Price Gouging: State Emergency Price-Cap Laws & Class Actions
By Steve Levine · Updated July 2, 2026 · 7 min read
Quick Answer
Price gouging is charging excessive prices for essential goods or services during an emergency. There is no general federal price-gouging statute — the rules come from state law, and roughly 37 states plus D.C. have them. Most activate only when a state of emergency is declared, then either cap increases at a set percentage (California Penal Code § 396's 10% rule) or ban "unconscionably excessive" prices (New York GBL § 396-r). Enforcement belongs mainly to state attorneys general, who seek injunctions, restitution, and civil penalties; in some states consumers can also sue privately — often through the state's general consumer-protection statute — which is how price-gouging claims turn into class actions, as a wave of COVID-era cases showed.
What Price Gouging Is — and Isn't
"Price gouging" has a specific legal meaning that is narrower than the everyday complaint about
high prices. In most states it refers to raising the price of essential goods and
services — food, water, fuel, medicine, batteries, generators, lodging, building materials,
repair and reconstruction services — beyond a statutory limit, during a declared emergency.
All three pieces matter: the goods must be covered, the trigger (usually an emergency
declaration) must be active, and the increase must exceed what the statute allows.
Outside those conditions, U.S. law mostly leaves pricing to the market. A high price is not
illegal by itself; it becomes actionable when some other law is violated — an agreement among
competitors to fix prices under the
Sherman Act, a deceptive
pricing or fee practice under a consumer statute like
NY GBL § 349,
or a gouging statute during an emergency.
No General Federal Law
Congress has never enacted a general federal price-gouging statute. During the COVID-19
pandemic, the federal government used the Defense Production Act's anti-hoarding
provisions against resellers of designated scarce materials such as PPE, and federal bills to
create a standing national price-gouging law have been introduced repeatedly — but none has
passed. The FTC
can police deceptive pricing practices and unfair methods of competition, and federal antitrust
law reaches coordinated price increases, but a seller unilaterally charging a very high price
during a disaster is, as a matter of federal law, largely unregulated.
That gap is why the action is in state law — and why the same conduct can be perfectly legal in
one state and a violation carrying civil penalties next door.
How State Laws Work — Caps vs. Standards
Roughly 37 states plus the District of Columbia have price-gouging laws. They differ in
detail, but nearly all share the same skeleton:
A trigger. The law activates when a state of emergency (or "abnormal disruption of the market") is declared — by the governor, the president, or sometimes a local government — and usually runs for a set period (often 30 days, extendable) after the declaration.
Covered essentials. The statute lists protected goods and services: food, water, fuel, medical supplies, lodging, transportation, repair and reconstruction services, and similar necessities.
A limit — percentage cap or unconscionability standard. Cap states draw a bright line: California Penal Code § 396 generally bars raising prices more than 10% above the pre-emergency price. Standard states use a flexible test: N.Y. GBL § 396-r bans "unconscionably excessive" prices, with a gross disparity from the pre-disruption price as prime evidence.
A cost defense. Sellers can generally justify an increase by showing their own costs rose — the cap applies to margin expansion, not to passing through genuinely higher supplier costs.
California's § 396 is notable for carrying criminal penalties (it sits in the Penal Code)
as well as civil exposure, and its emergency periods have repeatedly been extended after
wildfires. New York's § 396-r, by contrast, is a civil statute enforced by the Attorney General
and was amended in 2020 to broaden the essentials it covers, including medical supplies during
the pandemic. Many other states fall somewhere between these two models — some cap increases at
10–25%, some prohibit any increase at all on certain essentials, and about a dozen states have
no price-gouging statute.
Enforcement — AGs, Penalties & Private Suits
The primary enforcers are state
attorneys general. After a disaster, AG offices typically open complaint hotlines and portals,
send warning letters, and bring civil actions seeking injunctions, restitution for
overcharged consumers, and civil penalties that commonly run thousands of dollars per
violation — and each overpriced sale can count as a separate violation. In cap states with
criminal provisions, egregious cases can be prosecuted.
Private enforcement varies. Some statutes give consumers an express right to sue; many do not.
But even where the gouging statute itself is AG-only, plaintiffs often route the claim through
the state's general consumer-protection statute: in California, for example, a violation
of Penal Code § 396 can serve as the predicate for an "unlawful practice" claim under the
Unfair Competition Law,
and other states' unfair-and-deceptive-practices acts can play the same role. That routing is
what opens the class-action door.
The COVID-Era Litigation Wave
The COVID-19 pandemic produced the largest test of these laws in their history. With nearly
every state under an emergency declaration simultaneously, AGs brought enforcement actions over
PPE, hand sanitizer, disinfectants, and groceries, and private plaintiffs filed dozens of
consumer class actions over pandemic pricing of essentials — including cases against major
online marketplaces over prices charged on essential goods during the emergency. One example
covered on this site is the
Amazon COVID price-gouging class action,
in which plaintiffs allege that prices on essential items sold on the platform rose sharply
during the emergency period — allegations the company disputes, with no settlement or claim
process created as of this writing.
