On Saturday, March 7, New York Governor, Andrew Cuomo, issued Executive Order No. 202 declaring a disaster emergency in the State of New York in connection with the COVID-19 outbreak. As a result of this declaration, ESCOs are prohibited from making “unsolicited telemarketing sales calls” during the period of the disaster emergency. The period of the disaster emergency shall remain in effect for six (6) months unless earlier rescinded by Governor Cuomo. Executive Law § 28 (3) (note that this period may also be extended for additional six (6) month periods). ESCOs violating this law may be subject to penalties up to $11,000 per violation (i.e., per call).
In particular, New York General Business Law § 399-z states that “[i]t shall be unlawful for any telemarketer doing business in this state to knowingly make an unsolicited telemarketing sales call to any person in a county, city, town or village under a declared state of emergency of disaster emergency as described in sections twenty-four or twenty-eight of the executive law.” General Business Law § 399-z (5-a) (please note that this provision of the law went into effect on December 18, 2019). For purposes of this statute, please note that “telemarketer” is defined as “any person who, for financial profit or commercial purposes in connection with telemarketing, makes telemarketing sales calls to a customer when the customer is in this state or any person who directly controls or supervises the conduct of a telemarketer.” General Business Law § 399-z (1) (h). The definition of customer only includes “natural persons,” which would suggest that ESCOs could potentially continue marketing to commercial and industrial customers. General Business Law § 399-z (1) (c); see also New York Bill Jacket, 2000 S.B. 8132, Ch. 547 (noting that the purpose of the bill is to establish a “statewide registry of New York State residents wishing to reduce unsolicited telemarketing sales calls made to their households”) (emphasis added); June 15, 2019, New York Committee Report, 2019 NY A.B. 117 (NS) (stating that the purpose of Section 5-a of the bill is to ensure that “residents have open lines of communication to the outside world”) (emphasis added). The plain reading of statute, however, prohibits telemarketing calls to “any person” and the statute defines “person” as “any natural person, association, partnership, firm, corporation and its affiliates or subsidiaries or other business entity,” which would therefore include commercial and industrial customers. While the legislative history and the Governor’s announcement about the statute all speak to “residents” and “individuals,” so as to suggest that the intent is merely to limit telemarketing calls to residential customers, because the statute can be read to also restrict calls to businesses, it may be prudent to limit all telemarketing calls during the emergency disaster period.
Pursuant to Executive Law § 28, “whenever the governor, on his own initiative or pursuant to a request from one or more chief executives, finds that a disaster has occurred or may be imminent for which local governments are unable to respond adequately, he shall declare a disaster emergency by executive order.” Executive Law § 28 (1). The definition of “disaster” includes a “disease outbreak” such as COVID-19. Executive Law § 20 (2)(a).
This alert does not purport to be a substitute for advice of counsel on specific matters.
Harris Beach has offices throughout New York state, including Albany, Buffalo, Ithaca, Melville, New York City, Rochester, Saratoga Springs, Syracuse, Uniondale and White Plains, as well as New Haven, Connecticut and Newark, New Jersey.