Case 1:19-cv-11711-LJL Document 207 Filed 08/11/22 Page 1 of 40
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
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`ERIC FISHON, et al.,
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`PELOTON INTERACTIVE, INC.,
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`---------------------------------------------------------------------- X
`LEWIS J. LIMAN, United States District Judge:
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`-v-
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`Plaintiffs,
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`Defendant.
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`8/11/2022
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`19-cv-11711 (LJL)
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`OPINION AND ORDER
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`Defendant Peloton Interactive, Inc. (“Peloton” or “Defendant”) moves, pursuant to
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`Federal Rule of Civil Procedure 12(b)(1) and 12(b)(6), to dismiss the Third Amended Complaint
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`(the “Complaint”). For the following reasons, Peloton’s motion to dismiss is denied.
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`BACKGROUND
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`Familiarity with the Court’s prior opinions resolving previous motions to dismiss in this
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`case is assumed, and the relevant facts are reviewed here only in brief. For the purposes of this
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`motion to dismiss, the Court accepts as true the well-pleaded allegations of the Complaint.
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`Peloton is an exercise equipment and media company that sells stationary bicycles
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`(“Peloton Bike”) and treadmills (“Peloton Tread”). Dkt. No. 195 ¶¶ 2–3. Peloton also offers a
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`monthly subscription service that allows users of the Peloton Bike and Peloton Tread (together,
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`“Peloton Hardware”) to watch live or pre-recorded “on-demand” fitness classes. Id. ¶ 3.
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`Purchasers of Peloton Hardware may buy this subscription—which contains library access,
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`advanced metrics, and a feature that allows users to compete against each other—for $39 per
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`month. Id. ¶ 5.
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`Peloton incorporates music into its classes, in that “[e]very on-demand and studio class
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`Case 1:19-cv-11711-LJL Document 207 Filed 08/11/22 Page 2 of 40
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`includes a themed playlist curated by the instructor to match the tempo and intensity of the
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`class.” Id. ¶ 18. Peloton obtained licenses from certain copyright holders, but some of the music
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`played in the classes was used without permission, id. ¶ 19; Peloton was thus “building its on-
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`demand library with copyrighted material for which it did not have the proper licenses,” id. ¶ 20.
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`In April 2018, Peloton received a cease-and-desist letter regarding alleged copyright
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`infringement of songs appearing in certain of the on-demand classes in its library. Id. ¶ 21. In
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`March 2019, members of the National Music Publishers Association filed a lawsuit against
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`Peloton alleging that, for years, Peloton had been using their music in its fitness-class videos
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`without proper licensing and that this copyright infringement was knowing and reckless. Id.
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`¶ 22. Peloton denied that it was violating copyright laws and asserted counterclaims in that
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`action for antitrust violations and tortious interference with prospective business relations. Id.
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`¶ 23. Notwithstanding this denial, on March 25, 2019, Peloton “abruptly removed every class
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`from its on-demand library that contained one or more of the allegedly copyright infringing
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`songs . . . result[ing] in the removal of more than half of the classes from its on-demand library.”
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`Id. This “purge of Peloton’s on-demand library . . . significantly decreased the quality and
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`quantity of popular music available on Peloton’s workout class playlists, . . . materially
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`diminishing users’ experience with both the Peloton Hardware and Peloton Membership.” Id.
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`¶ 27.
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`Peloton has described its library of fitness classes as “ever-growing” or “growing,” see
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`id. ¶¶ 16–17, and Plaintiffs assert that “Peloton’s ‘ever-growing’ on-demand library is central to
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`its marketing,” id. ¶ 15. Even after receiving notice via the cease-and-desist letter that Peloton
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`was building its library of classes with infringing songs, Peloton continued to market “an
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`expansive, ever-growing library of live and on-demand studio classes,” id. ¶ 30 (internal
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`quotation marks omitted), and to refer to its subscriptions as including “unlimited access to a
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`growing library of live streaming and on-demand Peloton classes,” id. (internal quotation marks
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`omitted). Peloton also continued to accept subscription payments and charge full price for its
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`subscription services notwithstanding that it knew or should have known that subscribers “would
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`not be able to use the full on-demand class library because the number of on-demand classes was
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`materially decreasing due to Peloton’s wrongful conduct,” id. ¶ 31 and knew that they “would
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`necessarily not be receiving everything that Peloton represented they would receive,” id. ¶ 32.
