Thursday, March 10, 2011

Mississippi's Price Gouging Statute Upheld as Constitutional

After Hurricane Katrina the price of gas in Mississippi gas stations jumped by as much as 40 cents a gallon. As a result the Mississippi Legislature passed a bill which says that during a time of emergency, goods and services shouldn't cost more than the ordinary price for similar items "in the same market area at or immediately before the declaration of a state of emergency or local emergency."

The statute was tested when the Attorney General brought suit against Fair Oil co. and a judge agreed with Fair hope that the statute was unconstitutional because the phrases "same market area" and "at or immediately before" where too broad and vague enough to be considered unconstitutional.

The Mississippi Supreme Court reversed and remanded the case stating that "The alleged conduct being prosecuted is the raising of prices after the declaration of a state of emergency, absent justification," and this even without stated time and geographical restrictions in the statute.

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