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.
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Price Gouging Updates: Warren Accuses Large Corporations of Price Gouging; Plaintiffs Respond in Amazon Price Gouging Case
In an interview on All In with Chris Hayes in January, Sen. Elizabeth Warren, D-Mass., claimed that a factor causing the high prices facing U.S. consumers is “giant corporations who say, wow, a lot of talk about high prices and inflation. This is a chance to get in there and…
What the Omicron Variant Could Mean For Price Gouging Enforcement in New York
New York Governor Kathy Hochul has declared a disaster emergency for the state through January 15, 2022 in the wake of rising COVID-19 cases in the state and the newly identified Omicron variant. According to The Wall Street Journal, New York is the first state to declare a state of emergency in response to Omicron, although many states have remained under declared states of emergency since the beginning of the pandemic. New York allowed its previous declared state of emergency to expire on June 24, 2021.
Price Gouging Litigation Continues Apace
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.
Online Marketplaces Could Expose Third-Party Sellers to Price Gouging Liability
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.
Minnesota Files Price Gouging Suit Against Egg Producer
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.
E-Commerce Platform Facing Price Gouging Scrutiny
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.
New York’s Overlapping Price Gouging Laws
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.