§4.8 B. Class Actions Under Gbl § 349

• Jurisdiction: New York

B. Class Actions under GBL § 349

In contrast to Donnelly Act claims, claims under GBL § 349 may be brought as class actions.⁴²¹ GBL § 349(h) permits private plaintiffs to recover “actual damages or fifty dollars, whichever is greater” and authorizes the court, “in its discretion,” to treble any actual damages if it finds that the defendant “willfully or knowingly” violated the statute.⁴²² By the statute’s plain terms, the plaintiff can elect to pursue actual damages rather than the $50 minimum, and the treble damages are discretionary. Plaintiffs, therefore, can bring class actions without being barred by the CPLR 901(b) prohibition on class actions to recover penalties (see II.C.), so long as they elect to pursue only actual damages.

Accordingly, in Cox v. Microsoft, the First Department barred a plaintiff from bringing a class action on behalf of software purchasers under the Donnelly Act against software giant Microsoft⁴²³ but permitted the class claims based on the same alleged anticompetitive conduct to go forward under GBL § 349.⁴²⁴ However, GBL § 349 claims must still satisfy the standard class action criteria—such as commonality and superiority—to survive as class actions.⁴²⁵

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Notes:

^[421] . Cox v. Microsoft Corp., 8 A.D.3d 39, 40, 778 N.Y.S.2d 147 (1st Dep’t 2004); Ridge Meadows Homeowners’ Ass’n, Inc. v. Tara Dev. Co., 242 A.D.2d 947, 665 N.Y.S.2d 361 (4th Dep’t 1997); Super Glue Corp. v. Avis Rent A Car Sys., Inc., 132 A.D.2d 604, 517 N.Y.S.2d 764 (2d Dep’t 1987); Leider v. Ralfe, 387 F. Supp. 2d 282, 292 (S.D.N.Y. 2005).

^[422] . GBL § 349(h) provides in relevant part: “[A]ny 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, an action to recover his actual damages or fifty dollars, whichever is greater, or both such actions. 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.”

^[423] . Cox v. Microsoft Corp., 290 A.D.2d 206, 737 N.Y.S.2d 1 (1st Dep’t 2002).

^[424] . Cox v. Microsoft Corp., 8 A.D.3d at 40.

^[425] . See generally Morrissey v. Nextel Partners, Inc., 72 A.D.3d 209, 895 N.Y.S.2d 580 (3d Dep’t 2010)...