Case: 3:20-cv-00029-GFVT Doc #: 36 Filed: 06/23/20 Page: 1 of 27 - Page ID#: 462
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`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF KENTUCKY
`CENTRAL DIVISION
`FRANKFORT
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` )
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`ONLINE MERCHANTS GUILD,
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` Plaintiff,
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`V.
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`DANIEL CAMERON, in his official
`capacity as Attorney General of
`Kentucky,
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` Defendant.
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`*** *** *** ***
`Is an old constitution relevant to a new economy? This case answers “yes.” The
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`Civil No. 3:20-cv-00029-GFVT
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`MEMORANDUM OPINION
`&
`ORDER
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`protections of the Commerce Clause are available to those in a virtual economy no less than
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`those who trade in an economy defined by bricks and mortar.
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`At issue here are KRS § 367.170 and KRS § 367.374, two Kentucky statutes crafted to
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`prevent, among other things, any price gouging of Kentucky consumers. In recent months, these
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`statutes have served as the basis for investigations by the Attorney General into potentially
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`excessive prices charged on Amazon’s online store. Plaintiff Online Merchants Guild takes issue
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`with these investigations. On May 1, 2020, Merchants Guild filed suit, challenging what it
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`believes is an unconstitutional application of the statutes as they relate to a specific class of
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`retailers—those who use an online, interstate platform like Amazon. [R. 1.]
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` On May 15, 2020, the Court denied Merchant Guild’s Motion for Temporary Restraining
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`Order. [R. 18.] The parties have since submitted additional briefing on the motion for
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`preliminary injunction and participated in oral argument on the matter. The Court now
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`addresses whether the circumstances warrant a preliminary injunction, enjoining Defendant
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`Attorney General Cameron from investigating Plaintiff’s members and similarly situated
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`merchants for potential violations of KRS § 367.170 and KRS § 367.374 or undertaking any
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`related enforcement actions. For the following reasons, Plaintiff Online Merchant Guild’s
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`Motion for Preliminary Injunction [R. 10] is GRANTED.
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`I
`In the wake of the coronavirus pandemic’s economic fallout, Kentucky Attorney General
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`Daniel Cameron began investigating alleged price gouging in order to protect Kentucky
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`consumers. [See R. 10-1 at ¶¶ 20, 37.] As part of this initiative, Attorney General Cameron
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`investigated, and continues to investigate, potential price gouging in the sale of goods on
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`Amazon’s online store. Id. at ¶ 20. As a result of these investigations, Merchants Guild, a trade
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`association for online merchants, brought suit against the Attorney General. [R. 1.] Merchants
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`Guild alleges that the Attorney General’s investigation into Amazon sales has recently been
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`targeted at certain of its members—merchants who supply Amazon1—and that the investigations
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`have caused a large contingent of its membership to grow concerned over potential liability.
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`Merchants Guild does not contest whether Kentucky law allows for these investigations.
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`Under the Kentucky Consumer Protection Act, the Attorney General has authority to investigate
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`whether price gouging has occurred in violation of KRS § 367.170 and, in times of emergency,
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`the closely related KRS § 367.374.2 See KRS § 367.240. And, on the record, it appears the
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`Attorney General acted pursuant to this authority in this instance.
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`1 In its motion, Merchants Guild repeatedly represents that its members “are not even retailers—they are
`suppliers of Amazon’s store.” [R. 10 at 3 (emphasis in original).] The significance of this distinction will
`be addressed more fully below.
` Pursuant to KRS § 367.378, all powers and duties provided in the first portion of KRS Chapter 367
`“apply with equal force and effect to an act declared unlawful by KRS 367.374.”
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` 2
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`2
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`First, the Attorney General began working with Amazon to identify potential price
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`gougers based in Kentucky. [R. 22 at 7 (citing Kentucky AG Press Release (March 26, 2020),
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`https://kentucky.gov/Pages/Activitystream.aspx? n=AttorneyGeneral&prId=888 .).] Following
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`discussions with Amazon, the Attorney General issued a civil investigative demand (CID) to a
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`newly minted Merchants Guild member, Jones & Panda, LLC, in addition to other vendors who
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`are not members.3 [See R. 22-1 at 13; see also Kentucky AG Press Release (March 26, 2020).]
