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

                                   238

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                               (PREFILED)

                             January 9, 2013
                               ___________

Introduced  by Sen. SQUADRON -- 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,
convulsion  of  nature,  failure  or shortage of electric power or other
source of energy, strike, civil disorder, war, military action, national

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

                                                           LBD00240-01-3

S. 238                              2

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.