False Advertising and Misleading Advertising in New York

What Are False Advertising and Misleading Advertising?

Background

“General Business Law §§ 349 and 350 are consumer protection statutes that prohibit deceptive acts and practices and false advertising, respectively, in the conduct of any business, trade or commerce or in the furnishing of any service in this state....” (Hollander v. Metro. Transp. Auth. (2015) 20 N.Y.S.3d 292 citing Scott v. Bell Atl. Corp. (2001) 282 A.D.2d 180, 183.)

General Information for Complaints and Motions

Section 349 Definition and Elements

“GBL section 349 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.’” (Bd. of Managers of 250 Bowery Condo. v. 250 VE LLC, 2018 N.Y. Slip Op. 31168, 7-8 [N.Y. Sup. Ct. 2018] citing GBL § 349 [a].)

The elements of a cause of action pursuant to this section are:

a deceptive consumer-oriented act or practice which is misleading in a material respect, and
injury resulting from such act.

(Id.)

Test for Determining Deceptive Act

“In determining whether a representation or omission is a deceptive act, the test is whether such act is likely to mislead a reasonable consumer acting reasonably under the circumstances.” (Id., citing Andre Strishak & Assoc. v Hewlett Packard Co. (2000) 300 A.D.2d 608, 609 ; see also Solomon v. Bell Atl. Corp. (2004) 9 A.D.3d 49, 52.)

Section 350 Definition and Elements

“GBL section 350 declares unlawful ‘[f]alse advertising in the conduct of any business, trade or commerce or in the furnishing of any service in this state.’” (GBL § 350).

“The elements of a cause of action under this section are that ’the advertisement:

had an impact on consumers at large,
was deceptive or misleading in a material way, and
resulted in injury.’”

(Andre Strishak & Assoc., supra, 300 A.D.2d at 609.)

“Similarly, the test is whether the advertisement is likely to mislead a reasonable consumer acting reasonably under the circumstances.” (Id.)

Standard of Review and Burdens of Proof

“Justifiable reliance is not an element of a claim under either section; a plaintiff need only show that the defendant's materially deceptive act, practice or advertisement caused actual injury, though not necessarily pecuniary harm.” (Hollander v. Metro. Transp. Auth. (2015) 20 N.Y.S.3d 292 citing Koch v. Acker, Merrall & Condit Co. (2012) 18 NY3d 940, 941.) However, the deceptive conduct must ‘mislead a reasonable consumer acting reasonably under the circumstances.’” (Oswego Laborers' Local 214 Pension Fund v. Marine Midland Bank (1995) 85 N.Y.2d 20, 26; see also Gaidon v. Mutual Life Ins. Co. of Am., (1999) 94 N.Y.2d 330, 353; Hollander, id.)

Requirements for ‘Consumer-Oriented’ Deceptive Act

“Courts evaluating whether a conduct is 'consumer-oriented' have generally focused on several factors, namely:

the amounts at stake,
the nature of the contracts at issue, and
the sophistication of the parties.”

(Singh v. City of N.Y., 2017 N.Y. Slip Op. 32215, 8-9 [N.Y. Sup. Ct. 2017] citing 4 K & D Corp. v. Concierge Auctions, LLC (2014) 2 F.supp 3d 525, 548.)

“To determine whether deceptive practices are consumer oriented, courts examine whether the transaction is more like ‘[t]he typical violation contemplated by the statute,’ which ‘involves an individual consumer who falls victim to misrepresentations made by a seller of consumer goods usually by way of false and misleading advertising,’ than ‘large, private, single-shot contractual transactions,’ which involve ‘complex arrangements, knowledgeable and experienced parties and large sums of money’....” (Singh v. City of N.Y., 2017 N.Y. Slip Op. 32215, 8-9 [N.Y. Sup. Ct. 2017] citing 904 Tower Apartment LLC v. Mark Hotel LLC (2012) 853 F.Supp.2d 386, 399, quoting Teller v. Bill Hayes, Ltd. (1995) 213 A.D.2d 141, 146-48.)

The Court’s Decision

“Alleged misrepresentations on websites and television programming are [...] not actionable [under GBL §§ 349 and 350].” (Bd. of Managers of 250 Bowery Condo. v. 250 VE LLC, 2018 N.Y. Slip Op. 31168, 8-9 [N.Y. Sup. Ct. 2018] citing Loeb v. Architecture Work, P.C. (2017) 154 A.D.3d 616, 617 [holding that "even if, arguendo, defendant ... engaged in consumer-oriented conduct by placing statements on its website, those statements were not likely to mislead a reasonable consumer acting reasonably under the circumstances; instead, they were ‘mere puffery.’”])

Cases where plaintiffs have recovered pursuant to GBL § 349 usually, if not uniformly, “involve transactions where the amount in controversy is small.” (Teller v. Bill Hayes, Ltd., 213 AD2d 141, 146.) “Courts in New York have held repeatedly that a single shot transaction involving complex arrangements, knowledgeable and experienced parties and large sums of money is not a consumer-oriented transaction for purposes of GBL claims....” ( 4 K & D Corp. v. Concierge Auctions, LLC, supra, 548; Singh, supra, Slip Op. 32215, 8-9.)

Documents for False Advertising/Misleading Advertising in New York

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Semen Schmargon v. Sears Holdings Management A FOREIGN CORPORATION, Sears Roebuck And Co. B DOMESTIC CORPORATION, Kmart Corporation A FOREIGN CORPORATION document preview

EXHIBIT(S) - 1 - Plan

4 pages

FILED: KINGS COUNTY CLERK 09/29/2023 11:25 AM INDEX NO. 10181/2015 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 09/29/2023 EXHIBIT "1" FILED: KINGS COUNTY CLERK 09/29/2023 11:25 AM INDEX NO. 10181/2015 Case 3 1:18-cv-09373-MKV-BCM NYSCEF DOC.18-23538-rdd NO. DocumentEntered Doc 537…

Case Name Semen Schmargon v. Sears Holdings Management A FOREIGN CORPORATION, Sears …