January 18, 2021

Volume XI, Number 18

Advertisement

January 15, 2021

Subscribe to Latest Legal News and Analysis

When Emergencies Become De Rigueur

Pennsylvania, for example, was already two years into an existing state of emergency before COVID-19 became a concern. Last month, Pennsylvania Governor Tom Wolf signed the twelfth consecutive renewal of the state’s January 2018 disaster declaration to help the state fight the opioid epidemic. The “disaster emergency” related to the opioid crisis also appears to have triggered price gouging prohibitions, as the language of the state price gouging act provides that “[d]uring and within 30 days of the termination of a state of disaster emergency declared by the Governor … it shall be a violation of this act for any party within the chain of distribution of consumer goods or services or both to sell or offer to sell the goods or services within the geographic region that is the subject of the declared emergency for an amount which represents an unconscionably excessive price.” Penn. P.L. 1210, No. 133 §4(a). Since the conditions necessitating the emergency declaration remain a threat, the state has repeatedly renewed the disaster declaration, and arguably extended the application of those price gouging laws.

We have discussed the effect of overlapping states of emergencies in the past, and some of the challenges and confusion they may pose for price gouging calculations. It remains to be seen how courts will parse the appropriate pricing baselines for products that may have been subject to ongoing price gouging controls before this past March.

Additionally, while challenges to the validity of long-term states of emergencies and price controls are likely, it is worth noting that their outcomes can be unpredictable. This fall, as discussed, the Michigan Supreme Court ruled that Governor Gretchen Whitmer had no authority to issue or renew executive orders relating to COVID-19 beyond April 30. And, just last week the U.S. Supreme Court enjoined New York Governor Andrew Cuomo from enforcing certain executive orders that imposed occupancy limits on religious services during the COVID-19 pandemic.

The Kentucky Supreme Court, however, recently upheld that state’s emergency orders. On March 6, 2020, Kentucky Governor Andy Beshear declared a state of emergency, which remains in effect. Three Kentucky businesses sued Governor Beshear in June, challenging the validity of the governor’s orders related to COVID-19. The court ultimately found that the orders “were, and continue to be, necessary to slow the spread of COVID-19 and protect the health and safety of all Kentucky citizens.” Addressing challenges to the kind of authority that the governor was exercising in issuing these orders, the court concluded that, “the Governor is largely exercising emergency executive power but to the extent legislative authority is involved it has been validly delegated by the General Assembly consistent with decades of Kentucky precedent, which we will not overturn.” While the order did not specifically address price gouging restrictions, those restrictions were activated by the Governor’s March 6, 2020 state of emergency declaration per Ky. Rev. Stat. §367.374(1)(b).

In short, it appears that there is a real possibility that price gouging restrictions will remain in place for as long as the condition underlying the state of emergency persists. In the face of this uncertainty, businesses that gain comfort navigating price gouging compliance now are likely to have surer footing with respect to enforcement actions and legal challenges in the future.

Advertisement
© 2020 Proskauer Rose LLP. National Law Review, Volume X, Number 338
Advertisement

TRENDING LEGAL ANALYSIS

Advertisement
Advertisement

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
Kelly Landers Hawthorne, Proskauer Law Firm, New York, Litigation Attorney
Associate

Kelly Landers Hawthorne is an attorney in the Litigation Department.

Education

  • Columbia Law School, J.D., 2017

  • George Mason University, M.Ed., 2013

  • University of Richmond, B.A., 2011

212-969-3537
Law Clerk

Nathaniel Miller is a Law Clerk in the litigation department. He works for the firm's New York offices. 

Education

  • New York University School of Law, J.D., 2017
  • Harvard University, B.A., 2014
212-969-354
Nicollette R. Moser Litigation & Antitrust Proskauer Rose Washington, DC
Associate

Nicollette Moser is an associate in the Litigation Department and a member of the Antitrust Group.

Related Practices

  • Litigation
  • Antitrust

Admissions & Qualifications

  • District of Columbia
202.416.5862
Advertisement
Advertisement