Senator Thomas J. Umberg and Southern California District Attorneys Introduce Legislation to Protect People from Price Gouging

Senator Thomas J. Umberg and Southern California District Attorneys Introduce Legislation to Protect People from Price Gouging During State of Emergency

Santa Ana, Calif. – Today, Senator Thomas J. Umberg (D-Santa Ana) debuted new legislation, in concert with Orange County District Attorney Todd Spitzer, and San Diego District Attorney Summer Stephan, to combat price gouging in the State of California during a declared state of emergency. In the midst of the COVID-19 pandemic, our state has seen countless examples of unscrupulous individuals using the crisis as an opportunity to turn a profit on essential goods and services. Senate Bill 1196 (SB 1196) will tighten California law to assist law enforcement officials in prosecuting instances of price gouging that are committed by new sellers during an emergency.

“We are committed to protect Californians from those that prey on our community during the trying times of national or global emergencies. We will continue to use all of the tools at our disposal to prevent price gouging during this, and any future disaster” said Senator Umberg. “There are brave men and women in the health and public safety sectors of our community whose lives are on the line every day. It is immoral and unacceptable to allow some to take advantage of this crisis when so many are fighting to help.”

Currently, under California Penal Code Section 396, price gouging is illegal and punishable by law during a declared state of emergency. However, the code hasn’t been revisited since 1992, and it’s time to bring it up to speed to modern-day standards and to reflect current market technologies. For example, Penal Code Section 396 dictates that a seller has committed price gouging when they charge “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 or emergency.” This section clearly prevents established sellers of specified goods from committing price gouging, but is silent to new sellers in a market place.

“Exploiting the public’s fear and panic is not a defense to engaging in criminal activity,” said Orange County District Attorney Todd Spitzer. “Existing law left a loophole that allowed opportunists to take advantage of a crisis and overcharge customers for a product just because they had never sold that product before. This important legislation closes that loophole and ensures that those who shamelessly exploit people’s vulnerabilities during a time of emergency are prosecuted. In this case we do not reward ‘entrepreneurship.'”

“Emergencies like the COVID-19 pandemic bring out the best in most Californians, but some businesses take advantage of emergency conditions to gouge consumers with extreme prices for essential goods and services,” San Diego District Attorney Summer Stephan said. “This bill will help close loopholes that allow greedy actors to escape accountability and ensure that California businesses don’t charge abusive prices for health and consumer essentials during this national emergency.”

Senate Bill 1196 (SB 1196) will be introduced when the legislature reconvenes.

To contact Senator Umberg’s District Office regarding any incidents of recent price gouging, please call (714) 558-3785.

To file a complaint with the Consumer Protection Unit of the Orange County District Attorney, visit this link.