Court to hear Hood’s appeal in price gouging case

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Published: November 15,2010

Tags: courts, disasters, price gouging, retail

JACKSON — The Mississippi Supreme Court will take up Attorney General Jim Hood’s appeal of a Winston County judge’s ruling that Mississippi’s price-gouging law is unconstitutionally vague.

Chancellor J. Max Kilpatrick’s ruling came in 2008 in his rejection of Hood’s lawsuit that accused a Mississippi oil company of charging too much for fuel in the aftermath of Hurricane Katrina.

Kilpatrick’s ruling came in a case involving Louisville-based Fair Oil Co., one of two companies Hood sued in 2007. The lawsuit accused the company of gouging consumers after Katrina struck in 2005.

The law states that during an emergency, goods and services shouldn’t cost more than what’s ordinarily charged for comparable items “in the same market area at or immediately before the declaration of a state of emergency or local emergency.”

Fair Oil had argued the phrase “same market area” isn’t defined. The company also said the language “at or immediately before” wasn’t definitive.

Hood contended that the law has a clear, plain meaning. Hood said in court documents that Fair Oil is aware of its market area prices for fuel and sets its own retail prices.

In his ruling, Kilpatrick said other states’ price gouging laws use clear terms. He said New York and Florida, for example, use the phrase “trade area” and Alabama’s law refers to “affected area.”

Kilpatrick said it’s not clear whether the law requires a company to keep prices the same as on the day of the emergency or hold prices to some average of the prior week or month.

Hood contends that usually when a court finds an ambiguity in the law, the first step is to construe the statute as constitutional and give it a reasonable interpretation.

Starkville attorney Charles Winfield, representing Fair Oil, said the law needed revision.

After the Katrina struck in 2005, Hood said his office was inundated with complaints alleging price gouging by oil distributors. He said many companies did raise prices, but that some did to cover their increased costs.

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