Price gouging complaints around the country have been skyrocketing and Michigan is no exception. Between March 5, 2019, and April 14, 2019, Michigan had 80 price gouging complaints. During the same period in 2020, Michigan received 3,541 complaints – an increase of 4,326 percent. Michigan has been under a state of emergency since March 10, 2020, which remains in effect indefinitely.

Michigan Attorney General Dana Nessel is taking allegations of price gouging seriously and has assigned a team of special agents to assist in investigating complaints. “Our objective is to make sure business owners are following the laws Michigan has in place to protect consumers, and public awareness of price-gouging can offer valuable support in our efforts to keep companies honest,” Nessel stated. “If that can be accomplished without legal action, then that is a path we will pursue. But if stores continue to disregard the rules and raise their prices beyond justifiable amounts, then we will hold them accountable.” Nessel aims to avoid what she termed “an environment where … only the very wealthy can stay healthy.”

Michigan’s price gouging law states that “unfair, unconscionable, or deceptive methods, acts, or practices in the conduct of trade are unlawful and are defined as follows: … [c]harging the consumer a price that is grossly in excess of the price at which similar property or services are sold.” Mich. Comp. Laws §445.903(z). A persistent and knowing violation of the statute can result in a civil fine up to $25,000. Mich. Comp. Laws §445.905. Michigan’s law also includes a private cause of action, which allows victims to recover actual damages, or $250, whichever is greater, as well as reasonable attorneys’ fees. Mich. Comp. Laws §445.911(2).

On March 10, 2020, the same day that she declared a state of emergency, Governor Gretchen Whitmer issued Executive Order 2020-18, taking Michigan’s price gouging laws a step farther. That order was replaced with Executive Order 2020-53 on April 1, 2020. Under Executive Order 2020-53, “[a] person must not resell a product in [Michigan] at a price that is grossly in excess of the purchase price at which the person acquired the product.” The Executive Order defines “grossly in excess” to mean selling “at a price that is more than 20% higher than what the person offered or charged for that product as of March 9, 2020” (the day before the state of emergency was issued). The Executive Order covers “any good, material, or consumer food item with a fair market value of less than $1,000.00, or any emergency supply” and applies to any “individual, business, or other legal entity.”

The Executive Order also includes an exception for where the seller “demonstrates that the price increase is attributable to an increase in the cost of bringing the product to market or to an extraordinary discount in effect as of March 9, 2020.” A willful violation of Executive Order 2020-53 is a misdemeanor. The enhanced restrictions remain in effect through May 15, 2020.

*      *      *

Visit Proskauer on Price Gouging for antitrust insights on Covid-19.

*      *      *

Proskauer’s cross-disciplinary, cross-jurisdictional Coronavirus Response Team is focused on supporting and addressing client concerns. Visit our Coronavirus Resource Center for guidance on risk management measures, practical steps businesses can take and resources to help manage ongoing operations.

Photo of John R. Ingrassia John R. Ingrassia

John is a partner at the Firm, advising on the full range of foreign investment and antitrust matters across industries, including chemicals, pharmaceutical, medical devices, telecommunications, financial services consumer goods and health care. He is the first call clients make in matters relating…

John is a partner at the Firm, advising on the full range of foreign investment and antitrust matters across industries, including chemicals, pharmaceutical, medical devices, telecommunications, financial services consumer goods and health care. He is the first call clients make in matters relating to competition and antitrust, CFIUS or foreign investment issues.

For more than 25 years, John has counselled businesses facing the most challenging antitrust issues and helped them stay out of the crosshairs — whether its distribution, pricing, channel management, mergers, acquisitions, joint ventures, or price gouging compliance.

John’s practice focuses on the analysis and resolution of CFIUS and antitrust issues related to mergers, acquisitions, and joint ventures, and the analysis and assessment of pre-merger CFIUS and HSR notification requirements. He advises clients on issues related to CFIUS national security reviews, and on CFIUS submissions when non-U.S. buyers seek to acquire U.S. businesses that have national security sensitivities.  He also regularly advises clients on international antitrust issues arising in proposed acquisitions and joint ventures, including reportability under the EC Merger Regulation and numerous other foreign merger control regimes.

His knowledge, reputation and extensive experience with the legal, practical, and technical requirements of merger clearance make him a recognized authority on Hart-Scott-Rodino antitrust merger review. John is regularly invited to participate in Federal Trade Commission and bar association meetings and takes on the issues of the day.

Photo of Christopher E. Ondeck Christopher E. Ondeck

Chris Ondeck is co-chair of the Firm’s nationwide Antitrust Group. He represents 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…

Chris Ondeck is co-chair of the Firm’s nationwide Antitrust Group. He represents 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, consumer products, defense, franchise, medical devices, metals, mining, natural resources, oil and gas, packaging, pharmaceuticals, software and telecommunications. He also has developed substantial experience advising clients regarding the application of the antitrust laws to the pharmaceutical industry, the agriculture industry, trade associations and the energy industry.