AG's office issues subpoenas to gas stations

September 15, 2008 2:47:03 PM PDT
Attorney General Roy Cooper issued subpoenas Monday to more than a dozen North Carolina gas stations that allegedly charged consumers $5.49 or more a gallon for gas."There's no excuse for ripping off consumers who are already hurting from high gas prices," Cooper said. "Gouging for greed will not be tolerated in North Carolina."

Cooper's Consumer Protection Division issued the subpoenas today after getting more than 2,800 reports of possible price gouging from consumers across North Carolina.

The subpoenas are being sent out today to be served by Sheriff's Offices. Today's subpoenas will be served on gas stations in Anson, Ashe, Cherokee, Guilford, Montgomery, Stanley and Transylvania counties.

The subpoenas require retailers to provide documentation to the Attorney General's Office by September 26 including information on their costs.

Cooper expects to issue additional subpoenas to more gas stations later this week as part of this investigation. "We will take legal action if our investigation reveals that any retailer, distributor or wholesaler has violated our price gouging law," said Cooper.

Price gouging?or charging unreasonably excessive prices in times of crisis?violates North Carolina General Statute 75-38, when a disaster, an emergency or an abnormal market disruption for critical goods and services is declared or proclaimed by the Governor.

On Friday, North Carolina's law against price gouging was triggered by the declaration of an abnormal market disruption due to Hurricane Ike.

The price gouging law, which Cooper helped strengthen in 2006, applies to all levels of the supply chain from the manufacturer to the distributor to the retailer.

"I encourage consumers to conserve and to check prices before buying gas," Cooper said. "And let us know if you think you've found a case of price gouging."

Consumers can report possible price gouging to the Attorney General's Office by visiting www.ncdoj.gov to fill out a price gouging complaint form or by calling 1-877-5-NO-SCAM toll-free within North Carolina.

Price Gouging: Applicable State Statutes

Note: A violation of §75-38 is a violation of §75-1.1.

§ 75 37. Declaration of State public policy. It is the public policy of this State to protect its citizens from price gouging during states of disaster. The State also realizes the difficulty in regulating prices while not defeating the ability of the market in goods and services from bringing supply back in balance with demand and not defeating the function of price in allocating scarce resources. (2003 412, s. 1.)

§ 75 38. Prohibit excessive pricing during states of disaster, states of emergency, or abnormal market disruptions.
(a) Upon a triggering event, it is prohibited and shall be a violation of G.S. 75 1.1 for any person to sell or rent or offer to sell or rent any goods or services which are consumed or used as a direct result of an emergency or which are consumed or used to preserve, protect, or sustain life, health, safety, or economic well being of persons or their property with the knowledge and intent to charge a price that is unreasonably excessive under the circumstances. This prohibition shall apply to all parties in the chain of distribution, including, but not limited to, a manufacturer, supplier, wholesaler, distributor, or retail seller of goods or services. This prohibition shall apply in the area where the state of disaster or emergency has been declared or the abnormal market disruption has been found.
In determining whether a price is unreasonably excessive, it shall be considered whether:
(1) The price charged by the seller is attributable to additional costs imposed by the seller's supplier or other costs of providing the good or service during the triggering event.
(2) The price charged by the seller exceeds the seller's average price in the preceding 60 days before the triggering event. If the seller did not sell or rent or offer to sell or rent the goods or service in question prior to the time of the triggering event, the price at which the goods or service was generally available in the trade area shall be used as a factor in determining if the seller is charging an unreasonably excessive price.
(3) The price charged by the seller is attributable to fluctuations in applicable commodity markets; fluctuations in applicable regional, national, or international market trends; or to reasonable expenses and charges for attendant business risk incurred in procuring or selling the goods or services.
(b) In the event the Attorney General investigates a complaint for a violation of this section and determines that the seller has not violated the provisions of this section and if the seller so requests, the Attorney General shall promptly issue a signed statement indicating that the Attorney General has not found a violation of this section.
(c) For the purposes of this section, the end of a triggering event is the earlier of 45 days after the triggering event occurs or the expiration or termination of the triggering event unless the prohibition is specifically extended by the Governor.
(d) A "triggering event" means the declaration of a state of emergency pursuant to G.S. 166A 8 or Article 36A of Chapter 14 of the General Statutes, the proclamation of a state of disaster pursuant to G.S. 166A 6, or a finding of abnormal market disruption pursuant to G.S. 75 38(e).
(e) An "abnormal market disruption" means a significant disruption, whether actual or imminent, to the production, distribution, or sale of goods and services in North Carolina, which are consumed or used as a direct result of an emergency or used to preserve, protect, or sustain life, health, safety, or economic well being of a person or his or her property. A significant disruption may result from a natural disaster, weather, acts of nature, strike, power or energy failures or shortages, civil disorder, war, terrorist attack, national or local emergency, or other extraordinary adverse circumstances. A significant market disruption can be found only if a declaration of a state of emergency, state of disaster, or similar declaration is made by the President of the United States or an issuance of Code Red/Severe Risk of Attack in the Homeland Security Advisory System is made by the Department of Homeland Security, whether or not such declaration or issuance applies to North Carolina.
(f) The existence of an abnormal market disruption shall be found and declared by the Governor pursuant to the definition in subsection (e) of this section. The duration of an abnormal market disruption shall be 45 days from the triggering event, but may be renewed by the Governor if the Governor finds and declares the disruption continues to affect the economic well being of North Carolinians beyond the initial 45 day period. (2003 412, s. 1; 2006 245, s. 1; 2006 259, s. 41.)

