California’s protections against price gouging during a state of emergency

In light of the recent health risks in southern California, there has been a shocking increase in supply and demand for basic household essentials. However, there are rules set forth to protect Californians from price gouging of a range of basic goods and services in order to prevent an unjustifiable price increase for the essentials vital to the health, safety, and welfare of the population.

Likewise, California businesses should be aware of anti-price-gouging laws and avoid drastic increases in the cost of consumer goods unless they can demonstrate an increased cost in the supply chain.

During a state of emergency, it is illegal to sell goods and services for more than 10% of its ordinary price. Cal. Penal Code § 396(a). This prohibition generally lasts for 30 days from the declaration of the state of emergency. A state of emergency is a natural disaster (i.e., earthquakes, floods, fires, droughts), manmade disaster, disease or infestation. The state of emergency is declared by the President of the United States, the Governor of California, or by the Mayor of San Diego. Cal. Penal Code § 396(j)(1-2).


What is Price Gouging?

 The California Penal Code prohibits the increase of prices for goods and services by 10% of the ordinary price. Ordinary prices are the prices charged immediately before the declaration of a state of emergency. The California government implemented these rules in order to protect the public from an unjustifiable increase in prices of essentials needed during a time of emergency. Cal. Penal Code § 396(a).

There are very few exceptions to the price gouging rule. These include business and other entities that can increase prices on goods and services where they can prove the increase was a direct result of cost increases in labor or materials needed to price the goods or services.


Goods and Services Protected

 Goods are considered anything for personal, family or household purposes. Cal. Civ. Code § 1689.5(c). Therefore, the goods protected include food, toiletries, cleaning supplies, and other household basics.

Services protected include work, labor, and anything in connection with repairs, restoration, alteration or improvement regardless of the purpose of the thing being serviced. Contractors cannot markup their costs by more than the customary price for the work in the usual course of business. Other protected services include financial services, insurance, or any services used for emergency cleanup. Cal. Civ. Code § 1689.5(d).

In addition, it is unlawful to increase the pricing for goods used for emergency cleanup, emergency supplies, medical supplies, home heating essentials, building materials, housing, transportation, freight, storage services, or gas. Cal. Penal Code § 396(c).


Tenant and Occupant’s Rights

During the time period of a state of emergency, landlords and hotels cannot increase the price for any tenants or guests staying on their property.

Owners and operators of hotels and motels are prohibited from increasing the nightly rate by more than 10% as advertised immediately before the declaration of a state of emergency. Cal. Penal Code § 396(d).

A landlord cannot evict a tenant for the 30 days following a declaration of a state of emergency unless the eviction process began prior to the declaration. Further, a landlord may not increase rent more than 10% of the price before the state of emergency was declared, unless the lease states otherwise. Cal. Penal Code § 396(j)(11)(A-D). These tenant rights extend to occupants of mobile homes.


Relief from Any Illegal Price Gouging

The California Attorney General and the California Penal Code state that any conduct of illegal price gouging is a misdemeanor punishable by imprisonment in a county jail for a period of up to one year, or by a fine up to $10,000, or by both that fine and imprisonment. Cal. Penal Code § 396(h).

In addition, a violation of price increasing constitutes an unlawful business practice and an act of unfair competition. Violators will be subject to additional civil penalties of up to $2,500 for each violation, injunctive relief, and mandatory restitution. Bus. & Prof. Code § 17206(a).

If you believe you have been a victim of price gouging, please contact the office of the Attorney General.  Anyone who has been the victim of price gouging, or who has information regarding potential price gouging, is encouraged to immediately file a complaint with the Attorney General’s Office by going to the Attorney General’s website or by calling (800) 952-5225.

Latest News & Updates

Meet Our San Diego Attorneys

Thomas F. Gallagher, Esq.

Troy B. Krich, Esq.

Contact Gallagher Krich, APC

What Clients Say:

Mike K., Google

Rated 5 out of 5
August 11, 2023

Thank you so much for all your help in resolving a real estate matter so quickly and efficiently.

Mike K

What Clients Say:

Jonas Y., Google

Rated 5 out of 5
December 28, 2022

If you need a “ Closer”, go see Troy. Troy has been one of the best attorneys I have ever worked with. I don’t typically give reviews but after the last case Troy helped me settle out of court, I won’t hesitate to use Troy again! Thanks for all you do Troy !

Jonas Y

What Clients Say:

Daniel E., Google

Rated 5 out of 5
October 11, 2022

I left a voicemail for Tom late Sunday evening and received a phone call first thing the next morning.

Tom was very quick to reply to any questions I had, and if he was caught up in a meeting, he was sure to return my call promptly.

Tom provided sound and logical advice, during a very stressful and uncertain time. At times I asked him to be more aggressive and was often met with the pros and cons of that decision, allowing me to understand the approach and thought process behind his strategy.

Ultimately he provided options for several paths for us to take, worked swiftly, and got us where we needed to be.

He reached out several times to check on my sanity and make sure I was good.

As someone with very high expectations, I would highly recommend his services. He provided expertise that proved to be successful, and also took the time to make sure I was emotionally solid.

Tom assisted with me with a 50% / 50% ownership conflict.

Daniel E

What Clients Say:


Rated 5 out of 5
February 23, 2022

Really informative and actionable, very grateful to have connected and I look forward to working more with them in the future.


What Clients Say:


Rated 5 out of 5
February 8, 2022

i liked that a lawyer, and not a staff member, called me to get the details and he gave me his opinion of what his initial thoughts are about my case.


What Clients Say:

Bob W., Google

Rated 5 out of 5
August 30, 2021

What was thought to be a simple breach of contract turned into a nightmare. Through their tenacity and their deep knowledge of the law, we were successful. There is no reason to look any further as you will not get any better representation than this firm. I highly recommend them and strongly suggest that if you are considering starting a business or are already managing one, this firm will guide you, avoiding the troubled waters businesses sometimes find themselves in.

Bob W

What Clients Say:

Rasmita M., Google

Rated 5 out of 5
August 13, 2021

Johnny Nitti helped us with our estate plan. He was very meticulous while drafting the plan and spent enough time to explain the details to us. He filed the deed with county recorder and paid for the fees himself. Overall, Johnny did a great job and we definitely plan to work with him in the future for any updates to our EP.

Rasmita M

What Clients Say:

George A., Google

Rated 5 out of 5
August 7, 2021

Johnny Nitti helped me with my estate planning (will, living trust, etc.) and made the process smooth. He is very responsive and organized. I highly recommend contacting Johnny.

George A

What Clients Say:

Ashley C., Google

Rated 5 out of 5
July 18, 2020

Tom Gallagher is very knowledgeable and helpful when it comes to business law. I reached out to him reguarding the Pandemic and my salon and I’m so glad I did. Many times stress and hard times can fog clarity and he really helped me understand the laws.

Thanks Tom!!!

Ashley C

What Clients Say:

Evan D., Google

Rated 5 out of 5
July 16, 2019

Thank you Troy for everything! Professional, prompt, and smooth handling of my case. I will be recommending to anyone that is in need of a lawyer.

Evan D