Under both federal and state law in California, it is unlawful to engage in the hoarding of designated scare materials or price gouging during times of declared emergencies. President Trump and California Governor Gavin Newsom have both declared emergencies resulting from the coronavirus (COVID-19) pandemic. President Trump has cited the Defense Production Act (Chapter 55 of Title 50 of the United States Code) and has invoked it in at least one instance regarding ventilators and General Motors (GM).
Federal Hoarding & Price Gouging Laws & Penalties
If people (or businesses) buy or possess more scarce or essential goods than they can reasonably use, they can be prosecuted for “Hoarding of Designated Scarce Materials” by United States law enforcement. Such goods typically include certain medical equipment, pharmaceuticals, and personal protective equipment (PPEs), including medical masks, gowns, and gloves. If a person or entity is believed to be hoarding these or other designated scare goods, they can be investigated and prosecuted by a number of agencies, including the U.S. Department of Justice (DOJ), the Federal Bureau of Investigation (FBI), Defense Department (DOD), Homeland Security (HIS), U.S. Attorney’s Offices, and other agencies.
Hoarding goods or materials that are scarce or deemed essential for dealing with a federal emergency beyond reasonable personal or business demands or gathering them to sell at prices above market is a federal crime under 50 USC section 4512.
Anyone suspected with probable cause of hoarding may be arrested, jailed, and, if convicted, punished by up to one year in federal prison and a $10,000 fine for EACH violation under 50 USC section 4513.
Price Gouging Is a Crime in California
In California, Governor Newsom has declared an emergency, meaning that California’s prohibition against price gouging may be used to prosecute offenders (California Penal Code section 396.).
California law prohibits people and businesses from charging 10% more than prevailing prices in an emergency. However, one possible defense to that crime is alleging that the seller’s costs have increased in the emergency, therefore justifying the seller’s price increase.
The Los Angeles criminal defense lawyers at Stephen G. Rodriguez & Partners can help if you are being investigated or have been charged with hoarding or price gouging. This is an unusual time, and we are here to protect YOUR constitutional rights.
Call us at 213-481-6811 to schedule a consultation. We are currently offering client consultations in accordance with social distancing recommendations and rules.