A nonprofit publication of the Kentucky Center for Public Service Journalism

Online merchants group files lawsuit against Kentucky Attorney General over internet sales

By Tom Latek
Kentucky Today

A group representing online merchants has filed a lawsuit against Attorney General Daniel Cameron, alleging Kentucky’s ban on price-gouging is unconstitutional when it comes to internet sales.

The Online Merchants Guild filed the suit against Cameron at U.S. District Court in Frankfort. They say their members are making important goods available for purchase during the COVID-19 pandemic — for example, hand sanitizer, sanitizing wipes, and personal protective equipment (PPE) like gloves and masks.

According to the suit, “Online sales, typically made through Amazon’s store, are a key channel for collection and allocation of those critical-need items across the interstate marketplace. Items are offered nationwide; most sales are to residents of states other than Kentucky.”

Daniel Cameron

Kentucky’s anti-price-gouging laws are activated when the governor declares a state of emergency and allows the attorney general to prosecute those who sell items needed during times of emergency at greatly inflated prices.

On March 26, Cameron issued subpoenas to six third-party sellers in Kentucky who used Amazon’s online platform to engage in suspected price gouging during the coronavirus pandemic.

Earlier in March, he worked with Tennessee Attorney General Herbert Slatery to return medical supplies from a suspected price gouging scheme in the two states, to law enforcement and first responders.

In their suit, the Online Merchants Guild described the price-gouging law.

“Although the goal may be understandable, the effect is unlawful. Because of the nature of the national marketplace on Amazon, and Amazon’s unique role in controlling search results and sales on its site, the Kentucky AG’s efforts to impose Kentucky-specific price-controls is tantamount to national regulation of online merchants, who cannot engage in Kentucky only business. The Kentucky AG’s regulation of the interstate marketplace violates the dormant Commerce Clause.”

According to LawShelf Educational Media, “The Dormant Commerce Clause involves not federal power to act, but the restriction on state lower that are inherent in the Commerce Clause of the Constitution. While there is no actual ‘Dormant Commerce Clause’ found in the Constitution, the restrictions on state action have been inferred by Supreme Court rulings involving the Commerce Clause.”

The Guild seeks a declaration “that Kentucky’s anti-price-gouging laws are unconstitutional insofar as they are applied to regulate online merchants who offer items for sale in the national marketplace, using platforms like Amazon, but who lack the practical ability to control the price or sale of goods into Kentucky. The Court should enjoin such application of those statutes.”

Elizabeth Kuhn, a spokesperson for Cameron, responded by saying, “We’ve received the filing and are reviewing it. The Attorney General is committed to investigating price gouging allegations and seeking enforcement, when appropriate, during the COVID-19 crisis.”

She added Kentuckians should report suspected price-gouging to ag.ky.gov/pricegouging or by calling 1-888-432-9257.

Want more great content like this?

Become a sustaining member of KyForward with a tax-deductible donation today and help us continue to provide accurate, up-to-date local news and information you can depend on.

Click here to donate now!

Related Posts

Leave a Comment