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Defense Production Act Update – 3/23/2020

Today, the President signed an Executive Order to authorize the Sec. of HHS to designate medical equipment as “critical” or “essential” to the national response to the crisis.

Under DPA § 102, the President can take action to prohibit the hording of materials designated as “scarce” or “essential.” Sec. 102 prohibits the accumulation of such items: 1) in amounts that are in excess of reasonable personal, home use, or business purposes; and 2) for the purpose of resale in excess of prevailing market prices.  Such activities would be treated as criminal activity under this authority.

This action was reportedly taken based upon evidence indicating the potential for hoarding of such equipment and subsequent price gouging.

As of today, the Sec. of HHS has not designated any such materials pursuant to this authority. We can reasonably speculate that such declarations may follow with regard to N95 masks and sanitation products.


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