|July 13, 2009
Media Contact: Jenn Meale
Phone: (850) 245-0150
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TALLAHASSEE, FL (July 13, 2009) – Attorney General Bill McCollum and Florida Agriculture and Consumer Services Commissioner Charles H. Bronson today announced a groundbreaking $2.275 million settlement with Morgan Stanley Capital Group Inc. and a subsidiary, TransMontaigne Product Services Inc. The settlement resolves a price gouging investigation into price increases for fuel in the aftermath of Hurricane Ike last September. The multimillion dollar settlement is the largest ever paid under the state’s price-gouging law and may be the largest price gouging settlement obtained nationally to date.
“Price gouging victimizes people already dealing with a disaster, and big business needs to be held accountable for any involvement in this behavior,” said Attorney General McCollum. “I appreciate Morgan Stanley's efforts to resolve this matter and set a high standard for the rest of the fuel suppliers in the state.”
“The message here is that we will confront any instances of our citizens being exploited during an emergency,” Commissioner Bronson said. “And if we find that a retailer is simply passing on artificially inflated costs that he or she has had to incur, we will continue digging until we get to the source of it.”
Morgan Stanley is a wholesaler of motor fuel in Florida, and TransMontaigne provides marketing, storage and transportation services for Morgan Stanley’s gasoline. Last September, during a declared state of emergency for Hurricane Ike, fuel prices in Florida increased by $1.60 a gallon or more virtually overnight, triggering thousands of complaints to both Commissioner Bronson and Attorney General McCollum’s price-gouging hotlines. Investigators for the two offices determined that for the most part, retailers were simply passing on price increases that they were forced to pay by their suppliers. As a result of that finding, Commissioner Bronson subpoenaed records of 16 oil terminal operations in Florida, including TransMontaigne, and Attorney General McCollum jointly subpoenaed TransMontaigne and others seeking gasoline sales information to determine whether the price increases were legally justified.
Today’s settlement is believed to be the first case in the nation in which a fuel supplier – and not a retailer – has agreed to pay unjust enrichment and civil penalties for increasing fuel prices during a declared state of emergency. Because no gasoline retailers were associated with the investigation, consumer restitution from retailers was not possible.
Under terms of the settlement, Morgan Stanley and TransMontaigne will pay the state $650,000 in unjust enrichment, and the maximum $25,000 civil penalty for each of the five days during which price gouging allegedly occurred, for a total of $125,000. In addition, they will pay the state $1.5 million to further future consumer protection activities in Florida and reimburse the state for its fees and costs. Morgan Stanley and TransMontaigne entered into the agreement without admitting any liability, but the two companies have agreed to abide by Florida’s price-gouging statute in the future. The company and its subsidiary cooperated fully with the state’s investigation and worked with the state agencies to expedite this resolution.
A copy of the agreement is available online at: http://myfloridalegal.com/webfiles.nsf/WF/MRAY-7TWNJJ/$file/MorganStanleyAVC.pdf