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`Plaintiffs Eric Passman (“Passman”) and Ishmael Alvarado (“Alvarado” and together
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`with Passman, “Plaintiffs”) bring a class action complaint against Peloton, alleging that its
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`statements that its library of classes was “ever-growing” were misrepresentations and that,
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`through these misrepresentations and the failure to disclose the “imminent removal of over half
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`of its on-demand library,” Peloton defrauded them and other members of a proposed class,
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`deprived them of the benefit of their bargain, and unjustly enriched itself at their expense. Id. ¶
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`34. They allege that, as a result of Peloton’s representations and material omissions, they
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`overpaid for Peloton’s goods and services, id. ¶ 41, and that:
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`Peloton’s representations and material omissions were part of the basis of the
`bargain, in that Plaintiffs attributed value to Peloton’s promises regarding the nature
`and characteristics of its on-demand digital library and would not have purchased
`the hardware and corresponding [subscription], or would not have purchased it on
`the same terms, if they knew the truth that Peloton’s on-demand digital library
`would shrink by more than 50%.
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`Id. ¶ 42.
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`Plaintiffs bring claims under New York consumer-protection statutes individually and on
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`behalf of a class defined in the Complaint as “[a]ll purchasers of the Peloton Hardware and/or the
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`corresponding Peloton Membership subscription from April 9, 2018 through March 25, 2019 in
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`the State of New York.” Id. ¶ 107.1
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`PROCEDURAL HISTORY
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`This is the third amended complaint in this action. The first complaint was filed in
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`December 2019 by Eric Fishon (“Fishon”), Alicia Pearlman (“Pearlman”), and Patrick Yang,
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`individually and on behalf of all others similarly situated, bringing claims for violations of New
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`York General Business Law (“NYGBL”) §§ 349 and 350, which relate to deceptive acts or
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`practices and false advertising. Dkt. No. 1. On August 4, 2020, and pursuant to an unopposed
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`request, the Court ordered the voluntary dismissal of Patrick Yang. Dkt. No. 61. On November
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`9, 2020, the Court granted a motion to dismiss the claims of Pearlman—a Michigan resident—
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`because she lacked statutory standing under the New York statute, but it denied a motion to
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`dismiss Fishon’s claims. See Fishon v. Peloton Interactive, Inc. (“Fishon I”), 2020 WL
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`6564755 (S.D.N.Y. Nov. 9, 2020). In denying the motion to dismiss Fishon’s claims, the Court
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`explained that a plaintiff bringing a claim under Sections 349 and 350 need not specifically
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`allege that the plaintiff saw the misleading statements because “[r]eliance is not an element of a
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`private cause of action under either statute.” Id. at *9. Because reliance is not an element of the
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`claim, alleging that a plaintiff was injured by “rel[ying] on the misleading statement to her
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`detriment is not a ‘[t]hreadbare recital[] of the elements of a cause of action’” but rather “an
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`allegation of fact as to how she came to be injured.” Id. (quoting Ashcroft v. Iqbal, 556 U.S. 662,
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`678 (2009)); see also id. at *10.
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`On January 21, 2021, Plaintiffs filed a first amended complaint. Dkt. No. 81. Peloton
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`1 In the Complaint, Plaintiffs also state that they are bringing claims on behalf of “[a]ll
`purchasers of the Peloton hardware and/or corresponding Peloton Membership subscription from
`April 9, 2018 through March 25, 2019,” id. ¶ 106, but clarify that they are not pursuing claims on
`behalf of this nationwide class but “includ[ing] the assertion of a nationwide class in this Third
`Amended Complaint to preserve the issue for appeal,” id. n.70.
