Price Gouging Crimes after Hurricane Ian
If you received a “Warning Notice” or an “Investigative Subpoena Duces Tecum” from a Senior Financial Investigator with the Consumer Protection Division of Florida’s Office of the Attorney General, then seek out the services of an experienced attorney.
The attorneys at Sammis Law Firm represent businesses and corporations and their owners and managers during these kinds of investigations.
Update: On September 23, 2022, in response to the Governor declaring a State of Emergency related to Hurricane Ian, Attorney General Ashley Moody activated Florida’s Price Gouging Hotline to receive contacts about extreme or suspicious price increases. Immediately thereafter, callers began making complaints of excessive increases for all kinds of essential commodities including water, ice, food, lumber, gasoline, equipment, and storm-related services.
After the damage from Hurricane Ian, investigators began sending “WARNING NOTICES” to companies that it suspects of engaging in price gouging or unfair trade practices.
Most investigations are triggered by consumer complaints that a business or business owner engaged in conduct in violation of Section 501.160(2) or (3), Florida Statutes. These laws prohibit price gouging during a declared state of emergency, then an investigation begins with the warning notice letter.
If the claim of price gouging is substantiated by the Florida Attorney General’s Office, it might pursue civil penalties of $1,000 per violation or up to a total of $25,000 for multiple violations committed in a single 24-hour period.
Section 501.160, Florida Statutes (1992), was passed to prevent “dramatic increases in the prices of certain essential commodities” during “certain periods of disaster.”
Florida’s price gouging statute prohibits unconscionable price increases, which it defines as a “gross disparity” between the average cost of the commodity 30 days prior to a declared state of emergency and the current price of the commodity. However, the statute exempts price increases attributable to “additional costs . . . or national or international market trends.” § 501.160(1)(b), Fla. Stat.
Additionally, Florida’s Deceptive and Unfair Trade Practices Act, Section 501, Part II, Florida Statutes (“FDUTPA”), declares unlawful any “[u]nfair methods of competition, unconscionable acts or practices, and unfair or deceptive acts or practices in the conduct of any trade or commerce.”
Each violation of FDUTPA is punishable by a penalty of $10,000. Further, a penalty of up to $15,000 per violation may be imposed for violations involving a senior citizen, a person who has a disability, a military service member, or the spouse or dependent child of a military service member.
Attorneys for Price Gouging Investigations in Florida
Attorney General Moody’s Consumer Protection Division reviews allegations of unlawful price increases on essential commodities during the COVID-19 state of emergency.
In Florida, the accusations of price gouging might apply to essential commodities through third-party accounts on Amazon, although investigations have expanded to other platforms.
The most recent investigations center around price gouging for Hurricane Ian. The last State of Emergency concerned COVID-19 test kits, swabs, and related consumable medical supplies used in administering tests.
Any business owner under investigation for price gouging should take the accusation seriously. Your first clue that a criminal investigation is underway might be a knock on the door by an investigator or being served with an investigative subpoena seeking a copy of your records.
You might also receive a “WARNING NOTICE” letter with a copy of consumer complaints. The warning notice constitutes notice that your conduct may be in violation of Florida law.
An attorney can help you review the consumer complaints and provide the Senior Financial Investigator with the Consumer Protection Division of Florida’s Office of the Attorney General with an appropriate response.
Your response might include information about any remedial action you have taken, such as the issuance of a refund, a price reduction, and/or removal from inventory.
Price gouging is a crime that comes with serious criminal and civil penalties as explained in Section 501.160 and Section 501.206. An experienced criminal defense attorney can help you and your business protect your rights and any possibility of formal charges being filed for price gouging.
We represent business owners, including the owners of third-party companies that sell items on eBay or Amazon or their own website, as well as the owners or operators of gas stations, convenience stores, and real estate rental companies.
Our main office is in Tampa in Hillsborough County, FL. We have a second office in New Port Richey in Pasco County, FL. Our criminal defense attorneys are experienced in cases involving an investigation by the statewide prosecutor.
Call 813-250-0500 to discuss your case.
Price Gouging Complaints after Hurrican Ian
The investigation usually begins with an email from an Investigation Specialist with the Consumer Protection Division of the Office of the Attorney General regarding complaint(s) filed with the Office of the Florida Attorney General concerning a local company.
Pursuant to Amended Executive Order 22-219, effective September 24, 2022, Governor DeSantis declared that a state of emergency exists in the State of Florida as a result of Hurricane Ian, triggering the price gouging laws contained in Section 501.160, Florida Statutes.
After declaring the state of emergency, the Office of the Attorney General might receive one or more complaint(s) that a business, or its employees or agents, have taken actions with respect to one or more of these essential commodities which may be in violation of Florida’s Deceptive and Unfair Trade Practices Act, Section 501, Part II, Florida Statutes.
The Office of the Attorney General then reviews complaints and inquiries to develop information about patterns of business activity which may indicate the need for formal investigation or action by our Office to protect the broad public interest.
The correspondence might include the consumer complaints submitted to their office and request a detailed response to each individual consumer complaint.
Additionally, the Attorney General’s Office might request that you provide the pricing records currently in your possession, custody, or control during the relevant time period for the relevant commodity.
You may submit any additional evidence or information demonstrating that additional costs were not in your control or were already imposed before the State of Emergency.
Investigative Subpoena Duces Tecum for Price Gouging
On March 24, 2020, Attorney General Moody issued more than forty (40) businesses a subpoena duces tecum related to complaints of “price gouging.” Most of the complaints originally concerned “price gouging” by third-party sellers on Amazon.
Since then, at least 42 more investigative subpoenas have been issued to businesses suspecting of pricing gouging on other websites and online platforms.
