Can I Sue for Price Gouging?

The COVID-19 pandemic triggered hoarding and price-gouging for needed supplies and services. There were shortages and high prices for toilet paper, hand sanitizer, face masks, bottled water, disinfectant, and certain medical supplies.

Free markets are the lifeblood of the American economy. However, markets are imperfect and are subject to abuses if not properly regulated. There are limited federal antitrust and price gouging laws. Some states have stronger price gouging laws to protect consumers. To understand your state laws for price gouging protections, talk to a local consumer law attorney.

What Is Price Gouging?

Price gouging involves charging unconscionably excessive prices during a period of abnormal disruption of the market. An abnormal disruption can include any emergency that prevents the ready availability of essential consumer goods or services, such as food, water, or construction materials.

“Simply put, price gouging is an unconscionable, unethical act,” says Gregory Asciolla, a partner at DiCello Levitt. “It involves taking advantage of the most vulnerable during a crisis — like a natural disaster or a public health emergency such as COVID-19 — in order to make a quick, excessive profit by selling essential goods and services at exorbitant prices.”

More often than not, price gouging is obvious, Asciolla adds. You just need to look at the most necessary products during an emergency and watch prices skyrocket. “If they walk into a store and see a roll of toilet paper for $14, a consumer is going to say, ‘Wait a second. This should’ve been 75 cents. That’s what I paid before this emergency,'” he says.

State Price Gouging Statutes

Most states have some price-gouging consumer protection laws that prohibit excessive prices after an emergency declaration, such as a natural disaster or pandemic.

For example, the emergency declaration for the COVID-19 pandemic triggered New York’s price-gouging statute. Violators are subject to civil penalties of up to $25,000 per violation and restitution to consumers.

Oregon is another state with an anti-price-gouging statute. During the summer of 2017, the Oregon Department of Justice (DOJ) said it received a large number of price-gouging complaints from residents and tourists who were charged exorbitant hotel rates during the last North American solar eclipse.

Many people who had reserved rooms a year or more in advance found that the prices they were originally quoted doubled when they arrived for their stay. Oregon Attorney General Ellen Rosenblum said her office notified offending hotels that the law required them “to either honor visitors’ reservations with the originally booked price or give at least $500 to each consumer.”

Seeking Damages Through Civil Lawsuits

If you have had to pay unconscionably higher retailer prices due to possible price gouging, you have the right to seek civil damages and injunctive relief under state antitrust laws.

“The issue is whether or not you can establish an unfair or deceptive trade practice. Was the pricing extreme or artificial?” says Joseph P. Guglielmo, an attorney at Scott+Scott Attorneys at Law. “You have to look into the specific party and whether or not the pricing is out of whack compared to demand or supply.”

States Without a Price Gouging Statute

Ohio doesn’t have a specific price gouging law; excessive price increases during a state of emergency fall under a general consumer practices statute.

“Ohio law has a provision that prohibits sellers from charging a price substantially in excess of like items for sale,” explains Troy Doucet with Doucet Co. in Dublin, Ohio. Nevertheless, Doucet notes, Ohio’s attorney general is pushing for a stronger anti-gouging law.

Consumer Protection Against Excessive Prices

What should consumers do if they feel they are being overcharged? Report price gouging with your state consumer fraud department.

File a Price Gouging Complaint With the Office of the Attorney General

In some states, you can file a consumer complaint with the state’s consumer protection hotline. Or, reach out to an antitrust attorney to advise you on the actions that may be appropriate for your situation.

“While there are mechanisms in the law for a consumer to hold a business directly accountable,” says Doucet, “the easiest way to resolve this kind of issue would be to contact the state’s attorney general.” That agency, he says, “will be on the lookout for this kind of thing, and I expect would act quickly.”

Make Sure Businesses Honor Refund Requests

Additionally, when basic items run short due to demand and supply chain concerns, consumers should ensure businesses honor refund requests.

“In Ohio, most companies are required to tell consumers if they won’t be delivering the promised services within eight weeks of the deposit payment and offer consumers refunds if they don’t deliver the services they promised within eight weeks of the deposit being paid,” says Dan Myers with Myers Law in Cleveland.

Antitrust Laws and Deceptive Trade Practices

“If somebody sees or experiences price gouging activity, whether they’re 100 percent certain or not, they would want to report that to the attorney general. The office will investigate and prosecute any price gouging that they see,” Asciolla says.

Then there’s price fixing, which falls under antitrust laws and involves collaboration among competitors. This one is usually less obvious.

“The prices don’t necessarily go up thousands of percent,” Asciolla says. “At times, there is evidence, and consumers may notice that every six months, the price goes up by all the manufacturers by the exact same amount. And they say, ‘This is suspicious.’ Price-fixing conspiracies are more nuanced, more difficult to find because, with a conspiracy, the whole purpose is to keep it secret.”

Other Resources for Price Changes and Consumer Goods

If you suspect price gouging and need legal guidance, visit the Super Lawyers directory to find an experienced consumer law attorney in your area.