~ Herring joins bipartisan coalition of 31 attorneys general in filing an amicus brief arguing that states’ price gouging laws are necessary to protect vulnerable residents during emergencies ~

RICHMOND (September 24, 2020) – Attorney General Mark R. Herring has joined a bipartisan coalition of 31 attorneys general in filing an amicus brief in the U.S. Court of Appeals for the 6th Circuit to support states’ authority to enforce price gouging regulations to protect consumers during emergencies, such as the COVID-19 pandemic.

Attorney General Herring and his colleagues are urging the appellate court to overturn the district court’s decision in Online Merchants Guild v. Cameron. The court entered a preliminary injunction preventing Kentucky Attorney General Daniel Cameron from enforcing price gouging regulations against retailers selling products on Amazon. In the brief, the coalition states that national and local emergencies, such as the pandemic, create significant shortages for essential items. State price gouging laws are essential to ensuring that goods can be fairly allocated among residents and preventing bad actors from profiting off of residents by charging excessively high prices for goods that are scarce.

“The COVID-19 pandemic has highlighted just how unscrupulous some businesses will be in taking advantage of a situation like a public health crisis to try and make more money,” said Attorney General Herring. “It is critical that each state has the ability to protect its consumers and enforce its own price gouging laws during emergencies to make sure all consumers have the same access to essential goods. My office and I will continue to take price gouging seriously and hold any businesses that may be involved in price gouging accountable.”

 

During the COVID-19 pandemic, many states have implemented social distancing measures in public places and recommended that residents stay home when possible. As a result, more consumers have turned to online sellers to purchase food, medicine, cleaning supplies and other household essentials. The Online Merchants Guild, claiming that price gouging laws should not be applied to retailers selling goods on Amazon, filed a lawsuit after the Kentucky Attorney General’s office began investigating several Kentucky-based retailers.

The coalition emphasizes that price gouging laws level the playing field and ensure a more equitable distribution of goods to high- and low-income consumers. The attorneys general state that price gouging protections have been particularly necessary during the pandemic, which has caused financial instability for millions of Americans and created and threatened shortages of essential goods. Furthermore, regulating price gouging falls under states’ responsibility to aid vulnerable consumers during an emergency. Additionally, price gouging laws do not directly control the price of goods for out-of-state sales or create an actual conflict among state regulations.

States have taken action that has been crucial to curbing price gouging during the pandemic, including working toward voluntary compliance, issuing subpoenas, sending cease and desist letters, and filing civil actions. Attorney General Herring’s Consumer Protection Section has received more than 500 consumer complaints and inquiries regarding suspected price gouging by businesses during the COIVD-19 state of emergency and sent out more than 150 letters to businesses demanding that they cease any illegal price gouging. Investigation of these complaints has revealed that many retail businesses claim that price increases occurred further up the supply chain with manufacturers or distributors, making it more difficult to address the problem at the retail level.

In April, Attorney General Herring led a national effort to address price gouging in the PPE supply chain, urging 3M as one of the largest manufacturers of PPE, particularly masks, to do more to address price gouging within its supply and distribution chains that was causing hospitals and healthcare providers to pay exorbitant prices for PPE.

Attorney General Herring included legislation in his COVID response priorities package that will amend the Virginia Post-Disaster Anti-Price Gouging Act to also apply to manufacturers and distributors that charge unconscionable prices for necessary goods or services during a state of emergency declared by the Governor or President.

The coalition is asking the appellate court to reverse the district court’s order granting injunctive relief.

Joining Attorney General Herring in filing the amicus brief are the attorneys general of Alaska, Arkansas, California, Colorado, Connecticut, Delaware, the District of Columbia, Hawaii, Idaho, Illinois, Iowa, Kansas, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New York, North Carolina, Ohio, Oregon, Pennsylvania, Rhode Island, Tennessee, Texas, Vermont, Washington, and Wisconsin.

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