 and GOL § 11-105, “[a] suspected
shoplifter is given no opportunity to otherwise object, have a
hearing,
or
receive
guidance
from
counsel
before
signing
a
confession to shoplifting, and/or agreeing to pay civil penalties
because the civil penalties are being demanded at the time the
14
individual is under detention by Macy’s.”
Id. at 552-53.
“This
is not what is contemplated under the statute and these actions by
Macy’s, a private actor, go beyond what the legislature envisioned
when it enacted GBL § 218 and GOL § 11-105.”
Id. at 553.
Accordingly, Macy’s was “enjoined from demanding confessions
and payments while the [suspected shoplifter] is under detention”
but not from “proceeding to demand payment through a collection
effort by its attorneys, or through a civil action, after the
suspected shoplifter has been released.”6
Id. at 554-55.
b. First Amended Class Action Complaint and Removal
In September 2016, having received leave to do so, see id. at
555, plaintiffs filed their first amended class action complaint,
which (1) added a new lead plaintiff, Moftah, (2) asserted a new
cause of action against both Macy’s and Palmer for “deprivation of
civil
rights”
under
42
U.S.C.
§
definition of the putative class.7
1983,
and
(3)
modified
the
See Amended Complaint (“Am.
6
The Orellana court described the scope of the injunction differently
throughout the opinion. While it consistently held that Macy’s was enjoined
from “demanding payment of civil penalties while a suspected shoplifter is
detained in Macy’s custody,” see, e.g., 36 N.Y.S.3d at 556, it was inconsistent
as to whether Macy’s was also prevented from demanding that suspected
shoplifters sign confessions while detained, compare id., with id. at 554.
7 Orellana and Moftah’s first amended complaint outlined “a certified
class consisting of”: “Class 1: All individuals whom defendants detained,
arrested,
imprisoned,
threatened
with
prolonged
detention,
arrest,
imprisonment, and/or criminal prosecution, promised immediate release from such
detention, arrest, or imprisonment, or placed under any kind of duress or
coercion and who subsequently paid or agreed to pay penalties to defendants in
connection with GOL [§] 11-105 [along with a]ll individuals who paid or agreed
to pay penalties to defendants in connection with GOL [§] 11-105 while such
individuals were confined in holding cells against their will under threat of
15
Compl.”), ECF No. 1-3.
While Macy’s answered the amended class
action complaint, Palmer moved to dismiss the claims against it,
which
the
Supreme
Court
granted
with
respect
to
the
false
imprisonment and unjust enrichment claims, but not § 1983 claim.
See
Order,
Orellana
v.
Macy’s
Retail
Holdings,
Inc.,
453060/2015 (N.Y. Sup. Ct. Mar. 29, 2017), ECF No. 1-10.
thereafter,
plaintiffs
filed
a
motion
for
nationwide
No.
Soon
class
certification,8 after which Macy’s removed the action to this Court
pursuant to the Class Action Fairness Act of 2005, 28 U.S.C.
§ 1332(d).
See ECF No. 1.
c. The Instant Motion
Now pending is plaintiffs’ motion, pursuant to Federal Rules
of Civil Procedure 15(a), 20(a)(1), 21, and 81(c)(2),9 to amend
their operative first amended class action complaint to (1) add
prolonged detention or imminent criminal prosecution;” and “Class 2: All
individuals whom defendants falsely apprehended, detained, or imprisoned in an
unreasonable time and manner in violation of GBL § 218.” Am. Compl. ¶ 13.
8 Plaintiffs’ class certification motion sought to certify two “nationwide
classes”: (1) “All individuals who, while detained by Defendant Macy’s, have
been coerced into signing confessions and promises to make payments of civil
penalties to Defendants. The class includes Plaintiffs and all individuals who
paid civil penalties to Defendant Macy’s in connection with GOL [§] 11-105 while
being held in Macy’s detention, and those individuals who paid civil penalties
after being released from Macy’s detention upon signing a Statement of Admission
and/or Civil Demand Notice while being held in Macy’s detention;” and (2) “All
individuals who are ultimately not found to be in possession of any unpaid-for
Macy’s merchandise that the individual intended to steal, or in possession of
any fraudulently purchased Macy’s merchandise.”
Pl.’s Class Cert. Mot. 13,
June 20, 2017, ECF No. 1-4.
9
It is unclear why plaintiffs have moved pursuant to Federal Rule of
Civil Procedure 81(c)(2), which simply provides that “[a]fter removal,
repleading is unnecessary unless the court orders it.” Fed. R. Civ. P. 81(c)(2).
16
nine new lead plaintiffs (Ramirez, Perullo, Melgar, Lema, Ratner,
Nahar, Hoque, Acteopan, and Osongba), (2) withdraw all claims
against Palmer, (3) assert new causes of action against Macy’s for
fraud and deceptive business practices under GBL § 349, (4) modify
the pre-existing causes of action, and (5) redefine the contours
of the class.10
DISCUSSION
I.
Standard of Review
Federal Rule of Civil Procedure 15(a)(2) provides that leave
to amend shall be “freely give[n] . . . when justice so requires.”
Fed. R. Civ. P. 15(a)(2).
Whether to grant leave, however, is
ultimately “within the sound discretion of the district court.”
McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 200 (2d Cir.
2007) (citing Zahra v. Town of Southold, 48 F.3d 674, 686 (2d Cir.
1995)).
“A district court has discretion to deny leave for good
reason, including futility, bad faith, undue delay, or undue
prejudice to the opposing party.”
U.S. 178, 182 (1982)).
Id. (citing Foman v. Davis, 371
The same standard applies when a party
seeks to amend a pleading to add or remove parties pursuant to
Federal Rule of Civil Procedure 21. See, e.g., Michalek v. Amplify
10 After the instant motion was fully briefed, plaintiffs filed a letter
motion seeking leave to move to enforce the Supreme Court’s preliminary
injunction, and for contempt sanctions in violation thereof, which Macy’s
opposed. See ECF Nos. 36-38. Having concluded that the issue is complex and
having concluded that it would be better addressed, if at all, following the
issuance of this opinion, we deny plaintiffs leave without prejudice.
17
Sports & Entm’t LLC, No. 11 Civ. 508(PGG), 2012 WL 2357414, at *1
(S.D.N.Y. June 20, 2012).
An amendment is “futile” if it would not withstand a motion
to
dismiss
under
Federal
Rule
of
Civil
Procedure
12(b)(6).
Dougherty v. Town of N. Hempstead Bd. of Zoning Appeals, 282 F.3d
83, 88 (2d Cir. 2002) (citing Ricciuti v. N.Y.C. Transit Auth.,
941 F.2d 119, 123 (2d Cir. 1991)).
Because proposed amendments
are held to the Rule 12(b)(6) standard, leave to amend may be
denied if plaintiffs fail to allege “enough facts to state a claim
for relief that is plausible on its face.”
Fortis Bank S.A./N/V/
v. Brookline Fin. LLC, No. 10 Civ. 894 (NRB), 2011 U.S. Dist. LEXIS
47901, at *9 (S.D.N.Y. Mar. 22, 2011) (quoting Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007)). Similarly, in a proposed class
action, leave to amend may be denied if the amended class could
not be certified. See, e.g., Duling v. Gristede’s Operating Corp.,
265 F.R.D. 91, 104 (S.D.N.Y. 2010).
In opposition to plaintiffs’ motion for leave to amend, Macy’s
does not argue that the proposed amended class action complaint is
the product of bad faith or undue delay, nor does Macy’s suggest
that granting the motion would cause them undue prejudice.
agree.
We
Instead, Macy’s argues, and this opinion concerns, whether
granting plaintiffs leave to amend would be futile because the
claims asserted therein would not survive a motion to dismiss
and/or a class certification motion.
18
Specifically, Macy’s argues that plaintiffs’ proposed fraud,
unjust enrichment, GBL § 349, abuse of process, and § 1983 claims
do not state a claim for which relief could be granted.
Macy’s
does not, however, challenge the legal sufficiency of plaintiffs’
false arrest and “assault/battery” claims, but does assert that
Melgar and Lema’s causes of actions thereunder are time-barred.
Finally, Macy’s contends that plaintiffs’ class claims are futile
as plaintiffs could not certify the putative class as it is defined
in the proposed amended class action complaint.11
We consider
these arguments seriatim.
II.
Failure to State a Claim for Which Relief Could Be
Granted
To state a claim for which relief could be granted under Rule
12(b)(6), a complaint must include “enough facts to state a claim
that is plausible on its face.”
Bell Atl., 550 U.S. at 570.
claim
when
has
facial
plausibility
the
plaintiff[s]
“A
plead[]
factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct alleged.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
If plaintiffs fail
to “nudge[] their claims across the line from conceivable to
plausible, their complaint must be dismissed.”
Bell Atl., 550
11
Both Macy’s and Palmer consent to the amendment of plaintiffs’
complaint to the extent it withdraws all claims against Palmer. This aspect of
plaintiffs’ motion is granted.
19
U.S. at 570.
In applying this standard, “all factual allegations in the
complaint are accepted as true and all inferences are drawn in the
plaintiff[s’] favor.”
Littlejohn v. City of New York, 795 F.3d
297, 306-07 (2d Cir. 2015) (citing Ofori-Tenkorang v. Am. Int’l
Grp., Inc., 460 F.3d 296, 300 (2d Cir. 2006)).
However, “we give
no effect to assertions of law or legal conclusions couched as
factual allegations.”
Anderson News, L.L.C. v. Am. Media, Inc.,
680 F.3d 162, 185 (2d Cir. 2012) (quoting Starr v. Sony BMG Music
Entm’t, 592 F.3d 314, 321 (2d Cir. 2010)).
a. Fraud
Plaintiffs
allege
that
Macy’s
defrauded
them
by
(1)
“fraudulently simulating or assuming the role of law enforcement,”
(2) “falsely promising to release its detainees if they pay or
agree to pay civil penalties,” and (3) “falsely threatening them
with increased penalties if they do not pay before they appear in
court and have access to counsel.”
