NY State Senate Bill 2013-S3656A

Archive: Last Bill Status - In Senate Committee Consumer Protection Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 08, 2014	referred to consumer protection
Jun 13, 2013	print number 3656a
Jun 13, 2013	amend and recommit to consumer protection
Feb 08, 2013	referred to consumer protection

Bill Amendments

Original

A (Active)

2013-S3656 - Details

Current Committee:: Senate Consumer Protection
Law Section:: General Business Law
Laws Affected:: Amd §396-r, Gen Bus L
Versions Introduced in Other Legislative Sessions:: 2015-2016: S2825
2017-2018: S5440
2019-2020: S803
2021-2022: S4565
2023-2024: S3079

2013-S3656 - Summary

Relates to price gouging; defines unconscionably excessive price for the purposes of prohibiting price gouging during abnormal disruption of the market.

2013-S3656 - Sponsor Memo

                                BILL NUMBER:S3656

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

PURPOSE OR GENERAL IDEA OF BILL: To further define "unconscionably
excessive price" in the context of price gouging.

SUMMARY OF SPECIFIC PROVISIONS:

Section 1 provides that during periods of 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 shall offer to sell goods for an
"unconscionably excessive price." Unconscionably excessive prices is
further defined as a price that is excessive as compared to 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 emergen-
cy.

A price will be deemed excessive if the price exceeds, by at least 10%,
the price at which the good or service was sold immediately prior to the
state of emergency, unless the price charged is because of additional
costs imposed by the supplier or other costs of providing the good. In
such situations, the price will be excessive if it represents 10%
increase in the amount of markup from cost, compared to the markup

customarily applied by the seller in the usual course of business imme-
diately prior to the state of emergency.

Section 2 provides the effective date.

JUSTIFICATION: In the wake of Hurricane Sandy, gas stations sought to
capitalize on the gas shortage by gouging the price of gas, charging
customers a much higher price than before the storm. Additionally, some
hotels also allegedly engaged in price gouging, charging upwards of 5300
for a room after the storm. Such nightly rates are not unusual in
Manhattan and other tourist destinations however, for residents of the
outer boroughs, such prices were up to triple the amount they would have
paid for a room prior to the storm.

While the Attorney General's office is currently investigating and
imposing fines on such gas stations and other merchants for price goug-
ing after the hurricane, it is difficult for consumers to determine
whether price gouging is occurring because there is not an objective
definition.

Under current law, whether a price is "unconscionably excessive" is a
court determination. Evidence of price gouging includes a showing that
the amount charged represents a "gross disparity" between the-price of
the goods or services and their value before the abnormal disruption of
the market; or the amount charged "grossly exceeded" the price at which

other goods were readily obtainable by other consumers in the trade
area.

This bill would add more clarity to the law and would allow for a more
objective standard in the investigation of price gouging complaints,
rather than placing this determination in the hands of the courts.
Additionally, this would also allow consumers to know whether they are
victims of price gouging so that they may report such instances to the
Attorney general's office.

PRIOR LEGISLATIVE HISTORY: None.

FISCAL IMPLICATIONS: None.

EFFECTIVE DATE: This act shall take effect immediately.

2013-S3656 - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  3656

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                            February 8, 2013
                               ___________

Introduced  by  Sen.  LANZA  -- read twice and ordered printed, and when
  printed to be committed to the Committee on Consumer 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 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
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

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD03360-01-3

S. 3656                             2

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.
  (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

S. 3656                             3

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.

2013-S3656A (ACTIVE) - Details

Current Committee:: Senate Consumer Protection
Law Section:: General Business Law
Laws Affected:: Amd §396-r, Gen Bus L
Versions Introduced in Other Legislative Sessions:: 2015-2016: S2825
2017-2018: S5440
2019-2020: S803
2021-2022: S4565
2023-2024: S3079

2013-S3656A (ACTIVE) - Summary

Relates to price gouging; defines unconscionably excessive price for the purposes of prohibiting price gouging during abnormal disruption of the market.

2013-S3656A (ACTIVE) - Sponsor Memo

                                BILL NUMBER:S3656A

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

PURPOSE:

To further define "unconscionably excessive price" in the context of
price gouging.

SUMMARY OF PROVISIONS:

Section 1 provides that during periods of 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 shall offer to sell goods for an
"unconscionably excessive price." Unconscionably excessive prices is
further defined as a price that is excessive as compared to 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.

The amendments in Section 1 now make clear that the provisions are to
be triggered by abnormal disruptions that result in a declaration of a
state of emergency by the governor.

A price will be deemed excessive if the price exceeds, by at least
10%,the price at which the good or service was sold immediately prior
to the state of emergency, unless the price charged is because of
additional costs imposed by the supplier or other costs of providing
the good.. In such situations, the price will be excessive if it
represents 10% increase 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 emergency. The amendments
make clear how the 10% price point will be applied allowing for a
seller's acquisition or replacement cost whichever is higher plus the
mark up customarily applied by the seller in the usual course of
business immediately prior to the declaration of emergency by the
governor. The amendments further allow for fluctuations in regional or
national spot or commodities markets..  Other states affected by
Hurricane Katrina have adopted similar language. Finally, the
amendments allow for contract or price formulas agreed to prior to the
declaration of a state of emergency,

Section 2 provides the effective date.

