NY State Senate Bill 2019-S8229

Senate Bill S8229

2019-2020 Legislative Session

Relates to price gouging, fraud, and deceptive acts involving medical supplies related to a public health emergency

download bill text pdf

Archive: Last Bill Status - Stricken

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Aug 11, 2020	recommit, enacting clause stricken
Apr 27, 2020	referred to consumer protection

2019-S8229 (ACTIVE) - Details

See Assembly Version of this Bill:: A10410
Law Section:: General Business Law
Laws Affected:: Add §§396-rrr & 350-f-2, Gen Bus L

2019-S8229 (ACTIVE) - Summary

Relates to price gouging, fraud, and deceptive acts involving medical supplies related to a public health emergency.

2019-S8229 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S8229

SPONSOR: JACOBS
 
TITLE OF BILL:

An act to amend the general business law, in relation to price gouging,
fraud, and deceptive acts involving medical supplies related to a public
health emergency

 
PURPOSE:

To amend General Business Law in relation to price gouging, fraud, and
deceptive acts involving medical supplies related to a public health
emergency.

 
SUMMARY OF PROVISIONS:

Section 1 of the bill amends General Business Law by adding new section
396-rrr to prohibit any manufacturer, supplier, wholesaler, distributor,
or retail seller of consumer goods or services vital to the health,
safety and welfare of New York consumers, from selling or offering to

sell any such goods or services for an unconscionably excessive price
during a public health emergency. The Attorney General may enjoin any
such merchant that has allegedly acted fraudulently during a period of
time in which the Governor made a state declaration of disaster emergen-
cy. The court shall impose a civil penalty up to seventy-five thousand
dollars upon any merchant found to have knowingly defrauded consumers
during the period of a disaster emergency.

Section 2 of the bill adds new section 350-f-2 to General Business Law
to prohibit and penalize fraudulent and deceptive acts related to the
COVID-19 public health emergency.

Section 3 of the bill is the effective date; immediately upon being
signed in to law.

 
JUSTIFICATION:

As our state, country and world grapple with the fallout caused by the
novel coronavirus, or COVID-19 pandemic, each day we witness the life-
altering consequences that a public health emergency can have for indi-
viduals, families and small business owners. Unfortunately, a small
segment of our society has attempted to profit from this public health
crisis by charging excessively high prices for products that are desper-
ately needed, in particular medical and cleaning supplies.  Medical and
cleaning supplies are of tremendous importance to consumers and the
overall safety and well-being of our society, yet have been in high
demand and in short supply in recent weeks and months.

An especially egregious example of price gouging was reported recently,
when the New York Times claimed that two men "took a 1,300-mile road
trip across Tennessee and into Kentucky, filling a U-Haul truck with
thousands of bottles of hand sanitizer and thousands of packs of anti-
bacterial wipes." According to that article, those men posted 300
bottles of hand sanitizer and immediately sold each bottle for $8 to
$70. These prices were several multiples higher than the price that they
had paid for the bottles of hand sanitizer. Shortly after publication of
that article, the Tennessee Attorney General's Office announced an
investigation of those men would be initiated. According to CBS New
York, there have been recent examples of price gouging in Nassau County
where at a pharmacy sold N95 masks for $20 per mask and a gas station
sold 3-packs of Clorox wipes for $30 each, clearly unconscionable high
prices.

PIX 11 News, reported on March 25, 2020 that Holy Name Hospital in Tean-
eck, NJ (located in Bergen County - one of New Jersey's hardest hit
counties from the pandemic) was sold 1,000 N95 "faulty," masks and the
hospital could not verify if the masks they received from a vendor were
certified by the National Institute for Occupational Safety and Health
(NIOSH). The faulty N95 masks were tested prior to distribution and
"found that the batch of masks would not have adequately protected work-
ers," and were promptly returned to the vendor.

Potential fraud related to COVID-19 is not just isolated to Tennessee,
New Jersey or New York State. On April 15, 2020, the Federal Trade
Commission (FTC) said that since the beginning of the year there have
been 18,235 reports of fraud related to COVID-19 that the FTC was made
aware of by consumers. This has resulted in $13.4 million being taken
from the pockets of hardworking Americans.

