Bill Text: NY A08035 | 2017-2018 | General Assembly | Introduced
Bill Title: Relates to the delegation of state enforcement authority to private actors to bring public enforcement actions of consumer claims.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2017-12-15 - enacting clause stricken [A08035 Detail]
Download: New_York-2017-A08035-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 8035 2017-2018 Regular Sessions IN ASSEMBLY May 25, 2017 ___________ Introduced by M. of A. KAVANAGH -- read once and referred to the Commit- tee on Consumer Affairs and Protection AN ACT to amend the general business law, in relation to the delegation of state enforcement authority to private actors The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. This act shall be known and may be cited as the "Empowering 2 People in Rights Enforcement ("EMPIRE") Consumer Act". 3 § 2. Legislative findings and declaration. 1. The legislature finds 4 and declares that limits on the availability of public enforcement 5 resources have deleterious effects on the marketplace by allowing abuses 6 targeting consumers to persist unprosecuted. To ensure the robust 7 enforcement of consumer claims, while minimizing the outlay of scarce 8 state funds, this act allows private individuals to bring public 9 enforcement actions in certain contexts in which the state does not have 10 the means to fully enforce state consumer protections. 11 2. The legislature further finds and declares that unfair business 12 practices and abuses targeting consumers often affect large numbers of 13 consumers. 14 3. The legislature further finds and declares that the purpose of the 15 EMPIRE Consumer Act is to create a means of empowering citizens as 16 private attorneys general to enforce consumer protections. 17 4. The legislature further finds and declares that the purpose of the 18 EMPIRE Consumer Act is to incentivize private parties to recover civil 19 penalties and remedies for the government that otherwise may not have 20 been assessed and collected by overburdened state enforcement agencies. 21 Such representative actions are an efficient mechanism to limit system- 22 atic violations, will enforce the rights of more consumers, and can 23 benefit the New York state attorney general's office with enhanced 24 resources. EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD11783-01-7A. 8035 2 1 5. The legislature further finds and declares that the purpose of the 2 EMPIRE Consumer Act is to benefit those businesses that are operating 3 within the law and who, as a result, face unfair competition from indi- 4 viduals and entities shirking the law and victimizing consumers. 5 6. The legislature further finds and declares that the purpose of the 6 EMPIRE Consumer Act is to incentivize not-for-profit consumer groups to 7 aid consumers to report abuses and violations of the law. 8 7. The legislature further finds and declares that the EMPIRE Consumer 9 Act is part of a history both in New York state and the United States of 10 laws enabling private citizens to aid in public enforcement. In similar 11 qui tam legislation enabling private citizens to aid in public enforce- 12 ment, the resulting action is in reality a public enforcement action. 13 § 3. The general business law is amended by adding a new article 22-AA 14 to read as follows: 15 ARTICLE 22-AA 16 EMPOWERING PEOPLE IN RIGHTS ENFORCEMENT CONSUMER ACT 17 Section 350-f-2. Definitions. 18 350-f-3. Public enforcement actions. 19 350-f-4. Procedure. 20 350-f-5. Construction of this article. 21 § 350-f-2. Definitions. For the purposes of this article the following 22 terms shall have the following meanings: 23 1. "Consumer" is a natural person who buys, leases, contracts for or 24 otherwise obtains goods or services primarily for personal, family or 25 household purposes. In this article, unless the context clearly indi- 26 cates otherwise, the term "consumer" shall include one or more consumers 27 bringing a public enforcement action or for whose benefit a not-for-pro- 28 fit consumer group brought a public enforcement action. 29 2. "Consumer claim" means any cause of action primarily intended to 30 benefit consumers involving conduct which could otherwise be brought by 31 the attorney general pursuant to subdivision twelve of section sixty- 32 three of the executive law or any other provision of law. Such term 33 shall include, but not be limited to, violations of articles eleven, 34 twenty-two-A, twenty-five, and twenty-nine-H and section three hundred 35 ninety-six-r of this chapter, and articles nine, nine-A and ten of the 36 personal property law, but shall not include sections one hundred nine- 37 ty-eight-a and one hundred ninety-eight-b of this chapter. 38 3. "Corrective notice" means a notice issued by an injured consumer 39 pursuant to subdivision two of section three hundred fifty-f-four of 40 this article, after notice by the attorney general that the consumer's 41 or not-for-profit consumer group's original notice pursuant to subdivi- 42 sion one of section three hundred fifty-f-four was not in compliance 43 with subdivision one of such section or the regulations issued there- 44 under. 45 4. "Public enforcement action" means an action brought under this 46 article by one or more consumers or a not-for-profit consumer group 47 intended to enforce consumer claims enforceable by the attorney general. 