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`again moved to dismiss Pearlman’s claims, again contending that Pearlman did not plead facts
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`sufficient to show that she had statutory standing to sue under Sections 349 and 250 of the
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`NYGBL. The Court, once again, dismissed Pearlman’s claims under the NYGBL, explaining
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`that her amendment failed to cure the deficiencies identified in the original complaint. Fishon v.
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`Peloton Interactive, Inc. (“Fishon II”), 2021 WL 2941820, at *5 (S.D.N.Y. July 12, 2021). The
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`Court did, however, grant leave for Pearlman to amend her complaint to plead her cause of
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`action under Michigan law. Id.
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`On July 26, 2021, Plaintiffs filed a second amended complaint, with Fishon bringing
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`claims under NYGBL §§ 349 and 350 and Pearlman bringing a claim under the Michigan
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`Consumer Protection Act (“MCPA”), Mich. Comp. Laws Ann. § 445.901, et seq. On August 9,
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`2021, Defendant moved to dismiss Pearlman’s claim in that complaint. Dkt. No. 107. On
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`September 16, 2021, Fishon and Pearlman moved to certify the putative classes; Fishon moved
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`for certification of a class of “[a]ll purchasers of the Peloton hardware and/or the corresponding
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`Peloton Membership subscription from April 9, 2018 through March 25, 2019 in the State of
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`New York,” while Pearlman sought certification of a class of “[a]ll purchasers of the peloton
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`hardware and/or the corresponding Peloton Membership subscription from April 9, 2018 through
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`March 25, 2019 in the State of Michigan.” Dkt. No. 118 at 9. The Court granted Defendant’s
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`motion to dismiss Pearlman’s claim under the MCPA, concluding that Pearlman did not allege
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`with the requisite specificity facts giving rise to her reliance on Peloton’s statements that its on-
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`demand library of fitness classes were “ever-growing,” as was required under the Federal Rule of
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`Civil Procedure Rule 9(b) standard applicable to her MCPA claim for which reliance was an
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`essential element. Fishon v. Peloton Interactive, Inc., 2022 WL 179771, at *8 (S.D.N.Y. Jan. 19,
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`2022). The Court also denied the motion for class certification by Fishon on the grounds that
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`Fishon was not an adequate class representative. Id. at *11–12.
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`Plaintiffs Passman and Alvarado, previously absent class members, filed the Complaint—
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`the fourth in this action—on February 18, 2022. Dkt. No. 195. As before, Defendant has moved
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`to dismiss the Complaint, and Plaintiffs oppose dismissal.
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`LEGAL STANDARD
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`Defendant moves to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1) and
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`12(b)(6).
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`“A district court properly dismisses an action under Fed. R. Civ. P. 12(b)(1) for lack of
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`subject matter jurisdiction if the court ‘lacks the statutory or constitutional power to adjudicate
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`it,’ . . . such as when . . . the plaintiff lacks constitutional standing to bring the action.” Cortlandt
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`Street Recovery Corp. v. Hellas Telecomm., S.À.R.L., 790 F.3d 411, 417 (2d Cir. 2015) (quoting
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`Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000)). “A motion to dismiss for lack of
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`subject matter jurisdiction may ‘raise a facial challenge based on the pleadings, or a factual
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`challenge based on extrinsic evidence.’” U.S. Airlines Pilots Ass’n ex rel. Cleary v. US Airways,
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`Inc., 859 F. Supp. 2d 283 (E.D.N.Y. Mar. 16, 2012) (quoting Guadango v. Wallack Ader
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`Levithan Assoc., 932 F. Supp. 94, 95 (S.D.N.Y. 1996)). In either event, the plaintiff bears the
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`burden of establishing standing and “must allege facts that affirmatively and plausibly suggest
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`that it has standing to sue.” Amidax Trading Grp. v. S.W.I.F.T. SCRL, 671 F.3d 140, 145 (2d Cir.
