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Posted: September 12, 2017

Texas sues 3 businesses, alleging Harvey-related price gouging


By Chuck Lindell, Austin American-Statesman

Texas Attorney General Ken Paxton sued three businesses Tuesday, alleging that their owners violated a state law that prohibits price gouging during natural disasters.

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The lawsuits -- filed under a state law that bars businesses from charging exorbitant prices for drinking water, food, clothing and fuel during a governor-declared disaster -- carry fines of up to $20,000, rising to $250,000 for violations targeting those 65 and older.

“Almost immediately, incredible stories of compassion and heroism emerged -- reporters rescued citizens on live television and local business owners opened their doors to provide shelter to evacuees and first responders,” all three lawsuits said. “Unfortunately, also almost immediately consumers began contacting the Texas attorney general with reports of excessive and exorbitant pricing.”

Paxton indicated that additional lawsuits are possible, saying his office has received 3,321 complaints of price gouging related to Hurricane Harvey, which hit the Texas coast on Aug. 25.

“Texas has tough price gouging laws, and my office will continue to aggressively investigate and prosecute cases arising from Hurricane Harvey,” Paxton said.

The lawsuits, filed in state district court in the counties where the alleged violations took place, also hinted that additional action can be expected.

“Before the storm even made landfall, consumers trying to prepare for the imminent devastation seeking to buy necessities such as water faced prices of $40 to $50 per case, and those seeking emergency lodging were forced at some hotels to pay nearly triple their customary rate,” the lawsuits said.

Tuesday’s lawsuits targeted:

• The owners of the Best Western Plus Tropic Inn in Robstown, which Paxton accused of charging almost three times its normal room rate the weekend Hurricane Harvey hit. The hotel, 20 miles inland from Corpus Christi, sits along a hurricane evacuation route and charged $290 for rooms that cost $108 the prior weekend, the lawsuit said.

Best Western has since ended its relationship with Robstown Enterprises, Paxton said.

• Bains Brothers, owner of two Texaco gas stations in the Dallas-Fort Worth area allegedly charged $6.99 a gallon for regular unleaded gas on Aug. 31 while displaying signs with prices from $3 to $4.

“In some cases, the clerk refused to give customers receipts of their purchases made at the pump,” the lawsuit said. “Some consumers found that defendant raised the prices while they were in the process of filling up their tanks.”

• Encinal Fuel Stop, a Chevron station about 30 miles north of Laredo, allegedly charged $8.99 and $9.99 a gallon for regular unleaded gas on Aug. 31.

The lawsuits also seek to force the businesses to give up money that was “fraudulently taken” in price-gouging schemes, with repayment directed to consumers who can be identified.

“It’s unconscionable that any business would take advantage of Texans at their most vulnerable — those who are displaced from their homes, have limited resources and are in desperate need of fuel, shelter and the basic necessities of life,” Paxton said in a written statement.


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