Saturday, September 1, 2012

Price-Gouging Law Tested With Arrest in Franklin County

Saturday, September 1, 2012

ROXIE, MS - Mississippi Attorney General Jim Hood's office said in a press release that Roxie Truck Stop business owner, 51-year old Kuldip 'Dee' Singh of Natchez, was arrested at approximately 6:30 PM on August 29th at his business in Franklin County and charged under the statue of the once challenged 'price-gouging law'.  Investigators say prior to his arrest that during the 'state of emergency' and within a 48 hour time frame Singh's gas prices at his truck stop skyrocketed from $3.59 a gallon to $3.99.  Franklin County was proclaimed by the Governor under a 'state of emergency' order at 5:20 p.m. on Monday, August 27, 2012.  Singh was held at Franklin County Detention Center but has made bond according to information from the Franklin County Sheriffs Office. It is not known at this time if he is represented by an attorney.  

The Roxie Truck Stop is located at the corner of hwy's 33-84/98 in the western section of Franklin County.  Singh was charged with price-gouging during a 'state of emergency'. The state of emergency  is currently in place because of Tropical Storm Isaac. Investigators accuse Singh of charging 17 cents per gallon over his 'usual profit margin' at the station which is clearly in direct conflict and non-compliance with the interpretation and meaning of the price-gouging law.   Hoods office said 'It was not clear whether  another gas station owner arrested in Madison,  Ms at the same time, 50 year old Fajinder Singh, is related to Singh or whether either parties have attorneys'. 

It is not clear if additional charges will be brought and the investigation is still ongoing.  It is also not clear if Singh's timing of his price increase was within the 'state of emergency' time frame but the broad scope of the law addresses this with the 'usual profit margin' which is at the center of the law.  Additional evidence of  price-gouging by increase pricing at his business will be determined by investigators upon further examination of audited report of receipts in recorded cash register log given to customers effected by purchases other than gas, such as cigarettes and dry goods.  This log 'tape' must be present to reflect the proper amount of collected sales tax and reported to state tax commission monthly for due sales tax payments. Investigators also will look at computer recorded timing of any scanner price increase. A computer increase or decrease occurs when the control selling price is altered or entered into the computer to reflect  the purchase amount when products are scanned and recorded  'at the counter cash register' indicating proper purchase amount.  It is not clear if the business uses a scanner or only uses a recorded cash register tape. Investigators also pointed out that state tax receipts from prior months along with current wholesale purchase invoices could also be used to address the 'usual profit margin' portion of the law in determining additional charges.   

The 'usual profit margin' is at the very center of the constitutional interpretation of the 'price-gouging' law and has been upheld by the Mississippi Supreme Court in a 2010 ruling involving Fair Oil Co of Louisville, Ms. Timing of the price increase has also been under question but upheld due to invoice dating and tax receipts.  Mississippi’s price gouging law prevents a merchant from increasing 'his' average profit margin on products until a state of emergency executive order is lifted.  Businesses have complained that the effective time and date of an executive order is sometimes unclear because of lack of communication within the community. Attorney General Jim Hood has said many times 'if something is unclear, then call 'someone' and find out. My office is always open for these types of questions'.  

Attorney General Jim Hoods office issued a printed statement  by Jan Schaefer, Public Information Officer (601.359.2002) on August 28, 2012 which said in part “The proclamation engaging the price gouging law only applies in counties traversed by Interstate 20 and all counties south of that line,”  The counties covered under the price gouging statute during the state of emergency are: Warren, Hinds, Rankin, Scott, Newton, Lauderdale, Claiborne, Copiah, Simpson, Smith,  Jasper, Clarke, Jefferson, Adams, Franklin, Lincoln, Lawrence, Jefferson Davis, Covington, Jones, Wayne, Wilkinson, Amite, Pike, Walthall, Marion, Lamar, Forrest, Perry, Greene, Pearl River, Stone, George, Hancock, Harrison and Jackson.  “The rule of thumb for merchants inside this area is that they can pass on verifiable increases in their cost of products, but they cannot increase their average profit margin on products after 5:20 p.m. on Monday, August 27, 2012, until the executive order is rescinded. Violations of our price gouging laws could result in one to five years behind bars per count.”

As with all cases, a defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.  This case is being investigated by Richie McCluskey and Bo Luckey and will be prosecuted by Special Assistant Attorney General Patrick Beasley of the Attorney Generals Consumer Protection Division.  Anyone who suspects price gouging should contact the Attorney General’s Office at 1-800-281-4418 or visit web site at  

The price-gouging law has been tested in the courts.  A 'price gouging' appeal was filed in 2008 by State Attorney Jim Hood's office after a ruling dismissed a lawsuit filed against Fair Oil Company of Louisville, Ms.  Attorney General Jim Hood’s lawsuit accused the Mississippi oil company of charging too much for fuel after Hurricane Katrina.  The Mississippi Supreme Court took up the appeal of a Winston County judge's ruling in that case that said "Mississippi’s price-gouging law was unconstitutionally vague".   In the results, the Mississippi Supreme Court  unanimously overturned the ruling and it upheld the constitutionality of the state’s price-gouging law in November 2010. 

The Supreme Court sent the case back to Winston County to determine if Fair Oil Co. of Louisville violated the law. Fair Oil Co settled out of court. 

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Source: Press release - Attorney General Office / FCNews Staff Reporter