New York

• Pages: 441-449

441

CHAPTER 34

NEW YORK

A. Scope of the Statute and Elements of a Cause of Action

New York’s Consumer Protection from Deceptive Acts and Practices

Act1 (NYCPA) consists of two main sections. The first section prohibits

“[d]eceptive acts or practices in the conduct of any business, trade or

commerce or in the furnishing of any service in this state.”2 The second

section prohibits “[f]alse advertising in the conduct of any business, trade

or commerce or in the furnishing of any service in this state.”3

The NYCPA is intentionally broad, applying to “virtually all

economic activity” in an effort to secure an “honest marketplace where

“trust, not deception” prevails.4

Because each section of the NYCPA applies expressly to conduct “in

this state,” a plaintiff cannot bring a claim under the NYCPA if the

challenged conduct was “conceived and orchestrated in New York”but

the transaction occurred outside the state.5 One exception to the in-state

requirement lies in the New York SHIELD Act, which provides that a

violation of this act may constitute a violation of NYCPA section 349.6

To state a claim for deceptive practices under the NYCPA, a plaintiff

must show that: (1) the act or practice was consumer-oriented; (2) the act

or practice was misleading in a material respect; and (3) the plaintiff was

1. N.Y.GEN.BUS.LAW §§349-350.

2. Id. at § 349.

3. Id. § 350.

4. Goshen v. Mutual Life Ins. Co. of N.Y., 774 N.E.2d 1190, 1195 (N.Y.

2002) (internal citations omitted).

5. Gotlin v. Lederman, 616 F. Supp. 2d 376, 392 (E.D.N.Y. 2009); Goshen,

774 N.E.2d at 1195; cf. Grimaldi v. Guinn, 895 N.Y.S.2d 156, 157 (N.Y.

App. Div. 2010) (personal jurisdiction pursuant to New York’s long arm

statute found where the defendant was not present in New York and

engaged in only a single transaction in New York, but had telephone,

facsimile, and email contacts and used a passive website).

6. N.Y.GEN.BUS.LAW § 899-BB(2)(d). The SHIELD Act applies to data

breaches affecting New York State resid ents, although t he conduct may

have occurred out of state. The statute provides that failure to comply with

this subsection is a violation of § 349 and that “the attorney general may

bring an action in the name and on behalf of the people of the state of New

York to enjoin such violations and to obtain civil penalties under [§ 350-d]

of this chapter.” Id.