Last year, the Appellate Division, Third Department, found Regulation 187 to be unconstitutionally vague. The Appellate Division concluded that “ambiguities in the language employed, coupled with [the regulations] lack of clear standards for how these provisions will ultimately be enforced” bestow upon DFS “virtually unfettered discretion” in enforcing the regulation, thereby rendering it unconstitutionally vague.

The State appealed that decision to the New York State Court of Appeals, the state’s highest court. On February 3, 2022, the State filed its appellate brief. In its brief, the State explained that “[m]ost fundamentally, the ‘best interest’ standard prohibits producers from prioritizing their own financial incentives ahead of consumers’ interests.” The State argued that the regulation is not vague because regulated parties have fair notice of the nature of the conduct that will expose them to liability; the regulation uses definite and intelligible language to convey its requirements and prohibitions and sets forth clear standards for enforcement.

Respondents’ appellate brief is due on March 31, and the State’s reply brief is due on April 5. To view the state’s appellant brief, click here.

We will continue to keep you updated.