§ 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 penalties.

2. (a) 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 excessive price.

(b) 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, drug shortage, or other cause of an abnormal disruption of
the market which results in the declaration of a state of emergency by
the governor.

(c) For purposes of this section, the term "drug shortage" shall mean,
with respect to any drug or medical product intended for human use, that
such drug or medical product is publicly reported as being subject to a
shortage by the U.S. Food and Drug Administration.

(d) For the purposes of this section, the term "goods and services"
shall include (i) consumer goods and services used, bought or rendered
primarily for personal, family or household purposes, (ii) essential
medical supplies and services used for the care, cure, mitigation,
treatment or prevention of any illness or disease, and (iii) any other
essential goods and services used to promote the health or welfare of
the public.

(e) 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. For the purposes of this subdivision, the term "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
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 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 parties.

5. The attorney general may promulgate such rules and regulations as
are necessary to effectuate and enforce the provisions of this section.