CONSUMER LAW 2006 UPDATE
THE JUDGE'S GUIDE TO FEDERAL AND NEW YORK STATE CONSUMER PROTECTION STATUTES
June 1, 2006.See also:
•CONSUMER LAW 2005 UPDATE
•CONSUMER LAW 2003 UPDATE
•CONSUMER LAW 2001 UPDATE
•CONSUMER LAW 2000 UPDATE
Ever since my days as a City Court Judge sitting in the Small Claims Part [2] I have kept track of reported consumer law cases in New York State Courts. Causes of action alleging the violation of one or more Federal and/or New York State consumer protection statutes are frequently asserted in civil cases. This Paper, prepared annually for New York State Civil Court Judges, discusses those consumer protection statutes most frequently used in New York State courts, and, hopefully, will prove useful in resolving common consumer claims [ See e.g., Dvoskin v. Levitz Furniture Co., Inc. [3]
( " The informal nature of the layman facilitated small claims process dispenses with written answers as well as the need for plaintiffs to articulate all requisite elements of causes of action and instead places the responsibility upon the tribunal to ascertain from the proof what legal issues have been joined for disposition " )].
Arbitration, Forum Selection & Consumer Class Actions Too
In addition to reviewing recently reported New York State consumer law cases, this Paper discusses two new substantive and procedural topics. First, within the last seven years there has been a dramatic increase in the use of mandatory arbitration and forum selection clauses in consumer contracts, particularly, in agreements entered into over the Internet [4]. The enforceability of such clauses is addressed herein. Second, there has been a much needed effort by some Courts to establish standards of proof regarding the disposition of some types of consumer claims such as summary judgment motions made by credit card issuers[5] and appropriate procedures for the confirmation of credit card arbitration awards[6].
Consumer Class Actions Too
Article 9 of the C.P.L.R.[7] allows consumers to aggregate similar claims into class actions. The fact patterns in such consumer class actions provide useful information on new areas of consumer law. The scope of New York State consumer class actions including a review of all New York State class actions reported between January 2005 to March of 2006 appears herein.
Table Of Contents
1] Table of N.Y.S. Consumer Protection Statutes
2] Table of Federal Consumer Protection Statutes
2.1] Recent New York State Consumer Law Articles
3] Deceptive and Misleading Business Practices
[A] Consumer Oriented Conduct
[B] Stating A Cognizable Claim
[C] Preemption
[D] Actual Injury Necessary
[E] Threshold Of Deception
[F] Scope Of G.B.L. § 349
[G] Statute Of Limitations
[H] Application To Non-Residents
[I] No Independent Claim Necessary
[J] Territorial Limitations
[K] Types Of Goods & Services Covered By G.B.L. § 349
1] Apartment Rentals
2] Attorney Advertising
3] Aupair Services
4] Arbitrator's Award; Refusal To Pay
5] Auctions; Bid Rigging
6] Automotive; Disclosure of Contract Terms
6.1] Baldness Products
6.2] Bills, Automotive Repair
7] Budget Planning
7.1] Cable TV
8] Cars
9] Cell Phones
9.1] Checking Accounts
10] Clothing Sales
10.1] Computer Software
11] Credit Cards
12] Customer Information
13] Defective Automobile Ignition Switches
14] Defective Brake Shoes
15] Defective Dishwashers
16] Door-To-Door Sales
17] Educational Services
18] Employee Scholarship Programs
19] Excessive & Unlawful Bail Bond Fees
19.1] Excessive Modeling Fees
20] Exhibitions & Conferences
20.1] Extended Warranties
20.2] Food
21] Furniture Sales
22] Hair Loss Treatment
23] Home Heating Oil Price Increases
24] Home Inspections
25] In Vitro Fertilizations
26] Insurance Coverage
26.1] Insurance Claims Procedures
27] Internet Marketing & Services
28] " Knock-Off " Telephone Numbers
29] Lasik Eye Surgery
29.1] Layaway Plans
29.2] Leases, Equipment
30] Liquidated Damages Clause
31] Loan Applications
32] Mislabeling
32.1] Monopolistic Business Practices
33] Mortgages
34] Motor Oil Changes
35] Movers, Household Goods
35.1] Packaging
36] Professional Networking
37] Privacy Invasion
38] Pyramid Schemes
39] Real Estate Sales
40] Securities
41] Sports Nutrition Products
42] Termite Inspections
43] Tobacco Products
44] Transportation Services, E-Z Passes
45] Travel Services
46] TV Repair Shops
46.1] Unfair Competition Claims
47] Wedding Singers
4] False Advertising
[A] Unlawful Use Of Name Of Nonprofit Organization
5] Cars, Cars, Cars
[A] Automotive Parts Warranty
[B] Automotive Repair Shop Duties
[C] Implied Warranty of Merchantability & Non-Conforming Goods
[D] Magnuson-Moss Warranty Act & Leased Vehicles
[E] New Car Contract Disclosure Rule
[F] New Car Lemon Law
[G] Used Car Dealer Licensing
[H] Used Car Extended Warranty
[I] Used Car Lemon Law
[J] Warranty Of Serviceability
[K] Repossession & Sale of Vehicle
6] Homes
[A] Home Improvement Frauds
[B] Home Improvement Contractor Licensing
[C] New Home Implied Warranty Of Merchantability
[D] Movers, Household Goods
[E] Real Estate Broker Licenses
6.1] Insurance
[A]Coverage
[B] Claims Procedures
7] Loans & Credit
[A] Fair Credit Reporting
[B] Home Ownership and Equity Protection
[C] Real Estate Settlements
[D] Regulation Z
[E] Truth In Lending
[F] Mortgage Related Documents; Fees
[G] Credit Card Cases: Standards Of Proof
[H] Debt Collection Practices
8] Overcoats Lost At Restaurants
9] Pyramid Schemes
10] Real Property, Apartments & Coops
[A] Real Property Condition Disclosure
[B] Real Property Warranty Of Habitability
[C] Multiple Dwelling Law
11] Retail Sales & Leases
[A] Consumer Transaction Documents, Type Size
[A.1] Dating Services
[B] Dog And Cat Sales
[C] Door To Door Sales
[C.1] Furniture Extended Warranties
[C.2] Health Clubs
[D] Lease Renewals
[E] Licensing To Do Business
[1] Home Improvement Contractors
[2] Used Car Dealers
[3] Other Licensed Businesses
[E.1] Massage Therapy
[F] Merchandise Delivery Dates
[F.1] Merchandise Layaway Plans
[G] Refund Policies
[G.1] Retail Installment Sales
[H] Rental Purchase Agreements
[I] Warranty Of Merchantability
[J] Travel Services
12] Telemarketing
[A] Federal Telephone Consumer Protection Act
[B] N.Y.S. Telemarketing And Consumer Fraud And Abuse Prevention Act
[C] Telemarketing Devices Restrictions
[D] Telemarketing Sales Call Registry
13] Litigation Issues[A] Mandatory Arbitration Clauses
[B] Forum Selection Clauses
[B.1] Tariffs; Filed Rate Doctrine
[B.2] Credit Card Cases: Standards Of Proof
[C] Consumer Class Actions
1] Types of Consumer Class Action Claims
a] Baby Makers
b] Bail Bonds
c] Books
d] Cars, Cars, Cars
e] CDs & DVDs
f] Computers, Software & Internet Services
g] Dental Products
h] Drugs
i] Electricity
i.1] Entertainment
j] Food & Drink
k] Gambling
l] Grain Silos
m] Hospitals
n] Household Goods
o] Insurance
p] Loans/Credit Cards/Debit Cards
q] Mortgages
r] Newspaper Subscriptions
s] Nursing Homes
t] Personal Products
u] Privacy
v] Shippers
w] Tax Advice
x] Telephones, Cell Phones & Faxes
y] Tobacco Products
z] Toys
aa] Travel
bb] TV & Cable
cc] Windows
2] Consumer Law Theories of Liability
3] Common Law Claims
a] Breach of Contract
b] Quasi Contractual Claims
c] Unjust Enrichment
d] Money Had And Received
e] Bad Faith Dealings
f] Breach of Implied Covenant of Good Faith
g] Unconscionability
h] Economic Duress
I] Penalties
j] Breach of Warranty
k] Fraud
l] Breach of Fiduciary Duty
m] Negligence
4] Statutory Theories of Liability
a] G.B.L. §§ 349, 350
b] G.B.L. § 340
c] Telephone Consumer Protection Act
d] Public Health Law
e] Tenant Security Deposit
f] Privacy
g] No Fault Insurance
h] R.P.L. § 274
5] Mandatory Arbitration & Class Actions
6] Class Wide Arbitration
7] Removal To Federal Court
8] The Class Action Fairness Act of 2005
9] Coupon Settlements
[D] Reported Class Action Cases: 1/1/2005 - 7/1/2006
1] " Risk Free " Insurance
2] Monopolistic Business Practices
3] Forum Shopping: G.B.L. 340 In Federal Court
4] Fruity Booty Settlement Rejected
5] Listerine As Effective As Floss?
