Attorney General Ken Paxton files price gouging lawsuits

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Consumer complaints about price gouging was making waves across social media channels following Hurricane Harvey.

Encinal Fuel Stop owns a Chevron-branded gas station outside Laredo that allegedly charged $8.99 and $9.99 per gallon for regular unleaded on August 31. Bains Brothers owns Texaco-branded stations near Dallas-Fort Worth that allegedly charged $6.99 for a gallon of regular unleaded gas while the stations' signs advertised prices of $3 to $4.

Paxton has filed lawsuits against three businesses so far: Robstown Enterprises, Bains Brothers, and Encinal Fuel Stop.

Under Texas law, vendors are not allowed to charge exorbitant prices for items people need during a disaster - items like water, food, clothing and fuel.

One North Texan tells CBS11 she paid $85 for 12 gallons of gas during post-Harvey price gauging.

"In some cases, the clerk refused to give customers receipts of their purchases made at the pump", the lawsuit said. Best Western is no longer affiliated with the company, according to the attorney general's office.

Motel operator Robstown Enterprises, Inc., which operates as Best Western Plus Tropic Inn, is accused of tripling the price of its room rates the weekend Hurricane Harvey hit. It's a good thing it wasn't intentional, as the stiff civil penalties for price gouging run $20,000 per violation, and additional six-figure fines can be levied if the victims are senior citizens. If the customer defrauded is older than 65 years old, the penalty jumps to $250,000.

While most statutes will not prohibit price increases due to downstream business conditions (consider, for example, an increase in gasoline prices in Georgia due to some reduction in production in Saudi Arabia that drives up prices globally), companies can expect any local increases spurred on by demand from consumers desperate for emergency supplies to be quickly investigated by attorneys general and other local authorities.



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