NY’s Legislature Should Fix Runaway Consumer Class Action Damages—Not Make Them Worse

The New York Legislature is now considering a bill, A.679/S.2407, that would make major changes to the state’s chief consumer protection statute, General Business Law §349. One change in particular should terrify all companies that do business in the state. It would raise the guaranteed minimum recovery fortyfold, to $2,000, and it would expressly make this minimum award recoverable thousands or even millions of times over in class actions. True, §349’s damages scheme is badly broken and in dire need of a legislative fix—but this bill would make the problem exponentially worse. Instead of passing it, the Legislature should eliminate statutory damages altogether in consumer-protection suits—or, at minimum, clarify that they are available only in non-class actions.

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