The Court of Appeals recently clarified that when a plaintiff brings a consumer protection action for deceptive business acts in violation of General Business Law § 349(h), it is limited to recovering its actual damages and treble damages up to a cap of $1,000. Punitive damages over and above the $1,000 treble damages cap cannot be obtained under the statute. Let’s take a look at that opinion and what else has been happening in New York’s appellate courts over the past week.
Court of Appeals
Hobish v AXA Equit. Life Ins. Co., 2025 NY Slip Op 00183 (Ct App Jan. 14, 2025)
Consumer Protection, Punitive Damages
Issue: May a plaintiff recover punitive damages in a claim under General Business Law § 349(h)?
Facts: Plaintiffs sued AXA Equitable Life Insurance Company “for breach of contract and a violation of General Business Law § 349,” which prohibits deceptive acts or practices in the conduct of any business, “in connection with the purchase of a universal life insurance policy in 2007 and defendant’s decision to increase the effective cost of that policy in 2015.” Supreme Court denied the parties’ competing summary judgment motions, holding, among other things, that plaintiffs’ theories of actual damages were largely unsupported and their claim for punitive damages failed for either claim because “plaintiffs had not pointed to any evidence of AXA’s scienter or of evidence of actions intended to defeat the contract.” The Appellate Division affirmed, holding in addition that “General Business Law § 349 (h) only allows for ‘limited punitive damages’ of three times actual damages.”
Holding: Resolving a conflict amongst the Appellate Division departments, the Court of Appeals held that “punitive damages for section 349 (h) claims are limited to the treble damages provided by the statute,” i.e., “an award of damages . . . not to exceed three times the actual damages up to one thousand dollars, if the court finds the defendant willfully or knowingly violated this section.” The Court explained, “[t]he statute provides for layered damages: actual damages, or fifty dollars, whichever is greater; discretionary treble damages up to a cap of $1,000; and attorney’s fees. There is no reference to ‘punitive damages’ in the statute, although treble damages are viewed as having some punitive effect. Treble damages under section 349(h) are more easily proved than traditional punitive damages but are restricted in value. On the one hand, the statute provides a standard for treble damages—’willful and knowing’—that is substantially less onerous than the general standard for punitive damages. At the same time, the provision limits those damages to a hard cap of $1,000 and gives the court discretion in awarding them even if the lower standard is met.” Although the Legislature has amended the statute from time to time to increase other remedies, it has not changed the cap on damages available for section 349(h) claims. Indeed, the Court reasoned, “the legislature carefully calibrated damages at the time section 349 (h) was enacted. We decline to alter that balance by making available a remedy that goes far beyond what the legislature contemplated. As evidenced by the increased penalties on similar statutes, the legislature will act where it believes current remedies are insufficient. It has not done so here. We therefore conclude that punitive damages in addition to the treble damages delineated in section 349 (h) are unavailable.”
Appellate Division, First Department
People v Dupree, 2025 NY Slip Op 00199 (1st Dept Jan. 14, 2025)
Criminal Law
Issue: Should a court inquire into the prosecution’s comments, made during a plea or sentencing proceeding in open court, that raise a possible defense to the charged offense?
Facts: “Defendant Terrell Dupree was charged with, among other offenses, murder in the second degree. The prosecution asserted that Dupree had an altercation with another man and then fatally shot him. Dupree pleaded guilty to manslaughter in the first degree. . . . Before sentencing, Dupree was interviewed by the Department of Probation. He made the following statement: ‘I admitted to shooting someone in the leg and back and the bullet went through his chest. I was fighting with him (stranger) and was defending myself. I was drinking at the club and someone slipped something in my drink and I was leaving the club to get home. He saw me staggering and wanted to rob me.” This statement was included in the presentence report.” At sentencing, the People objected to Dupree’s statement, arguing that he didn’t have a valid claim of self-defense or intoxication. Neither Dupree nor his counsel addressed the statement, and the Court proceeded to sentence Dupree to 21 years in prison with 5 years of post-release supervision.
Holding: The First Department took issue with the trial court’s failure to inquire further into Dupree’s potential defense that was raised during sentencing. The Court explained, “during a plea colloquy, the court must make inquiries to ensure that the guilty plea is truly knowing and voluntary when a defendant indicates misunderstanding of the nature of the charges or consequences of a plea. Failure to do so requires vacatur of the plea. Among the indicia of misunderstanding that warrant inquiry are statements raising the possibility of a defense . . . Although there is no statewide consensus on this issue, in the First Department, the court’s obligation extends to comments during the plea colloquy or the sentencing proceeding.” Thus, the Court held, “courts should address a prosecutor’s comments indicating that a defendant may misunderstand the law, including those that refer to what the defendant has said out-of-court. Once a defendant’s possible confusion is addressed at sentencing, regardless of where and how it was originally expressed, it becomes a part of the actual sentencing proceeding, into which the judge must inquire.” Because the trial court failed to do so here, the Court remitted the matter to the trial court for further proceedings.
