While states continue to lift their COVID related states of emergency, new price gouging claims are being made and ongoing price gouging litigation continues to wind through the courts.  The federal government also now appears more poised than ever to intervene in price gouging issues. 

As described in previous posts, the Texas Attorney General has been aggressive in bringing price gouging cases against businesses.  Testing the Texas Deceptive Trade Practices Act (“DTPA”)—which prohibits “exorbitant and excessive prices” during a declared disaster—the Attorney General sought an injunction against two egg producers.  After the egg companies prevailed on a motion to dismiss the complaint, the Court of Appeals reversed the ruling, sending the case back to the trial court for further proceedings – and to develop a factual record in connection with the egg producers claims that the DTPA is unconstitutional. 

On October 31, 2022, the egg producers filed a petition for review with the Texas Supreme Court.  The egg producers seek a ruling from the Texas Supreme Court that DTPA is unconstitutional “because it: (1) is void for vagueness; (2) violates the dormant Commerce Clause; and (3) constitutes a regulatory taking.”  Among the flaws in the statute claimed by the egg producers, the DTPA prohibits “exorbitant and excessive prices” but, according to the producers, fails to identify any benchmark against which to measure prices, and fails to adequately define the prohibited conduct.  The producers further argue that without these benchmarks companies are unable to adequately identify “exorbitant” price increases.  Additionally, the egg producers rely on the State’s admissions that the egg producer’s prices “did not deviate from their customary pricing by using third-party market index prices.”  The petition for review remains pending.

In addition to state claims, the Biden administration continues monitor pricing and profits by companies.  Recently, President Biden made remarks on the announcements by oil companies of “record-setting profits.”  The President first noted that gasoline prices had dropped since the steep rise at the onset of the war in Ukraine.  He then turned to the recent earnings reports from oil companies showing profits well above last year’s.  The President called on oil companies to “to act in the interest of their consumers, their community, and their country; to invest in America by increasing production and refining capacity.”  However, the President did not stop there.  In the event these companies do not heed that call, the President made clear “they’re going to pay a higher tax on their excess profits and face other restrictions.”  The administration is prepared to “work with Congress” regarding available options.  Introduced on March 11, 2022, HR 7061 is currently pending before the House of Representatives.  The bill proposes to impose an additional excise tax on windfall profits on crude oil. 

Earlier in October, the Biden administration approached these same oil companies with a proposal to boost output and tame prices.  However, none of the oil companies agreed to such a plan.  The remarks by President Biden are in line with his administration’s prior comments about prices and price gouging.  Even without a national price gouging statute, the federal government will continue to play a role potential pricing restrictions, especially with respect to oil and gas refiners.

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Visit Proskauer on Price Gouging for antitrust insights on COVID-19.

Photo of Christopher E. Ondeck Christopher E. Ondeck

Chris Ondeck is co-chair of the Firm’s Antitrust Group and co-head of the Washington DC office. He represents clients in complex antitrust and consumer protection litigation, defends mergers and acquisitions before the U.S. antitrust agencies, represents companies involved in government investigations, and counsels…

Chris Ondeck is co-chair of the Firm’s Antitrust Group and co-head of the Washington DC office. He represents clients in complex antitrust and consumer protection litigation, defends mergers and acquisitions before the U.S. antitrust agencies, represents companies involved in government investigations, and counsels on antitrust compliance. Chris is also the founder and leader of the firm’s Price Gouging Practice, and is one of the key thought leaders in this space.

Chris handles antitrust matters for clients in a number of industries, including food and agriculture, financial services, media, telecom, technology, e-commerce, consumer products, natural resources, oil and gas, chemicals, and pharmaceuticals.  He also serves as outside counsel to a large number of industry groups, including trade associations and cooperatives.

Chris has been recognized as a leading antitrust practitioner by Chambers, noting that clients describe him as “our primary thought partner – he’s very good at explaining the complex issues and making them easy to understand” and praising “his strong advocacy skills”; by The National Law Review as a “Go To Thought Leader 2020”; by Acritas as a “Star” in multiple years; by Benchmark Litigation as a National Litigation Star 2021; and by The Legal 500 United States for Antitrust: Civil Litigation/Class Actions.

Photo of John R. Ingrassia John R. Ingrassia

John is a partner at the Firm, advising on the full range of foreign investment and antitrust matters across industries, including chemicals, pharmaceutical, medical devices, telecommunications, financial services consumer goods and health care. He is the first call clients make in matters relating…

John is a partner at the Firm, advising on the full range of foreign investment and antitrust matters across industries, including chemicals, pharmaceutical, medical devices, telecommunications, financial services consumer goods and health care. He is the first call clients make in matters relating to competition and antitrust, CFIUS or foreign investment issues.

For more than 25 years, John 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, joint ventures, or price gouging compliance.

John’s practice focuses on the analysis and resolution of CFIUS and antitrust issues related to mergers, acquisitions, and joint ventures, and the analysis and assessment of pre-merger CFIUS and HSR notification requirements. He advises clients on issues related to CFIUS national security reviews, and on CFIUS submissions when non-U.S. buyers seek to acquire U.S. businesses that have national security sensitivities.  He also regularly advises clients on international antitrust issues arising in proposed acquisitions and joint ventures, including reportability under the EC Merger Regulation and numerous other foreign merger control regimes.

His knowledge, reputation and extensive experience with the legal, practical, and technical requirements of merger clearance make him a recognized authority on Hart-Scott-Rodino antitrust merger review. John is regularly invited to participate in Federal Trade Commission and bar association meetings and takes on the issues of the day.

Photo of Shannon D. McGowan Shannon D. McGowan

Shannon McGowan is an associate in the Litigation department.  Shannon’s practice focuses on assisting clients navigate a range of antitrust issues.  In addition to her experience on wide-ranging antitrust litigations, Shannon works with clients on general antitrust compliance and litigation issues.  In connection…

Shannon McGowan is an associate in the Litigation department.  Shannon’s practice focuses on assisting clients navigate a range of antitrust issues.  In addition to her experience on wide-ranging antitrust litigations, Shannon works with clients on general antitrust compliance and litigation issues.  In connection with historic restructuring of Puerto Rico’s debts, Shannon advises the Financial Oversight and Management Board for Puerto Rico on a variety of issues related to Puerto Rico Oversight, Management, and Economic Stability Act.

Shannon maintains an active pro bono practice, including assisting non-profit organizations with research into immigration and refugee law and representing individual clients in litigation to improve housing conditions in the Washington D.C. area.

Shannon earned her J.D. from the University of Virginia School of Law, where she captained the school’s Philip C. Jessup International Law Moot Court team.  As an alumnae, she is active in advising the current UVA Jessup Team throughout the year-long competition.

Prior to law school, Shannon served as a legislative assistant to state representatives at the Oklahoma State House of Representatives, where she researched and advised on legislation and policy issues, including government transparency, education, and financial accountability.