II 

110TH CONGRESS 

1ST SESSION S. 1263 

To protect the welfare of consumers by prohibiting price gouging with respect 

to gasoline and petroleum distillates during natural disasters and abnormal market disruptions, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MAY 2, 2007 

Ms. CANTWELL (for herself, Mr. SMITH, Mr. KERRY, Mrs. BOXER, Mr. NELSON of Florida, Mrs. MCCASKILL, Mr. ROCKEFELLER, Mrs. MURRAY, 

Mrs. FEINSTEIN, Mr. BIDEN, Mrs. STABENOW, Mr. WYDEN, Mr. REED, 

Mr. DORGAN, Mr. DURBIN, and Mr. HARKIN) introduced the following 

bill; which was read twice and referred to the Committee on Commerce, 

Science, and Transportation 

A BILL 

To protect the welfare of consumers by prohibiting price 

gougingwith respect to gasoline and petroleum distillates 

during natural disasters and abnormal market disruptions, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Petroleum Consumer Price Gouging Protection Act’’. 


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1 (b) TABLE OF CONTENTS.—The table of contents for 

2 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Definitions. 

Sec. 3. Prohibition on price gouging during energy emergencies. 

Sec. 4. Prohibition on market manipulation. 

Sec. 5. Prohibition on false information. 

Sec. 6. Presidential declaration of energy emergency. 

Sec. 7. Enforcement by the Federal Trade Commission. 

Sec. 8. Enforcement by State Attorneys General. 

Sec. 9. Penalties. 

Sec. 10. Effect on other laws. 

3 SEC. 2. DEFINITIONS. 

4 In this Act: 

5 (1) AFFECTED AREA.—The term ‘‘affected 

6 area’’ means an area covered by a Presidential dec7 laration of energy emergency. 

8 (2) SUPPLIER.—The term ‘‘supplier’’ means 

9 any person engaged in the trade or business of sell10 ing or reselling, at retail or wholesale, or distributing 

11 crude oil, gasoline, or petroleum distillates. 

12 (3) PRICE GOUGING.—The term ‘‘price 

13 gouging’’ means the charging of an unconscionably 

14 excessive price by a supplier in an affected area. 

15 (4) UNCONSCIONABLY EXCESSIVE PRICE.—The 

16 term ‘‘unconscionably excessive price’’ means a price 

17 charged in an affected area for crude oil, gasoline, 

18 or petroleum distillates that— 

19 (A)(i) represents a gross disparity between 

20 the price at which it was offered for sale in the 


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1 usual course of the supplier’s business imme2 diately prior to the President’s declaration of an 

3 energy emergency; 

4 (ii) grossly exceeds the price at which the 

5 same or similar crude oil, gasoline, or petroleum 

6 distillate was readily obtainable by other pur7 chasers in the affected area; or 

8 (iii) represents an exercise of unfair lever9 age or unconscionable means on the part of the 

10 supplier, during a period of declared energy 

11 emergency; and 

12 (B) is not attributable to increased whole13 sale or operational costs outside the control of 

14 the supplier, incurred in connection with the 

15 sale of crude oil, gasoline, or petroleum dis16 tillates. 

17 (5) COMMISSION.—The term ‘‘Commission’’ 

18 means the Federal Trade Commission. 

19 SEC. 3. PROHIBITION ON PRICE GOUGING DURING ENERGY 

20 EMERGENCIES. 

21 (a) IN GENERAL.—During any energy emergency de22 clared by the President under section 6 of this Act, it is 

23 unlawful for any supplier to sell, or offer to sell, crude 

24 oil, gasoline, or petroleum distillates in, or for use in, the 


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1 area to which that declaration applies at an unconscion2 ably excessive price. 

3 (b) FACTORS CONSIDERED.—In determining whether 

4 a violation of subsection (a) has occurred, there shall be 

5 taken into account, among other factors, the price that 

6 would reasonably equate supply and demand in a competi7 tive and freely functioning market. 

8 SEC. 4. PROHIBITION ON MARKET MANIPULATION. 

9 It is unlawful for any person, directly or indirectly, 

10 to use or employ, in connection with the purchase or sale 

11 of crude oil, gasoline, or petroleum distillates at wholesale, 

12 any manipulative or deceptive device or contrivance, in 

13 contravention of such rules and regulations as the Com14 mission may prescribe as necessary or appropriate in the 

15 public interest or for the protection of United States citi16 zens. 

