Opinion
Index No. 651001/2023 Motion Seq. No. 001
11-13-2023
WARNERMEDIA DIRECT, LLC, Plaintiff, v. PARAMOUNT GLOBAL, SOUTH PARK DIGITAL STUDIOS LLC, and MTV ENTERTAINMENT STUDIOS, Defendants.
Unpublished Opinion
MOTION DATE 04/19/2023
DECISION + ORDER ON MOTION
HON. MARGARET A. CHAN JUDGE
The following e-filed documents, listed by NYSCEF document number (MS001) 23, 24, 25, 26, 46, 47, 48, 49, 50, 51, 52, 53, 54, 55, 56, 57, 58, 59, 60, 61, 65 were read on this motion to/for DISMISS 2nd and 3rd CAUSES OF ACTION
Plaintiff WarnerMedia Direct LLC (plaintiff or WMD) brings this action against defendants Paramount Global (Paramount), South Park Digital Studios LLC (SPDS), and MTV Entertainment Studios (MTV, and together with Paramount and SPDS, defendants) in connection with defendants' purported repudiation of plaintiffs contractual streaming rights to the popular animated comedy series South Park (NYSCEF # 1 - complaint or compl). Plaintiff asserts claims for (1) breach of contract, (2) breach of the implied covenant of good faith and fair dealing, (3) violation of New York General Business Law (GBL) § 349, (4) tortious interference with contract, and (5) unjust enrichment (id). Presently before the court is defendants' partial motion pursuant to CPLR 3211(a)(7) for an order dismissing plaintiffs second cause of action for breach of the implied covenant of good faith and fair dealing and third cause of action for violation of GBL § 349 (NYSCEF # 23). For the following reasons, defendants' motion is granted.
The following facts are drawn from the allegations in the complaint and are accepted as true solely for purposes of this motion.
WMD is the domestic operator of HBO Max (Max), a subscription-based, video-on-demand streaming platform that features programing from HBO, WMD's portfolio of networks, and other third-party studios and producers (compl ¶¶ 7, 15-17). WMD is part of Warner Bros. Discovery, Inc., a global media and entertainment company that creates and distributes a portfolio of content and brands across television, film, and streaming (id. ¶ 14).
According to WMD, on May 23, 2023, HBO Max was replaced by the streaming platform titled "Max.".
On or around September 12, 2019, SPDS-a joint venture between Paramount and the creators of South Park, Trey Parker (Parker) and Matt Stone (Stone)-began soliciting bids for the exclusive right to stream 30 new episodes of South Park after their television premiers on Comedy Central, as well as the exclusive right to stream the existing library of over 300 old South Park episodes (compl ¶¶ 3, 9, 24). On October 19, 2019, after participating in a competitive bidding process, WMD made an offer to SPDS by proposing a flat-rate per-episode licensing fee of $1,687,500 per episode (see id. ¶¶ 28-42, 51). WMD calculated this fee by considering the relatively lower per-episode value of SPDS's existing library of episodes (303 in total), the relatively higher per-episode value of new episodes, and the total number of anticipated new episodes (id. ¶¶ 34'35). WMD acted with the understanding (as communicated by SPDS) that each of the new seasons of South Park (i.e., seasons 24 through 26) would include 10 new episodes (see id. ¶¶ 36'42; see also NYSCEF # 49). As such, when accounting for at least 333 total episodes, WMD essentially offered more than half a billion dollars for the exclusive domestic streaming rights to South Park (compl ¶ 42).
On October 22, 2019, after SPDS accepted WMD's offer, the parties entered into a licensing agreement (the 2019 Agreement) (compl ¶¶ 43-45; see also NYSCEF # 50). Pursuant to the 2019 Agreement, the parties contemplated two types of licensed content: (1) long-form episodes (over 20 minutes) that first premiered on a non-streaming platform (Type A Licensed Content), and (2) any season 24 through 26 episodes that did not meet the premiering criteria for Type A Licensed Content (Type B Licensed Content) (compl ¶ 47). SPDS gave WMD exclusive U.S. rights to stream all Type A License Content for seasons 24 through 26 of South Park, as well as exclusive rights to stream all long-form episodes from seasons 1 through 23, a long-form documentary, and selected short-form content (id. ¶¶ 48, 52). WMD also received "the option but not the obligation" to license Type B Licensed Content (id. ¶ 49). The term for the 2019 Agreement extended from June 24, 2020 through June 23, 2025, during which time WMD's streaming rights were "exclusive" (id. ¶¶ 46, 50).
