Price Gouging – An Illegal Pricing Practice

Price gouging is an unlawful or otherwise irrational rise in the cost of goods and services, typically associated with an emergency or other catastrophic occurrence, in response to a significant increase in demand or a sharp reduction in supply.

Catastrophic Incident and Emergency

Illegal price gouging and similar legislation are usually correlated with an emergency declared by the government. Various jurisdictions will declare emergencies for weather-related disasters, conflicts, economic downturns, and health emergencies, including cities, states, and the federal government. Illegal price gouging is an illegal practice and being a victim of it you can contact a criminal defense attorney.

Different States – Different Laws

Many states codify price gouging as a statute, but not all states have made price gouging illegal. The following are standard components included in most state anti-price gouging legislation in order to be found guilty of price gouging:

  • Increasing the price of an item or service required,

  • During a declared state or national emergency, and

  • It is irrational, unfair, or otherwise misleading to raise the price.

General Market Law

One of the states that has a particular price gouging law is the state of New York. Under General Business Law § 396-r, New York may, in times of emergency, enact civil penalties for unfair business practices and price gouging. While such activity is not criminalized under the present law (although the state legislature has pending legislation to make it a criminal offence), violators may be subject to major financial penalties.

In New York, the ingredients for price gouging are:

  • Sale for an unconscionably high price goods and services;

  • During an abnormal market or state of emergency disruption; and during an abnormal disruption; and

  • Such goods or services are vital to consumers' health, safety, or welfare.

State distributors, dealers, and manufacturers in New York are protected by the legislation and include, among many other companies, groceries, pharmacies, hotels, delis, repairmen, and gas stations.

Price Gouging Rules in California-California Criminal Code Section 3966

Another state that has a particular price gouging statute is California. Section 396 of the California Penal Code, entitled "Crimes Against Public Health and Safety," contains the elements and punishments under state law for the crime of price gouging. The state must prove the following elements in order to be held responsible for price gouging in California:

  • During and 30 days after the emergency declared by the federal, state , or local

  • To offer or sell any products or services that are necessary

  • More than 10% above the price paid immediately prior to the emergency declaration.

Although Oklahoma explicitly specifies 10% as the cut-off during an emergency for a fair rise, the legislation almost often provides for exceptions, such as if it can be seen that the mark-up of labor and supply costs has also increased. As a general rule, they are consistent with the rule as long as the seller does not benefit more than 10 percent after increased costs.

Price Gouging and the Covid-19 Pandemic

The Covid-19 pandemic has resulted in the federal government, as well as several states and local governments, declaring an emergency. On March 7, 2020, the state of New York declared a state of emergency, which is effective until September 7, 2020. As a consequence of that declaration, § 396-r of the General Business Law of New York takes effect during the declaration, which limits the rise in the cost of goods and services.

You can discuss this price gouging with our criminal defense attorney in OKC. When you are unsure about the laws on price gouging in Oklahoma, see us at Foshee and Yaffee Attorneys at Law.

**Disclaimer: This content is not to be construed as legal advice nor does it establish terms of a client-attorney relationship.

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