6] Cable TV
7] Illegal Telephone " Slamming "
8] Rental Cars
9] Document Preparation Fees
10] Tax Assessments
11] Arbitration Clauses & Class Actions
12] Vanishing Premiums
13] Labor Disputes
14] Retiree Benefits
15] Mortgages
16] Tenants
17] Document Preservation
18] Shareholder's Suit
19] Corporate Merger
20] Partnership Dispute
21] Notice Issues
21.1] Insurance Dividends
22] Telephone Consumer Protection Act
23] Residential Electricity Contracts
24] Oil & Gas Royalty Payments
25] Street Vendors Unite
26] Inmates
27] Legal Aliens
28] Shelter Allowances
1] Table Of New York State Consumer Protection Statutes
[A] G.B.L. § 349 [ Deceptive & Misleading Business Practices ];
[B] G.B.L. § 350 [ False Advertising ];
[C] G.B.L. § 198-a [ New Car Lemon Law ];
[D] G.B.L. § 198-b [ Used Car Lemon Law ];
[E] G.B.L. § 201 [ Overcoats Lost At Restaurants ];
[F] G.B.L. § 218-a [ Retail Refund Policies ];
[G] G.B.L. § 359-fff [ Pyramid Schemes ];
[G.1] G.B.L. § 394-c [ Dating Services ];
[G.2] G.B.L. § 396-aa [ Unsolicited Telefacsimile Advertising ]
[H] G.B.L. § 396-p(5) [ New Car Purchase Contract Disclosure Requirements ];
[H.1] G.B.L. § 396-q [ New Cars; Sales & Leases ];
[H.2] G.B.L. § 396-t [ Merchandise Layaway Plans ];
[I] G.B.L. § 396-u [ Merchandise Delivery Dates ];
[I.1] G.B.L. § 397 [ Unlawful Use Of Name Of Nonprofit Organization ];
[I.2] G.B.L. § 399-c [ Mandatory Arbitration Clauses In Certain Consumer Contracts Prohibited ];
[J] G.B.L. § 399-p [ Restrictions On Automated Telemarketing Devices ];
[K] G.B.L. § 399-pp [ Telemarketing And Consumer Fraud And Abuse Prevention Act ];
[L] G.B.L. § 399-z [ No Telemarketing Sales Call Registry ];
[L.1] G.B.L. § 601 [ Debt Collection Practices ];
[M] G.B.L. § 617(2)(a) [ New Parts Warranties ];
[M.1] G.B.L. §§ 620 et seq [ Health Club Services ];
[N] G.B.L. §§ 752 et seq [ Sale Of Dogs And Cats ];
[O] G.B.L. §§ 771, 772 [ Home Improvement Contracts & Frauds ];
[O.1] G.B.L. § 777 [ New Home Implied Warranty Of Merchantability ];
[O.2] G.B.L. § 820 [ Sale Of Outdated Over The Counter Drugs ];
[P] C.P.L.R. § 3015(e) [ Licensing To Do Business ];
[Q] C.P.L.R. § 4544 [ Consumer Transaction Documents Must Be In 8 Point Type ];
[R] M.D.L. § 78 [ Duty To Keep Premises In Good Repair ];
[R.1] P.P.L. § 401 et seq. [ Retail Installment Sales Act ];
[R.2] P.P.L. § 401 et seq. [ Retail Installment Sales Act ];
[S] P.P.L. §§ 425 et seq [ Door-To-Door Sales ];
[T] P.P.L. §§ 500 et seq [ Rental Purchase Agreements ];
[U] R.P.L. § 235-b [ Warranty Of Habitability ];
[V] R.P.L. § 274-a(2)(a) [ Mortgage Related Fees ];
[V.1] R.P.L. § 441(b) [ Real Estate Broker Licenses ];
[W] R.P.L. § 462 [ Property Condition Disclosure Act ];
[W.1] U.C.C. § 2-207(2)(B) [ Additional Contract Terms ];
[X] U.C.C. §§ 2-314, 2-318 [ Warranty Of Merchantability ];
[Y] U.C.C. § 2-601 [ Nonconforming Goods; Right of Rescission ];
[Y.1] U.C.C. § 2-608 [ Delivery of Non-Conforming Goods ];
[Y.2] U.C.C. §§ 610, 611 [ Repossession & Sale Of Vehicle ];
[Z] V.T.L. § 417 [ Warranty Of Serviceability ];
[AA] 17 N.Y.C.R.R. § 814.7 [ Duties & Rights of Movers of Household Goods ];
[BB] Education Law § 6512(1) [ Massage Therapy ];
[CC] G.O.L. § 5-901 [ Limitations On Enforceability Of Automatic Lease Renewal Provisions ].
2] Table Of Federal Consumer Protection Statutes
[A] 12 U.S.C. § 2601 [ Real Estate Settlement Procedures Act ( RESPA ) ];
[B] 15 U.S.C. §§ 1601 et seq [ Truth In Lending Act ];
[C] 15 U.S.C. § 1639 [ Home Ownerships and Equity Protection Act of 1994 ( HOEPA )];
[D] 15 U.S.C. §§ 2301 et seq [ Magnuson-Moss Warranty Act ];
[E] 47 U.S.C. § 227 [ Federal Telephone Consumer Protection Act Of 1991 ];
[F] 12 C.F.R. §§ 226.1 et seq [ Regulation Z ].
2.1] Recent New York State Consumer Law Articles
Elsberg, "Incorporation of Arbitration Clauses," New York Law Journal, January 6, 2006, p. 4, col. 3( " Where the parties' contract has no arbitration clause, but refers or is related to a separate document that includes an arbitration clause, may one party compel the other to arbitrate? " ).
Kesselman & Kirsch, "Consumer Services Sector: Mandatory Arbitration End Threatened," New York Law Journal, November 18, 2005, p. 4, col. 3 ( discussion of Ragucci v. Professional Construction Services, 25 A.D. 3d 43, 803 N.Y.S. 2d 139 ( 2005 ) ( G.B.L. § 399-c's prohibition of the use of mandatory arbitration clauses in some consumer contracts applied to contract for architectural services ).
Karmel & Paden, "Consumer Protection Law Claims in Toxic Torts Litigation," N.Y.L.J., August 23, 2005, p. 3 ( discussion of whether
" the claim that the plaintiff's exposure to a toxic substance is actionable ( under ) state consumer protection statutes " ).Samson, "The Anticybersquatting Consumer Protection Act: Key Information," N.Y.L.J., September 9, 2005, p. 4
( ACPA " was intended to prevent ' cybersquatting ' an expression that has come to mean the bad faith, abusive registration and use of the distinctive trademarks of others as Internet domain names, with the intent to profit from the goodwill associated with those trademarks " ).Lesser, "New York Consumer Law-Court Decisions in 2004," N.Y.L.J., July 27, 2005, p. 4
( " During recent years, an increasing division in the courts has appeared in § 349 jurisprudence as to the standard, on a motion to dismiss, as to whether a given practice is deceptive...the two upstate departments' view that determinations of deceptiveness present issues of fact stands in contrast to what has been, particularly, the First Department's apparent willingness, particularly in consumer cases, to rule that alleged conduct was not deceptive-usually because that court concluded that a reasonable consumer would not have been misled by the allegedly deceptive conduct " ).
