Gov. Josh Green’s recent declaration of a statewide housing emergency might have an unintended consequence of making things other than housing cheaper for Hawaii consumers, according to a Maui attorney who contends that the governor’s July 17 proclamation automatically made it illegal to raise retail and wholesale prices on any commodity, including groceries and gas.
Lance Collins, a lawyer serving clients including consumers and environmental groups, has sent letters to eight of the largest retailers in the state warning them that a statewide prohibition on increasing commodity prices is in effect during the housing emergency running through Sept. 15 and intended for extension for a year.
“Selling of commodities at prices greater than prices offered on July 17, 2023 would be unlawful and offend established public policy and be substantially injurious to consumers,” Collins said in the letters, dated Tuesday, on behalf of a group called the Hawai‘i Working Consumers Hui.
THE LETTER advises that any consumer harmed under the law aimed at preventing price gouging during declared emergencies or severe-weather warnings is entitled to $1,000 to $5,000, plus reasonable attorney’s fees.
The letters were sent to Foodland Super Market, Times Supermarket, KTA Super Store, Safeway, Whole Foods, Walmart, Costco and the owner of Sam’s Club.
Collins said that members of the group he represents haven’t seen overt price gouging in the past two weeks, but noticed price increases in certain basic goods, including milk and gas, since the emergency was declared.
GREEN IS traveling and was unavailable to respond to the claims by Collins. Comments also could not be obtained Wednesday from Nani Medeiros, Green’s chief housing officer coordinating the emergency effort aimed at producing more housing at less cost under an alternate set of relaxed development regulations.
The state Department of the Attorney General suggested that the warning sent to retailers by Collins is flawed, and said no such price controls are in effect from Green’s housing emergency order.
“We have reviewed the letter and believe that its legal representations are without merit,” the agency said in a statement.
The state Office of Consumer Protection advises the public online that an emergency declaration triggers a statutory price freeze at pre-emergency levels for all goods and commodities in an area covered by the declaration unless the proclamation specifically excludes the provision prohibiting price increases.
Green’s proclamation doesn’t make such an exclusion under Hawaii emergency management law covered by section 127-A of Hawaii Revised Statutes.
This section of law also prohibits residential landlords from increasing rent or terminating tenancy as the result of an emergency declaration if not agreed to in writing by the tenant prior to the emergency order.
THE OFFICE of Consumer Protection advises that consumers should keep receipts and can report price gouging to the agency if they believe they paid higher prices for commodities prohibited under an emergency declaration.
However, the agency also notes that price increase prohibitions dur- ing emergencies can be short-lived.
Under the law, the prohibition is lifted either 96 hours after the emergency is declared or on a date specified in the proclamation, whichever is later. Green did not specify any date, so Collins acknowledged Wednesday that the prohibition ended at noon July 21.
In his Tuesday letter to the eight retailers, Collins said the companies had a duty not to increase the price of commodities “during our present state of emergency.”
The Department of the Attorney General said there are no consumer price controls or an eviction moratorium in effect from the housing emergency proclamation.
Emergency declarations can be made by a governor for the state or part of the state, by a mayor for a county or part of a county, or in response to a severe-weather warning from the National Weather Service.
In January a few state lawmakers introduced two bills aimed at amending terms of the price increase prohibition over issues similar to the one raised by Collins.
One measure, Senate Bill 1599, claimed that during an emergency declared by then-Gov. David Ige in 2018 after lava erupted in a rural subdivision on Hawaii island, businesses on other islands were prohibited from raising prices even though their products weren’t affected by the emergency situation.
Ige’s proclamation specifically invoked the price increase prohibition on construction products and equipment intended for eruption response as well as on food, water, ice and any services.
The other measure, House Bill 523, said a repeatedly extended COVID-19 emergency also declared by Ige subjected all commodities to the price-gouging statute for two years.
Both bills aimed in part to require that an emergency declaration specify which commodities related to an emergency are subject to price freezes. Neither bill received a hearing.
Some prior emergency declarations have excluded the price increase prohibition from applying, including one issued by Ige in 2022 to better control the axis deer population on Maui. This emergency has been extended by Green and is still in effect.
Green, who took office in December, has issued and renewed several emergency proclamations of his own, but they don’t exclude the price increase prohibition from applying.
Green’s emergencies include one issued in December and extended six times since then to expand medical flight service statewide. Another one declared homelessness as an emergency in January and has been renewed five times since then.
ON JULY 18, Green declared two more emergencies. One was to prepare for the then-approaching Tropical Storm Calvin. The other was to fence in and demolish the condemned Uncle Billy’s Hilo Bay Hotel on land owned by the state.
Collins said his announcement isn’t an indirect jab at the housing emergency proclamation, which some environmentalists have criticized. He said price increase prohibitions triggered by emergency proclamations deserve to be enforced.
“Whenever a state of emergency is declared, emergency price controls go into effect,” he said. “This hui does not have a collective position on the proclamation.”
Sen. Angus McKelvey (D, West Maui-Maalaea-South Maui) considers Green’s declaration of a housing emergency to be an improper use of emergency power, and said there are better ways to improve this chronic problem.
“We should be using scalpels, not sledgehammers,” he said.
McKelvey, who introduced SB 1599 on behalf of someone representing a retailer not on Hawaii island frustrated with price controls during the 2018 volcanic eruption, said any price increase prohibition against all commodities statewide isn’t appropriate under Green’s declared housing emergency. He encouraged the governor to amend the proclamation to achieve that.
