Article 9 of the New York Civil Practice Law and Rules (CPLR) governs class actions. CPLR 901(b) provides that a suit that seeks to collect on a liability imposed by statute that is in the nature of a penalty may not be maintained as a class action. Notwithstanding 901(b), where the enabling legislation creating the statutory remedy authorizes a class action, maintenance of such a suit is permissible. In Sperry v. Compton Corp., 8 N.Y.2d 204, 863 N.Y.S.2d 1012 (2007), the New York Court of Appeals ruled that the legislative history of the amendment to the Donnelly Act that authorized treble damages confirmed that it was intended as an incentive for an individual plaintiff above compensatory losses and therefore could only be construed as a penalty. Inasmuch as the Court of Appeals found the authorization for treble damages to be a penalty, and the Donnelly Act did not expressly authorize a class action, class certification was denied.
The lesson to be learned from this decision is that while courts generally don’t go behind the plain language of a statute, where the intent of the legislation is at issue, legislative history may drive the outcome of the case as happened here.