Price Gouging

DISCLAIMER: This page is for informational purposes only and does not constitute legal advice. Please consult with your legal counsel for specific advice regarding price gouging.

 Current Price Gouging Protections

The following locations are under price gouging protections as a result of Proclamations or Executive Orders issued by the Governor of California:

 
Location (Counties, unless otherwise indicated) Proclamation / Executive Order Price gouging protections in place until
​​El Dorado Mosquito Fire

3/7/2023 (Penal Code 396(c))

 

Imperial

Tropical Storm Kay (9/16/22)

 

3/15/2023 (Penal Code 396(c))

 

Inyo Tropical Storm Kay (9/16/22) 3/15/2023 (Penal Code 396(c))
Los Angeles Tropical Storm Kay (9/16/22) 3/15/2023 (Penal Code 396(c))
Madera Fork Fire (9/19/22)   3/18/2023 (Penal Code 396(c))
Mariposa Oak Fire (7/23/22) 1/19/2023 (Penal Code 396(c))
Modoc Barnes Fire (9/19/22)  3/18/2023 (Penal Code 396(c))
Placer Mosquito Fire 3/7/2023 (Penal Code 396(c))
Riverside

Fairview Fire

 

3/7/2023 (Penal Code 396(c))

 

Tropical Storm Kay (9/16/22)

 

3/15/2023 (Penal Code 396(c))

 

San Bernardino  Tropical Storm Kay (9/16/22) 3/15/2023 (Penal Code 396(c))
Siskiyou McKinney, China 2 and Evans fires (7/30/22)

1/26/2023 (Penal Code 396(c)) 

Mill Fire (9/2/22) 3/1/2023 (Penal Code 396(c))
Mountain Fire (9/19/22)  3/18/2023 (Penal Code 396(c))
Statewide Extreme Heat Wave Event (8/31/22) 2/27/2023 (Penal Code 396(c))

What are the Price Gouging Protections Under California Law?

California Penal Code section 396 prohibits excessive and unjustified increases in the prices of essential consumer goods and services, construction services, hotel lodging, and residential rental properties during and shortly after a declared state of emergency or local emergency.

Items Price protection Law
Any consumer food items or goods, goods or services used for emergency cleanup, emergency supplies, medical supplies, home heating oil, building materials, housing, transportation, freight, and storage services, or gasoline or other motor fuels

It is unlawful for a person, contractor, business, or other entity to sell or offer to sell at a price of more than 10 percent greater than the price charged by that person for those goods or services immediately prior to the proclamation or declaration of emergency, or prior to a date set in the proclamation or declaration.

A greater price increase is not unlawful if that person can prove that the increase in price was directly attributable to additional costs imposed on it by the supplier of the goods, or directly attributable to additional costs for labor or materials used to provide the services, during the state of emergency or local emergency, and the price is no more than 10 percent greater than the total of the cost to the seller plus the markup customarily applied by that seller for that good or service in the usual course of business immediately prior to the onset of the state of emergency or local emergency.

If the person, contractor, business, or other entity did not charge a price for the goods or services immediately prior to the proclamation or declaration of emergency, they may not charge a price that is more than 50 percent greater than the cost to the vendor.

Pen. Code § 396 (b)

​​Any repair or reconstruction services or any services used in emergency cleanup

It is unlawful for a contractor to sell or offer to sell for a price of more than 10 percent above the price charged by that person for those services immediately prior to the proclamation or declaration of emergency.

A greater price increase is not unlawful if that person can prove that the increase in price was directly attributable to additional costs imposed on it by the supplier of the goods, or directly attributable to additional costs for labor or materials used to provide the services, during the state of emergency or local emergency, and the price represents no more than 10 percent greater than the total of the cost to the contractor plus the markup customarily applied by the contractor for that good or service in the usual course of business immediately prior to the onset of the state of emergency or local emergency.

Pen. Code § 396 (c)
Hotel or motel

It is unlawful for an owner or operator of a hotel or motel to increase the hotel or motel’s regular rates, as advertised immediately prior to the proclamation or declaration of emergency, by more than 10 percent.

A greater price increase is not unlawful if the owner or operator can prove that the increase in price is directly attributable to additional costs imposed on it for goods or labor used in its business, to seasonal adjustments in rates that are regularly scheduled, or to previously contracted rates.

Pen. Code § 396 (d)

​​Any rental housing with an initial lease term of no longer than one year, including, but not limited to, a space rented in a mobilehome park or campground

It is unlawful for any person, business, or other entity, to increase the rental price advertised, offered, or charged for housing, to an existing or prospective tenant, by more than 10 percent.

A greater rental price increase is not unlawful if that person can prove that the increase is directly attributable to additional costs for repairs or additions beyond normal maintenance that were amortized over the rental term that caused the rent to be increased greater than 10 percent or that an increase was contractually agreed to by the tenant prior to the proclamation or declaration.

This does not authorize a landlord to charge a price greater than the amount authorized by a local rent control ordinance.

It is unlawful for a person, business, or other entity to evict any residential tenant of residential housing and rent or offer to rent to another person at a rental price greater than the evicted tenant could be charged under Penal Code section 396.

It shall not be a violation for a person, business, or other entity to continue an eviction process that was lawfully begun prior to the proclamation or declaration of emergency.

Pen. Code § 396 (e) & (f)

When do the protections come into effect and how long does it last?

Price gouging protections are triggered by an emergency proclamation from the Governor, the President of the United States, or a local government. These protections may also be extended for additional periods.

The statutory length of time for the protections depends on the type of item.

Items Statutory length of protection Law
Any consumer food items or goods, goods or services used for emergency cleanup, emergency supplies, medical supplies, home heating oil, building materials, housing, transportation, freight, and storage services, or gasoline or other motor fuels a period of 30 days following the proclamation or declaration Pen. Code § 396 (b)

​​Any repair or reconstruction services or any services used in emergency cleanup

a period of 180 days following the proclamation or declaration Pen. Code § 396 (c)
Hotel or motel

a period of 30 days following the proclamation or declaration

Pen. Code § 396 (d)
Any rental housing with an initial lease term of no longer than one year, including, but not limited to, a space rented in a mobilehome park or campground a period of 30 days following the proclamation or declaration Pen. Code § 396 (e) & (f)

What is the penalty for violating the protections?

A violation of Section 396 protections is a misdemeanor punishable by imprisonment in a county jail for a period not exceeding one year, by a fine of not more than ten thousand dollars ($10,000), or by both that fine and imprisonment. Pen. Code § 396 (h).

A violation of these protections also constitutes an unlawful business practice and an act of unfair competition within the meaning of Section 17200 of the Business and Professions Code. The remedies and penalties provided by this section are cumulative to each other, the remedies under Section 17200 of the Business and Professions Code, and the remedies or penalties available under all other laws of this state. Pen. Code § 396 (i).

Who enforces these laws?

The Office of the Attorney General and local district attorney offices, along with state and local law enforcement, investigate and prosecute civil and criminal violations of price gouging protections contained in Penal Code section 396. For more information, please visit the Office of the Attorney General’s website at

https://oag.ca.gov/consumers/pricegougingduringdisasters