S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  2495--A
 
                        2021-2022 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             January 19, 2021
                                ___________
 
 Introduced  by  M.  of  A.  NIOU, STECK, BARRON, KIM, DINOWITZ, EPSTEIN,
   FRONTUS,   RICHARDSON,   FALL,   REYES,   SIMON,    QUART,    SOLAGES,
   BICHOTTE HERMELYN,   BARNWELL,   GOTTFRIED,   JACOBSON,  L. ROSENTHAL,
   ABBATE, OTIS, CRUZ,  MONTESANO,  DeSTEFANO,  WEPRIN,  TAYLOR,  WALKER,
   DICKENS,  J. RIVERA, REILLY, HEVESI, GLICK, RODRIGUEZ, GALEF -- Multi-
   Sponsored by -- M. of A. COOK, ENGLEBRIGHT, FERNANDEZ, SAYEGH --  read
   once  and referred to the Committee on Consumer Affairs and Protection
   -- committee discharged, bill amended, ordered  reprinted  as  amended
   and recommitted to said committee
 
 AN ACT to amend the general business law, the financial services law and
   the  insurance  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:
 
   Section  1.  This act shall be known and may be cited as the "Consumer
 and Small business Protection Act (CSPA)".
   § 2. Legislative findings and intent. The  Legislature  declares  that
 the  State  has  a  responsibility to protect individuals and businesses
 within the State from unfair and abusive business  acts  and  practices.
 The  Legislature  further  declares  that the State's law, which guarded
 only against deceptive business acts and practices,  has  been  insuffi-
 cient  to  meet  this responsibility and has become out of date as other
 states' laws provide far greater protections. Consumers and small  busi-
 nesses have long been vulnerable to unscrupulous business practices that
 are unfair and abusive without being expressly deceptive. The State must
 not  allow  bad actors to peddle predatory products and services as long
 as they are clever enough not to get caught in a lie. To that  end,  and
 to  better  level  the  playing  field for the State's many honest busi-
 nesses, this legislation defines unfair and abusive acts  and  practices
 expansively.

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD04637-06-1
              

 A. 2495--A                          2
 
   The  State  must  also  ensure that this protection covers small busi-
 nesses, which are frequent targets of predatory loans and other forms of
 exploitation, along with all  consumer  transactions.  This  legislation
 therefore  rejects  the  limitation,  imposed by courts, that prohibited
 conduct  be  "consumer oriented," have an impact on the public at large,
 or be part of a broader pattern.  Consumers  and  small  businesses  are
 entitled  to  redress  whenever they are harmed by deceptive, unfair, or
 abusive conduct.
   Finally, for any of these protections to be meaningful, the State must
 ensure that the remedies for prohibited  conduct  provide  an  effective
 deterrent.  This legislation therefore updates the statutory damages for
 violations for the first time in decades, from $50 to $1,000, and allows
 meaningful punitive damages for  particularly  egregious  behavior.  The
 Legislature  recognizes  that  unfair,  deceptive, and abusive practices
 have a particular impact on poor individuals, people of color, and those
 affected by natural disasters  and  health  emergencies,  including  the
 COVID-19  pandemic.  For this reason, the State must ensure that limited
 resources not prevent individuals  and  small  businesses  from  seeking
 remedies.  This  legislation therefore opens access to justice by making
 recovery of attorney's fees mandatory for  a  prevailing  plaintiff  and
 authorizing class actions.
   §  3.  Section 349 of the general business law, as added by chapter 43
 of the laws of 1970, subdivision (h) as amended by chapter  157  of  the
 laws  of  1984,  and subdivision (j) as added by section 6 of part HH of
 chapter 55 of the laws of 2014, is amended to read as follows:
   § 349. [Deceptive acts] PROHIBITED ACTS and  practices  unlawful.  (a)
 [Deceptive] THIS SECTION PROHIBITS ANY UNFAIR, DECEPTIVE OR ABUSIVE acts
 or practices in the conduct of any business, trade or commerce or in the
 furnishing of any service [in this state are hereby declared unlawful].
   (1)  FOR  THE  PURPOSES  OF THIS SECTION, AN ACT OR PRACTICE IS UNFAIR
 WHEN IT CAUSES OR IS LIKELY TO CAUSE SUBSTANTIAL INJURY, THE  INJURY  IS
 NOT  REASONABLY  AVOIDABLE, AND THE INJURY IS NOT OUTWEIGHED BY COUNTER-
 VAILING BENEFITS.
   (2) FOR THE PURPOSES OF THIS SECTION, AN ACT OR PRACTICE IS  DECEPTIVE
 WHEN  THE  ACT OR PRACTICE MISLEADS OR IS LIKELY TO MISLEAD A PERSON AND
 THE PERSON'S INTERPRETATION IS REASONABLE UNDER THE CIRCUMSTANCES.
   (3) FOR THE PURPOSES OF THIS SECTION, AN ACT OR  PRACTICE  IS  ABUSIVE
 WHEN:
   (I)  IT  MATERIALLY  INTERFERES WITH THE ABILITY OF A PERSON TO UNDER-
 STAND A TERM OR CONDITION OF A PRODUCT OR SERVICE; OR
   (II) TAKES UNREASONABLE ADVANTAGE OF:
   (A) A PERSON'S LACK OF UNDERSTANDING OF THE MATERIAL RISKS, COSTS,  OR
 CONDITIONS OF THE PRODUCT OR SERVICE;
   (B)  A PERSON'S INABILITY TO PROTECT HIS OR HER INTERESTS IN SELECTING
 OR USING A PRODUCT OR SERVICE; OR
   (C) A PERSON'S REASONABLE RELIANCE ON A PERSON COVERED BY THIS SECTION
 TO ACT IN HIS OR HER INTERESTS.
   (b) Whenever the attorney general shall believe from  evidence  satis-
 factory  to him OR HER that any person, firm, corporation or association
 or agent or employee thereof has engaged in or is about to engage in any
 of the acts or practices stated to be  UNFAIR,  unlawful,  DECEPTIVE  OR
 ABUSIVE,  he OR SHE may bring an action in the name and on behalf of the
 people of the state of New York to enjoin such unlawful  acts  or  prac-
 tices  and  to  obtain  restitution  of  any moneys or property obtained
 directly or indirectly by any such unlawful acts or practices.  In  such
 action  preliminary  relief  may be granted under article sixty-three of