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`2011). Where the jurisdictional challenge is facial, a court “draw[s] all facts—which [it]
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`assume[s] to be true unless contradicted by more specific allegations or documentary evidence—
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`from the complaint and from the exhibits attached thereto” and “construe all reasonable
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`inferences to be drawn from those factual allegations in [the plaintiff’s] favor.” Id.
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`“Where the jurisdictional challenge is fact-based, the defendant may ‘proffer[] evidence
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`beyond the [p]leading,’ and the plaintiff ‘will need to come forward with evidence of [its] own to
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`controvert that presented by the defendant if the affidavits submitted on a 12(b) motion . . .
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`reveal the existence of factual problems in the assertion of jurisdiction.’” Monegro v. Street
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`Insider Dot Com Inc., 2022 WL 445797, at *2 (S.D.NY. Feb. 11, 2022) (internal quotation
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`marks and citation omitted) (quoting Carter v. HealthPort Techs., LLC, 822 F.3d 47, 57 (2d Cir.
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`2016)). Where jurisdictional facts are in dispute, “the party asserting subject matter jurisdiction
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`‘has the burden of proving by a preponderance of the evidence that it exists.’” Tandon v.
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`Captain’s Cove Marina of Bridgeport, Inc., 752 F.3d 239, 243 (2d Cir. 2014) (quoting
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`Makarova, 201 F.3d at 113). “If the extrinsic evidence presented by the defendant is material
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`and controverted, the district court will need to make findings of fact in aid of its decision as to
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`standing.” Carter, 822 F.3d at 57; see also APWU v. Potter, 343 F.3d 619, 627 (2d Cir. 2003)
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`(“[W]here jurisdictional facts are placed in dispute, the court has the power and obligation to
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`decide issues of fact by reference to evidence outside the pleadings, such as affidavits.” (quoting
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`LeBlanc v. Cleveland, 198 F.3d 353, 356 (2d Cir. 1999))). “However, the plaintiffs are entitled
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`to rely on the allegations in the [complaint] if the evidence proffered by the defendant is
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`immaterial because it does not contradict plausible allegations that are themselves sufficient to
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`show standing.” Carter, 822 F.3d at 57.
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`To survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), a
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`complaint must include “sufficient factual matter, accepted as true, to ‘state a claim to relief that
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`is plausible on its face.’” Iqbal, 556 U.S. at 678 (quoting Bell Atlantic Corp. v. Twombly, 550
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`U.S. 554, 557 (2006)). “A claim has facial plausibility when the plaintiff pleads factual content
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`that allows the court to draw the reasonable inference that the defendant is liable for the
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`misconduct alleged.” Id. Generally, a complaint need not allege “detailed factual allegations,”
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`but “a plaintiff’s obligation to provide the grounds of his entitlement to relief requires more than
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`labels and conclusions, and a formulaic recitation of the elements of a cause of action will not
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`do.” Twombly, 50 U.S. at 555.
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`DISCUSSION
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`Defendant argues that dismissal is warranted pursuant to Federal Rule of Civil Procedure
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`12(b)(1) because neither Passman nor Alvarado have standing since “they have not pled and
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`cannot credibly plead that they suffered an injury fairly traceable to any of the allegedly
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`misleading misstatements or omissions at issue in this case,” id. at 1, and “there are no well-pled
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`allegations that either Plaintiff suffered an injury caused by the allegedly deceptive
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`advertisements,” id. at 2. Defendant contends that dismissal also is appropriate under Rule
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`12(b)(6) because the Complaint does not plead causation or allege that Peloton omitted material
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`information by failing to disclose to its customers, before March 25, 2019, that it would remove
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`classes, id.; and because Plaintiffs’ claims are barred by the voluntary-payment doctrine, id. at
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`3.2 Plaintiffs disagree with Defendant’s view of the merits and, as to standing, argue that they
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`have adequately pleaded the injury necessary for standing in that they alleged that they paid price
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`premiums for Peloton’s products when they purchased those products before the “purge” of the
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`music classes—injuries that the Court has already found to be sufficient to sustain the NYGBL
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`claims—and that these injuries are fairly traceable to Peloton’s misleading advertisements. Dkt.
