A pair of bills being fast-tracked by the New York State Legislature would expand the power of the plaintiffs’ bar and generate years of litigation as state courts interpret the legislation’s vaguely defined terms, McGuireWoods partners Kevin B. Frankel and Jeff Ehrlich wrote in a June 15, 2023, commentary in The New York Law Journal.
The bills, A.7138 and S.795, would revise New York General Business Law Section 349, which prohibits “deceptive acts or practices” in a business context, to allow actions “regardless of whether or not the underlying violation is consumer-oriented [or] has a public impact” and would broaden the definition of illegal conduct to encompass “unfair” and “abusive,” rather than just “deceptive” conduct.
The attorneys noted that the meaning of “deceptive” is well developed in New York consumer law, but “unfair” and “abusive” are “slippery concepts that invite creative plaintiff’s lawyering and highly subjective judicial opinions.” Removing the public-interest requirement, meanwhile, may open the floodgates for trial lawyers to take on private contract disputes styled as Section 349 violations in the hopes of recovering attorneys’ fees.
The bills attempt to fix a problem that doesn’t exist, as New York has no shortage of consumer-protection litigation under current law, Frankel and Ehrlich noted.
“If enacted, it is doubtful that these laws will create a net public benefit. The only clear winners appear to be a certain subset of the plaintiff’s bar who will receive unfettered access to powers traditionally reserved to the discretion of the New York Attorney General,” the authors wrote.
Frankel, based in San Francisco, is a former prosecutor and New York assistant attorney general. Ehrlich, of Washington, D.C., previously served as deputy enforcement director at the Consumer Financial Protection Bureau.