PAC ¶¶ 82-83.
To state a claim for fraud under New York law, a plaintiff
must allege: “(1) a material misrepresentation or omission of fact;
(2) which the defendant knew to be false; (3) which the defendant
made with the intent to defraud; (4) upon which the plaintiff
reasonably relied; and (5) which caused injury to the plaintiff.”
Fin. Guar. Ins. Co. v. Putnam Advisory Co., 783 F.3d 395, 402 (2d
Cir. 2015) (citing Crigger v. Fahnestock & Co., 443 F.3d 230, 234
20
(2d Cir. 2006)).
In asserting a fraud claim, plaintiffs must
satisfy the heightened pleading standards of Federal Rule of Civil
Procedure 9(b) by “stat[ing] with particularity the circumstances
constituting
fraud
or
mistake.”
Fed.
R.
Civ.
P.
9(b).
Specifically, allegations of fraud must “(1) detail the statements
(or omissions) that the plaintiff contends are fraudulent, (2)
identify the speaker, (3) state where and when the statements (or
omissions) were made, and (4) explain why the statements (or
omissions) are fraudulent.”
Fin. Guar., 783 F.3d at 402-03
(internal quotation marks omitted) (quoting Eternity Glob. Master
Fund Ltd. v. Morgan Guar. Tr. Co. of N.Y., 375 F.3d 168, 187 (2d
Cir. 2012)).
We apply these standards to the three allegedly
fraudulent acts seriatim.
i.
Simulating or Assuming the Role of Law Enforcement
Plaintiffs first assert that Macy’s “extorts civil penalties
from suspected shoplifters by fraudulently simulating or assuming
the role of law enforcement.”
PAC ¶ 82.
This is so, they allege,
because Macy’s “employs all the trappings of police authority —
threat of handcuffs, jail cells, and/or full-body searches” as
“potent devices for bullying and frightening their detainees.”
Id. ¶ 84.
This particular fraud claim fails for several reasons, most
importantly because plaintiffs have not identified any sort of
misrepresentation.
While Macy’s allegedly used “handcuffs,” “jail
21
cells,” and “full-body” searches, there is no allegation that
Macy’s
personnel
identified
themselves
as
law
enforcement
officers, or made any statements to imply that they were acting in
a law enforcement capacity.
Further, there is no indication that any of the plaintiffs
relied upon the “trappings of police authority” to their detriment.
Not a single plaintiff has implied that he acted on the basis of
falsely believing, as a result of Macy’s alleged use of handcuffs,
jail cells, and full-body searches, that the loss prevention
personnel were in fact law enforcement officers.
ii.
False Promises of Release Upon Payment and Confession
Second,
plaintiffs
allege
that
Macy’s
loss
prevention
officers “falsely promis[e] to release its detainees if they pay
or agree to pay civil penalties.”
Id. ¶ 83.
Elsewhere in the
proposed amended class action complaint, plaintiffs assert that
their release was falsely conditioned not only on paying or
agreeing to pay a civil penalty, but also to signing a statement
confessing to the offense.
See, e.g., id. ¶ 18.
It is clear that Orellana, Moftah, Ramirez, Perullo, Melgar,
Lema, and Osongba have alleged an affirmative misrepresentation.
All allege that they were told that if they signed a civil demand
notice and paid, or agreed to pay, a civil penalty, and/or signed
a confession, they would be released.
See id. ¶¶ 28 (Orellana),
36 (Moftah), 39 (Ramirez) 45 (Perullo), 48 (Melgar), 52 (Lema), 69
22
(Osongba).
Yet they were instead subsequently held until the
police arrived to arrest them.
See id. ¶¶ 29 (Orellana), 36
(Moftah), 41 (Ramirez) 45 (Perullo), 49 (Melgar), 53 (Lema), 69
(Osongba).
The other plaintiffs, however, have not alleged facts
to support this assertion.
Nahar and Hoque were instructed that
they owed Macy’s $500, but not that they would be released if they
made payment.
See id. ¶¶ 61-62.
Ratner was simply told, “It will
be easier for you if you pay us $500 right now.” Id. ¶ 55 (internal
quotation marks omitted).
paper
in
the
store
which
And Acteopan was “required to sign a
she
believed
was
an
admission
to
shoplifting, and an agreement to pay a $500 penalty,” but not told
that she would be released if she did so.
Id. ¶ 66.
Moreover,
Acteopan was subsequently released.
Plaintiffs have also adequately alleged knowledge of the
falsity of the representation because the suspects were already
being held for the police at the time the statement was made.
See
id. ¶ 2.
Where plaintiffs have failed to explicitly allege that Macy’s
acted with an intent to defraud, the issue becomes whether the
proposed amended class action complaint may be read to implicitly
allege that element.
See United Merch. Wholesale, Inc. v. IFFCO,
Inc., 51 F. Supp. 3d 249, 269 (E.D.N.Y. 2014).
To satisfy this
requirement, a plaintiff must “allege facts that give rise to a
strong inference of fraudulent intent,” Acito v. IMCERA Grp., Inc.,
23
47 F.3d 47, 52 (2d Cir. 1995), either “(a) by alleging facts to
show that [the] defendant[] had both motive and opportunity to
commit fraud, or (b) by alleging facts that constitute strong
circumstantial evidence of conscious misbehavior or recklessness.”
Shields v. Citytrust Bancorp, Inc., 25 F.3d 1124, 1128 (2d Cir.
1994).
Plaintiffs have alleged that Macy’s had the motive and
opportunity to commit fraud.
Because confessions, payments, and
agreements to pay were obtained “before [plaintiffs] appear[ed] in
court and ha[d] access to counsel,” PAC ¶ 83, Macy’s had the motive
to defraud.
And because plaintiffs were detained, in a cell,
sometimes handcuffed, and in certain instances without access to
their belongings, see, e.g., id. ¶¶ 4, 34, 39, 44, they were eager
to
be
released
from
Macy’s
custody,
supplying
the
requisite
opportunity.
Plaintiffs have also adequately alleged their justifiable
reliance on Macy’s misrepresentations based on the circumstances
in which they were made.
In determining whether a plaintiff
reasonably relied on an alleged misrepresentation, courts consider
“the entire context of the transaction, including factors such as
its complexity and magnitude, the sophistication of the parties,
and the content of any agreements between them.”
Emergent Capital
Inv. Mgmt., LLC v. Stonepath Grp., Inc., 343 F.3d 189, 195 (2d
Cir. 2003) (citing Lazard Freres & Co. v. Protective Life Ins.
Co., 108 F.3d 1531, 1541-43 (2d Cir. 1997)).
24
According to the New
York Court of Appeals, where “facts represented are not matters
peculiarly within the party’s knowledge, and the other party has
the means available to him of knowing, by the exercise of ordinary
intelligence, the truth or the real quality of the subject of the
representation, he must make use of those means, or he will not be
heard to complain that he was induced to enter into the transaction
by misrepresentations.”
Danann Realty Corp. v. Harris, 5 N.Y.2d
317, 322, 157 N.E.2d 597 (1959) (quoting Schumaker v. Mather, 133
N.Y. 590, 596, 30 N.E. 755 (1892)).
inducement
context,
representation
agreement.”
that
may
In the parallel fraudulent
“a
party
not
is
specifically
justifiably
disclaimed
in
rely
a
on
a
written
Passelaigue v. Getty Images (US), Inc., No. 16-CV-
1362 (VSB), 2018 WL 1156011, at *3 (S.D.N.Y. Mar. 1, 2018) (citing
Dall. Aerospace, Inc. v. CIS Air Corp., 352 F.3d 775, 785 (2d Cir.
2003)); see Meadowlands Invs., LLC v. CIBC World Mkts. Corp., No.
04 Civ. 7328(DAB), 2005 WL 2347856, at *5 (S.D.N.Y. Sept. 22,
2005); Dandong v. Pinnacle Performance Ltd., No. 10 Civ. 8086(LBS),
2011 WL 5170293, at *16 (S.D.N.Y. Oct. 31, 2011) (noting that the
elements of fraud and fraudulent inducement claims under New York
law are “the same”), aff’d in part, remanded on other grounds sub
nom. Leng v. Pinnacle Performance Ltd., 474 F. App’x 810 (2d Cir.
2012) (summary order).
Plaintiffs
relied
on
statements
made
by
authoritative
figures, Macy’s loss prevention employees, who were responsible
25
for leading them off the sales floor, detaining them, handcuffing
them,
locking
them
in
a
jail
cell,
depriving
them
of
their
possessions, and subjecting them to a body search.
See PAC ¶ 4.
Further,
particularly
none
of
the
individual
plaintiffs
are
sophisticated, especially in comparison to a large corporation
like Macy’s, and several are not from the United States and/or
several speak only limited English.
38, 51-52, 70.
See, e.g., id. ¶¶ 7, 26, 32,
That a detainee in an environment that is, by
plaintiffs’ accounts, so unpleasant and coercive by Macy’s own
design would rely upon an authoritative figure’s representation
that he could be released so long as he acceded to his detainer’s
demands is entirely justifiable.
Macy’s,
however,
argues
that
plaintiffs
could
not
have
justifiably relied upon the alleged misrepresentation because it
was directly contradicted by language in the civil demand notices
which all of the plaintiffs other than Osongba contemporaneously
acknowledged receiving.
in particular: (1)
Macy’s points to the following language
“This claim is totally separate from any
criminal punishment or penalties arising from this incident;” (2)
“Paying the civil demand fee is not in any way related to criminal
punishment;” and (3) in bold face, “Macy’s intends to criminally
prosecute this case and you will be referred for prosecution,
regardless of whether or not we collect any civil demand payment
26
at
this
time.”12
Feder
Decl.
