Law360 (April 22, 2020, 5:14 PM EDT) -- Amazon has been exploiting consumers amid the coronavirus pandemic by drastically increasing prices for high-demand items, like face masks, pain relievers and disinfectants, in violation of Golden State law, according to a California federal lawsuit filed Tuesday.
As many consumers avoid brick-and-mortar stores in the wake of COVID-19, Amazon.com Inc. is illegally reaping the benefits by increasing the prices of some high-demand items by nearly 700% in some cases, which is "flagrantly unlawful" under a California law that prohibits increases of more than 10%, according to the class action complaint filed by consumers Mary McQueen and Victoria Ballinger.
"Exploiting consumers in their most vulnerable hour is not only contrary to basic human decency — it is a criminal offense in California," according to the suit.
After COVID-19 was declared a public health emergency in California last month, the consumers said Amazon prices for certain items increased. The price of face masks increased 500%, from less than $20 to $120, while the price of cold remedies increased by 674% from $4.65 to $35.99, and the price of black beans increased 672% from $3.17 to $24.50, according to the suit.
While some of the products that increased in price are supplied by third parties, Amazon is the functional seller of those products and is responsible when price-gouged sales violate the law, the consumers said.
The suit cites a study by the Public Interest Research Group Education Fund, which found in February 2020 that Amazon increased prices by more than 50% on one-sixth of public health products used to combat COVID-19.
"And perhaps most troublingly, Amazon has maintained its unlawfully high prices on many essential items while publicly trumpeting its efforts to prevent price gouging by third-party suppliers," the consumers said.
McQueen and Ballinger, who filed the suit on behalf of anyone in California who purchased any protected product on Amazon on Feb. 4 at a price that was 10% higher than on Feb. 2, rely on Amazon to buy essential goods for themselves and their families.
On March 23, McQueen bought a Sally Hansen Hair Remover Kit for $6.74 on Amazon, believing she wouldn't be able to go to a store to buy it, and said the price used to be $4.75. On March 13, Ballinger bought a Mary Kay facial cleanser from Amazon for $14.47, but said the price used to be $9.60. By April 10, the price of the cleanser reached $23.97, according to the suit.
McQueen and Ballinger's suit claims violations of California's Unfair Competition Law, negligence and unjust enrichment. The suit seeks damages, restitution and an injunction preventing Amazon from engaging in any more wrongful conduct.
Amazon was also hit Tuesday with another proposed class action saying it and a slew of other grocery providers have drastically marked up the prices of eggs in the wake of the pandemic.
More than two dozen grocery stores, wholesalers and producers, including Whole Foods, Walmart, Trader Joe's and Costco, have been nearly tripling the price of eggs over the past month following Gov. Gavin Newsom's emergency declaration that ordered all nonessential workers to stay home as COVID-19 swept around the world, according to the suit.
In addition, 3M Co. has been on a mission this past week to limit price-gouging in protective gear during the pandemic.
The company launched trademark litigation against New Jersey's Performance Supply LLC and Utah's Rx2Live LLC on April 10, accusing them of reselling its 3M-branded masks at drastically increased prices. 3M claims the companies used confusing tactics to mislead buyers into thinking the companies — and their "unconscionably high prices" — were authorized by 3M.
Steve W. Berman of Hagens Berman Sobol Shapiro LLP, an attorney for the consumers, told Law360 on Wednesday that they have received an "outpouring" of people contacting them regarding the claims in the suit.
In a statement to Law360, an Amazon spokesperson declined to comment on the lawsuit, but said the company has been monitoring its store 24/7 and has removed hundreds of thousands of items for attempted price gouging.
"We are disappointed that bad actors are attempting to take advantage of this global health crisis and, in addition to removing these offers, we have terminated more than 6,0000 accounts and are working directly with states' attorneys general to prosecute bad actors and hold them accountable," the spokesperson said. "We continue to actively monitor our store and remove offers that violate our policies."
The consumers are represented by Steve W. Berman, Ben M. Harrington and Benjamin J. Siegel of Hagens Berman Sobol Shapiro LLP.
Counsel information for Amazon was not immediately available.
The case is McQueen et al. v. Amazon.com Inc., case number 4:20-cv-02782, in U.S. District Court for the Northern District of California.
--Additional reporting by Dani Kass and Bill Donahue. Editing by Adam LoBelia.
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