Rantz: Coronavirus price gouging concern as WA company email leaks

Raising concerns of potential coronavirus price gouging, the president of a local janitorial products company told staff he would raise paper towel and toilet paper sales to a 50% margin. One of his reasons? The products are “like gold right now…” according to email screen grabs obtained by the Jason Rantz Show on KTTH.

The move comes as both Washington Attorney General Bob Ferguson and U.S. Attorney General Bill Barr ramp up their push to punish companies engaged in coronavirus price gouging.

Coronavirus price gouging concerns

Rick Anderson is the president of Ferndale-based Anderson Paper and Packaging. Like many companies, they’re dealing with the economic realities and product availability during the coronavirus crisis.

In an internal email to his sales team, Anderson wrote that paper towel and toilet tissue provider von Drehle “has cut our orders on Towel and Tissue and therefor we need to raise all Towel and Tissue sales to 50% margin Until [sic] this industry comes back to normal.”

Anderson argues the products are “like gold right now so we can’t give it Away [sic] at existing price levels.”

Employee pushback

In less than 20 minutes, an employee responded to the Anderson email arguing the move should be reconsidered.

“Maybe new customers but to screw existing is pretty short sided and customers have long memories,” the email said.

Anderson is seen in the screen shot replying, “We are not screwing anyone” and “I take offense to that language.”

Anderson went on to argue that the supply chain of paper towels and tissue “has been interrupted drastically and everyone has been put on Allocation.” [sic]

The company president went on to say von Drehle is only filling partial orders to Anderson Paper.

“This is called Force Majure in the industry and all price contract can be set aside until the national crises is over,” the email says.

The employee quickly responded: “When it comes to necessity item such as TP capitalism has no place.”

He asked Anderson once again to reconsider, warning him that he “may want the input from those who helped build Anderson Paper.”

‘Out of context’?

I reached out to Anderson for context to his emails. Can he explain his comments about increasing the price? Is this coronavirus price gouging? We’ve heard locally and nationally that the supply chain is still healthy. Plus, price gouging and unfair practices just earned significant time at a coronavirus task force press conference.

Anderson responded, but he didn’t appear happy.

That email was taken out of context and due to the standard legal disclaimer
After my auto signature it should not have been shared with anyone outside my company.

Please follow the instructions in the disclaimer and delete the email.

He’s referencing a boiler plate confidentiality notice many employees put at the end of their emails.

Not denying the email portion that I quoted to him, I responded and asked him if he could explain how this was taken out of context. He responded:

Jason

I have no time to discuss this.

I am too busy taking care of customers needs

In a follow up email, I again asked for a comment, including to clarify whether he raised prices to 50% margin. He did not respond.

AG taking claims seriously

Last week, Attorney General Bob Ferguson released a statement on the issue of price gouging statewide. It was not specific to this incident.

My office is investigating price gouging in the wake of the COVID-19 public health emergency. We do not identify the targets of our investigations, but we are taking formal investigative actions. If you see price gouging, file a complaint with my office.

Washington doesn’t have a specific price-gouging statute, but his office says “price gouging during an emergency is an unfair or deceptive practice under the Washington State Consumer Protection Act, which our office enforces.”

Is this illegal?

Is this email alone evidence of coronavirus price gouging in violation of the Consumer Protection Act? Nope.

In a blog post for his lawfirm, former Attorney General Rob McKenna says that it is “generally a question of law that appellate courts review de novo.”

McKenna notes at Orrick Herrington & Sutcliffe LLP:

Although most cases brought by the Attorney General under the Consumer Protection Act focus on ‘deceptive’ acts or practices, the Act’s prohibition of acts or practices that are ‘unfair’ covers ‘unconscionable’ contract terms including excessive prices during a declared emergency.

To make the case, you would need evidence that the increased prices are actually being charged. Anderson won’t confirm this. You would also need a customer to file a complaint with the state, something the AG’s office encourages if someone feels something is awry. And, the company could rebut by showing its suppliers are charging more than they are, if that’s happening.

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