3] Deceptive & Misleading Business Practices: G.B.L. § 349
The most popular of New York State's many consumer protection statutes is General Business Law § 349 [ " G.B.L. § 349 " ] which prohibits deceptive and misleading business practices.[8] G.B.L. § 349 allows consumers and, possibly, businesses[9] to sue for $50.00 or actual damages which may be trebled up to $1,000.00 upon a finding of a " wil(ful) or know(ing) violat(ion)".[10] An additional civil penalty not to exceed $10,000 may be imposed for a violation if the " conduct is perpetrated against one or more elderly persons ".[11] Attorneys fees and costs may be recovered as well.[A] Consumer Oriented Conduct
To establish a violation of G.B.L. § 349 the consumer must demonstrate that the alleged misconduct has " a broad impact on consumers at large " .[12] and constitutes " consumer-oriented conduct " ..[13]
B] Stating A Cognizable Claim
As stated in Small v. Lorillard Tobacco Co.[14]"To state a claim...a plaintiff must allege that the defendant has engaged ' in an act or practice that is deceptive or misleading in a material way and that plaintiff has been injured by reason thereof '...Intent to defraud and justifiable reliance by the plaintiff are not elements of the statutory claim...However, proof that ' a material deceptive act or practice causes actual, although not necessarily pecuniary harm ' is required to impose compensatory damages ".In Pelman v. McDonald's Corp.[15] the Court stated
"...To state a claim for deceptive practices under section 349, a plaintiff must show: (1) that the act, practice or advertisement was consumer-oriented; (2) that the act, practice or advertisement was misleading in a material respect; and (3) that the plaintiff was injured as a result of the deceptive act, practice or advertisement...The standard for whether an act or practice is misleading is objective, requiring a showing that a reasonable consumer would have been misled by the defendant's conduct... Omissions, as well as acts, may form the basis of a deceptive practices claim...traditional showings of reliance and scienter are not required under GBL § 349 ".A well pled G.B.L. § 349 claim need not particularize the deceptive practice but should, at a minimum, allege
" that ( defendants ) engaged in consumer-related activity that effected consumers at large, utilized tactics that were deceptive and misleading in material respects, disseminated advertising through various mediums, that was false in material respects, and injury resulting from ( defendants' ) business practices and advertising " ) [ Gabbay v. Mandel ][16].In addition, a G.B.L. § 349 complaint should identify the deceptive advertising and explain why and how the challenged advertising is materially deceptive [ Pelman v. McDonald's Corp. ].[17]
C] Preemption
G.B.L. §§ 349, 350 may be pre-empted by other consumer protection statutes [18] [ Stone v. Continental Airlines [19]( airline bumping G.B.L. § 349, 350 claims preempted by federal airline regulations ); People v. Applied Card Systems, Inc.[20]( " We next reject...contention that ( TILA ) preempted petitioner's claims ( which ) pertain to unfair and deceptive acts and practices " )].
D] Actual Injury Necessary
The complaint must allege actual injury arising from the alleged violations of G.B.L. § 349 [21] [ Small v. Lorillard Tobacco Co. [22]( in order to make out a G.B.L. § 349 claim the complaint must allege that a deceptive act was directed towards consumers and caused actual injury ); Shebar v. Metropolitan Life Insurance Co., 23 A.D. 3d 858, 807 N.Y.S. 2d 448 ( 2006 )( " Inasmuch as plaintiff asserts that this consumer-oriented conduct was deceptive, material and caused him injury...these allegations sufficiently allege ( a violation of G.B.L. § 349 ) " );
Solomon v. Bell Atlantic Corp. [23]( " A deceptive act or practice is not ' the mere invention of a scheme or marketing strategy, but the actual misrepresentation or omission to a consumer '...by which the consumer is ' caused actual, although not necessarily pecuniary, harm...'" );); Ho v. Visa USA, Inc. [24] ( consumers' G.B.L. § 349 claim arising from " retailers being required to accept defendants' debit cards if they want to continue accepting credit cards " dismissed because of " remoteness of their damages from the alleged injurious activity " ]; Goldberg v. Enterprise Rent-A-Car Company [25]
( " Plaintiffs do not allege they were charged for any damage to the rented vehicles, they made no claims on the optional insurance policies they purchased and their security deposits were fully refunded " );Thompson v. Foreign Car Center, Inc. [26]( car purchaser charges dealer with
" misrepresentations and non-disclosures concerning price, after-market equipment, unauthorized modification and compromised manufacturer warranty protect;"G.B.L. § 349 claim dismissed because of failure " to demonstrate that they sustained an actual injury " ); Wendol v. The Guardian Life Ins. Co.[27]
( " allegations that defendants engaged in a deceptive business practice by using Berkshire instead of Guardian to administer the claims of its policyholders are insufficient to state a claim under ( G.B.L. § 349 ) in the absence of any allegation or proof that any misrepresentation regarding the entity administering the claims caused any actual injury " );Meyerson v. Prime Realty Services, LLC , [28]
( " a privacy invasion claim-and an accompanying request for attorney's fees-may be stated under ( G.B.L. § 349 ) based on nonpecuniary injury " );Sokoloff v. Town Sports International, Inc. [29]( " Such claim impermissibly ' sets forth deception as both act and injury ' " ); Goldberg v. Enterprise Rent-A-Car Company, 14 A.D. 3d 417, 789 N.Y.S. 2d 114 ( 2005 )( failure to allege actual harm from failure to disclose data in rental car agreement );
Donahue v. Ferolito, Vultaggio & Sons[30]( " ( plaintiff ) failed to establish any actual damages resulting from defendants' alleged deceptive practices and false advertising on the labels " );Levine v. Philip Morris Inc.[31] ( " plaintiff must offer evidence that defendant made a misrepresentation...which actually deceived...and which caused her injury " );
Han v. Hertz Corp. [32] ( " proof that a material deceptive act or practice caused actual-albeit not necessarily pecuniary-harm is required to impose compensatory damages " )].
[E]Threshold Of Deception
Initially G.B.L. § 349 had a low threshold for a finding of deception, i.e., misleading and deceptive acts directed to" the ignorant, the unthinking and the credulous who, in making purchases, do not stop to analyze but are governed by appearances and general impressions " [ Guggenheimer v. Ginzburg ] [33] .Recently, the Court of Appeals raised the threshold to those misleading and deceptive acts " likely to mislead a reasonable consumer acting reasonably under the circumstances " [ Oswego Laborers' Local 214 Pension Fund v. Marine Midland Bank, N.A.;[34]Peabody v. Northgate Ford, Inc. [35]( failure to demonstrate that defendants
" engaged in practices which were ' likely to mislead a reasonable consumer acting reasonably under the circumstances '" ) ]. ].
F] Scope Of G.B.L. § 349
G.B.L. § 349 applies to a broad spectrum of goods and services [ Karlin v. IVF America [36] ( GBL 349..." on (its) face appl(ies) to virtually all economic activity and (its) application has been correspondingly broad...The reach of (this) statute ' provides needed authority to cope with the numerous, ever-changing types of false and deceptive business practices which plague consumers in our State '" )].G.B.L. § 349 is broader than common law fraud [ Gaidon v. Guardian Life Insurance Company [37] ( " encompasses a significantly wider range of deceptive business practices that were never previously condemned by decisional law " ); State of New York v. Feldman [38] ( G.B.L. § 349 " was intended to be broadly applicable, extending far beyond the reach of common law fraud " )].
