Class-action accuses world’s largest online retailer of engaging in illegal price increase of essential goods during the onset of the COVID-19 pandemic
In a victory for consumers, Washington state’s Supreme Court today filed an opinion in an active class-action lawsuit filed against Amazon.com accusing the world’s largest online retailer of price-gouging during the COVID-19 pandemic, according to attorneys at Hagens Berman.
Nine judges participated, with only two dissenting, upholding the rights of consumers under Washington’s Consumer Protection Act (CPA) that Amazon’s alleged price-gouging during the COVID-19 pandemic constitutes an “unfair or deceptive act” as defined by the law and also caused substantial injury.
“Here, the plaintiffs adequately allege the third prong of the substantial injury test. They allege that there are no countervailing consumer or competitive benefits to Amazon’s practice of ‘price gouging’ during the pandemic,” the opinion states. “They contend that the only party that benefited from their respective transactions was Amazon, which ‘reaped blockbuster profits by charging excessive prices throughout the pandemic’ and these profits were ‘earned only by exploiting consumers who have been forced to rely on Amazon to obtain essential goods during this unprecedented public health crisis.’”
In its opinion, the court deemed Amazon’s cited cases defending the claims “unconvincing,” “unpersuasive” and “misplaced.”
“During the pandemic Amazon criticized third-party sellers on its Marketplace who raised prices of essentials when Congress made inquiries. Then Amazon began its own price-gouging, increasing prices on toilet paper and other essentials 300 to 1200 percent,” said Steve Berman, managing partner of Seattle-based Hagens Berman. “In a decision that is wonderful for consumers in the scope of the Washington Consumer Protection statute and the applicable tests for such a claim, consumers won.”
“We are incredibly pleased with the court’s opinion and look forward to continuing this case we began four years ago so that millions of patient consumers may see the benefits they deserve.”
How Amazon Became the Center of Consumer COVID Panic
The class-action lawsuit against Amazon was originally filed April 21, 2020, and claims Amazon engaged in unlawful price increases for essential goods by upwards of 1,800 percent. The complaint includes detailed price comparisons accusing Amazon of price-gouging, including the price of toilet paper increasing up to 1,044 percent, from $17.48 to $200; the price of cold remedies increasing up to 1,523 percent, from $4.65 to $79.00; and the price of face masks increasing up to 1,800 percent, from $4.21 to $79.99, among other instances.
In the court’s Aug. 8, 2024, opinion, the justices detail how consumers came to rely on Amazon especially. When Americans were advised to stay home to inhibit spread of the novel coronavirus, they resorted to ordering food and other items online for home delivery or curbside pickup.
“As COVID-19 continued to spread throughout the United States, reports of stockpiling, scarcity, and hoarding escalated. Id. In November 2020, during the second wave of COVID-19, consumers continued to ‘panic shop,’ which was evidenced by a sea of empty shelves in supermarkets across the nation,” the opinion states. “The scarcity prompted consumers to become more reliant on Amazon—the world’s largest online retailer—for essential consumer goods. Indeed, industry observers recognized that Amazon saw an unprecedented demand amid the COVID-19 lockdowns. Id. In fact, ‘by July 2020, Amazon’s sales accounted for almost half of all U.S. retail e-commerce.’”
Consumers’ Rights During a Disaster
“Essentially Amazon argued this case would come down to the court questioning the decision making of a business and couldn’t possibly be within the purview of any state law,” Berman said. “The district court certified that question and who should decide the issue – judge or jury – to the Washington Supreme Court, and consumers’ claims have been upheld.”
The main question the court sought to answer: Does the CPA comprehend a claim of price gouging, as alleged by the individual plaintiffs in their first amended complaint, as an unfair practice?
“[W]e answer in the affirmative and hold that price gouging, as alleged in the plaintiffs’ first amended complaint, may be an unfair act or practice…,” the opinion states, adding that in considering the realm of various state anti-price-gouging laws, “Despite the variations across states, anti-price-gouging laws share the ‘common goal of consumer protection.’”
“We hold that under this test, price gouging, as alleged in the plaintiffs’ first amended complaint, may be an unfair act or practice within the meaning of our CPA.”
The lawsuit against Amazon seeks repayment to consumers for Amazon’s price-gouging, and treble damages, as well as injunctive relief from the court barring Amazon’s overpricing. The firm continues to litigate this matter as well as several active consumer cases against Amazon regarding price-fixing. Find out more about the class-action lawsuit against Amazon for price-gouging during the outbreak of COVID-19.
Hagens Berman is a global plaintiffs’ rights complex litigation law firm with a tenacious drive for achieving real results for those harmed by corporate negligence and fraud. Since its founding in 1993, the firm’s determination has earned it numerous national accolades, awards and titles of “Most Feared Plaintiff’s Firm,” MVPs and Trailblazers of class-action law. More about the law firm and its successes can be found at www.hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240808733895/en/
Contacts
Media Contact
Ash Klann
pr@hbsslaw.com
206-268-9363