DA announces settlement with Wal-Mart for price gouging during pandemic
Governor issued order prohibiting selling emergency supplies at ‘unconscionably excessive prices’
-District Attorney Dan Dow announced this week that he has reached a settlement agreement with Walmart Corporation in a civil matter brought against Walmart by the District Attorney’s Consumer Protection Unit for an unfair business practice of price gouging when selling disinfecting wipes to consumers in San Luis Obispo County during May and June 2020.
On April 3, 2020, the Governor of California issued Executive Order N-44-20, which ordered in part, the prohibition of offering to sell or selling medical or emergency supplies that a retailer had not previously sold prior to February 4, 2020, for “an unconscionably excessive price.” The order defined a price is “unconscionably excessive” if that price is more than 50 percent greater than the amount the business paid for the item. The executive order held that in each instance of a sale, or even an offer to sell, it would constitute a separate violation of the order. The executive order mandated that such a violation shall be redressable as either a misdemeanor, or as any other unlawful business practice under the Unfair Competition Law, Business and Professions Code section 17200 et seq.
After receiving complaints of price gouging by local and online retailers, the District Attorney’s Consumer Protection Unit investigation discovered that Walmart advertised and sold packs of sanitizing wipes within the County of San Luis Obispo at a price exceeding that permitted for the sale of goods defined as emergency and medical supplies during a declared State of Emergency resulting from the COVID-19 pandemic. The disinfecting wipes were sold eight times to six separate households in San Luis Obispo County from May 26, 2020, through June 22, 2020. Walmart sold the item between $18.99 and $19.99. The pricing by Walmart exceeded the 50% markup, constituting a violation of the executive order.
After being contacted by San Luis Obispo District Attorney’s Office, Walmart removed the item from its online platform and provided a 100-percent refund to not only the sales within San Luis Obispo County, but throughout the State of California.
On Friday, July 9, 2020 San Luis Obispo County Superior Court Judge Ginger E. Garrett approved the settlement stipulation and issued an order that Walmart must pay a civil penalty of one thousand five hundred dollars ($1,500) for the offer to sell and the sale of emergency and medical goods within San Luis Obispo County in violation of the executive order and to pay the Plaintiff’s investigatory and litigation costs of seven thousand five hundred dollars ($7,500). The total amount ordered to be paid by Walmart is $9,000.
“Protecting consumers in San Luis Obispo County increases the public’s trust in local business and fosters a level playing field for businesses in our community and beyond,” said District Attorney Dan Dow. “This important settlement sends a strong message that we are looking out for everyone who lives in our community.”
This case was investigated by the San Luis Obispo County District Attorney Bureau of Investigation and prosecuted by Deputy District Attorney Kenneth Jorgensen assigned to the District Attorney’s Consumer and Enviornmental Prosecution Unit.
Our consumer protection team is focused on protecting the public from unlawful, unfair, and fraudulent or deceptive business practices. Consumer protection cases can be pursued in either criminal or civil court. Examples of such cases include contractor’s fraud, false or misleading advertising, and “bait and switch” scams. The unit also aims to increase public awareness of consumer issues through presentations to local groups when called upon.
For more information about the consumer protection laws or to report suspected violations contact the California Department of Consumer Affairs Consumer Assistance Line toll-free at (800) 952-5210 or visit their website at www.dca.ca.gov/. Hearing-impaired persons may call TTY (800) 326-229.
To report a consumer complaint directly to the San Luis Obispo County District Attorney’s Office, you may submit a complaint form, found here.