Texas AG sues Rodeway Inn franchise for price gouging

Chris Rizo Feb. 10, 2009, 8:54am

AUSTIN(Legal Newsline)-Texas Attorney General Greg Abbott's office Tuesday said it has charged the owners of a Rodeway Inn franchise with price gouging.

Starlight International Inc. is accused of inflating hotel room rates by as much as 140 percent at a Houston-area Rodeway Inn during Hurricane Ike in September.

The defendants in the case -- Hsiang-Ting "Angel" Huang and Wei-Cheng "Michael" Kao - allegedly increased rates for children and other extra guests at their Rodeway Inn in Sealy, which is about one hour east of Houston.

The attorney general's office said the hotel boosted prices at the time as part of a "special event." The hotel also charged state and local taxes even after Gov. Rick Perry waived those taxes on Sept. 8, 2008, as part of his disaster declaration.

The Republican governor's order triggered provisions of the Texas Deceptive Trade Practices Act, which prohibits price gouging on fuel, food, lodging, medicine and other necessities.

The attorney general's office is seeking restitution for customers, up to $20,000 in penalties per violation of the Texas Deceptive Trade Practices Act and up to $250,000 in penalties if customers are 65 or older.

"An investigation by the Office of the Attorney General indicates these defendants unlawfully raised hotel room rates in an attempt to profiteer from Hurricane Ike," Abbott said in a statement. "To protect evacuees and other storm victims, Texas law prohibits vendors from attempting to increase profit margins after the Governor issues a disaster declaration."

From Legal Newsline: Reach staff reporter Chris Rizo at chrisrizo@legalnewsline.com.

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