The Middletown Press (Middletown, CT)
AG wants to pursue pandemic price gougers
Attorney General William Tong, citing the sale last year of 40 N95 masks for $500, wants to be able to hit retailers, wholesalers and even manufacturers with civil penalties for price-gouging during state emergencies.
Speaking before the legislative General Law Committee on Thursday, Tong stressed that the law he is proposing would be used only during civil or public health emergencies, both of which have been in effect for more than 10 months. His office has investigated more than 750 reports of gouging over the last year.
“I don’t have to tell state representatives and state senators how difficult it has been for your constituents, particularly at the beginning of the pandemic, to acquire hand sanitizer, masks, toilet paper and to make sure that people had access, including our frontline health care workers
and first responders to personal protective equipment PPE),” Tong said.
He recalled that social media, at the time, illustrated price-gouging on a daily basis, such as $40 prices for a pair of hand sanitizers.
“We also saw beyond that, that people were getting charged much higher than normal prices for eggs, for example and when we looked into that we discovered that maybe the retailer was charging a certain price for a dozen eggs, but they were being charged an even higher price than normal by their wholesaler or distributor,” Tong said. Hospitals also received solicitations for equipment that was as much as 10 times more than usual.
“What we discovered was that the retailer or the broker or the middle man that was trying to sell the PPE to the hospital or hospital system, they were charging one price, but really the increase in that price was driven by their wholesaler or distributor and somebody further up the chain,” Tong said, stressing that current state law does not allow his office to go up the distribution ladder.
“In many instances we found that we’d go to a retailer who’s say ‘no, no the price is going up because I’m being charged more by the wholesaler or retailer,” Tong said, asking lawmakers to approve the bill, which would allow his office to use the state’s unfair trade practices statutes to stop and penalize profiteering.
The bill would clarify the definition of pricegouging to fit the legal definition of “unconscionable” and excessive from normal prices. Current law is limited to energy prices.
Rep. Holly Cheeseman, R-East Lyme, wanted to know what the line is between acceptable and unacceptable. “Specifically, is this a 100 percent increase? Two hundred percent increase? Unconscionably excessive is descriptive but not really detailed,” she said.
“It’s flexible and factspecific,” Tong said, stressing that unconscionable is a common word in the legal world, especially in contracts. “There was a choice, Rep. Cheeseman, to go in the direction of saying 10 percent or 15 percent and putting that in statute. Some other states do that. I think that is too restrictive and could trigger investigations or violations of the law where there isn’t price gouging, and where there isn’t unconscionable action, or the price isn’t unconscionable on its face.”