GREENVILLE, S.C. -- South Carolina Attorney General Henry McMaster's office has opened civil investigations into a handful of gas stations that may have illegally raised prices after Hurricane Katrina slammed into the Gulf Coast nearly two months ago, his spokesperson said, according to an Associated Press report.
McMaster's office received more than 1,000 complaints about increasing gasoline prices, but has boiled the investigation to about seven stations to determine if prices were raised illegally to more than $4.50 a gallon, spokesperson Trey Walker [image-nocss] said last week.
The AG's office has subpoenaed records to see if there were any violations of the state's Unfair Trade Practices Act, Walker said.
McMaster is seeking lists of price changes at the stations before and after Hurricane Katrina hit on August 29, invoices from distributors and other documents from seven retail stations owned by four parent companies, said Walker.
The names of the companies were not released because it would be irresponsible to taint these businesses until it is determined that unfair trade practice laws were broken, he said.
McMaster will have to identify the systemic wrongdoing to be successful, said Marvin Quattlebaum, a business lawyer with Nelson Mullins Riley & Scarborough's Greenville office. The fact that someone is increasing prices leads to a number of questions, said Quattlebaum, who works on unfair trade practice cases. Is it because of the crunch in supply to those distributors? If their prices have gone up because supply has gone down, they would say, Look, I'm not doing anything unfair or deceptive. I'm just charging more because the law of economics is taking over'.
State law only allows prosecutors to deal with complaints of the criminal offense price gouging during a state of emergency. But McMaster has other options, including possible unfair trade and antitrust violations, Walker said. We receivedsince Katrinaover 1,000 complaints in this office, some straight to this office, some via the Department of Energy's website, Walker said. Of those 1,000 complaints, many of them were duplicates, many of them were not credible, but most of them did not warrant investigation.
Investigators went to more than 100 stations in 20 counties, met with employees and determined there are seven instances where additional investigation was warranted, Walker said.
The penalty for violating the state's Unfair Trade Practices Act is a $5,000 fine for each occurrence, he said.
McMaster is one of 43 attorneys general investigating whether the price increases across the nation were due to market forces or whether they were raised illegally.
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