We cannot allow unscrupulous individuals and businesses to profit from
public health crisis, including the COVID-19 pandemic. This bill ensures
that anyone that knowingly acts to defraud New York's consumers during a
public health emergency will receive a strong civil penalty, up to
$75,000 or an amount three times higher than actual damages, in a
successful public action. Courts may also award the victims of coronavi-
rus related fraudulent and deceptive acts, up to three hundred percent
of actual damages, when it is a determined that a defendant acted will-
fully and knowingly in private civil actions. Unfortunately, strong
financial penalties such as this, are needed to sufficiently deterrent
those would-be price gougers that seek to profit from taking advantage
of New Yorkers during periods of health crisis, including the current
coronavirus pandemic.

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
This act shall take effect immediately.

2019-S8229 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8229
 
                             I N  S E N A T E
 
                              April 27, 2020
                                ___________
 
 Introduced  by  Sen.  JACOBS -- 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,
   fraud,  and  deceptive  acts  involving  medical supplies related to a
   public health emergency
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The general business law is amended by adding a new section
 396-rrr to read as follows:
   §  396-RRR.  PRICE  GOUGING;  MEDICAL  SUPPLIES DURING A PUBLIC HEALTH
 EMERGENCY. 1. FOR THE PURPOSES OF  THIS  SECTION,  THE  FOLLOWING  TERMS
 SHALL HAVE THE FOLLOWING MEANINGS:
   (A) "PUBLIC HEALTH EMERGENCY" SHALL MEAN A PERIOD OF TIME DURING WHICH
 THE GOVERNOR HAS MADE A STATE DECLARATION OF DISASTER EMERGENCY PURSUANT
 TO SECTION TWENTY-EIGHT OF THE EXECUTIVE LAW.
   (B)  "CONSUMER  GOODS  AND SERVICES" SHALL MEAN ANY GOODS AND SERVICES
 VITAL AND NECESSARY FOR THE HEALTH, SAFETY AND WELFARE OF CONSUMERS.
   2. NO MANUFACTURER, SUPPLIER, WHOLESALER, DISTRIBUTOR, OR RETAIL SELL-
 ER OF CONSUMER GOODS AND SERVICES OR ANY OTHER INDIVIDUAL,  CORPORATION,
 PARTNERSHIP,  JOINT VENTURE, OR BUSINESS ENTITY WHO SELLS CONSUMER GOODS
 AND SERVICES SHALL:
   (A) SELL OR OFFER FOR SALE ANY SUCH CONSUMER GOODS OR SERVICES FOR  AN
 AMOUNT  WHICH  REPRESENTS  AN  UNCONSCIONABLY  EXCESSIVE  PRICE DURING A
 PUBLIC HEALTH EMERGENCY; OR
   (B) KNOWINGLY DEFRAUD AN INDIVIDUAL IN RELATION TO THE QUALITY, PRICE,
 QUANTITY, OR ANY OTHER CHARACTERISTIC OF ANY CONSUMER GOODS OR SERVICES.
   3. 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  SEVENTY-
 FIVE  THOUSAND  DOLLARS  AND,  WHERE  APPROPRIATE,  ORDER RESTITUTION TO
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets

                       [ ] is old law to be omitted.
                                                            LBD16061-03-0