48 5. "Underlying claim" means a consumer claim alleging illegal conduct 49 which serves as the basis of a public enforcement action. Such term 50 shall not include an action under subdivision twelve of section sixty- 51 three of the executive law. 52 § 350-f-3. Public enforcement actions. 1. Any injured consumer or 53 consumers or not-for-profit consumer group may initiate a public 54 enforcement action on behalf of the attorney general for any consumer 55 claim, on behalf of the injured consumer or other consumers in regard to 56 the conduct of any business, trade or commerce or in the furnishing ofA. 8035 3 1 any service in this state, pursuant to the procedures specified in 2 section three hundred fifty-f-four of this article. If a not-for-profit 3 consumer group brings the action, the consumer must elect the not-for- 4 profit consumer group in writing in a form which the attorney general 5 shall by regulation prescribe. Plaintiffs may allege multiple violations 6 affecting more than one consumer. 7 2.(a) In any public enforcement action, the injured consumer or not- 8 for-profit consumer group shall be entitled to receive any relief that 9 the attorney general or injured consumer would be entitled to under the 10 underlying claim, including injunctive relief, restitution, civil penal- 11 ties or damages. The injured consumer or not-for-profit consumer group 12 may receive either the civil penalty provided for in the underlying 13 claim or up to five thousand dollars for each violation, whichever is 14 higher. Notwithstanding the preceding sentence, a court may award a 15 lesser amount if, based on the facts and circumstances of the particular 16 case, to do otherwise would result in an award that is unjust, arbitrary 17 and oppressive, or confiscatory. 18 (b) Any injured consumer or not-for-profit consumer group that 19 prevails in a public enforcement action shall be entitled to an award of 20 reasonable attorney's fees and costs. 21 3. Civil penalties recovered by injured consumers or not-for-profit 22 consumer groups shall be distributed as follows: 23 (a) If the injured consumer initiated the public enforcement action 24 without electing a not-for-profit consumer group pursuant to subdivision 25 one of this section, forty-five percent to the consumer or consumers and 26 fifty-five percent to the attorney general for enforcement of this arti- 27 cle, to be continuously appropriated to supplement and not supplant the 28 funding to the attorney general for those purposes. 29 (b) If the injured consumer or consumers elected a not-for-profit 30 consumer group pursuant to subdivision one of this section, thirty 31 percent to the injured consumer, fifteen percent to the not-for-profit 32 consumer group, and fifty-five percent to the attorney general for 33 enforcement of this article, to be continuously appropriated to supple- 34 ment and not supplant the funding to the attorney general for those 35 purposes. 36 4. The right to bring a public enforcement action under this article 37 shall not be subject to private agreements between a consumer and a 38 business or other defendant. 39 5. Notwithstanding any other provision of law, public enforcement 40 actions must be commenced within three years, subject to the tolling 41 provisions in subdivision five of section three hundred fifty-f-four of 42 this article. 43 § 350-f-4. Procedure. 1. No public enforcement action may be commenced 44 prior to thirty days after written notice by certified mail, return 45 receipt requested, has been provided by the injured consumer or not-for- 46 profit consumer group to the attorney general in a form in compliance 47 with regulations in regard to this action which shall be prescribed by 48 the attorney general. Such regulations shall at a minimum provide that 49 the notice shall include: 50 (a) the legal name, address, telephone number (if any), and email (if 51 any) of the business; 52 (b) the name, address, telephone number (if any), and email (if any) 53 of the injured consumer; 54 (c) the legal name, address, telephone number (if any), and email (if 55 any) of the not-for-profit consumer group, if applicable; and 56 (d) a statement of the underlying claim.A. 8035 4 1 2. Such regulations pursuant to subdivision one of this section shall 2 provide for the right of the injured consumer or not-for-profit consumer 3 group to furnish a corrective notice after notice by the attorney gener- 4 al to the consumer or not-for-profit consumer group, whichever is appli- 5 cable, that the original notice was not in compliance with this section 6 or the regulations issued thereunder, specifying with particularity the 7 deficiencies in the original notice. Such notice shall be provided by 8 the attorney general within thirty days of the original notice or the 9 original notice shall be deemed in compliance with subdivision one of 10 this section. The consumer or not-for-profit consumer group shall have 11 thirty days after the attorney general's notice that the original notice 12 was not in compliance to submit a corrective notice to the attorney 13 general by certified mail, return receipt requested. For purposes of 14 determining whether the injured consumer or not-for-profit consumer 15 group complied with this subdivision or subdivision one of this section 16 in an action under this article, the notice shall be construed in a 17 light favorable to the consumer or not-for-profit consumer group. 