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`The CID explained that the Attorney General had “reason to believe” that Jones & Panda “ha[d]
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`engaged in, is engaging in, or is about to engage in any act or practice declared to be unlawful by
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`KRS 367.110 to 367.300 or KRS 367.372 to 376.378,” the price gouging statutes. [R. 22-1 at
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`13.] By way of the CID, the Attorney General requested certain business information from Jones
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`& Panda regarding products it sold on Amazon. See id. at 16. After receipt, Jones & Panda
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`brought suit in Fayette County Circuit Court seeking a court order setting aside or modifying the
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`CID.4 Id. at 11. On the present record, that suit remains pending. [See R. 33; R. 34.]
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`In the present suit, Merchants Guild contests the constitutionality of the price gouging
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`statutes that serve as the basis for the Attorney General’s recent investigations—KRS § 367.170
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`and § 367.374. [R. 10 at 1.] In different ways, each statute prohibits price gouging. KRS §
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`367.170 prohibits “unfair” acts or practices of any trade or commerce, defining unfair as
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`unconscionable. KRS § 367.374 is more specific, prohibiting prices charges “grossly in excess”
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`of prices charged prior to a declared emergency. It further specifies that a price will not violate
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`3 Merchants Guild also suggests, without providing details, that additional members have been the target of
`investigatory actions. [See R. 22 at 4 (“[T]he AG knows whom it targeted. . . . Assistant AG Cocanougher
`has participated in telephone calls with Guild members and Mr. Rafelson regarding the investigations . . .
`.”; see also R. 34 at 7 (discussing “other Guild members who have received subpoenas”).
`4 Merchants Guild is not a party to the state court lawsuit.
`3
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`the subsection if it is 10% percent or less above the price prior to the emergency declaration or
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`10% or less above the sum of the person’s costs and normal markup. KRS § 367.374(1)(c).
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`Merchants Guild argues the Attorney General’s recent application of these statutes are in
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`violation of numerous constitutional provisions: (1) the dormant Commerce Clause; (2) the First
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`Amendment; (3) the Due Process Clause; and (4) the Equal Protection Clause. [R. 10 at 7.] In
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`response, Attorney General Cameron argues first that there is no federal subject matter
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`jurisdiction such that a preliminary injunction is not available and, alternatively, that the statutes
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`do not violate the constitutional provisions at issue. [R. 21-1 at 1.]
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`II
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`“A preliminary injunction is an extraordinary remedy which should be granted only if the
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`movant carries his or her burden of proving that the circumstances clearly demand it.” Overstreet
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`v. Lexington–Fayette Urban County Government, 305 F.3d 566, 573 (6th Cir. 2002) (citing
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`Leary v. Daeschner, 228 F.3d 729, 739 (6th Cir. 2000) (cleaned up) (“[A] preliminary injunction
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`involv[es] the exercise of a very far-reaching power . . . .”)). To determine whether to issue a
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`preliminary injunction, a court must consider: 1) whether the movant has shown a strong
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`likelihood of success on the merits; 2) whether the movant will suffer irreparable harm if the
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`injunction is not issued; 3) whether the issuance of the injunction would cause substantial harm
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`to others; and 4) whether the public interest would be served by issuing the injunction.
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`Overstreet, 305 F.3d at 573 (citations omitted).
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`A court need not consider all of the factors if it is clear that there is no likelihood of
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`success on the merits. See Amoco Protection Co. v. Village of Gambell, AK, 480 U.S. 531, 546
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`n. 12 (1987) (“The standard for a preliminary injunction is essentially the same as for a
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`permanent injunction with the exception that the plaintiff must show a likelihood of success on
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`4
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`the merits rather than actual success.”). Relatedly, the Sixth Circuit has clarified that, “[w]hen a
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`party seeks a preliminary injunction on the basis of a potential constitutional violation, the
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`likelihood of success on the merits often will be the determinative factor.” City of Pontiac
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`Retired Employees Ass'n v. Schimmel, 751 F.3d 427, 430 (6th Cir. 2014) (quoting Obama for
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`Am. v. Husted, 697 F.3d 423, 436 (6th Cir. 2012)). However, even if the plaintiff is unable “to
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`show a strong or substantial probability of ultimate success on the merits” an injunction can be
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`issued when the plaintiff “at least shows serious questions going to the merits and irreparable
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`harm which decidedly outweighs any potential harm to the defendant if an injunction is issued.”
