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Greenbaum, Rowe, Smith & Davis LLP Client Alert

New Jersey Governor Phil Murphy’s Executive Order 103 of March 9, 2020 declared both a Public Health Emergency and a State of Emergency in New Jersey in response to the COVID-19 pandemic.  With this action, the Governor triggered the often discussed but seldom detailed price gouging law contained in the New Jersey Consumer Fraud Act. 

Simultaneously, New Jersey Attorney General Gurbir Grewal warned business owners that his office would aggressively investigate and prosecute any business engaged in price gouging and took the added measure of establishing a hotline to expedite the investigation of price gouging complaints.  In the two weeks that followed the emergency declaration, the Division of Consumer Affairs received more than 1,400 complaints, conducted 350 inspections, sent nearly 160 cease-and-desist letters and issued nearly 30 subpoenas. These figures represent an unprecedented number of investigations in such a short period of time.  

As much as price gouging has been discussed in the media and during press conferences, little specific information has been provided to alert commercial businesses as to what actions are explicitly prohibited.

Under the New Jersey Consumer Fraud Act, an “excessive price increase” is prohibited during a declared State of Emergency:

New York, Pennsylvania and Connecticut, among many other states, have similar restrictions on price increases during emergencies.  Connecticut law requires that no percentage price increase can be imposed during the coronavirus outbreak and establishes fines of up to $1,000 for each instance.  Pennsylvania defines an excessive price as at least 20% higher than the normal price range immediately prior to the declaration and punishes violators with a fine of up to $10,000 each.  New York does not define what markup is permitted during a declaration but imposes a civil penalty of $25,000 per offense, and has also introduced new legislation that would not only define “excessive price” similar to New Jersey’s definition at 10%, but would additionally empower District Attorneys to file criminal charges against violators.

Please contact the author of this Alert, Christopher D. Adams cadams@greenbaumlaw.com | 732.476.2692, with questions or to discuss any personal or business circumstances in greater detail.  Mr. Adams is Chair of the firm’s Criminal Defense & Regulatory Compliance Practice Group.