The COVID-19 pandemic has led to sharp spikes in demand for basic necessities, alcohol-based disinfecting products, and essential food staples. Consumers have been willing to pay a premium to stock up on these items from both brick-and-mortar and online marketplaces. While there is no federal law establishing clear guidelines regarding price gouging, many states have laws that limit or prohibit sellers from charging excessive prices for certain consumer products, which are triggered by the declaration of an emergency by federal, state, and/or local officials. Plaintiffs’ lawyers and states’ attorneys general have begun bringing state and nationwide class actions for price gouging against suppliers, distributors, and retailers of essential products, and we expect this litigation to increase in coming months.
In this three part series, we provide the statutory landscape and analyze the newly filed litigation, outline some key litigation strategies, and advise on best practices for manufacturers and retailers to minimize risk of litigation or investigation for pricing practices.
PART ONE: Landscape of COVID-19 Price Gouging Regulation
Part One of this report provides an overview of the statutory landscape governing price gouging and summarizes some of the newly filed cases.
Most of the 50 states have enacted specific laws prohibiting price gouging; in other states, actions are brought under general consumer protection statutes. Many states’ price-gouging statutes do not provide a private right of action, instead vesting prosecutorial authority in the state attorney general’s office.
While most states prohibit price gouging, the laws vary greatly. Many states, such