S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8035
 
                        2017-2018 Regular Sessions
 
                           I N  A S S E M B L Y
 
                               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:
 
   Section 1. This act shall be known and may be cited as the "Empowering
 People in Rights Enforcement ("EMPIRE") Consumer Act".
   §  2.  Legislative  findings and declaration. 1. The legislature finds
 and declares that limits  on  the  availability  of  public  enforcement
 resources have deleterious effects on the marketplace by allowing abuses
 targeting  consumers  to  persist  unprosecuted.  To  ensure  the robust
 enforcement of consumer claims, while minimizing the  outlay  of  scarce
 state  funds,  this  act  allows  private  individuals  to  bring public
 enforcement actions in certain contexts in which the state does not have
 the means to fully enforce state consumer protections.
   2. The legislature further finds and  declares  that  unfair  business
 practices  and  abuses targeting consumers often affect large numbers of
 consumers.
   3. The legislature further finds and declares that the purpose of  the
 EMPIRE  Consumer  Act  is  to  create  a means of empowering citizens as
 private attorneys general to enforce consumer protections.
   4. The legislature further finds and declares that the purpose of  the
 EMPIRE  Consumer  Act is to incentivize private parties to recover civil
 penalties and remedies for the government that otherwise  may  not  have
 been  assessed and collected by overburdened state enforcement agencies.
 Such representative actions are an efficient mechanism to limit  system-
 atic  violations,  will  enforce  the  rights of more consumers, and can
 benefit the New York  state  attorney  general's  office  with  enhanced
 resources.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD11783-01-7
              

