Minnesota legislation aims to stop price gougers during a crisis

When devastating winter storms hit Texas this month, the price gougers moved in.

Hundreds of thousands of people were without power, heat or water, so the price of food and bottled water skyrocketed. Gasoline and natural gas costs spiked. Hotel rooms were increasing prices to $1,000 a night.

But Texas has a law that allows the attorney general to go after people who try to exorbitantly increase the prices of essential goods during a state of emergency caused by a natural or man-made disaster. Fines in Texas can reach as high as $250,000, depending on the severity of the offense.

In all, 35 states and the District of Columbia have laws on the books that prevent the practice of price gouging during a state of emergency — but not Minnesota.

A bill heading for a floor vote in the Minnesota House aims to change that, prohibiting "unconscionably excessive" price increases on essential goods such as food, water, gas, health care, transportation and shelter during a state of emergency declared by the governor. Violators could be hit with fines and a civil penalty.

"What this bill is about is very narrowly targeting people engaged in behavior that no one can defend, which is to profit off the misery and desperation of people," said Rep. Zack Stephenson, DFL-Coon Rapids, who is sponsoring the bill in the House.

The bill has the backing of Attorney General Keith Ellison, who testified that because there's no law on the books, Minnesota Gov. Tim Walz had to issue an executive order at the start of the COVID-19 pandemic to prevent people from price gouging. His executive order says people cannot sell essential goods for more than 20% of the product's pre-pandemic price.

Since then, Ellison said his office received more than 2,400 complaints of price gouging, which his staff investigated. "I think everybody ... probably remembers those empty shelves of toilet paper," he said. "That's quite a visual."

But Jamie Pfuhl, executive director of the Minnesota Grocers Association, testified that rural and ethnic grocery stores were hit hardest by the executive order as they grappled with supply-chain issues and price increases that weren't caused by price gouging. Those smaller, independent grocery stores struggled with the paperwork responding to complaints of price gouging, said Pfuhl.

"They were tasked with providing over six weeks of invoices to prove they weren't price gouging in the middle of this crisis," she said. "We saw eggs increase anywhere from 95% to 222% at retail, and that was pure increase that the retailer experienced."

House Republicans criticized the legislation as something that could hurt businesses just trying to adapt to market changes and supply and demand.

"If government is going to interfere with marketplace, supply and demand curves, what will happen is supply will exhaust much faster and then no one will have anything," said Rep. Eric Lucero, R-Dayton.