§ 396-R — Price gouging

§ 396-r. Price gouging. 1. Legislative findings and declaration. The\nlegislature hereby finds that during periods of abnormal disruption of\nthe market caused by strikes, power failures, severe shortages or other\nextraordinary adverse circumstances, some parties within the chain of\ndistribution of goods have taken unfair advantage of the public by\ncharging grossly excessive prices for essential goods and services.\n In order to prevent any party within the chain of distribution of any\ngoods from taking unfair advantage of the public during abnormal\ndisruptions of the market, the legislature declares that the public\ninterest requires that such conduct be prohibited and made subject to\ncivil penalties.\n 2. (a) During any abnormal disruption of the market for goods and\nservices vital and necessary for the health, safety and welfare of\nconsumers or the general public, no party within the chain of\ndistribution of such goods or services or both shall sell or offer to\nsell any such goods or services or both for an amount which represents\nan unconscionably excessive price.\n (b) For purposes of this section, the phrase "abnormal disruption of\nthe market" shall mean any change in the market, whether actual or\nimminently threatened, resulting from stress of weather, convulsion of\nnature, failure or shortage of electric power or other source of energy,\nstrike, civil disorder, war, military action, national or local\nemergency, drug shortage, or other cause of an abnormal disruption of\nthe market which results in the declaration of a state of emergency by\nthe governor.\n (c) For purposes of this section, the term "drug shortage" shall mean,\nwith respect to any drug or medical product intended for human use, that\nsuch drug or medical product is publicly reported as being subject to a\nshortage by the U.S. Food and Drug Administration.\n (d) For the purposes of this section, the term "goods and services"\nshall include (i) consumer goods and services used, bought or rendered\nprimarily for personal, family or household purposes, (ii) essential\nmedical supplies and services used for the care, cure, mitigation,\ntreatment or prevention of any illness or disease, and (iii) any other\nessential goods and services used to promote the health or welfare of\nthe public.\n (e) This prohibition shall apply to all parties within the chain of\ndistribution, including any manufacturer, supplier, wholesaler,\ndistributor or retail seller of goods or services or both sold by one\nparty to another when the product sold was located in the state prior to\nthe sale. For the purposes of this subdivision, the term "goods and\nservices" shall also include any repairs made by any party within the\nchain of distribution of goods on an emergency basis as a result of such\nabnormal disruption of the market.\n 3. Whether a price is unconscionably excessive is a question of law\nfor the court.\n (a) The court's determination that a violation of this section has\noccurred shall be based on any of the following factors: (i) that the\namount of the excess in price is unconscionably extreme; or (ii) that\nthere was an exercise of unfair leverage or unconscionable means; or\n(iii) a combination of both factors in subparagraphs (i) and (ii) of\nthis paragraph.\n (b) In any proceeding commenced pursuant to subdivision four of this\nsection, prima facie proof that a violation of this section has occurred\nshall include evidence that:\n (i) the amount charged represents a gross disparity between the price\nof the goods or services which were the subject of the transaction and\ntheir value measured by the price at which such goods or services were\nsold or offered for sale by the defendant in the usual course of\nbusiness immediately prior to the onset of the abnormal disruption of\nthe market; or\n (ii) the amount charged grossly exceeded the price at which the same\nor similar goods or services were readily obtainable in the trade area.\n (c) A defendant may rebut a prima facie case with evidence that (1)\nthe increase in the amount charged preserves the margin of profit that\nthe defendant received for the same goods or services prior to the\nabnormal disruption of the market or (2) additional costs not within the\ncontrol of the defendant were imposed on the defendant for the goods or\nservices.\n 4. Where a violation of this section is alleged to have occurred, the\nattorney general may apply in the name of the People of the State of New\nYork to the supreme court of the State of New York within the judicial\ndistrict in which such violations are alleged to have occurred, on\nnotice of five days, for an order enjoining or restraining commission or\ncontinuance of the alleged unlawful acts. In any such proceeding, the\ncourt shall impose a civil penalty in an amount not to exceed\ntwenty-five thousand dollars per violation or three times the gross\nreceipts for the relevant goods or services, whichever is greater and,\nwhere appropriate, order restitution to aggrieved parties.\n 5. The attorney general may promulgate such rules and regulations as\nare necessary to effectuate and enforce the provisions of this section.\n