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Price Gouging Laws and Overlapping States of Emergency

Most price gouging laws have been in effect throughout the country since early March due to the pandemic. As hurricane season gets underway, businesses should be aware that new states of emergency may be declared, overlapping with current pandemic states of emergency. New states of emergency may trigger price gouging laws that cover a variety of goods not currently covered under those related to COVID-19.

While some price gouging laws cover a wide range of goods and services, many laws are narrower, focusing on the type of emergency. For example, Florida’s price gouging law states that it is unlawful “to rent or sell or offer to rent or sell at an unconscionable price within the area for which the state of emergency is declared, any essential commodity including, but not limited to, supplies, services, provisions, or equipment that is necessary for consumption or use as a direct result of the emergency.” Fla. Stat. § 501.160 (emphasis added). Florida has been under a state of emergency related to the pandemic since March 9, 2020, but on July 31, 2020, Governor Ron DeSantis declared another state of emergency for multiple east coast counties due to Hurricane Isaias.

The effect of an overlapping state of emergency means that new goods and services may be covered under Florida’s price gouging laws, separate and apart from commodities related to the health crisis. According to Florida Attorney General Ashley Moody, “[e]ssential commodities for each event may differ.” While some essential commodities are already covered under the pandemic related state of emergency, additional goods and services related to preparing and recovering from the storm will be covered under the July 31, 2020, emergency declaration.

Similarly, North Carolina declared a state of emergency on July 31, 2020, due to Hurricane Isaias. According to North Carolina Attorney General Josh Stein “North Carolina’s price gouging law is already in effect because of the coronavirus, but it applies to hurricanes as well.” North Carolina’s price gouging law prohibits any person from selling or renting goods or services which are “consumed or used as a direct result of an emergency or which are consumed or used to preserve, protect, or sustain life, health, safety, or economic well-being of persons or their property with the knowledge and intent to charge a price that is unreasonably excessive under the circumstances.” N.C. Gen. Stat. §75-38 (emphasis added).  Like Florida, North Carolina’s law may cover additional goods or services specifically related to preparing and recovering from the hurricane.

There have also been a variety of states of emergency in effect throughout the pandemic completely unrelated to COVID-19. For example, some West Virginia counties were under a state of emergency in mid-June due to flooding. West Virginia’s price gouging law, among other items, covers “goods for emergency cleanup” and “emergency supplies,” which likely differ from the goods covered under the pandemic state of emergency. One Tennessee county was similarly under a state of emergency for flooding in July. Tennessee’s price gouging law, among other items, covers “emergency supplies,” which again, likely differ in the event of a flood.

Price gouging related to the public health crisis has been the focus of Attorneys General enforcement actions and private litigation in recent months, but a variety of natural disasters can lead to increased scrutiny around price gouging as well. Businesses should keep these short term emergencies in mind when pricing products that may be covered by a state price gouging law. Further, businesses should also be aware that with a new state of emergency unrelated to the pandemic potentially comes a new baseline price for certain products. See our blog post on How to Calculate a Baseline Reference Price for Price Gouging Compliance for more details.

© 2020 Proskauer Rose LLP. National Law Review, Volume X, Number 219

TRENDING LEGAL ANALYSIS


About this Author

Christopher Ondeck, Antitrust Litigator, Proskauer Rose, law firm
Partner

Chris Ondeck is a partner in the Litigation Department and vice-chair of the Antitrust Group. He focuses his practice on representing clients in civil and criminal antitrust litigation, defending mergers and acquisitions before the U.S. antitrust agencies, defending companies involved in government investigations, and providing antitrust counseling.

Chris has handled antitrust matters for clients in a number of industries, including advertising, aerospace, alcoholic beverages, appliances, building materials, defense, medical devices, metals,...

202-416-5865
John Ingrassia, Antitrust Attorney, Telecommunications, Proskauer Law firm
Special Counsel

John Ingrassia is a special counsel and advises clients on a wide range of antitrust matters in various industries, including chemicals, pharmaceutical, medical devices, telecommunications, financial services, health care, and others. His practice includes a significant focus on the analysis of Hart-Scott-Rodino pre-merger notification requirements, the coordination and submission of Hart-Scott-Rodino filings, and the analysis and resolution of antitrust issues related to mergers, acquisitions, and joint ventures. John has extensive experience with the legal, practical, and technical requirements of the Hart-Scott-Rodino Act, and is regularly invited to participate in Federal Trade Commission and bar association discussions regarding Hart-Scott-Rodino practice issues. 

John also advises clients regarding international antitrust issues arising in proposed acquisitions and joint ventures, including reportability under the EC Merger Regulation and numerous other foreign competition filing regimes, and liaising with local counsel to coordinate foreign pre-merger notifications and ensure the efficacy and consistency of the competition law theories advanced.

202.416.6869
Kelly Landers Hawthorne, Proskauer Law Firm, New York, Litigation Attorney
Associate

Kelly Landers Hawthorne is an attorney in the Litigation Department.

Education

  • Columbia Law School, J.D., 2017

  • George Mason University, M.Ed., 2013

  • University of Richmond, B.A., 2011

212-969-3537
Law Clerk

Nathaniel Miller is a Law Clerk in the litigation department. He works for the firm's New York offices. 

Education

  • New York University School of Law, J.D., 2017
  • Harvard University, B.A., 2014
212-969-354
Nicollette R. Moser Litigation & Antitrust Proskauer Rose Washington, DC
Associate

Nicollette Moser is an associate in the Litigation Department and a member of the Antitrust Group.

Related Practices

  • Litigation
  • Antitrust

Admissions & Qualifications

  • District of Columbia
202.416.5862