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`No. 201 at 6–16.
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`2 Defendant also argues that Plaintiffs have repleaded claims with respect to Pearlman that have
`already been dismissed and that the Court should dismiss those claims to the extent they are
`alleged in the Complaint. In their opposition, Plaintiffs clarify that they are not asserting any
`claims that were previously dismissed. Dkt. No. 201 at 23 n.14. In light of this concession, the
`Court need not consider whether to dismiss such claims involving Pearlman; those claims are
`dismissed.
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`I.
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`Article III Standing
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`“Article III of the Constitution limits federal courts to deciding ‘Cases’ and
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`‘Controversies.’ For a legal dispute to qualify as a genuine case or controversy, at least one
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`plaintiff must have standing to sue.” Dep’t of Commerce v. New York, 139 S. Ct. 2551, 2565
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`(2019). “To have standing, a plaintiff must ‘present an injury that is concrete, particularized and
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`actual or imminent; fairly traceable to the defendant’s challenged behavior; and likely to be
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`redressed by a favorable ruling.’” Spokeo, Inc. v. Robins, 578 U.S. 330, 338 (2016) (quoting
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`Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992)). “If a plaintiff fails to satisfy any of
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`those elements, a federal court lacks subject-matter jurisdiction to hear the case and it must be
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`dismissed.” Ross v. AXA Equitable Life Ins. Co., 115 F. Supp. 3d 424, 432 (S.D.N.Y. 2015).
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`The Court must resolve the question whether Plaintiffs have Article III standing before it
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`considers Defendant’s argument that Plaintiffs have not pleaded causation sufficient to state a
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`claim under the NYGBL. See Coan v. Kaufman, 457 F.3d 250, 256 (2d Cir. 2006) (“Article III
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`standing . . . ordinarily should be determined before reaching the merits . . .”); Borenkoff v.
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`Buffalo Wild Ings, Inc., 2018 WL 502680, at *2 (S.D.N.Y. Jan. 19, 2018) (“Generally, a court
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`must determine whether it has subject matter jurisdiction before proceeding to evaluate the
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`merits of a plaintiff’s cause of action.”). Defendant contends that Plaintiffs lack Article III
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`standing for two independent reasons: Plaintiffs have not pleaded a cognizable injury, and
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`Plaintiffs have not adequately plead that their alleged injuries are fairly traceable to the allegedly
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`misleading advertisements.3
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`3 Defendant also argues that Plaintiffs lack standing to bring a claim for injunctive relief, Dkt.
`No. 197 at 14, but in their opposition to the motion to dismiss, Plaintiffs withdrew this claim.
`Defendant’s argument with respect to Plaintiffs’ standing to seek injunctive relief is therefore
`moot, and the claim for injunctive relief will be dismissed.
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`The Court independently analyzes whether Plaintiffs have Article III standing.4 That
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`inquiry is analytically distinct from the question whether the plaintiff has pleaded facts sufficient
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`to sustain a claim under NYGBL §§ 349 and 350. See Axon v. Florida’s Natural Growers, Inc.,
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`813 Fed. App’x 701, 703–04 (2d Cir. 2020) (summary order) (analyzing separately whether a
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`plaintiff had Article III standing and statutory standing under NYGBL §§ 349 and 350); Colpitts
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`v. Blue Diamond Growers, 527 F. Supp. 3d 562, 576 (S.D.N.Y. 2021) (stating that while the
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`plaintiff adequately pleaded an injury-in-fact for purposes of Article III standing, the question
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`“whether [p]laintiff has properly alleged an injury for his N.Y.G.B.L. §§ 349 and 350 claims
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`requires a separate inquiry”); DaCorta v. AM Retail Group, Inc., 2018 WL 557909, at *6–7
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`(S.D.N.Y. Jan. 23, 2018) (holding that the plaintiff’s allegation that she would not have made the
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`purchase or would not have paid the amount she did if not for the alleged deception was
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`sufficient to confer Article III standing but that plaintiff had failed to properly plead an injury for
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`the purposes of NYGBL §§ 349 and 350); Borenkoff, 2018 WL 502680, at *3–4 (holding that,
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`while the plaintiff had Article III standing—a conclusion the court reached with “serious
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`reservations”—she had not stated a claim). Holdings and statements regarding what
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`allegations—made by other plaintiffs—were adequate to state a claim under Sections 349 and
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`350 may be instructive. However, they are not dispositive with respect to whether these
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`Plaintiffs have Article III standing.
