Consumer Protection Class Actions Have Important Position, Applying New York's Statutory Scheme

Consumer Protection Class Actions (continued)

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4. Class Actions Under Sections 349 and 350.

Neither Section 349 or 350 make reference to class actions, presumably leaving their propriety to the applicable general provisions of Article 9 of New York Civil Practice Law and Rules. The only restriction posed by Article 9 on class actions brought for violations of Sections 349 and 350 is the prohibition against class actions for statutory minimum damages and penalties. CPLR § 901(b). In other words, a consumer class action may be maintained under CPLR Section 901(a) as long as the action seeks only injunctive relief or damages:

Although CPLR § 901(b) bars a class action to recovery a penalty or minimum damages imposed by statute, where, as here, the statute does not explicitly authorize a class recovery thereof, the named plaintiff in a class action may waive that relief and bring an action for actual damages only. ... Thus, the weight of authority holds that a class action may be maintained to recover actual damages and injunctive relief pursuant to General Business Law §349(h). ... Clearly, this was the intent of the legislature when it enacted General Business Law § 349(h).

Should any class member wish to pursue his or her statutory right to minimum and treble damages, he or she may opt out of the class and bring an individual action therefore. ...

Super Glue Corp. v. Avis Rent A Car System, Inc., 517 N.Y.S.2d 764, 767 (2d Dept. 1987) (citations omitted) (certifying a class of persons challenging the propriety of an automobile rental company's practice of including refueling charge, collision damage waiver and penalty for late return of automobile in standardized rental agreement). See also Ridge Meadows Homeowners Association, Inc. v. Tara Development Company, Inc., 665 N.Y.S.2d 361 (4th Dept. 1997) ("Although the Supreme Court properly found that the prerequisites for class action certification set forth in CPLR § 901(a) have been met, plaintiffs are barred by CPLR § 901(b) from maintaining a class action for the minimum and treble damages imposed by section 349(h) of the General Business Law").

Having satisfied himself that Section 349 and 350 may be pleaded and proven on a class basis, P.C. Winner next evaluates whether the claims of Ed Tort and the other class members will satisfy the requirements of CPLR § 901(a) and § 902. Those sections, predicated on Rule 23(a)(l)-(4) and (b)(3) of the Federal Rules of Civil Procedure, govern class actions brought in New York State courts. The federal rules, of course, govern Sections 349 and 350 claims sought to be certified in federal court.

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