Tish James' pro-consumer push could spark 'legal shakedowns' and boost greedy lawyers, businesses say
James' FAIR Business Practices Act looks to tighten up consumer protections to crack down on shady crimes like deed theft, junk fees and hard-to-cancel subscriptions but critics said it will open up small businesses to frivolous lawsuits and legal threats.
'The so-called FAIR Act would be anything but fair to New York's business community, especially Main Street businesses,' said Tom Stebbins, executive director of the Lawsuit Reform Alliance of NY.
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3 Attorney General Letitia James makes an announcement about new legislation to protect consumers and small businesses at AG office in New York on March 13, 2025.
Lev Radin/ZUMA Press Wire / SplashNews.com
'It strips away long standing legal safeguards and due process protections – like ensuring that claims are consumer-oriented or that plaintiffs actually have standing to sue – and replaces them with a system that invites abuse,' Stebbins added.
'The bill would specifically authorize profit-motivated law firms to send letters demanding pre-suit settlements for damages and fees,' Stebbins said. 'That's a recipe for a cottage industry of legal shakedowns, where small businesses are targeted not for wrongdoing, but because they lack the resources to fight back.'
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The act targets companies engaged in artificial intelligence-based schemes, online phishing scams and data breaches.
It also takes aim at student loan services that steer borrowers into more expensive repayment plans, unscrupulous car dealers, shady nursing homes that sue relatives of deceased residents for unpaid bills — and health insurance companies that use long lists of in-network doctors who turn out not to accept patients' insurance.
But business advocates worry it'll have an unintended burden on small businesses, citing a study claiming 'excess tort costs' already saddle New Yorkers with $61.8 billion in unnecessary legal bills.
3 The entrance to the Consumer Financial Protection Bureau (CFPB) headquarters is seen during a protest on February 10, 2025 in Washington, DC.
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Ashley Ranslow, New York State Director for the National Federation of Independent Businesses, said James' proposal 'would make it easier for lawyers to shake down small businesses with vague legal threats.
'Lawmakers should be focused on cutting costs and supporting small businesses, not making it easier for wealthy lawyers who have demonstrated no actual harm to sue them out of existence,' she said.
Justin Wilcox, executive director of Upstate United, said the bill has 'vague definitions' that lawyers will exploit for profit, not justice.
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Business Council lobbyist Chelsea Lemon said Gov. Kathy Hochul and lawmakers need to reject the bill if they are 'truly serious about addressing affordability.'
James had no immediate comment to backlash from business interests.
But during a press conference in March, she said the legislation was necessary while criticizing the Trump administration.
'At a time when the federal government is making life harder, we want to make life easier for New Yorkers,' James said.
'The FAIR Business Practices Act will close loopholes that make it too easy for New Yorkers to be scammed, and will allow my office to go after anyone who violates the law and look forward to working with my partners in state government to ensure that as Washington retreats from protecting consumers, New York steps up to lead.'
3 During a press conference in March, James said the legislation was necessary while criticizing the Trump administration.
Pixsooz – stock.adobe.com
Her office on Sunday provided statements from the Student Borrower Protection Center and the Small Business Majority who support the FAIR Act.
James has been in the political and legal fire herself of late.
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Trump's Justice Department last week launched a criminal probe into mortgage fraud claims against her.
Taxpayers also could be on the hook for legal bills from the investigation into her real estate dealings, according to the state budget.
James dismissed the allegations as 'baseless' and claimed the federal probe was part of a 'revenge tour' by the president because she brought civil fraud charges against him and his company, the Trump Organization.
James famously professed, 'no one is above the law,' when she launched her investigation into Trump in 2019 — which ended with a $454 million judgment against him and his real estate firm.
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