Opinion ID: 703880
Heading Depth: 2
Heading Rank: 2

Heading: The New York General Business Law Claim

Text: 55 Appellants contend that Securitron has no standing to assert a claim under New York General Business Law Sec. 349 because Securitron has not demonstrated any harm to the public and is simply a business competitor of the appellants. We reject this contention. 56 New York General Business Law Sec. 349 prohibits [d]eceptive acts or practices in the conduct of any business, trade or commerce or in the furnishing of any service. Although the statute is, at its core, a consumer protection device, see Genesco Entertainment v. Koch, 593 F.Supp. 743, 751 (S.D.N.Y.1984), corporate competitors now have standing to bring a claim under this [statute] ... so long as some harm to the public at large is at issue, Bristol-Myers Squibb Co. v. McNeil-P.P.C., Inc., 786 F.Supp. 182, 215 (E.D.N.Y.), vacated in part on other grounds, 973 F.2d 1033 (2d Cir.1992); see also Construction Technology, Inc. v. Lockformer Co., 704 F.Supp. 1212, 1222 (S.D.N.Y.1989). Section 349 does not expressly provide a right of action by one business competitor against another, but it does provide a right of action to 'any person who has been injured by reason of any violation of this section.'  H2O Swimwear, Ltd. v. Lomas, 164 A.D.2d 804, 560 N.Y.S.2d 19, 21 (1st Dep't 1990) (quoting Sec. 349(h)). It is clear that the gravamen of the complaint must be consumer injury or harm to the public interest. Azby Brokerage, Inc. v. Allstate Ins. Co., 681 F.Supp. 1084, 1089 n. 6 (S.D.N.Y.1988). The critical question, then, is whether the matter affects the public interest in New York, not whether the suit is brought by a consumer or a competitor. 57 Although appellants argue that there is absolutely nothing in this record showing that this private commercial dispute between the plaintiff and the defendant was aimed at the public, they concede that the public might have been incidentally affected by this private commercial dispute. We think that the harm to the public was manifest. The evidence demonstrated that appellants gave false information about the Securitron Magnalock to the BSA, a regulatory agency primarily concerned with the safety of the public. Schnabolk caused the BSA to undertake unnecessary investigations and interfered with its decisionmaking process by complaining of non-existent potential danger ... in fire safety situations. His activities in this respect surely were contrary to the public interest. 58 Also, appellants disseminated false information to HHC in regard to electromagnetic lock installations at the Neponset Health Care Center and may have caused the unnecessary cancellation of an awarded contract. Finally, it was detrimental to the public interest to divert the attention of UL from its normal activities to attend to the false accusations and deceptions of the appellants. The UL stamp of approval is frequently required to assure the safety of electrical equipment and installations in New York. 59 We reject appellants' contention that the injunctive relief granted by the district court on the General Business Law claim is unwarranted and contrary to the free speech provisions of the New York State Constitution. 60