An Amazon delivery truck. (Photo: Diego M. Radzinschi / ALM)

Online retail giant Amazon Inc. has been hit with a lawsuit claiming that the company and third-party sellers on its website have violated a California law prohibiting price hikes of more than 10% on certain essential goods during a declared emergency.

Lawyers at Hagens Berman Sobol Shapiro filed suit in the U.S. District Court for the Northern District of California on Tuesday seeking to certify a class of all California consumers who have purchased protected products that have gone up in price by 10% or more on or after Feb. 3, the date when Santa Clara County declared California's first state of emergency relating to COVID-19. California's Unfair Competition Law bars such price-gouging on items including food, emergency cleanup goods, emergency supplies and medical supplies.

"Like every seller, Amazon has an obligation under California law to ensure that its pricing does not exploit consumers facing emergency conditions," the Hagens Berman lawyers wrote. "Amazon has not abided by that obligation. In fact, as the COVID-19 crisis has escalated, so too have Amazon's prices for the goods consumers require to remain healthy, protected and nourished," they wrote.

An Amazon representative declined to comment on the lawsuit but said that the company is working around the clock to monitor and remove products in cases of 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 are terminating accounts and working directly with states attorneys general to prosecute bad actors and hold them accountable," the Amazon representative said. "We continue to actively monitor our store and remove offers that violate our policies."

According to the complaint, after COVID-19 was declared a public health emergency by California officials, Amazon prices increased on face masks by more than 500%, from less than $20 to $120; on certain cold remedies by 674%, from $4.65 to $35.99; and on black beans by 672%, from $3.17 to $24.50. Although some of the price were increased by third-party sellers on the site, plaintiffs allege that some prices on good sold by Amazon itself saw illegal price-jumps and that the company had the ability to monitor and prohibit price-gouging on its site, especially in cases where Amazon fulfilled orders for items offered by third-party sellers.

The complaint also claims that any attempt Amazon makes to force its customers to arbitrate price-gouging claims during the COVID-19 pandemic would be "unconscionable, contrary to public policy, and otherwise unenforceable."

"The pandemic has fundamentally disrupted market conditions," the Hagens Berman lawyers wrote. "Facing retail scarcity, 'stay at home' orders and repeated warnings from government and public health officials that public interaction could result in fatal exposure, Plaintiffs and the Class they purport to represent had no meaningful choice but to purchase consumer and other goods from Amazon," they wrote.

"Many Americans were already barely making ends meet before the outbreak of COVID-19, and the crisis gave many their first encounter with resource scarcity and widespread financial distress," said Hagens Berman managing partner Steve Berman, in a press release announcing the price-gouging lawsuit. "Amazon has chosen to take advantage of this global crisis facing all of us by profiteering on vulnerable consumers," he said.

The firm previously hit Amazon with an antitrust lawsuit last month in the U.S. District Court for the Western District of Washington claiming that the company's "pricing control" policy of forcing third-party sellers to meet or beat the prices they offer elsewhere with those on Amazon.com causes consumers to pay artificially increased prices across the internet.