One governor signs price-gouging law; other states pursue safeguards

| Wednesday, June 07, 2006

Wisconsin Gov. Jim Doyle has signed a bill into law that is intended to protect consumers in Wisconsin from being gouged at the fuel pump.

The National Conference of State Legislatures reports nearly 30 states have some type of price gouging ban in place, with many others pursuing their own rules. The laws in many of those states are triggered by emergency declarations.

Previously, the only anti-gouging rule in Wisconsin prohibited multiple mark-ups in a 24-hour period and charging people in line for fuel a new price posted while they’re waiting.

The new law prohibits selling consumers goods and services, such as food, medicine and fuel, at unreasonably high prices during an emergency declared by the governor.

The Department of Agriculture, Trade and Consumer Protection will draft formulas to determine when prices become unreasonable, The Associated Press reported. Violators will first be issued warnings, and then could face lawsuits seeking up to $10,000 in forfeitures and an injunction.

“The aftermath of a disaster should not be an excuse for big oil companies to gouge Wisconsin citizens,” Doyle said in a written statement. “We need to send a clear message to the big oil companies that they can’t simply raise prices 40 or 50 cents overnight for no reason.”

The new law, previously SB358, already is in effect.

A similar effort has been approved in Vermont with legislation in Louisiana nearing passage. However, another effort in Colorado has been vetoed.

Vermont Gov. Jim Douglas signed legislation May 29 to prevent sudden jumps in fuel prices. The new protection takes effect July 1.

The new law allows the governor to declare a “market emergency” during such circumstances like severe weather, electrical supply shortages and acts of war or terrorism. The declaration makes it illegal to sell petroleum, including diesel and home heating oil, at “an unconscionably high price.”

Violators would face fines up to $10,000 per occurrence.

A bill in the Louisiana House would criminalize price gouging and make it punishable by up to two years in jail and/or up to a $2,000 fine. Those who attempt to gouge customers could be fined as much as $500 and/or spend as much as six months in jail.

Existing Louisiana law imposes civil fines on merchants who overcharge for goods and services, including fuel, during or in the wake of a declared emergency.

Merchants would be permitted to increase prices if the mark up is consistent with similar goods and services outside the state. They would also be allowed to cover the cost of getting items in preparation for or after a disaster.

Merchants would not be able to charge a price that “grossly exceeds the prices ordinarily charged for comparable goods and services” during or before the disaster.

The rule would take effect during an emergency declared by the governor or a local official. It also would take effect when a named tropical storm or hurricane enters the Gulf of Mexico.

In Colorado, Gov. Bill Owens vetoed a bill that would have made it illegal for retailers to increase prices more than 10 percent above their costs after emergency declarations by the governor. Violators would have faced up to a $10,000 fine per day.

The state attorney general would have been able to file suit in district court to prevent gouging.

– By Keith Goble, state legislative editor
keith_goble@landlinemag.com

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