Attorney General Becerra Supports Kentucky’s Fight Against Price Gouging

Thursday, September 24, 2020
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Multistate coalition files amicus brief supporting Kentucky’s right to enforce price gouging laws on online platforms

SACRAMENTO – California Attorney General Xavier Becerra today joined a bipartisan, multistate coalition supporting Kentucky’s efforts to enforce its price gouging laws. In spring 2020, Kentucky Attorney General Daniel Cameron opened investigations into a number of merchants for allegedly charging excessive prices during the COVID-19 pandemic for items such as hand sanitizer and N95 masks. Shortly thereafter, the Online Merchants Guild filed suit against Kentucky, alleging that it is unconstitutional to apply state price-gouging statutes to sellers on digital marketplaces like Amazon that sell nationally. In the amicus brief, the coalition supports Kentucky’s right to protect its own residents from price gouging, even where the merchant is selling on online platforms like Amazon. Like Kentucky, California protects its residents from price gouging in times of crisis. California’s price gouging laws go into effect when a state of emergency or local emergency is declared. Under current law, vendors are prohibited from raising the price of goods and services by more than 10 percent. Attorney General Becerra supported Senate Bill 1196, a bill authored by Sen. Tom Umberg (D-Santa Ana) that further strengthens California's price gouging laws. The bill was passed by the legislature and it is now awaiting the Governor’s signature. 

“When our families are grappling with the effects of an emergency, it’s heartening to see our communities come together to support each other. But on the other side, there is always someone looking to take advantage of vulnerable people to make a buck,” said Attorney General Becerra. “Whether it’s wildfires, floods, or the COVID-19 pandemic, it is vital that states are able to use every tool in their arsenal to protect their people.” 

In the Kentucky case, the district court issued a preliminary injunction prohibiting the price gouging investigation and enforcement against the merchants. Kentucky has appealed the case to the Sixth Circuit Court of Appeals. 

The multistate coalition’s amicus brief explains how state price gouging statutes work, when they are triggered, and argues that states traditionally enforce these types of regulations. The attorneys general further assert that state prohibitions on price gouging provide important protections for their residents, legitimate businesses, and markets. During times of public emergency, price gouging regulations provide for equitable allocation of scarce goods by ensuring that everyone – not only those who can easily pay exorbitant prices – can access critical goods and services. 

Attorney General Becerra has been a leader in combatting price gouging in California. In August, Attorney General Becerra filed a lawsuit against an egg distributor to comply with subpoenas investigating alleged charging of excessive prices during a state of emergency and violating California’s price gouging laws. In June, Attorney General Becerra filed charges against a Los Angeles County pharmacist for price gouging on N95 masks. And in May, Attorney General Becerra announced price gouging charges against an Alameda County grocer for illegally hiking the price of essential food items. The California Department of Justice has reached out to hundreds of businesses through letters and in-person visits related to price gouging allegations.

Anyone with information about potential price gouging in California can file a complaint here or contact their local police department or sheriff’s office.

Attorney General Becerra joined the attorneys general of Illinois, Alaska, Arkansas, Colorado, Connecticut, Delaware, Hawaii, Idaho, Iowa, Kansas, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New York, North Carolina, Ohio, Oregon, Pennsylvania, Rhode Island, Tennessee, Texas, Vermont, Virginia, Washington, Wisconsin, and the District of Columbia in filing the amicus brief.

A copy of the amicus brief is available here.

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