SR-8-E (18)
CA:JL:F:atty\muni\strpts\mtt\price
city Council Meeting 1-24-94
J~4~
..'AN 2 5 199't
Santa Monica, California
STAFF REPORT
FROM:
city Attorney
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TO:
Mayor and city council
SUBJECT:
Following the Northridge earthquake on January 17, 1994,
numerous businesses which consumers utilized to purchase basic
goods, products and services were unable to open due to
difficulties associated with the earthquake. Some businesses,
which remained open, took advantage of the temporary shortage of
businesses offering basic goods and products or the immediate need
for vital services and unconscionably raised their prices to
exorbitant levels. Since there is no evidence of a shortage of
these goods and products or the unavailability of vital services,
such price increases are predatory and distort the marketplace at
a time when consumers are most vulnerable to this unfair business
practice.
The ordinance presented for adoption would limit price
increases during a state of emergency, and the thirty (30) day
period following the termination of the state of emergency,
declared by City, state or federal officials. The price charged
for goods, products and services would not be permitted to exceed
the price charged on the day immediately preceding the proclamation
or declaration of emergency by more than 10%. Increases higher
than 10% must be justified by unavoidable increases directly
attributable to additional costs charged by a supplier of the
products or goods or for labor and materials used to provide a
service and the further finding that without an increase greater
than 10%, the business would not be able to earn a fair rate of
return on their business. This ordinance provides for enforcement
by criminal prosecution and also through a civil action brought by
either the City Attorney's office or the affected citizen. Nothing
in this ordinance prevents a business from making a fair profit,
but the citizens of Santa Monica should not be forced to
unnecessarily expend scarce resources at a time of great need.
The ordinance is now presented to the city council for adoption.
JAN 2 5 1994
JAN 2 ~ 199't
~-[
RECOMMENDATION
It is respectfully recommended that the accompanying
ordinance be adopted.
PREPARED BY:
Joseph Lawrence, Acting City Attorney
Martin T. Tachiki, Chief Deputy city Attorney
CA:TCB:f:atty\muni\laws\mtt\price
city council Meeting 1-24-94
Santa Monica, California
ORDINANCE NO. _ (CCS)
(City council Series)
AN EMERGENCY ORDINANCE OF THE CITY COUNCIL
OF THE CITY OF SANTA MONICA ADDING CHAPTER 4.32.160
TO THE SANTA MONICA MUNICIPAL CODE TO REGULATE
PRICE INCREASES OF CONSUMER GOODS, PRODUCTS AND
SERVICES DURING A STATE OF EMERGENCY AND DECLARING
THE PRESENCE OF AN EMERGENCY
THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES ORDAIN
AS FOLLOWS:
SECTION 1. Chapter 4.32.160 is hereby added to the
Santa Monica Municipal Code to read as follows:
Section
4.32.160.
Excessive
price
increases
durinq
state
of
emerqency.
Findings.
(a) As a result of the state of emergency
that commenced on January 17, 1994, the City
Council finds that numerous consumers within
the City of Santa Monica have sought to
purchase consumer goods, products and services
such as emergency supplies, water, food,
clothing and other consumer items necessary
1
f9
for their health and safety. Al though no
general shortage of these consumer goods,
products and services exists, numerous
residents have reported incidents of excessive
price increases for these goods, products and
services in many instances, many times above
the prices in effect on or before January 16,
1994. Although price increases may be
necessary where a business has itself incurred
unavoidable higher expenses and the business
needs to increase prices in order to obtain a
fair rate of return, these exorbitant price
increases clearly exceed those that would be
reasonably related to any increased
operational expenses by a business.
(b) The City Council finds that
excessive and unjustified price increases
during a state of emergency distorts the
marketplace, subjects all consumers to
predatory and unfair business practices and is
unconscionable.
(c) The
City
council
finds
that
protecting citizens from excessive and
unjustified price increases during any state
of emergency as declared by the City, state or
federal officials is vital and necessary for
2
J[
public health, safety and welfare of all
consumers.
section 4.32 .161. Excessive Price
Increases Prohibited. Upon proclamation or
declaration by city, state or federal officials
of a state of emergency within or including the
City of Santa Monica, and for a period of
thirty (30) days after the date the emergency
is declared terminated, it shall be unlawful
for any person within the City of Santa Monica
to sell or offer for sale any consumer product
or service, including but not limited to
clothes, food, water, furniture, building or
construction materials, emergency or medical
supplies or gasoline for an amount which
exceeds ten percent (10%) of the price charged
by the person for the goods or services on the
day immediately before the proclamation or
declaration of emergency was declared, unless
the person can prove that an increase in price
of greater than ten percent (10%) was
unavoidable and directly attributable to
additional costs imposed on the person by the
supplier of the products or goods or for labor
and materials used to provide the service and
3
~>
that without a greater than ten percent (lot)
increase the person would not be able to earn
a fair rate of return in his, her or its entire
business.
section 4.32.162. Penalty and
enforcement.
