Three Texas businesses – two service stations and one motel owner – violated state consumer protection laws prohibiting price gouging during times of natural disaster, the state attorney general announced Tuesday.
Legal experts say the lawsuits, if successful, will almost certainly put the three companies out of business because of the huge fines levied under Texas law.
The three cases are likely just the first wave of litigation over alleged price gouging related to Hurricane Harvey, as the state consumer protection agency has received more than 3,300 such complaints.
Texas Attorney General Ken Paxton filed lawsuits against a Robstown motel owner and gas station owners in Dallas-Fort Worth and Laredo, claiming the small business operators illegally doubled and tripled prices it charged customers during Hurricane Harvey and its tragic aftermath.
The three separate lawsuits, filed in Travis County, name DFW-based Bains Brothers, Robstown hotel operator Robstown Enterprises and Laredo-based Encinal Fuel Stop with violating a Texas law the prohibits unlawful price gouging while consumers are in need of fuel, shelter and other essentials.
“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,” Attorney General Paxton said in a written statement.
“Texas has tough price gouging laws, and my office will continue to aggressively investigate and prosecute cases arising from Hurricane Harvey,” he said.
The lawsuit against Robstown Enterprises, which did business as Best Western Plus Tropic Inn, allegedly charged three times its normal room rate the weekend that Hurricane Harvey hit. The complaint states that Best Western actually ended its relationship with Robstown Enterprises as a result of the price gouging.
Bains Brothers, according to the lawsuit, charged $6.99 a gallon for regular unleaded gas on Aug. 31 at its Texaco-branded gas stations in the Dallas-Fort Worth area, even though the operators advertised $3 to $4 gas prices on its signs.
The complaint against Encinal Fuel Stop, which operates a Chevron-branded gas station outside Laredo, alleges that the owners charged customers as much as $9.99 a gallon for regular unleaded gas on Aug. 31.
Texas law allows courts to hit businesses that price gouge with civil penalties up to $20,000 for each violation, which is each individual who paid those prices for fuel and hotel rooms. The law also provides an additional $250,000 fine for price gouging senior citizens.
The Texas Lawbook contacted officials at Bains Brothers, Robstown Enterprises and Encinal Fuel Stop seeking a comment, but none have responded.