Costly Disasters

The backstory is largely universal at this point, but the fallout of the artic blast that rocked Texas in February continues to unfold. While individual cases of drastic increases in pricing on staple products like water and food are present during the disaster in some areas, significantly higher electric bills have been the predominate story.

And this is not the only time potential price gouging has made headline news in the past year. Supply shortages because COVID-19 was the hot topic last spring and summer.

But what recourse, if any, is available for consumers?

Texas is one of 34 states that have laws against price gouging. The Texas Deceptive Trade Practices Act (DTPA), found in Chapter 17 of the Business and Commerce Code, is a consumer protections act that has broad powers to help protect consumers from false, misleading or deceptive acts.  The list of protections in Business and Commerce Code section 17.46(b) are broad and the causes of action are typically brought in addition to other claims allowed by Texas law.

Section 17.46(b)(27) states that it is a false, misleading, or deceptive act or practice to take advantage of a disaster declared by the Governor, Government Code, or President by:

  • Selling or leasing fuel, food, medicine, lodging, building materials, construction tools, or another necessity at an exorbitant or excessive price; or
  • Demanding an exorbitant or excessive price in connection with the sale or lease of fuel, food, medicine, lodging, building materials, construction tools, or another necessity.

The DTPA creates a private cause of action in which injured buyers can sue to recover not only actual damages, but three times damages if the violation was knowingly or intentional. Although, the Texas Attorney General and many local prosecutors may act on such violations if it can show that there is sufficient public interest to do so.

Texas has been under a disaster declaration since March 2020. Additionally, on February 12th, Governor Abbott declared another state of disaster. This time for the response to the then imminent winter storm. Both disaster declarations trigger DTPA’s price gouging prohibition. However, the price gouging provision has never been applied to energy prices in Texas, even though it can arguably be applied under section 17.46b(2) “another necessity” wording.

This unknown is likely why the Texas Attorney General recently sued Griddy, one of the utility service providers in the news lately for extremely high bills, under other provisions of the DTPA including making representations about services or benefits that they do not have and failing to disclose material information concerning services with the intent to induce customers into the transaction.

Unfortunately, there will always be bad actors that seek to take advantage of others, especially in times of an emergency.  If you believe you have been the victim of a deceptive trade practice, it is important that you contact an experience attorney to discuss your situation. Each set of circumstances is unique and should be evaluated as such.

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