Ex.
A.
According
to
Macy’s,
plaintiffs simply needed to read the plain language of the civil
demand notice to understand that they would be arrested regardless
of whether they paid or agreed to pay a civil penalty and/or
confessed to shoplifting.
We disagree.
The civil demand notice can be read to inform the detainee
that the collection (or non-collection) of civil penalties is
separate and apart from any criminal proceedings that Macy’s
intends to initiate.
The notice might even be read as affording
plaintiffs notice, through use of the language
“you will be
referred for prosecution,” that they will be arrested by police.
But nothing in the notice suggests that plaintiffs will be arrested
at that time, as opposed to being released and only subsequently
arrested.
In fact, the language in the notice explaining that the
civil penalty is “totally separate from any criminal punishments
or
penalties
arising
from
this
incident,”
militates
against
reading the notice as advising plaintiffs that they will be
arrested
immediately
thereafter.
Plaintiffs
may
well
have
believed, given Macy’s alleged promises of release, as well as the
defined separation between the civil and criminal proceedings,
that
they
would
be
released
from
Macy’s
detention
and
12
At some point between July 2015, when Moftah was detained, and January
2016, when Perullo was detained, the civil demand notice was modified, and the
words “at this time” omitted. Compare Feder Decl. Ex. B, with id. Ex. E.
27
“separate[ly]” contacted by law enforcement using the addresses
they provided Macy’s in their signed confession forms.
Finally, all but Osonbga allegedly suffered damages by (1)
signing a confession that could subject them to criminal liability,
(2) paying civil penalties, and/or (3) agreeing to pay civil
penalties.13
Osongba “declined to sign.”
PAC ¶ 70.
Accordingly, Orellana, Moftah, Ramirez, Perullo, Melgar, and
Lema have stated an actionable claim for fraud with respect to
being assured that they would be released if they paid or agreed
to pay civil fines and/or signed confessions.
iii. Threats of Increased Civil Penalties
Finally,
plaintiffs
allege
that
Macy’s
loss
prevention
personnel “falsely threaten[] them with increased penalties if
they do not pay before they appear in court and have access to
13
Macy’s argues that, by signing and initialing the civil demand notice,
plaintiffs merely acknowledged receipt of the notice, but did not actually
commit to making any payments. We disagree. Detained plaintiffs were allegedly
instructed to initial next to, inter alia, the following statements to “signify
understanding and agreement”: “If the entire civil demand fee is not paid within
3 days, a letter may be mailed to your home address demanding the amount of the
civil demand fee we will be seeking;” “after being released, you may pay at any
store register or use one of the payment options below to settle this civil
claim within 3 days to avoid any further civil action;” and “I have received a
copy of the State civil demand statute, payment envelope, and flyer.” Feder
Decl. Ex. F (emphasis added). Finally, before signing at the bottom, plaintiffs
were provided a list of different payment options: “Online/Pay Pal,” “Phone,”
“Mail,” or “Store.” Id. In other words, plaintiffs signed forms pursuant to
which they “underst[ood] and agree[d]” that they were to make payments upon
release from detention, as well as the consequences of failing to do so
expeditiously.
Drawing all inferences in the plaintiffs’ favor, we read
plaintiffs’ signatures and initials thereof as agreeing to pay civil penalties
in the future. See Crawford v. Recovery Partners, No. 12 Civ. 8520, 2014 WL
1695239, at *5 (S.D.N.Y. Apr. 28, 2014) (citing Weixel v. Bd. of Educ., 287
F.3d 138, 145 (2d Cir. 2002)).
28
counsel.”
Id. ¶ 83.
Here, Ramirez, Nahar, and Acteopan have alleged an actionable
misstatement; each was allegedly informed that she would be subject
to penalties in excess of those authorized by GOL § 11-105 if she
failed to pay what was currently owed before making a court
appearance.
See id. ¶¶ 40 (Ramirez), 62 (Nahar), 67 (Acteopan).
Their claims fail, however, because neither Ramirez, Nahar,
nor Acteopan allege that they actually relied, reasonably or
otherwise, on this representation, or that they suffered any
resulting
injury.
There
is
no
allegation
that,
in
fear
of
incurring additional penalties, plaintiffs fulfilled their civil
demand obligations prior to their court appearance, or conducted
themselves any differently because they believed the penalties
would increase if they failed to timely pay.
In fact, the proposed
amended class action complaint does not even allege that Ramirez,
Nahar, or Acteopan ever made a civil demand payment.
Further,
even had plaintiffs relied on the misrepresentation, the reliance
would not have been reasonable as a matter of law.
demand
notice
that
Ramirez,
Nahar,
and
Acteopan
The civil
acknowledged
receiving clearly stated the applicable civil penalties. See Feder
Decl. Exs. F (Ramirez), H (Nahar), I (Acteopan).
The notice
explained that GOL § 11-105 “provides that a person who commits
larceny against the property of a mercantile establishment shall
be civilly liable to the merchant for the retail price of damaged
29
or unrecovered merchandise, up to $1500, plus a penalty of 5 times
the retail price of the merchandise or $75, whichever is greater,
but not to exceed $500.”
Id.
Nahar and Acteopan acknowledged
with their initials that the “[t]otal [a]mount of civil damages
New York law allows in this incident,” or “Penalty + Damages,” was
$500. See id. Exs. H, I. And Ramirez initialed next to a statement
that, perhaps by accident, stated the “total amount” was $0.
See
id. Ex. F. Given that plaintiffs were instructed in plain language
as to what New York law authorized Macy’s to collect, as well as
the
applicable
maxima
in
their
cases,
they
could
not
have
reasonably relied on a statement that the civil penalties would
increase
if
appearances.14
not
satisfied
prior
to
their
criminal
court
See Wash. Capital Ventures, LLC v. Dynamicsoft,
Inc., 373 F. Supp. 2d 360, 365 (S.D.N.Y. 2005) (“New York law
clearly conditions fraud on the reasonability of the plaintiff’s
reliance on a material misrepresentation, which in turn cannot be
established when a party fails to read an unambiguously-worded
agreement.”).
b. Unjust Enrichment
Plaintiffs next contend that Macy’s is liable for unjust
enrichment because the civil penalties “were obtained wrongfully,
14 Albeit not an actionable misstatement, Macy’s threat to increase civil
penalties, if made, contributes to the inherently coercive environment that
renders reasonable plaintiffs’ reliance on other of Macy’s misrepresentations.
30
and as such it is only just that Macy’s return the moneys that
they collected from Plaintiffs and the prospective class members.”
PAC ¶ 84.
To state a claim for unjust enrichment under New York law, a
plaintiff must show “(1) that the defendant benefitted; (2) at the
plaintiff’s expense; and (3) that equity and good conscience
require restitution.”
Choi v. Tower Research Capital LLC, 890
F.3d 60, 69 (2d Cir. 2018) (quoting Kaye v. Grossman, 202 F.3d
611, 616 (2d Cir. 2000)).
Yet “unjust enrichment is not a catchall
cause of action to be used when others fail. . . .
An unjust
enrichment claim is not available where it simply duplicates, or
replaces, a conventional contract or tort claim.”
Corsello v.
Verizon N.Y., Inc., 18 N.Y.3d 777, 790-91, 967 N.E.2d 1177 (2012);
see Alce v. Wise Foods, Inc., No. 17 Civ. 2402 (NRB), 2018 WL
1737750, at *11-12 (S.D.N.Y. Mar. 27, 2018).
Here, plaintiffs’ unjust enrichment claim merely duplicates
their “conventional” fraud claim.
civil
penalties
from
See PAC ¶¶ 82 (“Macy’s extorts
suspected
shoplifters
by
fraudulently
simulating or assuming the role of law enforcement.” (emphasis
added)); 83 (“Macy’s compounds the abuse of the criminal process
by falsely promising to release its detainees if they pay or agree
to pay civil penalties, and by falsely threatening them with
increased penalties if they do not pay before they appear in court
and
have
access
to
counsel.”
(emphasis
31
added)).
In
fact,
plaintiffs’
third
Enrichment.”
cause
Id. at 10.
of
action
is
labeled
“Fraud/Unjust
Accordingly, plaintiffs’ proposed unjust
enrichment claim is futile.
See Weisblum v. Prophase Labs, Inc.,
88 F. Supp. 3d 283, 296-97 (S.D.N.Y. 2015) (dismissing unjustenrichment claims as duplicative of tort claims, including fraud);
Allstate Ins. Co. v. Nazarov, No. 11-CV-6187(PKC)(VMW), 2015 WL
5774459, at *16 (E.D.N.Y. Sept. 30, 2015) (same).15
c. GBL § 349
Plaintiffs allege that Macy’s violated New York’s prohibition
on deceptive business practices, GBL § 349, by (1) “[i]imprisoning
alleged
shoplifters
“[t]hreatening
and
for
coercing
an
unreasonable
alleged
manner,”
shoplifters
into
(2)
signing
confessions and promissory notes,” and (3) “[d]emanding civil
penalties
from
alleged
Defendant’s detention.”
shoplifters
while
they
are
under
PAC ¶ 87(a)-(c).
A cause of action under GBL § 349 has three elements: (1)
“the challenged act or practice was consumer-oriented;” (2) “it
was misleading in a material way;” and (3) “the plaintiff suffered
15 The Supreme Court, in rejecting Macy’s argument that Orellana “ha[d]
failed to plead facts to establish that equity and good conscience require the
return of the funds at issue, i.e., the civil recovery permitted by GOL § 11105,” declined to dismiss the unjust enrichment claim in the initial class
action complaint. See Order at 3, Orellana v. Macy’s Retail Holdings, Inc.,
No. 453060/2015 (N.Y. Sup. Ct. June 24, 2016), ECF No. 1-7. The law of the
case doctrine does not preclude a different holding at this stage, however,
because the basis for our futility determination is that the unjust enrichment
claim is duplicative of the newly asserted fraud claim. See Quern v. Jordan,
440 U.S. 332, 347 n.18 (1979) (“The doctrine of law of the case comes into play
only with respect to issues previously determined.”).
