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.

AGs Defend Kentucky’s Investigation into Online Price Gouging

On September 23, 2020, a bipartisan coalition of 30 state attorneys general filed an amicus brief in the U.S. Court of Appeals for the Sixth Circuit urging the court to reverse the district court’s decision in Online Merchants Guild v. Cameron to preliminarily enjoin Kentucky from enforcing its price gouging prohibitions against merchants that sell their products on Amazon. Amici argue that the district court erred in accepting the Online Merchant Guild’s argument that applying price gouging laws to online sellers violates the dormant Commerce Clause because it constitutes an impermissible regulation of extraterritorial commerce. Instead, Amici argue that price gouging laws do not violate the dormant Commerce Clause because: 1) the dormant Commerce Clause reserves to the States broad regulatory authority to protect public health and safety; 2) regulating price gouging is a valid, non-protectionist exercise of state police powers; and 3) the extraterritoriality doctrine does not limit the States’ authority to regulate price gouging within their borders. Amici conclude by stating that “because price gouging laws like Kentucky’s affect only the price of goods within the State, without dictating prices in other States’ markets, those laws do not run afoul of the extraterritoriality doctrine.”

New Jersey Attorney General Remains Active in the Fight Against Price Gouging

In a September 21, 2020, Press Release, New Jersey Attorney General Gurbir Grewal provided an update on the actions his office and the Division of Consumer Affairs have taken to combat price gouging. According to Attorney General Grewal, the Division has sent 1,884 cease and desist letters to retailers suspected of unconscionable business practices during the pandemic, including price gouging. The Division has also issued 110 subpoenas, further investigating alleged violations of New Jersey’s Consumer Fraud Act. “Since the beginning of the COVID-19 outbreak, we made clear that we would take a tough stand on price gouging and other abuses of New Jersey consumers,” said Attorney General Grewal. The Press Release goes on to remind New Jersey residents that the law, which took effect following Governor Murphy’s March 9, 2020, declaration of a state of emergency, prohibits excessive price increases during a declared state of emergency and for 30 days after its termination.

New York City to Allow Restaurant Surcharge

On September 16, 2020, the New York City Council voted with an overwhelming majority to allow restaurants to temporarily impose a “COVID-19 recovery charge” to assist them through their pandemic-related financial struggles. According to a spokesman for Mayor Bill de Blasio’s office, the bill will allow restaurants to add up to a 10% surcharge to each bill so long as the surcharge is clearly noted on the menu. The surcharge will be allowed for 90 days after indoor dining has returned to normal, though this date is not yet determined. Some, however, do not support the surcharge, arguing that allowing it will discourage tipping due to some customers mistakenly thinking that some of the money goes to employees. While one restaurant owner, who has already raised his prices by about 5 or 6 percent, feels that unless there are new unforeseen costs that arise, “it kind of feels like price gouging.”

Heat Lamp Shortage Leads to Prices Skyrocketing

As fall gets underway, some cities are seeing a shortage of an unexpected product: heat lamps. According to September 21, 2020, report by Eater, Chicago is facing a patio heat lamp shortage as the winter restaurant season approaches, leading to prices skyrocketing. With heat lamps becoming a rare find across the area, many restaurant owners are having to turn to party rental companies for the lamps. However, rental companies are reportedly charging thousands of dollars per heat lamp, compared to their usual price of around $140. Where heat lamps can be found for sale, prices are ranging for $400 to $450 a lamp. Chicago restaurant owners are not alone. Restaurant owners in California and New York are similarly seeing a shortage of heat lamps.

Price Gouging Complaints Continue in Texas Following Hurricane Laura

According to Texas officials, the state has received 68 price gouging complaints following Hurricane Laura in late August. The breakdown of the complaints is as follows: 29 related to lodging; 19 related to fuel; 11 related to hardware supplies; 6 related to food, water, and groceries; 2 unknown; and 1 related to an online retailer. The Office of Attorney General expects more complaints following Texas’ most recent storm, Tropical Storm Beta. For comparison, the Texas Office of Attorney General received over 5,000 complaints following Hurricane Harvey in 2017. Read our blog post for more information on Texas’ price gouging law.

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.