BILL NUMBER:  S4597

 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 maximum $5,000 penalty 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.