Price gouging enforcement and litigation is front and center for company counsel and business managers nationwide. Our weekly round up highlights some of the most relevant news and information to our clients and friends.

Department of Justice Settles Price Gouging Allegations with Two New Jersey Companies

On August 14, 2020, the Department of Justice announced that two New Jersey companies had entered into agreements to resolve allegations that the companies violated the Defense Production Act of 1950 for price gouging personal protective equipment. The agreements arise out of the April 2020 seizure of over 11 million items of PPE. The companies have agreed to disgorge $400,000 in profits relating to transactions with two customers who purchased PPE at excessive prices. According to U.S. Attorney Craig Carpenito, “[t]he defendants in this case sought to profit illegally from a pandemic just as it was starting to sweep across the country. Today’s agreements will ensure that needed personal protective equipment gets into the hands of the people who need it, and at a fair price.” FBI Newark Acting Special Agent in Charge Joe Denahan also commented, stating that “[p]rofiteers who choose to shamelessly defraud the America[n] public should know the FBI will utilize every means under the law to bring them to justice.” For more information on the Defense Production Act of 1950, read our blog post, Price Controls under the Defense Production Act.

Virginia Attorney General Seeks to Expand Price Gouging Law

Attorney General Mark Herring’s Consumer Protection Section has received over 500 consumer complaints related to COVID-19 price gouging. In response, his office has sent over 150 letters to businesses demanding that they cease any illegal conduct. According to Attorney General Herring’s office, many companies investigated have claimed that their increased prices were the result of price increases further up the supply chain. As a result, Attorney General Herring has requested “legislation that will amend the Virginia Post-Disaster Anti-Price Gouging Act . . . to also apply to manufacturers and distributors that charge unconscionable prices for necessary goods or services during a state of emergency declared by the Governor or President.” Virginia’s price gouging law, which doesn’t explicitly limit its reach to retailers, states that “it shall be unlawful for any supplier to sell, lease, or license, or to offer to sell, lease or license, any necessary goods and services at an unconscionable price within the area for which the state of emergency is declared.” Va. Code § 59.1-527. Read our Bloomberg Law article for more information on Price Gouging Laws and COVID-19: What Supply Chain Businesses Should Know.

California Attorney General Issues Consumer Alert on Price Gouging Due to Wildfires and Extreme Weather

On August 18, 2020, California Governor Gavin Newsom declared a state of emergency due to the wildfires in California. The same day, California Attorney General Xavier Becerra issued a consumer alert reminding Californians that during a state of emergency, price gouging is illegal under Penal Code Section 396. Attorney General Becerra stated that “[a]s families throughout the state face devastating fires and extremely dangerous weather, they shouldn’t have to worry about whether they’re being illegally cheated out of fair prices for essential goods and services.” Section 396 prohibits charging a price that exceeds greater than 10% of the price of an item prior to the state of emergency. However, the law provides an exception where the price of labor, goods, or materials has increased. A violation of the price gouging statute can result in civil penalties of up to $2,500 per violation, as well as criminal prosecution resulting in up to a one-year imprisonment and a fine of up to $10,000. For more information on California’s price gouging law, read our post, California’s Crackdown on the Price Gouging Gold Rush.

Pennsylvania Attorney General Sues Online Seller Over Price Gouging

Pennsylvania Attorney General Josh Shapiro announced on August 20, 2020, that his office sued an online seller for price gouging. The Philadelphia based company—M&B Multi Services Inc.—allegedly sold 8-ounce bottles of hand sanitizer for prices ranging from $65 to $75. Attorney General Shapiro stated that, “M&B charged outrageous markups for hand sanitizer at the height of public anxiety, was asked to provide refunds, and refused.” The Attorney General’s office seeks civil penalties of $10,000 per violation, for a total of $825,000, as well as an injunction prohibiting M&B from violating Pennsylvania’s Price Gouging Act and Unfair Trade Practices and Consumer Protection Law moving forward.

Minnesota Attorney General Secures Agreement to Stop Illegal Price Gouging of Face Masks

On August 14, 2020, Minnesota Attorney General Keith Ellison announced that his office settled with a Minnesota man accused of selling face masks online at inflated prices. The Minnesota seller allegedly sold face masks online for $24.17 per mask, a price 1,744% greater than retail price for the same mask model. According to Attorney General Ellison, “[w]e’re helping Minnesotans afford their lives during this crisis by cracking down on price gouging on essential goods and services. We’re also helping people stay safe by making sure that protective gear is available everywhere at fair prices,” Attorney General Ellison said. “People need to know that the Governor’s Executive Order banning price gouging applies to individuals as well as retailers,” Attorney General Ellison further stated. The seller has agreed to pay $6,806.82 to consumers harmed by the inflated prices.

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

When competition or antitrust questions arise, John Ingrassia is sought out for his knowledge, reputation and credentials.

John is a recognized authority on Hart-Scott-Rodino antitrust merger review, and for more than 20 years has counselled businesses facing the most challenging antitrust issues and…

When competition or antitrust questions arise, John Ingrassia is sought out for his knowledge, reputation and credentials.

John is a recognized authority on Hart-Scott-Rodino antitrust merger review, and for more than 20 years 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 or joint ventures.

John is a senior counsel at the Firm, advising on the full range of antitrust matters in diverse industries, including chemicals, pharmaceutical, medical devices, telecommunications, financial services and health care, among others.  His practice focuses on the analysis and resolution of antitrust issues related to mergers, acquisitions, and joint ventures, and the analysis and assessment of pre-merger notification requirements. John has extensive experience with the legal, practical, and technical requirements of merger clearance and is regularly invited to participate in Federal Trade Commission and bar association meetings regarding Hart-Scott-Rodino practice issues.

Photo of Kelly Landers Hawthorne Kelly Landers Hawthorne

Kelly Landers Hawthorne is an associate in the Litigation Department.

While at Columbia, she served as an articles editor of the Columbia Journal of Law & the Arts and was involved with the Lawyering in the Digital Age Clinic.  She also worked as…

Kelly Landers Hawthorne is an associate in the Litigation Department.

While at Columbia, she served as an articles editor of the Columbia Journal of Law & the Arts and was involved with the Lawyering in the Digital Age Clinic.  She also worked as a judicial intern for the Honorable Sandra Townes of the United States District Court for the Eastern District of New York.

Kelly is a Teach For America alumnus and taught middle school special education and math in Washington, D.C. prior to law school.

Photo of Nathaniel Miller Nathaniel Miller

Nat Miller is an associate in the Litigation Department.

Nat earned a J.D. degree from NYU School of Law, where he was a Managing Editor of the Journal of Law & Business, and a B.A. from Harvard University. While at NYU Law, he…

Nat Miller is an associate in the Litigation Department.

Nat earned a J.D. degree from NYU School of Law, where he was a Managing Editor of the Journal of Law & Business, and a B.A. from Harvard University. While at NYU Law, he worked as a research assistant for Professor Arthur R. Miller on his treatise, Federal Practice and Procedure. After law school, Nat served as a law clerk to the Honorable Claria Horn Boom of the Eastern and Western Districts of Kentucky.

Photo of Nicollette R. Moser Nicollette R. Moser

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

Photo of Jennifer Tarr Jennifer Tarr

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