43 N.Y.2d 851 (1978)

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A contractual reservation of the power to increase fares is not inherently unconscionable or illegal, particularly when the increase is tied to an objective and verifiable factor such as a significant rise in fuel costs.

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Summary

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The New York Attorney General brought an action against Italian Line, alleging deceptive practices under Executive Law § 63(12) due to a fuel surcharge added to passenger tickets after the 1973-74 oil embargo. The Court of Appeals affirmed the lower court’s decision, finding that Italian Line had not engaged in any prohibited practice on a repeated or persistent basis. The court reasoned that reserving the right to increase fares was not inherently suspect, especially since the surcharge was directly linked to the extraordinary increase in oil prices. The delay between the surcharge and the legal action was noted regarding the lack of repeated instances, not as a requirement for immediate action by the Attorney General.

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Facts

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Italian Line, a passenger shipping company, included a clause in its ticket contracts reserving the right to increase fares. Following the 1973-1974 international oil embargo, there was an extraordinary rise in oil prices. Italian Line imposed a