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`In re Delorean Motor Co., 755 F.2d 1223, 1229 (6th Cir. 1985).
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`A
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`The Court will first consider whether Merchants Guild can establish a likelihood of
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`success on the merits which, as noted, is often the determinative factor in this context.
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`Schimmel, 751 F.3d at 430. In this case, before proceeding to the substance of the constitutional
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`claims, certain jurisdictional considerations must be addressed.
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`1
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`An essential part of establishing a likelihood of success is establishing standing to sue.
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`The Sixth Circuit has explained that an “affirmative burden of showing a likelihood of success
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`on the merits . . . necessarily includes a likelihood of the court’s reaching the merits, which in
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`turn depends on a likelihood that plaintiff has standing.” Waskul v. Washtenaw Cty. Cmty.
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`Mental Health, 900 F.3d 250, 260 n. 5 (6th Cir. 2018) (quoting National Wildlife Federation v.
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`Burford, 835 F.2d 305, 328 (D.C. Cir. 1987) (emphasis in original)).
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` To satisfy the case or controversy requirement of Article III—“the ‘irreducible
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`constitutional minimum’ of standing”—a plaintiff must demonstrate three things: “that he has
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`suffered an ‘injury in fact,’ that the injury is ‘fairly traceable’ to the actions of the defendant, and
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`that the injury will likely be redressed by a favorable decision.” Bennett v. Spear, 520 U.S. 154,
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`162 (1997) (quoting Lujan v. Defs. of Wildlife, 504 U.S. 555, 560–61 (1992)). “[A] plaintiff
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`must also establish, as a prudential matter, that he or she is the proper proponent of the rights on
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`which the action is based.” Haskell v. Washington Twp., 864 F.2d 1266, 1275 (6th Cir.
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`1988) (citations omitted).
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`The Attorney General asserts that Merchants Guild lacks standing both (1) to sue on its
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`own behalf, and (2) to sue via associational standing on its members’ behalf. [R. 21-1 at 7–8.]
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`These assertions are based on the premise that Merchants Guild “has offered no evidence
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`whatsoever of any direct injury” to itself and “has not identified any member who has suffered
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`any injury.” Id. at 7, 8. Merchants Guild disagrees. First, Merchants Guild contends that it has
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`standing in its own right because it has demonstrated that the Attorney General’s allegedly
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`unlawful conduct has caused it to divert resources in order to address and mitigate the impact of
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`that conduct as to its members. [R. 22 at 3.] In the alternative, it contends that it has
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`associational standing to sue on behalf of injured members. Id. at 4.
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`a
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`To prove that it has suffered an injury-in-fact, Merchants Guild must show “an invasion
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`of a legally protected interest which is ‘concrete and particularized,’ and ‘actual and imminent,
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`not conjectural and hypothetical.’” Spokeo v. Robins, 136 S. Ct. 1540 (2016) (quoting Lujan,
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`504 U.S. at 560. For an injury to be “particularized,” it “must affect the plaintiff in a personal
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`and individual way.” Id. (citation omitted). And for an injury to be concrete it must be “real,
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`and not abstract.” Id. (internal quotations and citations omitted).
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`In the context of organizational standing, the Sixth Circuit has made clear that a
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`cognizable injury may arise “from a ‘purportedly illegal action [that] increases the resources the
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`group must devote to programs independent of its suit challenging the action.’” Hous.
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`Opportunities Made Equal, Inc. v. Cincinnati Enquirer, 943 F.2d 644, 646 (6th Cir. 1991)
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`(alteration in original) (citation omitted). Stated otherwise, organizational injury exists where an
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`organization alleges that the purportedly illegal action perceptibly impairs or frustrates its
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`mission and there is a “consequent drain on the organization’s resources.” See Havens Realty
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`Corp. v. Coleman, 455 U.S. 363, 379 (1982); see also Miami Valley Fair Hous. Ctr., Inc. v.
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`Connor Grp., 725 F.3d 571, 577 (6th Cir. 2013).
