BCW Joins with Groups Raising Grave Concerns About Amendment to Consumer Protection Law

The Business Council of Westchester is among 30 business organizations and trade associations throughout the state that have a signed a letter to Gov. Kathy Hochul expressing their grave concerns regarding the proposed amendments to the state’s consumer protection law found in Part JJ of the Transportation and Economic Development Article VII Budget Legislation.

“While we share a commitment to protecting consumers and supporting small businesses, we believe that this proposal, as currently drafted, risks serious unintended consequences that could harm the very businesses and residents it seeks to assist,” read the letter. The letter notes that inclusion of “unfair” and “abusive” practices in the general business law, coupled with the nearly 2000% increase in statutory damages and the mandate for courts to award attorney’s fees threatens to dramatically increase extortionate litigation.

“The expansion proposed here is overly broad and relies heavily on subjective interpretations. This could lead to a surge in lawsuits against businesses of all sizes. Our concern is not just hypothetical. Research indicates that there continues to be a significant rise in consumer class action filings in New York’s federal courts, a trend that will almost certainly intensify if these amendments are enacted.”

The groups propose a “more targeted approach that focuses on genuinely harmful practices without opening the floodgates to opportunistic litigation. This could include refining the definitions of ‘unfair’ and ‘abusive’ practices to be more specific and objective, capping statutory damages at a more reasonable level, and reconsidering the mandatory awarding of attorney’s fees and costs, which incentivizes litigation over resolution.”

The letter concludes, “We commend efforts by Gov. Hochul and the Legislature to protect consumers and support small businesses, but the current form of the proposed amendments could lead to a catastrophic surge in litigation and create an environment that is more hostile to business operations, particularly for small enterprises. We urge you to reconsider these amendments and work towards a solution that truly balances the needs of protecting consumers without unduly burdening businesses and the state’s economy.”