PC 396: Price Gouging

Legal Definition: (a) The Legislature hereby finds that during a state of emergency or local emergency, including, but not limited to, an earthquake, flood, fire, riot, storm, drought, plant or animal infestation or disease, or other natural or manmade disaster, some merchants have taken unfair advantage of consumers by greatly increasing prices for essential consumer goods and services. While the pricing of consumer goods and services is generally best left to the marketplace under ordinary conditions when a declared state of emergency or local emergency results in abnormal disruptions of the market, the public interest requires that excessive and unjustified increases in the prices of essential consumer goods and services be prohibited. It is the intent of the Legislature in enacting this act to protect citizens from excessive and unjustified increases in the prices charged during or shortly after a declared state of emergency or local emergency for goods and services that are vital and necessary for the health, safety, and welfare of consumers…

To be found guilty under PC 396 the prosecution must prove that you intentionally:

1. You raised the price of consumer goods and services;

2. That price rise was over 10%;

AND

3. You did this after an emergency has been declared.

What does this mean?

Price gouging refers to sellers who try to take unfair advantage of consumers during an emergency or disaster by greatly increasing prices for essential consumer goods and services. This would be, for example, selling items like milk, toiletries, and hand sanitizers, among other items, during a pandemic involving sickness, such as COVID-19. Price gouging only can occur when the President of the United States, the Governor of California, or the city or county executive officer, declares a state of emergency. This code section applies to individuals as well as businesses and entities within California. This means that a person who buys a lot of one product, raises the price, and resells them during a state of emergency, can be charged under this section, despite not being a business.

These restrictions are generally valid for 30 days after a declaration of the emergency. The times of protections under this code include major necessities such as lodging (including rental housing, hotels, motels, and mobile homes); food and drink (including animals) emergency supplies such as water, flashlights, radios, batteries, candles, blankets, soaps, diapers, tape, toiletries, plywood, nails, and hammers; and medical supplies such as prescription and nonprescription medications, bandages, gauze, isopropyl alcohol, and antibacterial products. More info regarding this can be found here.

This section also applies to goods and services including heating oil; building materials; transportation; freight; storage services; gasoline; and repair and reconstruction services.

Penalties

A violation under PC 396 is a misdemeanor offense in California. If convicted, you could face up to one year in County Jail for this offense. You would have to serve at least 50% of your jail sentence in custody. You would also face hefty fines and fees up to $10,000, a payback of the extra money accrued, as well as a possible pan if you are a business running this operation. You are also subject to civil enforcement actions where fines could approach up to $5,000 per violation.

This is not a strike offense under the California Three Strikes law, and it is not a Sex Offense under PC 290. You could also face a loss of your Professional License if convicted, and if you are not a legal resident, you could face Deportation in Immigration Court since the offense involves an intent to deceive others.

Common Defenses

1. Statute of Limitations
2. Violation of Rights
3. Insufficient Evidence

A common defense under this section would involve showing that there is insufficient evidence that you were intending to price gouge people. If it can be shown, for example, that the increase in the price of the item is directly attributable to increases in the cost of labor or materials needed to provide the good or service, then you would not be liable under this section. This can happen, as oftentimes when demand for goods and services increases during times of emergencies, if the wholesaler has to raise prices to keep up with the demand to get the items back into the marketplace. This would, therefore, justify the reason why prices on necessities went up for your business. It’s harder to show this, for example, if you are not a business owner, but instead, a person that went from shop to shop to load up on necessities to sell outside of your garage.

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In the wake of emergencies, such as the ongoing COVID-19 crisis, attempting to capitalize on perceived opportunities through price gouging not only breaches ethical standards but also contravenes legal ones, potentially leading to custody, and the imposition of substantial fines over extended periods. PC 396, a legislation many may not be fully aware of, becomes particularly pertinent in these times, prohibiting excessive price increases during emergencies.

Given the complexities and potential consequences of engaging in activities that could be construed as price gouging, consulting with a knowledgeable attorney before venturing into any business that might skirt legal boundaries is crucial.

At Inland Empire Defense, our Ontario-based PC 396 attorney is deeply familiar with the nuances of price gouging laws, having successfully defended individuals accused of such charges. Our expertise in PC 396 cases ensures that your defense is grounded in a thorough understanding of the law and tailored to the specifics of your situation.

Why Turn to Inland Empire Defense for PC 396 Defense?

• Specialized Knowledge: Our attorney’s specialized knowledge of PC 396 cases means you benefit from defense strategies informed by an in-depth understanding of price gouging laws and their application.
• Proven Defense Record: Our track record of successfully defending against price gouging charges demonstrates our capability to navigate the legal challenges effectively and secure favorable outcomes for our clients.
• Strategic Legal Consultation: Recognizing the importance of informed decision-making, we offer strategic legal consultation to help you understand the potential legal implications of business ventures during crisis situations.

Protect Your Future with Inland Empire Defense

Facing charges under PC 396 demands an informed and strategic legal response. Inland Empire Defense, located in Ontario, is prepared to offer the expert legal support necessary to address these charges effectively.

Contact Inland Empire Defense Today

If you’re concerned about potential legal implications related to price gouging or have already been charged under PC 396, don’t hesitate to reach out to Inland Empire Defense at 909-939-7126. Our commitment to providing expert legal counsel and support is your advantage in navigating the complexities of PC 396 charges and safeguarding your future. Let us guide you through this legal challenge with the dedication and expertise your case demands.