Mississippi high court upholds price-gouging law

By The Associated Press

JACKSON — The Mississippi Supreme Court has upheld the constitutionality of the state’s price-gouging law.

The justices Thursday unanimously overturned a Winston County judge’s ruling that the law was unconstitutionally vague.

Chancellor J. Max Kilpatrick’s ruling came in 2008 as he rejected Attorney General Jim Hood’s lawsuit accusing a Mississippi oil company of charging too much for fuel after Hurricane Katrina. Kilpatrick has since retired from the bench.

The Supreme Court sent the case back to Winston County to determine if Fair Oil Co. in Louisville violated the law.

Fair Oil was one of two companies Hood sued in 2007. The lawsuit, which represents only one side of a legal argument, accused the company of gouging consumers after Hurricane Katrina struck in 2005.

The law says 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 was aware of its market area prices for fuel and set its own retail prices.

Kilpatrick never determined whether Fair Oil had violated the price-gouging law.

In his ruling, Kilpatrick said it was 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.

“Comprehending the nature of the conduct prohibited by the Price-Gouging Statute requires neither an advanced degree from the Wharton Business School nor an accounting degree from one of our fine public universities,” Supreme Court Justice Randy Pierce wrote in Thursday’s decision.

“The alleged conduct being prosecuted is the raising of prices after the declaration of a state of emergency, absent justification,” Pierce said.

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