Store Owners Beware: IL Governor Addresses Price-Gouging
The recent COVID-19 pandemic has highlighted that even in a time of crisis some people are interested in profit — at the expense of others’ misfortune.
Reports of companies and individuals price-gouging, among other white-collar crimes, abound. You are probably already aware that items being hardest hit include toilet paper, hand sanitizer, surgical masks, and other necessary medical equipment.
Since the initial outbreak, Illinois officials have reported over seven hundred calls from people complaining of price-gouging. And the Governor of Illinois has responded personally.
An executive order has been issued to combat the situation. It extends the current law to cover those hard-hit items currently targeted for price-gouging during this pandemic.
The Current Price-Gouging Laws on Illinois Books
The state of Illinois has very specific laws regarding price-gouging that were put into place to protect consumers for exorbitant petroleum pricing. The law defines price-gouging as:
“During any market emergency, for any petroleum-related business to sell or offer to sell any petroleum product for an amount that represents an unconscionably high price”
There’s a lot of leeway in a law that uses such a subjective concept as “unconscionable,” but we know for sure it didn’t cover the items named in today’s complaints.
Because these laws only cover petroleum-related businesses, consumers have had no protections in place during the COVID-19 pandemic. This has led opportunists to try and make excessive amounts of money off of the crisis.
The Governor’s Executive Order Bridges the Gap
The executive order is meant to bridge the gap between the current law and issues currently affecting the citizens of Illinois. It is likely that this is temporary and a more complete bill will be passed later to enhance consumer protections.
House Bill 2882 Addresses Pharma
One such bill that is making its way through the legislature is House Bill 2882. This bill expands price-gouging to include manufacturers and wholesale drug distributors and states that they are prohibited from charging high prices on essential off-patent and generic drugs.
More Comprehensive Legislation Expected
The latest executive order, combined with HB 2882, points to the fact that a more comprehensive bill to reform price-gouging laws in Illinois could be on its way. If such a bill were brought forth, it would likely include provisions covering food, medical supplies, and essential consumer goods such as toilet paper.
What Future Price-Gouging Legislation Could Look Like for IL
Today’s crisis will likely be the basis for determining how to best expand current price-gouging legislation in this state. We imagine legislators will look to other states which currently have more robust price gouging laws in place for ideas.
Here are some of the official provisions from across the country.
Idaho Price-Gouging Law: “Fuel or food, pharmaceuticals, or water for human consumption at an exorbitant or excessive price during a declared state of emergency”
Kansas Price-Gouging Law: “For any supplier of a “necessary property or service” to “profiteer from a disaster” by charging 25% or more than the pre-disaster price for such goods/services.”
Maine Price-Gouging Law: “Selling or offering for sale “necessities at an unconscionable price” when there is an abnormal market disruption”
Michigan Price-Gouging Law: “Charging the consumer a price that is grossly in excess of the price at which similar property or services are sold — regardless of whether there is a declared emergency.”
It is likely that a new price-gauging bill in the state of Illinois would follow in the footsteps of these other states, and consider the provisions they have each made when crafting its own legislation.
The bills would most likely cover a wider range of goods which are deemed both necessary and important during a state of emergency.
In the meantime, the most recent executive order does provide additional and much-needed protections. Business owners beware, if you do not adhere to these requests or are inadvertently violating them, you could wind up needing legal advice.
Penalties for Price-Gouging Offenses in Illinois
This white-collar (or “victimless”) crime usually lands an offender with charges of unfair business practice.
Consequences of conviction based on the petroleum-related laws often encompass an order for restitution to be paid to victims and civil penalties. Additionally, your business could be fined up to $50,000 per violation.
As it stands, the new executive order is currently allowing the enforcement of fines of up to $10,000 per violation. A single sale could qualify as a violation.
If you’ve sold multiples of an item in question at a price the court believes to be exorbitant, you could face far heftier penalties — something no Illinois business owner wants to wind up paying.
About the Author:
Andrew M. Weisberg is a former felony prosecutor who now serves as a defense attorney in the greater Chicago area. He has extensive experience in handling all types of criminal cases, from sex offenses and domestic violence to retail theft-related crimes, murder, and drug crimes.