18 3. No public enforcement action shall be brought if the attorney 19 general is actively investigating the same matter which is the subject 20 of the notice provided for in subdivision one of this section with the 21 intent to determine whether it will file an action or special proceeding 22 over such conduct, provided that the attorney general informs the 23 injured consumer or not-for-profit consumer group of the same by certi- 24 fied mail, return receipt requested, within thirty days of the consum- 25 er's or not-for-profit consumer group's original notice made pursuant to 26 subdivision one of this section or the consumer's or not-for-profit 27 consumer group's corrective notice, whichever is later. 28 4. Notwithstanding subdivision three of this section, if after provid- 29 ing the notice to the injured consumer or not-for-profit consumer group 30 pursuant to subdivision three of this section, the attorney general does 31 not commence an action within one hundred eighty days of the later of 32 the time periods specified in subdivision three of this section, the 33 consumer or not-for-profit consumer group may file a public enforcement 34 action. 35 5. The statute of limitations in subdivision five of section three 36 hundred fifty-f-three of this article shall be tolled: 37 (a) for the thirty day period in subdivision one of this section, if 38 the attorney general does not issue a corrective notice; 39 (b) for the period from the providing of the original notice by the 40 consumer or not-for-profit consumer group pursuant to subdivision one of 41 this section to the date permitted for the consumer or not-for-profit 42 consumer group to submit a corrective notice, if the attorney general 43 requested a corrective notice pursuant to subdivision two of this 44 section; or 45 (c) for the period from the providing of the original notice by the 46 consumer or not-for-profit consumer group pursuant to subdivision one of 47 this section to the later of the periods provided in subdivision four of 48 this section, if the attorney general provides the notice provided in 49 subdivision three of this section that it is actively investigating the 50 same matter and then does not commence an action in the time periods 51 provided in subdivision four of this section. 52 6. In any public enforcement action, the plaintiff shall notify the 53 attorney general of the action and the attorney general may intervene as 54 a matter of right. 55 7. The attorney general shall establish a publicly available database 56 of actions brought pursuant to this article, including the parties, theA. 8035 5 1 disposition and any other information which the attorney general shall 2 by regulation prescribe. 3 § 350-f-5. Construction of this article. 1. Nothing in this article 4 shall operate to limit any party's right to pursue any other remedies 5 available under state or federal law, either separately or concurrently 6 with an action taken under this article. 7 2. This article shall not supersede any other law of this state under 8 which the attorney general is authorized to take any action or conduct 9 any inquiry, including subdivision twelve of section sixty-three of the 10 executive law. 11 3. This article shall be construed in light of its purposes to expand 12 the enforcement of laws that protect injured consumers. 13 § 4. Subdivision (h) of section 349 of the general business law, as 14 amended by chapter 157 of the laws of 1984, is amended to read as 15 follows: 16 (h) In addition to the right of action granted to the attorney general 17 pursuant to this section, any person who has been injured by reason of 18 any violation of this section may bring an action in his or her own name 19 to enjoin such unlawful act or practice, an action to recover his or her 20 actual damages or [fifty] five hundred dollars, whichever is greater, or 21 both such actions. The court may, in its discretion, increase the award 22 of damages to an amount not to exceed three times the actual damages up 23 to [one] ten thousand dollars, if the court finds the defendant willful- 24 ly or knowingly violated this section. The court may award reasonable 25 attorney's fees to a prevailing plaintiff. 26 § 5. Severability. If any word, phrase, clause, sentence, paragraph, 27 section or part of this act or the application thereof to any person or 28 circumstances shall be adjudged invalid by a court of competent juris- 29 diction, such order or judgment shall be confined in its operation to 30 the controversy in which it was rendered, and shall not affect or inval- 31 idate the remainder thereof, but shall be confined in its operation to 32 the word, phrase, clause, sentence, paragraph, section or part thereof 33 directly involved in the controversy in which such judgment shall have 34 been rendered. 35 § 6. This act shall take effect on the one hundred eightieth day after 36 it shall have become a law, provided, however, that effective immediate- 37 ly, the addition, amendment and/or repeal of any rule or regulation 38 necessary for the implementation of this act on its effective date are 39 authorized to be made and completed on or before such date.
