People v Hudson Riv. Rafting Co., Inc.

[*1] People v Hudson Riv. Rafting Co., Inc. 2013 NY Slip Op 51090(U) Decided on May 15, 2013 Supreme Court, Hamilton County Giardino, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on May 15, 2013
Supreme Court, Hamilton County

People of the State of New York, by ERIC T. SCHNEIDERMAN, Attorney General of the State of New York, Petitioner,

against

Hudson River Rafting Company, Inc. And PATRICK CUNNINGHAM, Respondents.



2012-6972



For Petitioner:

ERIC T. SCHNEIDERMAN

Attorney General of the State of New York

G. Nicholas Garin, Of Counsel

Poughkeepsie, New York

For Respondents:

JASON T. BRITT

McPhillips, Fitzgerald & Cullum, LLP

Glens Falls, New York

Richard C. Giardino, J.

The Attorney General (hereinafter petitioner) commenced this special proceeding, in October 2012, pursuant to his authority under Executive Law § 63 (12) and General Business Law (GBL) article 22-A, for, among other things, injunctive relief, restitution, penalties and costs.[FN1] On March 29, 2013, this Court issued a Decision granting summary judgment to [*2]petitioner on three of the four causes of action contained in the verified petition.[FN2] However, this Court failed to grant summary judgment on petitioner's second cause of action, which alleged that respondents repeatedly and persistently engaged in false and misleading advertising in violation of GBL § 350.

After issuing its decision, this Court has held numerous conferences and has received multiple submissions from both sides, including respondent's, Hudson River Rafting Company, Inc. (hereinafter HRRC), tax returns for an in camera review. In addition, this Court has allowed the parties to voice their contentions and has given them sufficient time to make their legal arguments. Lastly, petitioner requested that this Court reconsider its earlier decision based on the fact that the record was sufficiently made and that no further argument, appearance nor hearing was needed in order to decide the petitioner's second cause of action.

Under Executive Law § 63 (12), the Attorney General may seek injunctive relief against any business engaged in repeated fraudulent or illegal conduct in the transaction of business (see State of New York v Princess Prestige Co., 42 NY2d 104, 107-108 [1977]; Matter of People v Applied Card Sys., Inc., 27 AD3d 104, 106 [2005]). This Court has decided to adopt petitioner's alternative recommendation that respondents be permanently enjoined from owning or operating a business that offers guided rafting excursions unless and until respondents file a performance bond. Therefore, this Court is requiring that respondents' post a bond to assure proper business behavior on their part in the future.

In addition, trial courts have been given broad discretion when called upon to impose a civil penalty, so long as the court's decision "is explained and it is not disproportionate to the offense'" (Matter of People v Applied Card Sys., Inc., 41 AD3d 4, 10 [2007], affd. 11 NY3d 105 [2008], cert. denied sub nom Cross Country Bank, Inc. v New York, 555 US 1136 [2009], quoting Tatta v State of New York, 20 AD3d 825, 826 [2005], lv denied 5 NY3d 716 [2005], accord Lake George Park Comm'n v Salvador, 72 AD3d 1245, 1248 [2010]). Pursuant to GBL § 350-d, this Court is authorized to assess a civil penalty of up to $5,000.00 for each and every deceptive act committed by the respondents. When arriving at a civil penalty this Court is to consider, and in this case has taken into consideration, among other things, some of the following pertinent factors: (1) HRRC's profitability; (2) size of HRRC; (3) respondents' ability to pay a penalty; (4) respondents' good faith and history of prior violations (see Matter of People v Applied Card Sys., Inc., 41 AD3d at 10; Matter of Sarco Indus. v Angello, 23 AD3d 715, 717 [2005]). This Court has also taken into consideration the fact that respondent, Patrick Cunningham, was a pioneer in the industry and the fact that he has provided guided river excursions with rafts, kayaks and canoes for over thirty years. Similarly, the Court has considered the fact that over those thirty plus years respondents have successfully guided thousands of customers down various rivers without incident. [*3]

Now, therefore, upon taking into consideration the most recent submissions and legal arguments made by the parties, along with this Court's reconsideration of the Order to Show Cause executed on October 31, 2012; the Verified Petition dated October 10, 2012; the Affirmation of G. Nicholas Garin, Assistant Attorney General, dated October 10, 2012, and the exhibits annexed thereto, with proof of service; the Verified Answer dated October 18, 2012; the Answering Affirmation of Jason T. Britt, dated October 18, 2012, and the exhibits annexed thereto; the Memorandum of Defendants dated October 18, 2012; the Affidavit of Patrick Cunningham dated October 11, 2012; the Reply Affirmation of G. Nicholas Garin dated February 21, 2013; the Memorandum of Law in Reply to Opposition Submitted by Respondents dated February 21, 2013; the Sur-Reply Affirmation of Jason T. Britt dated March 7, 2013, and the exhibits annexed thereto; the Memorandum of Respondents dated March 7, 2013; the Sur-Reply Memorandum of Law in Rebuttal to Respondents' Arguments dated March 15, 2013; and all of the other pleadings, papers and exhibits filed herein, and due deliberation having been had; it is hereby

ORDERED, ADJUDGED AND DECREED, that petitioner's second cause of action, alleging that respondents were engaged in false and misleading advertising in violation of GBL § 350, is dismissed without prejudice; and it is further

ORDERED, ADJUDGED AND DECREED, that the respondents', HRRC and Patrick Cunningham, are permanently enjoined from violating Executive Law § 63(12), GBL § 349, ECL § 11-0533 and VTL § 509-b.; and it is further

ORDERED, ADJUDGED AND DECREED, that the respondents', HRRC and Patrick Cunningham, are permanently enjoined from renting rafts, kayaks or any other similar type of water craft or floatation device for customers to "captain their own boats" on the subject rivers where a licensed guide is required by 6 NYCRR § 172.2 (k); and it is further

ORDERED, ADJUDGED AND DECREED, that the respondents', HRRC and Patrick Cunningham, are permanently enjoined from owning or operating a business that offers guided rafting excursions on any rivers or parts of rivers in this state, where licenced guides are required by the DEC, unless and until a $50,000.00 performance bond is posted with the petitioner by a surety or bonding company licensed by and in good standing with the New York State Department of Insurance; and it is further

ORDERED, ADJUDGED AND DECREED, that the respondents', HRRC and Patrick Cunningham, and/or the petitioner may petition this Court, on notice to the opposing party, for modification of the above mentioned bonding requirement if a change in circumstances presents itself; and it is further

ORDERED, ADJUDGED AND DECREED, that the respondents', HRRC and Patrick Cunningham, pay a $1,200 civil penalty for each of the ten different documented instances where respondents' employees were either issued tickets for rafting without a license or for operating a bus without the appropriate license, as shown by the evidence and record in the case, for a total civil penalty of $12,000.00.

Signed this day of 2013, at Johnstown, New York.

____________________________________

HON. RICHARD C. GIARDINO [*4]

Acting Supreme Court Justice

ENTER. Footnotes

Footnote 1: It should be noted that, during the course of the proceedings, petitioner decided to withdraw their restitution claim.

Footnote 2: In particular, this Court found that respondents: (1) repeatedly provided rafting guides who were not licensed by the Department of Environmental Conservation (hereinafter DEC) in violation of ECL § 11-05333; (2) repeatedly operated a motor vehicle, in particular respondents' buses, without possessing the requisite drivers licence in violation of Vehicle and Traffic Law § 509-b; and (3) violated Executive Law § 63 (12).