Final settlement reached in Hurricane Ike gas price gouging suit‏

Nick Rees Jan. 6, 2010, 1:57pm

Bill Mims

RICHMOND, Va. (Legal Newsline) - Virginia Attorney General Bill Mims has reached a settlement with a Montgomery, Va., gasoline retailer over allegations of price gouging during a declared state of emergency.

"This settlement is the eighth and final legal action relating to the spike in gasoline prices seen in anticipation of Hurricane Ike last year," Mims said. "I hope these actions send a strong message that Virginia enforces its Anti-Price Gouging Act. We will not tolerate those who take advantage of Virginians by price gouging for gasoline or other necessities following a disaster."

P. P. Raj Inc., doing business as Elliston Food Market, was alleged to have charged unconscionable prices for gasoline on September 12, 2008 and the morning of September 13, 2008, just prior to the arrival of Hurricane Ike in the Gulf Coast.

The gas prices charged, Mims said, grossly exceeded the prices the station charged during the 10 days prior to the declared state of emergency. The complaint against Elliston Food Market alleges that prices for regular gas rose as high as $4.799, a 33 percent increase over the station's $3.599 September 8 price for regular gas. At the same time, prices for mid-grade gasoline rose to $4.899 and premium to $4.999.

Elliston Food Market is enjoined by the settlement from engaging in any practices alleged to violate the Virginia Post-Disaster Anti-Price Gouging Act and the Virginia Consumer Protection Act. Elliston Food Market is also required to set aside $150 for consumer restitution.

The settlement also requires Elliston Food Market to provide its customers with notice by posting signs on its front door and each individual gas pump that they may be eligible for restitution. The company must also use its best efforts to identify credit and debit card customers who purchased gasoline at the inflated prices and on the dates noted in the settlement. Those customers will then be credited a refund to their debit or credit cards for the amount of the overcharge.

Additionally, Elliston Food Market will pay $1,000 to reimburse the commonwealth for costs, investigative expenses and attorney's fees. The settlement also requires a $400 contribution by Elliston Food Market to the American Red Cross Disaster Relief Fund in lieu of a payment of civil penalties.

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