States around the country have activated their price gouging statutes due to the COVID 19 pandemic.  These temporary restrictions typically go into effect upon the declaration of a local, state or national emergency.  However, even though all the emergency declaration began at roughly the same time (the first week of March 2020), they likely will end at very different times. States are taking much different approaches to their predicted end-dates for their price gouging restrictions.

Under the majority of state laws, Governors can declare a state of emergency only for a limited time period – typically 30, 60, or 90 days.  After that period, the Governors usually are required to renew the declaration.  Unless renewed, when the declaration expires, so do many of the price gouging restrictions.  In Louisiana, for example, “no state of disaster or emergency may continue for longer than thirty days unless renewed by the governor.”  La. Stat. Ann. § 29:724.  Louisiana’s price gouging statute tracks this language, stating that the statute “is effective for an initial period not to exceed thirty days pursuant to the initial declared state of emergency … and shall be renewed only by specific reference in any subsequent proclamations renewing the declared state of emergency by the governor.”  La. Stat. Ann. § 29:732(B).  Louisiana’s state of emergency related to COVID-19 expires on June 5, 2020, unless extended or terminated sooner.

Other states specify a set date when their price gouging restrictions expire in their declaration of emergency or another executive order.  For example, under California’s Proclamation of a State of Emergency, price gouging restrictions are in effect through September 4, 2020.  Michigan takes a similar approach, specifically extending its price gouging restrictions through June 12, 2020, via Executive Order 2020-89.

Some states also have price gouging laws that remain in effect even after the state of emergency expires.  For example, New Jersey’s price gouging statute states that “[i]t shall be an unlawful practice for any person to sell or offer to sell during a state of emergency or within 30 days of the termination of a state of emergency.”  N.J. Stat. Ann. §56:8-109.  New Jersey’s state of emergency expires on June 5, 2020.  Similarly, Pennsylvania’s price gouging statute remains in effect “[d]uring and within 30 days of the termination of a state of disaster emergency declared by the Governor.”  Penn. P.L. 1210, No. 133 §4(a).  Pennsylvania’s state of emergency, which must be renewed every 90 days, expires on June 4, 2020.

There are also some states in which the statutory time period for the price gouging restrictions has run, and the Governor has extended them.  Under Kentucky’s price gouging statute, for instance, restrictions are only in effect for fifteen days.  After the fifteen days expire, the Governor may renew the provisions up to “three additional fifteen (15) day periods [] if necessary to protect the lives, property, or welfare of the citizens.  Ky. Rev. Stat. §367.374(1)(b).  On April 21, 2020, the last of the fifteen-day extension periods expired.  However, Governor Andy Beshear has continued to extend the price gouging provisions beyond this statutory period by executive order.  The most recent executive order issued on May 21, 2020, extends the price gouging provisions “for the duration of the State of Emergency.”

While the majority of price gouging restrictions continue to remain in effect, some may begin to expire in the coming weeks or months.  With a wide range of expiration dates for price gouging restrictions, and renewals coming online daily, compliance on a regional or national level requires careful tracking of where the restrictions are in effect and for what period they are slated to remain in place.  Finally, the importance of maintaining a good record of your compliance and compliance efforts in place now survives the current state of emergency.  As some statutes allow for private causes of actions to be brought up to six years from now, plaintiffs will look retrospectively at what took place during this critical period when evaluating whether to bring claims – even months or years down the road.

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

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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 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.

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.