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Price-Gouging: The Law Against Unreasonable Prices During Natural Disasters

New York City can be a very difficult place to live, especially in the middle of a natural disaster. As was seen in the news during Hurricane Irene and Sandy, New York City was caught in the middle and sustained serious physical damage, as well as loss of life.
Though it is unfortunate, there are people that try to take advantage during times of disaster and crisis, honing in on the desperation of others to make a quick buck. In the past, New York retailers and vendors have increased the prices of necessities during times of crisis and natural disasters, knowing that people in desperate positions will pay more for a tank of gas, bottled water, flashlights and batteries, a generator, or any other product that may be life-saving. After seeing instances of this "price gouging," New York passed legislation, General Business Law Section 396-r, to deter vendors and retailers and to protect consumers from this type of price-gouging by incorporating civil penalties to those who have violated the law. 

The Elements of Price Gouging

The elements of the law section 396-r that are required to be present to show price-gouging are:

  • Any abnormal interference or disruption of the market;
  • Of consumer goods that are crucial for the consumers' health, safety, and welfare during this time;
  • Where the consumer goods are sold at grossly and unconscionably extreme prices.

Each of these elements must be defined and understood before a claim can go through. First and foremost, an "abnormal disruption of the market" pertains to any sort of natural disaster, strike, power outages, civil disorder, war, state of emergency, acute shortages, terrorist attacks, or any other event that has occurred or threatens to occur which may affect the welfare of the public. Consumer goods that are considered as crucial for the health, safety, and welfare of the public refers to any products that are used for personal and household use, and also extends to any repairs of goods that are necessary for personal and household use. These types of consumer goods include bottled water, generators, heaters, tents, food, flashlights, gasoline, etc.

When Are Prices "Unconscionably Excessive"?

The most difficult part to ascertain, and the part that is a question of law, refers to whether the consumer goods are sold at unconscionably excessive prices. For courts to determine this, the price difference between pre-disruption of the market and post-disruption of the market needs to be considered grossly excessive or extreme.

Any evidence that can show that there was some sort of price leveraging, bargaining, or any inducement of duress as to the purchase of the product could be determinative. The retailer or vendor will have the opportunity to show that if there were grossly and unconscionably excessive prices that they were due to circumstances outside of their control.

NYC Personal Injury Attorneys

Price-gouging may have serious effects on consumers. Depending on the natural disaster or crisis occurring, the consumer good may be the difference between life and death. If you or a loved one has been injured as a result of price-gouging during a crisis, please contact one of our experienced attorneys at Keogh Crispi, P.C. Our New York City attorneys will be able to answer any legal questions you may have and determine if you have a claim. Call us today at 212- 818-0600 or send us a message online.

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