Eight Companies Accused by New Jersey Governor Christie of Price Gouging During Hurricane Sandy

By | November 12, 2012

(Source: AG Jeffrey S. Chiesa) – NEWARK – Governor Chris Christie, Attorney General Jeffrey S. Chiesa, and the New Jersey Division of Consumer Affairs today announced that the State has filed civil lawsuits against eight New Jersey businesses, accusing them of unlawful price gouging while consumers were in need of fuel, shelter, and other essentials during the Hurricane Sandy state of emergency.

The defendants include seven gas stations and one hotel.  One gas station is accused of charging $5.50 per gallon for regular gasoline – an increase of $2.05 per gallon, or 59 percent, above its pre-storm prices. The State has received no information to indicate the defendants faced higher costs which would have justified the excessive price increases, in violation of New Jersey’s price gouging law. In fact, one of the gas stations allegedly paid less per gallon for a shipment of fuel on November 1 than it had paid for its last shipment before the storm – indicating a decrease in its costs during the state of emergency.

“New Jersey has a tough price gouging law to ensure that profiteers will not take unfair advantage of people at their most vulnerable – those who have been displaced from their homes, have limited resources, and are seeking fuel, shelter, and the basic necessities of life,” Governor Christie said. “Having visited the hardest-hit areas of our state, and having seen firsthand the suffering caused to so many of our residents, I have directed the Attorney General to aggressively investigate price gouging complaints. Businesses operating in New Jersey will obey our laws – or face significant penalties.”

The Attorney General’s lawsuits, filed by the Division of Law on behalf of the Division of Consumer Affairs, name the following defendants:

- Kistruga, Inc., d/b/a Lukoil station, at 253 McBride Avenue, Paterson. This gas station is accused of raising the price of regular fuel from $3.45 to $5.50 per gallon, an increase of 59 percent, during the state of emergency. On November 1 the business allegedly made approximately 230 sales of regular gasoline to consumers. The Division of Consumer Affairs received approximately 27 consumer complaints about this company.

- C.S. George & Sons, Inc., d/b/a George’s Gulf station, at 387 Crooks Avenue, Clifton. This gas station is accused of raising the price of regular gas from $3.49 per gallon to $4.69 per gallon, an increase of 34 percent, during the state of emergency. The Division of Consumer Affairs received approximately 52 consumer complaints about this company.

- Alen Service Corp., d/b/a Lukoil station, at 335 McCarter Highway, Newark. This gas station is accused of raising the price of regular gas from $3.60 per gallon to $4.50 per gallon, an increase of 25 percent, during the state of emergency. The business also allegedly raised the price of premium-grade gasoline by 25 percent, raised the price of plus-grade gasoline by 26 percent, and raised the price of diesel fuel by 31 percent, to $5.45 per gallon.  The Division of Consumer Affairs received approximately 21 consumer complaints about this company.

- Vinny Fuel Corporation, d/b/a Delta Gas station, at 141 Bloomfield Avenue, Bloomfield. This gas station is accused of raising the price of regular gas from $3.19 per gallon to $3.99 per gallon, an increase of 25 percent, during the state of emergency. The Division of Consumer Affairs received approximately six consumer complaints about this company.

- Perth Amboy NJPO, LLC, d/b/a BP station at 163 Fayette Street, Perth Amboy. This gas station was accused by consumers of raising the price of regular fuel between 22 percent and 33 percent during the state of emergency.  It also allegedly raised the price of premium-grade gasoline by 12 percent, and the price of plus-grade gasoline by 13 percent, from October 31 to November 1. The business has allegedly refused to provide receipts, records, and other documents that the Division of Consumer Affairs demanded by subpoena.  The Division of Consumer Affairs received approximately 19 consumer complaints about this company.

- S&D LLC, d/b/a Exxon station, at 555 Riverside Avenue, Lyndhurst. This gas station is accused of raising the price of regular fuel from $3.42 per gallon to $4.13 per gallon, an increase of 21 percent, during the state of emergency. It also allegedly raised the price of supreme-grade gasoline by 14 percent. The Division of Consumer Affairs received approximately 13 consumer complaints about this company.

- Couto & Sons, Inc. d/b/a Sunoco station, at 69 Wilson Avenue, Newark. This gas station is accused of raising the price of regular fuel from $3.80 per gallon to $4.46 per gallon, an increase of 17 percent, during the state of emergency. It also allegedly raised the price of plus-grade, premium-grade, and ultra-grade fuel by 11 percent. The gas station is also accused of increasing the prices for all four grades of fuel more than once per 24 hour period, in violation of the Motor Fuels Act. The State’s complaint further notes that this gas station paid less per gallon for a shipment of fuel on November 1 than it paid for its most recent shipment prior to the state of emergency – indicating a decrease in the company’s costs, rather than an increase, after the storm. The Division of Consumer Affairs received approximately 24 consumer complaints about this company.

- Ratan Hospitality Group, LLC, d/b/a Howard Johnson Express at 625 Route 46 East, Parsippany. This hotel is accused of raising its room prices by up to 32 percent – to $119 per night, compared with the hotel’s highest room rate of $90 immediately prior to the state of emergency.

“We have received no indication that these defendants faced costs that would have made these excessive price increases necessary or justifiable. One gas station even paid less per gallon for a shipment of fuel after the storm, than it had paid before the storm,” 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.”

New Jersey’s price gouging statute, N.J.S.A. 56:8-107, et. seq., prohibits excessive price increases during a declared state of emergency or for 30 days after the termination of the state of emergency. Excessive price increases are defined as more than 10 percent higher than the price at which merchandise was sold during the normal course of business prior to the state of emergency. If a merchant faces additional costs during the emergency, prices may not exceed 10 percent above the normal markup from cost.

Violations of the price gouging statute are subject to civil penalties of up to $10,000 for the first offense and up to $20,000 for subsequent offenses; each sale of merchandise is considered a separate event.

Eric T. Kanefsky, Acting Director of the New Jersey Division of Consumer Affairs, said, “Since Governor Christie declared the state of emergency, the Division of Consumer Affairs has made the investigation and prosecution of price gouging cases its number one priority. To date, the Division has issued more than 170 subpoenas to New Jersey merchants, and investigated hundreds of others. The Division will not stop until every consumer complaint of price gouging has been addressed. It is the Division’s mission to protect New Jersey’s consumers every day of the year. This mission has never been more important than it is now, following this storm.”

Acting Director Kanefsky noted that the Division has received nearly 2,000 consumer complaints since Governor Christie declared a state of emergency on October 27 – an unprecedented number in such a short period of time.

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.

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