California Strengthens Penal Code Section 396, Codifies Price Gouging Executive Order

Since the beginning of the pandemic, many governors have issued executive orders targeted at combating price gouging. However, one California state senator, Senator Thomas Umberg, proposed going a step further. In April 2020, Senator Umberg introduced Senate Bill 1196, which would codify many of the provisions in California Governor Gavin Newsom's Executive Order N-44-20. On September 30, 2020, Governor Newsom signed the bill into law. In connection with the signing, Senator Umberg stated that "[t]his decisive action ensures that fewer of our neighbors will be victims of price gouging."

California Penal Code Section 396 prohibits price gouging during a declared state of emergency. Specifically, Section 396 states that "it is unlawful for a person, contractor, business, or other entity to sell or offer to sell . . . [a covered good] for a price of more than 10 percent greater than the price charged by that person for those goods or services immediately prior to