The Consumer Protection Act (CPA), first enacted in 1961, prohibits unfair or deceptive practices in trade or commerce. It includes prohibitions on anti-competitive behavior and restraints on trade. The Legislature has enacted dozens of statutes covering specific areas of the marketplace, violation of which constitute per se violations of the CPA. The attorney general and private consumers can bring actions to enforce violations of the CPA.
Maximum civil penalties for violation of the CPA are set out as follows:
When the attorney general brings an action in the name of the state or on behalf of a private citizen to restrain a person from engaging in unlawful acts under the CPA, the court may award costs, including reasonable attorneys' fees, to the prevailing party.
In the event of a state of emergency no person shall sell, rent, or offer to sell or rent at an excessive price the following goods and services:
The Governor may implement this new law by executive order.
A state of emergency means a natural or man made disaster resulting from an epidemic, pandemic, earthquake, flood, fire, riot, storm, volcanic eruption, act of war, threat of war, military action, terrorist attack, or any other event for which a state of emergency has been declared by the Governor of the state of Washington or the President of the United States.
An excessive price means a price more than 10 percent greater than the price at which the person sold, rented, or offered for sale or rent the same product or service immediately prior to the state of emergency. When the price prior to the state of emergency can not be determined, an excessive price shall be presumed where the price is more than 10 percent greater than the price of the same product or service offered for sale or rent by other similarly situated sellers prior to the state of emergency.
However, it is not a violation if the price increase is attributable to a cost imposed by a supplier or attributable to costs for labor or materials.
The attorney general may investigate violations of this new law. The attorney general may issue subpoenas or civil investigative demands under the authority of the consumer protection act where there is a reason to believe a person has violated this new law. The attorney general may issue a cease and desist order to stop violations. If the recipient of a cease and desist order does not comply within five calendar days of receipt of the order, the attorney general may file an action in superior court to enforce the order. The court may enjoin a person from violations and may impose a civil penalty of not more than $10,000 per violation of the cease and desist order. In a successful action to enforce a cease and desist order the court shall award the attorney general costs of the legal action, reasonable costs of the investigation, and reasonable attorney fees. Additionally, every person who violates this new law must pay a civil penalty of no more than $25,000 per violation.
A violation of the new law, including a violation of the cease and desist order, is an unfair or deceptive act in trade or commerce and an unfair method of competition for the purpose of applying the consumer protection act. The remedies of this new law are in addition to any other remedies provided by law.
The attorney general must produce and maintain on its website translated versions of this new law in the top ten languages spoken in Washington State, and at the discretion of the attorney general, in other languages.
PRO: The shelves of stores were empty in the early days of the pandemic including hand sanitizer and other products. Hand sanitizer was available online for over $200 per bottle. We are among a handful of states that did not have protections for consumers during an emergency and 36 states do protect consumers. We looked at other state laws in selecting 10 percent as the threshold for an excessive price. Any time there is an emergency the scammers appear and price gouging is a real concern. The elderly are more vulnerable to the COVID-19 virus and are most in need of personal protective equipment. Yet many low-income individuals and elderly on a fixed income will not be able to buy essential goods and services if price gouging is not restricted. First responders are also affected by price gouging and they are on the front line to provide emergency services.
CON: This is going to cause chaos in small businesses. Businesses have all types of costs associated with providing a clean, healthy, and sanitized environment. This bill sets up a litigious process where the price increase may not be directly related to a product or service but is absolutely necessary for the small business to incur that cost in order to stay open.
OTHER: The 10 percent threshold is too narrow and could be caused by seasonal increases in products. The potentially liable person is the one who sets the price and it should not go up the supply chain. There need to be changes in the definition of emergency supplies to be a general items for the protection of health and welfare rather than a list of items. The definition for excessive price should not be a percent but rather should be a price that greatly exceeds the price prior to the state of emergency. The price should be a 25 percent threshold. Businesses should be compared to other like businesses.