[excon]

Hello:

There's a reason why I can't find out whether American or Canadian civil recovery is illegal or not... I'm not a lawyer. However, there ARE a couple lawyers here, and I wonder if they could do some legal research into the question...

I have consistently advised our customers that civil recovery is ILLEGAL. If it ISN'T, I'd like to give correct legal advice if I can...

excon

[Curlyben]

I believe that it relies on civil law rather than being a criminal act in itself.
So the real question is whether it's lawful or not.

We have a similar activity going on in the UK and there's currently quite a large backlash to the whole affair.

At the end of the day you haven't actually stolen anything until you LEAVE the vendors premises. Hence the actual criminal act.

Civil recovery is all about stopping people before the theft actually occurs and charging them for the time and effort involved in this activity.

Never hurts to have a quick look at wiki: Civil recovery - Wikipedia, the free encyclopedia

[AK lawyer]

The Wiki article Curlyben links (or an entry linked to it) suggests that there are statutes in all 50 states. I don't know if this is true. If so, and if one defines "civil recovery" meaning the right of stores to demand compensation, set by an arbitrary formula rather then by proof of damages, for shoplifting, apparently yes, it is "legal". It is, to my way of thinking, analogous to a liquidated damages clause.

[Curlyben]

BUT, and here's the kicker on this, people are being CRIMINALLY labelled (thief) without actually committing an illegal act. This is a civil matter.
I know I'm splitting hairs over the old legal Vs lawful, but it's makes a huge difference on the approach.

As you mentioned AK, the liquidated damages angel is what is pursued in the UK, but a number of overzealous companies are getting into serious trouble because of these activities.

[excon]

It is, to my way of thinking, analogous to a liquidated damages clause.

Hello lawyer:

To mine, it's extortion - give me money, or I'll do something bad to you... That's extortion... Liquidated damages, seems to be a contract between the parties - give me money, and I won't sue you for more...

excon

[Curlyben]

Here's an interesting press release from UK Citizens Advice : Citizens Advice slams retail industry over the unfair practice of threatened ?civil recovery?

[excon]

Hello again, ben:

I've not seen a civil recovery letter. What our clients SAY, is the letter doesn't simply demand tit for tat. It demands EXORBITANT sums, and threatens CRIMINAL action if not paid...

Now, even if the letter didn't use the wording I used above, if the perceived THREAT is CRIMINAL action, then it's extortion. It looks even MORE like extortion when the stores demands clearly ENRICH the store instead of simply paying the store back for what it's out, assuming it's out anything. And, when the merchandise is returned, the store isn't out anything.

A law giving a store an inch to get even, has been taken to CRIMINAL levels, in my opinion.

excon

[excon]

Hello again:

I heard from sideout. This is what he says. Makes sense to me.
------------------------------------
Well I haven't come across this in practice at all, but I have read about it a bit. We do have such a law on the books in NY and basically provides that a store can demand up to five times the purchase price in damages. The theory behind it is that this windfall of damages will offset the cost of loss prevention employees, etc.

It isn't extortion, but there is something to keep in mind. You aren't allowed to threaten criminal prosecution to secure a civil settlement. However, my understanding of these letters is that they say they will take "additional steps" if the money isn't paid. Which to the lay person might mean criminal prosecution but the actual remedy would be a civil case. (where the burden of proof is a "preponderance of the evidence and NOT "beyond a reasonable doubt") The importance of this would be that the old "it fell in to my bag", or "I forgot to pay for it" probably isn't going to fly in a civil context.

If I had a client approach me with one of these letters I would have to take them on a case by case basis. If the store has hard proof (video, etc.) of the theft, and it is for a substantial amount of money, you will want to work out a settlement as you will likely lose under the civil burden of proof. However, if it is for a small item, you need to take the reality of civil litigation into account as well. While they have ever right to commence a civil law suit over that pack of gum you stole, no law firm would incur the expense for a maximum possible receiver of 10 dollars. So in these cases, you have a great deal of leverage to negotiate a reduced amount, or stiff them completely.
-------------------------------------

Since MOST of our clients are small potatoes, I'm going to continue to advise them to STIFF the stores.

excon

[AK lawyer]

Yes, excon, much of what you say is true.

If a store were to send a demand letter without a statute giving it the right to (a money formula unrelated to money damages), it might be viewed as extortion. But if they are hanging their hats on such a statute it would seem they can do that.

What I am puzzled about, however, is conduct that falls short of criminal. The store can still get civil recovery for that? Doesn't seem right, unless I guess there are clearly-posted rules saying customers are not allowed to do such-and-such. Without an example or two, I don't know what else to say.

[JudyKayTee]

I'd like to see the NY law. This question has been going around AMHD for quite some time. Local Attorneys as well as Canadian (where this is common practice) cannot find a law which forbids it.

I KNOW in my area that stores are arresting people who pass the cash registers with unpaid merchandise, not limiting the stopping/arresting to people who leave the premises.

