118 Misc. 2d 289 | N.Y. Sup. Ct. | 1982
OPINION OF THE COURT
The defendants have submitted this joint motion to dismiss the complaint for failure to state a cause of action. The complaint, which contains seven causes of action, seeks money damages and injunctive relief for the injury sustained by plaintiff due to the malfunctioning of his automobile. Plaintiff is the owner of a 1978 gas-fueled Volkswagen Rabbit which was purchased on or about December 10, 1977 jointly with his wife. Plaintiff claims that sometime between June and December, 1979, after the vehicle had been driven approximately 27,000 miles,
Plaintiff’s first, second, third, fifth, sixth, and seventh causes of action are asserted pursuant to subdivision (h) of section 349 and subdivision 3 of section 350-d of the General Business Law. Both of these subdivisions were added on June 19, 1980 to create a right of action by private citizens. Prior to the amendments only the Attorney-General had the right to redress grievances under sections 349 and 350 of the General Business Law. (See General Business Law, § 349, subd [h]; § 350-d, subd 3.) Under these amendments an aggrieved individual may enjoin the unlawful act or practice and may collect his actual damages or $50, whichever is greater. The court, in its discretion, may also treble the actual damages to a maximum recovery of $1,000 if there is a finding that the defendant willfully or knowingly violated the section.
Plaintiff sets forth individual causes of action pursuant to subdivision (h) of section 349. and section 350 of the General Business Law at the second, third, sixth and seventh causes of action. As noted, the substantive right of
These amendments did not merely expand the form of remedies but created two wholly new causes of action with greater liability. Prior to the 1980 amendment, subdivision (b) of section 349 of the General Business Law allowed the Attorney-General to obtain only “restitution of any moneys or property”. Under preamendment section 350 of the General Business Law, the Attorney-General could recover a maximum penalty of $500. (General Business Law, § 350-c.) The 1980 amendments now give individuals the right to recover actual damages or a minimum of $50, injunctive relief, and discretionary treble damages to a maximum of $1,000. (General Business Law, § 349, subd [h]; § 350-d, subd 3.) Such an expansion of remedial rights can be given prospective application only. (See Jacobus v Colgate, 217 NY 235; Isola v Weber, 147 NY 329; O’Reilly v Utah, Neu. & Cal. Stor. Co., 87 Hun 406; Campbell v New York Evening Post, 245 NY 320, 322-324; McKinney’s Cons Laws of NY, Book 1, Statutes, § 53, at p 104.)
Having established that June 19, 1980 is the effective date for the creation of the statutory right of action which plaintiff seeks to assert, the court must now decide whether plaintiff’s causes of action accrued after that date. Sections 349 and 350 of the General Business Law create causes of action for deceptive acts and practices and false advertising, respectively. A necessary element of any ac
Next to be considered is whether plaintiff’s first and fifth causes of action, which seek to maintain class actions pursuant to subdivision (h) of section 349 and subdivision 3 of section 350-d of the General Business Law can be allowed. While both subsections provide that the action may be brought by the injured individual in his own name, this court does not feel that this language is dispositive of the issue. The language of CPLR 901 (subd b) cle.arly sets forth the conditions under which a class action may be maintained: “Unless a statute creating or imposing a penalty, or a minimum measure of recovery specifically authorizes the recovery thereof in a class action, an action to recover a penalty, or minimum measure of recovery created or imposed by statute may not be maintained as a class action.” As noted, both subdivision (h) of section 349 and subdivision 3 of section 350-d of the General Business Law set a minimum recovery of $50 and provide for a discretionary punitive award of treble damages up to $1,000. Pursuant to CPLR 901, class actions cannot be maintained under subdivision (h) of section 349 and subdivision 3 of section 350-d of the General Business law for recovery of minimum or punitive damages because those sections do not contain specific authorizing language. (See Carter v Frito-Lay, Inc., 74 AD2d 550, affd 52 NY2d 994.) As to actual damages,
The first and fifth causes of action are framed as requests for actual damages only and initially appear to be permissible. An action for actual damages only, however, carries with it a waiver of each class member’s right to a minimum recovery and treble damages. This may reflect adversely upon the plaintiff’s fitness to represent the class. (CPLR 901, subd a, par 4; cf. Russo & Dubin v Allied Maintenance Corp., 95 Misc 2d 344.) Resolution of this issue is most appropriately addressed at the time of plaintiff’s motion for certification. Defendants’ arguments on this point do not support dismissal at this juncture and may ultimately require severance of the damages issue while permitting liability to be tried as a class action. (See Vickers v Home Fed. Sav. & Loan Assn. of East Rochester, 62 AD2d 1171.) Plaintiff’s fitness to represent the class is further placed in question by this court’s ruling dismissing plaintiff’s individual actions under subdivision (h) of section 349 and subdivision 3 of section 350-d of the General Business Law. Accordingly, defendants’ motion to dismiss the first and fifth causes of action is denied without prejudice and resolution of this issue is deferred to be considered with plaintiff’s application for class certification.
In summary, the defendants’ motion to dismiss the complaint is granted as to the second, third, sixth and seventh causes of action and is denied without prejudice as to the first, fourth and fifth causes of action.
Subdivision (h) of section 349 and subdivision 3 of section 350-d of the General Business Law specifically provide:
Subdivision (h) of section 349: “In addition to the right of action granted to the attorney general pursuant to this section, any person who has been injured by reason of any violation of this section may bring an action in his own name to enjoin such unlawful act or practice and to recover his actual damages or fifty dollars, whichever is greater. The court may, in its discretion, increase the award of damages to an amount not to exceed three times the actual damages up to one thousand dollars, if the court finds the defendant willfully or knowingly violated this section. The court may award reasonable attorney’s fees to a prevailing plaintiff.”
Subdivision 3 of section 350-d: “Any person who has been injured by reason of-any violation of section three hundred fifty or three hundred fifty-a of this article may bring an action in his own name to enjoin such unlawful act or practice and to recover his actual damages or fifty dollars, whichever is greater. The court may, in its discretion, increase the award of damages to an amount not to exceed three times the actual damages up to one thousand dollars, if the court finds the defendant willfully or knowingly violated this section. The court may award reasonable attorney’s fees to a prevailing plaintiff.”