G] Statute Of Limitations
G.B.L. § 349 claims are governed by a three-year period of limitations [ C.P.L.R. 241(2) ]. G.B.L. § 349 claims accrue when the consumer " has been injured by a deceptive act [39]" .H] Application To Non-Residents
G.B.L. § 349 does not apply to the claims of non-residents who did not enter into contracts in New York State [ Goshen v. Mutual Life Insurance Company [40] ] or received services in New York State [ Scott v. Bell Atlantic Corp. ].[41]].I] No Independent Claim Necessary
G.B.L. § 349 claim " does not need to be based on an independent private right of action " [ Farino v. Jiffy Lube International, Inc. ].[42][J] Territorial Limitations
In Goshen v. The Mutual Life Ins. Co. [43][ consumers of vanishing premium insurance policies ] and Scott v. Bell Atlantic Corp. ,[44] [ consumers of Digital Subscriber Line ( DSL ) [45] Internet services ], the Court of Appeals, not wishing to" tread on the ability of other states to regulate their own markets and enforce their own consumer protection laws "and seeking to avoid " nationwide, if not global application " , held that G.B.L. § 349 requires that " the transaction in which the consumer is deceived must occur in New York ". Following this latest interpretation [46] of the " territorial reach " of G.B.L. § 349 the Court in Truschel v. Juno Online Services, Inc.[47] , a consumer class action alleging misrepresentations by a New York based Internet service provider, dismissed the G.B.L. § 349 claim because the named representative entered into the Internet contract in Arizona. Notwithstanding the Goshen territorial limitation, the Court in Peck v. AT&T Corp .[48], a G.B.L. § 349 consumer class action involving cell phone service which
" improperly credited calls causing ( the class ) to lose the benefit of weekday minutes included in their calling plans ",approved a proposed settlement on behalf of residents in New York, New Jersey and Connecticut
[ " it would be a waste of judicial resources to require a different [ G.B.L. § 349 ] class action in each state...where, as here, the defendants have marketed their plans on a regional ( basis ) " ].
K] Goods, Services & Misconduct Covered By G.B.L. § 349
The types of goods and services to which G.B.L. § 349 applies include the following:
[1] Apartment Rentals [ Bartolomeo v. Runco[49] and Anilesh v. Williams [50] ( renting illegal apartments ); Yochim v. McGrath[51] ( renting illegal sublets )];
[2] Attorney Advertising [ People v. Law Offices of Andrew F. Capoccia[52] ( " The alleged conduct the instant lawsuit seeks to enjoin and punish is false, deceptive and fraudulent advertising practices " ); Aponte v. Raychuk[53] ( deceptive attorney advertisements [ " Divorce, Low Fee, Possible 10 Days, Green Card " ] violated Administrative Code of City of New York §§ 20-70C et seq )];
[3] Aupair Services [ Oxman v. Amoroso[54] ( misrepresenting the qualifications of an abusive aupair to care for handicapped children )];
[4] Arbitrator's Award; Refusal To Pay [ Lipscomb v. Manfredi Motors [55] ( auto dealer's refusal to pay arbitrator's award under G.B.L. § 198-b ( Used Car Lemon Law ) is unfair and deceptive business practice under G.B.L. § 349 )];
[5] Auctions; Bid Rigging [ State of New York v. Feldman[56] ( scheme to manipulate public stamp auctions comes " within the purview of ( G.B.L. § 349 ) " )];
[6] Automotive; Contract Disclosure Rule [ Levitsky v. SG Hylan Motors, Inc .[57] ( violation of G.B.L. § 396-p " and the failure to adequately disclose the costs of the passive alarm and extended warranty constitute a deceptive action ( per se violation of G.B.L. § 349 ); Spielzinger v. S.G. Hylan Motors Corp. [58] ( failure to disclose the true cost of " Home Care Warranty " and " Passive Alarm ", failure to comply with provisions of G.B.L. § 396-p and G.B.L. § 396-q; per se violations of G.B.L. § 349 )];
[6.1] Baldness Products [ Karlin v. IVF [59] ( reference to unpublished decision applying G.B.L. § 349 to products for treatment of balding and baldness );
Mountz v. Global Vision Products, Inc. [60] ( " Avacor, a hair loss treatment extensively advertised on television...as the modern day equivalent of the sales pitch of a snake oil salesman "; allegations of misrepresentations of " no known side effects ' of Avacor is refuted by documented minoxidil side effects " )];[6.2] Bills, Automotive Repair [ Joyce v. SI All Tire & Auto Center [61]
( " the invoice ( violates G.B.L. § 349 ). Although the bill has the total charge for the labor rendered for each service, it does not set forth the number of hours each service took. It makes it impossible for a consumer to determine if the billing is proper. Neither does the bill set forth the hourly rate " )];
[7] Budget Planning [ People v. Trescha Corp. [62] ( company misrepresented itself as a budget planner which
" involves debt consolidation and...negotiation by the budget planner of reduced interest rates with creditors and the cancellation of the credit cards by the debtors...the debtor agrees to periodically send a lump sum payment to the budget planner who distributes specific amounts to the debtor's creditors " )];[7.1] Cable TV [ In Samuel v. Time Warner, Inc. [63] , a class of cable television subscribers claimed a violation of G.B.L. § 349 and the breach of an implied duty of good faith and fair dealing because defendant allegedly
" is charging its basic customers for converter boxes which they do not need, because the customers subscribe only to channels that are not being converted ...( and ) charges customers for unnecessary remote controls regardless of their level of service ".In sustaining the G.B.L. § 349 claim based, in part, upon " negative option billing " [64] , the Court held that defendant's
" disclosures regarding the need for, and/or benefits of, converter boxes and...remote controls are buried in the Notice, the contents of which are not specifically brought to a new subscriber's attention...a claim for violation of GBL § 349 is stated " ];
[8] Cars [ People v. Condor Pontiac [65] ( used car dealer violated G.B.L. § 349 and V.T.L. § 417 in failing to disclose that used car was
" previously used principally as a rental vehicle "; " In addition ( dealer violated ) 15 NYCRR §§ 78.10(d), 78.11(12),(13)...fraudulently and/or illegally forged the signature of one customer, altered the purchase agreements of four customers after providing copies to them, and transferred retail certificates of sale to twelve (12) purchasers which did not contain odometer readings...( Also ) violated 15 NYCRR § 78.13(a) by failing to give the purchaser a copy of the purchase agreement in 70 instances ( all of these are deceptive acts ) " );Spielzinger v. S.G. Hylan Motors Corp. [66] ( failure to disclose the true cost of " Home Care Warranty " and " Passive Alarm ", failure to comply with provisions of G.B.L. § 396-p and G.B.L. § 396-q; per se violation of G.B.L. § 349 )];
[9] Cell Phones [ Naevus International, Inc. v. AT&T Corp.[67] , ( wireless phone subscribers seek damages for " frequent dropped calls, inability to make or receive calls and failure to obtain credit for calls that were involuntarily disconnected " )];
[9.1] Checking Accounts [ Sherry v. Citibank [68]
( " plaintiff stated ( G.B.L. §§ 349, 350 claims ) for manner in which defendant applied finance charges for its checking plus ' accounts since sales literature could easily lead potential customer to reasonable belief that interest would stop accruing once he made deposit to his checking account sufficient to pay off amount due on credit line " )].