17 SEC. 5. PROHIBITION ON FALSE INFORMATION. 

18 (a) IN GENERAL.—It is unlawful for any person to 

19 report information related to the wholesale price of crude 

20 oil, gasoline, or petroleum distillates to the Commission 

21 if— 

22 (1) that person knew, or reasonably should have 

23 known, the information to be false or misleading; 

24 (2) the information was required by law to be 

25 reported; and 


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1 (3) the person intended the false or misleading 

2 data to affect data compiled by the Commission for 

3 statistical or analytical purposes with respect to the 

4 market for crude oil, gasoline, or petroleum dis5 tillates. 

6 SEC. 6. PRESIDENTIAL DECLARATION OF ENERGY EMER7 GENCY. 

8 (a) IN GENERAL.—If the President finds that the 

9 health, safety, welfare, or economic well-being of the citi10 zens of the United States is at risk because of a shortage 

11 or imminent shortage of adequate supplies of crude oil, 

12 gasoline, or petroleum distillates due to a disruption in 

13 the national distribution system for crude oil, gasoline, or 

14 petroleum distillates (including such a shortage related to 

15 a major disaster (as defined in section 102(2) of the Rob16 ert T. Stafford Disaster Relief and Emergency Assistance 

17 Act (42 U.S.C. 5122(2))), or significant pricing anomalies 

18 in national energy markets for crude oil, gasoline, or pe19 troleum distillates, the President may declare that a Fed20 eral energy emergency exists. 

21 (b) SCOPE AND DURATION.—The emergency declara22 tion shall specify— 

23 (1) the period, not to exceed 30 days, for which 

24 the declaration applies; 


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1 (2) the circumstance or condition necessitating 

2 the declaration; and 

3 (3) the area or region to which it applies, 

4 which, for the 48 contiguous states may not be lim5 ited to a single State. 

6 (c) EXTENSIONS.—The President may— 

7 (1) extend a declaration under subsection (a) 

8 for a period of not more than 30 days; and 

9 (2) extend such a declaration more than once. 

10 SEC. 7. ENFORCEMENT BY THE FEDERAL TRADE COMMIS11 SION. 

12 (a) ENFORCEMENT.—This Act shall be enforced by 

13 the Federal Trade Commission. In enforcing section 3 of 

14 this Act, the Commission shall give priority to enforcement 

15 actions concerning companies with total United States 

16 wholesale or retail sales of crude oil, gasoline, and petro17 leum distillates in excess of $500,000,000 per year but 

18 shall not exclude enforcement actions against companies 

19 with total United States wholesale sales of $500,000,000 

20 or less per year. 

21 (b) VIOLATION IS UNFAIR OR DECEPTIVE ACT OR

22 PRACTICE.—The violation of any provision of this Act 

23 shall be treated as an unfair or deceptive act or practice 

24 proscribed under a rule issued under section 18(a)(1)(B) 


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1 of the Federal Trade Commission Act (15 U.S.C. 

2 57a(a)(1)(B)). 

3 (c) COMMISSION ACTIONS.—Following the declara4 tion of an energy emergency by the President under sec5 tion 6 of this Act, the Commission shall— 

6 (1) establish within the Commission— 

7 (A) a toll-free hotline that a consumer may 

8 call to report an incident of price gouging in the 

9 affected area; and 

10 (B) a program to develop and distribute to 

11 the public informational materials to assist resi12 dents of the affected area in detecting and 

13 avoiding price gouging; 

14 (2) consult with the Attorney General, the 

15 United States Attorney for the districts in which a 

16 disaster occurred (if the declaration is related to a 

17 major disaster), and State and local law enforcement 

18 officials to determine whether any supplier in the af19 fected area is charging or has charged an uncon20 scionably excessive price for crude oil, gasoline, or 

21 petroleum distillates in the affected area; and 

22 (3) conduct an investigation to determine 

23 whether any supplier in the affected area has vio24 lated section 3 of this Act, and upon such finding, 


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1 take any action the Commission determines to be 

2 appropriate to remedy the violation. 

3 SEC. 8. ENFORCEMENT BY STATE ATTORNEYS GENERAL. 

4 (a) IN GENERAL.—A State, as parens patriae, may 

5 bring a civil action on behalf of its residents in an appro6 priate district court of the United States to enforce the 

7 provisions of section 3 of this Act, or to impose the civil 

8 penalties authorized by section 9 for violations of section 

9 3, whenever the attorney general of the State has reason 

10 to believe that the interests of the residents of the State 

11 have been or are being threatened or adversely affected 

12 by a supplier engaged in the sale or resale, at retail or 

13 wholesale, or distribution of crude oil, gasoline, or petro14 leum distillates in violation of section 3 of this Act. 

