Even as Governors lift mask mandates and sporting events welcome fans to stadiums, some states are revisiting their price gouging laws. Recently, several states have advanced legislation to amend or create price gouging statutes. State governments are learning from experiences during COVID-19 emergencies and some are proposing legislation to adjust the scope, definitions, and penalties for price gouging.
State of Emergency
Is the Pipeline Interruption a Price Gouging Issue?
Last week, gas stations across much of the Southeast saw shortages, demand spikes, and price increases after a cyberattack on a major gasoline pipeline. Proskauer’s price gouging team authored a Law360 article addressing the lessons learned from the past year’s emergencies — whether related to COVID-19 or natural disasters —…
Amazon to Arbitrate Price Gouging Class Action, Leaving Open Questions of Platform Liability
Class actions plaintiffs and state enforcers have tried to use state price gouging laws to hold online retailers accountable for prices set by third parties. It remains unclear, however, whether platforms will—or can, under the current legal frameworks—be held liable for price increases made by third party vendors. One of the key cases that could shed some light on this issue, discussed last summer, has been put on hold, pending the completion of arbitration.
Sixth Circuit Remands Price Gouging Case, Allows Kentucky AG to Resume Investigations
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.
Updates to Price Gouging States of Emergency
Over a year ago, states of emergency were declared across the country. Such emergency declarations are often the trigger for state pricing restrictions. Tracking the start and end of the emergency declarations is essential for interpreting the pricing restrictions they impose. For instance, in Oklahoma, the pricing restrictions remain in place throughout the duration of the emergency, and extend for 30 days after the state of emergency has terminated. Proskauer’s Price Gouging Coast to Coast Reference Guide has been updated to reflect new states of emergency dates and legislative changes.
A Comedy of Errors Sinks a Local Government’s Price Gouging Case
In a case of mistaken identity and a web of conflicting testimony, a Fresno local business successfully appealed a price gouging fine. The saga between the store and the City of Fresno offers insights in the importance of maintaining proper business records to defend potential price gouging allegations.
On April 8, 2021, an Administrative Hearing Officer for the City of Fresno, California dismissed an Administrative Citation issued by the City Attorney’s Office against a local business for allegedly price gouging. City Inspectors issued the $10,000 citation in March 2020 while Fresno was under a State of Emergency. The store owner appealed the fine, and after a virtual hearing, the Hearing Officer determined that the City had not met its burden of proving each element of the case against the business.