In some ways, it feels like the country is moving into another phase of how we experience the COVID-19 pandemic. With two vaccines in distribution, and more vaccine approvals possible, the pandemic could very well be effectively managed much sooner than experts initially feared. Given the light the end of the tunnel, it is worth renewing talk of how long state and federal price gouging restrictions could remain in place. Emergency declarations and their attendant price restrictions could continue longer than some might hope. In this post, we unpack a few of the strongest indications that these restrictions could endure until the end of the calendar year or beyond.

Appeal of Long Term Emergency Powers. An emergency declaration can—and often does—last indefinitely. States had many good reasons for issuing emergency declarations as part of their response to the pandemic. Having unlocked sweeping powers to respond to the COVID-19 virus, however, it remains to be seen how quickly states will be ready to scale back. When it comes to price gouging, many local actors may have a hard time foregoing enforcement actions and practices that, just weeks or months earlier, they had advocated for as necessary to protect their constituents. It is entirely possible that, rather than scaling those powers back as soon as possible, states may be more interested in maintaining some crisis powers to respond to potential resurgences of the virus, prepare for future emergencies, or keep them on hand as part of a necessary “new normal.”

The COVID-19 pandemic was declared a national emergency on March 13, 2020. That declaration expires after one year unless renewed by the President, though it may also be terminated at any time by the President or by joint resolution of Congress.  At this time, it appears likely that it will be renewed for another year. While Congress could rescind a renewed executive emergency declaration through a simple majority vote, that seems unlikely.

Vaccination Pacing Suggests a Longer Timeline. It is impossible to predict when a critical amount of the population will be willing and able to get vaccinated.  We do know that vaccinations have rolled out more slowly than some had hoped, with about one-third of the anticipated 20 million doses actually distributed by January 1. Recent reported estimates indicate that a return to some form of “normalcy” is not expected before the fall. It is not yet clear whether mutations could, to any extent, delay that process or curb the effectiveness of the two currently-approved vaccines.  In the meantime, it is unlikely that most emergency declarations—and their accompanying pricing restrictions—would be allowed to expire.

Even After the Pandemic Abates, Other Disasters May Persist. Dozens of states of emergencies are ongoing, including but not limited to those related to the COVID-19 pandemic. At the federal level, according to an October 2020 Congressional Research Service report, there are currently 37 national emergencies in effect, including one dating back to the Carter era.  At the local level, in addition to the pandemic-related states of emergencies in effect in nearly all states, there may be concurrent and overlapping states of emergencies. States have emergency declarations in place that respond to a variety of ongoing challenges, ranging from social issues like the opioid epidemic to natural disasters like hurricanes and wildfires. Even after states allow their pandemic emergency declarations to expire, at least some of these other emergencies will likely persist.  Since the specifics of goods and services covered varies widely, any price gouging restrictions that could remain in place due to other emergencies may apply to more limited goods or services.  Still, many businesses could continue to find their products subject to price restrictions, albeit with different baseline dates and prices.

Time will tell whether this somewhat pessimistic perspective on the long horizon for price gouging restrictions will be proven true. Stay tuned – next week, we will discuss why these restrictions could potentially be turned off sooner than the some predict.

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Visit Proskauer on Price Gouging for antitrust insights on COVID-19.

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Proskauer’s cross-disciplinary, cross-jurisdictional Coronavirus Response Team is focused on supporting and addressing client concerns. Visit our Coronavirus Resource Center for guidance on risk management measures, practical steps businesses can take and resources to help manage ongoing operations.

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Photo of Kelly Landers Hawthorne Kelly Landers Hawthorne

Kelly Landers Hawthorne is an associate in the Litigation Department and a member of the Antitrust and Product Liability groups. She represents clients in litigations and due diligence across a range of industries, including consumer products, life sciences, healthcare, education, hospitality, sports and…

Kelly Landers Hawthorne is an associate in the Litigation Department and a member of the Antitrust and Product Liability groups. She represents clients in litigations and due diligence across a range of industries, including consumer products, life sciences, healthcare, education, hospitality, sports and entertainment.