 S. 8229                             2
 
 AGGRIEVED CONSUMERS.  IN ANY SUCH PROCEEDING WHERE THE COURT  FINDS  THE
 VIOLATION  OCCURRED WILLFULLY, INTENTIONALLY, OR DELIBERATELY, THE COURT
 SHALL IMPOSE A CIVIL PENALTY NOT TO EXCEED THE GREATER  OF  SEVENTY-FIVE
 THOUSAND DOLLARS OR THREE TIMES THE AMOUNT OF ACTUAL DAMAGES.
   §  2. The general business law is amended by adding a new section 350-
 f-2 to read as follows:
   § 350-F-2. DECEPTIVE ACTS INVOLVING CORONAVIRUS DISEASE  2019  (COVID-
 19). 1. AS USED IN THIS SECTION:
   (A)  "MEDICAL  SUPPLIES" SHALL MEAN GOODS AND PRODUCTS USED, BOUGHT OR
 RENDERED FOR THE CARE, CURE, MITIGATION,  TREATMENT,  OR  PREVENTION  OF
 ILLNESSES OR DISEASES INCLUDING, BUT NOT BE LIMITED TO: BANDAGES, GAUZE,
 OR  DRESSINGS;  HAND  SANITIZER,  ANTIBIOTIC  OINTMENT, RUBBING ALCOHOL,
 HYDROGEN PEROXIDE, SALINE SOLUTION; MEDICAL OR SURGICAL  MASKS;  MEDICAL
 OR SURGICAL GLOVES; TISSUES; OVER-THE-COUNTER MEDICATIONS; AND ANY OTHER
 GOODS OR PRODUCTS IDENTIFIED IN EMERGENCY REGULATIONS PROMULGATED BY THE
 COMMISSIONER OF THE DEPARTMENT OF HEALTH DURING A PUBLIC HEALTH EMERGEN-
 CY.
   (B)  "SUBSTANDARD  MEDICAL SUPPLIES" SHALL MEAN MEDICAL SUPPLIES WHICH
 FAIL TO MEET QUALITY STANDARDS, SPECIFICATIONS, OR BOTH.
   (C) "FALSIFIED MEDICAL SUPPLIES" SHALL MEAN MEDICAL SUPPLIES THAT:
   (I) APPEAR TO BE, WITHOUT AUTHORIZATION, IDENTICAL TO, OR SUBSTANTIAL-
 LY SIMILAR TO, GENUINE MEDICAL SUPPLIES OF THE MANUFACTURER;  OR
   (II) ARE HELD OUT TO BE HELPFUL IN ANY  WAY  AGAINST  THE  CORONAVIRUS
 DISEASE 2019 (COVID-19) WITHOUT HAVING A MEDICAL BASIS FOR SUCH CLAIMS.
   (D)  "PERSON"  SHALL  MEAN ANY PERSON, PARTNERSHIP, FIRM, CORPORATION,
 COMPANY, TRUST, ASSOCIATION, OR OTHER ENTITY OR ANY  AGENT  OR  EMPLOYEE
 THEREOF.
   2. (A) IT SHALL BE UNLAWFUL FOR ANY PERSON TO KNOWINGLY:
   (I)  MAKE,  OFFER  TO  DISTRIBUTE OR DISTRIBUTE, OFFER TO SELL OR SELL
 SUBSTANDARD OR FALSIFIED MEDICAL SUPPLIES;
   (II) OBTAIN PATIENT INFORMATION FOR CORONAVIRUS DISEASE  2019  (COVID-
 19) TESTING AND THEN USE SUCH INFORMATION TO FRAUDULENTLY BILL FOR OTHER
 TESTS AND PROCEDURES;
   (III)  SEEK  DONATIONS FOR NON-EXISTENT CHARITABLE ORGANIZATIONS WHICH
 PURPORT TO BE INVOLVED IN ANY WAY WITH CORONAVIRUS DISEASE 2019  (COVID-
 19);
   (IV)  VIOLATES  SECTION  THREE  HUNDRED NINETY-B OF THIS CHAPTER WHILE
 USING THE CORONAVIRUS DISEASE 2019 (COVID-19) IN ANY ELECTRONIC MESSAGE;
 OR
   (V) CREATES OR OPERATES A WEBSITE OR  APPLICATION  WHICH  PURPORTS  TO
 PROVIDE INFORMATION ON THE CORONAVIRUS DISEASE 2019 (COVID-19) BUT WHICH
 ACTUALLY  IS USED TO STEAL FROM OR EXTORT THE WEBSITE'S OR APPLICATION'S
 USERS.
   (B) ANY VIOLATION OF THIS SECTION SHALL CONSTITUTE A DECEPTIVE ACT  OR
 PRACTICE  WITHIN THE MEANING OF SECTION THREE HUNDRED FORTY-NINE OF THIS
 ARTICLE.
   § 3. This act shall take effect immediately.

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