Texas AG Says Hotel and Owner Exploited Hurricane Evacuees

Texas Attorney General Greg Abbott announced he has sued an economy motel operator for charging exorbitant rates to evacuees fleeing Hurricane Rita in September 2005. The suit alleges the Lone Star Motel in Waco, Texas, and owner Bipin Patel exploited evacuees as a way to pocket excessive profits during the declared disaster.

“Texas businesses that offer goods and services to the public must be on their best behavior during such a crisis,” said Attorney General Abbott. “Texas law requires the Attorney General to bring legal action against any business that price-gouges consumers during a declared disaster, and we take that responsibility seriously.”

The motel, located on LaSalle Avenue in Waco, allegedly charged Hurricane Rita evacuees $60 and $141.25, respectively, for rooms that typically lease for $30 and $55. Many consumers who were seeking shelter at that time were over the age of 65, which triggers a provision in the law authorizing the Attorney General to request a penalty of up to $250,000, plus civil penalties of up to $20,000 per violation of the Texas Deceptive Trade Practices Act (DTPA).

On Sept. 20, 2005, Gov. Rick Perry issued a state disaster declaration as Hurricane Rita approached Texas. State and federal officials urged residents of coastal counties around Houston and Beaumont/Port Arthur to evacuate as soon as possible. An estimated two to three million people heeded these warnings and drove north, seeking lodging in hotels and motels along the way until the storm passed.

The Texas DTPA prohibits any business from taking advantage of a declared disaster by selling or leasing fuel, food, lodging, medicine or other necessity at an exorbitant rate.

In October 2005, the AG sued the owners of Quality Inn & Suites in Marshall for gouging Louisiana and Texas evacuees fleeing both Hurricanes Katrina and Rita, as well as exploiting Federal Emergency Management Agency volunteers.

According to the AG’s office, the owners, Jaswantiben and Rambhai Patel, routinely charged exorbitant ratesm in one instance billing a couple from Orange three times more on their credit card than they agreed to pay when they signed their bill.

Source: Texas Attorney General’s Office