On November 12, 2020, D.C. Attorney General Karl Racine filed a lawsuit against Capitol Petroleum Group, LLC (“CPG”), a retailer and distributor of gasoline in the District. According to Attorney General Racine, CPG overcharged its customers for gasoline in violation of the Natural Disaster Consumer Protection Act (“NDCPA”). This is the latest example of aggressive attorneys general investigating price gouging allegations that go well beyond personal protective equipment and other staples.

The complaint alleges that CPG violated the law by engaging in price gouging during an emergency, as well as unfairly increasing profits on gas distribution. In its investigation, the OAG obtained data that during the three months preceding the March 11, 2020, declaration of emergency, CPG’s average profits per gallon on regular gasoline and premium gas were $0.44 and $0.88, respectively. In the complaint, the Attorney General alleges that CPG’s average profit per gallon in the weeks following the pandemic increased to $0.88 per gallon of regular gas, and $1.23 per gallon of premium gas that it sold. Attorney General Racine is seeking injunctive relief, restitution, civil penalties, and attorney’s fees.

D.C.’s price gouging law prohibits sellers from charging “more than the normal average retail price for any merchandise or service sold during a public health emergency.” D.C. Code § 28-4102(a). The “normal average retail price” under the NDCPA is “the price equal to the wholesale cost plus a retail mark-up that is the same percentage over wholesale cost as the retail mark-up for similar merchandise sold in the Washington Metropolitan Area during the 90-day period that immediately preceded an emergency.” Id. at § 28-4101(2)(B). A violation of the law can result in penalties of up to $5,000 per violation. A key issue in the case is likely to be whether the defendant’s prices or mark-up exceeded the “normal average retail price”, as there are numerous questions of fact that must be determined, and defenses may be available.

Attorney General Racine’s lawsuit is not the first of its kind. In the early months of the pandemic, Attorney General Racine brought a lawsuit against a D.C. convenience store for allegedly charging $12.99 for 121-oz. bottles of bleach. This, Attorney General Racine said, was 200 percent higher than the price offered by other retailers in the District. The lawsuit followed a cease and desist letter ordering the store to reduce its price. Attorney General Racine stated that the “Office of the Attorney General will enforce the law against stores like [this] that flatly refuse to adhere to a cease and desist letter that it received from my office.”

This lawsuit reflects a further reach by attorneys general against a broad range companies, accusing them of price gouging goods and services beyond personal protective equipment. Like the District’s price gouging law, many state laws are broad in scope, and potentially may be applied to a variety of goods and services that arguably should be outside the scope of price gouging laws. To mitigate this risk, businesses should be familiar with the variety of goods and services that state laws may cover and implement compliance practices as necessary. For more compliance practice tips, read our previous blog post.

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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 Jennifer Tarr Jennifer Tarr

Jennifer E. Tarr is a senior associate in the Litigation Department, and a member of Proskauer’s Sports Law and Antitrust Groups. She regularly litigates on behalf of sports leagues and counsels clients active in the sports industry on a variety of matters, including…

Jennifer E. Tarr is a senior associate in the Litigation Department, and a member of Proskauer’s Sports Law and Antitrust Groups. She regularly litigates on behalf of sports leagues and counsels clients active in the sports industry on a variety of matters, including issues pertaining to antitrust, team relocation, league governance, contract disputes, sponsorship and fan-league relationships.

In addition to sports antitrust work, Jennifer also has experience counseling and defending clients on issues related to mergers and acquisitions, claims related to unlawful conspiracy and anticompetitive agreements, monopolization claims, and price fixing claims. Jennifer is also a member of the firm’s price gouging team.

In 2019, she was a panelist on the Environmental Law Institute’s Managing Private Sector Environmental Initiatives panel, where she spoke about the Antitrust Implications of Corporate Environmental Collaborations.

Jennifer maintains an active pro bono practice and is a member of the Firm’s Pro Bono Committee. She received Proskauer’s Golden Gavel Award for excellence in pro bono work in 2018 and 2019.

Prior to joining Proskauer, Jennifer clerked for the Honorable Lorna G. Schofield on the United States District Court for the Southern District of New York. She also was a Staff Attorney at the Environmental Law & Policy Center, where she represented clients as lead counsel in litigation before multiple federal district and appellate courts and in federal mediation.

While in law school, Jennifer was a member of the Harvard Legal Aid Bureau, one of three honors societies at the law school and the nation’s oldest student-run legal services center. In that capacity, she argued and won a case of first impression before the Massachusetts Supreme Judicial Court. She also argued over 20 motions in state trial court and successfully represented clients in federal mediation and before federal administrative tribunals.