Minding Your Business

Proskauer’s perspective on developments and trends in commercial litigation.

If there is a silver lining to the extended application of most state price gouging laws, it is that we now know more about their ramifications. State attorneys general have launched numerous investigations and brought many lawsuits, and several class actions have been filed by consumers against companies for alleged price gouging up and down the supply chain. Insights can be gleaned from these price gouging-related suits to understand the “anatomy” of these suits, including what they allege, how to avoid them, and, when necessary, how to defend against them.…
Are Michigan’s Enhanced Price Gouging Provisions Undone? As much of the country remains under various and often overlapping states of emergency, one Governor’s powers have been limited by a state supreme court. On October 2, 2020, the Michigan Supreme Court held that Michigan Governor Gretchen Whitmer did not have authority to issue or renew COVID-related executive orders beyond April 30, 2020. The Court stated that “our decision today . . . leaves open many avenues for our Governor and Legislature to work together in a cooperative spirit and constitutional manner to respond to the COVID-19 pandemic.”…
Since the beginning of the pandemic, many governors have issued executive orders targeted at combating price gouging. However, one California state senator, Senator Thomas Umberg, proposed going a step further. In April 2020, Senator Umberg introduced Senate Bill 1196, which would codify many of the provisions in California Governor Gavin Newsom’s Executive Order N-44-20. On September 30, 2020, Governor Newsom signed the bill into law. In connection with the signing, Senator Umberg stated that “[t]his decisive action ensures that fewer of our neighbors will be victims of price gouging.”…
Florida Governor Ron DeSantis recently made headlines around the country by announcing that he was lifting physical distancing restrictions on restaurants and other businesses in Florida. The Governor’s order allows restaurants to open at full capacity, and prevents cities and counties from ordering them to operate at less than half capacity unless justified by health or economic reasons. Florida cities and counties are also barred from collecting fines for violations of social distancing or mask rules. But, while such actions may seem to indicate an imminent return to something resembling normalcy, or at least the end of widespread social distancing…
Proskauer’s Antitrust Practice Group has provided clients with need-to-know information on price gouging restrictions across the country since the start of COVID-19. In light of the continuously changing landscape, Proskauer has developed an interactive state-by-state price gouging map, which provides a quick reference to current price gouging restrictions in effect in each state. *      *      * Visit Proskauer on Price Gouging for antitrust insights on COVID-19. *      *      * Proskauer’s cross-disciplinary, cross-jurisdictional Coronavirus Response Team is focused on supporting and addressing client concerns. Visit our Coronavirus Resource Center for guidance on risk management measures, practical steps businesses can take…
On September 23, 2020, the New York Supreme Court dismissed Attorney General Letitia James’ lawsuit against Quality King Distributors alleging that the wholesaler unlawfully increased the price of its Lysol products. In a decision no longer than a page, Judge Eileen A. Rakower found that Quality King’s prices were neither “unconscionable or overall extreme.”…
Six months into the states of emergencies triggered by the COVID-19 pandemic, there is a sizeable amount of data on how prices have actually moved, potentially leading to more private actions as plaintiffs’ now have the opportunity to review prices retroactively and establish claims based on hard data.…
The global pandemic has brought about countless changes, including, for many households, increased reliance on online retail and delivery services, such as Amazon. When consumers sign up for these services or place their orders, they are likely to see a notice regarding terms and conditions, which may include an arbitration agreement pursuant to which the consumer agrees to arbitrate disputes arising from the use of the service, rather than pursue their claims in court. Recent decisions underscore the importance of the terms of these agreements and the challenges consumers may face if they wish to avoid arbitration of disputes with service…
Price gouging laws have become more relevant than ever, but a historical review reveals that price gouging laws may be a historically recent, and misguided development. It was not until 1979 that New York State enacted the nation’s first law explicitly targeted at price gouging.…
Since the ongoing states of emergency were put in place in response to a health crisis, pricing in the pharmaceutical industry is under more of a microscope than usual.  While the immediate focus may be on products that are used to diagnose, treat, or prevent COVID-19, price gouging laws cover a wide variety of pharmaceutical products covering the full range of conditions. Given the current and proposed regulations that may impact pricing, companies should remain mindful of their price gouging compliance policies when considering pricing movements during the states of emergency.…
As annual supply contracts come up for renewal, businesses may be wondering whether price increases for annual contracts are permitted under the panoply of price gouging laws currently in effect. Parties may want to negotiate contracts with “normal” price increases, operating under the assumption that, at some point during the contract year, price controls will expire. But if states of emergencies remain in effect when the new contract prices become effective, parties could find themselves in a bind.…
Whether you are a regular user of arbitration, a default user of your local courts or pick and choose a forum depending on the deal, it always pays to take a cold look at those choices. Do they still work for you? Will they work in the future when a dispute arises? Have you taken into account developments in law and current best practice? Today is the day to review your dispute resolution (DR) provisions. Why? We give you 5 good reasons.…
Price gouging enforcement is at an all-time high, but many ambiguities about the application of these state laws remain. Among the many questions left unanswered: what does a statute mean when it says “trade area” or “market area”? Many laws refer to the price at which the same or similar good or service is available in the “trade area” or “market area,” but do not provide a definition. Does it mean goods or services sold within a city or county? Or the entire state? What about sellers who offer goods or services in an area that borders another state, especially…
Much of the discussion to date regarding price gouging laws has rightly focused on the two core elements of a price gouging lawsuit: what constitutes a violation and what are the defenses? And while these defenses are valid, most would prefer to never have to spend the time and expense getting a case dismissed in the first place – raising the question of whether a declaratory judgment may be the right solution.…
Businesses may be wondering whether there is increased risk of price gouging liability when they impose higher penalty terms, ask for higher up-front payments, raise rates, or otherwise seek terms that may be more burdensome. Sellers and service provides should consider the risk of being held liable for non-price terms that result in higher customer costs.…
Private plaintiffs and state enforcers have been targeting businesses up and down the supply chain for price gouging violations. Some of these actions have been over the price of goods long associated with the COVID-19 pandemic, such as toilet paper and medical supplies. Yet others, such as a dispute in which a California winery has accused the company managing its storage facility of illegally increasing its rates, show the wide range of businesses potentially affected by price gouging laws. And with many state price gouging laws likely to remain in effect until at least early 2021, these lawsuits provide insight…