32
injury as a result of the deceptive act.”
Crawford v. Franklin
Credit Mgmt. Corp., 758 F.3d 473, 490 (2d Cir. 2014) (quoting
Stutman v. Chem. Bank, 95 N.Y.2d 24, 29, 731 N.E.2d 608 (2000)).
Yet unlike common law fraud, GBL § 349 claims “need not include
proof of intent to deceive, scienter, or justifiable reliance.”
M&T Mortg. Corp. v. White, 736 F. Supp. 2d 538, 570 (E.D.N.Y. 2010)
(citing Petitt v. Celebrity Cruises, Inc., 153 F. Supp. 2d 240,
265 (S.D.N.Y. 2001)).
Macy’s contends that plaintiffs have not
established any of GBL § 349’s elements, which we proceed to
consider seriatim.16
i.
Consumer-Oriented Practice
At
the
threshold,
plaintiffs
must
establish
that
Macy’s
Macy’s argues, in a footnote, that Orellana, Melgar, Lema, and Ratner’s
GBL § 349 claims are barred by the applicable three-year statute of limitations.
See Def. Macy’s Opp’n Pls.’ Mot. Leave Amend (“Def.’s Opp’n”) 10 n.11 (citing
Gaidon v. Guardian Life Ins. Co. of Am., 96 N.Y.2d 201, 208-10, 750 N.E.2d 1078
(2001)). Arguments made wholly in a footnote usually need not be addressed by
the Court. In re Gildan Activewear, Inc. Sec. Litig., No. 08 Civ. 5048(HB),
2009 WL 4544287, at *4 n.4 (S.D.N.Y. Dec. 4, 2009); see City of Syracuse v.
Onondaga County, 464 F.3d 297, 308 (2d Cir. 2006). Regardless, Macy’s argument
fails because the amended claims relate back to the initial filing of this
action, which occurred within three years of each plaintiff’s detention.
Federal Rule of Civil Procedure 15(c) provides that an amended pleading may
“relate[] back” if the law that supplies the statute of limitations allows
relation back. Fed. R. Civ. P. 15(c)(1)(A). New York C.P.L.R. § 203(f), in
turn, authorizes relation back “unless the original pleading does not give
notice of the transactions, occurrences, or series of transactions or
occurrences, to be proved pursuant to the amended pleading.”
N.Y. C.P.L.R.
§ 203(f). Orellana, Melgar, Lema, and Ratner’s GBL § 349 claims arise out of
the same series of transactions that give rise to the existing claims: demands
for confessions and payments or agreements to pay civil penalties from suspected
shoplifters while they are being detained. Cf. Thrane v. Franklin First Fin.,
Ltd., 266 F.R.D. 51, 53 (E.D.N.Y. 2010). As all of the plaintiffs were detained,
and thus subject to Macy’s allegedly misleading practices, within three years
of the commencement of this lawsuit in July 2015, their GBL § 349 claims are
timely. PAC ¶¶ 26 (Orellana), 47 (Melgar), 51 (Lema), 55 (Ratner); see N.Y.
C.P.L.R. §§ 203(c), 304(a) (a claim is interposed, for statute of limitations
purposes, when the notice and summons are filed with the clerk of the court).
16
33
challenged practices are “consumer-oriented.”
Specifically, a
plaintiff must “demonstrate that the acts or practices have a
broader impact on consumers at large.”
Oswego Laborers’ Local 214
Pension Fund v. Marina Midland Bank, 85 N.Y.2d 20, 25, 647 N.E.2d
741 (1995); see N.Y. Univ. v. Cont’l Ins. Co., 87 N.Y.2d 308, 320,
662 N.E.2d 763 (1995) (“The conduct need not be repetitive or
recurring but defendant’s acts or practices must have a broad
impact on consumers at large; ‘private contract’ disputes unique
to the parties . . . would not fall within the ambit of the
statute.” (internal quotation marks omitted)).
Yet the “consumer-
oriented” requirement is construed “liberally,” Mayfield v. Asta
Funding, Inc., 95 F. Supp. 3d 685, 700 (S.D.N.Y. 2015) (citing New
York v. Feldman, 210 F. Supp. 2d 294, 301 (S.D.N.Y. 2002)), and is
satisfied if a private transaction has “ramifications for the
public at large,” or is “harmful to the public interest.” M&T
Mortg., 736 F. Supp. 2d at 571 (quoting Exxonmobil Inter-Am., Inc.
v. Advanced Info. Eng’g Servs., Inc., 328 F. Supp. 2d 443, 447-49
(S.D.N.Y. 2004)).
Whether conduct is “consumer-oriented” turns on
several factors: (1) the amounts at stake, (2) the sophistication
of the parties, and (3) the nature of the transaction at issue.
See Fleisher v. Phx. Life Ins. Co., 858 F. Supp. 2d 290, 304
(S.D.N.Y. 2012) (citing Interested Underwriters at Lloyd’s of
London Subscribing to Policy # 991361018 v. Church Loans & Invs.
Tr., 432 F. Supp. 2d 330, 332 (S.D.N.Y. 2006)).
34
The application
of these factors makes clear that the challenged conduct at issue
is consumer-oriented.
First, the amounts at stake are quite modest: Macy’s was
empowered to collect no more than $2,000—$1,500 in damages and a
$500
penalty—from
each
plaintiff.
N.Y.
Gen.
Oblig.
Law
§ 11-105(5), (6); see Pfizer, Inc. v. Stryker Corp., No. 02
Civ.8613 LAK, 2003 WL 21660339, at *4 (S.D.N.Y. July 15, 2003)
(concluding
that
a
$2
billion
transaction
was
not
consumer-
oriented).
Second,
as
discussed
supra,
none
of
the
plaintiffs
are
particularly sophisticated—especially in comparison to Macy’s, a
major corporation operating 885 stores nationwide—and some speak
very limited English.
See PAC ¶¶ 7, 26, 32, 38, 51-52, 65, 70;
Phifer v. Home Savers Consulting Corp., No. 06 CV 3841(JG), 2007
WL 295605, at *5 (E.D.N.Y. Jan. 30, 2007) (finding relevant that
plaintiff “allege[d] herself to be a relatively unsophisticated
market player who ‘had trouble understanding’ documents she was
made to sign quickly and with misleading expectations”).
Finally, the transaction at issue is inherently consumeroriented in nature.
The statutory authority pursuant to which
Macy’s allegedly detained plaintiffs and collected civil fines
therefrom, i.e., the powers plaintiffs maintain Macy’s abused, is
explicitly consumer-oriented in scope.
mercantile
establishment”
permitted
35
Specifically, a “retail
to
detain
suspected
shoplifters under GBL § 218 is “a place where goods, wares or
merchandise are offered to the public for sale,” N.Y. Gen. Bus.
Law § 217(1), and a “mercantile establishment” authorized to
collect civil penalties under GOL § 11-105 is “a place or vehicle
where goods, wares or merchandise are offered for sale or a place
or vehicle from which deliveries of goods, wares or merchandise
are made,” N.Y. Gen. Oblig. Law § 11-105(1).
Further, the universe
of persons who may be detained as suspected shoplifters will, with
rare
exceptions
discussed
infra,
be
comprised
solely
of
individuals who, from Macy’s perspective, are potential customers
as soon as they enter the store.
And while it is true that some
of the detained shoplifters may never have intended to engage in
consumer activity, and instead visited Macy’s for the sole purpose
of committing larceny, Macy’s policy sweeps broader, and may well
sweep innocent shoppers into its net.
In that sense, Macy’s policy
affects the public interest, and thus rightly falls within GBL
§ 349’s ambit.
Thus, Macy’s challenged practices are “consumer-oriented”
such that plaintiffs satisfy GBL § 349’s threshold requirement.
There is, however, one exception.
Lema was a contractor working
in a Brooklyn store as part of a cleaning crew when she was seen
pocketing several retail items.
See PAC ¶ 51.
No element of her
claim relates to consumers, such that her GBL § 349 claim fails.
ii.
Materially Misleading
36
The New York Court of Appeals has adopted an “objective”
approach for determining whether a challenged consumer practice is
materially misleading; the test is whether the alleged act is
“likely to mislead a reasonable consumer acting reasonably under
the circumstances.”
Cohen v. JP Morgan Chase & Co., 498 F.3d 111,
126 (2d Cir. 2007) (quoting Oswego Laborers, 85 N.Y.2d at 26, 647
N.E.2d 741).
This standard encompasses a “far greater range of
claims” than common law fraud.
N.E.2d 1078.
Gaidon, 96 N.Y.2d at 209, 750
Further, it is “well settled” that a court may
determine as a matter of law whether allegedly deceptive conduct
would have misled a reasonable consumer.
Fink v. Time Warner
Cable, 714 F.3d 739, 741 (2d Cir. 2013).
Macy’s correctly argues that the first act plaintiffs allege,
“[i]mprisoning alleged shoplifters for an unreasonable manner,”
PAC ¶ 87(a), does not entail any deceptive conduct. Simply because
the alleged detention may have been unreasonable does not render
it misleading in any sense.
By contrast, Macy’s practice of “[t]hreatening and coercing
alleged shoplifters into signing confessions and promissory notes”
and “[d]emanding civil penalties from alleged shoplifters while
they
are
under
misleading
represented
to
to
Defendant’s
the
extent
Orellana,
detention,”
loss
Moftah,
37
id.
¶
87(b)-(c),
is
prevention
officers
falsely
Ramirez,
Perullo,
Melgar,
Ratner,17 and Osongba that they would be released from custody if
they signed confessions, made payments, or agreed to make future
payments.
