N.J. Sues Gas Stations, Hotel for Post-Sandy Gouging

New Jersey accused seven filling stations and a hotel of gouging customers during the state of emergency after Hurricane Sandy by raising prices as much as 59 percent.

The state sued two gas stations in Newark, as well as stations in Paterson, Clifton, Bloomfield and Perth Amboy, New Jersey Attorney General Jeffrey Chiesa said today at a news conference in Newark. Also sued was a Howard Johnson Express in Parsippany owned by Ratan Hospitality Group LLC.

The storm last week killed more than 100 people, triggered an almost 14-foot tidal surge, displaced thousands and knocked out power to millions. It crippled mass transit and interrupted supplies of gasoline.

“We warned merchants again and again not to violate the law by taking advantage of people following this catastrophe,” Chiesa said. “The fact that we have these fringe businesses that think that disasters are a profit center is troubling.”

A Lukoil gas station in Paterson owned by Kistruga Inc. raised prices from $3.45 to $5.50 a gallon, according to Chiesa. The station made 230 sales at the highest price on Nov. 1, he said.

New Jersey law defines price gouging as an “excessive price increase,” or of 10 percent or more, during a declared state of emergency.

Consumer Affairs

The state Division of Consumer Affairs got 2,000 complaints about price gouging for gasoline, generators, food and lodging, according to Chiesa. About 83 percent involved gas stations, he said. About 4 percent of the state’s 2,400 gas retailers were subject to subpoenas.

Businesses sued by the state face penalties of $10,000 for a first offense and $20,000 for a second offense, he said.

Authorities in New York are also investigating complaints of price gouging, mostly about gasoline prices. There have also been reports of merchants’ charging $7 for a loaf of bread and $10 for a box of matches, New York Attorney General Eric Schneiderman’s office said Nov. 5. Brooklyn, New York, District Attorney Charles Hynes yesterday said he had empaneled a special grand jury to probe gouging reports.

New York law prohibits selling goods or services for an “unconscionably excessive price” during “abnormal disruption of the market.”

To contact the reporters on this story: David Voreacos in Newark at dvoreacos@bloomberg.net;

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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