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 for our clients and friends.

Santa Monica Woman Pleads Guilty Under the Defense Production Act to Hoarding and Price Gouging

A Santa Monica woman recently pled guilty to hoarding and price gouging face masks in violation of the Defense Production Act of 1950 (“DPA”).  The DPA prohibits the accumulation of materials “in excess of the reasonable demands of business, personal, or home consumption,” as well as the accumulation of materials for the “purpose of resale at prices in excess of prevailing market prices.” According to prosecutors, the defendant began accumulating face masks in February “in anticipation of a shortage that would be caused by a global pandemic resulting from the spread of the novel coronavirus.” The woman accumulated nearly 20,000 face masks between February and June, reselling them for as much as $15 a mask. The woman’s sentencing hearing is set for May 2021, where she faces up to a year in federal prison.  For more information on the Defense Production Act, read our prior post.

California Grocer Sued for Price Gouging in Class Action Complaint

On January 5, 2021, a class action was filed in the Superior Court of California for the County of Orange against a local gourmet grocer for allegations of price gouging. According to the complaint, “Defendants willfully increased their prices [of food items and other consumer goods] beyond permissible limits after the March 4, 2020 declaration of a state of emergency in California in violation of Penal Code § 396, Executive Order N-44-20, and Executive Order
N-78-20.” The lawsuit alleges that plaintiff “observed that prices for many food items and other consumer goods had been increased by more than 10% of the price they had been prior to the declared state of emergency” and that defendants knew or should have known that its prices were unlawful. The complaint seeks actual damages, restitution, and attorneys’ fees.

Michigan Attorney General Settles Price Gouging Case

On December 21, 2020, the Michigan Department of the Attorney General announced a settlement had been reached with a company accused of violating the Michigan Consumer Protection Act for price gouging. According to the Attorney General’s office, the office began receiving complaints in April about a business advertising excessively priced face masks for sale.  In connection with the settlement, Michigan Attorney General Dana Nessel stated that “[f]rom the outset, my office has been committed to protecting consumers from retailers who try to use this pandemic as an excuse to prey on the vulnerabilities of hard-working people. We will continue to be vigilant and follow through on credible consumer complaints to ensure Michigan residents are not being taken advantage of.”

Vermont Attorney General Settles Price Gouging Case

On December 21, 2020, Vermont Attorney General T.J. Donovan announced that his office had reached a settlement with a business and its owner accused of selling surgical masks to a Vermont hospital and the state of Vermont at unlawful prices. According to the lawsuit, the business resold surgical masks that cost 10 cents each for $2.50. In April 2020, the court granted the Attorney General’s request for an injunction, preventing defendants from selling personal protective medical equipment at inflated prices. Attorney General Donovan stated that “[p]rice-gouging will not be tolerated in Vermont, especially during this historic pandemic. Protecting Vermonters, especially hospitals and medical professionals, from unfair practices involving medical equipment will remain a top priority for my office.”

California Governor Extends Price Gouging Prohibitions Related to Wildfires Through the End of 2021

On December 30, 2020, California Governor Gavin Newsom extended the state’s prohibition on price gouging in Butte, Los Angeles, Mendocino, Napa, Sonoma, and Ventura counties. Price gouging protections have been in place for certain counties for several years resulting from the wildfires that caused widespread destruction across the state. According to the executive order, “communities impacted by these [2017 and 2018] wildfires . . . have indicated a need for price gouging protections to remain in place because, for example, many rebuilding permits for homes damaged or destroyed by the wildfires have not yet been submitted, much less approved.” Governor Newsom’s executive order shall remain in effect through December 31, 2021.

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.