Florida, New Jersey and Tennessee have filed price-gouging lawsuits over retail fuel prices, while 44 state attorneys general continue an investigation into price spikes after recent hurricanes.
Meanwhile, the Federal Trade Commission is investigating whether “forms of illegal behavior have provided a foundation for price manipulation,” John Seesel, an FTC associate general counsel, said Sept. 22. Such crimes would be pursued aggressively by the FTC, Seesel said.
New Jersey has filed four lawsuits in Mercer County’s state superior court against oil companies Hess, Motiva Shell and Sunoco and against independent gas-station owners selling Citgo, Hess, Shell and Sunoco gasoline, acting Gov. Richard Codey announced Sept. 26.
Pump prices spiked overnight as Hurricane Katrina made landfall, but afterward, when oil prices fell several dollars a barrel, gas prices decreased only slowly, said Kimberly Ricketts, state consumer affairs director. “There seems to be a speed aberration that even Einstein would have difficulty understanding,” she said.
The state said the businesses’ pricing practices, including multiple price changes during a 24-hour period, violated the state Motor Fuels Act and Consumer Fraud Act.
Other violations include failure to display fuel price signs, failure to maintain price records and failure to provide access to price records, the state charged.
Darci Sinclair, a spokeswoman for Royal Dutch Shell and its subsidiary, Motiva, said the company was reviewing the charges and could not comment further. “Shell and Motiva have a history of being sensitive to price changes during significant events, such as Hurricane Katrina, as do our retailers and wholesalers,” Sinclair said.
Hess officials released a statement saying their prices were less than competitors’ before and after Katrina, when the fuel price paid by retailers changed minute to minute.
Competitors raised prices “immediately and dramatically,” while Hess raised prices only in increments in response to wholesale cost, the Hess statement said. After the company learned that more than one increase in a single day violated New Jersey law, it took responsibility for the oversight and has complied since, the Hess statement said.
Sunoco did not return a phone call seeking comment.
Florida Attorney General Charlie Crist filed suit Sept. 9 against the Tallahassee-based gas station Swifty Stars. It unconscionably raised its gasoline prices during a declared state of emergency and falsely advertised the actual prices being charged, Crist alleged.
Between Aug. 25, when the store received its shipment of regular and premium unleaded gas, and Sept. 1, prices increased 70 cents per gallon for regular and 80 cents per gallon for premium, Crist said.
Swifty Stars’ owner said he raised prices to reduce customer volume, the state alleged. “He further indicated that he wanted to save some gas for himself,” the lawsuit said.
Swifty Stars violated Florida’s price-gouging statute and its Unfair and Deceptive Trade Practices Act, Crist said.
A week before that suit was filed, Crist subpoenaed two gas distributors, Colonial Oil Industries and Murphy Oil USA, seeking records of their deliveries into Florida.
In July, after Hurricane Dennis, he subpoenaed two other gas distributors, Motiva and Tate Oil.
Tennessee Attorney General Paul Summers has filed a motion in Hamilton County Court against Chattanooga’s Tip Top market, alleging it charged nearly $5 per gallon for gas. The market violated the state’s consumer protection and price-gouging acts, the suit alleges.
Summers also dismissed a price-gouging complaint filed against a Warren County grocery.
As of Sept. 13, Alabama Attorney General Troy King had issued a first round of subpoenas to more than 20 gas retailers, requiring that comprehensive fuel pricing information dating to July 1 be provided to King by Sept. 30.
On the federal level, U.S. Sen. Maria Cantwell, D-Wash., introduced a bill Sept. 20 that would ban retail fuel price gouging after natural disasters. The proposed Energy Emergency Consumer Protection Act would give the president authority to declare national energy emergencies, during which price gougers would be subject to new fines and criminal penalties.
Modeled after price-gouging laws that currently exist in 28 states, the act also would allow federal regulators to pursue aftermarket manipulation of oil and gas prices every day. Violations would carry civil penalties of up to $3 million daily and a new criminal penalty of a maximum five-year prison sentence.
The previous day, U.S. Sen. Mark Dayton, D-Minn., introduced the Oil and Gas Price Gouging Prevention Act, which would make it a felony to raise oil or gas prices by more than 15 percent during natural disasters and other emergencies. It would give the Federal Trade Commission and state attorneys general authority to prosecute violators.
Both bills were referred to the Senate Committee on Commerce, Science and Transportation. Cantwell’s bill already has 25 co-sponsors.
