S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  4094

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                              April 9, 2009
                               ___________

Introduced  by Sens. SCHNEIDERMAN, ADAMS, BRESLIN, DIAZ, DUANE, HASSELL-
  THOMPSON, KLEIN, KRUEGER, KRUGER, MONTGOMERY, PARKER, SAMPSON,  SERRA-
  NO,  STACHOWSKI, STAVISKY, THOMPSON, VALESKY -- read twice and ordered
  printed, and when printed to be committed to the Committee on Consumer
  Protection

AN ACT to amend the general business law, in relation to price gouging

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.  Section  396-r of the general business law, as amended by
chapter 510 of the laws of 1998, subdivision 4 as amended by chapter 224
of the laws of 2008, is amended to read as follows:
  S 396-r. Price gouging. 1. Legislative findings and  declaration.  The
legislature  hereby  finds that during periods of abnormal disruption of
the market caused by strikes, power failures, severe shortages or  other
extraordinary  adverse  circumstances,  some parties within the chain of
distribution of consumer goods have taken unfair advantage of  consumers
by  charging  grossly  excessive prices for essential consumer goods and
services.
  In order to prevent any party within the chain of distribution of  any
consumer goods from taking unfair advantage of consumers during abnormal
disruptions  of  the  market,  the  legislature declares that the public
interest requires that such conduct be prohibited and  made  subject  to
civil AND CRIMINAL penalties.
  2. During any abnormal disruption of the market for consumer goods and
services  vital  and  necessary  for  the  health, safety and welfare of
consumers, no party within the chain of distribution  of  such  consumer
goods  or services or both shall sell or offer to sell any such goods or
services or both for an amount which represents an unconscionably exces-
sive  price.  For  purposes  of  this  section,  the  phrase   "abnormal
disruption  of  the market" shall mean any change in the market, whether
actual or imminently  threatened,  resulting  from  stress  of  weather,

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD11107-01-9
              

S. 4094                             2

convulsion  of  nature,  failure  or shortage of electric power or other
source of energy, strike, civil disorder, war, military action, national
or local emergency, or other cause of  an  abnormal  disruption  of  the
market  [which results in the declaration of a state of emergency by the
governor]. For the purposes of this section, the term consumer goods and
services shall  mean  those  used,  bought  or  rendered  primarily  for
personal,  family or household purposes. This prohibition shall apply to
all parties within the chain of distribution, including any  manufactur-
er, supplier, wholesaler, distributor or retail seller of consumer goods
or  services  or both sold by one party to another when the product sold
was located in the state prior to the sale. Consumer goods and  services
shall  also  include  any  repairs made by any party within the chain of
distribution of consumer goods on an emergency basis as a result of such
abnormal disruption of the market.
  3. Whether a price is unconscionably excessive is a  question  of  law
for the court.
  (a)  The  court's  determination  that a violation of this section has
occurred shall be based on any of the following factors:  (i)  that  the
amount  of  the  excess in price is unconscionably extreme; or (ii) that
there was an exercise of unfair leverage  or  unconscionable  means;  or
(iii)  a  combination  of  both factors in subparagraphs (i) and (ii) of
this paragraph.
  (b) In any proceeding commenced pursuant to subdivision [four] FIVE of
this section, prima facie proof that a violation  of  this  section  has
occurred shall include evidence that
  (i)  the amount charged represents a gross disparity between the price
of the goods or services which were the subject of the  transaction  and
their  value  measured  by  the  price  at  which such consumer goods or
services were sold or offered for sale by the  defendant  in  the  usual
course  of  business  immediately  prior  to  the  onset of the abnormal
disruption of the market or
  (ii) the amount charged grossly exceeded the price at which  the  same
or  similar goods or services were readily obtainable by other consumers
in the trade area. A  defendant  may  rebut  a  prima  facie  case  with
evidence  that  additional costs not within the control of the defendant
were imposed on the defendant for the goods or services.
  4.  ANY PERSON WHO VIOLATES THE PROVISIONS OF THIS  SECTION  SHALL  BE
GUILTY OF A VIOLATION.
  5.  Where  a  violation of this section is alleged to have occurred, A
DISTRICT ATTORNEY MAY FILE AN  ACCUSATORY  INSTRUMENT  WITH  A  CRIMINAL
COURT  WITHIN THE JUDICIAL DISTRICT IN WHICH SUCH VIOLATIONS ARE ALLEGED
TO HAVE OCCURRED, AND the attorney general may apply in the name of  the
People of the State of New York to the supreme court of the State of New
York  within  the judicial district in which such violations are alleged
to have occurred, on notice of five days,  for  an  order  enjoining  or
restraining  commission  or continuance of the alleged unlawful acts. In
any such proceeding, the court shall impose a civil penalty in an amount
not to exceed twenty-five thousand dollars and, where appropriate, order
restitution to aggrieved consumers.
  S 2. This act shall take effect immediately.