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

Consumer Protection Class Actions (continued)

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The requirement of CPLR § 901(a)(4) and Federal Rule 23(a)(4), that the representative plaintiff and his counsel fairly and adequately protect the interest of the class, should never be a hindrance to the certification of a consumer protection class. The interests of Ed Tort "would not be adverse to those of a class seeking actual damages only," and both Ed and P.C. will "vigorously and adequately pursue the action" against Acme. Super Glue Corp., 517 N.Y.S.2d at 76748.

Finally, the requirement of CPLR § 901(a)5 and Federal Rule 23(b)(3), that a class action be superior to other available methods for the fair and efficient adjudication of the class, is most often satisfied in the consumer protection context. There "can be little doubt that a class action is the only feasible mechanism of addressing the claims of the individual members of the proposed class. The small amount of damages sustained by the individual class members would discourage many of them from pursuing their claims individually, and the number of claimants would render a consolidation unfeasible." Super Glue Corp., 517 N.Y.S.2d at 768. See also Pruitt v. Rockefeller Center Properties, Inc., 574 N.Y.S.2d 672, 677 (1st Dept. 1991) ("[S]ince the relatively insignificant amount of damages suffered by many members of the class makes individual actions cost prohibitive, and the large number of class members renders consolidation unworkable, a class action is not only superior but, indeed, the only practical method of adjudication").

Satisfied that he is on sound legal and factual footing in pursuing Ed's claims under Sections 349 and 350 on a class basis, P.C.'s final prefiling inquiry is how broadly he can define the class.

5. Jurisdictional Questions in Class Actions Under Sections 349 and 350

Because he knows Acme sold its Super Ear hearing aids in all 50 states, and Acme's conduct was substantially the same as to all purchasers of the hearing aid, P.C. would like to pursue Ed's Sections 349 and 350 claims on behalf of a nationwide class in a New York state court. The important question, P.C. knows, is whether Sections 349 and 350 can apply to the claims of Super Ear purchasers outside of New York.

Both Sections 349(a) and 350 prohibit deceptive acts or practices and false advertising "in this state." N.Y. Gen. Bus. Law §§ 349(a), 350. Further, at least one New York court has concluded that "by its terms, GBL § 349 is applicable herein only to those claims which arose out of transactions occurring in New York State and so may not be raised in favor of any plaintiff who claims to have been injured by the purchase [of a product or service] in any other jurisdiction." Goshen v. The Mutual Life Insurance Company of New York, 1997 WL 710669 at *13 (N.Y. Sup. Ct. Oct. 21, 1997).

P.C. concludes that he may not assert class claims under Sections 349 and 350 on behalf of Super Ear purchasers outside of New York (and because Acme is not a New York company, he has no argument that the "transactions" all occurred in New York). He decides to file Ed's case in the New York Supreme Court on behalf of a class of persons who purchased their Super Ear hearing aids in New York.

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