The majority of price gouging laws have been activated throughout the country for over a year now, but reports of price gouging continue, along with enforcement and lawsuits. While many are aware that price gouging restrictions apply to essential goods such as medical and emergency supplies, some covered goods are often mistakenly thought not to be covered. As a result, companies should remain vigilant and familiarize themselves with the scope of covered products and services in the states in which they conduct business.

A recent example of a product potentially subject to certain state price gouging restrictions is fertilizer, a product that has reportedly been increasing in price in recent months. A recent report details how the price of anhydrous ammonia, a foundation for all nitrogen fertilizers, has increased almost 60% since the fall, rising to $655 a ton. According to one fertilizer expert, “[y]ou have to go back at least half a decade to see values of where we’re at today. It’s been a stark turnaround compared to where we were last summer.” While not covered by all state price gouging laws, some state laws have broad applicability and thus, while activated, arguably may cover such products.

Another category of goods that some mistakenly believe may be excluded from price gouging prohibitions are building materials. With home improvement projects on the rise during the pandemic, complaints of price gouging have been widespread. Most recently, contractors in Maryland reported that “the cost of building materials in the wake of the pandemic is going to put them out of business.” According to a poll by the Associated General Contractors of America, 93% of respondents claim that they have seen increased costs due to the pandemic. Many state price gouging laws across the country apply to building materials, including Colorado, Iowa, Kansas, Texas, and Virginia, to name a few.

More specifically, a recent CNBC article reports that “[s]oftwood lumber prices are now about 112% higher than they were a year ago,” reportedly jumping just 10% in the week prior to the February article’s posting. However, CNBC reports that it is not just demand driving up prices, but also “because both mill operators and lumber dealers misread the 2020 market.” Consistent with CNBC’s report, an August 2020 Wall Street Journal article similarly reported that “[s]aw mills didn’t see this coming. Lumber prices tumbled in late February as the U.S. economy began to shut down to slow the spread of the deadly Covid-19. An estimated 40% of North American lumber production was curtailed in March and April as millions of people lost their jobs. Futures hit a four-year low April 1. They have been rising ever since. By July, prices had returned to their pre-pandemic level and have subsequently added another 47%.”

While energy prices prompted discussions and investigations in the wake of winter storms, other factors in supply chains could lead to price gouging scrutiny of energy prices. In Michigan, the state is planning a response to energy markets with the potential closure of “Line 5,” a natural gas pipeline in the northern part of the state.  The pipeline serves the Detroit Airport and many consumers who rely on propane for heat. The Michigan Governor expressed concerns that consumers could face price gouging as a result of the pipeline’s closure and the state’s Attorney General has urged the legislature to reconsider amending the state’s price gouging laws to increase enforcement capabilities.

While some states, like California, have begun limiting the scope of their price gouging restrictions, most state price gouging laws remain active and in full force. To guide your company in compliance with state price gouging laws, read our State Price Gouging Laws Coast-to-Coast Reference Guide.

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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 Christopher E. Ondeck Christopher E. Ondeck

Chris Ondeck is head of the Washington, DC office and co-chair of the Firm’s Antitrust Group. Chris is one of the most highly rated antitrust trial lawyers in the United States. In 2023, he won the largest antitrust jury trial of the year…

Chris Ondeck is head of the Washington, DC office and co-chair of the Firm’s Antitrust Group. Chris is one of the most highly rated antitrust trial lawyers in the United States. In 2023, he won the largest antitrust jury trial of the year, and one of the largest in history, by defending Sanderson Farms as the sole non-settling defendant where the direct purchaser plaintiffs alleged $7 billion in damages. The significance of the trial victory was widely reported by Reuters, Bloomberg Law, Law360, and other publications, calling it a “blockbuster case.” Law360 noted that Chris “blasted” the plaintiffs’ assertions at trial and called it one of the biggest trial decisions of the year. Chris and his team were named Litigators of the Week by the American Lawyer. Benchmark Litigation also shortlisted Chris for antitrust litigator of the year in 2023.

Chris is a go-to litigator for clients in high-profile antitrust matters, including AARP, Amtrak, AT&T, Butterball, Cardinal Health, Continental Resources, Daybreak Foods, Discovery, DuPont, Ocean Spray, SpaceX, Sunkist, Wayne Sanderson Farms, Welch’s, and Weyerhaeuser. He also has 30-years’ expertise with the Capper-Volstead Act’s application and interpretation for agricultural cooperatives, and 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”; by Acritas as a “Star” for multiple years; by Benchmark Litigation as a National Litigation Star; and by The Legal 500 United States for Antitrust: Civil Litigation/Class Actions.

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 Shannon D. McGowan Shannon D. McGowan

Shannon McGowan is an associate in the Litigation department.  Shannon’s practice focuses on assisting clients navigate a range of antitrust issues.  In addition to her experience on wide-ranging antitrust litigations, Shannon works with clients on general antitrust compliance and litigation issues.  In connection…

Shannon McGowan is an associate in the Litigation department.  Shannon’s practice focuses on assisting clients navigate a range of antitrust issues.  In addition to her experience on wide-ranging antitrust litigations, Shannon works with clients on general antitrust compliance and litigation issues.  In connection with historic restructuring of Puerto Rico’s debts, Shannon advises the Financial Oversight and Management Board for Puerto Rico on a variety of issues related to Puerto Rico Oversight, Management, and Economic Stability Act.

Shannon maintains an active pro bono practice, including assisting non-profit organizations with research into immigration and refugee law and representing individual clients in litigation to improve housing conditions in the Washington D.C. area.

Shannon earned her J.D. from the University of Virginia School of Law, where she captained the school’s Philip C. Jessup International Law Moot Court team.  As an alumnae, she is active in advising the current UVA Jessup Team throughout the year-long competition.

Prior to law school, Shannon served as a legislative assistant to state representatives at the Oklahoma State House of Representatives, where she researched and advised on legislation and policy issues, including government transparency, education, and financial accountability.