S T A T E   O F   N E W   Y O R K
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                                  8431

                       2011-2012 Regular Sessions

                          I N  A S S E M B L Y

                              June 15, 2011
                               ___________

Introduced by M. of A. DINOWITZ -- read once and referred to the Commit-
  tee on Consumer Affairs and Protection

AN  ACT  to  amend  the general business law, in relation to arbitration
  organizations

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1. Subdivision 1 of section 399-c of the general business law
is amended by adding a new paragraph e to read as follows:
  E. THE TERM "ARBITRATION  ORGANIZATION"  SHALL  MEAN  AN  ASSOCIATION,
AGENCY,  BOARD,  COMMISSION,  OR OTHER ENTITY THAT IS NEUTRAL AND INITI-
ATES, SPONSORS, OR ADMINISTERS AN ARBITRATION PROCEEDING OR IS  INVOLVED
IN THE APPOINTMENT OF AN ARBITRATOR.
  S  2.  Section  399-c of the general business law is amended by adding
three new subdivisions 3, 4 and 5 to read as follows:
  3. A. ANY PRIVATE ARBITRATION  ORGANIZATION  THAT  ADMINISTERS  OR  IS
OTHERWISE  INVOLVED  IN FIFTY OR MORE CONSUMER ARBITRATIONS A YEAR SHALL
COLLECT, PUBLISH AT LEAST QUARTERLY, AND MAKE AVAILABLE TO THE PUBLIC IN
A COMPUTER-SEARCHABLE DATABASE  THAT  PERMITS  SEARCHING  WITH  MULTIPLE
SEARCH TERMS IN THE SAME SEARCH, WHICH SHALL BE ACCESSIBLE AT THE INTER-
NET  WEBSITE  OF  THE  PRIVATE  ARBITRATION ORGANIZATION, IF ANY, AND ON
PAPER UPON REQUEST, ALL OF  THE  FOLLOWING  INFORMATION  REGARDING  EACH
CONSUMER  ARBITRATION  IT HAS ADMINISTERED OR OTHERWISE BEEN INVOLVED IN
WITHIN THE PRECEDING FIVE YEARS:
  (1) THE NAME OF THE NON-CONSUMER PARTY, IF THE NON-CONSUMER PARTY IS A
CORPORATION OR OTHER BUSINESS ENTITY;
  (2) THE STATE AND ZIP CODE IN WHICH THE CONSUMER PARTY RESIDED AT  THE
TIME OF ARBITRATION;
  (3) THE TYPE OF DISPUTE INVOLVED, INCLUDING GOODS, BANKING, INSURANCE,
HEALTH  CARE,  EMPLOYMENT, AND, IF IT INVOLVES EMPLOYMENT, THE AMOUNT OF
THE EMPLOYEE'S ANNUAL WAGE DIVIDED INTO THE FOLLOWING RANGES: LESS  THAN
ONE  HUNDRED  THOUSAND  DOLLARS,  ONE  HUNDRED  THOUSAND  DOLLARS TO TWO

