The Sixth Circuit issued its opinion in the Online Merchants Guild v. Cameron case on April 29, 2021, dissolving a preliminary injunction that had prevented the Kentucky Attorney General from investigating alleged violations of Kentucky’s price gouging laws, and remanding to the district court for further proceedings.

Last June, a Kentucky federal court had granted a preliminary injunction to the Online Merchants Guild, halting the AG’s investigations “into potentially excessive prices charged on Amazon’s online store.”  The Online Merchants Guild argued that Kentucky’s enforcement of its price gouging laws violated the dormant Commerce clause for multiple reasons, including that they were impermissibly extraterritorial.  According to the Online Merchants Guild, because their sales of goods in Amazon’s online marketplace were governed by Amazon’s own internal requirement that all goods in the Amazon marketplace be priced the same nationwide, by investigating violations of Kentucky’s price gouging laws, in effect, Kentucky was demanding that the vendors charge Kentucky-based pricing in all 50 states.  The district court found that the Online Merchants Guild was “likely to succeed in showing that the practical effect of [the] Attorney General’s recent investigations into possible violations violates the dormant Commerce Clause.”  The district court’s decision was based in large part on the determination that the impact of the application of the Kentucky price gouging laws on the Online Merchants Guild was impermissibly extraterritorial.

Kentucky Attorney General Daniel Cameron appealed the preliminary injunction to the Sixth Circuit. The Sixth Circuit agreed with AG Cameron that Kentucky’s law was not impermissibly extraterritorial in violation of the dormant Commerce Clause because even if Kentucky’s price gouging laws did have an effect on “wholly out-of-state commerce, that effect is not the law’s direct or inevitable result.” In effect, it was Amazon’s pricing structure that led to any extraterritorial effect, not the price gouging law itself.  The Circuit’s ruling was narrowly tailored to the district court opinion on extraterritoriality and did not touch the other dormant Commerce Clause arguments that were pleaded but not fully briefed below. Instead, the Court found the extraterritoriality argument a particularly bad fit given that “in a modern economy just about every state law will have some ‘practical effect’ on extraterritorial commerce.”

Online Merchants Guild has filed papers indicating they plan to move for an en banc hearing. Its motion papers for rehearing are due on June 1, 2021.

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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.

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 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.