While states continue to lift their COVID related states of emergency, new price gouging claims are being made and ongoing price gouging litigation continues to wind through the courts. The federal government also now appears more poised than ever to intervene in price gouging issues.
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.
With the Biden administration ramping up scrutiny on supply chains and pricing practices, businesses should take a moment to revisit their COVID-19 price gouging compliance. As we’ve previously highlighted, risk management with ever-shifting price gouging restrictions requires careful consideration of documentation and oversight of pricing practices and decisions. For reputable companies up and down the national supply chain, compliance with the array of state price gouging laws requires more than intuition and a moral compass. Even with the best intentions, many businesses inadvertently run afoul of price gouging laws. Because price gouging statutes can cover more than obvious bad conduct and point-of-sale pricing to consumers, manufactures and suppliers should consider implementing procedures to assess whether they are required to comply with pricing restrictions, whether they are complying, and how to manage compliance. Below we outline some key considerations for businesses.
As price gouging restrictions remain in place in many states and municipalities, new and ongoing enforcement actions continue to advance or settle. Over the past several weeks, we have seen a number of noteworthy developments in the most watched price gouging matters.
On July 2, 2021, a group of consumers filed a putative class action in Washington District Court alleging Amazon engaged in unlawful price gouging during the COVID-19 pandemic on a variety of products. The case is noteworthy because Washington does not have a specific price gouging statute. Instead, plaintiffs argue that the alleged price gouging is an “unfair or deceptive act or practice in the conduct of any trade or commerce” in violation of Washington Consumer Protection Act (“WCPA”). Commentators have speculated that one of the purposes for filing in Washington is to pursue, in a state court, nationwide damages from Amazon.
Although many states of emergency have expired, new lawsuits that allege price gouging continue to be filed. On September 3, 2021, Minnesota Attorney General Keith Ellison filed a complaint in Minnesota state court against Sparboe Farms, Inc. alleging the company engaged in price gouging for the sale of eggs in violation of the Minnesota Governor’s executive order.
In the early days of the pandemic, COVID-19 was synonymous with a mad dash for anti-virus home items like hand sanitizer, toilet paper, and anti-bacterial wipes. Amazon emerged from the shopping frenzy as key source of these products and hosts of others. Even as many states are lifting states of emergency, businesses active during the pandemic, such as Amazon, are facing suits for conduct during the pandemic.
On June 24, 2021, New York celebrated the lifting on most COVID-19 restrictions. Governor Andrew Cuomo announced the COVID-19 state of emergency would officially expire. With the expiration of the emergency declaration, the state of New York’s price gouging restrictions were also lifted. The New York price gouging statute provides for certain pricing restrictions “during any abnormal disruption of the market”, and that an abnormal disruption of the market is triggered by a declaration of a state of emergency by the Governor. After over a year of COVID-19 related pricing restrictions, the Governor’s announcement marked the end of those restrictions.
In recent weeks many states have either started lifting pricing restrictions put in place during the COVID-19 pandemic or announced their plans to do so. Still, some state governments have indicated that they will continue to hold pricing restrictions in place as a means of protecting consumer welfare as people return to normal spending habits and economies recover from the toll of the pandemic. As the country begins turning the corner toward the end of the pandemic, the landscape of state price gouging restrictions remains muddy as governors take individualized approaches to states of emergency.