Vermont Business Magazine Chittenden Superior Court Judge Helen Toor today granted a preliminary injunction to stop a price-gouging scheme involving surgical masks. Attorney General TJ Donovan filed a lawsuit and motion for preliminary injunction against Big Brother Security Programs and its owner Shelley Palmer of Williston, Vermont, on April 13, 2020. The lawsuit alleged that Big Brother Security Programs, whose primary business is to own and operate public and private transportation, imported surgical masks that cost 10 cents each and re-sold them to Central Vermont Medical Center for $2.50 each.
With today’s ruling, Big Brother Security Programs and Palmer are now enjoined from selling surgical masks or any other personal protective medical equipment at inflated prices.
“I am very pleased with the Court’s decision,” said Attorney General Donovan. “These are extraordinary times during which Vermonters must continue to work together to stop the spread of COVID-19. It has been heartening to see so many Vermont businesses rise to the occasion during this time of crisis. Price gouging has no place in Vermont, especially during a public health crisis.”
The complaint alleges that Mr. Palmer violated Vermont’s Consumer Protection Act when he took advantage of disruptions to normal supply chains to unfairly raise prices for masks to an unconscionable amount. Price gouging, an unfair act in commerce, is an unconscionable increase in the cost of goods during a declared emergency. The Attorney General’s lawsuit is seeking restitution for Central Vermont Medical Center, penalties, and injunctive relief.
In today’s decision, the Court found that “selling crucial personal protective equipment (PPE) desperately needed to save lives during a health emergency at a 2400% markup is an unconscionable act in violation of public policy.” The Attorney General’s Office proposed that Mr. Palmer could continue to sell masks at a reasonable rate (up to 10% above verified, legitimate costs), and with notice and documentation to the Attorney General. If Mr. Palmer wishes to sell masks at a reasonable price, he must file a response to the Court by April 30, 2020.
Today’s ruling is the latest action in Attorney General Donovan’s ongoing effort to stop price gouging. Last week, he joined a coalition of attorneys general from across the country in sending a letter to Congress asking lawmakers to temporarily fix the prices of medical supplies and equipment during the COVID-19 pandemic. Attorney General Donovan, along with 19 attorneys general, also sent a letter urging 3M to do more to combat inflated prices of N95 respirators and other desperately needed personal protective equipment. In March, he led a coalition of 32 states that sent a letter to online platforms and retailers putting them on notice that online price gouging will not be tolerated and demanding action to stop third-party vendors from taking advantage of consumers.
Reports of potential price gouging in Vermont can be made by contacting the Attorney General’s Consumer Assistance Program at 800-649-2424 or AGO.CAP@vermont.gov.
A copy of today’s ruling can be found here.
Source: BURLINGTON – Vermont Attorney General’s Office 4.27.2020