BROOKLYN, N.Y. (Legal Newsline) - The lawyer who wanted to punish CVS for conducting a fundraising campaign for the American Diabetes Association has lost his case.
New York judge Rachel Kovner on Sept. 29 threw out the case, with prejudice, of plaintiff Kevin McCabe and his attorneys at Todd Bank, who sued CVS in May 2022 over a $10 million pledge CVS made to the ADA.
To fulfill this pledge, customers at CVS were asked if they'd like to make a donation when they checked out. The suit said CVS was using the goodwill of its customers to pay off a debt, while CVS in October 2022 challenged the plaintiff's definition of "debt."
"As is plain from the agreement, CVS has no debt to the ADA," a motion to dismiss said. "Rather, CVS agreed to fundraise from its customers and turn over the donations to the ADA.
"CVS further promised that at the conclusion of three-plus years of fundraising, CVS would (if necessary) make up the difference between the cumulative customer donations and $10 million. Obviously, upon signing, CVS did not assume an unconditional $10 million debt to the ADA."
Judge Kovner wrote that McCabe failed to allege any fraud, breach of contract or violations of New York General Business Law and other state laws. At issue was the donation screen, which featured several pre-selected amounts or a "no" option.
"The Checkout Message described in the amended complaint does represent to customers that their donations will go to the ADA," Kovner said.
"But Plaintiff has not plausibly alleged that this representation was false, because it is undisputed that the donations of customers such as McCabe did go to the ADA."
McCabe claimed the message needed to disclose CVS would have to pay the difference if it failed to raise $10 million from customers. That didn't amount to fraud, Kovner wrote.
McCabe also alleged CVS could divert donations over the $10 million threshold to other entities (which CVS denied), but he never alleged that happened. CVS said the agreement required it to give all donations to the ADA.
CVS's motion to dismiss said the lawyer Bank used an alias that did not identify him as an attorney to obtain pertinent information about the ADA agreement before he filed suit.