California State of Emergency Declaration
Proclamation Invokes Price Gouging Laws
On March 4, Governor Gavin Newsom declared a State of Emergency for California in response to and in preparation for impacts due to COVID-19 (Coronavirus).
The proclamation includes invoking Price Gouging laws stated in Penal Code Section 396. These laws make it unlawful to sell a necessary good or service for a price more than 10 percent greater than the price charged before the declaration.
A greater price increase is allowed if it can be shown the price increase is attributable to increased costs to offer the item for sale during the emergency and is not more than 10 percent of the increased cost of the item.
Price Gouging laws remain in effect for 30 days following the declaration, unless revised by the Governor. This declaration specifically extends the Price Gouging law for emergency supplies and medical supplies through September 4, 2020. The definition of these supplies is listed in Section 396 in the Penal Code.
The California Attorney General may enforce price gouging laws along with private citizens through the court system. Both Governor Newsom and Attorney General Xavier Becerra have made explicit public warnings about necessary compliance with the law.
CGA encourages companies to be familiar with the law and comply fully. Companies may want to engage the services of a legal professional when making compliance plans.
STATE OF EMERGENCY DECLARATIONS
Declaration of a State of Emergency is common in response to wildfires, extreme weather, earthquakes, and other similar scenarios. For reference, California had five declarations of a State of Emergency in 2019.
A declaration of a State of Emergency allows the state government several opportunities to make response and recovery funding available, enable mutual aid between local, state and federal governments, and more efficiently direct state resources.
Grocery companies should continue to follow the recommendations of the Center for Disease Control and the California Department of Public Health regarding COVID-19 available here.
CGA staff is available to answer general questions and provide additional information. Contact Tim James, Senior Director, Local Government Relations, (916) 448-3545.
State of Emergency Declaration Resources
- Proclamation of State Emergency, March 4, 2020 – Governor’s Office
- FAQS on Price Gouging – California Department of Justice
- Penal Code Section 396, Price Gouging Law
The California Grocers Association has established relationships with a number of key emergency management organizations including the Federal Emergency Management Agency (FEMA), the California Office of Emergency Services (CalOES) and the American Red Cross to provide CGA members real-time information during a natural, or man-made disaster and to assist these agencies in disaster relief.
- California Office of Emergency Services
- Federal Emergency Management Agency
- California Resiliency Alliance
MEMORANDUM OF UNDERSTANDING
In 2008, the California Grocers Association was one of the first in the private sector to sign a historic Memorandum of Understanding (MOU) with the California Emergency Management Agency (Cal-EMA). The MOU provides for CGA to be fully integrated into the state’s Standardized Emergency Management System. This allows CGA access to the State Operations Center – the statewide nerve center during any significant disaster – as part of the Business Operations Center. CGA is provided real time situation reports that are forwarded to affected Association members. In return, CGA works with Cal-EMA as a resource during and after a significant disaster.
For more information on CGA’s emergency management program, contact Nate Rose at (916) 448-3545.