MICH. COMP. LAWS § 445.903(z).
On March 20, 2020, the Governor issued Executive Order 2020-18, which imposed enhanced restrictions related to price gouging.
In a March 23, 2020 press release , the Attorney General announced that she has “assigned a team of special agents to assist her attorneys in gathering information related to the high number of price-gouging complaints the Attorney General’s office has been receiving during the coronavirus disease 2019 (COVID-19) pandemic.”
Michigan Senate Bill No. 847, introduced March 17, 2020, is bipartisan legislation, supported by the Attorney General, to strengthen the state's anti-price-gouging laws. It authorizes penalties of $10,000 per violation by individuals, and $1 million for a business, for raising prices on “building materials, consumer food items, goods, services, emergency supplies, or medical supplies” during an emergency by an “excessive” amount. Violations would be a misdemeanor, and the Attorney General would also be authorized to file class action lawsuits seeking triple damages. Senate Bills 846 and 848 apply the same restrictions and penalties to lodging and energy products, respectively.
On March 27, 2020, the Attorney General sent a cease and desist letter to a supplier of face masks.
After receiving complaints about excessive prices for hand sanitizer, on March 30, 2020, the attorney general announced that her office is moving forward with an investigation into price gouging by an Ann Arbor business.
On April 7, 2020, the attorney general announced that her office sent cease and desist letters to four online sellers for price gouging of items like hand sanitizer, face masks, respirators, and disinfectant spray. One of the sellers sold a product to a Michigan consumer at a grossly excessive price; the other three sellers are located in Michigan.
On April 16, 2020, the attorney general announced an investigation into a Muskegon company for several potentially illegal activities including price-gouging.
On April 22, 2020, the attorney general announced that she led a multi-state coalition asking Congress to temporarily regulate prices of medical supplies and equipment to respond to inflated prices for these goods.
On April 28, 2020, the Attorney General released a video with state senators Jeremy Moss and Ruth Johnson about what they’re doing to address price-gouging in Michigan. The senators introduced the three-bill package of anti-price gouging legislation in March.
On April 29, 2020, the attorney general issued a press release saying her office is “on high-alert for online price gouging,” and that her office has sent cease and desist letters to three online sellers selling products like face masks and hand sanitizer. In addition, a Michigan resident selling high-priced face masks on eBay reached an assurance of voluntary compliance agreement with the attorney general’s office. To date, her office has received 3,689 complaints about price gouging.
On May 1, 2020, the Attorney General’s office said it had received price gouging complaints for prices of feminine hygiene products during the pandemic.
On May 5, 2020, it was reported that the attorney general had received over 3,800 price gouging complaints, with 60% of the complaints reported by phone. Most of the complaints are related to milk, toilet paper, and ground beef.
On May 15, 2020, the governor extended the executive order that enhanced price gouging restrictions through June 12, 2020.
On May 26, 2020, the Attorney General’s office issued a press release stating that it had received more than 4,200 price gouging complaints, although some of the complaints do not warrant further investigation or do not contain enough information to verify that the complaints are legitimate. The Release also updated the status of investigations against A.M. Cleaning & Supplies for increased cost of hand sanitizer; against BioMed Wellness Center (who has entered into an assurance of voluntary compliance) for selling sanitizers, gloves, and face masks at increased prices; against Smokehouse Distribution for price gouging face masks, and against several online sellers on Amazon.
Executive Order 2020-89 extended the applicability of the price gouging provision through on June 12, 2020.
On June 12, 2020, the governor issued Executive Order 20-75 extending the peacetime emergency and the application of the governor’s price gouging prohibition through July 13, 2020.
On July 1, 2020, the attorney general issued a press release warning the public to continue to be wary of price gouging and other scams. She reported that since early March, her office has received about 4,400 price-gouging complaints, most of which relate to grocery items, face masks, and sanitizers. While the number of complaints has been slowing down, the attorney general warned that her office “will continue to evaluate the many complaints reported to my office and take action on as many targets as possible.”
On September 1, 2020, the attorney general announced that her office had received court approval for civil subpoenas to investigate a Traverse City business making 3D-printed facemasks, DreamLab Industries LLC. The attorney general alleges that the company engages in multiple unlawful practices including false advertising, making false statements, failing to provide goods in a timely fashion, and price gouging.
On September 23, 2020, the attorney general signed onto an Amicus Curiae brief before the Sixth Circuit opposing the Eastern District of Kentucky order in Online Merchants Guild v. Cameron preliminary enjoining the Kentucky attorney general from enforcing Kentucky price gouging laws against sellers on Amazon signed by 30 states’ and the District of Columbia’s attorneys general.
On October 30, 2020, the attorney general announced that, after a seven month investigation, a janitorial equipment supplier had entered into an Assurance of Voluntary Compliance after price gouging hand sanitizer. The business allegedly violated the Michigan Consumer Protection Act for practices including price gouging. The announcement of this Assurance of Voluntary Compliance under the Michigan Consumer Protection Act signals that the attorney general will rely on this Act to prosecute price gouging after the Michigan Supreme Court ruled on October 2, 2020 that the governor did not have the authority to issue emergency orders past April 30, 2020.
On December 21, 2020, the attorney general announced that her office signed an Assurance of Voluntary Compliance with Smokehouse Distribution, an business in Oakland County, for price gouging protective equipment and other consumer protection violations. Under the terms of the agreement, the company agreed to provide full refunds to all consumers who purchased face masks and gloves from the company in April 2020, plus a fine and assurance that the company will not sell or advertise for sale any face masks for Covid-19 protection. In the announcement, the attorney general said: ““From the outset, my office has been committed to protecting consumers from retailers who try to use this pandemic as an excuse to prey on the vulnerabilities of hard-working people. We will continue to be vigilant and follow through on credible consumer complaints to ensure Michigan residents are not being taken advantage of.”
The statute applies to property and services.
Executive Order 2020-18 applies to any good, material, or consumer food item with a fair market value of less than $1,000 or any emergency supply.
Charging a consumer a price that is “grossly in excess of the price at which similar property or services are sold.” MICH. COMP. LAWS § 445.903(z).
Executive Order 2020-18 specifies that:
- If a person has acquired any product from a retailer, the person must not resell that product in this state at a price that is grossly in excess of the purchase price at which the person acquired the product, and
- A person must not offer for sale or sell any product in this state at a price that is more than 20% higher than what the person offered or charged for that product as of March 9, 2020, unless the person demonstrates that the price increase is attributable to an increase in the cost of bringing the product to market or to an extraordinary discount in effect as of March 9, 2020.
EXCEPTIONS OR DEFENSES
Statutory provision is not limited to emergencies.
AG AUTHORITY/ PENALTIES
For statutory violations, the Attorney General may seek include injunctive relief; and for persistent and knowing violations, a civil penalty of up to $25,000 per violation. MICH. COMP. LAWS § 445.905(1).
A willful violation of Executive Order 2020-18 is a misdemeanor.
PRIVATE RIGHT OF ACTION
Yes., under the Consumer Protection Act. MICH. COMP. LAWS § 445.911.