Herring files price gouging lawsuit
Attorney General Mark R. Herring has filed suit against Springfield-based Tahir and Sons LLC, d/b/a Interstate Fuel LLC, for alleged violations of the Virginia Post-Disaster Anti-Price Gouging Act.
Herring’s lawsuit relates to allegations that the business charged unconscionable prices on gasoline, a necessary good, after a state of emergency was declared in May, in response to the temporary shutdown of the Colonial Pipeline, which supplies gasoline and other petroleum-based products to a significant part of the United States east coast.
Herring has taken two other enforcement actions against price gouging this year following the state of emergency declaration in response to the COVID-19 pandemic.
“The unfortunate reality is that bad actors will take advantage of times of crises to unreasonably increase prices for necessary goods, like gasoline,” Herring said. “During a disaster or crisis, Virginians should never have to worry about whether they are paying a fair price for something they truly need. Price gouging will never be tolerated in the Commonwealth and my Consumer Protection Section will take swift action whenever businesses are taking advantage of consumers.”
Herring’s Complaint alleges that, during the period from May 1-10, Interstate Fuel sold regular unleaded fuel at a steady average daily price of about $2.99 per gallon. On about May 11, the defendant’s average daily price of the same gasoline rose to $3.629, and then again rose to $3.670 during the period from May 12 to May 14, increases of 21.37 percent and 22.74 percent, respectively.
Herring further alleges that the defendant’s actual prices rose at least as high as $3.989 on or around the morning of May 13, an increase of 33.4 percent above what the business was charging during the ten days before the emergency was declared. The suit claims that these price increases were not attributable to additional costs incurred by the business in connection with the sale of gasoline, nor were they due to increases in costs imposed by its source.
The Virginia Post-Disaster Anti Price Gouging Act prohibits businesses from charging unconscionable prices on necessary goods during a time of disaster. Among other factors that can be considered in determining whether a price is “unconscionable” is whether it grossly exceeds the price charged for the same or similar goods during the 10 days immediately prior to the time of disaster. A violation of Virginia’s price gouging law is also a violation of the Virginia Consumer Protection Act.
The lawsuit, filed with the Fairfax County Circuit Court, requests that the court, among other things, enjoin the illegal practices, and award restitution to affected consumer victims.
During Gov. Ralph Northam’s state of emergency that was issued in response to the COVID-19 pandemic, the Virginia Attorney General’s Office received more than 500 complaints and e-mails alleging possible price gouging activity and has sent more than 150 investigative letters to businesses.
Investigation of these complaints has largely revealed that many price increases occurred further up the supply chain with manufacturers or distributors that were beyond the reach of the state’s price gouging laws, and this prompted Herring to successfully seek amendments to the state’s price gouging law during the 2020 General Assembly special session.