Miller’s office files first lawsuit alleging excessive prices in COVID-19 pandemic
UPDATE: On May 7, Judge Third Judicial District Judge Patrick Tott signed an order granting a stipulated temporary injunction, in which Michael Evan Noteboom agrees to be enjoined temporarily from selling or buying items or merchandise needed by victims of the COVID-19 pandemic, including masks, gloves, toilet paper, paper towels, wipes, disinfectants, sanitizers, water, food, medicines, medical supplies, sanitation supplies, utilities, building materials, and materials, goods, or services for cleanup or repair.
DES MOINES — Iowa Attorney General Tom Miller has sued an Orange City man for alleged price gouging, accusing him of charging excessive prices on more than 250 items on eBay, including toilet paper, paper towels and disinfecting and sanitizing products.
The lawsuit is the first Iowa price-gouging petition filed during the COVID-19 pandemic. Since the beginning of the public health emergency, the office’s Consumer Protection Division has received 470 reports of price gouging, including 285 formal complaints.
The lawsuit names Michael Evan Noteboom of Orange City, who the lawsuit says has the eBay account known as mn65. The lawsuit, filed Friday, asks a judge to order a temporary and permanent injunction to stop Noteboom from selling household merchandise on any platform. It also seeks consumer restitution or disgorgement and civil penalties.
Businesses or individuals found in violation of Iowa’s price-gouging rule could face civil penalties of up to $40,000 under the Iowa Consumer Fraud Act.
“Our office has warned the defendant repeatedly to stop his activity,” Miller said. “Through news reports, public-service announcements and other notices, our office has informed sellers and the public that we will not hesitate to protect consumers from price gouging.”
Third Judicial District Judge Patrick Tott set a hearing on the request for a temporary injunction at 9 a.m. May 6, via videoconference.
A disaster declaration triggers the state’s price-gouging rule, which forbids excessive prices for goods or services “needed by victims of disasters.” An excessive price is one “not justified by the seller’s actual costs of acquiring, producing, selling, transporting, and delivering the actual product sold, plus a reasonable profit.”
The prohibition on charging excessive prices applies to all sellers of merchandise, including brick and mortar stores, suppliers, internet stores, and sales on social media sites. Sellers who accept excessive prices on online auction sites are not exempt from Iowa’s price-gouging law.
According to the lawsuit:
About March 22, the Attorney General’s office received two complaints of alleged price gouging by eBay seller mn65, who according to his posts was located in Iowa. The complaints’ allegations included that mn65 was selling a 12-ounce can of Lysol on eBay for $65.99, Angel Soft toilet paper (12 count) for $86, and Bounty paper towels (6 count) for $49.99.
The seller was sent a written warning about price gouging on March 24.
Further investigation showed that from March 2 through March 27, the seller had sold 253 items needed by COVID-19 disaster victims on eBay to consumers in California, Illinois, New York, Michigan, Texas and several states. The highest price item was a 12-count package of Bounty paper towels for $119.99.
On April 2, the Attorney General’s office sent Noteboom a letter directing him to cease and desist from violating the price-gouging rule. He has refused or otherwise failed to respond.
“From the pandemic, heroes have arisen who put the social good and their fellow man first, such as doctors, nurses and other health care workers,” the lawsuit states. “Unfortunately, others have chosen to take advantage of the crisis in order to personally and unfairly profit from the panic and product shortages initiated by COVID-19. Defendant is in the latter group.”
To seek help
To learn more, go to the price-gouging page on the A.G.'s website.
Consumers will find a form to report price gouging. Please attach photos, receipts, advertisements or other supporting documents to the form.
Consumers can also contact the Consumer Protection Division via:
Phone: 515-281-5926 (toll-free number outside of the Des Moines area: 888-777-4590)