Any person who shall be convicted of
violating the provisions of this Chapter shall
be guilty of a misdemeanor and upon conviction
shall be punished by a fine of not greater than
$500 or by imprisonment in the County Jail for
not more than six months, or by both such fine
and imprisonment. Each day that a violation of
this section occurs shall be considered a
separate offense.
(b) The City Attorney or any citizen may
prosecute a civil action to enforce this
Chapter and in any action obtain such legal and
equitable relief, including the recovery of
actual and punitive damages and reasonable
attorney fees, as may be imposed as provided by
law.
SECTION 2. The city Council finds pursuant to City Charter
Section 615 that a state of local emergency exists within the City
of Santa Monica as a result of severe earthquake damage and that
4
the pUblic health, safety and welfare of the residents of the city
of Santa Monica will be threatened if the price of consumer goods
is left unregulated and allowed to increase unconscionably far
beyond reasonable rates of return.
SECTION 3. This Ordinance is declared to be an urgency
measure adopted pursuant to the provisions of Section 615 of the
Santa Monica City Charter. It is necessary for preserving the
public peace, health and safety, and the urgency for its adoption
is set forth in the findings above.
SECTION 4. Any provision of the Santa Monica Municipal Code
or appendices thereto inconsistent with the provisions of this
Ordinance, to the extent of such inconsistencies and no further,
are hereby repealed or modified to that extent necessary to effect
the provisions of this Ordinance.
SECTION 5. If any section, subsection, sentence, clause, or
phrase of this Ordinance is for any reason held to be invalid or
unconsti tutional by a decision of any court of any competent
jurisdiction, such decision shall not affect the validity of the
remaining portions of this Ordinance. The city council hereby
declares that it would have passed this Ordinance, and each and
every section, subsection, sentence, clause, or phrase not declared
invalid or unconstitutional without regard to whether any portion
5
of the Ordinance would be subsequently declared invalid or
unconstitutional.
SECTION 6.
The Mayor shall sign and the city Clerk shall
attest to the passage of this Ordinance.
The City Clerk shall
cause the same to be published once in the official newspaper
within 15 days after its adoption. This Ordinance shall become
effective upon adoption.
APPROVED AS TO FORM:
7~. /J ('42,..:I<ek~
SEPH\~EllCE
ting City Attorney
6
~
CA: TCB: f:atty\muni\laws\mtt\price
City Council Meeting 1-24-94
Santa Monica, California
ORDJ:BABCB BO. 1723 CCCS)
(City Council Series)
AN EMERGENCY ORDINANCE OF THE CITY COUNCIL
OF THE CITY OF SANTA MONICA ADDING CHAPTER 4.32.160
TO THE SANTA MONICA MUNICIPAL CODE TO REGULATE
PRICE INCREASES OF CONSUMER GOODS, PRODUCTS AND
SERVICES DURING A STATE OF EMERGENCY AND DECLARING
THE PRESENCE OF AN EMERGENCY
THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES ORDAIN
AS FOLLOWS:
SECTION 1. Chapter 4.32.160 is hereby added to the
Santa Monica Municipal Code to read as follows:
Section
4.32.160.
Excessive
Drice
increases
4urinQ
state
or
emerqency.
Pindings.
(a) As a result of the state of emergency
that commenced on January 17, 1994, the City
Council finds that numerous consumers within
the City of Santa Monica have sought to
purchase consumer goods, products and services
such as emergency supplies, water, food,
clothing and other consumer items necessary
1
for their health and safety. Although no
general shortage of these consumer goods,
products and services exists, numerous
residents have reported incidents of excessive
price increases for these goods, products and
services in many instances, many times above
the prices in effect on or before January 16,
1994. Although price increases may be
necessary where a business has itself incurred
unavoidable higher expenses and the business
needs to increase prices in order to obtain a
fair rate of return, these exorbitant price
increases clearly exceed those that would be
reasonably related to any increased
operational expenses by a business.
