GBL Section 349 Is Not Just for Consumers - Businesses Can Also Assert a Claim
General Business Law (“GBL”) § 349 “prohibits deceptive acts or practices in the conduct of any business, trade or commerce or in the furnishing of any service in this state." Shakespeare v. Compu-Link Corp., 848 F. App'x 474, 476 (2d Cir. 2021). “To prevail under a Section 349 claim, a plaintiff must establish that ‘(1) the challenged transaction was consumer-oriented; (2) defendant engaged in deceptive or materially misleading acts or practices; and (3) plaintiff was injured by reason of defendant's deceptive or misleading conduct.’" (Dubai Equine Hosp. v Equine Imaging, LLC, 2024 US Dist LEXIS 65990, at *35 [SDNY Apr. 9, 2024, No. 18-CV-6925 (VSB)]) (quoting Denenberg v. Rosen, 71 A.D.3d 187, 194, 897 N.Y.S.2d 391 (1st Dep't 2010) (internal quotation marks omitted).
While GBL § 349 is generally thought of as a consumer protection statute, and the typical case involves a consumer suing a company for some deceptive practice, recent New York federal cases have made clear that you do not need to be a consumer to have standing to file a GBL § 349 claim. For example, in Sirius XM Radio Inc. v Aura Multimedia Corp., 2024 US Dist LEXIS 64190 [SDNY Apr. 6, 2024, No. 1:21-cv-06963 (GHW) (SDA), Sirius XM Radio Inc. obtained summary judgment against Aura Multimedia Corp. “for its unfair and deceptive trade practices claim pursuant to GBL § 349 related to the Aura Defendants' unauthorized use of Plaintiff's marks.” Id. at *19.
Similarly, in Gracie Baked LLC v GiftRocket, Inc., 2024 US Dist LEXIS 58407 (EDNY Mar. 28, 2024), defendant GiftRocket, Inc. (“GiftRocket”) sought to dismiss the GBL § 349 claim of the Plaintiffs, who are online merchants who did not wish to be affiliated with GiftRocket. Specifically, Plaintiffs alleged that GiftRocket harmed their reputations “by falsely affiliating them with GiftRocket …refusing to remove merchants from the GiftRocket Business Directory who have requested disaffiliation … [and stealing] potential customers from Plaintiffs and the class members by diverting them to purchase misleading GiftRocket Prepaid Gifts, rather than directly transact with Plaintiffs and the class members.” Id. at *14-16. The Court found that, while not consumers, Plaintiffs nevertheless had standing to assert this claim. Id. at *16.
It is imperative for businesses of all sizes to protect their reputation, particularly online. In New York, if a person or entity is directing deceptive or materially misleading information about your business to consumers, they may be in violation of GBL § 349.