The pandemic cases also exposed the laws' open questions: whether a marketplace is responsible
for third-party sellers' prices, how to compute the pre-emergency baseline for volatile goods,
and whether out-of-state sales are covered. Courts continue to work through those issues, and
legislatures in several states responded by tightening or clarifying their statutes.
How Price-Gouging Claims Become Class Actions
Gouging fact patterns fit the class device well: many consumers, the same product, the same
pricing conduct, and small individual overcharges that no one would litigate alone. The typical
complaint pleads the state gouging statute (directly or as a predicate under the consumer
statute), plus unjust
enrichment, and seeks refunds of the overcharge for everyone who bought during the
emergency window. Where the price increase allegedly resulted from coordination among sellers
rather than one seller's unilateral markup, the case is pleaded as an antitrust conspiracy
instead — a related but distinct theory with treble damages.
Settled examples exist in both camps. California consumers, for instance, shared in the
$50M artificially-high gasoline prices settlement,
which resolved claims that traders manipulated the state's gasoline spot market — without any
admission of wrongdoing. As with any case on this site: a filed price-gouging complaint is only
allegations, nothing is owed to consumers unless a court enters judgment or approves a
settlement, and when a settlement does exist, the official settlement website is the place to
file.
Frequently Asked Questions
Is price gouging illegal in the United States?
There is no general federal price-gouging statute, but roughly 37 states plus the District of Columbia prohibit it under state law. Most of these laws activate only when a state of emergency or abnormal market disruption is declared, and they apply to essential goods and services like food, water, fuel, medicine, lodging, and repair services. Outside a declared emergency, high prices alone are generally legal unless they result from something else unlawful, such as an antitrust conspiracy or a deceptive practice.
How do state price-gouging laws define gouging?
Two main approaches. Percentage-cap states set a bright line — California Penal Code § 396, for example, generally makes it unlawful to raise the price of essential goods and services more than 10% above the pre-emergency price after an emergency declaration, unless the seller's own costs rose. Standard-based states use a flexible test — New York GBL § 396-r bans "unconscionably excessive" prices for vital goods and services during an abnormal market disruption, with a gross disparity between the price charged and the pre-disruption price as key evidence.
Who enforces price-gouging laws?
Primarily state attorneys general, who can seek injunctions, restitution for consumers, and civil penalties; in some states, including California, violations can also be prosecuted criminally. Some states allow private lawsuits, and even where the gouging statute itself gives consumers no direct right to sue, plaintiffs often bring claims through the state's general consumer-protection statute — in California, a Penal Code § 396 violation can support a claim under the Unfair Competition Law.
Can I join a class action over price gouging?
Sometimes. When a seller allegedly overcharged many consumers the same way during an emergency, those claims can be aggregated into a class action, usually pleaded under state consumer-protection statutes or antitrust law. The COVID-19 pandemic produced a wave of such cases over essentials like PPE, hand sanitizer, and groceries. A filed complaint is only allegations, and there is nothing to claim unless a settlement is reached and approved — check the case's official settlement website when one exists.
Is charging a high price always price gouging?
No. Price-gouging laws are narrow: most apply only during a declared emergency, only to essential goods and services, and only to increases beyond the statutory cap or standard. Sellers can generally defend an increase by showing their own costs rose. Outside those conditions, U.S. law mostly leaves prices to the market — a high price is not illegal by itself unless it results from conduct another law prohibits, such as a price-fixing agreement under the Sherman Act or a deceptive pricing practice under a consumer-protection statute.
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About This Page
General legal information about price-gouging laws, not legal advice. OpenClassActions.com is a
consumer news site and is not a law firm or a settlement administrator. Price-gouging statutes
vary significantly by state, activate and expire with emergency declarations, and change over
time; how they apply depends on the facts of a particular situation. For controlling text, see
your state's statute (for example, California Penal Code § 396 or N.Y. Gen. Bus. Law § 396-r)
and your state Attorney General's consumer-protection resources. Litigation described on this
page involves allegations that the defendants dispute unless a court has ruled otherwise;
settlements resolve claims typically without any admission of wrongdoing. If you think your
rights were affected, consult a qualified attorney in your jurisdiction.
More on Pricing & Consumer-Protection Law
California UCL: The Unfair Competition Law — how § 396 violations become private "unlawful practice" claims. Read the guide →
Sherman Antitrust Act: Price-fixing, monopolization, and treble damages — when high prices are a conspiracy. Learn more →
NY GBL §§ 349 & 350: New York's deceptive-practices and false-advertising statutes. What they cover →
Attorney General (AG): What state AGs do — including price-gouging sweeps after disasters. Read more →
Unjust Enrichment: The refund theory pleaded alongside gouging and overcharge claims. How it works →
