Office of the Attorney General
Kentucky Court Upholds Constitutionality of State's Price-Gouging Statute in Challenge By Marathon Oil
Attorney General Jack Conway today announced a significant ruling in Franklin Circuit Court in a lawsuit against Marathon Petroleum Company LLC, Marathon Oil Corp., and Speedway SuperAmerica LLC alleging price gouging in the wholesale and retail pricing of gasoline in the wake of Hurricanes Katrina and Rita. On Monday, Oct. 5, Franklin Circuit Judge Thomas Wingate upheld the constitutionality of Kentucky’s anti-price-gouging law and dismissed three counterclaims filed by the defendants that alleged the law was vague and violated the separation of powers and due process clauses.
The Office of the Attorney General filed suit against Marathon and Speedway SuperAmerica in May 2007 under Kentucky’s anti-price-gouging statute. General Conway sought a ruling from Franklin Circuit Court after the defendants challenged the constitutionality of the law. In upholding the state’s price-gouging statute, Judge Wingate noted that Kentucky has a legitimate interest in protecting consumers from unjustified price spikes during a declared state of emergency and that the statute provides adequate notice to businesses who must obey it.
“This is an important victory for Kentucky consumers, and it serves as a warning to those who seek excessive profits during times of disaster,” said General Conway. “My office will continue to enforce this law and protect consumers from those who prey on their vulnerability.”
The court has reserved ruling on two other claims, noting that the defendants allege more factual discovery is required. The court also referenced that Marathon Petroleum and its parent company, Marathon Oil, allegedly reaped a record income for the fourth quarter of 2005 and that many Speedway SuperAmerica stations across Kentucky allegedly enjoyed a significant increase in profit-per-gallon of gasoline sold during the declared state of emergency.
The Office of the Attorney General is seeking $89 million in damages plus penalties from Marathon and Speedway SuperAmerica for alleged price-gouging. No trial date has been set.