See id. ¶¶ 28 (Orellana), 36 (Moftah), 39 (Ramirez), 45
(Perullo), 48 (Melgar), 56 (Ratner), 69 (Osongba).
Yet Macy’s
argues, pointing to the same language in the civil demand notice
as it did in the fraud context supra, that a reasonable consumer
would not be misled given notice of written affirmative disclosures
to the contrary.
We disagree.
As we already explained, the language in the civil demand
notice fails to disclaim that plaintiffs would not be released
irrespective of whether they paid or agreed to pay civil penalties
and/or signed confessions.
Regardless, under GBL § 349, “the mere
presence of an accurate disclaimer does not necessarily cure other
potentially misleading statements or representations.”
Delgado v.
Ocwen Loan Servicing, LLC, No. 13-CV-4427 (NGG)(RML), 2014 WL
4773991,
at
*8
misrepresentation
(E.D.N.Y.
is
not
Sept.
cured
as
24,
a
2014).
matter
Rather,
of
a
law
a
by
contradictory disclaimer, at least where the subject matter of the
misrepresentation is within the defendant’s control.
In Goshen v.
Mutual Life Insurance Co. of New York, 98 N.Y.2d 314, 323, 774
17 Ratner was told, “It will be easier for you if you pay us $500 right
now,” PAC ¶ 56, which we find to be materially misleading even if not fraudulent.
See Pelman ex rel. Pelman v. McDonald’s Corp., 396 F.3d 508, 511 (2d Cir. 2005)
(GBL § 349 “extends well beyond common-law fraud to cover a broad range of
deceptive practices.”).
38
N.E.2d 1190 (2002), the defendants, DSL providers, made certain
misleading representations regarding the quality of their internet
service but also made disclaimers in their service agreement
stating that “the service is provided on an ‘as is’ or ‘as
available’ basis.”
The New York Court of Appeals concluded that
these disclaimers were insufficient to render the representation
about service quality not misleading, because the quality of the
service was allegedly “defective due to malfunctions largely or
wholly within defendants’ control” and the defendants allegedly
“knew this to be the case” and the “promotional representations
were therefore knowingly deceptive.”
Id. at 326, 774 N.E.2d 1190.
Similarly, in Ward v. TheLadders.com, Inc., 3 F. Supp. 3d 151,
168-69 (S.D.N.Y. 2014), the defendant operator of a job placement
website argued that representations on its website about the
quality of job listings—”experts pre-screen all jobs so they’re
always a $100K+”—were not misleading in light of the terms of use
which notified users that the postings were provided on an “as is”
or “as available basis.”
The court concluded that the defendant’s
failure to pre-screen jobs as advertised “would be a failure wholly
within the defendant’s control.”
Id. at 169.
“Therefore, the
defendant’s representations . . . would be ‘knowingly deceptive’
and misleading.”
Id.
Here, even if the civil demand notice could be read as
notifying
plaintiffs
that,
contrary
39
to
Macy’s
oral
representations, they would not be released from detention and
instead
arrested,
plaintiffs
would
still
have
alleged
an
actionable misleading practice because the ability to release
plaintiffs as opposed to continuing to detain them and having them
arrested was solely within Macy’s control.18
iii. Injury
Finally, to satisfy the injury requirement under GBL § 349,
“a
plaintiff
must
allege
that,
on
account
of
a
materially
misleading practice, she purchased a product and did not receive
the full value of her purchase.”
Orlander v. Staples, Inc., 802
F.3d 289, 302 (2d Cir. 2015) (citing Small v. Lorillard Tobacco
Co., 94 N.Y.2d 43, 56, 720 N.E.2d 892 (1999)).
Here, plaintiffs
allege that, relying upon Macy’s representations that they would
be released if they did so, they paid or agreed to pay civil
penalties and/or confessed to shoplifting.
arguments
for
why
these
actions
do
not
Macy’s makes two
satisfy
the
injury
requirement.
First, Macy’s asserts that “six of the proposed plaintiffs do
not even allege that they made any civil demand payments, so they
necessarily suffered no injury from any representation about civil
18
Indeed, to release plaintiffs without involving law enforcement would
be to fulfill GOL § 11-105’s intended purpose of relieving the criminal courts
of the burden of prosecuting these cases, and “allowing most cases to be resolved
through a civil case or [out] of court settlement.” N.Y. Bill Jacket, S.B.
3916/A.B. 5783, 189th Leg., 1991 Sess., ch. 724, at 4-5 (1991).
40
demands.”
Def.’s Opp’n 13.
Macy’s misunderstands the injury
requirement; although a plaintiff must prove actual injury under
the statute, the injury need not be pecuniary in nature.
Stutman,
95 N.Y.2d at 29, 731 N.E.2d 609 (citing Oswego Laborers, 85 N.Y.2d
at 26, 647 N.E.2d 741).
Here, the plaintiffs who did not actually
make civil payments agreed to do so in the future, creating an
injurious obligation, and/or signed confessions to shoplifting.
Second, as to
payments, Macy’s
the plaintiffs who did make civil demand
argues that
“in light of the clear written
explanation about the lack of relationship between civil demand
payments and Macy’s decision to press charges, any payment they
made cannot plausibly be alleged to have resulted from deception.”
Def.’s Opp’n 13.
This argument was considered, and rejected, in
concluding that plaintiffs alleged materially misleading acts.
Thus, Orellana, Moftah, Ramirez, Perullo, Melgar, and Ratner
have asserted an actionable claim under GBL § 349 to the extent
they allege they were misled into believing that they would be
released so long as they confessed and/or paid or agreed to pay a
civil penalty.
However, Osongba, having declined to pay or agree
to pay a civil penalty, or to sign a confession, did not suffer
injury for purposes of GBL § 349 from Macy’s allegedly misleading
practice.
d. Abuse of Process
Plaintiffs allege that Macy’s has committed the tort of abuse
41
of
process
by
“regularly
issuing
boiler-plate
Supporting
Depositions which become the basis and part of Criminal Court
proceedings against individuals accused of shoplifting at their
stores” for the “improper and ulterior purpose” of “induc[ing]
those
suspects
execut[ing]
into
paying
confessions
of
Macy’s
civil
judgment
and
collection of these civil penalties.”
penalties
and
facilit[ating]
to
the
PAC ¶¶ 77-78.
The “gist” of the abuse of process tort is “said to be the
misuse of legal process primarily to accomplish a purpose for which
it was not designed, usually to compel the victim to yield on some
other matter not involved in the suit, or to harass litigation
opponents by clearly wrongful conduct.”
Dan B. Dobbs, Paul T.
Hayden & Ellen M. Bublick, Dobbs’ Law of Torts § 594 (2d ed. 2018).
Under New York law, “a malicious abuse-of-process claim lies
against a defendant who (1) employs regularly issued legal process
to compel performance or forbearance of some act, (2) with intent
to do harm without excuse o[r] justification, and (3) in order to
obtain a collateral objective that is outside the legitimate ends
of the process.”
Savino v. City of New York, 331 F.3d 63, 69-70
(2d Cir. 2003) (quoting Cook v. Sheldon, 41 F.3d 73, 80 (2d Cir.
1994)).
“The traditional rule in New York has been that ‘the
pursuit of a collateral objective must occur after the process is
issued; the mere act of issuing process does not give rise to a
42
claim.’”19
Gilman v. Marsh & McLennan Cos., 868 F. Supp. 2d 118,
131 (S.D.N.Y. 2012) (quoting Lopez v. City of New York, 901 F.
Supp. 684, 691 (S.D.N.Y. 1995)), aff’d, 654 F. App’x 16 (2d Cir.
2016) (summary order); accord Berry v. Deutsche Bank Tr. Co. of
Ams., No. 07 Civ. 7634(WHP), 2008 WL 4694968, at *7 (S.D.N.Y. Oct.
21, 2008), aff’d, 378 F. App’x 110 (2d Cir. 2010) (summary order).
Plaintiffs
allege
that
the
completion
of
supporting
depositions by loss prevention employees constitutes “process”
because law enforcement “relies on these supporting depositions”
and
does
“not
conduct
an
independent
investigation
of
allegations against individuals accused of shoplifting.”
¶ 78.
the
PAC
Furthermore, “[t]he subsequent Criminal Complaints filed
against accused individuals arrested at Macy’s department stores
mirror the information provided in the boiler-plate supporting
depositions produced and provided to law enforcement by Macy’s
loss prevention specialists.”
Id.
We disagree.
19 In Parkin v. Cornell University, Inc., 78 N.Y.2d 523, 530, 583 N.E.2d
939 (1991), the New York Court of Appeals considered in dicta whether this
timing requirement is truly dispositive of an abuse of process claim. See id.
(“We have noted several times that the gist of the action for abuse of process
lies in the improper use of process after it is issued. . . . It is not clear,
however, whether this language should be viewed as a strict and limiting
definition of the tort or whether it is merely illustrative.” (internal
quotation marks and citations omitted)). The Second Circuit has, after Parkin,
repeatedly maintained that “[t]he gist of abuse of process is the improper use
of process after it is regularly issued.” Cook, 41 F.3d at 80; see Gilman v.
Marsh & McLennan Cos., 654 F. App’x 16, 16 (2d Cir. 2016) (summary order). This
“Court is bound by the law of the Circuit . . . .
Accordingly, the
dicta . . . from Parkin does not alter the established law governing malicious
abuse of process claims.” Richardson v. N.Y.C. Health & Hosps. Corp., No. 05
Civ. 6278(RJS), 2009 WL 804096, at *16 (S.D.N.Y. Mar. 25, 2009).
43
In the context of an abuse of process claim, “[c]ourts define
the necessary legal process as a direction or demand that the
person to whom it is directed perform or refrain from the doing of
some prescribed act.”
Korova Milk Bar of White Plains, Inc. v.
PRE Props., LLC, No. 11 Civ. 3327(ER), 2013 WL 417406, at *15
(S.D.N.Y.
