N.J. AG Files Suit Against Seven Stations Over Alleged Gouging

Published in CSP Daily News

One allegedly paid less per gallon for shipment Nov. 1 than prior to state of emergency

NEWARK, N.J. -- Governor Chris Christie, Attorney General Jeffrey Chiesa and the New Jersey Division of Consumer Affairs on Friday 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.

The state said that it 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.

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., dba Lukoil station, Paterson. This station is accused of raising the price of regular fuel from $3.45 to $5.50 per gallon, an increase of 59%, during the state of emergency. On Nov. 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., dba George's Gulf station, Clifton. This station is accused of raising the price of regular gas from $3.49 per gallon to $4.69 per gallon, an increase of 34%, during the state of emergency. The Division of Consumer Affairs received approximately 52 consumer complaints about this company.
  • Alen Service Corp., dba Lukoil station, 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%, during the state of emergency. The business also allegedly raised the price of premium-grade gasoline by 25%, raised the price of plus-grade gasoline by 26%, and raised the price of diesel fuel by 31%, to $5.45 per gallon. The Division of Consumer Affairs received approximately 21 consumer complaints about this company.
  • Vinny Fuel Corp., dba Delta Gas station, Bloomfield. This station is accused of raising the price of regular gas from $3.19 per gallon to $3.99 per gallon, an increase of 25%, during the state of emergency. The Division of Consumer Affairs received approximately six consumer complaints about this company.
  • Perth Amboy NJPO LLC, dba BP station, Perth Amboy. This station was accused by consumers of raising the price of regular fuel between 22% and 33% during the state of emergency. It also allegedly raised the price of premium-grade gasoline by 12%, and the price of plus-grade gasoline by 13%, from Oct. 31 to Nov. 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, dba Exxon station, Lyndhurst. This station is accused of raising the price of regular fuel from $3.42 per gallon to $4.13 per gallon, an increase of 21%, during the state of emergency. It also allegedly raised the price of supreme-grade gasoline by 14%. The Division of Consumer Affairs received approximately 13 consumer complaints about this company.
  • Couto & Sons Inc. dba Sunoco station, Newark. This station is accused of raising the price of regular fuel from $3.80 per gallon to $4.46 per gallon, an increase of 17%, during the state of emergency. It also allegedly raised the price of plus-grade, premium-grade and ultra-grade fuel by 11%. The 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 noted that this 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--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.

New Jersey's price gouging statute 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% 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% 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, "To date, the Division has issued more than 170 subpoenas to New Jersey merchants, and investigated hundreds of others."

He also said that the division has received nearly 2,000 consumer complaints since Christie declared a state of emergency on Oct. 27.