2012 -- S 2606 SUBSTITUTE A

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LC01889/SUB A

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2012

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A N A C T

RELATING TO COMMERCIAL LAW - GENERAL REGULATORY PROVISIONS -

UNFAIR SALES PRACTICES

     Introduced By: Senators Algiere, Bates, and Tassoni

     Date Introduced: March 01, 2012

     Referred To: Senate Corporations

It is enacted by the General Assembly as follows:

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     SECTION 1. Chapter 6-13 of the General Laws entitled "Unfair Sales Practices" is

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hereby amended by adding thereto the following section:

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     6-13-21. Price gouging - essential commodities. -- (a) Upon a declaration of a state

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of emergency by the governor, or federal disaster declaration by the president, it shall be

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an unfair sales practice for individuals or retailers, to participate in price gouging, by making

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sales, or offering to sell, within the area for which the market emergency is declared, essential

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commodities to consumers for an amount that represents an unconscionably high price.

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     (b) As used in this section:

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     (1) “Unconscionably high price” means the amount charged represents a gross disparity

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between the average prices at which the same or similar commodity was readily available and

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sold or offered for sale within the local trade area in the usual course of business during the thirty

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(30) days immediately before the declaration of the market emergency, and the additional charges

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are not substantially attributable to increased cost to retailers, imposed by their suppliers,

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including replacement costs imposed by the vendors’ source. Additionally, the average price

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calculation during said thirty (30) day period shall not include discounted prices set and offered

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as a result of bona fide manufacturer’s or supplier’s limited discounts or rebates.

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     (i) Under a federal disaster declaration by the president or upon a declaration of a state of

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emergency by the governor, it is unlawful and a violation of chapter 6-13 of title 6, and

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subdivision 30-15-9(e)(12) of title 30, to sell, or offer to sell, at an unconscionably high price,

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any essential commodity.

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     (2) "Price gouging" means charging a consumer an unconscionably high price for

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essential commodities during a declared market emergency.

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     (3) “Essential commodities” means any goods, services, materials, merchandise, supplies,

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equipment, resources, or other article of commerce, and includes, without limitation, home

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heating fuels, motor fuels, food, water, ice, chemicals, petroleum products and lumber necessary

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for consumption or use as a direct result of the market emergency.

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     (4) “Market emergency” means any declaration of a state of emergency by the

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governor or federal disaster declaration by the president. The market emergency shall exist until

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the declaration expires or is terminated.

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      (5) "Individual" means a person, corporation, partnership, limited liability company,

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association, joint venture, agency, or any other legal or commercial entity.

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     (6) "Consumer" means an individual who enters into a transaction primarily for personal,

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family, or household purposes.

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     (7) "Retailer" means and includes every individual licensed to engage in the business of

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making sales at retail within this state.

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     (c) This section shall not prohibit the fluctuation in price of essential commodities which

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occur during the normal course of business.

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     (d) Any violation of this section shall constitute an unfair sales practice under the terms

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of chapter 13.1 of title 6.

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     (e) In addition to the penalties provided in chapter 13.1 of title 6, and subdivision 30-

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15-9(e)(12), the court may impose orders and civil penalties, including, but not limited to:

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     (1) A fine of not more than one thousand dollars ($1,000) per violation with an aggregate

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total not to exceed twenty-five thousand dollars ($25,000) for any twenty-four (24) hour period;

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     (2) An order to pay costs of litigation relating to the offense;

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     (3) An order for disgorgement of profits earned; and

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     (4) Any other relief determined by the court to be appropriate.

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     (f) All monetary penalties so collected shall accrue to the enforcing authority to further

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consumer enforcement efforts.

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SECTION 2. This act shall take effect upon passage.

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LC01889/SUB A

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO COMMERCIAL LAW - GENERAL REGULATORY PROVISIONS -

UNFAIR SALES PRACTICES

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     This act would prohibit individuals and retailers of essential commodities from engaging

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in price gouging during a market emergency or upon a declaration of a state of emergency by the

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governor or federal disaster declaration.

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     This act would take effect upon passage.

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LC01889/SUB A

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