Perkins v. The New York Times Company

Background

Megan Perkins brought a putative class action against The New York Times Company, doing business as The New York Times. She alleged that she purchased a monthly digital subscription through the Times website while located in North Carolina. She claimed that the Times did not adequately disclose that the subscription would automatically renew, how to cancel it, and that the subscription price would later change. She alleged that the subscription was renewed repeatedly and that she incurred $136 in charges without knowing consent.

Perkins asserted one claim under North Carolina’s Automatic Renewal Statute, N.C.G.S. § 75-41, along with claims for unfair or deceptive trade practices under North Carolina law and unjust enrichment. The Times moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint plausibly states a legal claim.

Automatic-Renewal Statute

The court concluded that the complaint did not plausibly allege a violation of subsection 75-41(a)(1), which requires clear and conspicuous disclosure of the automatic-renewal clause. The checkout page shown in the complaint stated twice that the subscription would automatically renew, including once above the purchase button. The court held that the complaint could not require additional design features—such as special size, color, or font—that the statute did not expressly require for that subsection. The motion to dismiss was granted as to this claim.

The court reached a different conclusion as to subsection 75-41(a)(2), which requires clear and conspicuous disclosure of how to cancel. The checkout page told consumers they could cancel but did not explain how. Although a hyperlink led to a longer cancellation policy listing a telephone number and online chat option, the court held that Perkins plausibly alleged that the cancellation methods were not clearly and conspicuously disclosed. The motion to dismiss was denied as to this claim.

Perkins acknowledged that subsection 75-41(a)(3), concerning written notice for an automatic renewal exceeding 60 days, did not apply to her subscription. Her claim under that subsection was deemed voluntarily dismissed.

The court also held that Perkins plausibly alleged a violation of subsection 75-41(a)(4), which requires changing contract terms to be disclosed clearly and conspicuously in at least 12-point type and bold print. The complaint alleged that the checkout page described the later price increase but did not use bold type. The court concluded that the claim could proceed, at least because the text was not bolded. The motion to dismiss was denied as to this claim.

Standing

The court considered whether Perkins had Article III standing, meaning a concrete personal injury sufficient to sue in federal court. It held that the complaint adequately alleged concrete harm at the pleading stage because Perkins claimed that deficient disclosures led to an automatically renewing subscription and $136 in charges. The court stated, however, that Perkins would ultimately have to prove that the alleged disclosure violations caused concrete harm, rather than relying only on technical statutory violations.

Other Claims

The court granted the motion to dismiss the unfair-or-deceptive-trade-practices claim. It held that the complaint described formatting problems involving information that was accessible through the checkout page or a linked policy, but did not plausibly allege deception, concealment, or the egregious or aggravating conduct required under North Carolina law.

The court dismissed the unjust-enrichment claim because the complaint treated the subscription as a contract, did not plead unjust enrichment in the alternative, and sought relief for conduct governed by that contract. Under North Carolina law, the court explained, unjust enrichment generally is unavailable when a contract governs the parties’ relationship.

Disposition

Judge Castel concluded that the motion to dismiss was denied as to Count One claims under N.C.G.S. § 75-41(a)(2) and (a)(4). The subsection (a)(3) claim was voluntarily dismissed. The motion was granted as to the remainder of Count One and the entirety of Counts Two and Three. The opinion did not decide whether a class should be certified.