Assembly Bill A278

                                BILL NUMBER:A278A

TITLE  OF BILL:  An act to amend the general business law, in relation
to price gouging

PURPOSE OR GENERAL IDEA OF BILL:  The purpose of this bill is to grant
citizens who  are  victims  of  illegal  price  gouging  in  times  of
emergency the right to directly sue the responsible party.

SUMMARY  OF  SPECIFIC PROVISIONS:   The bill inserts a new subdivision
into the existing price gouging statute (General Business Law  Section
396-r)  granting a private right of action to citizens who fall victim
to price gouging in times of emergency. The bill would provide for the
possibility of injunctive relief, a minimum $1,000 damage claim and  a
discretionary additional award up to $5,000 for willful violations.

JUSTIFICATION:     Presently,  only  the  State  Attorney  General  is
empowered to bring legal action against violators of the price gouging
statute. This bill would leave the Attorney General's powers  in  this
regard  intact,  but  would  also  permit  individual victims of price
gouging to sue the price gougers directly.

The events that occurred during the Great Ice  Storm  of  1998,  which
affected  five northern counties in New York, demonstrate the need for
this legislation. These counties were in a state of  emergency,  which
placed   the   price   gouging  statute  in  effect  in  those  areas.
              

Nonetheless, reports from  these  northern  counties  indicated  that,
prices on everything from electrical generators to hotel space to milk
and  batteries  increased dramatically in an attempt to take advantage
of those suffering from the disaster. Indeed, hundreds  of  complaints
of  price gouging were filed. By some accounts, prices were set at six
times above normal. For example, a $40 piece of cable was  being  sold
for  $240, C batteries were being offered at $11 a piece and one store
was charging $995 for generators that are regularly priced at $690.

This example, along with documented instances of  price  gouging  that
have  occurred  since  1998, including gouging by certain hotels after
the events of September 11, 2001, gouging by snowplow operators  after
a  major  snowstorm  in  Buffalo  in  December  2001, and gouging that
occurred after Hurricane Katrina in 2005, demonstrate that the  threat
of  enforcement  by the Attorney General is not serving as an adequate
deterrent. Other states have recognized that a private right of action
is necessary to effectively deter would-be  price  gougers.  At  least
seven  other  states allow private plaintiffs to bring actions against
those who engage in such activity.

Clearly, the current  enforcement  provisions  of  the  price  gouging
statute  are  insufficient. Private citizens must be empowered to seek
relief on their own from  those  who  seek  to  profit  unjustly  from
others' misfortunes.

PRIOR  LEGISLATIVE  HISTORY:    2007-2008:  A.223  -  Passed  Assembly
2005-2006: A.662 - Passed Assembly 2003-2004: A.5155 - Passed Assembly

FISCAL IMPLICATIONS: None.

EFFECTIVE DATE:  Immediately.