The Sixth Circuit issued its opinion in the Online Merchants Guild v. Cameron case on April 29, 2021, dissolving a preliminary injunction that had prevented the Kentucky Attorney General from investigating alleged violations of Kentucky’s price gouging laws, and remanding to the district court for further proceedings.

Last June, a Kentucky federal court had granted a preliminary injunction to the Online Merchants Guild, halting the AG’s investigations “into potentially excessive prices charged on Amazon’s online store.”  The Online Merchants Guild argued that Kentucky’s enforcement of its price gouging laws violated the dormant Commerce clause for multiple reasons, including that they were impermissibly extraterritorial.  According to the Online Merchants Guild, because their sales of goods in Amazon’s online marketplace were governed by Amazon’s own internal requirement that all goods in the Amazon marketplace be priced the same nationwide, by investigating violations of Kentucky’s price gouging laws, in effect, Kentucky was demanding that the vendors charge Kentucky-based pricing in all 50 states.  The district court found that the Online Merchants Guild was “likely to succeed in showing that the practical effect of [the] Attorney General’s recent investigations into possible violations violates the dormant Commerce Clause.”  The district court’s decision was based in large part on the determination that the impact of the application of the Kentucky price gouging laws on the Online Merchants Guild was impermissibly extraterritorial.

Kentucky Attorney General Daniel Cameron appealed the preliminary injunction to the Sixth Circuit. The Sixth Circuit agreed with AG Cameron that Kentucky’s law was not impermissibly extraterritorial in violation of the dormant Commerce Clause because even if Kentucky’s price gouging laws did have an effect on “wholly out-of-state commerce, that effect is not the law’s direct or inevitable result.” In effect, it was Amazon’s pricing structure that led to any extraterritorial effect, not the price gouging law itself.  The Circuit’s ruling was narrowly tailored to the district court opinion on extraterritoriality and did not touch the other dormant Commerce Clause arguments that were pleaded but not fully briefed below. Instead, the Court found the extraterritoriality argument a particularly bad fit given that “in a modern economy just about every state law will have some ‘practical effect’ on extraterritorial commerce.”

Online Merchants Guild has filed papers indicating they plan to move for an en banc hearing. Its motion papers for rehearing are due on June 1, 2021.

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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.