State of New York v. Unique Ideas, Inc.

44 N.Y.2d 345, 405 N.Y.S.2d 656, 376 N.E.2d 1301 (1978)

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State of New York v. Unique Ideas, Inc.

New York Court of Appeals
44 N.Y.2d 345, 405 N.Y.S.2d 656, 376 N.E.2d 1301 (1978)

Facts

Unique Ideas, Inc. (Unique) and Unique’s principal, Ernie Tucker (defendants), sold get-rich-quick schemes to the public. The State of New York (state) sued Unique and Tucker on behalf of defrauded consumers. To resolve the state’s suit, Unique and Tucker entered into a consent judgment in which they agreed to cease their fraudulent conduct. Yet just five days after the consent judgment, Unique and Tucker purchased more than four million envelopes in order to mail new fraudulent solicitations; a few weeks later, Unique and Tucker mailed over two million solicitations via four bulk mailings to potential new victims. These postconsent-judgment solicitations yielded Unique and Tucker at least $209,000. At the request of the state, acting through the attorney general, the supreme court held Unique and Tucker in civil contempt. The supreme court opined that, pursuant to Judiciary Law § 773, it could impose a civil fine of approximately $600 million ($250 for each of the over two million new solicitations because each individual mailing constituted a separate and willful contempt of the consent judgment). However, the supreme court imposed only a $500,000 fine. The court suspended all but $209,000 of the fine on the condition that Unique and Tucker comply with the consent judgment going forward. The appellate division affirmed the supreme court’s contempt finding but reduced the civil fine to $1,000. Per the appellate division, Unique and Tucker were subject to a $250 fine per violation of the consent judgment. However, the appellate division ruled that Unique and Tucker violated the consent judgment only four times: once per each bulk mailing. The state appealed.

Rule of Law

Issue

Holding and Reasoning (Wachtler, J.)

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