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New York Consolidated Laws

N.Y. Judiciary Law § 489 (2026)

Purchase of claims by corporations or collection agencies

✓ text as retrieved May 2026 (this copy records no edition or section history)
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§ 489. Purchase of claims by corporations or collection agencies. 1.
No person or co-partnership, engaged directly or indirectly in the
business of collection and adjustment of claims, and no corporation or
association, directly or indirectly, itself or by or through its
officers, agents or employees, shall solicit, buy or take an assignment
of, or be in any manner interested in buying or taking an assignment of
a bond, promissory note, bill of exchange, book debt, or other thing in
action, or any claim or demand, with the intent and for the purpose of
bringing an action or proceeding thereon; provided however, that bills
receivable, notes receivable, bills of exchange, judgments or other
things in action may be solicited, bought, or assignment thereof taken,
from any executor, administrator, assignee for the benefit of creditors,
trustee or receiver in bankruptcy, or any other person or persons in
charge of the administration, settlement or compromise of any estate,
through court actions, proceedings or otherwise. Nothing herein
contained shall affect any assignment heretofore or hereafter taken by
any moneyed corporation authorized to do business in the state of New
York or its nominee pursuant to a subrogation agreement or a salvage
operation, or by any corporation organized for religious, benevolent or
charitable purposes. Any corporation or association violating the
provisions of this section shall be liable to a fine of not more than
five thousand dollars; any person or co-partnership, violating the
provisions of this section, and any officer, trustee, director, agent or
employee of any person, co-partnership, corporation or association
violating this section who, directly or indirectly, engages or assists
in such violation, is guilty of a misdemeanor.
  2. Except as set forth in subdivision three of this section, the
provisions of subdivision one of this section shall not apply to any
assignment, purchase or transfer hereafter made of one or more bonds,
promissory notes, bills of exchange, book debts, or other things in
action, or any claims or demands, if such assignment, purchase or
transfer included bonds, promissory notes, bills of exchange and/or book
debts, issued by or enforceable against the same obligor (whether or not
also issued by or enforceable against any other obligors), having an
aggregate purchase price of at least five hundred thousand dollars, in
which event the exemption provided by this subdivision shall apply as
well to all other items, including other things in action, claims and
demands, included in such assignment, purchase or transfer (but only if
such other items are issued by or enforceable against the same obligor,
or relate to or arise in connection with such bonds, promissory notes,
bills of exchange and/or book debts or the issuance thereof).
  3. The rights of an indenture trustee, its agents and employees shall
not be affected by the provisions of subdivision two of this section.
Notes of Decisions
Cited in 92 cases (15 in the last 5 years), 1973–2024 · leading case: Justinian Capital SPC ex rel. Blue Heron Segregated Portfolio v. WestLB AG, 65 N.E.3d 1253 (N.Y. 2016).
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Justinian Capital SPC ex rel. Blue Heron Segregated Portfolio v. WestLB AG, 65 N.E.3d 1253 (N.Y. 2016). · cites it 31× “New York's champerty doctrine is codified at Judiciary Law § 489 (1). As pertinent here, the statute prohibits the purchase of notes, securities, or other instruments or claims with the intent and for the primary purpose of bringing a lawsuit (see id.”