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD00514-01-1
              

A. 8431                             2

HUNDRED FIFTY THOUSAND DOLLARS, INCLUSIVE, AND OVER  TWO  HUNDRED  FIFTY
THOUSAND DOLLARS;
  (4) WHETHER THE CONSUMER WAS THE PREVAILING PARTY;
  (5)  ON  HOW MANY OCCASIONS, IF ANY, THE NON-CONSUMER PARTY HAS PREVI-
OUSLY BEEN A PARTY IN AN ARBITRATION OR MEDIATION  ADMINISTERED  BY  THE
PRIVATE ARBITRATION ORGANIZATION;
  (6)  WHETHER THE CONSUMER PARTY WAS REPRESENTED BY AN ATTORNEY AND, IF
SO, THE IDENTIFYING INFORMATION FOR THAT ATTORNEY, INCLUDING THE  ATTOR-
NEY'S  NAME,  THE NAME OF THE ATTORNEY'S FIRM, AND THE CITY IN WHICH THE
ATTORNEY'S OFFICE IS LOCATED;
  (7) THE DATE THE PRIVATE ARBITRATION ORGANIZATION RECEIVED THE  DEMAND
FOR  ARBITRATION, THE DATE THE ARBITRATOR WAS APPOINTED, AND THE DATE OF
DISPOSITION BY THE ARBITRATOR OR PRIVATE ARBITRATION ORGANIZATION;
  (8) THE TYPE OF DISPOSITION OF THE DISPUTE, IF KNOWN, INCLUDING  WITH-
DRAWAL,  ABANDONMENT,  SETTLEMENT,  AWARD  AFTER  HEARING, AWARD WITHOUT
HEARING, DEFAULT, OR DISMISSAL WITHOUT HEARING;
  (9) THE AMOUNT OF THE CLAIM, THE AMOUNT OF THE AWARD,  AND  ANY  OTHER
RELIEF GRANTED, IF ANY; AND
  (10)  THE  NAME  OF THE ARBITRATOR, THE ARBITRATOR'S TOTAL FEE FOR THE
CASE, AND THE PERCENTAGE OF  THE  ARBITRATOR'S  FEE  ALLOCATED  TO  EACH
PARTY.
  B.  IF  THE INFORMATION REQUIRED BY PARAGRAPH A OF THIS SUBDIVISION IS
PROVIDED BY THE PRIVATE ARBITRATION ORGANIZATION IN A  COMPUTER-SEARCHA-
BLE  FORMAT AT THE ORGANIZATION'S INTERNET WEBSITE AND MAY BE DOWNLOADED
WITHOUT ANY FEE, THE ORGANIZATION MAY CHARGE THE ACTUAL COST OF  COPYING
TO  ANY PERSON WHO REQUESTS THE INFORMATION ON PAPER. IF THE INFORMATION
REQUIRED BY PARAGRAPH A OF THIS SUBDIVISION IS  NOT  ACCESSIBLE  THROUGH
THE USE OF THE INTERNET, THE ORGANIZATION SHALL PROVIDE THAT INFORMATION
WITHOUT CHARGE TO ANY PERSON WHO REQUESTS THE INFORMATION ON PAPER.
  C.  THIS SUBDIVISION SHALL APPLY TO ANY CONSUMER ARBITRATION COMMENCED
ON OR AFTER JANUARY FIRST, TWO THOUSAND THIRTEEN.
  D. THIS SUBDIVISION SHALL NOT APPLY TO ARBITRATIONS INVOLVING DISPUTES
BETWEEN CONSUMERS.
  4. A. NO PRIVATE ARBITRATION ORGANIZATION MAY  ADMINISTER  A  CONSUMER
ARBITRATION TO BE CONDUCTED IN THIS STATE, OR PROVIDE ANY OTHER SERVICES
RELATED TO A CONSUMER ARBITRATION, IF:
  (1)  THE  ORGANIZATION  HAS,  OR  WITHIN THE PRECEDING YEAR HAS HAD, A
FINANCIAL INTEREST IN ANY PARTY OR ATTORNEY FOR A PARTY; OR
  (2) ANY PARTY OR ATTORNEY FOR A PARTY HAS,  OR  WITHIN  THE  PRECEDING
YEAR  HAS HAD, ANY TYPE OF FINANCIAL INTEREST IN THE PRIVATE ARBITRATION
ORGANIZATION.
  B. THIS SUBDIVISION SHALL OPERATE ONLY  PROSPECTIVELY  SO  AS  NOT  TO
PROHIBIT  THE  ADMINISTRATION  OF  CONSUMER ARBITRATIONS ON THE BASIS OF
FINANCIAL INTERESTS HELD PRIOR TO JANUARY FIRST, TWO THOUSAND THIRTEEN.
  C. FOR THE PURPOSES OF THIS SUBDIVISION, THE TERM "FINANCIAL INTEREST"
MEANS OWNERSHIP OF MORE THAN A ONE PERCENT LEGAL OR  EQUITABLE  INTEREST
IN A PARTY, OR A LEGAL OR EQUITABLE INTEREST IN A PARTY OF A FAIR MARKET
VALUE  IN EXCESS OF ONE THOUSAND FIVE HUNDRED DOLLARS, OR A RELATIONSHIP
AS DIRECTOR, ADVISOR OR OTHER ACTIVE PARTICIPANT IN  THE  AFFAIRS  OF  A
PARTY, EXCEPT AS FOLLOWS:
  (1) OWNERSHIP IN A MUTUAL OR COMMON INVESTMENT FUND THAT HOLDS SECURI-
TIES  IS NOT A "FINANCIAL INTEREST" IN THOSE SECURITIES UNLESS THE ARBI-
TRATOR PARTICIPATES IN THE MANAGEMENT OF THE FUND.
  (2) AN OFFICE IN AN EDUCATIONAL, RELIGIOUS, CHARITABLE, FRATERNAL,  OR
CIVIC  ORGANIZATION  IS NOT A "FINANCIAL INTEREST" IN SECURITIES HELD BY
THE ORGANIZATION.