Appellate Division, Third Department
Scaletta v Michels Power, Inc., 2025 NY Slip Op 00258 (3d Dept Jan. 16, 2025)
Labor Law, Federal Preemption under the Federal Aviation Act
Issue: Are state Labor Law claims preempted by the Federal Aviation Act if the plaintiff was injured while working from a helicopter hovering in the air?
Facts: “Plaintiff worked . . . as a helicopter lineman, a job that required him to use a helicopter to reach towers and power lines so that he could perform needed work on them. Upon reaching the portions of the towers and power lines that needed work, plaintiff would work from a platform attached to the helicopter as it hovered next to the structure.” While doing this in Sullivan County one day, the plaintiff “ascended to the area of the structure needing work on a platform attached to the outside of a 1989 McDonnell Douglas Model 350 helicopter. Plaintiff was working on the structure from that platform when one or more of the helicopter’s rotors made contact with the structure. The helicopter spun out of control and crashed, and plaintiff sustained serious injuries.” After the plaintiff brought Labor Law §§ 200, 240, and 241(6) claims against the general contractor, the defendant moved to dismiss arguing that the state Labor Law claims were barred as preempted under the FAA. “Defendant specifically argued that the field of air safety had been wholly occupied by the Federal Aviation Act of 1958 and its implementing regulations and that, to the extent that plaintiff’s claims were not entirely preempted, the standards of care ordinarily applicable to them impermissibly conflicted with federal air safety regulations.” Supreme Court denied the motion, holding that “plaintiff’s claims against defendant were not preempted because the helicopter at issue was essentially acting as a piece of construction equipment — like a crane or bucket truck — at the time of the accident, although the court left open the possibility that federal standards of care might apply to plaintiff’s claims depending upon how they evolved over the course of discovery.”
Holding: The Third Department held that the plaintiff’s state Labor Law claims were not preempted under the FAA. Although Congress intended the FAA to “centralize air safety authority and the comprehensiveness of the regulations issued pursuant to that authority . . . reflect[] that Congress intended to occupy the entire field and thereby preempt state regulation of air safety,” “the FAA contemplates that state law remedies survive its enactment and may be pursued within its purview, including state law personal injury suits.” The question, therefore, is “whether the claims arise in the area of air safety and interfere with federal laws and regulations sufficiently to fall within the scope of the preempted field.”
The Court held, “Plaintiff’s claims accordingly arise out of the state’s police power to regulate occupational health and safety issues, not aviation, and defendant points to nothing in the FAA or implementing regulations indicating that Congress meant to affect state regulation of occupational health and safety, or the types of damages that may be recovered for a violation of those workplace safety standards.” Thus, “although plaintiff was injured when the helicopter he was working outside of lost control, his claims against defendant involve standards applicable to all construction workers facing elevation-related hazards in New York and have no obvious connection to the manner in which the helicopter was operated. Defendant has not articulated how plaintiff’s claims substantively clash with federal air safety standards given the foregoing facts and, in the absence of any indication that plaintiff’s claims enter the scope of the preempted field in either their purpose or their effect, Supreme Court correctly determined that they were not subject to field preemption.”
Hankey v Ogdensburg City Sch. Dist.,2025 NY Slip Op 00253 (3d Dept Jan. 16, 2025)
Torts, Assumption of the Risk
Issue: May a non-participant, non-spectator who was injured at a sporting event be held to have assumed the risk of injury merely by being present at the event?
Facts: Plaintiff was allegedly injured when he was hit in the head by an errant hockey puck while delivering a large number of pies at a high school sporting facility for the school’s annual fundraiser. Students in gym class were skating on the rink, and a few were working on hockey skills at the time, including wrist shots on goal, when the plaintiff was injured. The plaintiff sued the school for negligence. Following discovery, the school moved for summary judgment, arguing that the plaintiff assumed the risk of injury, that it had adequately supervised its students and provided adequate protection for its spectators at the sports facility, and that the accident was not foreseeable. Supreme Court denied the motion.
Holding: The Third Department affirmed, also rejecting the school’s attempt to assert an assumption of the risk defense. As the Court explained, “assumption of the risk applies when a consenting participant in a qualified activity is aware of the risks; has an appreciation of the nature of the risks; and voluntarily assumes the risks. Although primary assumption of risk extends to spectators and bystanders of such qualified activities, any such engagement must still have been consenting and voluntary for the doctrine to apply.” Here, the Court held, the plaintiff was not a spectator or a bystander who was voluntarily observing the activity. Rather, the plaintiff was “performing a job function for a nonparty. He had never been to the subject school or facility before, and he was escorted into the building through a rear maintenance entrance. Not only was he instructed, by an agent of defendant, where to enter the building, [the plaintiff] was instructed exactly where to place his delivery. At that location, within minutes and before he could complete his delivery, he sustained the alleged injury. Regardless of [the plaintiff’s] alleged awareness of the multi-faceted activity at issue here, the commonly appreciated risks thereof or whether those risks were concealed or enhanced under the circumstances, he cannot be said to have voluntarily placed himself in close proximity to the subject activity, and he was therefore neither a spectator nor a bystander thereof within the meaning of the doctrine.”
New York Appeals 