Commercial Division Blog

Posted: June 30, 2014 / Categories Commercial, Class Actions

Plaintiff may Waive Statutory Damages and Bring a Class Action Despite CPLR § 901(b)

On June 30, 2014, Justice Scarpulla of the New York County Commercial Division issued a decision in Pires v. Bowery Presents, LLC, 2014 NY Slip Op. 24174, denying a motion to dismiss a proposed class action.

The plaintiff and proposed class representative alleged that she had purchased a ticket to attend a play, but that the seller, Bowery, never issued her a paper ticket and prevented her from transferring her ticket to a friend by only "admit[ing] people to the event by checking their identification cards at the door against a list of people who originally purchased tickets." Plaintiff alleged that this admissions policy violated section 25.30(1)(c) of the New York Arts & Cultural Affairs Law, which prohibits "any operator of a place of entertainment, or its agent, from employing a paperless ticketing system ‘unless the consumer is given the option to purchase paperless tickets that the consumer can transfer at any price, and at any time, and without additional fees, independent of the operator or operator’s agent.' A consumer injured by a violation . . . 'may bring an action in his or her own name to enjoin such unlawful act, an action to recover his or her actual damages or fifty dollars, whichever is greater, or both such actions' and may also be awarded reasonable attorney fees."

Defendant objected that Plaintiff was ineligible to bring a class action for violations of the ACAL because CPLR § 901(b) prohibits class actions based upon any statute that "creates or imposes a penalty or minimum level of recovery, unless the statute specifically authorizes such recovery in a class action."

Plaintiff responded by arguing that, because she had waived her claim for statutory damages, her case was outside the coverage of CPLR § 901(b).

The court agreed, following Cox v. Microsoft Corp., 8 A.D.3d 39, 40 (1st Dept. 2004), where the First Department held that a plaintiff who waived statutory damages in a GBL § 349 case could bring a class action because CPLR § 901(b) no longer applied. The court rejected Defendant's argument that the statutory language allowing plaintiffs to "recover his or her actual damages or fifty dollars, whichever is greater," made recovery of the statutory damages mandatory in any case where the $50 was greater than the actual damages, holding that this argument was foreclosed by Cox.

This case shows plaintiffs’ attorneys that a class action is possible even where consumer protection laws provide for statutory damages, as long as the proposed class representative is willing to waive that particular claim.