Bill Text: NY S02407 | 2019-2020 | General Assembly | Amended

Bill Title: Relates to standing for persons affected by prohibited or unlawful business practices and expands prohibited acts to include unfair, deceptive or abusive acts.

Spectrum: Partisan Bill (Democrat 21-0)

Status: (Introduced) 2020-01-08 - REFERRED TO CONSUMER PROTECTION [S02407 Detail]

Download: New_York-2019-S02407-Amended.html

                STATE OF NEW YORK

            Cal. No. 1093

                               2019-2020 Regular Sessions

                    IN SENATE

                                    January 24, 2019

          SALAZAR, SEPULVEDA, SKOUFIS, THOMAS -- read twice and ordered printed,
          and  when  printed  to  be  committed  to  the  Committee  on Consumer
          Protection -- committee discharged, bill amended, ordered reprinted as
          amended and recommitted to said  committee  --  committee  discharged,
          bill  amended,  ordered  reprinted  as amended and recommitted to said
          committee -- reported favorably from said committee, ordered to  first
          and  second  report,  ordered  to a third reading, amended and ordered
          reprinted, retaining its place in the order of third reading

        AN ACT to amend the general business law, in relation  to  standing  for
          persons affected by prohibited or unlawful business practices

          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:

     1    Section 1. Section 349 of the general business law, as added by  chap-
     2  ter 43 of the laws of 1970, subdivision (h) as amended by chapter 157 of
     3  the  laws  of 1984, and subdivision (j) as added by section 6 of part HH
     4  of chapter 55 of the laws of 2014, is amended to read as follows:
     5    § 349. [Deceptive acts] Prohibited acts and  practices  unlawful.  (a)
     6  [Deceptive] This section prohibits any unfair, deceptive or abusive acts
     7  or practices in the conduct of any business, trade or commerce or in the
     8  furnishing of any service [in this state are hereby declared unlawful].
     9    (1)  For  the  purposes  of this section, an act or practice is unfair
    10  when:
    11    (i) it causes or is likely to cause substantial injury, the injury  is
    12  not  reasonably  avoidable, and the injury is not outweighed by counter-
    13  vailing benefits; or
    14    (ii) it takes unreasonable advantage of the inability of a  person  to
    15  protect his or her interests because of the person's infirmity, illiter-
    16  acy or inability to understand the language of an agreement.

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.

        S. 2407--C                          2

     1    (2)  For the purposes of this section, an act or practice is deceptive
     2  when the act or practice misleads or is likely to mislead a  person  and
     3  the person's interpretation is reasonable under the circumstances.
     4    (3)  For  the  purposes of this section, an act or practice is abusive
     5  when:
     6    (i) it materially interferes with the ability of a  person  to  under-
     7  stand a term or condition of a product or service; or
     8    (ii) takes unreasonable advantage of:
     9    (A)  a person's lack of understanding of the material risks, costs, or
    10  conditions of the product or service;
    11    (B) a person's inability to protect his or her interests in  selecting
    12  or using a product or service; or
    13    (C) a person's reasonable reliance on a person covered by this section
    14  to act in his or her interests.
    15    (b)  Whenever  the attorney general shall believe from evidence satis-
    16  factory to him or her that any person, firm, corporation or  association
    17  or agent or employee thereof has engaged in or is about to engage in any
    18  of  the  acts  or  practices stated to be unfair, unlawful, deceptive or
    19  abusive, he or she may bring an action in the name and on behalf of  the
    20  people  of  the  state of New York to enjoin such unlawful acts or prac-
    21  tices and to obtain restitution  of  any  moneys  or  property  obtained
    22  directly  or  indirectly by any such unlawful acts or practices. In such
    23  action preliminary relief may be granted under  article  sixty-three  of
    24  the  civil  practice law and rules.  Such actions may be brought regard-
    25  less of whether or not the underlying violation is directed at  individ-
    26  uals  or  businesses,  is consumer-oriented, or involves the offering of
    27  goods, services, or property for personal, family or household purposes.
    28    (c) Before any violation of this section is sought to be enjoined, the
    29  attorney general shall be required to give the person against whom  such
    30  proceeding  is  contemplated notice by certified mail and an opportunity
    31  to show in writing within five business days after receipt of notice why
    32  proceedings should not be instituted against  him  or  her,  unless  the
    33  attorney  general  shall  find,  in  any  case  in which he or she seeks
    34  preliminary relief, that to give such notice and opportunity is  not  in
    35  the public interest.
    36    (d)  In any such action it shall be a complete defense that the act or
    37  practice is, or if in interstate  commerce  would  be,  subject  to  and
    38  complies  with  the  rules and regulations of, and the statutes adminis-
    39  tered by, the federal trade commission or any official department, divi-
    40  sion, commission or agency of the United States  as  such  rules,  regu-
    41  lations  or  statutes are interpreted by the federal trade commission or
    42  such department, division, commission or agency or the federal courts.
    43    (e) Nothing in this section shall apply to  any  television  or  radio
    44  broadcasting  station  or  to  any  publisher or printer of a newspaper,
    45  magazine  or  other  form  of  printed  advertising,   who   broadcasts,
    46  publishes, or prints the advertisement.
    47    (f) In connection with any proposed proceeding under this section, the
    48  attorney general is authorized to take proof and make a determination of
    49  the  relevant facts, and to issue subpoenas in accordance with the civil
    50  practice law and rules.
    51    (g) This section shall apply to all [deceptive] prohibited  acts  [or]
    52  and  practices  [declared to be unlawful], whether or not subject to any
    53  other law of this state, and shall not supersede, amend  or  repeal  any
    54  other  law  of this state under which the attorney general is authorized
    55  to take any action or conduct any inquiry.

