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Circuit Upholds Constitutionality of Kentucky's Price Gouging Laws
Kentucky Ag Connection - 04/30/2021

Attorney General Daniel Cameron Thursday announced that his office successfully defended the constitutionality of Kentucky's price-gouging laws against a challenge from the Online Merchants Guild. The U.S. Court of Appeals for the Sixth Circuit unanimously lifted a preliminary injunction by the district court, which had prohibited the Attorney General's Office from investigating alleged price gouging of Kentuckians by third-party Amazon sellers during the COVID-19 pandemic.

"The Commonwealth's price-gouging laws exist to protect Kentuckians from bad actors, especially during times of emergency, and we're proud that we successfully defended these laws in court," said Cameron. "During the height of the pandemic, we saw markups of up to nearly 2,000 percent from online third-party sellers for products such as masks and hand sanitizer, and it's important that we have the legal tools necessary to ensure Kentucky's price gouging laws are followed."

In March of last year, the Attorney General's Office of Consumer Protection announced that it had issued subpoenas to Kentucky-based third-party sellers that used Amazon's online platform to engage in alleged price gouging during the pandemic. The sellers were suspected of price gouging personal protective equipment (PPE), such as N95 respirator masks, and other essential emergency and medical supplies.

The Online Merchants Guild, an organization representing online sellers, challenged the constitutionality of Kentucky's price-gouging laws and secured a preliminary injunction from the district court to stop the enforcement of the laws against Amazon sellers. During the time the court's injunction was in effect, the Attorney General's Office was prohibited from investigating Amazon sellers suspected of price gouging.

Attorney General Cameron immediately appealed the district court's decision to the Sixth Circuit, arguing that Kentucky's price-gouging laws are constitutional and necessary to protect Kentucky consumers during times of emergency. Thirty states and the District of Columbia, led by the Illinois Attorney General, filed an amicus brief to support Kentucky's position.


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