Merrill Lynch Mortg. Investors, Inc. v. Love Funding Corp., 918 N.E.2d 889 (N.Y. 2009). · cites it 3× “The United States Court of Appeals for the Second Circuit has certified to us questions relating to Judiciary Law § 489, New York’s champerty statute.”
Red Tulip, LLC v. Neiva, 44 A.D.3d 204 (N.Y. App. Div. 1st Dep't 2007). · cites it 2× “v Jupiter Partners, 280 AD2d 208, 215 [2001]), is available only where the purchaser or assignee obtains the claim “with the intent and for the purpose of bringing an action or proceeding thereon” (Judiciary Law § 489 [1]; see generally Bluebird Partners v First Fid.”
Richbell Info. Servs., Inc. v. Jupiter Partners L.P., 280 A.D.2d 208 (N.Y. App. Div. 1st Dep't 2001). · cites it 5× “whether the complaint should have been dismissed on the ground that plaintiffs’ assignment of their claims to an entity financially able to sustain the litigation violated Judiciary Law §489. We hold that the motion to dismiss should have been denied because a determination as a…”
Beazley Ins. Co. v. ACE Am. Ins. Co., 197 F. Supp. 3d 616 (S.D.N.Y. 2016). · cites it 2× “Defendants argue that Beazley cannot recover any damages on NASDAQ’s behalf because NASDAQ’s assignment of its rights to Beazley is barred by the medieval doctrine of champerty, which is codified at New York Judiciary Law § 489.”
Bluebird Partners v. First Fid. Bank, N. A., 731 N.E.2d 581 (N.Y. 2000). · cites it 2× “The record leaves no doubt that plaintiffs ‘primary purpose’ * * * in purchasing those certificates was the maintenance of this litigation against the second series trustee, and, accordingly, the complaint should have been dismissed as against it on the ground of champerty…”
RSM Prod. Corp. v. Fridman, 643 F. Supp. 2d 382 (S.D.N.Y. 2009). “That statute, Judiciary Law § 489, prohibits the purchase of claims by corporations or collection agencies with the specific purpose of bringing an action thereon.”
Semi-Tech Litig., LLC v. Bankers Trust Co., 272 F. Supp. 2d 319 (S.D.N.Y. 2003). · cites it 2× “N.Y. Jud. L. § 489 (McKinney 1983). 15 . PI.”
Limpar Realty Corp. v. Uswiss Realty Holding, Inc., 112 A.D.2d 834 (N.Y. App. Div. 1st Dep't 1985). · cites it 3× “), entered January 15, 1985 denying plaintiff’s motion for summary judgment on its complaint, unanimously reversed on the law, with costs, judgment of foreclosure granted, the affirma *835 tive defense of Judiciary Law § 489 dismissed, and the action is remanded to Special Term…”
Universal Inv. Advisory SA v. Bakrie Telecom Pte., Ltd., 154 A.D.3d 171 (N.Y. App. Div. 1st Dep't 2017). ““Judiciary Law § 489 is New York’s champerty statute.”
IKB Int'l S.A. v. Stanley, 142 A.D.3d 447 (N.Y. App. Div. 1st Dep't 2016). “This series of events forms the backbone of defendants’ additional arguments, that this action violates the champerty statute because plaintiffs purchased the claims for the sole purpose of bringing an action (Judiciary Law § 489), plaintiffs lack standing, and in any event, it…”
Lots 4 Less Stores, Inc. v. Integrated Props., Inc., 152 A.D.3d 1181 (N.Y. App. Div. 4th Dep't 2017). “Finally, contrary to defendants’ contention, plaintiff’s claims are not barred by the statutory prohibition against champerty set forth in Judiciary Law § 489. The record establishes that *1184 plaintiff had a legitimate business purpose in acquiring the tanning beds and…”
Show all 92 citing cases →
N.Y. Judiciary Law § 489(1): 5 cases
Fulton Holding Grp., LLC v. Lindoff, 2018 NY Slip Op 7099 (N.Y. App. Div. 2d Dep't 2018).
Fulton Holding Grp., LLC v. Lindoff, 2018 NY Slip Op 7098 (N.Y. App. Div. 2d Dep't 2018).
Fulton Holding Grp., LLC v. Lindoff, 2018 NY Slip Op 7097 (N.Y. App. Div. 2d Dep't 2018).
Fulton Holding Grp., LLC v. Lindoff, 2018 NY Slip Op 7096 (N.Y. App. Div. 2d Dep't 2018).
Gowen v. Helly Nahmad Gallery, Inc., 60 Misc. 3d 963 (N.Y. Sup. Ct. 2018).
N.Y. Judiciary Law § 489(2): 1 case
Gowen v. Helly Nahmad Gallery, Inc., 60 Misc. 3d 963 (N.Y. Sup. Ct. 2018).
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