2023 New York Laws › GBS - General Business › Article 26 - Miscellaneous › 396-R - Price Gouging.

§  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  goods  have  taken  unfair  advantage of the public by
charging grossly excessive prices for essential goods and services.
In order to prevent any party within the chain of distribution of  any
goods  from  taking  unfair  advantage  of  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. (a) During any abnormal disruption of  the  market  for  goods  and
services  vital  and  necessary  for  the  health, safety and welfare of
consumers  or  the  general  public,  no  party  within  the  chain   of
distribution  of  such  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 excessive price.
(b)  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,  drug  shortage,  or other cause of an abnormal disruption of
the market which results in the declaration of a state of  emergency  by
the governor.
(c) For purposes of this section, the term "drug shortage" shall mean,
with respect to any drug or medical product intended for human use, that
such  drug or medical product is publicly reported as being subject to a
shortage by the U.S. Food and Drug Administration.
(d) For the purposes of this section, the term  "goods  and  services"
shall  include  (i) consumer goods and services used, bought or rendered
primarily for personal, family or  household  purposes,  (ii)  essential
medical  supplies  and  services  used  for  the care, cure, mitigation,
treatment or prevention of any illness or disease, and (iii)  any  other
essential  goods  and  services used to promote the health or welfare of
the public.
(e) This prohibition shall apply to all parties within  the  chain  of
distribution,   including   any   manufacturer,   supplier,  wholesaler,
distributor or retail seller of goods or services or both  sold  by  one
party to another when the product sold was located in the state prior to
the  sale.  For  the  purposes  of this subdivision, the term "goods and
services" shall also include any repairs made by any  party  within  the
chain of distribution of goods on an emergency 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 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 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 parties.
5.  The  attorney general may promulgate such rules and regulations as
are necessary to effectuate and enforce the provisions of this section.