AG Mark Herring takes action against COVID-related price gouging

Attorney General Mark R. Herring has taken further action against COVID-related price gouging in Virginia by holding Falls Church-based Rio Medical Supplies accountable for alleged violations of the Virginia Post-Disaster Anti-Price Gouging Act. Attorney General Herring has reached a settlement with Rio Medical Supplies resolving allegations that the business charged unconscionable prices on hand sanitizer, a necessary good. This is the second enforcement action Attorney General Herring has taken against price gouging following Governor Northam’s state of emergency declaration – in January, he secured a settlement with Joule Wellness Pharmacy over alleged price gouging practices.

“The COVID-19 pandemic has created unprecedented economic hardships for Virginians, and no one should have to worry about businesses unreasonably increasing prices on necessary goods, but especially during a time of such uncertainty,” said Attorney General Herring. “For over a year now, my team and I have been working hard to combat price gouging in the Commonwealth, and I’m proud of what we have been able to accomplish to hold those who have taken advantage of this state of emergency accountable.”

Attorney General Herring’s complaint alleges that, during the period from March 14, 2020, to March 23, 2020, Rio Medical Supplies charged $59.99 per bottle for 1,000-ml bottles of hand sanitizer, a price level that represented a 20% increase from the prices at which it offered the product for sale before the emergency was declared. A violation of Virginia’s price gouging law is also a violation of the Virginia Consumer Protection Act.

Under the terms of the settlement, Rio Medical Supplies agrees to be enjoined from engaging in further violations of Virginia’s price gouging law and the Virginia Consumer Protection Act. The business also has agreed to pay $2,500 in civil penalties and attorneys’ fees and also has disgorged $1,646.40 in profits made from the 32 offending sales. Consumers who purchased hand sanitizer from Rio Medical Supplies during the period from March 14, 2020, to March 23, 2020, should contact the Attorney General’s Consumer Protection Section for reimbursement of excess charges they paid.

During the COVID-19 emergency, the Virginia Attorney General’s Office has received more than 500 complaints and e-mails alleging possible price gouging activity and has sent more than 150 investigative letters to businesses. Investigation of these complaints has largely revealed that many price increases occurred further up the supply chain with manufacturers or distributors that were beyond the reach of the state’s price gouging laws, and this prompted Attorney General Herring to successfully seek amendments to the state’s price gouging law during the 2020 General Assembly special session.

Additionally, last April, Attorney General Herring led a national effort to address price gouging in the PPE supply chain, urging 3M as one of the largest manufacturers of PPE, particularly masks, to do more to address price gouging within its supply and distribution chains that were causing hospitals and healthcare providers to pay exorbitant prices for PPE.

The settlement, in the form of an Assurance of Voluntary Compliance, has been filed for approval with the Falls Church Circuit Court.