STATE OF NEW YORK
        ________________________________________________________________________

                                          7138

                               2023-2024 Regular Sessions

                   IN ASSEMBLY

                                      May 11, 2023
                                       ___________

        Introduced  by  M.  of  A.  WEINSTEIN  --  read once and referred to the
          Committee on Consumer Affairs and Protection

        AN ACT to amend the general business law, in relation  to  enacting  the
          "Consumer and Small business Protection Act"

          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  "Consumer
     2  and Small business Protection Act (CSPA)".
     3    §  2.  Legislative  findings and intent. The Legislature declares that
     4  the State has a responsibility to  protect  individuals  and  businesses
     5  within  the  State  from unfair and abusive business acts and practices.
     6  The Legislature further declares that the  State's  law,  which  guarded
     7  only  against  deceptive  business acts and practices, has been insuffi-
     8  cient to meet this responsibility and has become out of  date  as  other
     9  states'  laws provide far greater protections. Consumers and small busi-
    10  nesses have long been vulnerable to unscrupulous business practices that
    11  are unfair and abusive without being expressly deceptive. The State must
    12  not allow bad actors to peddle predatory products and services  as  long
    13  as  they  are clever enough not to get caught in a lie. To that end, and
    14  to better level the playing field for  the  State's  many  honest  busi-
    15  nesses,  this  legislation defines unfair and abusive acts and practices
    16  expansively.
    17    The State must also ensure that this  protection  covers  small  busi-
    18  nesses, which are frequent targets of predatory loans and other forms of
    19  exploitation,  along  with  all  consumer transactions. This legislation
    20  therefore rejects the limitation, imposed  by  courts,  that  prohibited
    21  conduct  be  "consumer oriented," have an impact on the public at large,
    22  or be part of a broader pattern.  Consumers  and  small  businesses  are
    23  entitled  to  redress  whenever they are harmed by deceptive, unfair, or
    24  abusive conduct.

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD02751-01-3

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     1    Finally, for any of these protections to be meaningful, the State must
     2  ensure that the remedies for prohibited  conduct  provide  an  effective
     3  deterrent.  This legislation therefore updates the statutory damages for
     4  violations for the first time in decades, from $50 to $1,000, and allows
     5  meaningful  punitive  damages  for  particularly egregious behavior. The
     6  Legislature recognizes that unfair,  deceptive,  and  abusive  practices
     7  have a particular impact on poor individuals, people of color, and those
     8  affected  by  natural  disasters  and  health emergencies, including the
     9  COVID-19 pandemic. For this reason, the State must ensure  that  limited
    10  resources  not  prevent  individuals  and  small businesses from seeking
    11  remedies. This legislation therefore opens access to justice  by  making
    12  recovery  of  attorney's  fees  mandatory for a prevailing plaintiff and
    13  authorizing class actions.
    14    § 3. Section 349 of the general business law, as added by  chapter  43
    15  of  the  laws  of 1970, subdivision (h) as amended by chapter 157 of the
    16  laws of 1984, and subdivision (j) as added by section 6 of  part  HH  of
    17  chapter 55 of the laws of 2014, is amended to read as follows:
    18    §  349.  [Deceptive  acts] Prohibited acts and practices unlawful. (a)
    19  [Deceptive] This section prohibits any unfair, deceptive or abusive acts
    20  or practices in the conduct of any business, trade or commerce or in the
    21  furnishing of any service [in this state are hereby declared unlawful].
    22    (1) For the purposes of this section, an act  or  practice  is  unfair
    23  when  it  causes or is likely to cause substantial injury, the injury is
    24  not reasonably avoidable, and the injury is not outweighed  by  counter-
    25  vailing benefits.
    26    (2)  For the purposes of this section, an act or practice is deceptive
    27  when the act or practice misleads or is likely to mislead a  person  and
    28  the person's interpretation is reasonable under the circumstances.
    29    (3)  For  the  purposes of this section, an act or practice is abusive
    30  when:
    31    (i) it materially interferes with the ability of a  person  to  under-
    32  stand a term or condition of a product or service; or
    33    (ii) takes unreasonable advantage of:
    34    (A)  a person's lack of understanding of the material risks, costs, or
    35  conditions of the product or service;
    36    (B) a person's inability to protect his or her interests in  selecting
    37  or using a product or service; or
    38    (C) a person's reasonable reliance on a person covered by this section
    39  to act in his or her interests.
    40    (b)  Whenever  the attorney general shall believe from evidence satis-
    41  factory to him or her that any person, firm, corporation or  association
    42  or agent or employee thereof has engaged in or is about to engage in any
    43  of  the  acts  or  practices stated to be unfair, unlawful, deceptive or
    44  abusive, he or she may bring an action in the name and on behalf of  the
    45  people  of  the  state of New York to enjoin such unlawful acts or prac-
    46  tices and to obtain restitution  of  any  moneys  or  property  obtained
    47  directly  or  indirectly by any such unlawful acts or practices. In such
    48  action preliminary relief may be granted under  article  sixty-three  of
    49  the  civil  practice law and rules.  Such actions may be brought regard-
    50  less of whether or not the underlying violation is directed at  individ-
    51  uals  or  businesses,  is consumer-oriented, or involves the offering of
    52  goods, services, or property for personal, family or household purposes.
    53    (c) Before any violation of this section is sought to be enjoined, the
    54  attorney general shall be required to give the person against whom  such
    55  proceeding  is  contemplated notice by certified mail and an opportunity
    56  to show in writing within five business days after receipt of notice why

