Senate Bill S3248B

                                 
BILL NUMBER: S3248

SPONSOR: COONEY
 
TITLE OF BILL:

An act to amend the state finance law and the cannabis law, in relation
to authorizing a qui tam proceeding for civil violations of the cannabis
law

 
PURPOSE OR GENERAL IDEA OF BILL:

This bill would permit a person, known as a qui tam plaintiff, to bring
a civil action under the New York False Claims Act for violations of
general prohibitions and restrictions of cannabis law.

 
SUMMARY OF PROVISIONS:

Section 1. Subdivision 1 of § 189 of the state finance law is amended to
include new paragraph (i) for violations of any civil provisions of §
125 of the cannabis law. Paragraph (h) of subdivision 1 is further
amended to provide, however, that the civil penalty for violations of
the cannabis law shall be as set forth in § 132 of the cannabis law.
              

Section 2. Subdivision 5 of § 138-a is amended to allow for an action or
proceeding authorized under § 189 of the state finance law.

Section 3. Effective date.

 
JUSTIFICATION:

The New York False Claims Act permits civil actions to be brought by the
government for certain fraudulent acts. These acts include, but are not
limited to, knowingly present false or fraudulent claims for payment or
approval, knowingly make a false record or statement material to an
obligation to pay or transmit money or property to the state or local
government and concealing and improperly avoiding or decreasing an obli-
gation to pay or transmit money or property to the state or a local
government.

If the government declines to participate in the civil action based on a
violation of § 189 of the state finance law or declines to authorize a
local government to participate in the civil action then a person, known
as a qui tam plaintiff, may bring a civil action for a violation of §
189 of the state finance law on behalf of the person and the people of
New York or a local government.

This bill will allow a qui tam plaintiff to bring a civil action for
violations of any civil provision that are included within the general
prohibitions and restrictions of § 125 of the cannabis law.  Empowering
everyday New Yorkers with tools against illegal cannabis operators,
whose conduct is both unlawful and inundates our communities with
untested, unregulated and potentially deadly cannabis, is vital as we
continue our enforcement efforts to combat illegal cannabis. Illegal
cannabis operators undermine the legal cannabis industry in New York,
whose cannabis processors, cultivators, distributors and retail dispen-
sary licensees followed the rules only see their hard work damaged by
those who violate the cannabis law. New York must lead when legitimate
business is compromised by the conduct of bad actors.

The bill expands the ability for the government to bring an action or
proceeding authorized under § 189 of the state finance law for action
for unlawful business practices relating to cannabis under § 138-a of
the cannabis law. Authorizing a qui tam plaintiff to bring a civil
action for violations of cannabis law under the New York False Claims
Act adds another layer of legal protection for everyday New Yorkers.

 
PRIOR LEGISLATIVE HISTORY:'

2023-24: S.9441

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

To be determined

 
EFFECTIVE DATE:
This act shall take effect immediately.

                                 
BILL NUMBER: S3248A

SPONSOR: COONEY
 
TITLE OF BILL:

An act to amend the cannabis law, in relation to authorizing for a
private right of action for certain violations


 
PURPOSE OR GENERAL IDEA OF BILL:

This bill would permit any person to bring a civil action for a
violation of subdivision one of § 125 of the cannabis law and may
recover damages.

 
SUMMARY OF PROVISIONS:

Section 1. The cannabis law is amended to add a new section 138-c that
will permit any person to bring a civil action for a violation of subdi-
vision one of § 125 of the cannabis law and may recover actual damages
or five thousand dollars, whichever is greater, or both such actions.
The court may in its discretion increase damages to an amount not to
              

exceed three times the actual damages or up to ten thousand dollars if
the court finds the defendant willfully and knowingly violated this
section.

Section 2. Effective date.

 
JUSTIFICATION:

Illegal cannabis operators undermine the legal cannabis industry in New
York, whose cannabis processors, cultivators, distributors and retail
dispensary licensees followed the rules only see their hard work damaged
by those who violate the cannabis law. New York must lead when legiti-
mate business is compromised by the conduct of bad actors.

This bill would permit any person to bring a civil action for violations
of subdivision one of § 125 of the cannabis law, which prohibits any
person from cultivating, processing, distributing for sale or sell at
wholesale, retail or deliver to consumers any cannabis, cannabis prod-
uct, medical cannabis, or cannabinoid hemp or hemp extract product, or
any product marketed or labeled as such, within New York State without
obtaining the appropriate registration, license or permit required under
existing law, and allows for damages to be recovered by the party bring-
ing the civil action. Authorizing this type of civil action for these
specific violations of the cannabis law adds another layer of legal
protection for everyday New Yorkers.

 
PRIOR LEGISLATIVE HISTORY:

2023-24: S.9441, referred to Finance

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

To be determined

 
EFFECTIVE DATE:
This act shall take effect immediately.