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`Based on the current record, Merchants Guild has sufficiently established that it has
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`suffered a particularized and concrete injury. Merchants Guild states that, as a trade association
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`for online merchants, its mission “is to advocate for a free and fairly-regulated online
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`marketplace, and for the interests of online merchants.”5 [R. 10-1 at ¶ 3.] So, in response to the
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`price gouging investigations, it represents it “has had to expend organization resources . . .
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`working with targeting merchants to understand and respond to the subpoenas.” Id. at ¶ 21. And,
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`relatedly, that it “had to analyze the complex web of investigations and discuss open questions
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`with [concerned] merchants who have not received subpoenas . . ..” [Id.; see also R. 1 at ¶ 9.]
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`Merchants Guild’s actions are not taken in response to some vague or distant threat. In
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`addition to the formal investigatory actions taken to this point, Attorney General Cameron has
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`explicitly stated that “the subpoenas we issued should serve as a warning to anyone who tries to
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`illegally profit from COVID-19.” [R. 22 at 7 (citing Kentucky AG Press Release (March 26,
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`2020).] Understandably, Merchants Guild’s members who supply goods to Amazon at an
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`increased price due to recent changes in supply and demand now express concern that they will
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`be labeled and prosecuted as price-gougers. [R. 10-1 at ¶ 21.] Indeed, one of Merchants Guild’s
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`5 Merchants Guild’s allegations relevant to standing are largely included in its Executive Director’s
`declaration. [See R. 10-1.]
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`main contentions is that illegality is so poorly defined by the price gouging statutes that members
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`cannot readily determine what is or is not illegal in the eyes of the Attorney General. [Id. at ¶ 27;
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`see also R. 22-2 at ¶ 9.]
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` Importantly, as represented by Merchants Guild, addressing these novel matters
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`constitutes a diversion of resources from its ordinary spending as an organization. Cf. Shelby
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`Advocates for Valid Elections v. Hargett, 947 F.3d 977, 982 (6th Cir. 2020). In fact, in the
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`preliminary injunction hearing Merchants Guild’s counsel represented that it spent “little to no
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`time” on price gouging issues prior to the pandemic. In other words, Merchants Guild’s recent
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`efforts are not ordinary undertakings in the context of the services and benefits it typically offers
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`its members.
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`In the injunctive relief context, it is also important that the plaintiff demonstrate that its
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`injury is imminent or ongoing. See Kanuszewski v. Mich. Dep't of Health & Human Servs., 927
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`F.3d 396, 406 (6th Cir. 2019). Here, Merchants Guild has done so. On the record, it appears it
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`and its members continue to wrestle with the potential for liability under the price gouging
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`statutes and, as such, Merchants Guild continues to expend resources advocating for and
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`educating its members on these unique matters. [See R. 34 at 7 (“The Guild and its members
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`also take from the AG’s aggressive posturing in the Jones & Panda matter (and this matter) that
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`the AG intends to continue his efforts to apply the price-control statutes to the other Guild
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`members who have received subpoenas and cease-and-desist orders . . . .”).] Consequently,
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`Merchants Guild’s allegations are sufficient to meet both prongs of the injury analysis. See
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`Phillips v. Snyder, 836 F.3d 707, 714 (6th Cir. 2016) (citing Lujan, 504 U.S. at 560) (“The injury
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`was ongoing and thus actual and imminent as opposed to conjectural or hypothetical, therefore
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`satisfying the second part of the injury inquiry outlined in Lujan.”).
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`Defendant believes otherwise but offers unconvincing arguments on this issue. Attorney
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`General Cameron argues Merchants Guild cannot establish injury in fact because Merchants
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`Guild (1) has not received a CID, and (2) cannot show injury “independent of the costs of
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`litigation.” [R. 21 at 7.] On this first point, it is true that Merchants Guild has not received a
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`CID. But this type of injury is not the only avenue by which Merchants Guild can establish
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`standing. As explained above, frustration of mission and a consequent drain on resources is
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`sufficient to establish injury to an organization. And, as relevant to the Attorney General’s
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`second point, Merchants Guild has met this latter “drain on resources” prong. On the present
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`record, Merchants Guild has expended resources to inquire into the price gouging investigations,
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`to analyze its members potential liability and obligations under the relevant statutes, and to
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`educate its members on these matters, including those members who have yet to receive a CID
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`but still have legitimate concerns.6 These efforts may relate to this litigation but are not properly
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`classified solely as “costs of litigation.” At this preliminary stage, Merchants Guild sufficiently
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`demonstrates it has suffered an injury as an organization.
