By SHELIA BYRD
Associated Press Writer
JACKSON, Miss. (AP) - A Mississippi oil company accused of
charging too much for fuel in the aftermath of Hurricane Katrina
has won its challenge to the state's price-gouging law after a
judge ruled it unconstitutional because it's too vague.
Attorney General Jim Hood said Thursday he would appeal the
decision handed down by Winston County Chancery Judge J. Max
Kilpatrick's ruling came in a case involving Louisville-based
Fair Oil, one of two companies Hood sued in 2007. The lawsuit
accused the company of gouging consumers after Katrina struck in
The law states 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 in a counterclaim for declaratory judgment
the phrase "same market area" isn't defined. The company also
said the language "at or immediately before" wasn't definitive.
But Hood contended that the law has a clear, plain meaning. Hood
said in court documents that Fair Oil is aware of its market area
prices for fuel and sets its own retail prices.
In his ruling on Wednesday, Kilpatrick said the law "is too
vague to pass constitutional muster."
Kilpatrick said other states' price gouging laws use clear
terms. New York and Florida use the phrase "trade area" and
Alabama's law refers to "affected area." Kilpatrick said it's 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.
"It simply does not provide adequate notice as to the standards
that potential violators in the oil industry will be judged by when
faced with an investigation of their pricing methods during a state
of emergency," Kilpatrick wrote.
Hood said the ruling was flawed because usually when a court
finds an ambiguity in the law, the first step is to construe the
statute as constitutional and give it a reasonable interpretation.
"Although I have tremendous respect for the judge, in this case
the court failed to follow this long-standing rule by stating what
was a reasonable time before the hurricane hit to determine the
average price of fuel during that period," Hood said in an e-mail
to The Associated Press. "Had the court set the period at one day
or 30 days prior to Katrina, the defendant far exceeded the average
price of fuel in violation of the price gouging law."
Hood said he already has proposed a bill for the upcoming
legislative session that sets the period at 30 days before the
Fair Oil was pleased with the decision, said Charles Winfield, a
Starkville attorney representing the company.
"We believe Mississippi's price-gouging statute is in need of
significant improvement and revision, and we look forward to
working with the Legislature and the attorney general to make that
happen," Winfield 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 did raise prices, but that
some did to cover their increased costs.
Hood initially charged seven companies with wrongdoing, but five
agreed to cooperate and pay thousands of dollars in penalties.
Fair Oil and Wilburn Oil, owned by former state Rep. Jerry
Wilburn of Mantachie, wouldn't negotiate with Hood so he sued the
companies. The ruling on Wednesday was only in Fair Oil's case.
(Copyright 2008 by The Associated Press. All Rights Reserved.)