The parties originally agreed that Max would receive the first episodes for season 24 of South Park in 2020 (compl ¶ 53). However in March 2020, as a result of the COVID-19 pandemic, SPDS informed WBD that it would not go forward with production of season 24 (id). Despite this representation, between September 2020 and March 2021, SPDS allegedly produced two COVID-themed "specials" that premiered on Comedy Central and was approximately 50 minutes in length (the Pandemic Specials) (id. ¶ 54). Although SPDS insisted that the Pandemic Specials were not part of season 24, it nevertheless agreed that they were licensed content under the 2019 Agreement, and the parties agreed to a licensing fee for the Pandemic Specials (id. ¶¶ 55'56). SPDS also gave various assurance to WMD that season 24 episodes would be coming soon (id. ¶ 57).
Later, in January 2021, Paramount announced that it was launching its own streaming platform, Paramount+ (compl ¶ 60). WMD alleges that defendants intended to make South Park a core part of its strategy to grow Paramount-!- (id. ¶¶ 61'63). To effectuate this plan, on August 25, 2021, MTV announced a new, $900 million deal with Parker and Stone that would provide Paramount-!- with exclusive new South Park content over the next five years (id. ¶¶ 64-65, 96; NYSCEF # 51). According to the announcement, Paramount-!- would receive 14 "made-for-streaming movies" (id. ¶ 67; NYSCEF # 52, 91-92). WMD contends that SPDS characterized its new content as "movies," "films," and "events," rather than episodes, to avoid its contractual obligations to WMD under the 2019 Agreement (see compl ¶¶ 66, 68'67, 81, 83-85).
On October 27, 2021, Paramount-!- and MTV issued a press release announcing it first two South Park "events," with the first "event," titled South Park: Post COVID, premiering on November 25, 2021, and the second, then-untitled event premiering in December 2021 (the Post' COVID Content) (see compl ¶¶ 70'71; NYSCEF # 53). The second "event," entitled South Park: Post COVID: The Return of COVID, was subsequently announced on December 8, 2021 (compl ¶¶ 79'80; NYSCEF # 54). According to WMD, the Post' COVID Content was similar in format and length to the Pandemic Specials-it featured the same characters from the prior 23 seasons of South Park, addressed similar subject matter (COVID), and had similar running times (approximately 50'60 minutes per episode) (compl ¶¶ 84, 82). SDPS did not give WMD any notice of its plans to release the Post' COVID Content, nor did it provide WMD with any option to stream this content on Max (see id. ¶¶ 75'76). SPDS subsequently delivered two additional "supersized" movies to Paramount+ which were titled South Park The Streaming Wars Part 1 and South Park The Streaming Wars Part 2, respectively (the Streaming Wars Content) (id. ¶¶ 91, 96; NYSCEF #s 55-56).
While defendants were announcing new South Park content for Paramount+ SPDS informed WMD that the Pandemic Specials were now considered part of season 24 and would constitute four of the episodes for that season (compl ¶ 77). Although SPDS initially assured WMD that it would receive the remaining six episodes of season 24 by the first quarter of 2022, in January 2022, it changed course and represented that the Pandemic Specials were now the entirety of season 24 and that season 25 would consist of only six episodes (id. ¶¶ 78, 86). As of February 9, 2023, SPDS has only provided WMD with eight new South Park episodes (id. ¶ 88). WMD alleges, upon information and belief, that season 26 will also consist of six episodes (id. ¶ 89).
SPDS apparently provided the first episode of season 26 on February 9, 2023, and the second episode of season 26 on February 16, 2023 (compl ¶ 89).
