Relates to price gouging; defines unconscionably excessive price for the purposes of prohibiting price gouging during abnormal disruption of the market.
STATE OF NEW YORK
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818--B
2013-2014 Regular Sessions
IN ASSEMBLY(Prefiled)
January 9, 2013
___________
Introduced by M. of A. BRAUNSTEIN, BRINDISI, McDONOUGH, SKOUFIS, WEISEN-
BERG, THIELE, GUNTHER, MILLER, STIRPE, HEVESI -- Multi-Sponsored by --
M. of A. BRENNAN, GABRYSZAK, GOTTFRIED, LUPINACCI, NOLAN, RABBITT --
read once and referred to the Committee on Consumer Affairs and
Protection -- committee discharged, bill amended, ordered reprinted as
amended and recommitted to said committee -- again reported from said
committee with amendments, ordered reprinted as amended and recommit-
ted 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:
1 Section 1. Section 396-r of the general business law, as amended by
2 chapter 510 of the laws of 1998, subdivision 4 as amended by chapter 224
3 of the laws of 2008, is amended to read as follows:
4 § 396-r. Price gouging. 1. Legislative findings and declaration. The
5 legislature hereby finds that during periods of abnormal disruption of
6 the market caused by strikes, power failures, severe shortages or other
7 extraordinary adverse circumstances, some parties within the chain of
8 distribution of consumer goods have taken unfair advantage of consumers
9 by charging grossly excessive prices for essential consumer goods and
10 services.
11 In order to prevent any party within the chain of distribution of any
12 consumer goods from taking unfair advantage of consumers during abnormal
13 disruptions of the market, the legislature declares that the public
14 interest requires that such conduct be prohibited and made subject to
15 civil penalties.
16 2. During any abnormal disruption of the market for consumer goods and
17 services vital and necessary for the health, safety and welfare of
18 consumers, no party within the chain of distribution of such consumer
19 goods or services or both shall sell or offer to sell any such goods or
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD03360-05-3
A. 818--B 2
1 services or both for an amount which represents an unconscionably exces-
2 sive price. For purposes of this section, the phrase "abnormal
3 disruption of the market" shall mean any change in the market, whether
4 actual or imminently threatened, resulting from stress of weather,
5 convulsion of nature, failure or shortage of electric power or other
6 source of energy, strike, civil disorder, war, military action, national
7 or local emergency, or other cause of an abnormal disruption of the
8 market which results in the declaration of a state of emergency by the
9 governor. For the purposes of this section, the term consumer goods and
10 services shall mean those used, bought or rendered primarily for
11 personal, family or household purposes. This prohibition shall apply to
12 all parties within the chain of distribution, including any manufactur-
13 er, supplier, wholesaler, distributor or retail seller of consumer goods
14 or services or both sold by one party to another when the product sold
15 was located in the state prior to the sale. Consumer goods and services
16 shall also include any repairs made by any party within the chain of
17 distribution of consumer goods on an emergency basis as a result of such
18 abnormal disruption of the market.
19 3. [Whether a price is unconscionably excessive is a question of law
20 for the court.
21 (a) The court's determination that a violation of this section has
22 occurred shall be based on any of the following factors: (i) that the
23 amount of the excess in price is unconscionably extreme; or (ii) that
24 there was an exercise of unfair leverage or unconscionable means; or
25 (iii) a combination of both factors in subparagraphs (i) and (ii) of
26 this paragraph.
27 (b) In any proceeding commenced pursuant to subdivision four of this
28 section, prima facie proof that a violation of this section has occurred
29 shall include evidence that
30 (i) the amount charged represents a gross disparity between the price
31 of the goods or services which were the subject of the transaction and
32 their value measured by the price at which such consumer goods or
33 services were sold or offered for sale by the defendant in the usual
34 course of business immediately prior to the onset of the abnormal
35 disruption of the market or
36 (ii) the amount charged grossly exceeded the price at which the same
37 or similar goods or services were readily obtainable by other consumers
38 in the trade area.] For purposes of this section, "unconscionable exces-
39 sive price" means a price that is excessive as compared to the price at
40 which the consumer good or service was sold or offered for sale by the
41 seller in the usual course of business immediately prior to the state of
42 emergency. A price shall be deemed excessive if:
43 (a) The price exceeds by more than ten percent the price at which the
44 good or service was sold or offered for sale by the seller in the usual
45 course of business immediately prior to the state of emergency, unless
46 the price charged by the seller is attributable to additional costs
47 imposed by the seller's supplier or other costs of providing the good or
48 service during the state of emergency;
49 (b) In those situations where the increase in price is attributable to
50 additional costs imposed by the seller's supplier or additional costs of
51 providing the good or service during the state of emergency, the price
52 represents an increase of more than ten percent in the amount of markup
53 from cost, compared to the markup customarily applied by the seller in
54 the usual course of business immediately prior to the state of emergen-
55 cy.
A. 818--B 3
1 (c) A defendant may rebut a prima facie case with evidence that addi-
2 tional costs not within the control of the defendant were imposed on the
3 defendant for the goods or services.
4 4. Where a violation of this section is alleged to have occurred, the
5 attorney general may apply in the name of the People of the State of New
6 York to the supreme court of the State of New York within the judicial
7 district in which such violations are alleged to have occurred, on
8 notice of five days, for an order enjoining or restraining commission or
9 continuance of the alleged unlawful acts. In any such proceeding, the
10 court shall impose a civil penalty in an amount not to exceed twenty-
11 five thousand dollars and, where appropriate, order restitution to
12 aggrieved consumers.
13 § 2. This act shall take effect immediately.
