As COVID-19 endures, state attorneys general have been inundated with complaints of price gouging and illegal profiteering on highly sought-after and necessary products. Their responses have been swift, stern, and will persist as they endeavor to protect consumers from price gouging.
Pennsylvania Attorney General Josh Shapiro announced on July 7, 2020, that his office has shut down price gouging efforts at Paoli Pharmacy after receiving tips alleging that the store was selling N95 masks in Ziploc bags for as much as $25 per mask. AG Shapiro entered into an Assurance of Voluntary Compliance with Paoli, requiring it to pay $5,300 in civil penalties in addition to restitution of $1,946.50 for consumers who purchased the facemasks. Before this action, A.G. Shapiro reported that in response to more than 5,000 complaints from the beginning of the pandemic to June, his office had sent 466 cease-and-desist letters (CIDs), issued subpoenas to 200 targets for further investigation, and found 27 businesses where he believed actual price gouging occurred.
Similarly, California Attorney General Xavier Becerra announced misdemeanor price gouging charges against licensed pharmacist Katrin Golian, doing business as RxAll Pharmacy in Los Angeles. The complaint against Ms. Golian alleges that she knowingly sold KN95 masks at prices exceeding the 50% mark-up permitted under Governor Newsom’s executive order that triggered price gouging prohibitions across California. If convicted, Ms. Golian faces up to six months of county-jail time and/or up to a $1,000 fine.
Showing his state that small operations would not fly under the radar, Ohio Attorney General Dave Yost sued an Athens couple, Marcus and Ellen Fultz, for allegedly hoarding hundreds of bottles of hand sanitizer and selling them online – raising prices by 241.8% to 1,017.3% and raking in over $26,700 from the sale of 600 products. AG Yost is seeking restitution to reimburse affected consumers and civil penalties.
Michigan Attorney General Dana Nessel reinforced her commitment to protecting consumers, highlighting that her office has received more than 4,000 price gouging complaints over inflated prices for grocery items, face masks, and sanitizers. A.G. Nessel has encouraged consumers to file online complaints and to include as much information as possible so that her office could properly investigate and evaluate a response.
Likewise, Florida Attorney General Ashley Moody recently announced that her office has recovered more than $700,000 for consumers complaining of price gouging and related scams. Part of this effort resulted in her office issuing 82 subpoenas to further price gouging investigations and working with online platforms to deactivate 224 posts offering items at highly inflated prices.
The message remains clear: unscrupulous profiteering will not be tolerated, and state attorneys general will continue to scrutinize companies across industries as price gouging laws remain in effect. As chief legal officers of their respective states, attorneys general have made it apparent that they are taking enforcement action, including filing criminal charges and civil complaints, against those deemed to run afoul of state price gouging laws.
Companies that manufacture, sell, or otherwise distribute products or services that fall within current anti-price gouging laws and orders must examine their pricing practices to confirm compliance. Because state laws vary, it is important to stay abreast of enforcement actions and investigations across AG offices and to consult compliance counsel to not only assist in this effort but to review current practices to ensure the company conforms to applicable state and federal laws and regulations. Equally important, if a company has received a state attorney general inquiry or CID, our state A.G. team is equipped to navigate a swift and appropriate response.