Price Gouging in an Emergency
Summary
Under normal circumstances, in a primarily capitalistic society, the laws of supply and demand establish reasonable prices for goods and services. Laws prohibiting price gouging in an emergency are designed to protect consumers against such exploitation and the potentially dangerous conditions that may result. Various laws recognize that in times of emergency consumers have increased and immediate needs for essential items such as food, water, medical supplies and fuel. Upon the proclamation of a state of emergency…it is unlawful for a person, contractor, business, or other entity to sell or offer to sell any consumer food items or goods, goods or services used for emergency cleanup, emergency supplies, medical supplies, home heating oil, building materials, housing, transportation, freight, and storage services, or gasoline or other motor fuels for a price of more than 10 percent greater than the price charged by that person for those goods or services immediately prior to the proclamation or declaration of emergency. However, a greater price increase is not unlawful if that person can prove that the increase in price was directly attributable to additional costs imposed on it by the supplier of the goods, or directly attributable to additional costs for labor or materials used to provide the services, during the state of emergency or local emergency, and the price is no more than 10 percent greater than the total of the cost to the seller plus the markup customarily applied by the seller for that good or service in the usual course of business immediately prior to the onset of the state of emergency or local emergency.” This California law similarly prohibits (with similar caveats) the following: A violation is a misdemeanor punishable by imprisonment in a county jail for a period not exceeding one year, or by a fine of not more than ten thousand dollars ($10,000), or by both that fine and imprisonment.