North Carolina Department of Justice Files Lawsuit Against Gas Station for Price Gouging

When the Colonial Pipeline suffered a cyber-attack in May 2021, the availability of gasoline was suddenly a concern for drivers across the east coast, including North Carolina. Executive Order 213 issued by Governor Roy Cooper on May 10, 2021 declared a state of emergency and implemented provisions aimed at easing trucking and transport regulations to address the supply and accessibility of gas across the state. Under N.C.G.S. § 75-38, anti-price gouging laws automatically went into effect following the issuance of the state of emergency.  

At the time, the administration and the North Carolina Department of Justice alerted consumers to the risk of price gouging and invited complaints through the State’s online and telephone reporting system. Last week the State took action in response and filed a lawsuit against a Durham gas station alleging violations of price gouging and deceptive practices statutes. Citing investigation by NCDOJ’s Consumer Protection Division, the Complaint alleges that Jack’s In and Out Mart, LLC raised the price of premium gasoline from $3.29 before the State of Emergency to as high as $5.49 in the week following the gas shortage. Further, the lawsuit claims that although regular grade gas was advertised, only premium grade was available for purchase. The State claims that such actions constitute illegal gouging and deceptive practices.

Businesses found liable for price gouging violations can be ordered to disgorge revenues and make restitution to customers harmed by improperly inflated prices. Statutes also allow for the award of attorney’s fees and costs against violators as well as civil penalties of up to $5,000.00 per occurrence. In addition to civil liability and penalties, N.C.G.S. § 75-13 allows for criminal indictment against businesses or individuals engaged in deceptive practices.

Throughout the COVID-19 pandemic, the North Carolina Attorney General’s Office has repeatedly taken action to enforce price gouging statutes by filing lawsuits against violators. Business owners are encouraged to speak with experienced legal counsel to help navigate the compliance issues created by the various layers of executive orders. Gas station and convenience store owners, who are already responsible for compliance with numerous and sometimes overlapping agency regulations, should consult with attorney immediately if you are notified that your business is a target of a Consumer Protection Division. More helpful, however, would be to regularly consult with legal counsel to help identify compliance issues before they become costly problems.