Feb.
4,
2013)
(internal
quotation
marks
omitted)
(quoting Nickerson v. Commc’n Workers of Am. Local 1171, No.
504CV00875NPM, 2005 WL 1331122, at *8 (N.D.N.Y. May 31, 2005));
accord Julian J. Studley, Inc. v. Lefrak, 41 N.Y.2d 881, 884, 362
N.E.2d 611 (1977).
In other words, process entails that which is
capable of “compelling the performance or forbearance of some
prescribed act.”
Berisic v. Winckelman, 40 A.D.3d 561, 562, 835
N.Y.S.2d 390 (2d Dep’t 2007) (quoting James v. Saltsman, 99 A.D.2d
797, 797-98, 472 N.Y.S.2d 129 (2d Dep’t 1984)).
As an initial
matter, the proposed amended class action complaint only alleges
that
Macy’s
prepared
supporting
Orellana, Moftah, and Lema.20
(Moftah), 54 (Lema).
depositions
See
with
respect
to
PAC ¶¶ 29 (Orellana), 36
Regardless, the supporting depositions are
nothing more than sworn statements to the police, which cannot by
themselves compel or forbid any conduct.
Their completion by
Macy’s loss prevention officers does not per se “direct or demand”
20
While the proposed amended class action complaint does not contain a
factual allegation that a supporting deposition was prepared with respect to
Osongba, Macy’s has submitted a copy thereof. See Feder Decl. Ex. X.
44
detainee-plaintiffs to either “perform or refrain from the doing
of some prescribed act.”
Korova Milk Bar, 2013 WL 417406, at *15.
Accordingly, their use may not be considered “process.”
On the other hand, that Macy’s caused all but Acteopan to be
arrested and to face criminal prosecution is in fact process.21
See W. Page Keeton et al., Prosser & Keeton on Torts § 121, p. 899
(5th ed. 1984) (listing “arrest of the person” and “criminal
prosecution” as quintessential forms of process).
Indeed, in
denying Macy’s motion to dismiss plaintiffs’ initial class action
complaint,
“calling
the
the
Supreme
police
Court
and
rejected
making
‘process’ that can be abused.”
a
Macy’s
criminal
argument
complaint
is
that
not
Order at 3, Orellana v. Macy’s
Retail Holdings, Inc., No. 453060/2015 (N.Y. Sup. Ct. June 24,
2016), ECF No. 1-7.
Plaintiffs’
claim
must
still
fail,
however,
because
the
pursuit of “collateral objectives” to which plaintiffs point,
“induc[ing] suspects into paying Macy’s civil penalties and to
execut[ing] confessions of judgment and facilit[ating] collection
of these civil penalties,” preceded their arrests.
868 F. Supp. 2d at 131.
See Gilman,
The proposed amended class action
complaint alleges that Macy’s coerced plaintiffs into confessing
GBL § 218 does not provide an affirmative defense to abuse of process.
See N.Y. Gen. Bus. Law § 218.
21
45
to shoplifting, and paying or agreeing to pay civil penalties,
with promises of release, as well as increased penalties if
plaintiffs did not pay thereafter.
before
plaintiffs
were
arrested.
All of these efforts occurred
Indeed,
a
key
element
of
plaintiffs’ fraud claim is that they were misled into believing
they would be released, and not immediately arrested, after they
confessed, paid, or agreed to pay civil penalties.
Accordingly,
plaintiffs have failed to state an actionable claim for abuse of
process.22
e. Section 1983
Plaintiffs allege, under 42 U.S.C. § 1983, that “Macy’s instore civil recovery practices and the statutes that authorize
them” violate the Fifth and Fourteenth Amendments of the Federal
Constitution and Articles Six and Twelve of the New York State
Constitution.
PAC ¶ 95.
22
Even assuming, arguendo, plaintiffs stated an otherwise actionable
claim for abuse of process, Lema and Melgar’s claims would still fail as timebarred. Under New York law, a cause of action for abuse of process is subject
to a one-year statute of limitations, Ong v. Park Manor (Middletown Park) Rehab.
& Healthcare Ctr., No. 12-CV-974 (KMK), 2015 WL 5729969, at *28 (S.D.N.Y. Sept.
30, 2015), which ordinarily “accrues at such time as the criminal process is
set in motion—typically at arrest—against the plaintiff,” Anderson v. County
of Putnam, No. 14-CV-7162 (CS), 2016 WL 297737, at *3 (S.D.N.Y. Jan. 22, 2016)
(quoting Duamutef v. Moris, 956 F. Supp. 1112, 1118 (S.D.N.Y. 1997)); see Pinter
v. City of New York, 976 F. Supp. 2d 539, 570 (S.D.N.Y. 2013) (“[A]ccrual of a
cause of action for abuse of process need not await the termination of an action
in claimant’s favor.” (quoting Cunningham v. State, 53 N.Y.2d 851, 853, 422
N.E.2d 821 (1981))). Lema and Melgar were arrested, triggering the one-year
statute of limitations, in December 2012 and October 2013, respectively. PAC
¶¶ 47, 51. Their claims, therefore, would be time-barred even if they related
back to the July 2015 commencement of this litigation.
46
To state a claim under § 1983, “a plaintiff must allege that
he was injured by either a state actor or a private party acting
under color of state law.”
Ciambriello v. County of Nassau, 292
F.3d 307, 323 (2d Cir. 2002) (citing Spear v. Town of West
Hartford, 954 F.2d 63, 68 (2d Cir. 1992)).
In order to establish
that a private entity like Macy’s acted “under color of state law,”
the
“allegedly
unconstitutional
attributable to the state.’”
conduct
must
be
‘fairly
Tancredi v. Metro. Life Ins. Co.,
316 F.3d 308, 312 (2d Cir. 2003) (quoting Am. Mfrs. Mut. Ins. Co.
v. Sullivan, 526 U.S. 40, 51 (1999)).
Ostensibly private conduct
is, in turn, only “fairly attributable to the state” if “there is
such a close nexus between the State and the challenged action
that seemingly private behavior may be fairly treated as that of
the State itself.” Id. (internal quotation marks omitted) (quoting
Brentwood Acad. v. Tenn. Secondary Sch. Athletic Ass’n, 531 U.S.
288, 295 (2001)).
“Generally, the acts of private security guards, hired by a
store, do not constitute state action under § 1983.”
Prowisor v.
Bon-Ton, Inc., 426 F. Supp. 2d 165, 170 (S.D.N.Y. 2006) (quoting
Guiducci v. Kohl’s Dep’t Stores, 320 F. Supp. 2d 35, 37 (E.D.N.Y.
2004)), aff’d, 232 F. App’x 26 (2d Cir. 2007) (summary order).
Indeed, security guards have only been found to act under color of
state law in limited circumstances, such as when a security guard
was deputized as a “special patrolman,” see Rojas v. Alexander’s
47
Dep’t Store, Inc., 654 F. Supp. 856, 858 (E.D.N.Y. 1986), or where
the store security guard and police officers acted in tandem, see
Brooks v. Santiago, No. 93 Civ. 206(HB), 1998 WL 107110, at *4
(S.D.N.Y. Mar. 10, 1998).
that
Macy’s,
shoplifting,
after
called
Plaintiffs, by contrast, merely allege
detaining
the
police,
plaintiffs
with
whom
on
suspicion
loss
of
prevention
employees provided a supporting deposition containing allegations
of shoplifting, and that plaintiffs were arrested.
Courts in this
Circuit have repeatedly found similar allegations insufficient to
establish the requisite nexus to state action.23
See Prowisor, 426
F. Supp. 2d at 171; Guiducci, 320 F. Supp. 2d at 38; Newman v.
Bloomingdale’s, 543 F. Supp. 1029, 1032 (S.D.N.Y. 1982).
Plaintiffs argue that this case is distinguishable because
Macy’s acts are sanctioned by state law, viz., GBL § 218 and GOL
§ 11-105.
well.
Yet courts have routinely rejected that argument as
See Guiducci, 320 F. Supp. 2d at 38 (Section 218 “is an
23
The state court, in dicta, suggested a different conclusion in
considering Orellana’s motion for a preliminary injunction. See Orellana, 36
N.Y.S.3d at 554 (“It appears, and could be argued, that these private acts by
Macy’s are furthering the police objective to provide a basis to arrest these
individuals and have them prosecuted.”). This Court, however, is not bound by
dicta from a court engaged in a preliminary proceeding. See Garten v. Hochman,
No. 08 Civ. 9425(PGG), 2010 WL 2465479, at *3 n.1 (S.D.N.Y. June 16, 2010)
(“[T]he law of the case doctrine is not typically applied in connection with
preliminary determinations, such as a ruling on a motion for a preliminary
injunction.” (citing Goodheart Clothing Co. v. Laura Goodman Enters., Inc., 962
F.2d 268, 274 (2d Cir. 1992))); Russul Corp. v. Zim Am. Integrated Shipping
Servs. Co., No. 06 Civ. 0037(JCF), 2009 WL 3247141, at *4 (S.D.N.Y. Oct. 5,
2009) (“[T]he law of the case doctrine does not apply to dicta, but only a prior
court’s rulings of law.” (citing Arizona v. California, 460 U.S. 605, 618
(1983))).
48
affirmative defense against tort claims.
It in no way establishes
store security guards as state actors.”); Newman, 543 F. Supp. at
1031; Klein v. Alexander’s Dep’t Store, No. 75 Civ. 6024 (CHT),
1977 U.S. Dist. LEXIS 14673, at *3-4 (S.D.N.Y. Aug. 2, 1977);
Estate
of
Iodice
v.
Gimbels,
Inc.,
416
F.
Supp.
1054,
1055
(E.D.N.Y. 1976) (“The statute relied on is not sufficient to bridge
the gap between private and State action. . . .