WMD avers that, because of defendants' conduct, it overpaid for South Park episodes under the 2019 Agreement and has lost out on valuable South Park content purportedly owed to it (compl ¶¶ 93'97). Paramount, meanwhile, has enjoyed a sizeable increase in subscriptions and profits by releasing South Park content on Paramount-!- (id. ¶¶ 98'102). WMD further alleges, upon information and belief, that defendants' conduct resulted in substantial confusion among consumers regarding which streaming platform has "exclusive" rights to South Park and has also forced consumers to purchase subscriptions from Paramount-!- when they had believed that exclusivity resided with Max (id. ¶¶ 119'120). In support, WMD points to an article in which Stone and Parker acknowledged that "it probably is confusing" that South Park content appears on two different services (NYSCEF # 57). WMD also identifies a Tom's Guide consumer advice article that characterizes as "[c]onfusing" the fact that Paramount+ is the purported "exclusive home of the movies" while "the series' back catalogue lives on HBO Max" (NYSCEF # 58).
Although relying on federal case law interpreting Federal Rule of Civil Procedure 12(b)(6), courts in this state have recognized that "li]n assessing the legal sufficiency of a claim, the Court may consider those facts alleged in the complaint, documents attached as an exhibit therefor or incorporated by reference . . . and documents that are integral to the plaintiffs claims, even if not explicitly incorporated by reference" (see Dragonetti Brothers Landscaping Nursery & Florist, Inc. v Verizon New York, Inc., 71 Mise 3d 1214[A], at *2 [Sup Ct, NY County, Apr. 18, 2021], aff'd 208 A.D.3d 1125 [1st Dept 2022]; Lore v New York Racing Assn. Inc., 12 Mise 3d 1159[A], at *2 [Sup Ct, Nassau County, May 23, 2006], citing Pisani v Westchester County Health Care Corp., 424 F.Supp.2d 710, 714 [SD NY 2006]).
Legal Standard
CPLR 3211(a)(7) provides that a party may move for judgment dismissing one or more causes of action when a pleading "fails to state a cause of action" (CPLR 3211 [a] [7]). On such a motion, the court "must accept as true the facts as alleged in the complaint and submissions in opposition to the motion, accord [the non-movant] the benefit of every possible favorable inference and determine only whether the facts as alleged fit within any cognizable legal theory" (Whitebox Concentrated Convertible Arb. Partners, L.P. v Superior Well Servs., Inc., 20 N.Y.3d 59, 63 [2012] [internal quotation omitted]; accord Pavich v. Pavich, 189 A.D.3d 548, 549 [1st Dept 2020]). "[W]hether a plaintiff. . . can ultimately establish its allegations is not taken into consideration in determining a motion to dismiss" (Phillips S. Beach LLC v ZC Specialty Ins. Co., 55 A.D.3d 493, 497 [1st Dept 2008], Iv denied 12 N.Y.3d 713 [2009]). The court, however, will not accept "conclusory allegations of fact or law not supported by allegations of specific fact" (Wilson v Tully, 243 A.D.2d 229, 234 [1st Dept 1998]).
Discussion
Plaintiff advances five causes of action against defendants, including claims for (1) breach of contract (Count I), (2) breach of the implied covenant of good faith and fair dealing (Count II), (3) violations of GBL § 349 (Count III), (4) tortious interference with contract (Count IV), and (5) unjust enrichment (Count V) (id}. Defendants now move to dismiss Counts II and III (NYSCEF # 23). The court addresses the sufficiency of these two causes of action below.
I. Plaintiffs GBL § 349 Claim (Count III)
In seeking to dismiss the GBL § 349 claim, defendants argue that plaintiff fails to identify any "consumer-oriented" act or practice in the complaint (NYSCEF # 26 - MOL at 10'12). Rather, defendants urge, the gravamen of the complaint is harm to plaintiffs business arising out of a private contract dispute (id. at 10-12; NYSCEF # 65 - reply at 2-6). And even if plaintiff did allege "consumer-oriented" conduct, defendants aver, it has failed to identify any material misstatement or cognizable injury to consumers (MOL at 11-15; reply at 5-9).