[10] Clothing Sales [ Baker v. Burlington Coat Factory [69] ( refusing to refund purchase price in cash for defective and shedding fake fur )];
[10.1] Computer Software [ Cox v. Microsoft Corp. >[70]( " allegations that Microsoft engaged in purposeful, deceptive monopolistic business practices, including entering into secret agreements with computer manufacturers and distributors in inhibit competition and technological development and creating an ' applications barrier ' in its Windows software that...rejected competitors' Intel-compatible PC operating systems, and that such practices resulted in artificially inflated prices for defendant's products and denial of consumer access to competitor's innovations, services and products " )[11] Credit Cards [ People v. Applied Card Systems, Inc. ,[71]( misrepresenting the availability of certain pre-approved credit limits;
" solicitations were misleading...because a reasonable consumer was led to believe that by signing up for the program, he or she would be protected in case of an income loss due to the conditions described " );People v. Telehublink [72]
( " telemarketers told prospective customers that they were pre-approved for a credit card and they could receive a low-interest credit card for an advance fee of approximately $220. Instead of a credit card, however, consumers who paid the fee received credit card applications, discount coupons, a merchandise catalog and a credit repaid manual " );Sims v. First Consumers National Bank ,[73]
( " The gist of plaintiffs' deceptive practices claim is that the typeface and location of the fee disclosures, combined with high-pressure advertising, amounted to consumer conduct that was deceptive or misleading " );Broder v. MBNA Corporation[74] ( credit card company misrepresented the application of its low introductory annual percentage rate to cash advances )];
[12] Customer Information [ Anonymous v. CVS Corp. [75] ( CVS acquired the customer files from 350 independent pharmacies without customers' consent; the
" practice of intentionally declining to give customers notice of an impending transfer of their critical prescription information in order to increase the value of that information appears to be deceptive " )];
[13] Defective Automobile Ignition Switches [ Ritchie v. Empire Ford Sales, Inc. [76] ( dealer liable for damages to used car that burned up 4 ½ years after sale )];
[14] Defective Brake Shoes [ Giarrantano v. Midas Muffler [77]( Midas Muffler fails to honor brake shoe warranty )];
[15] Defective Dishwashers [ People v. General Electric Co., Inc [78]( misrepresentations " made by...GE to the effect that certain defective dishwashers it manufactured were not repairable " was deceptive under G.B.L. § 349 )];
[16] Door-To-Door Sales [ New York Environmental Resources v. Franklin [79],( misrepresented and grossly overpriced water purification system ); Rossi v. 21st Century Concepts, Inc. [80] ( selling misrepresented and overpriced pots and pans )];[17] Educational Services [ People v. McNair>[81]
( " deliberate and material misrepresentations to parents enrolling their children in the Harlem Youth Enrichment Christian Academy...thereby entitling the parents to all fees paid ( in the amount of $182,393.00 ); civil penalties pursuant to G.B.L. 350-d of $500 for each deceptive act or $38,500.00 and costs of $2,000.00 pursuant to CPLR § 8303(a)(6) );Andre v. Pace University [82] ( failing to deliver computer programming course for beginners ); Brown v. Hambric [83] ( failure to deliver travel agent education program )];
[18] Employee Scholarship Programs[ Cambridge v. Telemarketing Concepts, Inc. [84] ( refusal to honor agreement to provide scholarship to employee )];
[19] Excessive & Unlawful Bail Bond Fees [ McKinnon v. International Fidelity Insurance Co. [85]( misrepresentation of expenses in securing bail bonds )];
[19.1] Excessive Modeling Fees [ Shelton v. Elite Model Management, Inc. [86]( models' claims of excessive fees caused
" by reason of any misstatement, misrepresentation, fraud and deceit, or any unlawful act or omission of any licensed person "stated a private right of action under G.B.L. Article 11 and a claim under G.B.L. § 349 )];
[20] Exhibitions and Conferences [ Sharknet Inc. v. Telemarketing, NY Inc. [87]( misrepresenting length of and number of persons attending Internet exhibition )];
[20.1] Extended Warranties
[ " The extended warranty and new parts warranty business generates extraordinary profits for the retailers of cars, trucks and automotive parts and for repair shops. It has been estimated that no more than 20% of the people who buy warranties ever use them... Of the 20% that actually try to use their warranties...( some ) soon discover that the real costs can easily exceed the initial cost of the warranty certificate " ;[88]Dvoskin v. Levitz Furniture Co., Inc. [89] ( one year and five year furniture extended warranties;
" the solicitation and sale of an extended warranty to be honored by an entity that is different from the selling party is inherently deceptive if an express representation is not made disclosing who the purported contracting party is. It is reasonable to assume that the purchaser will believe the warranty is with the Seller to whom she gave consideration, unless there is an express representation to the contrary. The providing of a vague two page sales brochure, after the sale transaction, which brochure does not identify the new party...and which contains no signature or address is clearly deceptive " );Kim v. BMW of Manhattan, Inc. [90]( misrepresented extended warranty; $50 statutory damages awarded under G.B.L. 349(h)); Giarratano v. Midas Muffler [91] ( Midas would not honor its brake shoe warranty unless the consumer agreed to pay for additional repairs found necessary after a required inspection of the brake system;
" the Midas Warranty Certificate was misleading and deceptive in that it promised the replacement of worn brake pads free of charge and then emasculated that promise by requiring plaintiff to pay for additional brake system repairs which Midas would deem necessary and proper " );Petrello v. Winks Furniture [92] ( misrepresenting a sofa as being covered in Ultrasuede HP and protected by a 5 year warranty )];
[20.2] Food [ Pelman v. McDonald's Corp .[93] ( misrepresentation of nutritional value of food products ); Matter of Food Parade, Inc. V. Office of Consumer Affairs [94]( the mere display and sale of expired food items in not a deceptive act under Nassau County Administrative Code § 21-10.2 which is not preempted by G.B.L. § 820 governing sale of outdated over-the-counter drugs ); Matter of Stop & Shop Supermarket Companies, Inc. V. Office of Consumer Affairs of County of Nassau [95]( " A supermarket's mere display and sale of expired items is not a deceptive trade practice under Nassau County Administrative Code § 21-10.2(b)(1)(d) " ) ];
[21] Furniture Sales [ Petrello v. Winks Furniture [96] ( misrepresenting a sofa as being covered in Ultrasuede HP and protected by a 5 year warranty ); Walker v. Winks Furniture [97] ( falsely promising to deliver furniture within one week ); Filpo v. Credit Express Furniture Inc. [98] ( failing to inform Spanish speaking consumers of a three day cancellation period ); Colon v. Rent-A-Center, Inc. [99]( rent-to-own furniture; " an overly inflated cash price " for purchase may violate G.B.L. § 349 )];
[22] Hair Loss Treatment [ Mountz v. Global Vision Products, Inc. [100] ( " marketing techniques ( portrayed ) as the modern day equivalent of the sales pitch of a snake oil salesman ", alleged misrepresentations of " no known side effects " without revealing documented side effects " which include cardiac changes, visual disturbances, vomiting, facial swelling and exacerbation of hair loss "; G.B.L. § 349 claim stated for New York resident " deceived in New York " )];
[23] Home Heating Oil; Unilateral Price Increase [ State v. Wilco Energy Corp. [101] ( home heating oil company's " conduct constituted a deceptive practice. It offered a fixed-price contract and then refused to comply with its most material term-an agreed-upon price for heating oil " )];
[24] Home Inspections [ Ricciardi v. Frank d/b/a/ InspectAmerica Enginerring,P.C. [102]( civil engineer liable for failing to discover wet basement ) ];
[25] In Vitro Fertilization [ Karlin v. IVF America, Inc. [103] ( misrepresentations of in vitro fertilization rates of success )]; [26] Insurance [ Gaidon v. Guardian Life Insurance Co. & Goshen v. Mutual Life Insurance Co. [104] ( misrepresentations that " out-of-pocket premium payments ( for life insurance policies ) would vanish within a stated period of time " ); Monter v. Massachusetts Mutual Life Ins. Co.[105] ( misrepresentations with respect to the terms " Flexible Premium Variable Life Insurance Policy " ); Skibinsky v. State Farm Fire and Casualty Co. [106] ( misrepresentation of the coverage of a " builder's risk " insurance policy ); Brenkus v. Metropolitan Life Ins. Co. [107] ( misrepresentations by insurance agent as to amount of life insurance coverage ); Makastchian v. Oxford Health Plans, Inc. [108] ( practice of terminating health insurance policies without providing 30 days notice violated terms of policy and was a deceptive business practice because subscribers may have believed they had health insurance when coverage had already been canceled )]; [26.1] Insurance Claims Procedures [ Shebar v. Metropolitan Life Insurance Co. [109]
