On June 6, New York Governor Andrew Cuomo signed into law legislation (S.8189) that strengthens the state’s price gouging statute, in response to COVID-19. The legislation expands the current price gouging statute by including protections for personal protection equipment. The legislation amends the statute’s current definition of consumer goods to include any products or services that are vital or necessary to the health, safety, and welfare of consumers or the general public. The new law also extends the protections beyond only consumers or the general public to small businesses, hospitals, health care providers, and the state of New York.
According to the bill’s authors, the pandemic has resulted in “countless instances of egregious price gouging, particularly of medical supplies such as hand sanitizer, face masks, bandages, medical-grade apparel, and other crucial supplies that are desperately needed by our hospitals and other health care facilities.”
Based on these examples, the legislators argue the new law will act as a “strong deterrent to individuals seeking to use a pandemic or other emergency to enrich themselves at the expense of the general public and the health care workers who are fighting to keep [the public safe] at great personal danger to themselves.”
The legislation makes the following changes to the existing price gouging statute, Section 396-r of the New York General Business Law:
Amends the existing law by removing the word “consumer” before “goods and services” and expands the definition to include the following:
As noted in our previous post, state attorneys general have actively used their powers to pursue pandemic-related price gouging in their states. This new law provides the New York Attorney General more power by increasing the civil penalties and specifically covering essential medical and other personal protection equipment used during pandemics. Attorney General Letitia James made it clear during the pandemic she will not tolerate price gouging and has made good on that promise. Most recently, Attorney General James filed a lawsuit against a wholesale grocery distributor for alleged price gouging of Lysol disinfectant products to neighborhood grocery and discount stores.
Businesses need to remain vigilant during the pandemic to closely monitor and document their prices of all products, especially personal protection equipment.