 A. 8035                             2
 
   5.  The legislature further finds and declares that the purpose of the
 EMPIRE Consumer Act is to benefit those businesses  that  are  operating
 within  the law and who, as a result, face unfair competition from indi-
 viduals and entities shirking the law and victimizing consumers.
   6.  The legislature further finds and declares that the purpose of the
 EMPIRE Consumer Act is to incentivize not-for-profit consumer groups  to
 aid consumers to report abuses and violations of the law.
   7. The legislature further finds and declares that the EMPIRE Consumer
 Act is part of a history both in New York state and the United States of
 laws  enabling private citizens to aid in public enforcement. In similar
 qui tam legislation enabling private citizens to aid in public  enforce-
 ment, the resulting action is in reality a public enforcement action.
   § 3. The general business law is amended by adding a new article 22-AA
 to read as follows:
                               ARTICLE 22-AA
           EMPOWERING PEOPLE IN RIGHTS ENFORCEMENT CONSUMER ACT
 SECTION 350-F-2. DEFINITIONS.
         350-F-3. PUBLIC ENFORCEMENT ACTIONS.
         350-F-4. PROCEDURE.
         350-F-5. CONSTRUCTION OF THIS ARTICLE.
   § 350-F-2. DEFINITIONS. FOR THE PURPOSES OF THIS ARTICLE THE FOLLOWING
 TERMS SHALL HAVE THE FOLLOWING MEANINGS:
   1.  "CONSUMER"  IS A NATURAL PERSON WHO BUYS, LEASES, CONTRACTS FOR OR
 OTHERWISE OBTAINS GOODS OR SERVICES PRIMARILY FOR  PERSONAL,  FAMILY  OR
 HOUSEHOLD  PURPOSES.  IN  THIS ARTICLE, UNLESS THE CONTEXT CLEARLY INDI-
 CATES OTHERWISE, THE TERM "CONSUMER" SHALL INCLUDE ONE OR MORE CONSUMERS
 BRINGING A PUBLIC ENFORCEMENT ACTION OR FOR WHOSE BENEFIT A NOT-FOR-PRO-
 FIT CONSUMER GROUP BROUGHT A PUBLIC ENFORCEMENT ACTION.
   2. "CONSUMER CLAIM" MEANS ANY CAUSE OF ACTION  PRIMARILY  INTENDED  TO
 BENEFIT  CONSUMERS INVOLVING CONDUCT WHICH COULD OTHERWISE BE BROUGHT BY
 THE ATTORNEY GENERAL PURSUANT TO SUBDIVISION TWELVE  OF  SECTION  SIXTY-
 THREE  OF  THE  EXECUTIVE  LAW  OR ANY OTHER PROVISION OF LAW. SUCH TERM
 SHALL INCLUDE, BUT NOT BE LIMITED TO,  VIOLATIONS  OF  ARTICLES  ELEVEN,
 TWENTY-TWO-A,  TWENTY-FIVE,  AND TWENTY-NINE-H AND SECTION THREE HUNDRED
 NINETY-SIX-R OF THIS CHAPTER, AND ARTICLES NINE, NINE-A AND TEN  OF  THE
 PERSONAL  PROPERTY LAW, BUT SHALL NOT INCLUDE SECTIONS ONE HUNDRED NINE-
 TY-EIGHT-A AND ONE HUNDRED NINETY-EIGHT-B OF THIS CHAPTER.
   3. "CORRECTIVE NOTICE" MEANS A NOTICE ISSUED BY  AN  INJURED  CONSUMER
 PURSUANT  TO  SUBDIVISION  TWO  OF SECTION THREE HUNDRED FIFTY-F-FOUR OF
 THIS ARTICLE, AFTER NOTICE BY THE ATTORNEY GENERAL THAT  THE  CONSUMER'S
 OR  NOT-FOR-PROFIT CONSUMER GROUP'S ORIGINAL NOTICE PURSUANT TO SUBDIVI-
 SION ONE OF SECTION THREE HUNDRED FIFTY-F-FOUR  WAS  NOT  IN  COMPLIANCE
 WITH  SUBDIVISION  ONE  OF SUCH SECTION OR THE REGULATIONS ISSUED THERE-
 UNDER.
   4. "PUBLIC ENFORCEMENT ACTION" MEANS  AN  ACTION  BROUGHT  UNDER  THIS
 ARTICLE  BY  ONE  OR  MORE  CONSUMERS OR A NOT-FOR-PROFIT CONSUMER GROUP
 INTENDED TO ENFORCE CONSUMER CLAIMS ENFORCEABLE BY THE ATTORNEY GENERAL.
   5. "UNDERLYING CLAIM" MEANS A CONSUMER CLAIM ALLEGING ILLEGAL  CONDUCT
 WHICH  SERVES  AS  THE  BASIS  OF A PUBLIC ENFORCEMENT ACTION. SUCH TERM
 SHALL NOT INCLUDE AN ACTION UNDER SUBDIVISION TWELVE OF  SECTION  SIXTY-
 THREE OF THE EXECUTIVE LAW.
   §  350-F-3.  PUBLIC  ENFORCEMENT  ACTIONS.  1. ANY INJURED CONSUMER OR
 CONSUMERS  OR  NOT-FOR-PROFIT  CONSUMER  GROUP  MAY  INITIATE  A  PUBLIC
 ENFORCEMENT  ACTION  ON  BEHALF OF THE ATTORNEY GENERAL FOR ANY CONSUMER
 CLAIM, ON BEHALF OF THE INJURED CONSUMER OR OTHER CONSUMERS IN REGARD TO
 THE CONDUCT OF ANY BUSINESS, TRADE OR COMMERCE OR IN THE  FURNISHING  OF