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`4 As Judge Furman wrote in evaluating a putative class action brought pursuant to New York
`law:
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`it is insufficient for Plaintiffs to argue . . . that [a state law], standing alone, confers
`upon them an ‘injury’ sufficient to establish Article III standing. Instead, Plaintiffs
`must establish that at least one of them has otherwise suffered an injury sufficient
`to entitle him to sue in federal court—namely, the ‘invasion of a legally protected
`interest which is . . . concrete and particularized’ and ‘actual or imminent, not
`conjectural or hypothetical.’
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`Id. (quoting Lujan, 504 U.S. at 560).
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`A.
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`Injuries Alleged
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`Plaintiffs allege that, by misrepresenting that its on-demand digital library would be
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`“ever-growing” and not disclosing “the imminent removal of over half its on-demand library,”
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`Peloton “defrauded Plaintiffs and the other Class members, depriving them of the benefit of their
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`bargain with Peloton and/or unjustly enriching itself at Plaintiffs’ and the other Class members’
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`expense.” Dkt. No. 195 ¶ 34. Plaintiffs allege that they entered into transactions with Peloton
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`“relying on Peloton’s uniform representations about its ‘ever-growing’ or ‘growing’ on-demand
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`library of fitness classes.” Id. ¶¶ 35, 37. Plaintiffs further allege they were harmed in two
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`separate ways: First, that “Peloton’s representations and material omissions regarding its on-
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`demand library caused Plaintiffs to pay increased costs for the Peloton Hardware and
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`corresponding Peloton Membership, which was worth less than represented because Peloton’s
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`representations and/or omissions regarding its on-demand digital library were deceptive and
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`misleading and constituted false advertising,” id. ¶ 41; and second, “Peloton’s representations
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`and material omissions were part of the basis of the bargain, in that Plaintiffs attributed value to
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`Peloton’s promises regarding the nature and characteristics of its on-demand digital library and
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`would not have purchased the Peloton Hardware and corresponding Peloton Membership, or
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`would not have purchased it on the same terms, if they knew the truth that Peloton’s on-demand
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`digital library would shrink dramatically, by more than 50%,” id. ¶ 42; see also id. ¶¶ 127, 146
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`(alleging that “Peloton deprived Plaintiffs . . . of the benefit of the bargain”).
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`Stated otherwise, Plaintiffs allege they were harmed in two distinct but overlapping ways.
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`First, regardless whether they personally relied on or even saw Defendant’s misrepresentations,
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`Defendant’s misleading statements made consumers believe that there was value in Defendant’s
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`Hardware and/or subscriptions that was not there, thereby permitting Defendant to charge
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`Plaintiffs a price for the Hardware and/or subscriptions that Defendant would not have been able
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`to command in the marketplace but for the misrepresentations. Second, Plaintiffs personally
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`were misled by Peloton’s misrepresentations and as a result of those misrepresentations agreed to
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`purchase their Hardware and/or subscriptions at a price they would not have—if they had
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`purchased them at all—had they not been misled by Peloton’s misrepresentations. The second
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`theory clearly implicates the Plaintiffs’ personal reliance on the representations—by alleging that
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`they would not have purchased their Hardware and/or subscription memberships at all or on the
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`same terms “if they knew the truth that Peloton’s on-demand digital library would shrink
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`dramatically,” id. ¶ 42, the complaint assumes that Plaintiffs knew something other than “the
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`truth”—that is, that they were aware of Peloton’s alleged misrepresentations and believed that
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`the digital library would not shrink. See Sharpe v. A&W Concentrate Co., 2021 WL 3721392, at
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`*2 (E.D.N.Y. July 23, 2021) (characterizing “an allegation that, absent the misrepresentation, the
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`plaintiff ‘would not have paid the same amount’ for the product” as an allegation of reliance
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`(quoting Colpitts, 2021 WL 981455, at *5)).
