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Price Gouging During the COVID-19 Pandemic: Armas v. Amazon Inc.
April 09, 2020

The COVID-19 pandemic created a run on certain personal hygiene products due to the fear of a widespread outbreak in the United States. Those scarce supplies include hand sanitizer, disinfecting wipes, gloves, masks, and toilet paper. The Florida Deceptive and Unfair Trade Practices Act (FDUTPA), enacted after Hurricane Andrew in 1992, prohibits unconscionable prices for the sale of essential commodities during a declared state of emergency.

On March 9, 2020, Florida Gov. Ron DeSantis declared a state of emergency that activated Florida's price gouging laws. That same day, Stephanie Armas allegedly purchased a package of toilet paper for $99.99 and a two-pack of one-liter hand sanitizers for $199.99 from Amazon.com. The next day, Armas filed a class action lawsuit against Amazon in Miami-Dade Circuit Court alleging FDUTPA violations for charging unconscionable rates for personal hygiene products during the COVID-19 state of emergency.

In the complaint, Armas alleges a gross disparity between the prior customary retail price of $1 per roll and $7-$8 per liter of hand sanitizer and the current price. She further alleges that Amazon is preying upon the public's fear of a widespread pandemic to pad profits for exorbitant prices. Armas seeks certification of a class of statewide consumers "who purchased hygienic products from [Amazon] following the declaration of a state of emergency, on March 9, 2020." Interestingly, Armas' complaint does not state whether she purchased the products directly through Amazon or from a third-party seller using Amazon's platform. Should the case proceed, the circuit court will need to consider what, if any, liability Amazon may have if the products were purchased through a third-party seller.

Florida Attorney General Ashley Moody issued a statement concerning "commodities covered under COVID-19 state of emergency." The essential commodities covered include protective masks, sanitizing and disinfecting supplies, and all personal protective equipment. Based on the current list of essential commodities, the court will also have to consider whether the toilet paper Armas purchased is covered.

In these types of FDUTPA class actions, courts will look at whether the price of an essential commodity represents a gross disparity from the average price charged 30 days before the state declared a state of emergency or whether the price grossly exceeds the average market price for an area. If companies choose to raise prices during this period, they must be able to justify the current price by showing an increase in the price of their supplies and/or changes in market trends.
Authored By
Image: Stephanie A. Fichera
Stephanie A. Fichera
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