South Carolina Launches Investigation

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South Carolina Launches Investigation

GREENVILLE, S.C. -- State Attorney General Henry McMaster's office has opened civil investigations into a handful of gas stations that may have illegally raised prices after Hurricane Katrina slammed into the Gulf Coast nearly two months ago, reported the Associated Press.

McMaster's office received more than 1,000 complaints about increasing gas prices but has boiled down the investigation to about seven Upstate stations to determine whether prices were raised illegally to more than $4.50 a gallon, McMaster's spokesman Trey Walker told the AP.

The attorney general's office has subpoenaed records to see whether there were any violations of the state's Unfair Trade Practices Act, Walker said in the report.

McMaster is seeking lists of price changes at the stations before and after Hurricane Katrina hit Aug. 29, invoices from distributors and other documents from seven retail stations owned by four parent companies, Walker said.

The names of the companies were not released because "it would be irresponsible to taint these businesses until it is determined that unfair trade practice laws were broken," he told the AP.

McMaster will have to identify the systemic wrongdoing to be successful, Marvin Quattlebaum, a business lawyer with Nelson Mullins Riley & Scarborough, said in the AP report.

"The fact that someone is increasing prices leads to a number of questions," Quattlebaum, who works on unfair trade practice cases, said. "Is it because of the crunch in supply to those distributors? If their prices have gone up because supply has gone down, they would say, 'Look, I'm not doing anything unfair or deceptive. I'm just charging more because the law of economics is taking over.'"

State law only allows prosecutors to deal with complaints of the criminal offense price gouging during a state of emergency, but McMaster has other options, including possible unfair trade and antitrust violations, Walker said in the report.