15 (b) NOTICE.—The State shall serve written notice to 

16 the Commission of any civil action under subsection (a) 

17 prior to initiating the action. The notice shall include a 

18 copy of the complaint to be filed to initiate the civil action, 

19 except that if it is not feasible for the State to provide 

20 such prior notice, the State shall provide such notice im21 mediately upon instituting the civil action. 

22 (c) AUTHORITY TO INTERVENE.—Upon receiving the 

23 notice required by subsection (b), the Commission may in24 tervene in the civil action and, upon intervening— 


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1 (1) may be heard on all matters arising in such 

2 civil action; and 

3 (2) may file petitions for appeal of a decision in 

4 such civil action. 

5 (d) CONSTRUCTION.—For purposes of bringing any 

6 civil action under subsection (a), nothing in this section 

7 shall prevent the attorney general of a State from exer8 cising the powers conferred on the Attorney General by 

9 the laws of such State to conduct investigations or to ad10 minister oaths or affirmations or to compel the attendance 

11 of witnesses or the production of documentary and other 

12 evidence. 

13 (e) VENUE; SERVICE OF PROCESS.—In a civil action 

14 brought under subsection (a)— 

15 (1) the venue shall be a judicial district in 

16 which— 

17 (A) the defendant operates; 

18 (B) the defendant was authorized to do 

19 business; or 

20 (C) where the defendant in the civil action 

21 is found; 

22 (2) process may be served without regard to the 

23 territorial limits of the district or of the State in 

24 which the civil action is instituted; and 


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1 (3) a person who participated with the defend2 ant in an alleged violation that is being litigated in 

3 the civil action may be joined in the civil action with4 out regard to the residence of the person. 

5 (f) LIMITATION ON STATE ACTION WHILE FEDERAL

6 ACTION IS PENDING.—If the Commission has instituted 

7 a civil action or an administrative action for violation of 

8 this Act, a State attorney general, or official or agency 

9 of a State, may not bring an action under this section 

10 during the pendency of that action against any defendant 

11 named in the complaint of the Commission or the other 

12 agency for any violation of this Act alleged in the Commis13 sion’s civil or administrative action. 

14 (g) NO PREEMPTION.—Nothing contained in this 

15 section shall prohibit an authorized State official from pro16 ceeding in State court to enforce a civil or criminal statute 

17 of that State. 

18 SEC. 9. PENALTIES. 

19 (a) CIVIL PENALTY.— 

20 (1) IN GENERAL.—In addition to any penalty 

21 applicable under the Federal Trade Commission Act, 

22 any supplier— 

23 (A) that violates section 4 or section 5 of 

24 this Act is punishable by a civil penalty of not 

25 more than $1,000,000; and 


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1 (B) that violates section 3 of this Act is 

2 punishable by a civil penalty of— 

3 (i) not more than $500,000, in the 

4 case of an independent small business mar5 keter of gasoline (within the meaning of 

6 section 324(c) of the Clean Air Act (42 

7 U.S.C. 7625(c))); and 

8 (ii) not more than $5,000,000 in the 

9 case of any other supplier. 

10 (2) METHOD OF ASSESSMENT.—The penalties 

11 provided by paragraph (1) shall be assessed in the 

12 same manner as civil penalties imposed under sec13 tion 5 of the Federal Trade Commission Act (15 

14 U.S.C. 45). 

15 (3) MULTIPLE OFFENSES; MITIGATING FAC16 TORS.—In assessing the penalty provided by sub17 section (a)— 

18 (A) each day of a continuing violation shall 

19 be considered a separate violation; and 

20 (B) the Commission shall take into consid21 eration the seriousness of the violation and the 

22 efforts of the person committing the violation to 

23 remedy the harm caused by the violation in a 

24 timely manner. 


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1 (b) CRIMINAL PENALTY.—Violation of section 3 of 

2 this Act is punishable by a fine of not more than 

3 $5,000,000, imprisonment for not more than 5 years, or 

4 both. 

5 SEC. 10. EFFECT ON OTHER LAWS. 

6 (a) OTHER AUTHORITY OF THE COMMISSION.— 

7 Nothing in this Act shall be construed to limit or affect 

8 in any way the Commission’s authority to bring enforce9 ment actions or take any other measure under the Federal 

10 Trade Commission Act (15 U.S.C. 41 et seq.) or any other 

11 provision of law. 

12 (b) STATE LAW.—Nothing in this Act preempts any 

13 State law. 

Æ 


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