Relates to price gouging

Summary of provisions

1. Establishes the crime of price gouging as a violation.

2. Authorizes district attorneys to pursue violators.

3. Clarifies that no state of emergency need be declared by the governor for the enforcement of the price gouging law to be in effect during an abnormal disruption in the market.

Existing law

General Business Law § 396-r prohibits any party within the chain of distribution of any consumer goods from selling or offering to sell such goods or services for an amount that represents an unconscionably excessive price during an abnormal disruption of the market for such goods and services. Defines "abnormal disruption of the market" to include any change, whether actual or imminently threatened, but requires that it be one that results in the declaration of a state of emergency by the Governor.

Justification

Following the 2005 hurricanes, Katrina and Rita, gasoline price increases have gone far beyond anything justified or relating to the market disruptions. During such abnormal disruption of the market caused by extraordinary adverse circumstances like a hurricane, 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 public interest requires that such conduct be prohibited and made subject to civil penalties and criminal sanctions.

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 excessive price.

This bill authorizes the Attorney General or any local district attorney to immediately commence an action on behalf of the People of the State of New York when price gouging is suspected.

Whether a price is unconscionably excessive remains a question of law for the court.

This bill applies to all parties within the chain of distribution, including any manufacturer, supplier, wholesaler, distributor or retail seller of goods (including gasoline) both sold by one party to another when the product sold was located in the state prior to the sale. It also clarifies that no emergency declaration by the Governor is necessary in order for law enforcement to commence an action pursuant to this statute.

In every corner of the state, calls have been received from consumers who believe that the prices they are paying at the pump are being unscrupulously inflated. We must give law enforcement the tools to pursue those who attempt to illegally profit and seek severe penalties from those who are found to have violated the law. This bill adds a strong enforcement tool for the attorney general and local prosecutors to help curb price gouging at the pump.

By bolstering the price gouging law,' the state is ensuring that we will pursue those who attempt to illegally profit and seek severe penalties from those who are found to have violated the law. Any seller in the chain of distribution who prices goods well above the average level for a given area has some explaining to do. We must avoid the kinds of behavior we saw immediately following 9/11 and the 2005 hurricanes, when some service station owners drastically increased the pump price because of unfounded supply fears, and some motorists engaged in panic buying. We must ensure that the proper enforcement mechanisms are in place to deter price gouging during current and future crises. There must be zero tolerance of people breaking the law during an emergency.

Legislative history

2005 Referred to Rules 2006 Referred to Consumer Protection 2010 Referred to Consumer Protection (S.4094)

Fiscal implications

None.

Local fiscal implications

None.

Effective date

This act shall take effect immediately.