Plaintiff responds that defendants' actions were consumer-oriented because they involved statements designed to influence subscription decisions and divert consumers to Paramount-l- (NYSCEF # 46 - Opp at 14-17). Plaintiff argues that it has sufficiently alleged materially misleading conduct based on defendants allegedly obscuring that Max, rather than Paramount+ held exclusive rights to new South Park episodes and allowed consumers to stream a larger library of South Park content (id. at 17-19). Finally, plaintiff contends that it has sufficiently alleged "devalued or unnecessary subscriptions" resulting from defendants' conduct (id. at 20-21).
Section 349 of the GBL provides a cause of action for any person injured by "deceptive acts or practices in the conduct of any business, trade or commerce or in the furnishing of any service in [New York]" (GBL § 349[a], [h]). To state a GBL § 349 claim, a plaintiff must allege that (1) defendant's acts were consumer oriented; (2) the acts or practices were "deceptive or misleading in a material way"; and (3) plaintiff was injured as a result (see Stutman v Chern. Bank, 95 N.Y.2d 24, 29 [2000]; Oswego Laborers' Local 214 Pension Fund v Marine Midland Bank, N.A., 85 N.Y.2d 20, 25 [1995]).
A key component of a GBL § 349 claim is that the alleged misconduct by a defendant must be "consumer oriented" (New York Univ, v Cont. Ins. Co., 87 N.Y.2d 308, 320 [1995]). Private contract disputes, unique to the parties, are not covered by the statute (see Oswego, 85 N.Y.2d at 25; see also Sec. Mut. Life Ins. Co. of N.Y. v DiPasquale, 283 A.D.2d 182, 182 [1st Dept 2001] [concluding that proposed GBL § 349 claim not viable where it "essentially allege[d] a private contract dispute"]). Even though the alleged conduct need not be repetitive or recurring, "defendant's acts or practices must have a broad impact on consumers at large" (Gomez-Jimenez v New York Law Sch., 103 A.D.3d 13, 16 [1st Dept 2012], Iv denied 20 N.Y.3d 1093 [2013]). In other words, the "gravamen of the complaint must be consumer injury or harm to the public interest" rather than harm to another business (see Electra v 59 Murray Enterprises, Inc., 987 F.3d 233, 258 [2d Cir 2021] [dismissing GBL § 349 claim where alleged misconduct was a "private dispute over a private injury"; A. V.E.L.A., Inc. v Estate of Marilyn Monroe, LLC, 2018 WL 1273343, at *10 [SD NY, Mar. 5, 2018, No. 12 Civ. 4828 (KPF)] [dismissing GBL § 349 claim where allegations concerned harm that counterclaimants' business suffered]).
Plaintiffs GBL § 349 claim fails as a matter of law. As the complaint alleges, defendants purportedly repudiated plaintiffs streaming rights by diverting new South Park content-in the form of supersized "movies," "films," and/or "events"-to Paramount's new streaming service, Paramount-!- (compl ¶¶ 59'69). In doing so, defendants purportedly failed to deliver South Park episodes (i.e., Type A Licensed Content), or otherwise allow plaintiff to exercise an option to license other forms of South Park content (i.e., Type B Licensed Content), as was contemplated under the 2019 Agreement (id. ¶¶ 47-52, 73'78, 86'92). Because of this alleged derogation of plaintiffs bargained for licensing rights, defendants caused WMD to overpay for South Park episodes while defendants purportedly gained increased streaming subscribers and profits at plaintiffs expense (id. ¶¶ 93'103, 122). Viewing these allegations together, it is evident that the gravamen of the complaint centers around a "private contract dispute" that has caused harm to plaintiffs business and not conduct that has caused harm to consumers (see e.g. Moshik Nadav Typography LLC v Banana Republic, LLC, 2021 WL 2403724, at *4 [SD NY June 10, 2021, No. 20'CV'8325 (JMF)] [dismissing GBL § 349 claim where "core of the claim is a dispute between businesses, not harm to consumers"]); Advent Software, Inc. v Sei Global Servs., Inc., 2021 WL 4553670, at *2 [Sup Ct, NY County, Oct. 5, 2021 ["Where the gravamen of the claim is 'harm to the business as opposed to the public at large, the business does not have a cognizable cause of action under § 349.'"]). And insofar as plaintiff has alleged any harm flowing from defendants' marketing and sales, it is incidental to the private contractual harm squarely at the heart of the complaint and therefore insufficient to support this cause of action (see Reed Constr. Data Inc. v. McGraw-Hill Cos., Inc., 745 F.Supp.2d 343, 355 [SD NY 2010] [dismissing GBL § 349 claim where alleged harm to consumers was "incidental in nature" to any harm to plaintiffs business interest]).