( " Allegations that despite promises to the contrary in its standard-form policy sold to the public, defendants made practice of ' not investigating claims for long-term disability benefits in good faith, in a timely fashion, and in accordance with acceptable medical standards... when the person submitting the claim...is relatively young and suffers from a mental illness ', stated cause of action pursuant to ( G.B.L. ) § 349 " );Makuch v. New York Central Mutual Fire Ins. Co. [110]
( " violation of ( G.B.L. § 349 for disclaiming ) coverage under a homeowner's policy for damage caused when a falling tree struck plaintiff's home " );Acquista v. New York Life Ins. Co. [111]
( " allegation that the insurer makes a practice of inordinately delaying and then denying a claim without reference to its viability "" may be said to fall within the parameters of an unfair or deceptive practice " );Rubinoff v. U.S. Capitol Insurance Co. [112] ( automobile insurance company fails to provide timely defense to insured );
[27] Internet Marketing & Services
[ Zurakov v. Register.Com, Inc.[113] ( " Given plaintiff's claim that the essence of his contract with defendant was to establish his exclusive use and control over the domain name ' Laborzionist.org ' and that defendant's usurpation of that right and use of the name after registering it for plaintiff defeats the very purpose of the contract, plaintiff sufficiently alleged that defendant's failure to disclose its policy of placing newly registered domain names on the ' Coming Soon ' page was material "and constitutes a deceptive act under G.B.L. § 349 );
People v. Network Associates, Inc. [114]( " Petitioner argues that the use of the words ' rules and regulations ' in the restrictive clause ( prohibiting testing and publication of test results of effectiveness of McAfee antivirus and firewall software ) is designed to mislead consumers by leading them to believe that some rules and regulations outside ( the restrictive clause ) exist under state or federal law prohibiting consumers from publishing reviews and the results of benchmark tests...the language is ( also ) deceptive because it may mislead consumers to believe that such clause is enforceable under the lease agreement, when in fact it is not...as a result consumers may be deceived into abandoning their right to publish reviews and results of benchmark tests " );People v. Lipsitz [115] ( failing to deliver purchased magazine subscriptions ); Scott v. Bell Atlantic Corp. , [116] ( misrepresented Digital Subscriber Line ( DSL ) [117] Internet services )];
[28] " Knock-Off " Telephone Numbers
[ Drizin v. Sprint Corp. [118] ( " defendants' admitted practice of maintaining numerous toll-free call service numbers identical, but for one digit, to the toll-free call service numbers of competitor long-distance telephone service providers. This practice generates what is called ' fat-fingers ' business, i.e., business occasioned by the misdialing of the intended customers of defendant's competing long-distance service providers. Those customers, seeking to make long-distance telephone calls, are, by reason of their dialing errors and defendants' many ' knock-off ' numbers, unwittingly placed in contact with defendant providers rather than their intended service providers and it is alleged that, for the most part, they are not advised of this circumstance prior to completion of their long-distance connections and the imposition of charges in excess of those they would have paid had they utilized their intended providers. These allegations set forth a deceptive and injurious business practice affecting numerous consumers ( under G.B.L. 349 ) " )];
[29] Lasik Eye Surgery [ Gabbay v. Mandel [119]( medical malpractice and deceptive advertising arising from lasik eye surgery )];
[29.1] Layaway Plans [ Amiekumo v. Vanbro Motors, Inc. [120]( failure to deliver vehicle purchased on layaway plan and comply with statutory disclosure requirements; a violation of G.B.L. § 396-t is a per se violation of G.B.L. § 349 ];
[29.2] Leases, Equipment [ Sterling National Bank v. Kings Manor Estates[121]
( " The defendants...claim that the equipment lease was tainted by fraud and deception in the inception, was unconscionable and gave rise to unjust enrichment...the bank plaintiff, knowing of the fraudulent conduct, purchased the instant equipment lease at a deep discount, and by demanding payment thereunder acted in a manner violating...( G.B.L. § 349 ) " )];
[30] Liquidated Damages Clause [ Morgan Services, Inc. v. Episcopal Church Home & Affiliates Life Care Community, Inc .[122] ( it is deceptive for seller to enter
" into contracts knowing that it will eventually fail to supply conforming goods and that, when the customer complains and subsequently attempts to terminate the contract ( seller ) uses the liquidated damages clause of the contract as a threat either to force the customer to accept the non-conforming goods or to settle the lawsuit " )];
[31] Loan Applications [ Dunn v. Northgate Ford, Inc. [123] ( automobile dealer completes and submits loan application to finance company and misrepresents teenage customer's ability to repay loan which resulted in default and sale of vehicle )];
[32] Mislabeling [ Lewis v. Al DiDonna [124]( pet dog dies from overdose of prescription drug, Feldene, mislabeled " 1 pill twice daily ' when should have been " one pill every other day " )];
[32.1] Monopolistic Business Practices
[ Cox v. Microsoft Corporation [125]( " allegations that Microsoft engaged in purposeful, deceptive monopolistic business practices; including entering into secret agreements with computer manufacturers and distributors to inhibit competition and technological development and creating an ' applications barrier ' in its Windows software that, unbeknownst to consumers, rejected competitors' Intel-compatible PC operating systems, and that such practices resulted in artificially inflated prices for defendant's products and denial of consumer access to competitors' innovations, services and products " )];
[33] Mortgages
[ Kidd v. Delta Funding Corp. [126]( " The defendants failed to prove that their act of charging illegal processing fees to over 20,000 customers, and their failure to notify the plaintiffs of the existence and terms of the settlement agreement, were not materially deceptive or misleading " );Walts v. First Union Mortgage Corp .[127] ( consumers induced to pay for private mortgage insurance beyond requirements under New York Insurance Law § 6503 ); Negrin v. Norwest Mortgage, Inc. [128]( mortgagors desirous of paying off mortgages charged illegal and unwarranted fax and recording fees ); Trang v. HSBC Mortgage Corp., USA [129]( $15.00 special handling/fax fee for a faxed copy of mortgage payoff statement violates R.P.L. § 274-a(2)(a) which prohibits charges for mortgage related documents and is deceptive as well )];
[34] Motor Oil Changes [ Farino v. Jiffy Lube International, Inc. [130] ( an " Environmental Surcharge " of $.80 to dispose of used motor oil after every automobile oil change may be deceptive since under Environmental Conservation Law § 23-2307 Jiffy was required to accept used motor oil at no charge )];
[35] Movers; Household Goods [ Goretsky v. ½ Price Movers, Inc . [131] ( " failure to unload the household goods and hold them ' hostage ' is a deceptive practice under " G.B.L. § 349 )];
[35.1] Packaging [ Sclafani v. Barilla America, Inc. [132]( deceptive packaging of retail food products )];
[36] Professional Networking [ BNI New York Ltd. v. DeSanto [133]( enforcing an unconscionable membership fee promissory note ) ];
[37] Privacy [ Anonymous v. CVS Corp .[134] ( sale of confidential patient information by pharmacy to a third party is " an actionable deceptive practice " under G.B.L. 349 ); Smith v. Chase Manhattan Bank [15] ( same ); Meyerson v. Prime Realty Services, LLC , [136]
( " landlord deceptively represented that ( tenant ) was required by law to provide personal and confidential information, including... social security number in order to secure renewal lease and avoid eviction " ) ];
[38] Pyramid Schemes [ C.T.V. Inc. v. Curlen [137] ( selling bogus " Beat The System Program " certificates ); Brown v. Hambric [138]( selling misrepresented instant travel agent credentials and educational services )];
[39] Real Estate Sales [ Gutterman v. Romano Real Estate [139] ( misrepresenting that a house with a septic tank was connected to a city sewer system ); Board of Mgrs, of Bayberry Greens Condominium v. Bayberry Greens Associates [140] ( deceptive advertisement and sale of condominium units ); B.S.L. One Owners Corp. v. Key Intl. Mfg. Inc.[141] ( deceptive sale of shares in a cooperative corporation ); Breakwaters Townhouses Ass'n. v. Breakwaters of Buffalo, Inc. [142]( condominium units ); Latiuk v. Faber Const. Co. [143]( deceptive design and construction of home ); Polonetsky v. Better Homes Depot, Inc. [144]( N.Y.C. Administrative Code §§ 20-700 et seq ( Consumer Protection Law ) applies to business of buying foreclosed homes and refurbishing and reselling them as residential properties; misrepresentations that recommended attorneys were approved by Federal Housing Authority deceptive )];
[40] Securities [ Not Covered By G.B.L. § 349 ][ Gray v. Seaboard Securities, Inc. [145 ( G.B.L. § 349 provides no relief for consumers alleging injury arising from the deceptive or misleading acts of a trading company ); Yeger v. E* Trade Securities LLC,[146]
