Treiber v. Aspen Dental Management, Inc.

SUMMARY ORDER Plaintiffs, individuals who sought and obtained dental treatment from dentists allegedly employed by defendant corporate entities, appeal from the dismissal of their complaint for lack of standing, see Fed. R,Civ.P. 12(b)(1), and from the denial of leave to amend. On appeal of a Rule 12(b)(1) dismissal, “we review factual findings for dear error and legal conclusions de novo, accepting all material facts alleged in the complaint as true and drawing all reasonable inferences in the plaintiffs favor.” Liranzo v. United States, 690 F.3d 78, 84 (2d Cir.2012). We review a denial of leave to amend for abuse of discretion, see Anderson News, L.L.C. v. American Media, Inc., 680 F.3d 162, 185 (2d Cir.2012), except where the denial is based on an interpretation of law, which we review de novo, see TechnoMarine SA v. Giftports, Inc., 758 F.3d 493, 505 (2d Cir.2014). We assume the parties’ familiarity with the facts and record of prior proceedings, which we reference only as necessary to explain our decision to affirm. 1. Standing To demonstrate Article III standing, a plaintiff must allege “a concrete and particularized injury that is fairly traceable to the challenged conduct, and is likely to be redressed by a favorable judicial decision.” Hollingsworth v. Perry, — U.S. -, 133 act. 2652, 2661, 186 L.Ed.2d 768 (2013). *3 Plaintiffs assert that they adequately alleged injury in the form of payments made for dental products and services deceptively represented by defendants as being provided by a legitimate dental practice, when, in fact, the dental practices violated state-law bans on the corporate practice of medicine. 1 After an independent review of the record, we conclude, like the district court, that these payments are not enough to manifest redressable injury. Insofar as the crux of plaintiffs’ complaint is defendants’ proscribed corporate practice of medicine, New York law leaves enforcement to the Attorney General, affording no enforcement rights to consumers. See Schlessinger v. Valspar Corp., 21 N.Y.3d 166, 171-73, 969 N.Y.S.2d 416, 418-20, 991 N.E.2d 190 (2013); see generally Warth v. Seldin, 422 U.S. 490, 500, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975) (“Although standing in no way depends on the merits of the plaintiffs contention that particular conduct is illegal ... it often turns on the nature and source of the claim asserted.”). Plaintiffs assert that they allege a distinct injury attributable to defendants’ deceptive representations. The argument cannot succeed where defendants’ practice “is not inherently deceptive but [becomes] problematic only” because it violates “provision[ ] of New York law” prohibiting non-dentist ownership of dental practices. Schlessinger v. Valspar Corp., 723 F.3d 396, 399 (2d Cir.2013). Such is the case here. Plaintiffs do not allege that they were treated by any unlicensed dentists, that any doctor committed malpractice, that they were ever billed for services that they did not need or receive, or that they suffered injury from any other conduct that, in itself, might “tend[] to deceive consumers.” Schlessinger v. Valspar Corp., 21 N.Y.3d at 172, 969 N.Y.S.2d at 419, 991 N.E.2d 190. 2 While plaintiffs’ assertion of price gouging might, properly pled, demonstrate injury, because the allegation is wholly con-clusory and unsupported by any facts, it is insufficient to support standing. See Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (“[B]are assertions ... are conclusory and not entitled to be assumed true.”). Plaintiffs concede that they did not plead a premium price theory in their complaint. See Appellants’ Reply Br. 5-6. Further, they fail to demonstrate how the value differential between the dental services as advertised and the care received can be measured. See generally Baur v. Veneman, 352 F.3d 625, 632 (2d Cir.2003) (“[T]he requirement of concrete injury recognizes that if an injury is too abstract, the plaintiffs claim may not be capable of, or otherwise suitable for, judicial resolution.”). People by Lefkowitz v. Therapeutic Hypnosis, Inc., 83 Misc.2d 1068, 374 N.Y.S.2d 576 (Sup.Ct., Special Term, 1975), cited by plaintiffs, warrants no different conclusion because it was a state-law-authorized enforcement action by the Attorney General in state court. See Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 804, 105 S.Ct. 2965, 86 L.Ed.2d 628 (1985) (“Standing to sue in any Article III court *4 is, of course, a federal question which does not depend on the party’s ... standing in state court.”); see also Miller v. Redwood Toxicology Lab., Inc., 688 F.3d 928, 934 (8th Cir.2012) (“State courts may afford litigants standing to appear where federal courts would not, but whether they do so has no bearing on the parties’ Article III standing in federal court” (internal quotation marks omitted)). That same reasoning defeats plaintiffs’ efforts to ground their own Article III standing in New York’s decision to allow insurers to pursue claims against fraudulently incorporated medical corporations. Because plaintiffs have not demonstrated the cognizable injury necessary for Article III standing, the district court properly dismissed the complaint under Rule 12(b)(1). 2. Leave to Amend We identify no error in the district court’s denial of leave to amend. Plaintiffs, who had already once amended their pleadings after defendants filed motions to dismiss, failed to show how amendment could have demonstrated a cognizable injury sufficient to support Article III standing. Thus, any further amendment would have been futile. See TechnoMarine SA v. Giftports, Inc., 758 F.3d at 505-06. 3. Conclusion We have considered plaintiffs’ remaining arguments and conclude that they are without merit. We therefore AFFIRM the judgment of the district court. Footnotes [1] New York’s corporate practice of medicine doctrine is codified in various provisions of New York's Education Law, Business Corporation Law, and Limited Liability Company Law, See Treiber v. Aspen Dental Mgmt., Inc., 94 F.Supp.3d 352, 361-62 (N.D.N.Y.2015) (explaining how various New York statutory provisions operate in concert to prohibit "corporations from practicing health care professions that require state licensure, such as medicine and dentistry”). [2] Insofar as plaintiffs cite cases in which standing was premised on actual injury from the receipt of services from an unlicensed physician, such cases are distinguishable on their facts and, therefore, are not applicable here.