        S. 2407--C                          3

     1    (h) (1) In addition to the right of action  granted  to  the  attorney
     2  general  pursuant  to  this  section, any person who has been injured by
     3  reason of any violation of this section may bring an action  in  his  or
     4  her  own  name  to  enjoin  such  unlawful act or practice, an action to
     5  recover  his  or  her actual damages [or fifty] and statutory damages of
     6  one thousand dollars, [whichever is greater,] or both such actions. Such
     7  actions may be brought regardless  of  whether  or  not  the  underlying
     8  violation is consumer-oriented or has a public impact. The court may, in
     9  its  discretion,  increase  the  award  of  damages [to an amount not to
    10  exceed three times the actual damages up to one  thousand  dollars,]  if
    11  the  court  finds  the  defendant  willfully  or knowingly violated this
    12  section. The court [may] shall  award  reasonable  attorney's  fees  and
    13  costs to a prevailing plaintiff.
    14    [(j)]  (i)  For  purposes of this section, a "person" is defined as an
    15  individual, firm, corporation,  partnership,  cooperative,  association,
    16  coalition or any other organization's legal entity, or group of individ-
    17  uals however organized;
    18    (ii) For purposes of this section "non-profit organization" is defined
    19  as  an  organization  that  is (1) not an individual; and (2) is neither
    20  organized nor operating in whole, or in significant part, for profit;
    21    (iii) Given the remedial nature of this section, standing to bring  an
    22  action  under  this section, including but not limited to organizational
    23  standing and third-party standing,  shall  be  liberally  construed  and
    24  shall be available to the fullest extent otherwise permitted by law.
    25    (2)  Any  individual  or  non-profit organization entitled to bring an
    26  action under this article may, if the prohibited  act  or  practice  has
    27  caused damage to others similarly situated, bring an action on behalf of
    28  himself  or  herself and such others to recover actual, statutory and/or
    29  punitive damages or obtain other relief as provided for in this article.
    30  Statutory damages under this section will be limited to (i) such  amount
    31  for  each  named  plaintiff as could be recovered under paragraph one of
    32  this subdivision; and (ii) such amount as the court may  allow  for  all
    33  other class members without regard to a minimum individual recovery, not
    34  to exceed the lesser of one million dollars or two per centum of the net
    35  worth  of the business.  Thus, any action brought under this subdivision
    36  shall comply with article nine of the civil practice law and rules.
    37    (3) A non-profit organization may bring an action under this  section,
    38  on behalf of itself or any of its members, or on behalf of those members
    39  of  the  general public who have been injured by reason of any violation
    40  of this section, including a violation involving goods or services  that
    41  the  non-profit  organization  purchased or received in order to test or
    42  evaluate qualities pertaining to use for personal, household, or  family
    43  purposes.    A  non-profit  organization  may seek the same remedies and
    44  damages that a person may seek under paragraph one of this subdivision.
    45    (4) Before any violation of this section is sought to be enjoined, the
    46  person bringing the action shall be required to give the person  against
    47  whom  such action is contemplated notice by certified mail, to the place
    48  where the transaction occurred or to the  principal  place  of  business
    49  within the state of the person against whom such action is contemplated,
    50  and  an  opportunity  to  show in writing within ten business days after
    51  mailing of notice why proceedings should not be instituted  against  him
    52  or  her,  unless,  in  any  case  in  which the person seeks preliminary
    53  relief, the giving of such notice and opportunity would cause  immediate
    54  and irreparable injury, loss or damages.
    55    (i)  Notwithstanding  any law to the contrary, all monies recovered or
    56  obtained under this article by a  state  agency  or  state  official  or

        S. 2407--C                          4

     1  employee  acting in their official capacity shall be subject to subdivi-
     2  sion eleven of section four of the state finance law.
     3    §  2.  This  act  shall take effect on the sixtieth day after it shall
     4  have become a law.