In the past month, Florida’s Attorney General has received thousands of complaints about price gouging across the state.  As a result, Florida is taking action.  Attorney General Ashley Moody has issued dozens of subpoenas to third-party sellers on Amazon and secured thousands in refunds for consumers.  The AG’s office has also been working with online platforms to deactivate price gouging accounts and has created a “Rapid Response Team” focused on price gouging.  Florida is, and promises to remain, active on price gouging enforcement.

Florida’s price gouging law was designed to prevent massive price increases during times of emergency.  Like many other states, Florida does not set a specific benchmark for what constitutes price gouging.  However, unlike some other states, Florida has an active enforcement history.  Historically, Florida’s Attorneys General have paid special attention to price gouging in order to protect consumers during and after hurricane season.

The Governor activated Florida’s price gouging rules on March 9, 2020 by declaring a state of emergency.  The restrictions remain in effect until May 8th, unless extended.

Florida Price Gouging Basics

Florida’s price gouging law covers the rental or sale of essential commodities during an emergency.  The law defines commodities, but not what makes them essential.  Commodities include a broad arrange of things: “any goods, services, materials, merchandise, supplies, equipment, resources, or other articles of commerce … necessary for consumption or use as a direct result of the emergency.”  In practice, the current Attorney General has focused her efforts on face masks, hand sanitizers, and disinfectants.  However, the law applies to much more, and specifically lists “food, water, ice, chemicals, petroleum products, and lumber.” Fla. Stat. § 501.160(1)(a).

Importantly, the law covers supply-chain sales in addition to retail sales.  Florida’s statue applies to any person (or her or his agent or employees) that rents, sells, or offers to sell “essential commodities” within the area covered by the emergency declaration.  However, the law includes an exception for supply-chain sellers of raw or processed food products.  Fla. Stat. § 501.160(5).

Like many states, Florida does not set a specific benchmark, instead prohibiting “unconscionable prices.”  Fla. Stat. § 501.160.  Prices are prima facie unconscionable if:

  1. There is a “gross disparity” between the sale or offer price now and the average sale or offer price of the commodity in the 30 days immediately before the state of emergency; or
  2. The current price “grossly exceeds the average price at which the same or similar commodity was readily obtainable in the trade area during the 30 days immediately prior” to the emergency.

Both of these definitions pose new questions, i.e. what counts as a “gross disparity” and when does one price “grossly exceed” another?  The statute does not define either term.  Prior cases indicate enforcers are often looking for increases of 50% or more, though lower price increases could be unconscionable in different scenarios.

Like other states with price gouging rules, Florida includes an exception for increased costs.  Florida’s rule exempts “increase[s] in the amount charged [that are] attributable to additional costs incurred in connection with the rental or sale of the commodity or rental or lease of any dwelling unit or self-storage facility, or regional, national, or international market trends.”  Fla. Stat. § 501.160(1)(b)1.  This exception comports with the principle that sellers should not be punished for higher prices due to increased costs elsewhere.  However, this common increased costs exception also means that when investigators ask retailers why their prices jumped, their first answer will often be, “my suppliers are charging me more.”

Notably, Florida’s exception for increased costs includes “regional, national, or international market trends.”  Some sellers have argued this language covers index-based pricing, however, this may only be true where an increase in the index price actually increases the seller’s costs.  As a result, sellers at all levels of the supply chain, and even those pricing based on an index, may consider tracking their costs and prices in the period immediately before the activation of the pricing prohibitions, along with documenting the bases for any pricing movements.

Penalties & Enforcement

Florida’s hurricane-prone climate has led to a history of active price gouging enforcement.  For example, in 2004, the Governor created a Hurricane Task Force responsible for investigating price gouging during the hurricane season.  The task force brought numerous civil cases against hotels, construction companies, and individuals, and recovered thousands in restitution and penalties.

In Florida, price gouging carries a $1,000 penalty for each violation, up to $25,000 for a 24-hour period.  Fla. Stat. § 501.164.  Florida has no private right of action for price gouging, so cases must be brought by the Attorney General or Department of Legal Affairs.  Fla. Stat. § 501.160(8).  The statute also makes it a misdemeanor to sell products during a state of emergency without a business tax receipt.  Fla. Stat. § 501.160(9).

Florida’s active enforcement can be expected to continue in the weeks and months ahead.  Look to Proskauer on Price Gouging for more information on these and other price gouging developments nationwide.

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Photo of John R. Ingrassia John R. Ingrassia

John is a partner at the Firm, advising on the full range of foreign investment and antitrust matters across industries, including chemicals, pharmaceutical, medical devices, telecommunications, financial services consumer goods and health care. He is the first call clients make in matters relating…

John is a partner at the Firm, advising on the full range of foreign investment and antitrust matters across industries, including chemicals, pharmaceutical, medical devices, telecommunications, financial services consumer goods and health care. He is the first call clients make in matters relating to competition and antitrust, CFIUS or foreign investment issues.

For more than 25 years, John has counselled businesses facing the most challenging antitrust issues and helped them stay out of the crosshairs — whether its distribution, pricing, channel management, mergers, acquisitions, joint ventures, or price gouging compliance.

John’s practice focuses on the analysis and resolution of CFIUS and antitrust issues related to mergers, acquisitions, and joint ventures, and the analysis and assessment of pre-merger CFIUS and HSR notification requirements. He advises clients on issues related to CFIUS national security reviews, and on CFIUS submissions when non-U.S. buyers seek to acquire U.S. businesses that have national security sensitivities.  He also regularly advises clients on international antitrust issues arising in proposed acquisitions and joint ventures, including reportability under the EC Merger Regulation and numerous other foreign merger control regimes.

His knowledge, reputation and extensive experience with the legal, practical, and technical requirements of merger clearance make him a recognized authority on Hart-Scott-Rodino antitrust merger review. John is regularly invited to participate in Federal Trade Commission and bar association meetings and takes on the issues of the day.

Photo of Christopher E. Ondeck Christopher E. Ondeck

Chris Ondeck is co-chair of the Firm’s nationwide Antitrust Group. He represents clients in civil and criminal antitrust litigation, defending mergers and acquisitions before the U.S. antitrust agencies, defending companies involved in government investigations, and providing antitrust counseling.

Chris has handled antitrust matters…

Chris Ondeck is co-chair of the Firm’s nationwide Antitrust Group. He represents clients in civil and criminal antitrust litigation, defending mergers and acquisitions before the U.S. antitrust agencies, defending companies involved in government investigations, and providing antitrust counseling.

Chris has handled antitrust matters for clients in a number of industries, including advertising, aerospace, alcoholic beverages, appliances, building materials, consumer products, defense, franchise, medical devices, metals, mining, natural resources, oil and gas, packaging, pharmaceuticals, software and telecommunications. He also has developed substantial experience advising clients regarding the application of the antitrust laws to the pharmaceutical industry, the agriculture industry, trade associations and the energy industry.