Kelly also maintains a diverse pro bono practice. She received Proskauer’s Golden Gavel Award for excellence in pro bono work in 2019.

She is a frequent contributor to Proskauer’s Minding Your Business blog, where she authors articles related to price gouging issues.

Kelly is also a member of the Proskauer Women’s Alliance Steering Committee, where she serves on subcommittees focused on highlighting and providing professional development opportunities for women at the firm.

Prior to her legal career, Kelly was a Teach For America corps member and taught middle school in Washington, DC.

While at Columbia Law School, Kelly served as an articles editor of the Columbia Journal of Law & the Arts and interned for the Honorable Sandra Townes of the U.S. District Court for the Eastern District of New York.

Photo of John R. Ingrassia John R. Ingrassia

John is a partner at the Firm, advising on the full range of foreign investment and antitrust matters across industries, including chemicals, pharmaceutical, medical devices, telecommunications, financial services consumer goods and health care. He is the first call clients make in matters relating…

John is a partner at the Firm, advising on the full range of foreign investment and antitrust matters across industries, including chemicals, pharmaceutical, medical devices, telecommunications, financial services consumer goods and health care. He is the first call clients make in matters relating to competition and antitrust, CFIUS or foreign investment issues.

For more than 25 years, John has counselled businesses facing the most challenging antitrust issues and helped them stay out of the crosshairs — whether its distribution, pricing, channel management, mergers, acquisitions, joint ventures, or price gouging compliance.

John’s practice focuses on the analysis and resolution of CFIUS and antitrust issues related to mergers, acquisitions, and joint ventures, and the analysis and assessment of pre-merger CFIUS and HSR notification requirements. He advises clients on issues related to CFIUS national security reviews, and on CFIUS submissions when non-U.S. buyers seek to acquire U.S. businesses that have national security sensitivities.  He also regularly advises clients on international antitrust issues arising in proposed acquisitions and joint ventures, including reportability under the EC Merger Regulation and numerous other foreign merger control regimes.

His knowledge, reputation and extensive experience with the legal, practical, and technical requirements of merger clearance make him a recognized authority on Hart-Scott-Rodino antitrust merger review. John is regularly invited to participate in Federal Trade Commission and bar association meetings and takes on the issues of the day.

Photo of Christopher E. Ondeck Christopher E. Ondeck

Chris Ondeck is co-chair of the Firm’s Antitrust Group and co-head of the Washington DC office. He represents clients in complex antitrust and consumer protection litigation, defends mergers and acquisitions before the U.S. antitrust agencies, represents companies involved in government investigations, and counsels…

Chris Ondeck is co-chair of the Firm’s Antitrust Group and co-head of the Washington DC office. He represents clients in complex antitrust and consumer protection litigation, defends mergers and acquisitions before the U.S. antitrust agencies, represents companies involved in government investigations, and counsels on antitrust compliance. Chris is also the founder and leader of the firm’s Price Gouging Practice, and is one of the key thought leaders in this space.

Chris handles antitrust matters for clients in a number of industries, including food and agriculture, financial services, media, telecom, technology, e-commerce, consumer products, natural resources, oil and gas, chemicals, and pharmaceuticals.  He also serves as outside counsel to a large number of industry groups, including trade associations and cooperatives.

Chris has been recognized as a leading antitrust practitioner by Chambers, noting that clients describe him as “our primary thought partner – he’s very good at explaining the complex issues and making them easy to understand” and praising “his strong advocacy skills”; by The National Law Review as a “Go To Thought Leader 2020”; by Acritas as a “Star” in multiple years; by Benchmark Litigation as a National Litigation Star 2021; and by The Legal 500 United States for Antitrust: Civil Litigation/Class Actions.