General Assembly Considers Price-Gouging Bill

Senate Majority Leader Martin Looney (D-New Haven / Hamden) testified before the General Assembly’s General Law Committee Tuesday in support of a bill he co-sponsored, Raised Bill 1089, which bans price gouging for critical services during weather emergencies.

Extreme weather this winter created a need for various weather related services. Ongoing flooding across Connecticut will require pumping of waterlogged basements. Record breaking snows of the past couple months caused several buildings to collapse, and required snow removal from residential and commercial roofs.

“It is no coincidence that this proposal comes at the tail end of the record-breaking winter of 2011, which exposed some glaring weaknesses in our price gouging statutes," Looney said. "The snow put great stress on roofs all across Connecticut. And now, as we head into spring, we are seeing ample flooding due to rain and melting snow.

“This all has led to what I believe is an alarming increase in Connecticut consumers’ vulnerability to price gouging, particularly for services," he said. "This bill will extend our state’s price gouging ban beyond the goods it covers now, and ensure consumers are protected for emergency weather services as well.”

A February 1, 2011 article in the Hartford Courant discussed a homeowner in Berlin who received a quote from a snow removal company for $3,650 to clear the roof of her 2,000 square foot home. When she demurred, the contractor immediately lowered its quote by $1,000. Others paid just a few hundred dollars for the same services.

Under current law, §42-230 of the Connecticut General Statutes prohibits an increase in the price of any good sold in an area under a formal disaster emergency declaration by the governor or President of the United States. §42-232 does apply to price gouging for some services, but only when the governor has resorted to the extreme declaration of a supply emergency or energy emergency, which also allows for rationing and carries potential criminal penalties.

The proposed legislation would extend the ban on price gouging to cover services as well as goods, and would also apply during, and potentially in the aftermath of, less extreme weather and other types of emergencies that do not necessarily result in a formal declaration by the governor or president.

Whether a price is “unconscionably excessive” would be determined in court, taking into account the common price of the relevant goods and services prior to the emergency, and the amount charged by other providers to consumers in the same area during that emergency.

The proposed bill is inspired by a similar law in the state of New York, which imposes a penalty of $10,000 for comparable price gouging during emergency conditions.