(b) The City Council finds that
excessive and unjustified price increases
during a state of emergency distorts the
marketplace, sUbjects all consumers to
predatory and unfair business practices and is
unconscionable.
(c) The City Council finds that
protecting citizens from excessive and
unjustified price increases during any state
of emergency as declared by the City, state or
federal officials is vital and necessary for
2
public health, safety and welfare of all
consumers.
Section 4.32.161. Excessive Price
Increases Prohibited. Upon proclamation or
declaration by city, state or federal officials
of a state of emergency within or including the
Ci ty of Santa Monica, and for a period of
thirty (30) days after the date the emergency
is declared terminated, it shall be unlawful
for any person within the City of Santa Monica
to sell or offer for sale any consumer product
or service, including but not limi ted to
clothes, food, water, furniture, building or
construction materials, emergency or medical
supplies or gasoline for an amount which
exceeds ten percent (10%) of the price
regularly and customarily charged by the person
for the goods or services on the day
immediately before the prOClamation or
declaration of emergency was declared, unless
the person can prove that an increase in price
of greater than ten percent (10%) was
unavoidable and directly attributable to
additional costs imposed on the person by the
supplier of the products or goods or for labor
3
and materials used to provide the service and
that without a greater than ten percent (10%)
increase the person would not be able to earn
a fair rate of return in his, her or its entire
business.
section 4.32.162. Penalty and
enforcement.
Any person who shall be convicted of
violating the provisions of this Chapter shall
be guilty of a misdemeanor and upon conviction
shall be punished by a fine of not greater than
$500 or by imprisonment in the County Jail for
not more than six months, or by both such fine
and imprisonment. Each day that a violation of
this section occurs shall be considered a
separate offense.
(b) The City Attorney or any citizen may
prosecute a civil action to enforce this
Chapter and in any action obtain such legal and
equitable relief, including the recovery of
actual and punitive damages and reasonable
attorney fees, as may be imposed as provided by
law.
SECTION 2. The City Council finds pursuant to City Charter
Section 615 that a state of local emergency exists within the city
4
.
~r.
of Santa Monica as a result of severe earthquake damaqe and that
the public health, safety and welfare of the residents of the City
of Santa Monica will be threatened if the price of consumer goods
is left unregulated and allowed to increase unconscionably far
beyond reasonable rates of return.
SECTION 3. This Ordinance is declared to be an urgency
measure adopted pursuant to the provisions of section 615 of the
Santa Monica city Charter. It is necessary for preserving the
pUblic peace, health and safety, and the urgency for its adoption
is set forth in the findings above.
SECTION 4. Any provision of the Santa Monica Municipal Code
or appendices thereto inconsistent with the provisions of this
Ordinance, to the extent of such inconsistencies and no further,
are hereby repealed or modified to that extent necessary to effect
the provisions of this Ordinance.
SECTION 5. If any section, subsection, sentence, clause, or
phrase of this Ordinance is for any reason held to be invalid or
unconstitutional by a decision of any court of any competent
jurisdiction, such decision shall not affect the validity of the
remaining portions of this Ordinance. The City Council hereby
declares that it would have passed this Ordinance, and each and
every section, subsection, sentence, clause, or phrase not declared
invalid or unconstitutional without regard to whether any portion
5
~
of the Ordinance would be subsequently declared invalid or
unconstitutional.
SECTION 6.
The Mayor shall sign and the city Clerk shall
attest to the passage of this Ordinance.
The City Clerk shall
cause the same to be published once in the off icial newspaper
within 15 days after its adoption. This Ordinance shall become
effective upon adoption.
APPROVED AS TO FORM:
~~~
LAWRENCE
City Attorney
6
.
.
Adopted and approved this 25th day of January, 1994
9tM~
I hereby certify that the foregoing Ordinance No 1723 (CCS) was duly and regularly
mtroduced at a meetmg of the CIty Council on the 25th clay of January, 1994; that the said
Ordinance was thereafter duly adopted at a meeting of the City Council on the 25th day of
January, 1994 by the followmg Council vote:
Ayes.
Councilmembers'
Abdo, Genser, Greenberg, Holbrook, Olsen, Rosenstem,
Vazquez
Noes
Councilmembers:
None
Abstam' CouncIlmembers None
Absent' Councilmembers' None
ATIEST-
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.---- -~ - /
CIty Clerk