Plaintiffs reliance on N. State Autobahn, Inc. v Progressive Ins. Group Co. (102 A.D.3d 5 [2d Dept 2012]) misses the mark. The plaintiffs in N. State Autobahn, alleged that defendants engaged in a false marketing scheme to mislead plaintiffs' customers, as well as those of other independent repair shops, into believing that they must have their vehicles repaired at repair shops that were members of a program advertised by defendants (102 A.D.3d at 9, 13). Notably, the Autobahn plaintiffs had alleged that defendants' conduct was part of an "institutionalized program and [] constituted a standard practice that was routinely applied to all claimants" (id. at 13). Based on these allegations, the Second Department concluded that plaintiffs had sufficiently alleged "consumer-oriented" conduct because their claim focused on actions that had a "broad [] impact on consumers at large" (id. [alterations in original]). Here, by contrast, the complaint is devoid of any allegations of a similar type of wide-reaching marketing campaign by defendants. Rather, as explained above, the overwhelming focus of plaintiffs claims is that it was aggrieved by defendants' purported attempts to skirt their contractual duties under the 2019 Agreement (compl ¶¶ 1, 3'5, 66'92, 122).
Even assuming, however, plaintiff had sufficiently alleged consumer-oriented conduct, its GBL § 349 claim would still fail. It is well established that if a complaint sets forth consumer-oriented conduct, it must still plausibly allege that that defendants had engaged "in an act or practice that is deceptive in a material way" (see Oswego, 85 N.Y.2d at 255 New York Univ., 87 N.Y.2d at 320). Whether a representation or omission is a "deceptive practice" will depend on the likelihood that it will "mislead a reasonable consumer acting reasonably under the circumstances" (Stutman, 95 N.Y.2d at 29! Oswego, 85 N.Y.2d at 26). Here, the crux of plaintiffs GBL § 349 claim is that defendants' representations were materially misleading because they seemingly muddled consumers understanding of who held "exclusive" rights to South Park through intentional mischaracterizations (see compl ¶ 120). But neither the complaint nor the materials offered by plaintiff in its opposition support this conclusion (or even reasonable inference).
To start, nothing in the complaint indicates that the information included in defendants' marketing materials and press releases was false. It is undisputed that, as alleged, defendants, through an agreement between SPDS and MTV, debuted South Park content on Paramount-l- and did so on an "exclusive" basis (see id. ¶¶ 67, 70-71, 79-83, 91). Although plaintiff may take issue with defendants' characterization of the Post-COVID Content and Streaming Wars Content as "events" or "movies" as an attempt to circumvent the terms of the 2019 Agreement, defendants' literally true public representations are not actionable conduct under GBL § 349 (see Gomez-Jimenez, 103 A.D.3d at 17 [explaining that a "party does not violate GBL 349 by simply publishing truthful information and allowing consumers to make their own assumptions about the nature of the information"]; see also Dwyer v Allbirds, Inc., 598 F.Supp 3d 137, 150 [SD NY 2022] [rejecting GBL § 349 claim where no reasonable consumer could conclude that defendant was undertaking a carbon-footprint calculation in any matter other than the one described in its literature]).
