Federal Court to Consider Constitutionality of Juiced-Up Statutory Damages Awards in Consumer Class Actions
New York’s consumer protection laws are particularly attractive to the plaintiff’s bar. One reason is the availability of “statutory” damages under New York’s General Business Law (“GBL”). While most states’ consumer protection laws limit plaintiffs’ recovery to their actual damages, if any, Sections 349 and 350 of the GBL guarantee minimum statutory damages of $50 (for a violation of § 349) and $500 (for a violation of § 350). So, for example, a consumer who paid $5 for a bottle of juice with a purportedly deceptive label (and paid only a fraction of that price as the “premium” associated with the allegedly deceptive claim) might nevertheless seek to recover a total of $550 in statutory damages under the GBL—more than 100 times what he actually paid for the product.