In late June 2020, the Attorney General’s Office in Florida announced that it recovered more than $700,000 for consumers involved in COVID-19-related purchases and scams.
Investigations for price gouging target businesses that charged “unconscionable prices” for essential items in short supply prior to a disaster or during any early recovery period. Price gouging is illegal under either Florida Statute Section 501.160 or under local county or city ordinances.
Any third-party sellers who receive an investigative subpoena duces tecum looking for unconscionable pricing schemes should respond appropriately within the allotted time. If you fail to comply with the subpoena in the allotted time, you might face an additional $5,000 civil penalty (plus reasonable attorney’s fees and costs).
The best way to respond to an investigative subpoena requires hiring a criminal defense attorney with experience in these types of investigations. For some of these cases, the Attorney General’s Office will be considering criminal charges for price gouging or seeking expensive civil penalties.
If you received an investigative subpoena, the best result is getting the investigation closed without any civil or criminal penalties being imposed.
Civil and Criminal Penalties for Price Gouging Crimes
Under Florida Statute Section 501.160, each incident of price gouging can be charged as a misdemeanor of the second degree which is punishable by up to 60 days in jail and a $500 fine.
Although the statute provides no private cause of action, under Section 501.164, the court can impose a civil penalty of not more than $1,000 per violation with an aggregate total not to exceed $25,000 for any 24-hour period against any person who violates the provisions of Section 501.160.
Subsection 9 of Section 501.160 makes it a crime to conduct business after the declaration of a state of emergency without possessing a business tax receipt. The crime is charged as a second-degree misdemeanor.
Although the requirement for a business license after a declared state of emergency does not apply to religious, charitable, fraternal, civic, educational, or social organizations.
List of Commodities Covered by Florida’s Gouging Laws
Florida’s prohibitions against price gouging are embodied in Section 501.160, F.S. The price gouging statute in Florida applies to a list of commodities that became scarce during the COVID-19 state of emergency including:
- protective face masks or coverings
- sanitizing and disinfecting supplies
- hand sanitizer or gels
- wipes or cleaning supplies for surface cleaning
- any commercial cleaning supplies
- personal protective equipment (PPE)
- protective gowns, booties, gloves, and other protective gear
- COVID-19 test kits, swabs, and related consumable medical supplies used in administering tests
Section 501.160, Florida Statutes, was passed to prevent “dramatic increases in the prices of certain essential commodities” during “certain periods of disaster.”
Florida’s price gouging statute prohibits unconscionable price increases, which it defines as a “gross disparity” between the average cost of the commodity 30 days prior to a declared state of emergency and the current price of the commodity.
However, the price gouging statute exempts price increases attributable to “additional costs . . . or national or international market trends.” § 501.160(1)(b), Fla. Stat.
How to Respond to a Subpoena Duces Tecum for Price Gouging
Florida’s Office of Attorney General for the Department of Legal Affairs and Consumer Protection has issued an investigative subpoena duces tecum for several companies suspected of price gouging during the COVID-19 public health crisis.
The investigative subpoena duces tecum is issued pursuant to the Florida Deceptive and Unfair Trade Practices Act, Chapter 501, Parts I and II, Florida Statutes, and Section 501.160, Florida Statutes, Rental or Sale of Essential Commodities During a Declared State of Emergency: Prohibition Against Unconscionable Prices, in the course and authority of an official investigation.
The letter regarding the investigative subpoena refers to Sections 501.160, 501.204, and 501.206 (2019), Florida Statutes.
If you or your business received an investigative subpoena duces tecum for price gouging, then retain an attorney who can help you provide the appropriate documents in response.
In a price-gouging investigation, your attorney will help you determine which documents are covered by attorney-client privilege, work-product privilege, or any other privilege. Your attorney can also help you decide which documents you are entitled to withhold from being produced.
Attorneys can help you assert trade secret protection under Florida Statutes Section 688.002(4), Section 812.081(1)(c), Section 815.04, and/or Section 815.045, or other applicable Florida Statutes, when appropriate.
Most of these cases concern documents to identify the prices charged for items sold between February 7, 2020, and March 8, 2020, or March 9, 2020, to present including:
- sanitizing products
- hand sanitizer
- cleansing foam
- soap
- products intended to minimize exposure to airborne particles
- face masks
- respirators
- COVID-19 test kits, swabs, and related consumable medical supplies used in administering tests
The investigative subpoena duces tecum issued by an Assistant Attorney General in the Office of the Attorney General Consumer Protection Division might command you to produce the following:
“all documentary material and other tangible evidence as described herein, that is in your possession, custody, or control, or in the possession, custody, or control of your agents or employees, and to make it available for inspection and copying or reproduction before an Assistant Attorney(s) General on a specific date.”
Many of these investigations are being conducted out of the Tampa location of the Office of the Attorney General Consumer Protection Division on 3507 E. Frontage Rd., Suite 325 in Tampa, FL.
Alternatively, you might be allowed to comply with the subpoena by delivering copies of all of the requested materials listed in the attached addendum, prior to the date set forth in the letter to the Assistant Attorney General via email.
Frequently Asked Questions
When did the state of emergency begin in Florida?
Pursuant to Executive order 20-52, effective March 9, 2020, Governor DeSantis declared that a state of emergency exists in the State of Florida as a result of the Novel Coronavirus Disease 2019 (COVID-19), triggering Florida’s law prohibiting price gouging.
Additional Resources
Florida’s Price Gouging Hotline – Attorney General Moody activated Florida’s Price Gouging Hotline in response to the COVID-19 state of emergency. Consumers suspicious of price gouging are told to report the incident to 1(866) 9NO-SCAM or 1-866-966-7226.
Florida’s Price Gouging Laws Remain in Effect as Hurricane Ian Recovery Efforts Continue
This article was last updated on Monday, October 24, 2022.