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How Does a State of Emergency Affect Prices in North Carolina?

On Tuesday, Governor McCrory issued Executive Order number 43, which declared a state of emergency across the entire state pursuant to Chapter 166A of the General Statutes (the North Carolina Emergency Management Act).

One of the interesting legal consequences of this development is that the ordinary economic rules of supply and demand are partially suspended, and price gouging prohibitions become effective under Section 75-38 of the General Statutes.

Price gouging is selling or renting certain goods and services "with the knowledge and intent to charge a price that is unreasonably excessive under the circumstances."   The goods and services covered by the statute are those "which are consumed or used as a direct result of an emergency or which are consumed or used to preserve, protect, or sustain life, health, safety, or economic well-being of persons or their property." 

Although we commonly think of price gouging as a retail issue, the price gouging law applies to all parts of the chain of distribution, including manufacturers, suppliers, wholesalers, and distributors.

The law makes price gouging an "unfair trade practice" and gives consumers who were gouged the right to sue and recover treble (triple) damages from the seller.  The Attorney General may also sue to enforce the law, and courts can impose civil penalties against price gougers of up to $5,000 per violation.  (By way of example, the Consumer Protection Division of the N.C. Department of Justice obtained $71,000 from 14 gas stations as result of a price gouging investigation in 2008.)

In the event the Attorney General investigates a complaint of price gouging and determines that a seller has not violated the law, the wrongfully-accused seller can demand that the Attorney General issue a signed statement indicating the seller's innocence.

The Executive Order--and therefore the prohibition on price gouging--will remain in effect until rescinded by the Governor.
 


Wampa from the frozen planet Hoth (Star Wars reference) by Chris Griego



Read more here: http://www.newsobserver.com/2014/02/12/3614487/nc-price-gouging-law-in-effect.html#storylink=cpy
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