Schedule a Free Consultation

Price Gouging and Hurricane Iselle

What’s going on right now with price gouging in the state of Hawaii is a crime. No really. It’s a crime.

Price gouging is unconscionable in the face of natural disasters such as Hurricane Iselle. We all understand mark-ups and the capitalist system, but not everyone has a cellar where we can place pallets of bottled water. In a state with outrageous property prices and a glut of condominiums, there simply isn’t space to have water Spam and Vienna wieners laying around for months, “just in case”. Some of us have children who grow so fast, the children are ten pounds heavier before it is time to use the two weeks of back-up diapers. We need to buy these things when trouble comes. In an island community, it is even more important. Were something to happen to the ports, we have to be prepared longer than anyone on the mainland.

And don’t depend on the government. Hurricane Katrina taught us that. New Orleans is connected by a highway in every direction. We depend on shipping exclusively.

KHON 2 reported yesterday that price gouging is illegal under Hawaii Revised Statute § 209-9. That’s wrong, as § 209-9 is no longer a law in the state of Hawaii. (KHON, my resume is available if you’re looking for a new legal consultant.)

On June 20, 2014, Governor Abercrombie signed Act 111, which wrote § 209-9 out of the law. This law has been effective since July 1, 2014, slightly more than a month before this particular problem and updates the sixty-year-old laws that govern what happens during times of disaster.

§ -30 of Act 111 covers price gouging: “Whenever the governor declares a state of emergency for the entire State or any portion thereof, or a mayor declares a local state of emergency for the county or any portion thereof, or when the State, or any portion thereof, is the subject of a severe weather warning:

There shall be prohibited any increase in the selling price of any commodity, whether at the retail or wholesale level, in the area that is the subject of the proclamation or the severe weather warning."

So what’s the penalty? The penalty, unfortunately, is a civil one, with treble damages as defined in another section.

On the other hand, the governor and the mayors have another avenue they can explore, which they should do, to respond to the demands of the people that currently need water and supplies for their family. The new law makes this complicated, but it is found like this.

§ -25 explains how the governor or mayors can create specific rules that have the effect of law during severe weather warning periods. Clearly this is a broad power and shouldn’t be taken lightly, but it is strictly limited to what we need as a state to protect our citizens. Once the Mayor or Governor adopts these rules, the penalties are no longer civil, but criminal!

Any person violating any rule of the governor or mayor prescribed and promulgated pursuant to this chapter and having the force and effect of law, shall, if it shall be so stated in the rule, be guilty of a misdemeanor. Upon conviction, the person shall be fined not more than $5,000, or imprisoned not more than one year, or both.

One year in jail for selling a water bottle for two and a half times what you would sell it at if there was no rain? Sounds fair to me.

Do it, Governor! The severe weather and the state of emergency have been declared, now create the rules that protect our families from being raked over the coals before we buy a bottle of water. 

The good thing about this law is that it does have a way for businesses who otherwise are attempting to obey the law to make up for making the innocent mistake of increasing the price simply for capitalistic reasons. When the national Whole Foods understands what the local branch is reportedly doing, it allows them to correct the problem. Even better, the law allows businesses who actually have to pay extra to get those supplies (let’s say, an increase in the shipping cost during the hurricane) to pass those costs on to the consumer.  These are the actual costs we don’t expect the businesses to absorb, we just don’t want businesses to collect lottery winnings because a state of emergency is declared. Hopefully, it is just rain, and we’ll all be drinking bottled water for months out of choice, not a necessity.

Stay safe out there. Looking out the office window, it may be the bluest sky I’ve ever seen.