NJ Sues Businesses For Price-Gouging After Hurricane Sandy

These increased prices could lead to millions in penalties for the station owner.

In the wake of Hurricane Sandy, many businesses in New Jersey and New York raised their prices in response to higher demand or weakened supply. But when those prices are jacked up so high that it’s disproportionate to the additional cost to the business, that’s gouging. Today, the state of New Jersey filed suit against eight businesses accused of crossing that line.

Not surprising, seven of the alleged gougers are gas stations. The remaining defendant is a Howard Johnson Express hotel.

- A Lukoil station in Paterson. After the storm, a gallon of gas here was selling for $5.50, a 59% increase from the pre-storm price of $3.45.

- A Gulf station in Clifton allegedly raised the price of regular gas from $3.49/gallon to $4.69 per gallon.

- A Lukoil station in Newark, where the owners are accused of raising the price of regular gas from a pre-storm $3.60/gallon to $4.50.

- A Delta Gas station in Bloomfield accused of raising the price of regular gas from $3.19/gallon to $3.99.

- A BP station in Perth Amboy, where the price of gas increased anywhere from 22% to 33% during the state of emergency. Additionally, this station has allegedly refused to provide receipts, records, and other documents that the Division of Consumer Affairs demanded by subpoena.

- An Exxon station in Lyndhurst is accused of raising the price of regular gasoline from $3.42/gallon to $4.13.

- A Sunoco station in Newark where the price of regular fuel jumped up from $3.80/gallon to $4.46. According to the complaint, this gas station paid less per gallon for a shipment of fuel on Nov. 1 than it paid for its most recent shipment prior to the state of emergency, which should indicate a decrease in the company’s costs.

- A Howard Johnson Express in Parsippany. Room rates here allegedly increased by 32% following the storm to $119 per night.

New Jersey law prohibits excessive price increases during a declared state of emergency and for 30 days after the termination of the state of emergency. An excessive price increase is defined as more than 10% higher than the price at which merchandise was sold during the normal course of business prior to the state of emergency. Merchants who face additional costs during the emergency can charge more, but not more than 10% above the normal markup from cost.

“We have received no indication that these defendants faced costs that would have made these excessive price increases necessary or justifiable,” Attorney General Chiesa said. “We have hundreds of complaints still to investigate. Anyone seeking to prey upon the desperation of consumers during this state of emergency will find that the penalties far outweigh any ill-gotten profits.”

Merchants caught violating the anti-gouging laws face penalties of up to $10,000 for the first offense and up to $20,000 for subsequent offenses, with each sale considered a separate event. For example, the Paterson Lukoil station that allegedly charged $5.50/gallon to at least 230 customers could face upward of $4.59 million in penalties.

Consumers who suspect price gouging or any other violation of consumer protection laws, particularly as a result of Hurricane Sandy, are urged to call the Division of Consumer Affairs at 800-242-5846.

Consumers who believe they have been cheated or scammed by a business, or suspect any other form of consumer abuse, can file a complaint with the New Jersey Division of Consumer Affairs by visiting its website or by calling 1-800-242-5846 (toll free within New Jersey) or 973-504-6200.