The Business Council of New York State opposes A.9785 (Titone) which would greatly expand the consumer protection deceptive acts and practices section of the general business law. This legislation would lead to a needless spike in the number of meritless lawsuits in our already overly litigious state.
This legislation adds the term “unfair” to §349 of the General Business Law, thus creating vastly broader definition of excessive or unreasonable actions. Defendants would be liable under this legislation if they, in the eyes of the court, may have known or reasonably should have known that a plaintiff was physically infirm, illiterate, or unable to understand language of an agreement. Additionally, the court would be empowered to determine that at the time a consumer transaction was entered into, the price of the product or service grossly exceeded the price at which similar property or services were readily obtainable. These are not only impossible standards, their broadness put all businesses who enter into contracts at unwarranted risk of litigation.
In addition to creating impossible standards for businesses under contract, this legislation further incentivizes litigation by containing multiple provisions that incentivize law suits. These include increasing the minimum damage penalties from $50 to $500; treble damages from $1,000 to $10,000; and maximum civil penalties from $10,000 to $20,000 and $5,000 to $10,000, as well as the awarding of punitive damages up to three times the actual damages with any further equitable relief the court considers necessary or proper. When coupled with the above, the bill’s addition of class actions to this area of the law, all but guaranties a new flood of meritless lawsuits that will clog our already overburdened court system.
The Business Council understands, recognizes and supports the idea of protecting consumers from unfair practices. This broadness of this bill however will not protect consumer but instead will unquestionably harm New Yorkers of every stripe. This bill will lead to tens of thousands of frivolous lawsuits with the potential for excessive punitive damages, increased fees and higher court costs – all which will ultimately lead to higher costs of goods and services for all New Yorkers. A policy that trades windfalls for the few for higher costs for the many is simply bad public policy.
For these reasons, The Business Council of New York State is strongly opposes this legislation.