Demarco v. National Collector's Mint, Inc.

229 F.R.D. 73, 2005 U.S. Dist. LEXIS 13657, 2005 WL 1606408
CourtDistrict Court, S.D. New York
DecidedJune 30, 2005
DocketNo. 04 CIV. 09206(CM)
StatusPublished
Cited by9 cases

This text of 229 F.R.D. 73 (Demarco v. National Collector's Mint, Inc.) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Demarco v. National Collector's Mint, Inc., 229 F.R.D. 73, 2005 U.S. Dist. LEXIS 13657, 2005 WL 1606408 (S.D.N.Y. 2005).

Opinion

DECISION AND ORDER DENYING DEFENDANTS’ MOTION TO DISMISS AND GRANTING PLAINTIFF’S MOTION FOR CLASS CERTIFICATION

MCMAHON, District Judge.

Plaintiff Adam DeMarco has commenced this purported class action against the National Collector’s Mint, Sidney Nachman, and Avram C. Freedberg (collectively “Defendants”) for Defendants’ failure to comply with their obligations under the Hobby Protection Act, 15 U.S.C. § 2101 (“HPA”) with regards to their production, marketing, and distribution of a commemorative coin known as the Freedom Tower Silver Dollar. Plaintiff alleges the Defendants failed to mark the Freedom Tower Silver Dollar with the word “COPY,” as required for “imitation numismatic items” under the Hobby Protection Act.

Defendants have moved to dismiss Plaintiffs complaints for failure to state a claim pursuant to Fed.R.Civ.P. 12(b)(6) and failure to satisfy the pleading requirements of Fed. R.Civ.P. 8. Plaintiff opposes the motion and cross moves for class certification.

For the reasons stated below, all Defendants’ motions are DENIED and Plaintiffs cross motion is GRANTED. I also deny Defendants’ application for bifurcation of the trial into liability and damages phases.

[76]*76Facts

The facts as alleged in the complaint are as follows:

Defendant National Collector’s Mint (“NCM”) is a Delaware corporation whose principal place of business is in Port Chester, New York. Complaint (“Cplt.”) 115. NCM marketed, sold, and distributed a coin called the Freedom Tower Silver Dollar (“FTSD”) throughout the United States. Cplt. H 9.

Sidney Nachman and Avram C. Freedberg are the president and director of NCM respectively. They share a business address withs NCM and are responsible for formulating, directing, and controlling the acts and practices of NCM. Cplt. HH 6-7.

On or about September 1, 2004, Defendants began to advertise and sell the FTSD for $23.45 per coin plus shipping and handling. Cplt. HH 9, 15-16. Defendants advertised the FTSD as a “coin” made from .999 pure silver that had been “recovered from Ground Zero.” Cplt. H14. Defendants also stated that the coin had been “legally authorized” and was “government issue.” Cplt. H11. The FTSD is stamped with the phrases, “In God We Trust”, “One Dollar”, and “We Will Never Forget” surrounding an image of the World Trade Center on one side and the design for the Freedom Tower project on the other. Cplt. HH 12-13.

Plaintiff is a resident of Burlington County, New Jersey. Cplt. H 4. He purchased the coin from Defendants after seeing a television advertisement that promoted the FTSD as a legally authorized, government-issued silver dollar that commemorated the September 11, 2001 attacks on the World Trade Center. Cplt. HH 4, 9,11.

Plaintiff alleges the FTSD is an “imitation numismatic item” as defined under the “HPA” and should have been marked “COPY” as per the HPA. Cplt. HH 19-20. Plaintiff claims that by advertising the FTSD as a “coin',” and “legally authorized” and “government issue,” Defendants engaged in unfair and deceptive practices in commerce in violation of the Federal Trade Commission Act. Cplt. H 21. Plaintiff further asserts that Defendants had knowledge of these violations of law but have failed to remedy those violations and have persisted in this illegal conduct. Cplt. HH 40^11.

Plaintiff seeks certification of a nationwide class consisting of himself and all other purchasers of the FTSD. He seeks both injunctive and monetary relief.

Standards

Dismissal of a complaint for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6) is proper where “it appears beyond a doubt that the plaintiff can prove no set of facts in support of his claim that would entitle him to relief.” Hards v. City of New York, 186 F.3d 243, 247 (2d Cir.1999). The test is not whether the plaintiff is ultimately likely to prevail, but whether he is entitled to offer evidence to support his claims. Chance v. Armstrong, 143 F.3d 698, 701 (2d Cir.1998). The court assumes that all factual allegations in the complaint are true, and .draws all reasonable inferences in the plaintiffs favor. EEOC v. Staten Island Sav. Bank, 207 F.3d 144, 148 (2d Cir.2000).

“In considering a motion to dismiss for failure to state a claim under Fed.R.Civ.P. 12(b)(6), a district court must limit itself to facts stated in the complaint or in documents attached to the complaint as exhibits or incorporated in the complaint by reference.” Kramer v. Time Warner, Inc. 937 F.2d 767, 773 (2d Cir.1991) (Emphasis added). I do so limit myself and ignore any additional material that were included in the motion papers but not attached to the complaint. Because the text of the FTSD advertisement is quoted in the complaint, the advertisement itself may be considered without converting the motion to one for summary judgment. Id.

A motion to dismiss a complaint for failure to satisfy the pleading requirements pursuant to Fed.R.Civ.P. 8 will only be granted if the plaintiffs complaint lacks a “short and plain statement of the claim showing that the pleader is entitled to relief.” Swierkiewicz v. Sorema N.A., 534 U.S. 506, 512, 122 S.Ct. 992, 152 L.Ed.2d 1 (2002) (quoting Rule 8(a)(2)). A complaint need not state the legal theory, facts, or elements underlying the claim except in certain instances and the complaint should be considered very liberally with dismissal based on Rule 8 occurring [77]*77only for egregious shortcomings. Phillips v. Girdich, 408 F.3d 124, 127-28 (2d Cir.2005).

Discussion

The Hobby Protection Act

The HPA was designed to protect hobbyists and collectors from being defrauded by unscrupulous individuals and corporations that marketed and/or distributed imitation numismatic items. It is a consumer protection statute, and so, like all other consumer protection statutes, it should be liberally construed. Johnson v. Riddle, 305 F.3d 1107, 1117 (10th Cir.2002) (the court quoting Congressional Committee hearings “found that debt collection abuse by third party debt collectors is a widespread and serious national problem ... as such is should be construed liberally in favor of the consumer”). See 15 U.S.C. § 1692(e); Harrison v. NBD Inc., 968 F.Supp. 837, 844 (E.D.N.Y.1997) (Court held because the Fair Debt Collection Practices Act is a remedial statute, it should be construed liberally in favor of the consumer); Belmont v.

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229 F.R.D. 73, 2005 U.S. Dist. LEXIS 13657, 2005 WL 1606408, Counsel Stack Legal Research, https://law.counselstack.com/opinion/demarco-v-national-collectors-mint-inc-nysd-2005.