S T A T E   O F   N E W   Y O R K
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                                  2825

                       2015-2016 Regular Sessions

                            I N  S E N A T E

                            January 29, 2015
                               ___________

Introduced  by  Sen.  LANZA  -- 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 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
or local emergency, or other cause of  an  abnormal  disruption  of  the

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD01371-01-5
              

S. 2825                             2

market  [which],  WHERE SUCH ABNORMAL DISRUPTION results in the declara-
tion 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 distrib-
ution,  including any manufacturer, 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 emer-
gency 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 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)  A  PRICE IS NOT AN "UNCONSCIONABLY EXCESSIVE PRICE" IF ANY ONE OF
THE FOLLOWING APPLIES:
  (I) IT IS TEN PERCENT OR LESS ABOVE THE SELLER'S PRICE FOR THAT  PROD-
UCT  IMMEDIATELY  PRIOR  TO THE DECLARATION OF THE STATE OF EMERGENCY BY
THE GOVERNOR;
  (II) IT IS TEN PERCENT OR LESS ABOVE CURRENT PRICES FOR  THAT  PRODUCT
IN ANY AREA OUTSIDE THE GEOGRAPHIC SCOPE OF THE DECLARATION OF THE STATE
OF EMERGENCY OR AN ADJOINING STATE, TAX-ADJUSTED;
  (III)  IT  IS  TEN PERCENT OR LESS ABOVE THE SUM OF THE SELLER'S:  (A)
ACQUISITION OR REPLACEMENT COST, WHICHEVER IS HIGHER; PLUS (B) THE MARK-
UP CUSTOMARILY APPLIED BY THE SELLER IN THE  USUAL  COURSE  OF  BUSINESS
IMMEDIATELY  PRIOR  TO  THE DECLARATION OF THE STATE OF EMERGENCY BY THE
GOVERNOR;
  (IV) IT IS ATTRIBUTABLE TO  FLUCTUATIONS  IN  APPLICABLE  REGIONAL  OR
NATIONAL SPOT OR COMMODITY MARKETS; OR
  (V)  IT  IS  A  CONTRACT PRICE OR PRICE FORMULA AGREED TO PRIOR TO THE
DECLARATION OF THE STATE OF EMERGENCY BY THE GOVERNOR.
  (B) A defendant may rebut a prima facie case with evidence that  addi-
tional costs not within the control of the defendant were imposed on the
defendant for the goods or services.
  4.  Where a violation of this section is alleged to have occurred, 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

S. 2825                             3

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.