S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8189
 
                             I N  S E N A T E
 
                              April 13, 2020
                                ___________
 
 Introduced  by  Sen. HOYLMAN -- 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:
   § 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 [consum-
 ers] THE PUBLIC 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] THE  PUBLIC
 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 OR THE GENERAL PUBLIC, no party within the chain  of  distrib-
 ution  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  repres-
 ents  an  unconscionably  excessive 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]  INCLUDE  (A)  CONSUMER
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
              

                       [ ] is old law to be omitted.
                                                            LBD16097-03-0

 S. 8189                             2
 
 GOODS  AND  SERVICES  used,  bought  or rendered primarily for personal,
 family  or  household  purposes,  (B)  ESSENTIAL  MEDICAL  SUPPLIES  AND
 SERVICES USED FOR THE CARE, CURE, MITIGATION, TREATMENT OR PREVENTION OF
 ANY  ILLNESS  OR DISEASE, AND (C) ANY OTHER ESSENTIAL GOODS AND SERVICES
 USED TO PROMOTE THE HEALTH OR WELFARE OF THE PUBLIC.   This  prohibition
 shall  apply  to all parties within the chain of distribution, 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]  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  consum-
 ers] in the trade area.
   (C)  A  defendant  may rebut a prima facie case with evidence that (1)
 THE INCREASE IN THE AMOUNT CHARGED PRESERVES THE MARGIN OF  PROFIT  THAT
 THE  DEFENDANT  RECEIVED  FOR  THE  SAME  GOODS OR SERVICES PRIOR TO THE
 ABNORMAL DISRUPTION OF THE MARKET OR (2) additional 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 PER VIOLATION OR THREE TIMES  THE  GROSS  RECEIPTS
 FOR  THE  RELEVANT  GOODS  OR  SERVICES, WHICHEVER IS GREATER and, where
 appropriate, order restitution to aggrieved [consumers] PARTIES.
   5. THE ATTORNEY GENERAL MAY PROMULGATE SUCH RULES AND  REGULATIONS  AS
 ARE NECESSARY TO EFFECTUATE AND ENFORCE THE PROVISIONS OF THIS SECTION.
   § 2. This act shall take effect immediately.