 A. 2495--A                          3
 
 the civil practice law and rules.  SUCH ACTIONS MAY BE  BROUGHT  REGARD-
 LESS  OF WHETHER OR NOT THE UNDERLYING VIOLATION IS DIRECTED AT INDIVID-
 UALS OR BUSINESSES, IS CONSUMER-ORIENTED, OR INVOLVES  THE  OFFERING  OF
 GOODS, SERVICES, OR PROPERTY FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES.
   (c) Before any violation of this section is sought to be enjoined, the
 attorney  general shall be required to give the person against whom such
 proceeding is contemplated notice by certified mail and  an  opportunity
 to show in writing within five business days after receipt of notice why
 proceedings  should  not  be  instituted  against him OR HER, unless the
 attorney general shall find, in any  case  in  which  he  OR  SHE  seeks
 preliminary  relief,  that to give such notice and opportunity is not in
 the public interest.
   (d) In any such action it shall be a complete defense that the act  or
 practice  is,  or  if  in  interstate  commerce would be, subject to and
 complies with the rules and regulations of, and  the  statutes  adminis-
 tered by, the federal trade commission or any official department, divi-
 sion,  commission  or  agency  of the United States as such rules, regu-
 lations or statutes are interpreted by the federal trade  commission  or
 such department, division, commission or agency or the federal courts.
   (e)  Nothing  in  this  section shall apply to any television or radio
 broadcasting station or to any publisher  or  printer  of  a  newspaper,
 magazine   or   other  form  of  printed  advertising,  who  broadcasts,
 publishes, or prints the advertisement.
   (f) In connection with any proposed proceeding under this section, the
 attorney general is authorized to take proof and make a determination of
 the relevant facts, and to issue subpoenas in accordance with the  civil
 practice law and rules.
   (g)  This  section shall apply to all [deceptive] PROHIBITED acts [or]
 AND practices [declared to be unlawful], whether or not subject  to  any
 other  law  of  this state, and shall not supersede, amend or repeal any
 other law of this state under which the attorney general  is  authorized
 to take any action or conduct any inquiry.
   (h)  (1)  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  actual damages or fifty dollars, whichever is greater, or
 both such actions] ONE THOUSAND DOLLARS AND HIS OR HER  ACTUAL  DAMAGES,
 IF ANY, OR BOTH SUCH ACTIONS.  SUCH ACTIONS MAY BE BROUGHT REGARDLESS OF
 WHETHER  OR  NOT  THE  UNDERLYING  VIOLATION IS CONSUMER-ORIENTED, HAS A
 PUBLIC IMPACT OR INVOLVES THE OFFERING OF GOODS,  SERVICES  OR  PROPERTY
 FOR  PERSONAL,  FAMILY  OR  HOUSEHOLD  PURPOSES.  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 thousand dollars,] if the court
 finds  the  defendant  willfully or knowingly violated this section. The
 court [may] SHALL award  reasonable  attorney's  fees  AND  COSTS  to  a
 prevailing plaintiff.
   [(j)]  (I)  FOR  PURPOSES OF THIS SECTION, A "PERSON" IS DEFINED AS AN
 INDIVIDUAL, FIRM, CORPORATION,  PARTNERSHIP,  COOPERATIVE,  ASSOCIATION,
 COALITION OR ANY OTHER ORGANIZATION'S LEGAL ENTITY, OR GROUP OF INDIVID-
 UALS HOWEVER ORGANIZED;
   (II) FOR PURPOSES OF THIS SECTION "NON-PROFIT ORGANIZATION" IS DEFINED
 AS  AN  ORGANIZATION  THAT  IS (1) NOT AN INDIVIDUAL; AND (2) IS NEITHER
 ORGANIZED NOR OPERATING IN WHOLE, OR IN SIGNIFICANT PART, FOR PROFIT;
   (III) GIVEN THE REMEDIAL NATURE OF THIS SECTION, STANDING TO BRING  AN
 ACTION  UNDER  THIS SECTION, INCLUDING BUT NOT LIMITED TO ORGANIZATIONAL

