Price-gouging legislation pushed in Arizona

Arizona Attorney General Terry Goddard renewed his effort Wednesday to pass a law against price gouging at a meeting of more than 40 state attorneys general at the Arizona Biltmore in Phoenix.

Despite state lawmakers who have shot down the idea the last two years, Goddard said he would push again for a statute in the upcoming legislative session.

"We need to help consumers and keep prices down," he said, adding the law would only be triggered following a state of emergency or a supply disruption somewhere else in the country that would lead to gouging in the Valley.

Goddard and others state attorneys general attending the National Association of Attorneys General winter meetings discussed a federal price gouging statute. Currently there are no federal laws against price gouging, but at least one U.S. senator asked for states to come up with one following recent hearings on oil company profits.

Goddard is working with Mississippi Attorney General Jim Hood and Florida Attorney General Charlie Crist on the legislation. Hood said his state’s price gouging law was invaluable following Hurricane Katrina in August.

"I’m surprised Arizona doesn’t have some progressive measure to deal with it," he said, adding Mississippi often crafts its laws after ones in Arizona.

Last month Hood took along some television cameras for emphasis and used the law to arrest the owner of three hotels in Pearl, Miss.

The owner was charged with two counts of price gouging for raising the cost of rooms during an emergency.

The law prohibits anyone from making $250 more than they normally would following disasters.

Violating the law is a felony punishable by a maximum of five years in jail and a $5,000 fine.

Twenty-eight states and two U.S. territories have a price-gouging statute, said Emma Lehner Mamaluy, special assistant to Goddard.

Most are triggered only when a state of emergency is called by the governor, and they only deal with essential goods and services like food, water, building supplies, transportation and hotels.

Many states have laws similar to Florida, which prohibits "unconscionable" prices during an emergency.

In early November, Crist, a Republican, sued a Fort Myers, Fla., hotel alleging it increased its room rates by as much as 108 percent following Hurricane Wilma.

In 2004, Crist’s office received more than 8,900 complaints of price gouging and the office launched 58 formal investigations and filed 13 lawsuits against hotels, generator businesses, tree removal companies and other businesses.

This year Crist has received just 4,300 price- gouging complaints, 3,000 of which are related to gasoline prices, Lockwood said.

"The lawsuits have helped to curb it," he said. Crist filed two lawsuits this year against Tallahassee, Fla., gas stations for alleged price gouging during Katrina.

But price-gouging laws are unnecessary, said Anita Mangels, spokesman for the Western States Petroleum Association.

"If you take a look at all of the investigations the Federal Trade Commission has done over the last couple of decades, you’ll see they’ve constantly, repeatedly and consistently found it has been market conditions and basically market conditions only that have caused the types of price fluctuations that typically result in calls for this type of legislation," she said.

Goddard’s law would not allow prices to increase more than 10 percent. The preceding 30 days would be used a baseline.

The law does allow businesses to pass on to customers the increased costs of doing business during an emergency.

But Sen. Jay Tibshraeny, RChandler, who sponsored a price- gouging bill in 2004, says he’ll wait to see what happens at federal level before promoting a state law.

"It sounds good and it feels good for price gouging statewide," he said. "But really the problem that we’re seeing is the oil companies at the federal level."