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 ANY  SERVICE  IN  THIS  STATE,  PURSUANT  TO THE PROCEDURES SPECIFIED IN
 SECTION THREE HUNDRED FIFTY-F-FOUR OF THIS ARTICLE. IF A  NOT-FOR-PROFIT
 CONSUMER  GROUP  BRINGS THE ACTION, THE CONSUMER MUST ELECT THE NOT-FOR-
 PROFIT  CONSUMER  GROUP  IN WRITING IN A FORM WHICH THE ATTORNEY GENERAL
 SHALL BY REGULATION PRESCRIBE. PLAINTIFFS MAY ALLEGE MULTIPLE VIOLATIONS
 AFFECTING MORE THAN ONE CONSUMER.
   2.(A) IN ANY PUBLIC ENFORCEMENT ACTION, THE INJURED CONSUMER  OR  NOT-
 FOR-PROFIT  CONSUMER  GROUP SHALL BE ENTITLED TO RECEIVE ANY RELIEF THAT
 THE ATTORNEY GENERAL OR INJURED CONSUMER WOULD BE ENTITLED TO UNDER  THE
 UNDERLYING CLAIM, INCLUDING INJUNCTIVE RELIEF, RESTITUTION, CIVIL PENAL-
 TIES  OR  DAMAGES. THE INJURED CONSUMER OR NOT-FOR-PROFIT CONSUMER GROUP
 MAY RECEIVE EITHER THE CIVIL PENALTY  PROVIDED  FOR  IN  THE  UNDERLYING
 CLAIM  OR  UP  TO FIVE THOUSAND DOLLARS FOR EACH VIOLATION, WHICHEVER IS
 HIGHER. NOTWITHSTANDING THE PRECEDING SENTENCE,  A  COURT  MAY  AWARD  A
 LESSER AMOUNT IF, BASED ON THE FACTS AND CIRCUMSTANCES OF THE PARTICULAR
 CASE, TO DO OTHERWISE WOULD RESULT IN AN AWARD THAT IS UNJUST, ARBITRARY
 AND OPPRESSIVE, OR CONFISCATORY.
   (B)  ANY  INJURED  CONSUMER  OR  NOT-FOR-PROFIT  CONSUMER  GROUP  THAT
 PREVAILS IN A PUBLIC ENFORCEMENT ACTION SHALL BE ENTITLED TO AN AWARD OF
 REASONABLE ATTORNEY'S FEES AND COSTS.
   3. CIVIL PENALTIES RECOVERED BY INJURED  CONSUMERS  OR  NOT-FOR-PROFIT
 CONSUMER GROUPS SHALL BE DISTRIBUTED AS FOLLOWS:
   (A)  IF  THE  INJURED CONSUMER INITIATED THE PUBLIC ENFORCEMENT ACTION
 WITHOUT ELECTING A NOT-FOR-PROFIT CONSUMER GROUP PURSUANT TO SUBDIVISION
 ONE OF THIS SECTION, FORTY-FIVE PERCENT TO THE CONSUMER OR CONSUMERS AND
 FIFTY-FIVE PERCENT TO THE ATTORNEY GENERAL FOR ENFORCEMENT OF THIS ARTI-
 CLE, TO BE CONTINUOUSLY APPROPRIATED TO SUPPLEMENT AND NOT SUPPLANT  THE
 FUNDING TO THE ATTORNEY GENERAL FOR THOSE PURPOSES.
   (B)  IF  THE  INJURED  CONSUMER  OR CONSUMERS ELECTED A NOT-FOR-PROFIT
 CONSUMER GROUP PURSUANT TO  SUBDIVISION  ONE  OF  THIS  SECTION,  THIRTY
 PERCENT  TO  THE INJURED CONSUMER, FIFTEEN PERCENT TO THE NOT-FOR-PROFIT
 CONSUMER GROUP, AND FIFTY-FIVE  PERCENT  TO  THE  ATTORNEY  GENERAL  FOR
 ENFORCEMENT  OF THIS ARTICLE, TO BE CONTINUOUSLY APPROPRIATED TO SUPPLE-
 MENT AND NOT SUPPLANT THE FUNDING TO  THE  ATTORNEY  GENERAL  FOR  THOSE
 PURPOSES.
   4.  THE  RIGHT TO BRING A PUBLIC ENFORCEMENT ACTION UNDER THIS ARTICLE
 SHALL NOT BE SUBJECT TO PRIVATE AGREEMENTS  BETWEEN  A  CONSUMER  AND  A
 BUSINESS OR OTHER DEFENDANT.
   5.  NOTWITHSTANDING  ANY  OTHER  PROVISION  OF LAW, PUBLIC ENFORCEMENT
 ACTIONS MUST BE COMMENCED WITHIN THREE YEARS,  SUBJECT  TO  THE  TOLLING
 PROVISIONS  IN SUBDIVISION FIVE OF SECTION THREE HUNDRED FIFTY-F-FOUR OF
 THIS ARTICLE.
   § 350-F-4. PROCEDURE. 1. NO PUBLIC ENFORCEMENT ACTION MAY BE COMMENCED
 PRIOR TO THIRTY DAYS AFTER WRITTEN  NOTICE  BY  CERTIFIED  MAIL,  RETURN
 RECEIPT REQUESTED, HAS BEEN PROVIDED BY THE INJURED CONSUMER OR NOT-FOR-
 PROFIT  CONSUMER  GROUP  TO THE ATTORNEY GENERAL IN A FORM IN COMPLIANCE
 WITH REGULATIONS IN REGARD TO THIS ACTION WHICH SHALL BE  PRESCRIBED  BY
 THE  ATTORNEY  GENERAL. SUCH REGULATIONS SHALL AT A MINIMUM PROVIDE THAT
 THE NOTICE SHALL INCLUDE:
   (A) THE LEGAL NAME, ADDRESS, TELEPHONE NUMBER (IF ANY), AND EMAIL  (IF
 ANY) OF THE BUSINESS;
   (B)  THE  NAME, ADDRESS, TELEPHONE NUMBER (IF ANY), AND EMAIL (IF ANY)
 OF THE INJURED CONSUMER;
   (C) THE LEGAL NAME, ADDRESS, TELEPHONE NUMBER (IF ANY), AND EMAIL  (IF
 ANY) OF THE NOT-FOR-PROFIT CONSUMER GROUP, IF APPLICABLE; AND
   (D) A STATEMENT OF THE UNDERLYING CLAIM.

