Contact: Christopher J. Curtis, Chief, Public Protection Division, 802-828-3171
Attorney General T.J. Donovan announced that he filed a lawsuit and motion for preliminary injunction to stop a price-gouging scheme involving surgical masks. The State of Vermont alleges Big Brother Security Programs, whose primary business is to own and operate public and private transportation, and its owner Shelley Palmer of Williston, Vermont, imported surgical masks that cost 10 cents each and re-sold them to Central Vermont Medical Center for $2.50 each; for at least a 500 percent mark-up.
“Protecting hospitals and medical professionals from unfair practices involving medical equipment is a top priority,” said Attorney General Donovan. “These folks are on the front lines saving lives during a public health emergency. We need to do everything we can to protect them so that they can continue to protect us.”
The complaint alleges violations of the Vermont Consumer Protection Act based on price gouging, an unfair act in commerce. Price gouging is an unconscionable increase in the cost of goods during a declared emergency. In Vermont, as a result of the global COVID-19 pandemic, personal protective equipment is in short supply at hospitals. The complaint alleges that Mr. Palmer took advantage of disruptions to normal supply chains to unfairly raise prices for masks to an unconscionable amount. In mid-February, as the COVID-19 crisis unfolded, Central Vermont Medical Center could purchase masks for 6 cents each. In mid-March, Mr. Palmer sold the masks for $2.50 each. The Attorney General is seeking restitution for Central Vermont Medical Center, penalties, and injunctive relief.
Even if prices rise somewhat during supply chain disruptions, unconscionable charges are illegal. For example, even if material, labor, and other legitimate supply chain costs increased such that mask costs increased to 40 cents or 50 cents each, $2.50 is unconscionable.
Attorney General Donovan recently 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 can be made by contacting the Attorney General’s Consumer Assistance Program at 800-649-2424 or AGO.CAP@vermont.gov.
An emergency hearing on the preliminary injunction has been set for 1:00 p.m. on Wednesday, April 22, 2020, in the Chittenden Superior Court, Civil Division. Judge Helen Toor, the presiding judge, ruled that this matter qualifies as an emergency under Administrative Order No. 49.