S T A T E O F N E W Y O R K
________________________________________________________________________
818--B
2013-2014 Regular Sessions
I N A S S E M B L Y
(PREFILED)
January 9, 2013
___________
Introduced by M. of A. BRAUNSTEIN, BRINDISI, McDONOUGH, SKOUFIS, WEISEN-
BERG, THIELE, GUNTHER, MILLER, STIRPE, HEVESI -- Multi-Sponsored by --
M. of A. BRENNAN, GABRYSZAK, GOTTFRIED, LUPINACCI, NOLAN, RABBITT --
read once and referred to the Committee on Consumer Affairs and
Protection -- committee discharged, bill amended, ordered reprinted as
amended and recommitted to said committee -- again reported from said
committee with amendments, ordered reprinted as amended and recommit-
ted to said committee
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 510 of the laws of 1998, subdivision 4 as amended by chapter 224
of the laws of 2008, is amended to read as follows:
S 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 consumer goods have taken unfair advantage of consumers
by charging grossly excessive prices for essential consumer goods and
services.
In order to prevent any party within the chain of distribution of any
consumer goods from taking unfair advantage of consumers 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. During any abnormal disruption of the market for consumer goods and
services vital and necessary for the health, safety and welfare of
consumers, no party within the chain of distribution of such consumer
goods or services or both shall sell or offer to sell any such goods or
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD03360-05-3
A. 818--B 2
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 consumer goods and
services shall mean those used, bought or rendered primarily for
personal, family or household purposes. This prohibition shall apply to
all parties within the chain of distribution, including any manufactur-
er, supplier, wholesaler, distributor or retail seller of consumer goods
or services or both sold by one party to another when the product sold
was located in the state prior to the sale. Consumer goods and services
shall also include any repairs made by any party within the chain of
distribution of consumer 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 consumer 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 by other consumers
in the trade area.] FOR PURPOSES OF THIS SECTION, "UNCONSCIONABLE EXCES-
SIVE PRICE" MEANS A PRICE THAT IS EXCESSIVE AS COMPARED TO THE PRICE AT
WHICH THE CONSUMER GOOD OR SERVICE WAS SOLD OR OFFERED FOR SALE BY THE
SELLER IN THE USUAL COURSE OF BUSINESS IMMEDIATELY PRIOR TO THE STATE OF
EMERGENCY. A PRICE SHALL BE DEEMED EXCESSIVE IF:
(A) THE PRICE EXCEEDS BY MORE THAN TEN PERCENT THE PRICE AT WHICH THE
GOOD OR SERVICE WAS SOLD OR OFFERED FOR SALE BY THE SELLER IN THE USUAL
COURSE OF BUSINESS IMMEDIATELY PRIOR TO THE STATE OF EMERGENCY, UNLESS
THE PRICE CHARGED BY THE SELLER IS ATTRIBUTABLE TO ADDITIONAL COSTS
IMPOSED BY THE SELLER'S SUPPLIER OR OTHER COSTS OF PROVIDING THE GOOD OR
SERVICE DURING THE STATE OF EMERGENCY;
(B) IN THOSE SITUATIONS WHERE THE INCREASE IN PRICE IS ATTRIBUTABLE TO
ADDITIONAL COSTS IMPOSED BY THE SELLER'S SUPPLIER OR ADDITIONAL COSTS OF
PROVIDING THE GOOD OR SERVICE DURING THE STATE OF EMERGENCY, THE PRICE
REPRESENTS AN INCREASE OF MORE THAN TEN PERCENT IN THE AMOUNT OF MARKUP
FROM COST, COMPARED TO THE MARKUP CUSTOMARILY APPLIED BY THE SELLER IN
THE USUAL COURSE OF BUSINESS IMMEDIATELY PRIOR TO THE STATE OF EMERGEN-
CY.
A. 818--B 3
(C) A defendant may rebut a prima facie case with evidence that addi-
tional 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 and, where appropriate, order restitution to
aggrieved consumers.
S 2. This act shall take effect immediately.