This ‘shopkeepers’
privilege’ is insufficient to transform defendants’ conduct into
acts under color of state law.”); People v. Jones, 47 N.Y.2d 528,
532, 393 N.E.2d 443 (1979); cf. Moher v. Stop & Shop Cos., 580 F.
Supp. 723, 724-25 (D. Conn. 1984); Battle v. Dayton-Hudson Corp.,
399 F. Supp. 900 (D. Minn. 1975); Weyandt v. Mason’s Stores, Inc.,
279 F. Supp. 283 (W.D. Pa. 1968).
Finally, in their reply brief, plaintiffs point to a 2014
Assurance of Discontinuance (“AOD”) into which Macy’s entered with
the Attorney General of the State of New York as evidence of state
action.24
Pls.’ Reply Mem. Law Supp. Mot. Leave Amend Class Action
Compl. (“Pls.’ Reply”) 9; Compl. Ex. A.
[d]iscontinuance,
like
its
federal
An “[a]ssurance of
counterpart,
the
consent
The AOD was attached to Orellana’s initial class action complaint but
not the proposed amended class action complaint. See Compl. Ex. A. Because
exhibits attached to prior versions of a complaint may be considered on a motion
to dismiss, we will consider the AOD for the purpose of determining the futility
of the proposed amended class action complaint.
See ATSI Commc’ns, Inc. v.
Shaar Fund, Ltd., 493 F.3d 87, 98 (2d Cir. 2007); Wright v. Green Tree Servicing
LLC, No. 1:14-cv-08493 (ALC), 2016 WL 4098404, at *1 n.1 (S.D.N.Y. July 25,
2016), aff’d, 685 F. App’x 67 (2d Cir. 2017) (summary order).
24
49
decree,” is a “stipulation of settlement, which binds the parties”
thereto.
State ex rel. Abrams v. Solil Mgmt. Corp., 491 N.Y.S.2d
243, 247 (Sup. Ct.), aff’d, 114 A.D.2d 1057, 495 N.Y.S.2d 161
(Table) (1st Dep’t 1985).
The AOD followed an investigation,
undertaken by the Attorney General, “to determine whether Macy’s
engaged in unlawful racial profiling of customers and prospective
customers, in violation of Title II of the Civil Rights Act of
1964, 42 U.S.C. § 2000a; 42 U.S.C. § 1981; New York Human Rights
Law, N.Y. Exec. Law § 296; and New York Civil Rights Law § 40.”
Compl. Ex. A, at 4.
certain
procedural
Under the AOD, Macy’s “agreed to implement
safeguards
with
respect
to
its
detention
policies and procedures,” and was “to follow the procedures,
instructions, and guidelines advised” by the New York Attorney
General.
Pls.’ Reply 9.
The AOD calls for a Security Monitor,
designated by Macy’s and approved by the Attorney General, to
“conduct[] internal oversight of the loss prevention policies and
practices for all Macy’s stores located in the State of New York.”
Compl. Ex. A, at 6.
Plaintiffs, by referencing the AOD, are
presumably arguing that Macy’s acted under color of state law
because it was
subject to state regulatory authority.
This
argument also fails.
First,
plaintiffs
do
not
cite
any
authority
for
the
proposition that parties subject to an AOD act under color of state
law with respect to the AOD’s subject matter.
50
Indeed, no such
authority appears to exist.
There is, however, authority in this
District for the “well settled” proposition that the actions of a
monitor appointed by a federal court “to oversee the implementation
of a union consent decree do not constitute ‘state action’ for
constitutional purposes.”
United States v. Mason Tenders Dist.
Council of Greater N.Y., No. 94 Civ. 6487(RWS), 1998 WL 23214, at
*7 (S.D.N.Y. Jan. 13, 1998) (citing United States v. Int’l Bhd. of
Teamsters, 981 F.2d 1362, 1371 (2d Cir. 1992)).
If the actions of
a court appointed security monitor are not state action, then a
fortiori neither are the actions of, as here, a monitor appointed
by the monitored party.
And if the actions of the monitor
appointed by the monitored party are not state action, then a
fortiori neither are the actions of the monitored party itself.
Second,
in
order
for
the
exercise
of
state
regulatory
authority to be sufficient for the regulated private party to have
acted under color of state law, the state must have been involved
“with the activity that caused the injury giving rise to the
action.”
Sybalski v. Indep. Grp. Home Living Program, Inc., 546
F.3d 255, 257 (2d Cir. 2008) (emphasis and internal quotation marks
omitted) (quoting Schlein v. Millford Hosp., Inc., 561 F.2d 427,
428 (2d Cir. 1977)).
The clear and overwhelming focus of the AOD
is curbing the use of racial profiling in detaining suspected
shoplifters in the first instance.
The proposed amended class
action complaint, by contrast, challenges the procedures used once
51
alleged shoplifters have been detained, and makes no assertion of
racial profiling whatsoever.
f. “Assault/Battery” and False Imprisonment
Plaintiffs’ final causes of action are for “assault/battery”
and false imprisonment.
allege
that
Macy’s
See PAC ¶¶ 71-74, 89-92.
“engage[s]
in
the
unlawful
Plaintiffs
practice
of
confining, isolating, body-searching, handcuffing, jailing, and
photographing Plaintiffs against their will in order to obtain
confessions and on-the-spot payments from them.”
Id. ¶ 72; see
id. ¶ 90.
“To sustain a cause of action for damages for assault, there
must be proof of physical conduct placing the plaintiff in imminent
apprehension of harmful conduct.”
Doe v. Alsaud, No. 13 Civ. 571
(RWS), 2016 WL 2689290, at *6 (S.D.N.Y. May 9, 2016) (quoting
Bastein v. Sotto, 299 A.D.2d 432, 433, 749 N.Y.S.2d 538 (2d Dep’t
2002)).
“A battery claim under New York State law requires proof
‘that there was bodily contact, that the contact was offensive,
and that the defendant intended to make the contact without the
plaintiff’s consent.’”
Biswas v. City of New York, 973 F. Supp.
2d 504, 530 (S.D.N.Y. 2013) (quoting Bastein, 299 A.D.2d at 433,
749 N.Y.S.2d 538)), appeal dismissed, 576 F. App’x 58 (2d Cir.
2014)
(summary
order).
Finally,
to
state
a
claim
of
false
imprisonment, a plaintiff must plead “(1) the defendant intended
to confine him, (2) the plaintiff was conscious of the confinement,
52
(3) the plaintiff did not consent to the confinement, and (4) the
confinement was not otherwise privileged.”
Wright v. Musanti, 887
F.3d 577, 587 (2d Cir. 2018) (quoting Broughton v. State, 37 N.Y.2d
451, 456, 335 N.E.2d 310 (1975)).
Macy’s
does
not
challenge
the
legal
sufficiency
of
plaintiffs’ allegations, but instead argues that claims belonging
to two of the plaintiffs, Lema and Melgar, are time-barred.
Def.’s Opp’n 24-25.
See
Plaintiffs’ only response is to incorrectly
assert that it is improper to consider whether a claim is timely
on a motion for leave to amend.
Pls.’ Reply 6 n.1; see Grace v.
Rosenstock, 228 F.3d 40, 53 (2d Cir. 2000).
Under New York law, causes of action for assault, battery,
and false imprisonment
limitations.
are subject to a one-year statute of
N.Y. C.P.L.R. § 215(3).
The statutes of limitations
for assault and battery accrue at the time of the assault and
battery, respectively, see Lettis v. U.S. Postal Serv., 39 F. Supp.
2d 181, 204 (E.D.N.Y. 1998), and for false imprisonment when the
confinement terminates, see Harris v. Town of Islip Hous. Auth.,
825 F. Supp. 2d 370, 375 (E.D.N.Y. 2011); Davis v. State, 89 A.D.3d
1287, 1287, 933 N.Y.S.2d 431 (3d Dep’t 2011).
Lema and Melgar were detained and subsequently released in
December 2012 and October 2013, respectively, at which point their
claims for assault, battery, and false imprisonment accrued.
¶¶ 47, 51.
PAC
Thus, even if Lema and Melgar’s claims related back to
53
the commencement of this litigation in July 2015, they would still
be time-barred.
III. Class Certification
Macy’s argues that leave to amend should be denied to the
extent plaintiffs assert class action claims.
This is so, Macy’s
contends, because the class as currently defined could not be
certified under Federal Rule of Civil Procedure 23. In particular,
Macy’s argues that plaintiffs could not establish commonality,
Fed. R. Civ. P. 23(a)(2), typicality, Fed. R. Civ. P. 23(a)(3), or
predominance, Fed. R. Civ. P. 23(b)(3).
See Def.’s Opp’n 5-9.
“[I]nquiry into class action requirements on a motion to amend
filed prior to a class certification motion is limited.”
Blagman
v. Apple, Inc., 307 F.R.D. 107, 117 (S.D.N.Y. 2015) (internal
quotation marks omitted).
“Leave to amend should be denied for
futility only where the proposed amendment would, on its face,
violate class action requirements.”25
Blagman v. Apple, Inc., No.
12 Civ. 5453(ALC)(JCF), 2014 WL 2106489, at *6 (S.D.N.Y. May 19,
25 In contrast, where “a plaintiff seeks to amend [his] complaint in order
to cure deficiencies in [his] motion for class certification, the futility
inquiry focuses on whether the amendments will enhance the likelihood of class
certification, rather than on whether they state a claim.” Oscar v. BMW of N.
Am., LLC, No. 09 Civ. 11(PAE), 2011 WL 6399505, at *6 (S.D.N.Y. Dec. 20, 2011)
(quoting Duling, 265 F.R.D. at 104), reconsideration denied, 2012 WL 245229
(S.D.N.Y. Jan. 25, 2015). If, after viewing the amendment in the light most
favorable to the plaintiffs, “the court finds the proposed class cannot be
certified under Rule 23, leave to amend will be denied.” Id. (quoting Pierre
v. JC Penney Co., No. 03-4782 JFB/WP, 2006 WL 407553, at *6 (E.D.N.Y. Feb. 21,
2006)).
