Price gouging 101: a call to Florida lawmakers to perfect Florida's price gouging law.

• Author: Page, Edward J.

In 2004, the awesome power of Hurricanes Charley, Frances, Jeanne, and Ivan devastated the lives of thousands of Floridians. In 2005, Hurricanes Katrina, Rita, and Wilma annihilated parts of Louisiana, Mississippi, Texas, and Florida. Indeed, the 2004 and 2005 hurricane seasons brought severe anxiety, frustration, and exhaustion for many Floridians as they attempted to get back on their feet. In the midst of the recovery, price gouging profiteers preyed upon hurricane victims. Fortunately, Florida's price gouging law protected these consumers.

Since the recent increase in catastrophic hurricanes striking Florida, the Florida Attorney General's Office, (1) which enforces Florida's price gouging law, has investigated thousands of businesses and individuals for suspected violations. Florida Attorney General Charlie Crist states that the main objective for investigating and prosecuting price gougers is to prevent businesses and/or individuals from taking advantage of consumers' misfortunes. Crist states:

[W]hen we are in a state of emergency, if there is a gross disparity between what the store was charging before the emergency arose and then afterwards, it's very clear that that is not making a profit. That's profiteering at the expense of people at a time of need. That's why these laws are important. Listen, I'm all for free enterprise and entrepreneurship, but we're not for people taking advantage of Floridians in a time of need. That's why these laws are on the books and that's why we will aggressively enforce them to protect the people of our state. (2)

Florida's price gouging law protects weary consumers from lurking predators whose primary goal is to take advantage of consumers' misfortunes resulting from the hurricanes. Unfortunately, Florida's price gouging law is not perfect in any sense, and some commentators criticize Florida's law for its subjectivity and have even called upon Florida lawmakers to revise it to establish uniformity and objectivity. (3)

This article provides a general overview of Florida's price gouging law and summarizes some of the individual attorney general's investigations. Finally, it discusses suggested changes to Florida's price gouging law.

Florida's Price Gouging Law

Florida's law prohibits the unconscionable pricing of commodities during a state of emergency. (4) It is prima facie evidence that a price is unconscionable if:

1. The amount charged represents a gross disparity between the price of the commodity that is the subject of the offer or transaction and the average price at which that commodity was rented, leased, sold, or offered for rent or sale in the usual course of business during the 30-days immediately prior to a declared state of emergency, and the increase in the amount is not attributable to additional costs incurred in connection with the rental or sale of the commodity or rental or lease of any dwelling unit or self-storage facility, or national or international market trends; or 2. The amount charged grossly exceeds the average price at which the same or similar commodity was readily obtainable in the trade area during the 30-days immediately prior to a declared state of emergency, and the increase in the amount is not attributable to additional costs incurred in connection with the rental or sale of the commodity or rental or lease of any dwelling unit or self-storage facility, or national or international market trends. (5)

In other words, it is unlawful during a state of emergency to sell, lease, offer to sell, or offer for lease commodities, dwelling units, or self-storage facilities for an amount that grossly exceeds the average price for the commodity the 30 days before the declaration of the state of emergency or the seller's price for the commodity during the 30 days before the declaration of the state of emergency, unless the seller can show how increases in its prices or market trends justify the price increase. (6)

Additionally, it is a violation of [section] 501.204 of the Florida Unfair and Deceptive Trade Practices Act (FDUTPA) for a person, his or her agent, or employee, during a declared state of emergency, to rent or sell or offer to rent or sell at an unconscionable price within the state of emergency area, any essential commodity including, but not limited to, supplies, services, provisions, or equipment that is necessary for consumption or use as a result of a declared state of emergency. (7) This prohibition remains in effect until the declaration of emergency expires or is terminated.

Price gougers are subject to hefty civil and criminal penalties. In addition to all other remedies FDUTPA provides, (8) a court may impose a civil penalty of not more than $1,000 per violation, with the aggregate not to exceed $25,000 for any 24-hour period against the price gouging law...