Where (Literally) Is the Deception?

New York Law Journal

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PUBLISHED ON: May 16, 2012

The New York General Business law prohibits “[d]eceptive acts or practices in the conduct of any business, trade or commerce or in the furnishing of any service in this state.” N.Y. Gen. Bus. §349 (McKinney 2012).

In Goshen v. Mutual Life Insurance Company of New York, the New York Court of Appeals held that the “territorial reach” of §349 is limited to deceptive acts or practices that occur in the state of New York. “[T]o qualify as a prohibited act under the statute, the deception of a consumer must occur in New York.”

Plaintiff Goshen was a Florida resident who purchased a “vanishing premium” policy from the defendant, Mutual Life Insurance Company of New York (MONY). The plaintiff alleged that the vanishing premium concept was conceived and orchestrated in New York prior to any dissemination to potential consumers and that the actionable deception occurred in New York although he “ultimately purchased a vanishing premium policy through a MONY representative in Florida.” The court noted that MONY had “extensive ties to New York” and conducted business in New York.