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`The Court first considers the argument there are insufficient allegations to support an
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`“overpayment” theory of injury, which relates to Plaintiffs’ first theory of injury—that they paid
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`increased costs for products that were worth less than was represented—which the Court will
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`refer to as a “price premium” injury. Next, the Court will consider Defendant’s argument that
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`any injury alleged by Plaintiffs is not fairly traceable to Peloton’s alleged misrepresentation. As
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`Defendant frames this argument, it is primarily based on the evidence in the record that Plaintiffs
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`either were not aware of the relevant misrepresentations prior to making their purchases or did
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`not rely on those representations in making their purchasing decisions and thus cannot sustain a
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`claim under Plaintiffs’ second theory of injury—that they were injured by buying a product on
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`terms that they would not otherwise have agreed to had they personally not been deceived and
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`had access to fewer classes than they reasonably believed they would have at that time. But it is
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`also based on Passman’s date that he purchased his bike and initially purchased his membership
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`in February 2017, which Defendant argues is well before Peloton’s representations allegedly
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`became false in April of 2018.
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`B.
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`Cognizable Injury
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`Defendant contends that Plaintiffs have not pleaded a cognizable injury sufficient to
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`support standing. It argues that Plaintiffs “have not included any specific factual allegations
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`supporting an ‘overpayment’ theory of injury—including what price they paid for their Bikes,
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`how the advertisements affected the price of Peloton’s products, or how much any competitors
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`charged for similar alternatives.” Dkt. No. 197 at 13. It also argues that, to the extent Plaintiffs
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`assert theories of injuries like a “diminished user experience” or failure to receive the “benefit of
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`the bargain” after classes were purged in March of 2019, such injuries cannot support standing.
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`Id. Plaintiffs do not appear to press these theories of standing injury in their opposition. Rather,
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`Plaintiffs respond that they were injured when they paid price premiums for Peloton’s products
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`and cite the Court’s prior Opinion in support of its position that the complaint need not provide
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`details about how the plaintiffs overpaid in order to sustain a claim under the NYGBL. Dkt. No.
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`201 at 6–8.5
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`As Plaintiffs correctly point out, multiple courts have held that allegations that a plaintiff
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`suffered a price premium injury is sufficient to support Article III standing at the motion to
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`dismiss stage. Dkt. No. 201 at 6–7 (citing Guariglia v. Procter & Gamble Co., 2018 WL
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`5 Plaintiffs also point to a conjoint analysis and associated damages report previously submitted
`to the Court in connection with a motion for class certification—reports which were challenged
`by Defendant and where the challenge was ultimately deemed to be moot—as “showi[ing] that
`the injury caused by Peloton’s misrepresentations was . . . actual, concrete, and measurable.” Id.
`at 9. These reports are not properly before the Court on a motion to dismiss, and the Court will
`not consider them.
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`Case 1:19-cv-11711-LJL Document 207 Filed 08/11/22 Page 14 of 40
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`1335356, at *12 (E.D.N.Y. Mar. 14, 2018) (noting, in the context of class standing, “that courts
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`in this circuit ‘have construed the payment of a premium price to be an injury in and of itself.’”
