Is there a private right of action for an alleged violation of Section 395-a of the General Business Law?  Answer:  No.

In Schlessinger v. Valspar Corporation, 21 NY3d 166 (2013), the Second Circuit Court of Appeals asked the New York Court of Appeals “to resolve two questions regarding General Business Law § 395-a, which (with certain exceptions) forbids the termination before expiration of any ‘maintenance agreement covering parts and/or service’.”  The New York Court of Appeals held that “General Business Law § 395-a does not make contract clauses that contradict its terms null and void; and that violation of section 395-a alone does not give rise to a cause of action under General Business Law § 349.” Id.

Schlessinger and her co-plaintiff purchased furniture from Fortunoff’s Department Store together with the “Guardsman Elite 5 year Furniture Protection Plan.” Id.

Fortunoff’s filed for bankruptcy; a claim was made under the plan for unspecified damages to the furniture; and, based upon a store closure provision in the plan, a full refund of the $100 plan payment was tendered.

Plaintiffs sued, in the U.S. District Court for the Eastern District of New York, for, among other things, breach of contract under General Business Law § 395-a and for damages under General Business Law § 349.  The District Court Judge dismissed the complaint; Schlessinger appealed; and the Second Circuit certified the questions presented to the Court of Appeals.

The Court of Appeals held that “[u]nlike certain other provisions in the General Business Law, there is no express or implied private right of action to enforce section 395-a”.  Instead, the legislature chose to assign enforcement exclusively to government officials.  Id. at 171.

As to Section 349-a, while the Court of Appeals noted that section 349(h) expressly created a private right of action thereunder, “Section 349 does not grant a private remedy for every improper or illegal business practice, but only for conduct that tends to deceive consumers[.]”  Id. at 172.  The Court of Appeals found that the conduct as to which complaint was made did not constitute a “deceptive act or practice” encompassed by Section 349.