Fox and frauds: Cablevision spat is breach of contract, not false advertising

In re Cablevision Consumer Litigation, 864 F. Supp. 2d 258 (E.D.N.Y. 2012)

Plaintiffs sued Cablevision for not giving them credits for a 2-week period in 2010 during which they couldn’t watch Fox channels because of a licensing dispute between Fox and Cablevision, allegedly because Cablevision rejected numerous reasonable proposals.  Cablevision’s terms of service include a provision for giving customers credit for each “known program or service interruption in excess of 24 hours,” which Cablevision didn’t do here (with a small exception for customers who ordered extra World Series coverage).  Here, the breach of contract claims survived because plaintiffs’ interpretation of the ToS was a reasonable one, while the claims for breach of the covenant of good faith and fair dealing and the state law consumer protection claims failed.  The court also dismissed plaintiffs’ request for an injunction requiring Cablevision to do better in its contracts with content providers.

The consumer protection claims were under the laws of New York, Connecticut, and New Jersey.  First, the court held that Rule 9(b) didn’t apply to the NY claims at least where the alleged conduct didn’t involve an affirmative misrepresentation, but didn’t need to resolve the issue because the claims flunked Rule 8.  NY’s GBL §349 requires (1) a consumer-oriented practice that was (2) materially misleading or deceptive, and (3) that caused the plaintiff resulting injury. 

Here, the allegations were that Cablevision represented that it would carry the Fox Channels despite having reason to know that an interruption of that service was imminent, failed to warn subscribers in advance that the Fox Channels would be disconnected, billed for service in advance and later failed to credit subscribers for the disruption.  But plaintiffs didn’t specify any affirmative misleading representations, and the alleged omission wasn’t objectively misleading.  Cablevision’s lineup wasn’t set in stone, and the ToS explicitly contemplated service and program interruptions, so the alleged omission couldn’t have misled a reasonable consumer into believing that no service interruptions would occur. Failure to provide a credit didn’t count as a deceptive practice, because that was a mere breach of contract claim, which is generally insufficient to state a §349 claim.  For the same reasons, §350, which bars false advertising, was no help.

Connecticut’s Unfair Trade Practices Act bans “unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce,” which also covers practices that violate public policy. But here too the claims failed because they merely stated “a breach of contract claim in disguise,” with no aggravating circumstances.

Likewise, New Jersey’s Consumer Fraud Act didn’t apply.  In cases of wrongful omissions, the NJCFA requires a showing that the defendant acted with knowledge, and plaintiffs didn’t allege that Cablevision intended to mislead customers by not timely advising them of the impending cutoff.  The NJCFA also requires more than a mere breach of contract.