Senate Bill S489A

                                 BILL NUMBER:  S489A

 TITLE OF BILL :

An act to amend the general business law, in relation to price gouging

 PURPOSE :

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 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 1993, 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.

 LEGISLATIVE HISTORY :

2016: S4243/A120 - REFERRED TO CONSUMER PROTECTION/ advanced to third
reading cal. 353
2015: S4243/A120 - REFERRED TO CONSUMER PROTECTION/ advanced to third
reading cal. 86
2013-2014: A.311- Ordered to Third Reading Calendar No. 20
2011-2012: A.311- Passed Assembly
2009-2010: A.278-A Passed Assembly
2007-2008: A.223 - Passed Assembly
2005-2006: A.662 Passed Assembly

 FISCAL IMPLICATIONS :

None.

 EFFECTIVE DATE :
Immediately