February 15, 2007
Joplin, Mo. — Attorney General Jay Nixon today sued several southwest Missouri businesses as the first step in an ongoing investigation into alleged price gouging after the severe ice storms of Jan. 12-14. Nixon said the businesses - which include hotels, gas stations and hardware stores - are located along or near the I-44 corridor from Joplin to St. Robert. The lawsuits involve the sale of hotel rooms, gasoline, kerosene and portable generators.
“My office was inundated with complaints from consumers up and down the I-44 corridor in southwest Missouri about the price of these items after the devastating ice storm hit,” Nixon said today at a news conference in Joplin. “In a situation such as this, with prices for these necessities showing wild fluctuations, we put in hundreds of hours examining market data for gas prices and hotel room rates before the storm hit and found significant differences in what the businesses charged in the aftermath.”
Overall, Nixon's office received 408 complaints regarding the alleged price gouging, and is still actively involved in more than 40 investigations.
Nixon has filed a lawsuit in Newton County Circuit Court, asking the court to order the Days Inn on South Rangeline in Joplin to comply with a civil investigative demand from his office as investigators look into complaints about price gouging. To date, the hotel owners have not complied with the request.
The Attorney General also filed suit in Greene County Circuit Court against the Super 8 hotel located at 3034 Moulder Avenue and the Springfield Inn at 2355 North Glenstone. Those lawsuits allege the hotels' rates and profit margin for rooms increased substantially immediately after the storm hit.
The Attorney General filed three other lawsuits alleging price gouging in other circuit courts in southern Missouri. In all the price gouging suits, Nixon is asking the defendants to pay restitution to consumers and penalties to the state. The other lawsuits are against:
In addition to the lawsuits, the Attorney General filed an assurance of voluntary compliance in Laclede County Circuit Court with Champion Oil of Lebanon over price gouging allegations in the sale of gasoline. The owner of the gas station will pay $2,886 in full restitution, $10,113 in court costs and $12,000 in civil penalties. The business would also have to pay another $78,000 in civil penalties if it is found to engage in price gouging in the future.
Nixon said his office also has reached an assurance of voluntary compliance in principle with the owners of the Days Inn in St. Robert. Under the agreement, the hotel will provide full refunds - not just the overcharged amount - to consumers who were overcharged. The hotel also will pay $2,000 to the state for its costs of bringing the case, and $1,000 as a penalty. An additional $9,000 in penalties was suspended pending the business' compliance with the law.
“When retailers take advantage of a situation like this natural disaster and their actions prevent consumers from making rational buying decisions, it is appropriate for the Attorney General to act,” Nixon said. “We have a proven track record of coming down hard on price gouging, and we want to send a signal to anyone else who would consider trying this that they will be held accountable.”
Nixon said most of the businesses contacted by his office during the investigation provided excellent cooperation, and that many of the complaints were resolved without the need for legal action. Investigations are continuing into more than 40 businesses, some of which have not complied with Nixon's civil investigative demands for more information. Those businesses ignore the requests at their own peril, Nixon said.
In December, Nixon recovered nearly $38,000 in consumer restitution from a Farmington business due to allegations of price gouging in the sale of portable generators in the wake of another winter storm. Previously, Nixon took action against eight gas stations in 2005 after Hurricane Katrina and against 48 stations in 2001 after Sept. 11 over allegations of price gouging. The stations paid almost $69,000 total to the state as a result of Nixon's investigation.