 A. 8035                             4
 
   2.  SUCH REGULATIONS PURSUANT TO SUBDIVISION ONE OF THIS SECTION SHALL
 PROVIDE FOR THE RIGHT OF THE INJURED CONSUMER OR NOT-FOR-PROFIT CONSUMER
 GROUP TO FURNISH A CORRECTIVE NOTICE AFTER NOTICE BY THE ATTORNEY GENER-
 AL TO THE CONSUMER OR NOT-FOR-PROFIT CONSUMER GROUP, WHICHEVER IS APPLI-
 CABLE,  THAT THE ORIGINAL NOTICE WAS NOT IN COMPLIANCE WITH THIS SECTION
 OR THE REGULATIONS ISSUED THEREUNDER, SPECIFYING WITH PARTICULARITY  THE
 DEFICIENCIES  IN  THE  ORIGINAL NOTICE. SUCH NOTICE SHALL BE PROVIDED BY
 THE ATTORNEY GENERAL WITHIN THIRTY DAYS OF THE ORIGINAL  NOTICE  OR  THE
 ORIGINAL  NOTICE  SHALL  BE DEEMED IN COMPLIANCE WITH SUBDIVISION ONE OF
 THIS SECTION. THE CONSUMER OR NOT-FOR-PROFIT CONSUMER GROUP  SHALL  HAVE
 THIRTY DAYS AFTER THE ATTORNEY GENERAL'S NOTICE THAT THE ORIGINAL NOTICE
 WAS  NOT  IN  COMPLIANCE  TO  SUBMIT A CORRECTIVE NOTICE TO THE ATTORNEY
 GENERAL BY CERTIFIED MAIL, RETURN RECEIPT  REQUESTED.  FOR  PURPOSES  OF
 DETERMINING  WHETHER  THE  INJURED  CONSUMER  OR NOT-FOR-PROFIT CONSUMER
 GROUP COMPLIED WITH THIS SUBDIVISION OR SUBDIVISION ONE OF THIS  SECTION
 IN  AN  ACTION  UNDER  THIS  ARTICLE, THE NOTICE SHALL BE CONSTRUED IN A
 LIGHT FAVORABLE TO THE CONSUMER OR NOT-FOR-PROFIT CONSUMER GROUP.
   3. NO PUBLIC ENFORCEMENT ACTION  SHALL  BE  BROUGHT  IF  THE  ATTORNEY
 GENERAL  IS  ACTIVELY INVESTIGATING THE SAME MATTER WHICH IS THE SUBJECT
 OF THE NOTICE PROVIDED FOR IN SUBDIVISION ONE OF THIS SECTION  WITH  THE
 INTENT TO DETERMINE WHETHER IT WILL FILE AN ACTION OR SPECIAL PROCEEDING
 OVER  SUCH  CONDUCT,  PROVIDED  THAT  THE  ATTORNEY  GENERAL INFORMS THE
 INJURED CONSUMER OR NOT-FOR-PROFIT CONSUMER GROUP OF THE SAME BY  CERTI-
 FIED  MAIL,  RETURN RECEIPT REQUESTED, WITHIN THIRTY DAYS OF THE CONSUM-
 ER'S OR NOT-FOR-PROFIT CONSUMER GROUP'S ORIGINAL NOTICE MADE PURSUANT TO
 SUBDIVISION ONE OF THIS SECTION  OR  THE  CONSUMER'S  OR  NOT-FOR-PROFIT