 A. 2495--A                          4
 
 STANDING AND THIRD-PARTY STANDING,  SHALL  BE  LIBERALLY  CONSTRUED  AND
 SHALL BE AVAILABLE TO THE FULLEST EXTENT OTHERWISE PERMITTED BY LAW.
   (2)  ANY  INDIVIDUAL  OR  NON-PROFIT ORGANIZATION ENTITLED TO BRING AN
 ACTION UNDER THIS ARTICLE MAY, IF THE PROHIBITED  ACT  OR  PRACTICE  HAS
 CAUSED DAMAGE TO OTHERS SIMILARLY SITUATED, BRING AN ACTION ON BEHALF OF
 HIMSELF  OR  HERSELF AND SUCH OTHERS TO RECOVER ACTUAL, STATUTORY AND/OR
 PUNITIVE DAMAGES OR OBTAIN OTHER RELIEF AS PROVIDED FOR IN THIS ARTICLE.
 STATUTORY DAMAGES UNDER THIS SECTION WILL BE LIMITED TO (I) SUCH  AMOUNT
 FOR  EACH  NAMED  PLAINTIFF AS COULD BE RECOVERED UNDER PARAGRAPH ONE OF
 THIS SUBDIVISION; AND (II) SUCH AMOUNT AS THE COURT MAY  ALLOW  FOR  ALL
 OTHER CLASS MEMBERS WITHOUT REGARD TO A MINIMUM INDIVIDUAL RECOVERY, NOT
 TO EXCEED THE LESSER OF ONE MILLION DOLLARS OR TWO PER CENTUM OF THE NET
 WORTH  OF THE BUSINESS.  THUS, ANY ACTION BROUGHT UNDER THIS SUBDIVISION
 SHALL COMPLY WITH ARTICLE NINE OF THE CIVIL PRACTICE LAW AND RULES.
   (3) A NON-PROFIT ORGANIZATION MAY BRING AN ACTION UNDER THIS  SECTION,
 ON BEHALF OF ITSELF OR ANY OF ITS MEMBERS, OR ON BEHALF OF THOSE MEMBERS
 OF  THE  GENERAL PUBLIC WHO HAVE BEEN INJURED BY REASON OF ANY VIOLATION
 OF THIS SECTION, INCLUDING A VIOLATION INVOLVING GOODS OR SERVICES  THAT
 THE  NON-PROFIT  ORGANIZATION  PURCHASED OR RECEIVED IN ORDER TO TEST OR
 EVALUATE QUALITIES PERTAINING TO USE FOR PERSONAL, HOUSEHOLD, OR  FAMILY
 PURPOSES.    A  NON-PROFIT  ORGANIZATION  MAY SEEK THE SAME REMEDIES AND
 DAMAGES THAT A PERSON MAY SEEK UNDER PARAGRAPH ONE OF THIS SUBDIVISION.
   (4) BEFORE ANY VIOLATION OF THIS SECTION IS SOUGHT TO BE ENJOINED, THE
 PERSON BRINGING THE ACTION SHALL BE REQUIRED TO GIVE THE PERSON  AGAINST
 WHOM  SUCH ACTION IS CONTEMPLATED NOTICE BY CERTIFIED MAIL, TO THE PLACE
 WHERE THE TRANSACTION OCCURRED OR TO THE  PRINCIPAL  PLACE  OF  BUSINESS
 WITHIN THE STATE OF THE PERSON AGAINST WHOM SUCH ACTION IS CONTEMPLATED,
 AND  AN  OPPORTUNITY  TO  SHOW IN WRITING WITHIN TEN BUSINESS DAYS AFTER
 MAILING OF NOTICE WHY PROCEEDINGS SHOULD NOT BE INSTITUTED  AGAINST  HIM
 OR  HER,  UNLESS,  IN  ANY  CASE  IN  WHICH THE PERSON SEEKS PRELIMINARY
 RELIEF, THE GIVING OF SUCH NOTICE AND OPPORTUNITY WOULD CAUSE  IMMEDIATE
 AND IRREPARABLE INJURY, LOSS OR DAMAGES.
   (I)  Notwithstanding  any law to the contrary, all monies recovered or
 obtained under this article by a  state  agency  or  state  official  or
 employee  acting in their official capacity shall be subject to subdivi-
 sion eleven of section four of the state finance law.
   (J) THIS SECTION IS INTENDED TO EXPAND  AND  NOT  TAKE  AWAY  EXISTING
 CONSUMER RIGHTS.
   §  4.  This  act  shall take effect on the sixtieth day after it shall
 have become a law.