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`The Merchants Guild also meets the second and third requirements of standing—
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`causation and redressability. See Miami Valley, 725 F.3d at 577 (6th Cir. 2013). The injury,
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`diversion of resources, is fairly traceable to the investigations undertaken by the Attorney
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`General. And Merchants Guild’s requested injunctive relief—enjoinment of investigatory and
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`enforcement actions undertaken pursuant to the price gouging statutes—would redress this injury.
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`6 The Attorney General also takes issue with the lack of evidence introduced by Plaintiff on
`certain matters. [See R. 21 at 20.] This concern is addressed more fully below within the
`ripeness analysis. For present purposes, the Court simply notes that “a movant need not prove
`his case in full at the preliminary injunction stage;” both Merchants Guild and the Attorney
`General will have the opportunity to more fully develop their arguments and the factual record
`from this point forward. Brake Parts, Inc. v. Lewis, 443 F. App'x 27, 31 (6th Cir. 2011).
`9
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`b
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`Merchants Guild has standing to sue in its own right but also claims it can establish
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`associational standing to sue on behalf of its members. See Int’l Union v. Brock, 477 U.S. 274,
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`281 (1986) (“Even in the absence of injury to itself, an association may have standing solely as
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`the representative of its members.”). To establish associational standing, Merchants Guild must
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`show that: (1) one of its members would have standing to sue in its own right; (2) the relief it
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`seeks is germane to its purpose; and (3) none of its members need to participate in their
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`individual capacity. Hunt v. Washington State Apple Advert. Comm’n, 432 U.S. 333, 343 (1977).
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`As to the first element, like any Art. III standing inquiry, an association must show one of its
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`members “(1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of
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`the defendant, and (3) that is likely to be redressed by a favorable judicial decision.” Spokeo,
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`Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016). Importantly, “plaintiff-organizations [must] make
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`specific allegations establishing that at least one identified member has suffered or would suffer
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`harm.” Waskul, 900 F.3d at 255 (alteration in original) (quoting Summers v. Earth Island Inst.,
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`555 U.S. 488, 498 (2009).
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`Merchants Guild can establish all three standing elements. First, Jones & Panda, a
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`Merchants Guild member, has received a CID and Merchants Guild adequately explains the
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`economic injury this has precipitated on Jones & Panda—namely, Jones & Panda is now hesitant
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`to engage in the interstate marketplace due to the real possibility of price gouging liability.
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`Indeed, Sarah Jones, the sole proprietor of Jones & Panda, has filed a declaration in the state
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`court case stating: “Upon receipt of the Attorney General’s CID . . . I am afraid to source and sell
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`important COVID-response goods, as well as other consumer goods, as I am unclear as to how to
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`comply with Kentucky’s laws.” [R. 22-2 at ¶ 9.] This alone may seem sufficient to establish
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`injury, but further analysis is required given the nature of the actions taken against Merchants
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`Guild members. Although a CID was issued to Jones & Panda,7 the statutes at issue have yet to
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`be enforced against it or any Merchants Guild member, making this a pre-enforcement challenge.
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`See Susan B. Anthony List v. Driehaus, 573 U.S. 149, 158 (2014). That said, the pre-
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`enforcement challenge factors, set forth by the Supreme Court in Susan B. Anthony List and
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`clarified by the Sixth Circuit in McKay v. Federspiel, are met. McKay, 823 F.3d 862, 868 (6th
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`Cir. 2016).
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`A plaintiff satisfies the injury-in-fact requirement at the pre-enforcement stage where he
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`or she alleges: (1) “an intention to engage in a course of conduct arguably affected with a
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`constitutional interest,” (2) that is “proscribed by a [law],” and (3) “there exists a credible threat
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`of prosecution thereunder.” Susan B. Anthony List, 573 U.S. at 159 (citation omitted). The first
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`two factors are met and do not require extended analysis. First, Merchants Guild has set out in
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`detail how the conduct of its members is protected under the Commerce Clause and other
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`constitutional provisions. [See R. 10 at 7–18.] And, as set forth below, the Court finds these
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`allegations establish that the intended conduct of Jones & Panda—engaging in online sales via
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`Amazon—is affected with at least one of these constitutional interests—the dormant Commerce
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`Clause. See discussion infra Section II.A.3. Second, as evidenced by the language of the CID
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`issued to Jones & Panda, at the very least the Attorney General believes the conduct may be
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`proscribed by law. Given the Attorney General’s view on the matter and the potentially broad
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`range of conduct implicated by the wording of the statutory prohibitions, the Court finds this
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`second element is met.