 CONSUMER GROUP'S CORRECTIVE NOTICE, WHICHEVER IS LATER.
   4. NOTWITHSTANDING SUBDIVISION THREE OF THIS SECTION, IF AFTER PROVID-
 ING  THE NOTICE TO THE INJURED CONSUMER OR NOT-FOR-PROFIT CONSUMER GROUP
 PURSUANT TO SUBDIVISION THREE OF THIS SECTION, THE ATTORNEY GENERAL DOES
 NOT COMMENCE AN ACTION WITHIN ONE HUNDRED EIGHTY DAYS OF  THE  LATER  OF
 THE  TIME  PERIODS  SPECIFIED  IN SUBDIVISION THREE OF THIS SECTION, THE
 CONSUMER OR NOT-FOR-PROFIT CONSUMER GROUP MAY FILE A PUBLIC  ENFORCEMENT
 ACTION.
   5.  THE  STATUTE  OF  LIMITATIONS IN SUBDIVISION FIVE OF SECTION THREE
 HUNDRED FIFTY-F-THREE OF THIS ARTICLE SHALL BE TOLLED:
   (A) FOR THE THIRTY DAY PERIOD IN SUBDIVISION ONE OF THIS  SECTION,  IF
 THE ATTORNEY GENERAL DOES NOT ISSUE A CORRECTIVE NOTICE;
   (B)  FOR  THE  PERIOD FROM THE PROVIDING OF THE ORIGINAL NOTICE BY THE
 CONSUMER OR NOT-FOR-PROFIT CONSUMER GROUP PURSUANT TO SUBDIVISION ONE OF
 THIS SECTION TO THE DATE PERMITTED FOR THE  CONSUMER  OR  NOT-FOR-PROFIT
 CONSUMER  GROUP  TO  SUBMIT A CORRECTIVE NOTICE, IF THE ATTORNEY GENERAL
 REQUESTED A CORRECTIVE  NOTICE  PURSUANT  TO  SUBDIVISION  TWO  OF  THIS
 SECTION; OR
   (C)  FOR  THE  PERIOD FROM THE PROVIDING OF THE ORIGINAL NOTICE BY THE
 CONSUMER OR NOT-FOR-PROFIT CONSUMER GROUP PURSUANT TO SUBDIVISION ONE OF
 THIS SECTION TO THE LATER OF THE PERIODS PROVIDED IN SUBDIVISION FOUR OF
 THIS SECTION, IF THE ATTORNEY GENERAL PROVIDES THE  NOTICE  PROVIDED  IN
 SUBDIVISION  THREE OF THIS SECTION THAT IT IS ACTIVELY INVESTIGATING THE
 SAME MATTER AND THEN DOES NOT COMMENCE AN ACTION  IN  THE  TIME  PERIODS
 PROVIDED IN SUBDIVISION FOUR OF THIS SECTION.
   6.  IN  ANY  PUBLIC ENFORCEMENT ACTION, THE PLAINTIFF SHALL NOTIFY THE
 ATTORNEY GENERAL OF THE ACTION AND THE ATTORNEY GENERAL MAY INTERVENE AS
 A MATTER OF RIGHT.
   7. THE ATTORNEY GENERAL SHALL ESTABLISH A PUBLICLY AVAILABLE  DATABASE
 OF  ACTIONS BROUGHT PURSUANT TO THIS ARTICLE, INCLUDING THE PARTIES, THE

