Second Circuit Affirms Dismissal of Action Against Kramer Levin Client Sirius XM Radio Inc.

On April 4, 2012, the U.S. Court of Appeals for the Second Circuit affirmed the dismissal of the action titled Kaufman v. Sirius XM Radio, Inc. This action was a purported class action seeking damages for those subscribers to the Sirius XM satellite radio service who were charged an invoice administration fee when sent an invoice but who ultimately paid by means other than a check or money order; plaintiffs alleged that the terms and conditions governing the fee only permitted it to be applied to subscribers receiving an invoice who paid by check or money order and further alleged that Sirius XM’s charging of the fee to the proposed nationwide class constituted a deceptive practice under New York General Business Law Section 349. In November 2010, the U.S. District Court for the Southern District of New York held that plaintiff’s Third Amended Complaint failed to state a claim for breach of contract, that GBL Section 349 only applied to persons deceived in New York (and not to a nationwide class), that plaintiffs were not entitled to leave to file a fourth amended complaint alleging unjust enrichment, and that—having made these rulings—the court lacked subject matter jurisdiction over the action (consisting of a claim under Section 349 on behalf of a purported class of persons deceived in New York against a New York based corporation). Plaintiffs, on appeal, challenged the application of Section 349 and the denial of leave to assert an unjust enrichment claim for a nationwide class. In its decision, the Second Circuit ruled that Section 349 applied only to persons deceived in New York and that the district court properly exercised its discretion in denying leave to amend and in dismissing the action for lack of subject matter jurisdiction.

Litigation partner Michael S. Oberman argued the appeal and was assisted on the brief by Intellectual Property partner Peter A. Abruzzese, Litigation partner Robin Wilcox and Litigation associate Adina C. Levine. Litigation associates Scott Ruskay-Kidd and Selina M. Ellis assisted in the preparation for the oral argument.