( " Although plaintiffs argue that the statute on its face, applies to virtually all economic activity, courts have held that federally regulated securities transactions are outside the ambit of section 349 " );Fesseha v. TD Waterhouse Investor Services, Inc. [147]
( " Finally, section 349 does not apply here because, in addition to being a highly regulated industry, investments are not consumer goods " );Berger v. E*Trade Group, Inc. [148]
( " Securities instruments, brokerage accounts and services ancillary to the purchase of securities have been held to be outside the scope of the section " );But see Scalp & Blade, Inc. v. Advest, Inc. [149] ( G.B.L. § 349 covers securities transactions )];
[41] Sports Nutrition Products [ Morelli v. Weider Nutrition Group, Inc. [150] ,( manufacturer of Steel Bars, a high-protein nutrition bar, misrepresented the amount of fat, vitamins, minerals and sodium therein )];
[42] Termite Inspections [ Anunziatta v. Orkin Exterminating Co., Inc. [151] ( misrepresentations of full and complete inspections of house and that there were no inaccessible areas are misleading and deceptive )];
[43] Tobacco Products [ Blue Cross and Blue Shield of New Jersey, Inc. v. Philip Morris Inc.[152], ( tobacco companies' scheme to distort body of public knowledge concerning the risks of smoking, knowing public would act on companies' statements and omissions was deceptive and misleading )];
[44] Transportation Services, E-Z Passes [ Kinkopf v. Triborough Bridge & Tunnel Authority [153] ( E-Z pass contract fails to reveal necessary information to customers wishing to make a claim and " on its face constitutes a deceptive practice " ),rev'd [154] ( toll is a use tax and not consumer oriented transaction )];
[45] Travel Services [ Meachum v. Outdoor World Corp. [155] ( misrepresenting availability and quality of vacation campgrounds; Vallery v. Bermuda Star Line, Inc.[156] ( misrepresented cruise ); Pellegrini v. Landmark Travel Group [157] ( refundability of tour operator tickets misrepresented ); People v. P.U. Travel, Inc. [158] ( Attorney General charges travel agency with fraudulent and deceptive business practices in failing to deliver flights to Spain or refunds )];
[46] TV Repair Shops [ Tarantola v. Becktronix, Ltd .[159] ( TV repair shop's violation of
" Rules of the City of New York ( 6 RCNY 2-261 et seq )...that certain procedures be followed when a licensed dealer receives an electronic or home appliance for repair...constitutes a deceptive practice under ( G.B.L. § 349 )" )];
[46.1] Unfair Competition Claims [ Not Covered By G.B.L. § 349 ][ In Leider v. Ralfe[160] , an action involving control of the diamond market, the Court held that there was no violation of G.B.L. § 349
( " Plaintiffs contend that De Beers' broad-scale manipulation and pollution of the diamond market is deceptive unto itself. I see no principled distinction between this allegation and a generic antitrust scheme, albeit on a substantially larger scale than most. Plaintiffs cannot escape the fact that...New York has chosen not to include ' unfair competition ' or ' unfair ' practices in its consumer protection statute, language that bespeaks a significantly broader reach " )];
[47] Wedding Singers [ Bridget Griffin-Amiel v. Frank Terris Orchestras [161]( the bait and switch [162] of a
" 40-something crooner " for the " 20-something " Paul Rich " who promised to deliver a lively mix of pop hits, rhythm-and-blues and disco classics " ) ].For broken engagements and disputes over wedding preparations, generally, see DeFina v. Scott. [163]
4] False Advertising: G.B.L. § 350
Consumers who rely upon false advertising and purchase defective goods or services may claim a violation of G.B.L. § 350 [ Scott v. Bell Atlantic Corp. [164] ( defective ' high speed ' Internet services falsely advertised ); Card v. Chase Manhattan Bank [165] ( bank misrepresented that its LifePlus Credit Insurance plan would pay off credit card balances were the user to become unemployed )]. G.B.L. § 350 prohibits false advertising which" means advertising, including labeling, of a commodity...if such advertising is misleading in a material respect...( covers )....representations made by statement, word, design, device, sound...but also... advertising ( which ) fails to reveal facts material " .[166]G.B.L. § 350 covers a broad spectrum of misconduct
[ Karlin v. IVF America [167] ( " ( this statute ) on ( its ) face appl(ies) to virtually all economic activity and ( its ) application has been correspondingly broad " )].Proof of a violation of G.B.L. 350 is simple, i.e., " the mere falsity of the advertising content is sufficient as a basis for the false advertising charge " [ People v. Lipsitz [168] ( magazine salesman violated G.B.L. § 350;
" ( the ) ( defendant's ) business practice is generally ' no magazine, no service, no refunds " although exactly the contrary is promised " ].People v. McNair [169]
( " deliberate and material misrepresentations to parents enrolling their children in the Harlem Youth Enrichment Christian Academy...thereby entitling the parents to all fees paid ( in the amount of $182,393.00 ); civil penalties pursuant to G.B.L. 350-d of $500 for each deceptive act or $38,500.00 and costs of $2,000.00 pursuant to CPLR § 8303(a)(6) )].
However, unlike a claim under G.B.L. § 349 plaintiffs must prove reliance on false advertising to establish a violation of G.B.L. § 350 [ Pelman v. McDonald's Corp. [170] ( G.B.L. § 350 requires proof of reliance );
Leider v. Ralfe >[171] ( G.B.L. § 350 requires proof of reliance ); Gale v. International Business Machines Corp. [172] ( " Reliance is not an element of a claim under ( G.B.L. § 349 )...claims under ( G.B.L. § 350 )...do require proof of reliance " )].
[A] Unlawful Use Of Name Of Nonprofit Organization
G.B.L. § 397 provides that" no person...shall use for advertising purposes...the name...of any non-profit corporation ...without having first obtained the written consent of such non-profit corporation ".In Metropolitan Opera Association, Inc. v. Figaro Systems, Inc.[173] the Met charged a New Mexico company with unlawfully using its name in advertising promoting its
" ' Simultext ' system which defendant claims can display a simultaneous translation of an opera as it occurs on a stage and that defendant represented that its system is installed at the Met " )].
5] Cars, Cars, Cars
There are a variety of consumer protection statutes available to purchasers and lessees of automobiles, new and used. A comprehensive review of five of these statutes [ GBL § 198-b[174] ( Used Car Lemon Law ), express warranty [175], implied warranty of merchantability [176] ( U.C.C. §§ 2-314, 2-318 ), Vehicle and Traffic Law [ V&T ] § 417, strict products liability [177]] appears in Ritchie v. Empire Ford Sales, Inc. [178], a case involving a used 1990 Ford Escort which burned up 4 ½ years after being purchased because of a defective ignition switch. A comprehensive review of two other statutes [ GBL § 198-a ( New Car Lemon Law ) and GBL § 396-p ( New Car Contract Disclosure Rules )] appears in Borys v. Scarsdale Ford, Inc. [179], a case involving a new Ford Crown Victoria, the hood, trunk and both quarter panels of which had been negligently repainted prior to sale.
[A] Automotive Parts Warranty: G.B.L. § 617(2)(a)
" The extended warranty and new parts warranty business generates extraordinary profits for the retailers of cars, trucks and automotive parts and for repair shops. It has been estimated that no more than 20% of the people who buy warranties ever use them... Of the 20% that actually try to use their warranties... ( some ) soon discover that the real costs can easily exceed the initial cost of the warranty certificate " .[180]In Giarratano v. Midas Muffler [181], Midas would not honor its brake shoe warranty unless the consumer agreed to pay for additional repairs found necessary after a required inspection of the brake system. G.B.L. § 617(2)(a) protects consumers who purchase new parts or new parts' warranties from breakage or a failure to honor the terms and conditions of a warranty
[ " If a part does not conform to the warranty...the initial seller shall make repairs as are necessary to correct the nonconformity " ].[182]A violation of G.B.L. § 617(2)(a) is a per se violation of G.B.L. § 349 which provides for treble damages, attorneys fees and costs .[183]See also: Kim v. BMW of Manhattan, Inc.[184] ( misrepresented extended automobile warranty; G.B.L. § 349(h) statutory damages of $50 awarded ).
[B] Auto Repair Shop Duty To Perform Quality Repairs
Service stations should perform quality repairs. Quality repairs are those repairs held by those having knowledge and expertise in the automotive field to be necessary to bring a motor vehicle to its premalfunction or predamage condition [ Welch v. Exxon Superior Service Center [185]( consumer sought to recover $821.75 from service station for failing to make proper repairs to vehicle;" While the defendant's repair shop was required by law to perform quality repairs, the fact that the claimant drove her vehicle without incident for over a year following the repairs indicates that the vehicle had been returned to its premalfunction condition following the repairs by the defendant, as required " );Shalit v. State of New York [186]( conflict in findings in Small Claims Court in auto repair case with findings of Administrative Law Judge under VTL § 398 ).
