Nessel and Democratic lawmakers talk bills to curb price gouging

Michigan Attorney General Dana Nessel speaks at a news conference in support of anti-price-gouging legislation on September 10, 2024 in the Michigan Capitol Building. | Photo: Anna Liz Nichols

Back in March 2020 at the start of the COVID-19 pandemic — when little was known about how the virus was spread, how long it would be around or how many Michiganders would get sick — some businesses took to price gouging essential items.

“.. [J]just because they could,” Michigan state Sen. Jeremy Moss (D-Southfield) said. “… just because they knew that if you needed lumber, if you needed food, if you needed housing during a crisis, this was their time to swoop in and profit off of human misery.”

And there was very little in Michigan state law to protect against face masks being sold for $20 a piece or selling toilet paper for $60 a case until Michigan’s Governor issued a temporary executive order placing restrictions and penalties on price gouging.

Now Moss, alongside other Democratic lawmakers and Michigan Attorney General Dana Nessel, are voicing their interest in implementing laws that restrict inflating prices during states of emergency. According to the group, which held a news conference on Tuesday, 34 states have some form of legislation dealing with price gouging during a state of emergency.

Moss is joined by fellow metro Detroit Sen. Mary Cavanagh (D-Redford Twp.) on the Senate side in sponsoring bills to bar the “excessive pricing for certain commodities and emergency services and supplies during a declared state of emergency.”

Under the bills SB 954 – SB 956 , inflating the price of things like building materials, food items, and medical supplies more than 10% of what was being charged leading up to a state of emergency being called would cost sellers up to $10,000 per violation.

Nessel recalled manning the phone lines for the state’s Consumer Protection Helpline during the pandemic and hearing frustration after frustration about food costs being hiked up, including baby formula. Nessel told Michigan Advance back in 2020 as she was taking calls on the helpline that her office was ready to implement one major resource at their disposal: public shaming.

“I think that these businesses should know that their reputations are on the line and at stake,” Nessel said back in 2020. “If they’re going to engage in price gouging related behavior, we’re going to be very vocal about it. We’re going to publicize it.”

And Rep. Laurie Pohutsky (D-Livonia) didn’t shy away from naming names noting that Kroger admitted to price gouging during the pandemic as she talked about she and Rep. Jason Hoskins (D-Southfield) spearheading their House versions of the anti-price gouging bills, HB 5895 – HB 5897 .

Kroger Senior Director for Pricing Andy Groff testified to a Federal Trade Commission attorney at the end of August that the company inflated the price of milk and eggs past inflation values , Newsweek reports.

Companies inflated their prices during the pandemic and didn’t really lower them after the state of emergency was over, Pohutsky said.

“A lot of times that predatory behavior starts during times of crisis,” Pohutsy said. “By tackling these very vulnerable situations, we’ll be able to [stop] some of that behavior as it starts.”

Although Michigan’s Consumer Protection Act does constitute that “charging the consumer a price that is grossly in excess of the price at which similar property or services are sold” is not permitted, Nessel reasons that the law does little to protect consumer when sellers raise prices excessively all at once, like many did during the pandemic.

It’s hard to quantify how much money businesses were able to make Michiganders pay in excess during the pandemic, Assistant Attorney General Darrin Fowler said before COVID came to Michigan. But the Consumer Protection Helpline was receiving around 10,000 consumer complaints a year and received 24,000 complaints in 2020.

The COVID-19 pandemic put price gouging on center stage, but Moss remembers his time representing Southeast Michigan in the state House where in 2017 violent winds tore down thousands of power lines, leaving more than one million Michigananders without power . Moss said he got a call from a constituent pointing at what one hotel was doing as people were looking for shelter from the storms.

“The hotel turned off its neon sign that said ‘$59 a night,’ and there were reports that they were charging people some $400 a night, basically trying to profit off of human misery due to an emergency situation,” Moss said. “That is totally the impetus that got me into this game. It was a real thing, a tangible thing, and I tried to solve it at the time, and was met with closed doors.”

Moss sponsored legislation to ban price gouging during a state of emergency in 2018, with bipartisan support, but the bills never made it to the finish line. Moss said Republican leadership killed the bills at the time, but he believes that Republicans will come on board with the bills before the legislative year ends in December and Democratic-led legislature will get the legislation to Gov. Gretchen Whitmer’s desk.

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Michigan state Rep. Laurie Pohutsky (D-Livonia) speaks at a news conference in support of anti-price-gouging legislation on September 10, 2024 in the Michigan Capitol Building. | Photo: Anna Liz Nichols

Michigan Attorney General Dana Nessel speaks at a news conference in support of anti-price-gouging legislation on September 10, 2024 in the Michigan Capitol Building. | Photo: Anna Liz Nichols

Michigan state Sen. Jeremy Moss (D-Southfield) (left) speaks alongside Michigan Attorney General Dana Nessel (right) at a news conference in support of anti-price-gouging legislation on September 10, 2024 in the Michigan Capitol Building.

Michigan state Rep. Jason Hoskins (D-Southfield) speaks at a news conference in support of anti-price-gouging legislation on September 10, 2024 in the Michigan Capitol Building. | Photo: Anna Liz Nichols

Michigan Attorney General Dana Nessel speaks at a news conference in support of anti-price-gouging legislation on September 10, 2024 in the Michigan Capitol Building. | Photo: Anna Liz Nichols

Michigan state Sen. Mary Cavanagh (D-Redford Twp.) speaks at a news conference in support of anti-price-gouging legislation on September 10, 2024 in the Michigan Capitol Building. | Photo: Anna Liz Nichols

Michigan Attorney General Dana Nessel speaks at a news conference in support of anti-price-gouging legislation on September 10, 2024 in the Michigan Capitol Building.

Michigan Attorney General Dana Nessel speaks at a news conference in support of anti-price-gouging legislation on September 10, 2024 in the Michigan Capitol Building. | Photo: Anna Liz Nichols

Michigan Attorney General Dana Nessel speaks at a news conference in support of anti-price-gouging legislation on September 10, 2024 in the Michigan Capitol Building. | Photo: Anna Liz Nichols

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