Massachusetts Attorney General Dramatically Expands Price Gouging Regulation in Response to COVID-19

At around noon on March 20, 2020, Massachusetts Attorney General Maura Healey filed emergency regulations dramatically expanding the reach of 940 CMR 3.18, the Commonwealth’s regulation on price gouging.  Historically, the regulation has applied only to “petroleum-related businesses,” such as gas stations, during “market emergencies.”

The emergency regulation, however, applies to “any goods or services necessary for the health, safety, or welfare of the public,” such as hand sanitizer and protective gear for medical personnel.  The regulation prohibits selling such goods and services at an “unconscionable price” during a declared state of emergency.  An “unconscionable price” is defined by a “gross disparity” between the new price and the price at which the same goods and services were offered or sold prior to the declaration of emergency, accounting for any increased costs attributable to the emergency.  The emergency regulations are effective immediately.

In the press release accompanying the emergency filing, AG Healey urged consumers to report “unreasonably high prices of consumer goods” and referred to price gouging as “unacceptable and illegal.”

AG Healey thus joins a growing group of state attorneys general coming out aggressively either to enforce existing regulations or expand current regulations on price gouging in the face of COVID-19.  Maine Attorney General Aaron Frey, for example, recently stated that he was conducting multiple price gouging investigations following Governor Janet Mills’ declaration of an abnormal market disruption on March 17, 2020.

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