Government

Attorney General Abbott resolves price-gouging case against Rosenberg motel operator

Motel operator who took advantage of consumers fleeing Hurricane Rita

From the Office of Greg Abbott, Attorney General of Texas

September 19, 2007

ROSENBERG – Texas Attorney General Greg Abbott Tuesday resolved the 2005 price-gouging charges he filed against a Rosenberg motel operator who took advantage of consumers fleeing Hurricane Rita.

“Texans won well-deserved praise for extending open arms to evacuees during the 2005 hurricane season,” said Attorney General Abbott. “The few unscrupulous profiteers who took advantage of evacuees will be held accountable for their actions, sending a clear message that Texas will not tolerate those who exploit victims of natural disasters.”

RNB Enterprises, Inc., which owns the Homer Norton Motel in Rosenberg, entered into an agreed final judgment and permanent injunction, concluding a lengthy dispute with the Attorney General. An investigation by the Office of the Attorney General revealed that motel owner Nizar Ali Bhalesha charged consumers fleeing the hurricane up to three times his standard rate for a room.

Under yesterday’s judgment, the defendant agreed to provide a refund to overcharged consumers and pay the state $20,000 in attorneys’ fees and $40,000 in civil penalties. Within 30 days of the judgment, RNB Enterprises, Inc. must notify overcharged consumers about the restitution plan.

Additionally, in the future, the defendant is prohibited from collecting hotel occupancy taxes from evacuees who are fleeing a disaster. RNB Enterprises, Inc. must also post the daily room rate in each room and maintain a registration system that includes guests’ names, contact information, length of stay and rates charged per day.

The case stemmed from the Attorney General’s authority to crack down on price-gouging after a disaster is declared by the governor.