Nor is there any basis to infer that defendants' marketing was misleading. In its opposition, plaintiff argues that defendants intentionally mischaracterized South Park content and the nature of its offerings to consumers (Opp at 19). To support this point, it cites to an interview with Parker and Stone in which Parker purportedly acknowledges that Paramount decided to call content produced pursuant to SPDS's deal with MTV as "movies" (id. at 19, citing NYSCEF # 61).
This notion of confusion, however, is belied by other documents offered by plaintiff, which indicates that consumers could, in fact, differentiate between the content offerings available on Max and Paramount-!- (see NYSCEF # 58 at 3-4 [distinguish between Paramount-!- being the "exclusive home" of "two South Park movies per year" and Max housing the "series' back catalogue"]). At any rate, to the extent that plaintiffs claim hinges on potential consumer confusion regarding the availability of "exclusive" South Park content on two different streaming platforms (seecompl ¶¶ 118-120), such confusion is insufficient to maintain a claim under GBL § 349 (see e.g. Narrative Ark Entertainment LLC v Archie Comic Pubs., Inc., 2017 WL 3917040, at *6 [SD NY Sept. 5, 2017, No. 16 CV 6109 (VB)] [concluding that allegations as to consumer confusion, which stemmed from defendant allegedly misrepresenting the extent of its use of plaintiffs stories, characters, and artwork in order to influence purchasing decisions, did not state a claim under GBL § 349]; see also Cooke v Terminal Iron Works, LLC, 2021 WL 2910321, at *1 [Sup Ct, NY County, July 8, 2021 [acknowledging that "consumer confusion does not constitute the type of consumer-oriented conduct that falls within the scope of GBL § 349"]).
WMD takes issue with the Tom's Guide article's representation that the South Park "back catalogue" would be on Max (Opp at 7 n.4). But nothing in the article suggests that episodes from seasons 24 through 26 would not be available on Max or that the author otherwise misapprehended the content offerings between Max and Paramount.
In short, plaintiff fails to state a claim for relief under GBL § 349. Defendants' motion to dismiss Count III is granted.
II. Plaintiffs Implied Covenant Claim (Count II)
Defendants maintain that plaintiff s claim for breach of the implied covenant of good faith and fair dealing is duplicative of its breach of contract claim because it alleges the same injuries and damages against the same party (MOL at 15-16). In opposition, plaintiff contends that its implied covenant claim is premised on additional facts beyond those asserted in its breach of contract claim (Opp at 11-13).
"Implicit in all contracts is a covenant of good faith and fair dealing in the course of contract performance" (Atlas El. Corp, v United El. Group, Inc., 77 A.D.3d 859, 861 [2d Dept 2010]). To establish a claim for breach of the implied covenant of good faith and fair dealing, a plaintiff must allege that the defendant sought to prevent performance of the contract or to withhold its benefits from the plaintiff (see Jaffe v. Paramount Communications, 222 A.D.2d 17, 22 [1st Dept 1996]). But where an implied covenant claim is predicated on essentially the same allegations as a breach of contract claim and seeks the same damages, dismissal is warranted (see Salomon v Citigroup Inc., 123 A.D.3d 517, 518 [1st Dept 2014]). That is exactly the case here.
In its complaint, plaintiff premises its breach of contract claim on the fact that SPDS breached the 2019 Agreement by "diverting and licensing episodes of [South Park to Paramount+," "failing to offer [WMD] the right to license Post-COVID Content and Streaming Wars Content," and providing [WMD] with fewer than 10 episodes for each of seasons 24 and 25 of [South Park]," as well as season 26 (compl ¶¶ 104-110). Meanwhile, for its implied covenant claim, plaintiff avers that SPDS "destroyed, interfered with, frustrated, and injured [WMD's] rights" by "diverting and licensing South Park episodes to Paramount+ failing to offer [WMD] the right to license the Post-CO VID Content and the Streaming Wars Content, and providing [WMD] with fewer than 10 episodes for each of season 24 and 25 of [South Park]," as well as season 26 (id. ¶ 114). Put simply, these claims are premised on an identical set of allegations of misconduct by defendants, and not, as plaintiff argues (see Opp at 12), "additional facts." Dismissal of plaintiffs implied covenant claim as duplicative is therefore appropriate (see Rossetti v Ambulatory Surgery Ctr. of Brooklyn, LLC, 125 A.D.3d 548, 549 [1st Dept 2015] [dismissing claim for breach of implied covenant of good faith and fair dealing where claim was based on "same allegations as underlie the breach of contract claims"]).