[jwelborn]

In response to JudyKayTee's request, I have pasted a copy of the New York statute below:

McKinney's General Obligations Law § 11-105

Mckinney's Consolidated Laws of New York Annotated Currentness
General Obligations Law (Refs & Annos)
Chapter 24-A. Of the Consolidated Laws (Refs & Annos)
Article 11. Obligations to Make Compensation or Restitution
Title 1. Compensation
§ 11-105. Larceny in mercantile establishments

1. When used in this section, the term “mercantile establishment” shall mean a place or vehicle where goods, wares or merchandise are offered for sale or a place or vehicle from which deliveries of goods, wares or merchandise are made

2. When used in this section, the term “larceny” is an act heretofore defined or known as common law larceny by trespassory taking as defined in paragraph (a) of subdivision two of section 155.05 of the penal law committed against the property of a mercantile establishment.

3. When used in this section, the term “emancipated minor” shall mean a person who was over the age of sixteen at the time of the alleged larceny and who was no longer a dependent of or in the custody of a parent or legal guardian.

4. In any proceeding brought under this section the burden of proof shall be by a preponderance of the evidence.

5. An adult or emancipated minor who commits larceny against the property of a mercantile establishment shall be civilly liable to the operator of such establishment in an amount consisting of:

(a) the retail price of the merchandise if not recovered in merchantable condition up to an amount not to exceed fifteen hundred dollars; plus

(b) a penalty not to exceed the greater of five times the retail price of the merchandise or seventy-five dollars; provided, however, that in no event shall such penalty exceed five hundred dollars.

6. Parents or legal guardians of an unemancipated minor shall be civilly liable for said minor who commits larceny against the property of a mercantile establishment to the operator of such establishment in an amount consisting of:

(a) the retail price of the merchandise if not recovered in merchantable condition up to an amount not to exceed fifteen hundred dollars; plus

(b) a penalty not to exceed the greater of five times the retail price of the merchandise or seventy-five dollars; provided, however, that in no event shall such penalty exceed five hundred dollars.

7. A conviction or a plea of guilty for committing larceny is not a prerequisite to the bringing of a civil suit, obtaining a judgment, or collecting that judgment under this section.

8. The fact that an operator of a mercantile establishment may bring an action against an individual as provided in this section shall not limit the right of such merchant to demand, orally or in writing, that a person who is liable for damages and penalties under this section remit the damages and penalties prior to the commencement of any legal action.

9. In any action brought under subdivision six of this section, the court shall consider in the interest of justice mitigating circumstances that bear directly upon the actions of the parent or legal guardian in supervising the unemancipated minor who committed the larceny.

10. An action for recovery of damages and penalties under this section may be brought in any court of competent jurisdiction.

11. The provisions of this section shall not be construed to prohibit or limit any other cause of action which an operator of a mercantile establishment may have against a person who unlawfully takes merchandise from the mercantile establishment.

12. Any testimony or statements of the defendant or unemancipated minor child of the defendant or any evidence derived from an attempt to reach a civil settlement or from a civil proceeding brought under this section shall be inadmissible in any other court proceeding relating to such larceny.

CREDIT(S)

(Added L.1991, c. 724, § 1.)


HISTORICAL AND STATUTORY NOTES



2010 Main Volume


L.1991, c. 724 legislation


L.1991, c. 724, § 2, provided:


“This act [enacting this section] shall take effect on the first day of November next succeeding the date on which it shall have become a law [Nov. 1, 1991] and shall apply to acts committed on or after such effective date.”

LIBRARY REFERENCES

2010 Main Volume


Infants 172.
Larceny 1, 21, 40, 41.
Parent and Child 13.5(2).
Westlaw Topic Nos. 211, 234, 285.
C.J.S. Infants §§ 52 to 53.
C.J.S. Larceny §§ 1 to 2, 20, 22, 50 to 51, 93 to 119.
C.J.S. Parent and Child §§ 191, 310.


RESEARCH REFERENCES

2011 Electronic Update

Treatises and Practice Aids

Jury Charges in NY Criminal Cases § 50:1, Nature and Definition of Offense.

McKinney's General Obligations Law § 11-105, NY GEN OBLIG § 11-105

Current through L.2010.

© 2011 Thomson Reuters

END OF DOCUMENT

[JudyKayTee]

We are looking for whether a store can say "Pay the civil penalty or we are having you arrested."

I thought that was the question, although I do know the question evolved.

[jwelborn]

Judy:

I was replying to your post in regards to, "I'd like to see the NY law.". In response to your most recent post, I believe it is safe to say that under no circumstances should anyone threaten criminal prosecution to induce settlement of a civil matter. However, there is a difference between referring a theft matter for criminal prosecution and thereafter requesting civil damages for the theft incident. The civil damages/penalties allowed under a civil statute are separate and distinct from the state's police power right to pursue a criminal prosecution for violation of the state's criminal code. Further, many state statutes that allow for liquidated, exemplary and/or nominal damages or a civil penalty for the invasion of the retailer's property rights do not require a conviction or plea of guilty as a prerequisite to maintaining a civil action under the civil statute.

[excon]

I believe it is safe to say that under no circumstances should anyone threaten criminal prosecution to induce settlement of a civil matter.

Hello j:

The statute clearly allows a store to profit from being ripped off. When that happens, the store has an incentive to do exactly what they SHOULDN'T do. Maybe if they couldn't enrich themselves by being a victim, they might do the right thing. But, as long as doing the wrong thing puts money in their pocket, I wouldn't hold my breath hoping they'll change.

excon