State v. Princess Prestige Co., Inc.
| Decision Date | 14 June 1977 |
| Citation | 366 N.E.2d 61,397 N.Y.S.2d 360,42 N.Y.2d 104 |
| Parties | , 366 N.E.2d 61 STATE of New York, Appellant-Respondent, v. PRINCESS PRESTIGE CO., INC., et al., Respondents-Appellants. |
| Court | New York Court of Appeals Court of Appeals |
Louis J. Lefkowitz, Atty. Gen. (Daniel M. Cohen, Samuel A. Hirshowitz and James A. Neuberger, New York City, of counsel), for appellant-respondent.
Noel W. Hauser, New York City, for respondents-appellants.
The disposition of the cross appeals in this case turns on the right of the Attorney-General, under subdivision 12 of section 63 of the Executive Law, to injunctive relief to prevent future violations of the Home Solicitation Sales Act (Personal Property Law, art. 10-A) and to retrospective relief with regard to past violations.
The Attorney-General instituted the present proceedings with allegations that the corporate respondent (whose management and policies were controlled by the individual respondent) was engaged in the business of selling housewares and electronic equipment through personal solicitation at the homes of prospective buyers on a deferred-payment basis within the ambit of the Home Solicitation Sales Act. The core charge was that respondents had committed repeated illegal acts in that they had not afforded their customers the cooling-off period and the right of cancellation required by the statute (Personal Property Law, § 428). There followed respondents' answer and the reply of the Attorney-General. Based on the pleadings and the affidavits and exhibits attached theret Special Term granted prospective relief by way of an injunction against future violations and retrospective relief with regard to sales between September 1, 1970 and the date of the order by directing respondents to afford the buyers in such sales an opportunity to cancel their purchases. The Appellate Division affirmed the grant of prospective injunctive relief but held that there was no authority under subdivision 12 of section 63 to support the grant of retrospective relief.
As to respondents' appeal, we are satisfied that there should be an affirmance. The record established that respondents by their conduct failed to comply with the statutory requirements as to home solicitation sales. This conclusion is not vitiated by the fact that the proceeding was initiated on the basis of 16 complaints out of what respondents tell us were some 3,600 transactions. Nor is it a defense that there were some cancellations and a few refunds in each of 1973, 1974 and 1975. No admissible proof is tendered that cancellation cards were regularly given to each purchaser as mandated by the statute. While the authority of the Attorney-General is restricted to seeking injunctive relief against repeated illegal or fraudulent acts, he is not required to establish a large percentage of violations. (Cf. Matter of Lefkowitz v. E. F. G. Baby Prods. Co., 40 A.D.2d 364, 340 N.Y.S.2d 39; Matter of People v. Compact Assoc., 22 A.D.2d 129, 254 N.Y.S.2d 265, affd., 17 N.Y.2d 758, 270 N.Y.S.2d 420, 217 N.E.2d 143.)
Nor is there any substance to respondents' contention that the Home Solicitation Sales Act was "in a state of suspension" and thus afforded no predicate for the present proceeding. Their argument is grounded on section 426 (subd. 2, par. (b)) of the Personal Property Law which provided that the term "home solicitation sale" does not include a transaction "in which the buyer has a right of cancellation pursuant to federal law". The Federal Trade Commission Act, to which the argument appears to refer, while vesting enforcement authority in the commission, does not purport to create or authorize any private right of cancellation (cf. Holloway v. Bristol-Meyers Corp., 158 U.S.App.D.C. 207, 485 F.2d 986; Alfred Dunhill, Ltd. v. Interstate Cigar Co., 2 Cir., 499 F.2d 232, 237). Additionally the Federal rule on which respondents would rely states explicitly that it is not intended to pre-empt State regulation .
Finally there is no merit to respondents' other claims. No defense is available under subdivision (b) of section 349 of the General Business Law,...
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