To avoid this outcome, plaintiff chiefly relies on the Second Department's decision in Elmhurst Dairy v Bartlett Dairy (97 A.D.3d 781 [2d Dept 2012]). Such reliance is misplaced. In Elmhurst, plaintiff, a milk processor, had entered into a contract with defendant, a milk wholesaler (id. at 782). Under the contract, defendant would purchase its milk requirements from plaintiff to sell to various stores, including Starbucks (id). Eventually, defendant informed plaintiff that it would stop selling plaintiffs milk to Starbucks and would instead deliver milk processed and sold by another entity under a separate, alternative arrangement (id.). Plaintiff sued for breach of contract and breach of the implied covenant of good faith and fair dealing (id.). In its analysis, the Second Department concluded that, as alleged, the implied covenant claim was not duplicative because it effectively espoused an alternative theory that, even if defendant had not breached an express contractual provision, it engaged in bad faith conduct designed to deprive plaintiff of the fruits of a specific contractual provision (i.e., exclusivity) (see id. at 784, citing Moran v Erk, 11 N.Y.3d 452, 456 [2008]). Here, by contrast, plaintiff has alleged that defendants "destroyed], interfer[ed], frustrated], or injur[ed]" plaintiffs rights under the 2019 Agreement, but it then repackages the exact same conduct that purportedly breached plaintiffs express licensing and content rights under the 2019 Agreement (compl ¶¶ 113-114). Thus, unlike in Elmhurst, the complaint is bereft of any "additional facts" suggesting an alternative, non-duplicative theory of bad faith conduct in support of an implied covenant claim.
Similarly unavailing is plaintiffs citation to Legend Autorama, Ltd. v Audi of Am., Inc. (100 A.D.3d 714 [2d Dept 2012]). The plaintiff in Legend Autorama, had franchised two Audi dealerships in Suffolk County that were operated pursuant to a dealer agreement it had with the defendant (id. at 715). Then, in 2007, defendant entered into a dealer agreement with another entity and appointed it as its authorized dealer in Suffolk County (id.). The Legend Autorama plaintiff alleged that, in addition to breaching the express terms of the dealer agreement, defendant also breached the implied covenant of good faith and fair dealing (id.). But the theories of liability underlying that plaintiffs breach of contract claim and its implied covenant claim were distinct and separate (id. at 716-717). On the one hand, the Legend Autorama plaintiff alleged that defendant breached the implied covenant of good faith and fair dealing by engaging in discretionary conduct that frustrated an existing right or benefit under its agreement with plaintiff (id. at 716). On the other hand, the breach of contract claim was premised on the defendant breaching its obligation to "actively assist [plaintiff] in all aspects of [plaintiffs] Operations" (id). Therefore, Legend Autorama seemingly involved a distinct set of facts to support plaintiffs two separate claims and, as a result, the issue of whether the plaintiffs claims were duplicative was not presented to the court.
To summarize, plaintiffs claim of breach of the implied covenant of good faith and fair dealing is entirely duplicative of its breach of contract claim. Defendants' motion to dismiss Count II is therefore granted.
Conclusion
For the foregoing reasons, it is hereby
ORDERED that defendants' motion to dismiss Counts II and III of the complaint is granted; and it is further
ORDERED that a preliminary conference shall take place on December 13, 2023 at 10:30 a.m. or at such time as the parties may schedule with the court's law clerk, provided, however, that the parties shall first meet and confer to stipulate to a preliminary conference order, available at https://www.nycourts.gov/LegacyPDFS/courts/comdiv/NY/PDFs/part49-PC-Order-fillable.pdf.