S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                    237
 
                        2019-2020 Regular Sessions
 
                           I N  A S S E M B L Y
 
                                (PREFILED)
 
                              January 9, 2019
                                ___________
 
 Introduced  by M. of A. BRAUNSTEIN, THIELE, HEVESI, GUNTHER, M. G. MILL-
   ER, STIRPE -- read once and referred  to  the  Committee  on  Consumer
   Affairs and 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:
   §  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.
                                                            LBD02659-01-9

 A. 237                              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

 A. 237                              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.
   § 2. This act shall take effect immediately.