 A. 8035                             5
 
 DISPOSITION AND ANY OTHER INFORMATION WHICH THE ATTORNEY  GENERAL  SHALL
 BY REGULATION PRESCRIBE.
   §  350-F-5.  CONSTRUCTION  OF THIS ARTICLE. 1. NOTHING IN THIS ARTICLE
 SHALL OPERATE TO LIMIT ANY PARTY'S RIGHT TO PURSUE  ANY  OTHER  REMEDIES
 AVAILABLE  UNDER STATE OR FEDERAL LAW, EITHER SEPARATELY OR CONCURRENTLY
 WITH AN ACTION TAKEN UNDER THIS ARTICLE.
   2. THIS ARTICLE SHALL NOT SUPERSEDE ANY OTHER LAW OF THIS STATE  UNDER
 WHICH  THE  ATTORNEY GENERAL IS AUTHORIZED TO TAKE ANY ACTION OR CONDUCT
 ANY INQUIRY, INCLUDING SUBDIVISION TWELVE OF SECTION SIXTY-THREE OF  THE
 EXECUTIVE LAW.
   3.  THIS ARTICLE SHALL BE CONSTRUED IN LIGHT OF ITS PURPOSES TO EXPAND
 THE ENFORCEMENT OF LAWS THAT PROTECT INJURED CONSUMERS.
   § 4. Subdivision (h) of section 349 of the general  business  law,  as
 amended  by  chapter  157  of  the  laws  of 1984, is amended to read as
 follows:
   (h) In addition to the right of action granted to the attorney general
 pursuant to this section, any person who has been injured by  reason  of
 any violation of this section may bring an action in his OR HER own name
 to enjoin such unlawful act or practice, an action to recover his OR HER
 actual damages or [fifty] FIVE HUNDRED dollars, whichever is greater, or
 both such actions.  The court may, in its discretion, increase the award
 of  damages to an amount not to exceed three times the actual damages up
 to [one] TEN thousand dollars, if the court finds the defendant willful-
 ly or knowingly violated this section. The court  may  award  reasonable
 attorney's fees to a prevailing plaintiff.
   §  5.  Severability. If any word, phrase, clause, sentence, paragraph,
 section or part of this act or the application thereof to any person  or
 circumstances  shall  be adjudged invalid by a court of competent juris-
 diction, such order or judgment shall be confined in  its  operation  to
 the controversy in which it was rendered, and shall not affect or inval-
 idate  the  remainder thereof, but shall be confined in its operation to
 the word, phrase, clause, sentence, paragraph, section or  part  thereof
 directly  involved  in the controversy in which such judgment shall have
 been rendered.
   § 6. This act shall take effect on the one hundred eightieth day after
 it shall have become a law, provided, however, that effective immediate-
 ly, the addition, amendment and/or repeal  of  any  rule  or  regulation
 necessary  for  the implementation of this act on its effective date are
 authorized to be made and completed on or before such date.