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`7 As noted, Merchants Guild indicates that other members have also received CIDs but, apparently to
`protect these members, has not identified the members. Nonetheless, it argues “[t]his is not a case of
`phantom members . . . [T]he AG knows whom it targeted.” [R. 22 at 5.]
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`Finally, Merchants Guild has established a credible threat of prosecution towards Jones &
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`Panda. Here, the language of the CID issued to Jones & Panda is again probative. The CID
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`states the Attorney General “reason to believe” that Jones & Panda “ha[d] engaged in, is
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`engaging in, or is about to engage in any act or practice declared to be unlawful by” the price
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`gouging statutes. [R. 22-1 at 13.] The CID then goes on to list specific information Jones &
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`Panda is to provide to the Attorney General which, logically, will factor into the decision on
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`whether to bring suit for price gouging under the statutes. See id. at 16 (“For each price increase
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`you contend was related to an increase in your cost, describe the nature of the increase, and
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`identify all documents that substantiate your claim.”). The Attorney General has also repeatedly
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`refused to disavow enforcement of the statutes, as evidenced his public statements and the
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`ongoing nature of this litigation and the Jones & Panda litigation. Further analysis on the
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`credible threat factor is unnecessary—it is met. See Platt v. Bd. of Comm'rs on Grievances &
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`Discipline of Ohio Supreme Court, 769 F.3d 447, 452 (6th Cir. 2014). Therefore, Merchants
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`Guild has established pre-enforcement injury to at least one of its members.
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`Next, the Court turns to the traceability and redressability elements of standing. As with
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`Merchants Guild’s organizational injury, the harm to its members is both traceable to
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`Defendant’s conduct and likely to be redressed by a favorable judicial decision. See discussion
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`supra Section II.A.1.a. So, Merchants Guild can establish Jones & Panda would have standing
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`but must still establish second and third elements of associational standing—that the relief it
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`seeks is germane to its purpose, and that none of its members need to participate in their
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`individual capacity.
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` These final elements are easily met. The relief Merchants Guild seeks is enjoinment of
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`the investigatory and enforcement actions undertaken pursuant to the price gouging statutes—
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`relief which is certainly in line with its purpose of advocating for a free and fairly-regulated
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`marketplace. [See R. 10-1 at ¶ 3.] And, none of Merchants Guild’s members need to participate
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`in this suit in their individual capacity. The constitutional issues before the Court are adequately
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`framed and, importantly, the relief sought does not require the Court “to consider the individual
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`circumstances of any aggrieved [Merchants Guild] member.” Int'l Union, United Auto.,
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`Aerospace & Agr. Implement Workers of Am. v. Brock, 477 U.S. 274, 287 (1986). This is a case
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`where “it can reasonably be supposed that the [requested] remedy, if granted, will inure to the
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`benefit of those members of the association actually injured.” Warth v. Seldin, 422 U.S. 490,
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`515 (1975). Merchants Guild has also established associational standing.
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`2
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`In light of the ongoing state court litigation, two other jurisdictional considerations—
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`ripeness and abstention—must be addressed before considering the merits of Plaintiff’s
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`constitutional claims. First, ripeness.
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`a
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`The ripeness doctrine serves “to prevent the courts, through premature adjudication, from
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`entangling themselves in abstract disagreements.” Hill v. Snyder, 878 F.3d 193, 213 (6th Cir.
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`2017) (quoting Thomas v. Union Carbide Agric. Prods. Co., 473 U.S. 568, 580 (1985). “The
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`Supreme Court has set forth a two-prong evaluation for addressing ripeness: A claim is ripe
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`where it is ‘fit for judicial decision’ and where ‘withholding court consideration’ will cause
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`hardship to the parties.” Id. (quoting Abbott Labs. v. Gardner, 387 U.S. 136, 149
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`(1967), abrogated on other grounds by Califano v. Sanders, 430 U.S. 99 (1977)).
