Ken Paxton

Monday, March 7, 2011

Texas Attorney General Resolves Cases Against Motels For Price Gouging During Hurricane Dolly

MCALLEN Texas Attorney General Greg Abbott today resolved five price-gouging cases he filed against South Texas motel operators for their improper conduct during Hurricane Dolly.

Each of the five defendants Motel 6 Harlingen, Best Western Las Palmas Inn, Comfort Inn Edinburg, Comfort Inn Pharr, and Country Hearth Inn & Suites Pharr/McAllen entered into an agreed final judgment and permanent injunction. State investigators discovered that the defendants unlawfully increased the cost of their rooms after Gov. Rick Perry issued a disaster declaration as Hurricane Dolly approached Texas.

Under the agreed final judgment, the defendants agreed to pay civil penalties to the State and implement multiple changes to their business practices during a declared disaster. Specifically, the five motel operators are prohibited from charging or accepting excessive or exorbitant fees for accommodations during a disaster. The defendants must also post the daily room rate in each room and maintain a registration system that includes guests’ names, contact information, length of stay and rates charged per day.

Additionally, Motel 6 Harlingen and Best Western Las Palmas Inn are prohibited from collecting hotel occupancy taxes from evacuees who are fleeing a disaster when such taxes are waived by the governor.

Under Texas law, when the governor declares a disaster, vendors are prohibited from raising prices to profit from the disaster. The attorney general is charged with enforcing the law’s prohibition on price-gouging during a declared disaster. Under the Texas Deceptive Trade Practices Act, vendors cannot sell or lease fuel, food, lodging, medicine or other necessities for excessive or exorbitant prices.