January 25, 2022

Volume XII, Number 25

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January 24, 2022

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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 Merchants Guild v. Cameron, 20-cv-00029-GFVT (E.D. K.Y.)

After Kentucky Attorney General Daniel Cameron initiated civil price gouging investigations into various Kentucky-based merchants last year, the Online Merchants Guild (“Guild”) brought suit to enjoin application of the state price gouging laws against its member suppliers. The district court granted a preliminary injunction, and Kentucky appealed. In April 2021, the Sixth Circuit dissolved the lower court’s preliminary injunction and remanded for further proceedings. The Attorney General filed a motion for judgment on the pleadings, arguing that the Guild’s allegations of constitutional violations fail because Kentucky’s statute is not extraterritorial and it is sufficiently clear to pass constitutional muster. On October 12, 2021, the Guild moved to voluntarily dismiss its case without prejudice, noting that the Guild and Attorney General were engaged in discussions to address the state’s concerns while avoiding further litigation. The Guild further stated it did not intend to pursue litigation as an entity, but if further litigation were necessary, it could be addressed through individual suits by its members. The parties are awaiting the district court’s determination on their respective dismissal motions.

Greenberg v. Amazon, 2:21-cv-00898-RSL (W.D. Wash.)

On July 2, 2021, a group of consumers filed a putative class action in Washington District Court seeking to hold Amazon accountable for allegedly unlawful price gouging during the COVID-19 pandemic on a variety of Amazon-branded products as well as products sold by third-party sellers in the Amazon marketplace. On October 1, 2021, Amazon filed a motion to dismiss the complaint. Among other things, Amazon pointed to the basic economic principle of supply and demand and argued that the court should not impose a blanket price ceiling of its own accord. Amazon also objected to the plaintiffs’ attempt to create a 15% limit on price increases, a standard which is not found in Washington’s consumer protection statute or case law. The plaintiffs’ filed an amended complaint which added an additional named plaintiff and described additional products allegedly sold at inflated prices. The plaintiffs amended complaint also claims the baseline price for measuring whether price gouging occurred is the “the price prevailing immediately prior to the declaration of a national emergency related to COVID-19.”  Amazon’s deadline to respond to the amended complaint is due November 5, 2021.

Bell v. Cal-Maine Foods et al., 1:20-cv-00461-RP (W.D. TX)

On September 20, 2021, Judge Robert Pitman dismissed a class action price gouging case in the Western District of Texas after adopting Magistrate Judge Mark Lane’s report and recommendation.  Plaintiffs alleged that defendant egg producers conspired to, and illegally raised egg prices in violation of section 17.46(b)(27) of the Texas Business and Commerce Code, which prohibits “exorbitant or excessive prices” on certain products during a state of emergency. Magistrate Judge Lane found that the plaintiffs failed to claim the amount in controversy necessary for the court to have subject matter jurisdiction. Plaintiffs argued that their claims against each defendant should be aggregated together but failed to make any factual allegations that the defendants are related or worked together to manipulate and raise egg prices.  The district court adopted these findings and dismissed the complaint without prejudice.

Ellison v. Sparboe Farms, Inc. 27-cv-21-10810 (MN)

On October 25, 2021, Minnesota Attorney General Keith Ellison announced a settlement between the state and Sparboe Farms, ending a lawsuit by the state which alleged that Sparboe had engaged in price gouging on eggs during the Covid-19 pandemic. As part of the settlement, Sparboe will donate over 1 million eggs to Minnesota nonprofit organizations for the purpose of combatting hunger and food insecurity over the next 18 months. Sparboe is responsible for all costs associated with the donation and must provide updates and documentation to the attorney general if requested.

© 2022 Proskauer Rose LLP. National Law Review, Volume XI, Number 306
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About this Author

Christopher Ondeck Antitrust Litigator chair of  Proskauer Rose nationwide Antitrust Group
Partner

Chris Ondeck is a partner in the Litigation Department and vice-chair of the Antitrust Group. He focuses his practice on representing clients in civil and criminal antitrust litigation, defending mergers and acquisitions before the U.S. antitrust agencies, defending companies involved in government investigations, and providing antitrust counseling.

Chris has handled antitrust matters for clients in a number of industries, including advertising, aerospace, alcoholic beverages, appliances, building materials, defense, medical devices, metals,...

202-416-5865
John Ingrassia, Antitrust Attorney, Telecommunications, Proskauer Law firm
Special Counsel

John Ingrassia is a special counsel and advises clients on a wide range of antitrust matters in various industries, including chemicals, pharmaceutical, medical devices, telecommunications, financial services, health care, and others. His practice includes a significant focus on the analysis of Hart-Scott-Rodino pre-merger notification requirements, the coordination and submission of Hart-Scott-Rodino filings, and the analysis and resolution of antitrust issues related to mergers, acquisitions, and joint ventures. John has extensive experience with the legal, practical,...

202.416.6869
Associate

Tim Burroughs is an associate in the Litigation Department.

Tim earned his J.D. from Vanderbilt Law School, where he was the Executive Student Writing Editor for the Vanderbilt Journal of Transnational Law and Teaching Assistant for the legal writing program. While at Vanderbilt, Tim interned at the U.S. Attorney’s Office for the Southern District of New York and published his student note on international anti-money laundering regulation in the fine-art market.

212-969-3121
Shannon D. McGowan Litigation Attorney Proskauer Rose Washington, DC
Associate

Shannon McGowan 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.

Prior to law school, Shannon served as a legislative assistant to state representatives at the Oklahoma State House of Representatives.

202-416-6824
Jennifer E. Tarr Litigation Attorney Proskauer Rose Washington, DC
Associate

Jennifer E. Tarr is an associate in the Litigation Department.

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