§ 75 1.1. Methods of competition, acts and practices regulated; legislative policy.
(a) Unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are declared unlawful.
(b) For purposes of this section, "commerce" includes all business activities, however denominated, but does not include professional services rendered by a member of a learned profession.
(c) Nothing in this section shall apply to acts done by the publisher, owner, agent, or employee of a newspaper, periodical or radio or television station, or other advertising medium in the publication or dissemination of an advertisement, when the owner, agent or employee did not have knowledge of the false, misleading or deceptive character of the advertisement and when the newspaper, periodical or radio or television station, or other advertising medium did not have a direct financial interest in the sale or distribution of the advertised product or service.
(d) Any party claiming to be exempt from the provisions of this section shall have the burden of proof with respect to such claim. (1969, c. 833; 1977, c. 747, ss. 1, 2.)

§ 75 15.1. Restoration of property and cancellation of contract. In any suit instituted by the Attorney General to enjoin a practice alleged to violate G.S. 75 1.1, the presiding judge may, upon a final determination of the cause, order the restoration of any moneys or property and the cancellation of any contract obtained by any defendant as a result of such violation. (1973, c. 614, s. 2.)

§ 75 15.2. Civil penalty. In any suit instituted by the Attorney General, in which the defendant is found to have violated G.S. 75 1.1 and the acts or practices which constituted the violation were, when committed, knowingly violative of a statute, the court may, in its discretion, impose a civil penalty against the defendant of up to five thousand dollars ($5,000) for each violation. In any action brought by the Attorney General pursuant to this Chapter in which it is shown that an action or practice when committed was specifically prohibited by a court order, the Court may, in its discretion, impose a civil penalty of up to five thousand dollars ($5,000) for each violation. Civil penalties may be imposed in a new action or by motion in an earlier action, whether or not such earlier action has been concluded. In determining the amount of the civil penalty, the court shall consider all relevant circumstances, including, but not limited to, the extent of the harm caused by the conduct constituting a violation, the nature and persistence of such conduct, the length of time over which the conduct occurred, the assets, liabilities, and net worth of the person, whether corporate or individual, and any corrective action taken by the defendant. The clear proceeds of penalties so assessed shall be remitted to the Civil Penalty and Forfeiture Fund in accordance with G.S. 115C 457.2. (1977, c. 747, s. 3; 1983, c. 721, s. 1; 1998 215, s. 99.)


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