While the majority of states have had price gouging laws on the books since before the pandemic, widespread pandemic price gouging has led states without laws to reconsider. Some states, like Colorado, passed price gouging legislation mid-pandemic, but other states, including New Hampshire and Washington, are now playing catch up.
Minding Your Business
Proskauer’s perspective on developments and trends in commercial litigation.
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One to Watch: Constitutional Challenges to NYC’s Price Gouging Rule
On March 18, 2021, retailer Union Square Supply, Inc. filed a civil rights class action lawsuit in the Southern District of New York challenging New York City’s price gouging enforcement practices. The complaint alleges that defendants are responsible for “the creation and maintenance of an illegal and unconstitutional penalty enforcement scheme, abuse of emergency powers,…
Idaho Says Pandemic Margin Boosts Are Lawful When Prices Fall
State legislatures are still continuing to enact new changes to their states’ price gouging statutes. Some are expanding the scope of their laws, while others are tailoring the law or emergency orders in response to new issues that have arisen during the course of the COVID-19 pandemic. Idaho took a third tack and limited limit overbroad enforcement so that its law applied only to price increase, and not to price decreases that are deemed to be insufficient.…
Beyond Essential Goods and Services: Price Gouging Laws Being Applied to a Wide Range of Products
The majority of price gouging laws have been activated throughout the country for over a year now, but reports of price gouging continue, along with enforcement and lawsuits. While many are aware that price gouging restrictions apply to essential goods such as medical and emergency supplies, some covered goods are often mistakenly thought not to be covered. As a result, companies should remain vigilant and familiarize themselves with the scope of covered products and services in the states in which they conduct business.…
The End of Price Restrictions in California… Or Merely a Step Towards Normal
One year after declaring a state of emergency in California due to COVID-19, the California Governor issued a new Executive Order lifting pricing restrictions on most categories of products previously subject to California’s price gouging statute. Governor Gavin Newsom’s 2021 Order comes as states across the nation slowly reopen. This 2021 Executive Order marks a change for businesses in California.…
Rental Properties Not Exempt From Price Gouging Laws
While PPE, toilet paper, and groceries make price gouging headlines, consumer goods are not the only goods covered by price gouging laws in many states. Less publicized, but equally important, lodging or housing may be found on lists of products covered by many price gouging statutes.
A recent case in California offers a glimpse. In California, the statute prohibits selling, or offering for sale, a lengthy list of goods and services “for a price of more than 10% greater than the price charged by that person for those goods or services immediately prior to the proclamation or declaration of emergency.” Among other things, California’s price gouging statute covers “housing.”…
The Future of the FTC, Part II
A previous blog post discussed FTC Chairwoman Slaughter’s first priority as the newly designated chairwoman – the COVID-19 pandemic. The FTC’s second priority, racial equity, can be broken down into two sub issues. First, the FTC plans to investigate biased and discriminatory algorithms that target vulnerable communities. As the FTC acknowledges, the analysis…
How to Freeze a Case: Defending a Price Gouging Suit after the Winter Storms
As Texas and other southern states thaw from a frigid winter storm, companies doing business in these states should assess and take steps to minimize the risk of a price gouging claims. As suits are filed in the wake of the storms, companies should prepare now to defend such claims, whether from state attorneys general or from private plaintiffs. In road-mapping a defense strategy, the following information may be helpful.…
Good Cause for Surcharges
Almost a year into the business disruptions caused by the pandemic, businesses continue to find ways to adapt and to comply with new pricing restrictions. Some of these changes relate to additional costs that businesses may need to pass along to consumers — at least in part. Given what we have seen in recent months, it is worth revisiting how businesses can implement these surcharges with an eye towards compliance with local price gouging laws.…
Nationwide Deep Freeze Leads to Spike in Natural Gas Prices
In the wake of the deep freeze that recently swept the nation, natural gas have taken the forefront among a slew of price gouging allegations. Last week’s winter storms caused natural gas spot market prices to spike, with some reporting up to a 100% percent increase. Reports also surfaced of spot prices for wholesale electricity in Texas’ power grid increasing more than 10,000%. In response, Minnesota Senator Tina Smith (D-MN) has not only encouraged federal regulators to investigate the price spikes, but has also requested regulators to “[i]nvoke, as appropriate, any emergency authorities available, including under the Natural Gas Policy Act, to allocate natural gas supplies at fair prices.” Whether natural gas prices exceeded allowable limits under applicable price gouging statutes currently in effect depends, among other things, on whether natural gas is within the scope of these laws in the first place.…