Governor Newsom signs Umberg Price Gouging Bill into law

(Sacramento, CA) – Today, Senator Thomas J. Umberg (D – Orange County) announced that Senate Bill 1196 (SB 1196), a bill that would protect Californians from price gouging during an emergency, has been signed into law by California Governor Gavin Newsom. Price gouging refers to the criminal act of raising the prices of essential goods more than 10% during an emergency.

“California is no longer in the midst of just one emergency, but now several as we continue to battle the COVID-19 pandemic, in addition to wildfire season. Preserving access to essential goods that are necessary to protect the health and welfare of those affected by these crises is absolutely imperative,” said Senator Umberg. “This decisive action ensures that fewer of our neighbors will be victims of price gouging.”

“As Californians grapple with hardships caused by devastating wildfires and the coronavirus pandemic, it is critical that we, as state leaders, do everything we can to protect against illegal price gouging,” said Attorney General Xavier Becerra. “SB 1196 strengthens California’s price gouging laws and puts prosecutors in a better position to go after bad actors. We thank Senator Umberg for championing a new law that will better the lives of our residents.”

Currently, under California Penal Code Section 396, price gouging is illegal and punishable by law during a declared state of emergency. However, the COVID-19 crisis and the recent wildfires California has experienced have shown a need to update these provisions. Senate Bill 1196 would codify the Governor’s authority to enact many of the provisions of his Executive Order N-44-20 on the subject from earlier this year.

“Opportunists have been preying on the public’s fear and panic to take advantage of a loophole in the law to overcharge customers,” said Orange County District Attorney Todd Spitzer. “This important legislation will ensure that loophole is closed and that those who are capitalizing on terror and anxiety during an emergency are prosecuted to the fullest extent of the law. Through the hard work and dedication of Sen. Umberg and our partner offices, the Orange County District Attorney’s Office is continuing to stand up and fight to protect consumers.”

“The need to effectively protect consumers becomes more critical during times of emergency. This is why we are fighting alongside Senator Umberg for SB 1196 to become law,” said San Diego District Attorney Summer Stephan. “This law will close a troubling loophole in California’s price gouging law, and ensure that all sellers — brick-and-mortar stores or online business, previous sellers or new market entrants — are prohibited from preying on our state’s consumers during a declared emergency like the COVID-19 pandemic.”

“Price gouging is profiteering, and more than six months into the pandemic we are still seeing exorbitant prices for critical items like masks and hand sanitizer,” said Claudia Deeg, CALPIRG Associate. “The signing of Senate Bill 1196 sends a clear message that this predatory behavior will not be tolerated. We are grateful to Senator Umberg and Attorney General Becerra for their hard work to protect consumers and to Gov. Newsom for signing this bill into law.”

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Senator Thomas Umberg represents the 34th Senate District, which includes the cities of Anaheim, Fountain Valley, Huntington Beach, Garden Grove, Long Beach, Los Alamitos,Midway City, Orange, Santa Ana, Seal Beach, and Westminster. Umberg is a retired U.S. Army Colonel, and former federal prosecutor. He and his wife, Brigadier General Robin Umberg, USA (ret.), live in Orange County.