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Legislative Memo

Ken Pokalsky
Vice President of Government Affairs
T 518.465.7511
www.bcnys.org

BILL:

A.8340 (Dinowitz)

Support

SUBJECT:

Private Right of Action for Unlawful Price Gouging

 

DATE:

January 18, 2012

 

The Business Council opposes this legislation, A.8340 (Dinowitz), which would duplicate existing state enforcement authority in response to alleged “price gouging” with a private right of action.

We believe existing law, Section 396-R of the General Business Law, is adequate and appropriate  It addresses “price gouging” and gives enforcement authority to the state’s Attorney General.  It allows for injunctive relief, civil penalty up to $25,000 (the maximum civil penalty was increased from $10,000 just last session) as well as court-ordered restitution to aggrieved consumers.  

The need for this legislation is questionable at best.  It implies that the Attorney General is either unwilling or unable to bring enforcement actions against entities alleged to have been engaged in price gouging.  We do not believe either to be true.

This bill basically creates a citizen suit provision, allowing individuals to act in addition to, instead of, or contrary to, state enforcement, and allow individuals who believe they have been the victim of price gouging to ask the courts to award them the greater of the their actual harm or $1000 – in effect, restitute well above and beyond any actual harm to the plaintiff.  They could also ask for $5,000 in “private penalties” for alleged “willful or knowing violations,” and the courts can award a prevailing plaintiff their attorney fees.  Nothing in the bill bars multiple individuals from seeking this enhanced restitution through this new private right of action.

Moreover, this bill would allow for private “enforcement” even if the Attorney General has taken action, or has heard a complaint and decided that enforcement was not warranted.  It would allow for “private” penalties against the violator, in addition to significant state-imposed civil penalties and court ordered restitution.

We see no need for multiple levels of enforcement for price gouging, and believe the Attorney General already has sufficient statutory authority to address alleged incidents of price gouging.

For these reasons, The Business Council opposes approval of A.8340 (Dinowitz).