S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                    795
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                              January 6, 2023
                                ___________
 
 Introduced  by  Sens. COMRIE, BAILEY, BRISPORT, BROUK, CLEARE, GIANARIS,
   GOUNARDES, HINCHEY, HOYLMAN, JACKSON,  KAVANAGH,  KRUEGER,  LIU,  MAY,
   MYRIE,  PARKER,  RAMOS,  RIVERA,  SALAZAR, SANDERS, SKOUFIS, THOMAS --
   read twice and ordered printed, and when printed to  be  committed  to
   the Committee on Consumer 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:
 
   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 cient  to  meet  this responsibility and has become out of date as other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.
   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

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

 S. 795                              2
 
 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
 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
 S. 795                              3
 
 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 (A) NOT AN INDIVIDUAL; AND (B) 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
 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
 S. 795                              4
 
 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.