ASHER v. Eliot Spitzer, Attorney General of the State of New York, Amicus Curiae. (2002)

Order, Supreme Court, New York County (Helen Freedman, J.), entered October 12, 2000, which, in an action under General Business Law § 340 (the Donnelly Act), insofar as appealed from, denied plaintiffs' motion for class certification, unanimously affirmed, without costs.

 Private persons cannot bring a class action under the Donnelly Act because the treble damages remedy provided in General Business Law § 340(5) is a “penalty” within the meaning of CPLR 901(b), the recovery of which in a class action is not specifically authorized and the imposition of which cannot be waived (Rubin v. Nine West Group, Sup Ct, Westchester County, John DiBlasi, J., 1999 WL 1425364, *4-5, 1999 N.Y. Misc. LEXIS 655, *10-14;  Russo & Dubin v. Allied Maintenance Corp., 95 Misc.2d 344, 348-349, 407 N.Y.S.2d 617 [Sup.Ct., N.Y. County, Hilda Schwartz, J., 1978];  Blumenthal v American Socy. of Travel Agents, Sup.Ct., N.Y. County, Arnold Fein, J., 1977 WL 18392, *3);  see also, McLaughlin, Practice Commentaries, McKinney's Cons. Laws of N.Y., Book 7B, CPLR C901:7;  Cox v. Microsoft Corp., 290 A.D.2d 206, 737 N.Y.S.2d 1 (Appeal No 4239 decided simultaneously herewith).   We note the specific authorization to bring class actions on behalf of governmental entities given to the Attorney General in General Business Law § 342-b, the absence of such specific authorization in section 340(6), and the enactment of the latter provision after two courts (Blumenthal, supra;  Russo & Dubin, supra ) had held that class actions could not be brought under the Donnelly Act because not specifically authorized (see, McKinney's Cons. Laws of N.Y., Book 1, Statutes §§ 74, 240, 363).   The conclusion that treble damages under the Donnelly Act are penal in nature is not undermined by the fact that they are mandatory, i.e., not discretionary or contingent upon a finding of bad faith, and indeed it can be argued that a statute providing for an award of multiple damages without need to prove willfulness or bad faith is more punitive than one that does require such proof.