Manhattan Beach Municipal Code Ch. 4.142 Price Gouging

The City Council hereby finds that during emergencies and major disasters elsewhere, including, but not limited to, earthquakes, fires, floods, or civil disturbances, some merchants have taken unfair advantage of consumers by greatly increasing prices for essential consumer goods and services. While the pricing of consumer goods and services is generally best left to the marketplace under ordinary conditions, when a declared state of emergency results in abnormal disruptions of the market, the public interest requires that excessive and unjustified increases in the prices of essential consumer goods and services be prohibited. It is the intent of the City Council in enacting this chapter to protect citizens from excessive and unjustified increases in the prices charged during or shortly after an emergency for goods and services that are vital and necessary for the health, safety, and welfare of consumers. Further it is the intent of the City Council that this chapter be liberally construed so that its beneficial purposes may be served.

(Ord. No. 20-0011-U, § 2, eff. March 17, 2020)

"Building materials" means lumber, construction tools, windows, and anything else used in the building or rebuilding of property.

"Consumer food item" means any article that is used or intended for use for food, drink, confection, or condiment by a person or animal.

"Declared emergency" means a local emergency or state of emergency as further described in Chapter 3.08 of this code.

"Emergency supplies" includes, but is not limited to, water, flashlights, radios, batteries, candles, blankets, soaps, diapers, temporary shelters, tape, toiletries, plywood, nails, and hammers.

"Gasoline" means any fuel used to power any motor vehicle or power tool.

"Goods" has the meaning ascribed in Civil Code Section 1689.5(c).

"Housing" means any rental housing leased on a month-to-month term.

"Medical supplies" includes, but is not limited to, prescription and nonprescription medications, bandages, gauze, isopropyl alcohol, and antibacterial products.

"Repair or reconstruction services" means services performed by any person who is required to be licensed under the California contractors' state license law (chapter 9, commencing with section 7000, of division 3 of the California Business and Professions Code), for repairs to residential or commercial property of any type that is damaged as a result of an event that led to a declared emergency or state of war emergency.

"Transportation, freight and storage services" means any service that is performed by any company that contracts to move, store, or transport personal or business property or rents equipment for those purposes.

(Ord. No. 20-0011-U, § 2, eff. March 17, 2020)

A. Consumer Goods and Services:

1. Upon the proclamation of a declared emergency or an event triggering a state of war emergency, and for a period of thirty (30) days following the proclamation of a declared emergency or the event that triggered a state of war emergency, it is unlawful for a person, contractor, business, or other entity to sell or offer to sell 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 for a price of more than ten percent (10%) above the price charged by that person for those goods or services immediately prior to the proclamation of a declared emergency or the event that triggered a state of war emergency.

2. A person may increase prices in excess of the amount permitted in subsection A.1. of this section if the seller or vendor can demonstrate that the increase in price is directly attributable to additional costs imposed on that person by the supplier of the goods, or directly attributable to additional costs for labor or materials used to provide the services, provided that in those situations where the increase in price is attributable to additional costs imposed by the seller's supplier or additional costs of providing the goods or service during the declared emergency or state of war emergency, the price represents no more than ten percent (10%) above the total of the cost to the seller plus the markup customarily applied by the seller for that good or service in the usual course of business immediately prior to the proclamation of a declared emergency or the event that triggered a state of war emergency.

3. A business offering an item for sale at a reduced price immediately prior to the proclamation of a declared emergency or the event triggering a state of war emergency may use the price at which it usually sells the item to calculate the price increase permitted pursuant to this subsection.

B. Construction, Repair, and Cleanup Services:

1. Upon the proclamation of a declared emergency or an event triggering a state of war emergency, and for a period of one hundred eighty (180) days following the proclamation of a declared emergency or the event that triggered a state of war emergency, it is unlawful for a contractor to sell or offer to sell any repair or reconstruction services or any services used in emergency cleanup for a price of more than ten percent (10%) above the price charged by that person for those services immediately prior to the proclamation of a declared emergency or the event that triggered a state of war emergency.

2. A person may increase prices in excess of the amount permitted in subsection B.1. of this section if the seller or vendor can demonstrate that the increase in price is directly attributable to additional costs imposed on that person by the supplier of the goods, or directly attributable to additional costs for labor or materials used to provide the services, provided that in those situations where the increase in price is attributable to the additional costs imposed by the contractor's supplier or additional costs of providing the service during the declared emergency or state of war emergency, the price represents no more than ten percent (10%) above 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 proclamation of a declared emergency or the event that triggered a state of war emergency.

3. A business offering services at a reduced price immediately prior to the proclamation of a declared emergency or the event triggering a state of war emergency may use the price it usually charges for such services to calculate the price increase permitted pursuant to this subsection.

C. Hotel and Motel Rates:

1. Upon the proclamation of a declared emergency or an event triggering a state of war emergency, and for a period of thirty (30) days following the proclamation of a declared emergency or the event that triggered a state of war emergency, 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 of a declared emergency or the event that triggered a state of war emergency, by more than ten percent (10%).

2. A hotel owner or operator may increase prices in excess of the amount permitted by subsection C.1. of this section 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.

(Ord. No. 20-0011-U, § 2, eff. March 17, 2020)

The provisions of this chapter may be extended for additional 30-day periods by the Director of Emergency Services, Assistant Director of Emergency Services or the City Council, if deemed appropriate to protect public health, safety, or welfare.

(Ord. No. 20-0011-U, § 2, eff. March 17, 2020)