S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   1461
 
                        2021-2022 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             January 11, 2021
                                ___________
 
 Introduced by M. of A. DINOWITZ, RICHARDSON, COOK, GALEF, SIMON, ABINAN-
   TI,  J. RIVERA, GOTTFRIED, SEAWRIGHT -- Multi-Sponsored by -- M. of A.
   BRAUNSTEIN, ENGLEBRIGHT, GLICK, THIELE -- 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 90 of the laws of 2020, 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  goods  have  taken  unfair  advantage of the public by
 charging grossly excessive prices for essential goods and services.
   In order to prevent any party within the chain of distribution of  any
 goods  from  taking  unfair  advantage  of  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 AND CRIMINAL penalties.
   2. During any abnormal disruption of the market for goods and services
 vital and necessary for the health, safety and welfare of  consumers  or
 the  general  public,  no party within the chain of distribution of such
 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
 market [which results in the declaration of a state of emergency by  the
 governor]. For the purposes of this section, the term goods and services
 shall  include  (a) consumer goods and services used, bought or rendered
              

 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD05314-01-1

 A. 1461                             2
 
 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 goods or services or both sold by one
 party to another when the product sold was located in the state prior to
 the sale. Goods and services shall also include any repairs made by  any
 party within the chain of distribution of 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 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 goods or  services  were
 sold  or  offered for sale by the defendant in the usual course of busi-
 ness 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 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. 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 per violation or three  times
 the  gross  receipts  for  the  relevant goods or services, whichever is
 greater and, where appropriate, order restitution to aggrieved parties.
   [5.] 6. 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.