A. 8431                             3

  (3) THE PROPRIETARY INTEREST OF A POLICYHOLDER IN A  MUTUAL  INSURANCE
ORGANIZATION, OR A DEPOSITOR IN A MUTUAL SAVINGS ASSOCIATION, OR A SIMI-
LAR  PROPRIETARY INTEREST, IS A "FINANCIAL INTEREST" IN THE ORGANIZATION
ONLY IF THE OUTCOME OF THE PROCEEDING  COULD  SUBSTANTIALLY  AFFECT  THE
VALUE OF THE INTEREST.
  5. WHENEVER THERE SHALL BE A VIOLATION OF THIS SECTION, AN APPLICATION
MAY  BE  MADE  BY  THE ATTORNEY GENERAL IN THE NAME OF THE PEOPLE OF THE
STATE OF NEW YORK TO A COURT OR JUSTICE HAVING JURISDICTION BY A SPECIAL
PROCEEDING TO ISSUE AN INJUNCTION, AND UPON NOTICE TO THE  DEFENDANT  OF
NOT  LESS THAN FIVE DAYS, TO ENJOIN AND RESTRAIN THE CONTINUANCE OF SUCH
VIOLATION; AND IF IT SHALL APPEAR TO THE SATISFACTION OF  THE  COURT  OR
JUSTICE  THAT  THE  DEFENDANT  HAS,  IN  FACT, VIOLATED THIS SECTION, AN
INJUNCTION MAY BE  ISSUED  BY  SUCH  COURT  OR  JUSTICE,  ENJOINING  AND
RESTRAINING  ANY  FURTHER  VIOLATION,  WITHOUT  REQUIRING PROOF THAT ANY
PERSON HAS, IN FACT, BEEN  INJURED  OR  DAMAGED  THEREBY.  IN  ANY  SUCH
PROCEEDING,  THE  COURT  MAY  MAKE ALLOWANCES TO THE ATTORNEY GENERAL AS
PROVIDED IN PARAGRAPH SIX OF SUBDIVISION  (A)  OF  SECTION  EIGHTY-THREE
HUNDRED  THREE  OF THE CIVIL PRACTICE LAW AND RULES, AND DIRECT RESTITU-
TION. WHENEVER THE COURT  SHALL  DETERMINE  THAT  A  VIOLATION  OF  THIS
SECTION  HAS  OCCURRED, THE COURT MAY IMPOSE A CIVIL PENALTY OF NOT MORE
THAN TWO THOUSAND DOLLARS FOR  SUCH  VIOLATION.  EACH  WRITTEN  CONTRACT
OFFERED  BY  A  NON-CONSUMER  PARTY  AND  SUBSEQUENTLY  ENTERED  INTO IN
VIOLATION OF SUBDIVISION TWO OF THIS SECTION SHALL CONSTITUTE A SEPARATE
VIOLATION.  IN CONNECTION WITH ANY SUCH PROPOSED APPLICATION, THE ATTOR-
NEY GENERAL IS AUTHORIZED TO TAKE PROOF AND MAKE A DETERMINATION OF  THE
RELEVANT FACTS AND TO ISSUE SUBPOENAS IN ACCORDANCE WITH THE CIVIL PRAC-
TICE LAW AND RULES.
  S 3. This act shall take effect on the one hundred eightieth day after
it shall have become a law.