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Friday, August 28, 2009

State sues Salem gas station in pricing case

Two stations signed settlements with the attorney general's office after being accused of price gouging.

The office of Virginia Attorney General Bill Mims said Thursday it sued a Salem gas station and signed settlements with two other Roanoke Valley fuel retailers over alleged violations last year of the state's price-gouging statute.

The cases are the latest in a series of legal actions over gasoline price spikes in the wake of Hurricanes Gustav and Ike in fall 2008.

Some consumers paid $5 or more for a gallon of regular gasoline after the storms impaired gasoline production and distribution, leading to a host of price-gouging complaints, many from Southwest Virginia.

The state prohibits a retailer from charging an unconscionably high price for any essential item during a declared disaster period.

Gasoline retailers accused of gouging have replied that they did raise prices, but only to preserve inventory during periods of panic-driven buying and that they lowered prices voluntarily soon after.

The attorney general has taken action against eight businesses scattered around the state, seven of which have signed settlements in which they agreed to reimburse gouged customers and the state and promise to not violate the law in the future.

In the latest legal cases, state lawyers said they sued the limited liability company that owns Main Street Citgo, 1803 W. Main St., Salem, over alleged violations of the anti-price gouging statute and related consumer protection laws.

The station charged $5.34 for a gallon of regular unleaded fuel on Sept. 12, 2008, when a hurricane-related disaster declaration was in effect, the lawsuit said, noting that that price was 53 percent higher than the price on Sept. 9, before the declaration.

The lawsuit filed in Salem Circuit Court asks a judge to order the business to reimburse customers, pay a fine of up to $2,500 per violation and reimburse the state for its legal and investigative expenses.

Tanvir Ahmad, who owns the business, said he wants to settle with the state and mailed a check and required paperwork. David Clementson, spokesman for the attorney general's office, said lawyers gave Ahmad several extensions of a deadline to pay and sign a settlement and he missed them all.

The office said it has received signed settlements of price-gouging lawsuits from the limited liability companies that own Ran Express Stop, 1522 10th St., Roanoke, and Liberty Two Stars, 813 W. Main St., Salem.

Ran Express, without admitting guilt, agreed to set aside $300 for customer reimbursement, post signs to notify customers of the reimbursement opportunity, voluntarily credit consumers who paid with credit and debit cards, reimburse the state with $1,200 and donate $600 to the American Red Cross, court papers said.

Liberty Two Stars, without admitting guilt, agreed to set aside $1,500 for customer reimbursement, post signs to notify customers of the reimbursement opportunity, voluntarily credit consumers who paid with plastic, reimburse the state with $2,000 and donate $1,800 to the American Red Cross, court papers said.

Cash customers should approach store owners for reimbursement and bring a receipt if they have it, Clementson said. If the owner declines, he must notify the state's lawyers who will review the matter separately and may order the business to pay, according to settlement terms.

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