BILL NUMBER: S3968
SPONSOR: SEPULVEDA
 
TITLE OF BILL:
An act to amend the general business law, in relation to communications
by mercantile establishments attempting to settle civil actions deriving
from larceny prosecutions
 
PURPOSE:
The purpose of this bill is to inform consumers that a settlement
related to a larceny prosecution will not have any effect on any crimi-
nal actions arising from the same event that led to the civil action.
 
SUMMARY OF PROVISIONS:
Section 1 adds a new section 349-h to the general business law that
requires a mercantile establishment that is attempting to settle a civil
action that is derived from a criminal prosecution provides a notice to
a consumer in any correspondence related to a possible settlement that
explains that a settlement of the civil action will not have any effect
on any criminal actions arising from the events that lead to the civil
action. The section provides the exact statement a mercantile establish-
ment must provide in writing or read to a consumer if the communication
is spoken.
Section 1 also allows for treble damages, as well as costs and attor-
ney's fees as determined by a court.
Section 2 sets the effective date
 
JUSTIFICATION:
There has been a series of articles highlighting deceptive practices
that merchants and retailers are using to punish shoplifters. Section
11-105 of the general obligation law allows for civil penalties for
anyone who commits larceny as defined by paragraph (a) of subdivision
two of section 155.05 of the penal law and clearly outlines the rights a
merchant or retailer has in pursuing civil action. However, many
merchants have initiated communication, both written and verbal, with
those who have committed larceny to attempt to settle out of court.
These communications have been found to be deceptive in that they often
allege a civil suit will be filed that the merchant has no intention of
filing, they are often sent by third parties who have been retained to
represent the merchant to collect a penalty. They also mislead consumers
to believe that should they settle the civil action they will be freed
from any future criminal proceeding which is not the case.
This legislation would require a specific and explicit notice be
provided in any form of communication that the communication is an
attempt to settle the civil action related to a criminal prosecution
that the consumer has a right to refuse or accept, and that acceptance
or refusal of the offer will have no impact on any criminal action aris-
ing from the event that led to the civil action. Furthermore, the notice
will inform the consumer that refusing the settlement may result in
civil litigation.
 
LEGISLATIVE HISTORY:
S.1925 of 2023-2024; Referred to Consumer Protection;
S.2729 of 2021-22: Referred to Consumer Protection
S.4210 of 2019-20: Referred to Consumer Protection
A.5231 of 2017-18: Advanced to Third Reading
A.402-A of 2015-16: Advanced to Third Reading
A.9478 of 2013-14: Advanced to Third Reading
 
FISCAL IMPLICATIONS:
None to the state.
 
EFFECTIVE DATE:
This-act shall take effect immediately and shall apply to any prospec-
tive attempted settlements of such civil actions.