S T A T E O F N E W Y O R K
________________________________________________________________________
10270
I N A S S E M B L Y
April 8, 2020
___________
Introduced by M. of A. ROZIC -- read once and referred to the Committee
on Consumer Affairs and 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:
§ 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 [consum-
ers] THE PUBLIC 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] THE PUBLIC
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 OR THE GENERAL PUBLIC, no party within the chain of distrib-
ution 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 repres-
ents an unconscionably excessive 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 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] INCLUDE (A) CONSUMER
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD16097-03-0
A. 10270 2
GOODS AND SERVICES used, bought or rendered primarily for personal,
family or household purposes, (B) ESSENTIAL MEDICAL SUPPLIES AND
SERVICES USED FOR THE CARE, CURE, MITIGATION, TREATMENT OR PREVENTION OF
ANY ILLNESS OR DISEASE, AND (C) ANY OTHER ESSENTIAL GOODS AND SERVICES
USED TO PROMOTE THE HEALTH OR WELFARE OF THE PUBLIC. This prohibition
shall apply to all parties within the chain of distribution, 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] 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 consum-
ers] in the trade area.
(C) A defendant may rebut a prima facie case with evidence that (1)
THE INCREASE IN THE AMOUNT CHARGED PRESERVES THE MARGIN OF PROFIT THAT
THE DEFENDANT RECEIVED FOR THE SAME GOODS OR SERVICES PRIOR TO THE
ABNORMAL DISRUPTION OF THE MARKET OR (2) additional 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
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 PER VIOLATION OR THREE TIMES THE GROSS RECEIPTS
FOR THE RELEVANT GOODS OR SERVICES, WHICHEVER IS GREATER and, where
appropriate, order restitution to aggrieved [consumers] PARTIES.
5. THE ATTORNEY GENERAL MAY PROMULGATE SUCH RULES AND REGULATIONS AS
ARE NECESSARY TO EFFECTUATE AND ENFORCE THE PROVISIONS OF THIS SECTION.
§ 2. This act shall take effect immediately.