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`(quoting Belfiore v. Proctor & Gamble Co., 94 F. Supp. 3d 440, 447 (E.D.N.Y. 2015))); and
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`Sharpe, 2021 WL 3721392, at *2); see also Axon, 813 Fed. App’x at 703–04 (“As for Article III
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`standing, Axon has suffered an injury-in-fact because she purchased products bearing allegedly
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`misleading labels and sustained financial injury—paying a premium—as a result.”); Gold v. Eva
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`Naturals, Inc., --- F. Supp. 3d ---, 2022 WL 566230, at *2 (E.D.N.Y. Feb. 16, 2022) (“[B]ased . .
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`. on the allegations, the putative class members have all suffered a concrete injury because they
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`paid a price premium for a purportedly ‘natural’ product.”); Kacocha v. Nestle Purina Petcare
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`Co., 2016 WL 4367991, at *7 (S.D.N.Y. Aug. 12, 2016) (explaining that “the law is clear that
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`economic injury—including that caused by paying a premium—is sufficient to establish injury
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`for standing purposes” and holding that plaintiff has pleaded an “adequate injury for purposes of
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`standing” where he “allege[d] that he ‘paid a premium price’ that he would not have had he
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`‘known the truth’” (alteration adopted) (citation omitted)). Those courts, however, have not
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`addressed the precise question raised by Plaintiffs’ first theory of injury—whether evidence that
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`a consumer paid more than the market otherwise would have demanded in the absence of a
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`misrepresentation can support standing in the absence of evidence of individualized reliance by
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`the consumer on the representation.
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`Sharpe v. A&W Concentrate Company is instructive on this point. In that case, the
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`plaintiffs testified that the allegedly false claim did not influence their decision to purchase the
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`product at issue, but they also alleged that they paid a premium for the product. Sharpe, 2021
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`WL 3721392, at *2; see also Sharpe v. A&W Concentrate Company, 1:19-cv-768-BMC
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`(E.D.N.Y.), ECF No. 35 ¶ 64. In concluding that the plaintiffs had Article III standing
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`Case 1:19-cv-11711-LJL Document 207 Filed 08/11/22 Page 15 of 40
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`notwithstanding the fact that the misrepresentations “did not mislead the plaintiffs,” Judge Cogan
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`explained:
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`[D]efendants misapprehend the injury. True, a plaintiff “comfortably satisfies the
`injury-in-fact prong” with an allegation that, absent the misrepresentation, the
`plaintiff “would not have paid the same amount” for the product. Colpitts v. Blue
`Diamond Growers, No. 20-cv-2487, 2021 WL 981455, at *5 (S.D.N.Y. March 16,
`2021). But even though this sort of reliance satisfies Article III, it does not follow
`that Article III requires this sort of reliance.
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`For instance, “a manufacturer’s misrepresentation may allow it to command a price
`premium and to overcharge customers systematically.” Carriuolo v. Gen. Motors
`Co., 823 F.3d 977, 987 (11th Cir. 2016). A manufacturer can do so when a product
`with the misrepresentation will “attract greater market demand” than a product
`without the misrepresentation. Id. A plaintiff thus suffers an injury when “a
`company marketed a product as having a ‘unique quality’ . . . the marketing allowed
`the company to charge a price premium for the product, and . . . the plaintiff paid
`the premium and later learned that the product did not, in fact, have the marketed
`quality.” Duran v. Henkel of Am., Inc., 450 F. Supp. 3d 337, 350 (S.D.N.Y. 2020).
`That injury doesn’t involve reliance, but it still satisfies Article III.
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`Sharpe, 2021 WL 3721392, at *2 (emphasis added).
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`
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`Judge Furman took a similar view in In re AXA Equitable Life Insurance Company COI
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`Litigation (“In re AXA”), 2020 WL 4694172 (S.D.N.Y. Aug. 13, 2020). In evaluating whether a
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`person was “aggrieved” within the meaning of New York Insurance Law § 4226(a)(1)—an
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`inquiry that is co-extensive with the injury-in-fact requirement of Article III—the cou