Provides that any claim for deceptive acts or practices against a distribution utility providing gas, electric or steam services to the public, the court shall have exclusive jurisdiction over such claim without regard to any defenses alleged; provides that in any claim for false advertising, the court shall have exclusive jurisdiction over such claim.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A1237
SPONSOR: Seawright TITLE OF BILL:
An act to amend the general business law, in relation to certain decep-
tive acts and practices
PURPOSE OR GENERAL IDEA OF BILL:
Section 350 was enacted in 1963 amid concerns that common law causes of
action and the New York Penal Law were ineffective in fighting the
effects of false advertising. New York's Attorney General supported the
enactment of a new law that would provide the Attorney General with the
regulatory power to cope with the false and deceptive business practices
which plague consumers in New York State. Section 349 was added to New
York's General Business Law in 1970 to broaden existing protections
provided to consumers from simply false advertising to varied forms of
deception. Section 349 was effectively "drawn from" Section 350. New
York State has recognized that protecting the rights of New York consum-
ers requires a flexible approach. To that end, the Legislature has not
hesitated to amend these statutes when necessary. GBL §§ 349 and 350
were amended to include a private right of action (allowing consumers to
sue as "private attorneys general") in 1980 because the New York Attor-
ney General was unable to adequately enforce the General Business Law's
consumer-protection provisions.
SUMMARY OF PROVISIONS:
Section one of this bill amends subdivision (h) of section 349 of the
general business law to clarify the damages that may be assessed by a
court and to grant courts exclusive jurisdiction over claims brought
under this subdivision. Section one of this bill is amended by adding a
new subdivision (i) granting courts exclusive jurisdiction over any
claims brought against distribution utilities providing electric, gas or
steam services to the public under subdivision j. Such jurisdiction
cannot be defeated by any defense alleged nor will any defense preclude
the court from adjudicating the merits of any claim brought under subdi-
vision j.
Section two of this bill amends section 350 of the general business law
to grant the courts exclusive jurisdiction over any claim brought under
this section.
Section three of this bill provides that the effective date shall take
effect immediately and shall apply to any claim brought on or after
January 1, 2023.
DIFFERENCE BETWEEN ORIGINAL AND AMENDED VERSION (IF APPLICABLE):
non-applicable
JUSTIFICATION:
New York State has a history of protecting consumers' rights. This
history is reflected in New York's very strong consumer protection law,
General Business Law ("GBL") §§ 349 and 350. These sections of the
General Business Law were enacted to protect New York consumers against
false advertising (Section 350) and other forms of deception, whether
intentional or not (Section 349). Despite accepted legal precedent that
GBL §§ 349 and 350 claims are within the jurisdiction of the courts to
decide, when these claims are brought against utility companies, courts
have either declined to exercise jurisdiction over them or dismissed
them based on the misapplication of the century old, legal jurisdic-
tional doctrines of Primary Jurisdiction and Filed Rate. This reliance
on these jurisdictional doctrines frustrates the legislative purpose of
New York's Consumer Protection Law to protect consumers to the point of
rendering it impotent as it applies to claims against utilities. An
amendment to the law permitting these consumer protection claims against
utilities to be adjudicated in the courts is essential to accomplishing
the Legislature's goal of protecting consumers.
PRIOR LEGISLATIVE HISTORY:
A7822 (Seawright) Referred to consumer affairs and protection.
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
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EFFECTIVE DATE:
This act shall take effect immediately and shall apply to any such claim
brought on or after January 1, 2023.
