Attorney General Bill Mims announced Thursday that legal action has been instituted against the Main Street Citgo in Salem, for allegations of price gouging.

The Attorney General’s Office also announced legal settlements with Two Stars LLC, also known as Liberty Two Stars, in Salem, and Basheer Al-Bishah, a sole proprietor trading as Ran Express Stop, a gas station in Roanoke.

The gas stations allegedly violated Virginia’s Post-Disaster Anti-Price Gouging Act by charging unconscionable prices for gasoline after Gov. Tim Kaine declared a state of emergency September 10, 2008, as Hurricane Ike approached the Gulf Coast.

“These are our third, fourth and fifth legal actions relating to the spike in gasoline prices seen in anticipation of Hurricane Ike last year,” says Mims. “As we experience the 2009 hurricane season, I hope these settlements send a strong message that Virginia enforces its Anti-Price Gouging Act. We will not tolerate those who take advantage of Virginians by price gouging for gasoline or other necessities following a disaster.”

Virginia’s Price Gouging Act, which requires a declared state of emergency to activate, went into effect July 1, 2004. Since then, the Attorney General’s Office has sued eight gas stations (three after Hurricane Katrina and five after Hurricane Ike). Today’s action against Main Street Citgo in Salem is the first where an agreed settlement, known as an Assurance of Voluntary Compliance, was not filed at the same time.

The settling stations are required to set aside money for consumer restitution. They also have agreed to make contributions to the American Red Cross Disaster Relief Fund, in lieu of paying civil penalties.

In addition, the stations are required to post signs on their front doors and on, or in areas near, their gas pumps, telling customers that they are eligible for restitution if they made purchases at certain price levels on certain days.

The companies are required to identify credit and debit card customers who purchased gasoline during the alleged price gouging, and credit a refund to their credit or debit cards for the appropriate amount of the overcharge.

Liberty Two Stars and Ran Express Stop agreed to enter into settlements after being contacted by the Attorney General. Because Main Street Citgo declined to enter into a settlement, Mims has filed suit against the gas station.

The suit against Main Street Citgo was filed with the Circuit Court of the City of Salem. The Assurance of Voluntary Compliance settlements with Liberty Two Stars and Ran Express Stop were filed with the Salem Circuit Court and the Roanoke Circuit Court, respectively, for approval.

Details of each individual case are below:

Main Street Citgo, in Salem

In the Complaint against Main Street Citgo, Mims alleges that certain prices the station charged for gasoline on September 12 and 13, 2008 were unconscionable as grossly exceeding the prices the station charged during the ten days immediately before the state of emergency declaration.

Specifically, the Complaint alleges that the following prices the station charged during these periods were unconscionable: Regular ($4.439, $4.939, $5.349); Mid-Grade ($4.539, $5.039, $5.449), and Premium ($4.639, $5.139, $5.549). The Regular gasoline price of $5.349 charged represented a 53 percent increase over the station’s September 8 price of $3.489. The Complaint further alleges that 1,836 gallons were sold to 260 customers at the unconscionable prices.

The lawsuit seeks to enjoin Main Street Citgo from engaging in practices that violate the Virginia Post-Disaster Anti-Price Gouging Act and the Virginia Consumer Protection Act, and to require Main Street Citgo to set aside monies for consumer restitution. The lawsuit also seeks to require Main Street Citgo to reimburse the Commonwealth for its costs, investigative expenses and attorneys’ fees in this matter, and to pay civil penalties for its violations.

Liberty Two Stars, in Salem

In the Complaint filed against Liberty Two Stars, along with the agreed-upon settlement, Mims alleged that prices the company charged for gasoline September 12 to 14, 2008, were unconscionable as grossly exceeding the prices the station charged during the ten days immediately before the state of emergency declaration.

Specifically, the following prices were unconscionable: Regular ($5.399); Mid-Grade ($5.499), and Premium ($5.599). The Complaint further alleges that the Regular gasoline price of $5.399 charged represented a 55-percent increase over the station’s September 8 price of $3.489.

The settlement enjoins Liberty Two Stars from engaging in any of the practices alleged to violate the Virginia Post-Disaster Anti-Price Gouging Act, and the Virginia Consumer Protection Act, and requires the company to set aside $1,500 for consumer restitution. This amount is based on sales transaction records Liberty Two Stars provided identifying the volume of gasoline sales made September 12, 13 and 14 at the prices deemed unconscionable.

The settlement further requires Liberty Two Stars to pay $2,000 to reimburse the Commonwealth for its costs, investigative expenses and attorneys’ fees, and requires Liberty Two Stars to make a contribution of $1,800 to the American Red Cross Disaster Relief Fund in lieu of a payment of civil penalties.

Ran Express Stop, in Roanoke

In the Complaint filed against Ran Express Stop, along with the Assurance, the Attorney General alleged that prices this station charged for gasoline September 12 and 13 were unconscionable as grossly exceeding the prices the station charged during the ten days immediately before the declaration.

Specifically, the Complaint alleges that the following prices were unconscionable: Regular ($5.399); Mid-Grade ($5.499) and Premium ($5.599). The Complaint further alleges that the Regular gasoline price of $5.399 charged represented a 46-percent increase over the station’s September 9 price of $3.699.

The settlement enjoins Ran Express Stop from engaging in any of the practices alleged to violate the Virginia Post-Disaster Anti-Price Gouging Act, and the Virginia Consumer Protection Act, and requires Ran Express Stop to set aside $300 for consumer restitution. This amount is based on sales transaction records Ran Express Stop provided identifying the volume of gasoline sales made September 12 and 13 at the prices deemed unconscionable.

The settlement further requires Ran Express Stop to pay $1,200 to reimburse the Commonwealth for its costs, investigative expenses and attorneys’ fees. And the settlement requires Ran Express Stop to make a contribution of $600 to the American Red Cross Disaster Relief Fund, in lieu of a payment of civil penalties.

Liberty Two Stars and Ran Express Stop cooperated with the Attorney General’s Office and the Virginia Department of Agriculture and Consumer Services throughout the investigations.