Critical Areas

Retailers, Hotels, and Constructors: Beware Of Price Gouging and DTPA Complaints

Texas-based retailers, hotels and construction companies should be aware that volumes of media reports and over a thousand complaints have been received by the Texas attorney general in the aftermath of Hurricane Harvey. Although many of these are legitimate, there are a large number that do not rise to the level of illegality. Regardless, the media reports and complaints can do real harm to legitimate companies.

In times of a disaster declared by Gov. Greg Abbott (such as with Hurricane Harvey), “price gouging” is made illegal. Texas law actually prohibits:

“Taking advantage of a disaster declared by the governor under Chapter 418, Government Code, by:

(A) selling or leasing fuel, food, medicine or another necessity at an exorbitant or excessive price; or
(B) demanding an exorbitant or excessive price in connection with the sale or lease of fuel, food, medicine or another necessity.”

Further, constructors making repairs in damaged areas should be aware that times of disaster bring heightened scrutiny of DTPA allegations of “misrepresentations” in connection with repairs.

Of course, what is “exorbitant,” “excessive,” a “necessity” or a “misrepresentation” can be quite subjective. 

Nevertheless, the attorney general takes such allegations seriously and has the unique power to investigate and seek $20,000/violation fines, obtain injunctive relief and remedies for consumers. In appropriate instances, criminal remedies may also be pursued. In past disasters, the attorney general has pursued significant claims against retailers of gasoline and food, as well as hotels, motels, construction companies and others.

The attorney general is in the process of issuing large numbers of Civil Investigative Demands (“CID”) to often unsuspecting companies. Do NOT confuse a CID with a request for production or other similar litigation tool. It is a unique investigative tool available only to the attorney general.

Gardere lawyers provide representation for individuals and companies that face legal and media issues involving state attorneys general in Texas and around the country. We have worked in and outside of the attorneys general office and thus are seasoned at addressing the concerns of attorneys general and the media while solving difficult problems facing clients.

More information can be found on our government affairs practice page here.

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