CALIFORNIA—On Thursday, June 11, the City of Santa Monica announced that California’s Penal Code Section 396 had come into effect, as is the case when a state of emergency is declared by the U.S. President or a city/ county executive officer.
The law “prohibits anyone from selling, or offering to sell, a wide array of consumer goods and services at excessively increased prices, for a period of 30 days after the emergency is declared.”
California Governor Gavin Newsom declared a statewide emergency on March 4, 2020 due to the COVID-19 pandemic, and another state of emergency was declared within Los Angeles County on May 30 as a result of widespread looting, arson, and property damage.
The law reportedly covers goods from building materials and medical supplies to toiletries, food and water, and rental housing. Contractors are also banned from charging over 10 percent above pre-emergency fees for “repair or reconstruction” or “emergency cleanup” services. This ban lasts for 180 days after the emergency declaration.
Price gouging carries a sentence of up to a one-year jail sentence and a $10,000 fine. However, according to the City of Santa Monica, “if the business or person can prove that the price increase was directly related to an increase in their own costs in providing the goods or services, including labor and material costs, they may not be liable under the law.”
View the official announcement here.