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THE ATTORNEY GENERAL’S PETITION ALLEGING RESPONDENT DISINFECTANT-DISTRIBUTOR ENGAGED IN PRICE GOUGING AT THE OUTSET OF THE COVID-19 PANDEMIC SHOULD NOT HAVE BEEN DISMISSED; THE CONTROLLING STATUTE, GENERAL BUSINESS LAW 396-R, IS NOT VOID FOR VAGUENESS (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Higgitt, reversing Supreme Court, determined the attorney general’s (AG’s) petition alleging that the respondent distributor (Quality King Distributors, Inc) engaged in price gouging should not have been dismissed. The petition alleged Quality King raised the price of Lysol, a disinfectant, at the outset of the COVID-19 pandemic in violation of General Business Law 396-r. The First Department rejected the argument the relevant statutory provisions were void for vagueness:

In the special proceeding underlying this appeal, petitioner Attorney General of the State of New York accused respondent Quality King Distributors, Inc. of engaging in price gouging in contravention of General Business Law § 396-r based on its sale of certain Lysol products in the first four months of 2020. … [W]e reverse Supreme Court’s order denying the AG’s petition and, in effect, dismissing the proceeding, and remand the matter for further proceedings. * * *

Employing the February 26, 2020 onset date, our review of the purchase and sale data discloses several instances in which the amount charged to a particular customer in a particular transaction represents, prima facie, a gross disparity between the price of the Lysol product and the price at which it was sold by Quality King in the usual course of business immediately prior to the onset of the abnormal disruption of the market. …

Thus, the AG’s evidence demonstrated, prima facie, that Quality King sold the Lysol product at unconscionably excessive prices on at least several occasions. Matter of People of the State of N.Y. v Quality King Distribs., Inc., 2022 NY Slip Op 05010, First Dept 8-23-22

Practice Point: The petition sufficiently alleged the distributor of Lysol, a disinfectant, engaged in price-gouging in violation of General Business Law 396-r at the outset of the COVD-19 pandemic.

 

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