Wednesday, May 3, 2006

Yet Another Federal Crime

We elect Congress to pass laws, so it is a bit disingenuous to criticize our Senators and Representatives for enacting legislation.  Yet, when it comes to federal criminal laws, will there ever come a time when we say "enough already"?  The House passed H.R. 5253, the Federal Energy Price Protection Act of 2006, on a 389-34 vote (AP story here).  The legislation ostensibly is designed to address one aspect of the spike in gasoline prices.  The Act makes it an unfair or deceptive practice to engage in "price gouging" in the sale of petroleum products such as gasoline, home heating oil, diesel fuel, and the like.  The law gives the Federal Trade Commission the authority to investigate such abuses and to bring civil actions for violations, and permits a civil penalty of $3 million per day.  It also authorizes state Attorney Generals to pursue a civil enforcement action in federal court under the law.  While that is all well and good, the final provision of H.R. 5253 (here) provides:

(1) IN GENERAL- In addition to any other penalty that applies, a violation of subsection (a) is punishable-

(A) in the case of a wholesale sale in violation of subsection (a), by a fine of not more than $150,000,000, imprisonment for not more than 2 years, or both; or

(B) in the case of a retail sale in violation of subsection (a), by a fine of not more than $2,000,000, imprisonment for not more than 2 years, or both.

What is "price gouging" you might ask?  The statute states that the FTC will adopt rules within six months defining that term.  That sure is precise for a criminal provision.  Note that the statute does not contain any mens rea element, and indeed simply adds criminal liability on to the civil liability provisions, with an additional fine and prison term a possibility tacked on to the bill.  Do we really need to make this type of conduct, which likely will be very difficult to prove, a federal offense?  (ph)

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