BILL NUMBER: S7087

SPONSOR: KAVANAGH
 
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 stat-
ute (General Business Law Section 396-r) granting a private right of
action to citizens who fall victim to price gouging in times of emergen-
cy. 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 every-
thing from electrical generators to hotel space to milk and batteries
increased dramatically in an attempt to take advantage of those suffer-
ing 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 enforce-
ment 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' misfor-
tunes.

 
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