For the Defense - Vol. 5, Issue 2 - 48

Office of Inspector General, the U.S. Department
of Education -- Office of Inspector General, and
the Pennsylvania State Police.2 The involvement
of these various agencies is indicative of the
wide-scope of the COVID-19 investigations and
the many industries that may be affected by this
initiative.
Following Pennsylvania, U.S. Attorney Craig
Carpenito, New Jersey Attorney General Gurbir
Grewal, and New Jersey Acting State Controller
Kevin Walsh created a joint federal-state task
force to investigate and prosecute misconduct
during the pandemic.3 Task Force members also
include New Jersey State Police, the Division of
Criminal Justice, the Division of Consumer Affairs,
the Division of Law, the Office of the Insurance
Fraud Prosecutor, and the Office of Public
Integrity and Accountability.4
State Attorneys General nationwide, and
particularly in New Jersey, New York, and Florida
are enforcing price gouging and consumer
protection laws with respect to complaints
related to critical health supplies, including
hand-sanitizer and N95 respiratory masks. Price
gouging refers to the practice of raising the price
of goods, services or commodities that are in high
demand during a time of an emergency to a level
much higher than is considered reasonable. Most
states have codified the circumstances under
which pricing will be regulated by statutes and
penalties vary by jurisdiction.
In Pennsylvania, pursuant to the Price Gouging
Act, within 30 days of the Governor declaring a
state of disaster emergency, it is a violation for
any business to offer to sell the goods or services
that are subject of the declared emergency for
an amount which represents an unconscionably
excessive price.5 This is defined as a change in
price that exceeds an amount equal to or in
excess of 20% of the average price for the goods
or services that were obtainable the seven days
immediately preceding the declared state of
emergency.6 Attorney General Shapiro has the
authority to investigate allegations of price
gouging complaints and may bring an action to
impose a civil penalty of up to $10,000 for each
violation, along with restitution and injunctive
relief.7 Attorney General Shapiro created a
specialized statewide resource for reporting price
gouging by businesses in Pennsylvania. As of MidMarch, his office received over 1,000 reports of
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For The Defense l Vol. 5, Issue 2

such alleged price hikes.
Many state Attorneys General have issued
general warnings against price gouging during
this public health crisis, and in some cases, sent
a cease and desist order to particular individuals
and businesses. The Kentucky Attorney General
has even taken it a step further, and issued
subpoenas for suspected price-gouging to
six third-party sellers in Kentucky who used
Amazon's online platform.8 Additionally, Florida
Governor Ron DeSantis asked the state Attorney
General Ashley Moody to investigate a hospital
in South Florida that was charging individuals
$150 per test for COVID-19, despite the President
repeatedly stating that the tests are free.9
There are more extreme enforcement activities
in certain jurisdictions. For example, in Florida,
Attorney General Ashley Moody has opened an
investigation into a local cruise line based on a
one-line advertisement: "the only thing you need
to worry about for your cruise is do you have
enough sunscreen."10 While the advertisement
might have been considered innocent in the past,
it is now receiving renewed scrutiny. The Florida
Attorney General's Office is looking into whether
this statement misled consumers into purchasing
cruise tickets by essentially minimizing COVID-19.
This example is evidence that Attorneys General
are monitoring and investigating a variety of
industries to ensure that advertisements and
other marketing outlets are not fraudulent or
misleading during this sensitive time.
These enforcement initiatives have made it
clear that should any business fail to comply
with various state regulations on price gouging
specifically and consumer protection generally,
civil fines may be imposed, and in certain cases
criminal charges may be filed as well.
Health Care Compliance
In the health care industry, nursing homes,
assisted living facilities, and other health care
providers are likely to be potential targets of
future state Attorneys General investigations.
As the number of residents in these facilities
diagnosed with COVID-19 increases, there are
more questions related to standard of care and
compliance. Investigations will focus on whether
procedures and protocols were implemented
properly and timely, and if the spread of the
For the Defense - Vol. 5, Issue 2

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