[C] Implied Warranty Of Merchantability: U.C.C. §§ 2-314, 2-318; Delivery Of Non-Conforming Goods: U.C.C. § 2-608
Both new and used cars carry with them an implied warranty of merchantability [ U.C.C. §§ 2-314, 2-318 ][ Denny v. Ford Motor Company ].[187] Although broader in scope than the Used Car Lemon Law the implied warranty of merchantability does have its limits, i.e., it is time barred four years after delivery [ U.C.C. § 2-725; Hull v. Moore Mobile Homes Stebra, Inc .,[188] ( defective mobile home; claim time barred )] and the dealer may disclaim liability under such a warranty [ U.C.C. § 2-316 ] if such a disclaimer is written and conspicuous [ Natale v. Martin Volkswagen, Inc. [189]( disclaimer not conspicuous )]. A knowing misrepresentation of the history of a used vehicle may state a claim under U.C.C. § 2-608 for the delivery of non-conforming goods [ Urquhart v. Philbor Motors, Inc. [190]][D] Magnuson-Moss Warranty Act & Leased Vehicles: 15 U.S.C. §§ 2301 et seq
In Tarantino v. DaimlerChrysler Corp. [191], DiCinto v. Daimler Chrysler Corp. [192]and Carter-Wright v. DaimlerChrysler Corp. [193] , it was held that the Magnuson-Moss Warranty Act, 15 U.S.C. §§ 2301 et seq. applies to automobile lease transactions. However, in DiCintio v. DaimlerChrysler Corp. [194], the Court of Appeals held that the Magnuson-Moss Warranty Act does not apply to automobile leases.[E] New Car Contract Disclosure Rule: G.B.L. § 396-p
In Borys v. Scarsdale Ford, Inc.[195] , a consumer demanded a refund or a new car after discovering that a new Ford Crown Victoria had several repainted sections. The Court discussed liability under G.B.L. § 198-a ( New Car Lemon Law ) and G.B.L. § 396-p(5) ( Contract Disclosure Requirements )
[ " gives consumers statutory rescission rights ' in cases where dealers fail to provide the required notice of prior damage and repair(s)' ( with a ) ' retail value in excess of five percent of the lesser of manufacture's or distributor's suggested retail price '" ].In Borys the Court dismissed the complaint finding (1) that under G.B.L. § 198-a the consumer must give the dealer an opportunity to cure the defect and (2) that under G.B.L. § 396-p(5) Small Claims Court would not have jurisdiction [ money damages of $3,000 ] to force " defendant to give...a new Crown Victoria or a full refund, minus appropriate deductions for use ". In Levitsky v. SG Hylan Motors, Inc. [196] a car dealer overcharged a customer for a 2003 Honda Pilot and violated G.B.L. 396-p by failing to disclose the " estimated delivery date and place of delivery...on the contract of sale ". The Court found that the violation of G.B.L. § 396-p
" and the failure to adequately disclose the costs of the passive alarm and extended warranty constitutes a deceptive act ( in violation of G.B.L. § 349 ). Damages included " $2,251.50, the $2,301.50 which he overpaid, less the cost of the warranty of $50.00 "and punitive damages under G.B.L. § 349(h) bringing the award up to $3,000.00, the jurisdictional limit of Small Claims Court.
In Spielzinger v. S.G. Hylan Motors Corp. [197]( failure to disclose the true cost of " Home Care Warranty " and " Passive Alarm ", failure to comply with provisions of G.B.L. § 396-p ( confusing terms and conditions, failure to notify consumer of right to cancel ) and G.B.L. § 396-q ( dealer failed to sign sales contract ); per se violations of G.B.L. § 349 with damages awarded of $734.00 ( overcharge for warranty ) and $1,000 statutory damages ).
And in Thompson v. Foreign Car Center, Inc. [198] a car purchaser charged a Volkswagen dealer with
" misrepresentations and non-disclosures concerning price, after-market equipment, unauthorized modification and compromised manufacturer warranty protection ".The Court dismissed the claim under G.B.L. § 396-p
( " While GBL § 396-p(1) and (2) state that a contract price cannot be increased after a contract has been entered into, the record reveals that defendants appear to have substantially complied with the alternative provisions of GBL § 396-p(3) by providing plaintiffs with the buyers' form indicating the desired options and informing them they had a right to a full refund of their deposit " ).However, claims under G.B.L. § 396-q and P.P.L. § 302 were sustained because defendants had failed to sign the retail installment contract.
[F] New Car Lemon Law: G.B.L. § 198-a
New York State's New Car Lemon Law [ G.B.L. § 198-a ] provides that" If the same problem cannot be repaired after four or more attempts; Or if your car is out of service to repair a problem for a total of thirty days during the warranty period; Or if the manufacturer or its agent refuses to repair a substantial defect within twenty days of receipt of notice sent by you...Then you are entitled to a comparable car or refund of the purchase price " [ Borys v. Scarsdale Ford, Inc. [199] ].Before commencing a lawsuit seeking to enforce the New Car Lemon Law the dealer must be given an opportunity to cure the defect [ Chrysler Motors Corp. v. Schachner [200] ( dealer must be afforded a reasonable number of attempts to cure defect )]. The consumer may utilize the statutory repair presumption after four unsuccessful repair attempts after which the defect is still present .[201] However, the defect need not be present at the time of arbitration hearing .[202]
[ " The question of whether such language supports an interpretation that the defect exist at the time of the arbitration hearing or trial. We hold that it does not " ]..[203]Civil Courts have jurisdiction to adjudicate Lemon Law refund remedy claims up to $25,000. .[204] Attorneys fees and costs may be awarded to the prevailing consumer [ Kucher v. DaimlerChrycler Corp . [205]
( " this court is mindful of the positive public policy considerations of the ' Lemon Law ' attorney fee provisions... Failure to provide a consumer such recourse would undermine the very purpose of the Lemon Law and foreclose the consumer's ability to seek redress as contemplated by the Lemon Law " );[ DaimlerChrysler Corp. v. Karman [2046( $5,554.35 in attorneys fees and costs of $300.00 awarded )].
[G] Used Car Dealer Licensing: C.P.L.R. § 3015(e)
In B & L Auto Group, Inc. v. Zilog [207] a used car dealer sued a customer to collect the $2,500.00 balance due on the sale of a used car. Because the dealer failed to have a Second Hand Automobile Dealer's license pursuant to New York City Department of Consumer Affairs when the car was sold the Court refused to enforce the sales contract pursuant to C.P.L.R. § 3015(e).[H] Used Car Extended Warranty
In Barthley v. Autostar Funding LLC [208] the consumer purchased a 1993 Lexus with over 110,000 miles and an extended warranty on the vehicle. After the vehicle experienced engine problems and a worn cam shaft was replaced at a cost of $1,733.66 the consumer made a claim under the extended warranty. The claim was rejected by the warranty company " on the basis that a worn camshaft was a pre-existing condition ". The Court found this rejection unconscionable and awarded damages to cover the cost of the new camshaft.
" In effect, the warranty company has chosen to warranty a ten year old car with over 110,000 miles on the odometer and then rejects a timely claim on the warranty on the basis that the car engine's internal parts are old and worn ".rev'd N.Y.L.J., April 26, 2005, p. 25, col. 3 ( N.Y.A.T. ) ( " defendant was not a party to the warranty agreement " ).
[I] Used Car Lemon Law: G.B.L. § 198-b
New York State's Used Car Lemon Law [ G.B.L. § 198-b ] provides limited warranty protection for used cars costing more than $1,500 depending upon the number of miles on the odometer [ e.g., 18,000 miles to 36,000 miles a warranty " for at least 90 days or 4,000 miles ", 36,000 miles to 80,000 miles a warranty " for at least 60 days or 3,000 miles " and 80,000 miles to 100,000 miles a warranty " for 30 days or 3,000 miles " ] [ Cintron v. Tony Royal Quality Used Cars, Inc. [209] ( defective 1978 Chevy Malibu returned within thirty days and full refund awarded )]. Used car dealers must be given an opportunity to cure a defect before the consumer may commence a lawsuit enforcing his or her rights under the Used Car Lemon Law [ Milan v. Yonkers Avenue Dodge, Inc. [210] ( dealer must have opportunity to cure defects in used 1992 Plymouth Sundance ) ]. The Used Car Lemon Law does not preempt other consumer protection statutes [ Armstrong v. Boyce ] [211], does not apply to used cars with more than 100,000 miles when p