JUSTIFICATION:

In the wake of Hurricane Sandy, gas stations sought to capitalize on
the gas shortage by gouging the price of gas, charging customers a
much higher price than before the storm. Additionally, some hotels
also allegedly engaged in price gouging, charging upwards of $5,300
for a room after the storm. Such nightly rates are not unusual in
Manhattan and other tourist destinations however, for residents of the
outer boroughs such prices were up to triple the amount they would
have paid for a room prior to the storm.  While the Attorney General's
office is currently investigating and imposing fines on such gas


stations and other merchants for price gouging after the hurricane, it
is difficult for consumers to determine whether price gouging is
occurring because there is not an objective definition,

Under current law, whether a price is "unconscionably excessive" is a
court determination,. Evidence of price gouging includes a showing
that the amount charged represents a "gross disparity" between
the-price of the goods or services and their value before the abnormal
disruption of the market; or the amount charged "grossly exceeded" the
price at which other goods were readily obtainable by other consumers
in the trade area.

This bill would add more clarity to the law and would allow for a more
objective standard in the investigation of price gouging complaints,
rather than placing this determination in the hands of the courts.
Additionally, this would also allow consumers to know whether they are
victims of price gouging so that they may report such instances to the
Attorney general's office.

FISCAL IMPLICATIONS: None.

EFFECTIVE DATE: Immediately.

2013-S3656A (ACTIVE) - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 3656--A

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                            February 8, 2013
                               ___________

Introduced  by  Sen.  LANZA  -- read twice and ordered printed, and when
  printed to be committed to the Committee  on  Consumer  Protection  --
  committee  discharged,  bill amended, ordered reprinted as amended and
  recommitted 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
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

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD03360-06-3

S. 3656--A                          2

source of energy, strike, civil disorder, war, military action, national
or local emergency, or other cause of  an  abnormal  disruption  of  the
market  [which],  WHERE SUCH ABNORMAL DISRUPTION results in the declara-
tion  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 distrib-
ution,  including any manufacturer, 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 emer-
gency 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.]
  (A)  A  PRICE IS NOT AN "UNCONSCIONABLY EXCESSIVE PRICE" IF ANY ONE OF
THE FOLLOWING APPLIES:
  (I) IT IS TEN PERCENT OR LESS ABOVE THE SELLER'S PRICE FOR THAT  PROD-
UCT  IMMEDIATELY  PRIOR  TO THE DECLARATION OF THE STATE OF EMERGENCY BY
THE GOVERNOR;
  (II) IT IS TEN PERCENT OR LESS ABOVE CURRENT PRICES FOR  THAT  PRODUCT
IN ANY AREA OUTSIDE THE GEOGRAPHIC SCOPE OF THE DECLARATION OF THE STATE
OF EMERGENCY OR AN ADJOINING STATE, TAX-ADJUSTED;
  (III)  IT  IS  TEN PERCENT OR LESS ABOVE THE SUM OF THE SELLER'S:  (A)
ACQUISITION OR REPLACEMENT COST, WHICHEVER IS HIGHER; PLUS (B) THE MARK-
UP CUSTOMARILY APPLIED BY THE SELLER IN THE  USUAL  COURSE  OF  BUSINESS
IMMEDIATELY  PRIOR  TO  THE DECLARATION OF THE STATE OF EMERGENCY BY THE
GOVERNOR;
  (IV) IT IS ATTRIBUTABLE TO  FLUCTUATIONS  IN  APPLICABLE  REGIONAL  OR
NATIONAL SPOT OR COMMODITY MARKETS; OR
  (V)  IT  IS  A  CONTRACT PRICE OR PRICE FORMULA AGREED TO PRIOR TO THE
DECLARATION OF THE STATE OF EMERGENCY BY THE GOVERNOR.
  (B) 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

S. 3656--A                          3

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.

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Senate Bill S3656A

Sponsored By

Archive: Last Bill Status - In Senate Committee Consumer Protection Committee

Bill Amendments

2013-S3656 - Details

2013-S3656 - Summary

2013-S3656 - Sponsor Memo

2013-S3656 - Bill Text download pdf

2013-S3656A (ACTIVE) - Details

2013-S3656A (ACTIVE) - Summary

2013-S3656A (ACTIVE) - Sponsor Memo

2013-S3656A (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S3656A

Share this bill

Sponsored By

Andrew J. Lanza

Archive: Last Bill Status - In Senate Committee Consumer Protection Committee

Bill Amendments

2013-S3656 - Details

2013-S3656 - Summary

2013-S3656 - Sponsor Memo

2013-S3656 - Bill Text download pdf

2013-S3656A (ACTIVE) - Details

2013-S3656A (ACTIVE) - Summary

2013-S3656A (ACTIVE) - Sponsor Memo

2013-S3656A (ACTIVE) - Bill Text download pdf

Comments