54
2014) (quoting Feldman v. Lifton, 64 F.R.D. 539, 543 (S.D.N.Y.
1974)); see Calibuso v. Bank of Am. Corp., 893 F. Supp. 2d 374,
386 (E.D.N.Y. 2012); Acad. of Ambulatory Foot Surgery v. Am.
Podiatry Ass’n, 516 F. Supp. 378, 383 (S.D.N.Y. 1981).
The briefing on these issues is extremely underdeveloped.
While plaintiffs filed a class certification motion in state court,
the motion was never briefed.
And while the class definition
changed in the proposed amended class action complaint, it was not
the thrust of the proposed amendments and, accordingly, did not
receive significant treatment in either of the parties’ briefing.
Indeed, the relevant issues at class certification are quite
difficult to brief where, as here, the lead plaintiffs and their
clams are still in flux.
to
Hon.
Naomi
Reice
See Letter from Meir Feder, Jones Day,
Buchwald,
United
States
District
Judge,
Southern District of New York at 1-2 (July 5, 2018) (“At present,
the parties do not know what the operative complaint will be, and
they
cannot
intelligently
brief
class
certification
without
knowing what claims are being asserted, the allegations supporting
those claims, or the identity of the named plaintiffs. . . .
In
short, the parties must know what the operative complaint is, what
claims are being tried, and the scope of the proposed class before
moving to class certification.”), ECF No. 40.
Thus, any ruling on
plaintiffs’ motion to amend their class claims would be a premature
evaluation of plaintiffs’ compliance with Rule 23’s requirements.
55
However,
even
plaintiffs
without
will
face
full
briefing
significant
it
appears
challenges
likely
that
the
class
at
certification stage.
First, the nature of Macy’s oral (mis)representations, which
form the basis of plaintiffs’ fraud and GBL § 349 claims, vary
significantly among the plaintiffs.
Compare PAC ¶ 28 (Orellana
“was told that she would be released as soon as [she] signed a
paper admitting guilt and agreeing to pay Macy’s a penalty equal
to five times the price of the merchandise that was found on
her.”), with id. ¶ 48 (Melgar “was told that if he signed a paper
which admitted to ‘making a mistake,’ and paid [Macy’s] $500 with
his Macy’s credit card, he would be released, and that his money
would eventually be refunded after his court appearance.”), and
id. ¶ 56 (“The Macy’s security employee took the perfume away from
[Ratner] and told her: ‘It will be easier for you if you pay us
$500 right now.’”).
This poses a problem for plaintiffs in
establishing predominance.
“Where there are material variations
in the nature of the misrepresentations made to each member of the
proposed class, . . . class certification is improper because
plaintiffs will need to submit proof of the statements made to
each
plaintiff,
the
nature
of
the
varying
material
misrepresentations, and the reliance of each plaintiff upon those
misrepresentations in order to sustain their claims.”
Moore v.
PaineWebber, Inc., 306 F.3d 1247, 1253 (2d Cir. 2002) (citing
56
Grainger v. State Sec. Life Ins. Co., 547 F.2d 303, 307 (5th Cir.
1977)).
Second, Macy’s may be entitled to present individualized
defenses to plaintiffs’ claims which have survived, including GBL
§ 218 as a defense to false imprisonment and assault, and unclean
hands as a defense to fraud.
See N.Y. Gen. Bus. Law § 218; In re
Visa Check/MasterMoney Antitrust Litig., 280 F.3d 124, 149 (2d
Cir. 2001) (“The law is ‘settled that affirmative defenses should
be considered in making class certification decisions.’” (quoting
Waste Mgmt. Holdings, Inc. v. Mowbray, 208 F.3d 288, 296 (1st Cir.
2000))), overruled on other grounds by In re Initial Pub. Offering
Sec. Litig., 471 F.3d 24 (2d Cir. 2006); In re Dig. Music Antitrust
Litig.,
321
F.R.D.
64,
94-98
(S.D.N.Y.
2017)
(denying
class
certification as, inter alia, existence of individualized unclean
hands defense precluded satisfaction of predominance requirement);
Weiss v. Mayflower Doughnut Corp., 1 N.Y.2d 310, 316, 135 N.E.2d
208 (1956) (New York law ordinarily permits an unclean hands
defense only when plaintiffs’ reprehensible conduct is “directly
related to the subject matter in the litigation and the party
seeking to invoke the doctrine was injured by such conduct.”).
Finally,
adequacy
of
plaintiffs
will
representation,
face
Fed.
R.
hurdles
in
Civ.
23(a)(4),
P.
establishing
which
requires inquiry into whether their “attorneys are qualified,
experienced and able to conduct the litigation.”
57
In re Flag
Telecom Holdings, Ltd. Sec. Litig., 574 F.3d 29, 35 (2d Cir. 2009)
(quoting Baffa v. Donaldson, Lufkin & Jenrette Sec. Corp., 222
F.3d 52, 60 (2d Cir. 2000)).
proposed
amended
counsel,
Faruk
class
Usar,
Despite plaintiffs’ assertion in the
action
“is
complaint
an
that
experienced
their
attorney
existing
who
has
demonstrated his ability to protect the interests of the class,
through his skillful and energetic advocacy for the class in NY
State Supreme Court,” PAC ¶ 25, his performance before this Court
has been to the contrary.
Plaintiffs’ opening memorandum of law
completely neglected to explain why leave to amend should not be
denied on the basis of futility.
Their reply brief appears to
explain why: by repeatedly characterizing Macy’s arguments that
the proposed claims were futile as “inappropriate” at this stage,
Mr. Usar demonstrated that he was unaware that futility is relevant
to,
and
potentially
determination.
dispositive
of,
the
leave
to
amend
See Pls.’ Reply 8 (“Here, the inclusion of the
G.B.L. § 349 claim in the proposed amended complaint should be
allowed, and any argument as to whether Defendant Macy’s actions
are or are not ‘consumer oriented’ are inappropriate and should be
addressed in an answer or a motion.”); see also Williams v.
Citigroup Inc., 659 F.3d 208, 214 (2d Cir. 2011) (“It is well
established that leave to amend need not be granted . . . where
the
proposed
amendment
would
be
futile.”
(quoting
Advanced
Magnetics, Inc. v. Bayfront Partners, Inc., 106 F.3d 11, 18 (2d
58
Cir. 1997))).
Further, to the extent Mr. Usar defended the merits
of the proposed claims in the reply brief, many of his arguments
were inapposite, poorly developed, and supported by sparse and
non-controlling
case
law.
It
is
appropriate
plaintiffs’ counsel’s performance in this case.26
to
consider
See Kulig v.
Midland Funding, LLC, No. 13 Civ. 4715(PKC), 2014 WL 5017817, at
*2 (S.D.N.Y. Sept. 26, 2014) (“[I]n determining the adequacy of
counsel, the court looks beyond reputation built upon past practice
and
examines
counsel’s
competence
displayed
by
present
performance.” (quoting Bolanos v. Norwegian Cruise Lines Ltd., 212
F.R.D. 144, 156 (S.D.N.Y. 2002))), reconsideration denied, 2014 WL
6769741 (S.D.N.Y. Nov. 30, 2014).
CONCLUSION
In summary, leave to amend is granted with respect to (1)
Orellana,
Moftah,
Ramirez,
Perullo,
Melgar,
and
Lema’s
fraud
claims, to the extent they allege that Macy’s misrepresented that
they would be released if they paid or agreed to pay civil fines
and/or sign confessions to shoplifting; (2) Orellana, Moftah,
Ramirez, Perullo, Melgar, and Ratner’s GBL § 349 claims, to the
extent they allege that Macy’s engaged in a deceptive business
practice by misrepresenting that they would be released if they
26
The role of Mr. Usar’s co-counsel, The Legal Aid Society, is allegedly
limited to “monitor[ing] compliance with any relief that is obtained from the
existing practice of in-store demands.” PAC ¶ 24.
59
paid
or
agreed
to
shoplifting; and
pay
(3)
civil
fines
and/or
Orellana, Moftah,
sign
Ramirez,
confessions
Perullo,
to
Ratner,
Hoque, Nahar, Acteopan, and Osongba's "assault/battery" and false
imprisonment claims.
Leave to amend is also granted to the extent
all claims against Palmer are withdrawn.
Plaintiffs' motion for
leave to amend is denied with prejudice
in all other respects.
Plaintiffs' motion for leave to move to enforce the Supreme Court
preliminary injunction,
thereof,
and for contempt sanctions in viol at ion
is denied without prejudice.
Plaintiffs shall
file an amended class action complaint in
accordance with, and within 14 days of, this Memorandum and Order.
All counsel for extant parties shall thereafter appear for a status
conference before this Court on August 2, 2018,
in Courtroom 21A,
500 Pearl Street, New York, NY 10007, at 2:30 P.M.
The Clerk of Court is directed to
(1)
terminate Law Offices
of Palmer, Reifler and Associates, P.A. as a defendant
(and amend
the case caption accordingly), and (2) terminate docket numbers 28
(granted
in
part
and
denied
in
part)
and
38
(denied
without
prejudice).
Dated:
New York, New York
July /0, 2018
L<;;i2eclfb;-~
NAOMI REICE BUCHWALD
UNITED STATES DISTRICT JUDGE
60
Counsel for plaintiffs:
Faruk Usar
Usar Law Group, P.C.
Steven B. Wasserman
The Legal Aid Society
Counsel for defendant Macy’s:
Alison B. Marshall
Meir Feder
Jones Day
Michael E. McDonagh
Robert N. Dunn
Lester Schwab Katz & Dwyer, LLP
Counsel for defendant Palmer:
Jerry D. Goldstein
Jerry D. Goldstein, LLC
61
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