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`Claims are fit for review “if they present ‘purely legal’ issues that ‘will not be clarified by
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`further factual development.’” Hill, 878 F.3d at 214. Using this principle, the Sixth Circuit has
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`regularly found “pre-enforcement facial constitutional challenges ripe for review.” Id. For
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`example, the Sixth Circuit has previously found “that a group of plaintiffs could challenge an
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`ordinance’s ‘judicial review provisions’ even before seeking the permits that were the subject of
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`the ordinance.” Id. (discussing and quoting Deja Vu of Nashville, Inc. v. Metro Gov’t of
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`Nashville & Davidson Cty., 274 F.3d 377, 399 (6th Cir. 2001).
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`The present case presents a different type of constitutional challenge, but the same
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`principles apply. Although the record will certainly benefit from further factual development,
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`the present record adequately frames the constitutional issues raised. Take, for example,
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`Merchants Guild’s argument that the Attorney General’s application of the price gouging statutes
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`violates the dormant Commerce Clause. [See R. 10 at 5.] As relevant to this claim, it argues that
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`certain of its members, by making goods available on Amazon, participate in the “unitary
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`interstate marketplace.” Id. at 3. And, the argument continues, by threatening the enforcement
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`of the price gouging statutes against these members, the Attorney General is requiring the
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`members to “treat Kentucky prices as a national ceiling, or exit the national marketplace.” Id. at
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`10. If true, of course, this is the type of extraterritorial effect prohibited by the dormant
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`Commerce Clause. Healy v. Beer Inst., Inc., 491 U.S. 324, 336 (1989) (cleaned up) (“[A] state
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`may not adopt legislation that has the practical effect of establishing a scale of prices for use in
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`other states.”). The respective positions of the parties, as well as the apparent effect of the
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`statutes in the current context, as it relates to this legal issue and the other constitutional disputes
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`are sufficiently framed. In sum, analysis of the constitutionality of the statutes presents primarily
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`legal issues to be resolved, not factual.
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`This much is clear when reviewing the Attorney General’s specific concerns. Attorney
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`General Cameron primarily takes issue with the lack of evidence introduced by Plaintiff to this
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`point concerning how specific members’ pricing has been affected, how its members interact
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`with Amazon, or how other Amazon protocols affect specific members. [See R. 21 at 20.] From
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`a practical standpoint, however, the Attorney General fails to explain why the evidence
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`introduced by Merchants Guild concerning Amazon’s pricing scheme—Amazon’s standard
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`agreements that control on these matters—are insufficient to establish Amazon’s control on these
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`matters. [See e.g., R. 10-1 at ¶ 9 n. 1, ¶ 17 n. 4.] The evidence introduced to this point is
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`sufficient given the issues to be resolved and the compressed time frame on which the parties
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`have operated. [See R. 18 at 3.] Second, while there is a certainly a lack of a fully developed
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`record on these matters, this is the preliminary injunction stage where, ordinarily, the record is
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`not complete. See Univ. of Texas v. Camenisch, 451 U.S. 390, 395 (1981). And, as noted above,
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`Merchants Guild offers a persuasive explanation for the lack of member-specific evidence:
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`maintaining its members’ anonymity “to protect them from commercial retaliation.” [R. 22 at 5;
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`see also R. 21-1 at 4 n. 6.] Relatedly, Merchants Guild maintains that “[t]his is not a case of
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`phantom members . . . [T]he AG knows whom it targeted.” [R. 22 at 5.] As this case moves
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`forward and the record develops it may very well be in Merchants Guild’s best litigation interests
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`to identify its members in order to succeed on the merits. At this stage, however, the Court finds
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`such identification is unnecessary for the reasons laid out above. This case is fit for review.
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`Merchants Guild will also suffer hardship absent judicial consideration of its claims.
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`Merchants Guild represents that it and its members continue to wrestle with the potential for
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`liability under the price gouging statutes, resulting in continued diversion of resources in
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`advocating for and educating its members on these unique matters. The immediacy of the harm
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`is made all the more apparent in view of the recent state court litigation involving a CID issued
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`to a Merchants Guild memb