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.

*      *      *

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 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

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 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.

Prior to law school, Shannon served as a legislative assistant to state representatives at the Oklahoma State…

Shannon McGowan 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.

Prior to law school, Shannon served as a legislative assistant to state representatives at the Oklahoma State House of Representatives.