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     1  proceedings should not be instituted against  him  or  her,  unless  the
     2  attorney  general  shall  find,  in  any  case  in which he or she seeks
     3  preliminary relief, that to give such notice and opportunity is  not  in
     4  the public interest.
     5    (d)  In any such action it shall be a complete defense that the act or
     6  practice is, or if in interstate  commerce  would  be,  subject  to  and
     7  complies  with  the  rules and regulations of, and the statutes adminis-
     8  tered by, the federal trade commission or any official department, divi-
     9  sion, commission or agency of the United States  as  such  rules,  regu-
    10  lations  or  statutes are interpreted by the federal trade commission or
    11  such department, division, commission or agency or the federal courts.
    12    (e) Nothing in this section shall apply to  any  television  or  radio
    13  broadcasting  station  or  to  any  publisher or printer of a newspaper,
    14  magazine  or  other  form  of  printed  advertising,   who   broadcasts,
    15  publishes, or prints the advertisement.
    16    (f) In connection with any proposed proceeding under this section, the
    17  attorney general is authorized to take proof and make a determination of
    18  the  relevant facts, and to issue subpoenas in accordance with the civil
    19  practice law and rules.
    20    (g) This section shall apply to all [deceptive] prohibited  acts  [or]
    21  and  practices  [declared to be unlawful], whether or not subject to any
    22  other law of this state, and shall not supersede, amend  or  repeal  any
    23  other  law  of this state under which the attorney general is authorized
    24  to take any action or conduct any inquiry.
    25    (h) (1) In addition to the right of action  granted  to  the  attorney
    26  general  pursuant  to  this  section, any person who has been injured by
    27  reason of any violation of this section may bring an action  in  his  or
    28  her  own  name  to  enjoin  such  unlawful act or practice, an action to
    29  recover [his actual damages or fifty dollars, whichever is  greater,  or
    30  both  such  actions] one thousand dollars and his or her actual damages,
    31  if any, or both such actions. Such actions may be brought regardless  of
    32  whether  or  not  the  underlying  violation is consumer-oriented, has a
    33  public impact or involves the offering of goods,  services  or  property
    34  for  personal,  family  or  household  purposes.   The court may, in its
    35  discretion, increase the award of damages [to an amount  not  to  exceed
    36  three times the actual damages up to one thousand dollars,] if the court
    37  finds  the  defendant  willfully or knowingly violated this section. The
    38  court [may] shall award  reasonable  attorney's  fees  and  costs  to  a
    39  prevailing plaintiff.
    40    [(j)]  (i)  For  purposes of this section, a "person" is defined as an
    41  individual, firm, corporation,  partnership,  cooperative,  association,
    42  coalition or any other organization's legal entity, or group of individ-
    43  uals however organized;
    44    (ii) For purposes of this section "non-profit organization" is defined
    45  as  an  organization  that  is (A) not an individual; and (B) is neither
    46  organized nor operating in whole, or in significant part, for profit;
    47    (iii) Given the remedial nature of this section, standing to bring  an
    48  action  under  this section, including but not limited to organizational
    49  standing and third-party standing,  shall  be  liberally  construed  and
    50  shall be available to the fullest extent otherwise permitted by law.
    51    (2)  Any  individual  or  non-profit organization entitled to bring an
    52  action under this article may, if the prohibited  act  or  practice  has
    53  caused damage to others similarly situated, bring an action on behalf of
    54  himself  or  herself and such others to recover actual, statutory and/or
    55  punitive damages or obtain other relief as provided for in this article.
    56  Statutory damages under this section will be limited to (i) such  amount

        A. 7138                             4

     1  for  each  named  plaintiff as could be recovered under paragraph one of
     2  this subdivision; and (ii) such amount as the court may  allow  for  all
     3  other class members without regard to a minimum individual recovery, not
     4  to exceed the lesser of one million dollars or two per centum of the net
     5  worth  of the business.  Thus, any action brought under this subdivision
     6  shall comply with article nine of the civil practice law and rules.
     7    (3) A non-profit organization may bring an action under this  section,
     8  on behalf of itself or any of its members, or on behalf of those members
     9  of  the  general public who have been injured by reason of any violation
    10  of this section, including a violation involving goods or services  that
    11  the  non-profit  organization  purchased or received in order to test or
    12  evaluate qualities pertaining to use for personal, household, or  family
    13  purposes.    A  non-profit  organization  may seek the same remedies and
    14  damages that a person may seek under paragraph one of this subdivision.
    15    (4) Before any violation of this section is sought to be enjoined, the
    16  person bringing the action shall be required to give the person  against
    17  whom  such action is contemplated notice by certified mail, to the place
    18  where the transaction occurred or to the  principal  place  of  business
    19  within the state of the person against whom such action is contemplated,
    20  and  an  opportunity  to  show in writing within ten business days after
    21  mailing of notice why proceedings should not be instituted  against  him
    22  or  her,  unless,  in  any  case  in  which the person seeks preliminary
    23  relief, the giving of such notice and opportunity would cause  immediate
    24  and irreparable injury, loss or damages.
    25    (i)  Notwithstanding  any law to the contrary, all monies recovered or
    26  obtained under this article by a  state  agency  or  state  official  or
    27  employee  acting in their official capacity shall be subject to subdivi-
    28  sion eleven of section four of the state finance law.
    29    (j) This section is intended to expand  and  not  take  away  existing
    30  consumer rights.
    31    §  4.  This  act  shall take effect on the sixtieth day after it shall
    32  have become a law.