N.Y. AG Announces Actions Against 13 Gas Station Operators

NYC, Long Island, Westchester sites allegedly violated price gouging statute

Published in CSP Daily News

Eric Schneiderman

ALBANY, N.Y. -- New York State Attorney General Eric T. Schneiderman's office has notified 13 gas station operators of his intent to commence enforcement proceedings against them for violations of the state price gouging statute.

These are the first of what is expected to be a series of actions taken in a wide-ranging investigation launched in the wake of Hurricane Sandy for price gouging after receiving hundreds of complaints from consumers across the state of New York, the AG's office said.

The 13 stations receiving notices:

Nassau County

  • Shell, Cedarhurst, Consumer complaint 5.00+.

Suffolk County

  • *Babylon Gas Station/Express Mart, Lindenhurst, NY, Consumer complaint $4.99.
  • USA Petroleum, East Islip, Consumer complaint $5.50+.
  • USA Petroleum, Medford, Consumer complaint 5.50+.

Westchester County

  • Shell, Cortlandt Manor, Consumer complaint $5.00.
  • *Mobil, White Plains, Consumer complaint $5.05.
  • Mobil, White Plains, Consumer complaint $5.03.

Brooklyn

  • Sonomax, Brooklyn, Consumer complaint $4.74.

Queens

  • Mobil, Long Island City, Consumer complaint $4.89.
  • Shell, Jackson Heights, Consumer complaint $5.50.
  • Delta, College Point, Consumer complaint $5.00.

Bronx

  • Getty, Bronx, Consumer complaint $5.39.
  • Mobil, Bronx, Consumer complaint $4.89.

The actions are based upon a review of both consumer complaints and independent pricing information.

"These 13 retailers stand out from others in the high prices they have charged and in the size of their price increases," said Schneiderman.

At the Mobil station located in Long Island City, the price per gallon was posted at the roadside as $3.89. The line for the station was three city blocks long. When the consumer got to the pump, the price sign noted a cash price of $4.89 for regular gasoline and a credit card price of $4.99. The consumer paid the $4.99 using his credit card because he was low on cash and needed the fuel.

At the Express mart station located in Lindenhurst, a consumer has reported that there were no road signs indicating the gasoline prices, only a plywood sign next to the road stating they were only accepting cash for gasoline purchases. There was a long line at the station. When the consumer pulled up to the pump he was told the gasoline price was $4.99 a gallon. He paid the $4.99 because he needed the fuel.

New York's price gouging law prohibits merchants from taking unfair advantage of consumers by selling goods or services for an "unconscionably excessive price" during an "abnormal disruption of the market." The law covers vendors, retailers and suppliers, including supermarkets, gas stations, hardware stores, bodegas, delis and taxi and livery cab drivers.

An "abnormal disruption " is defined as "any change in the market, whether actual or imminently threatened," that results from triggering events such as "weather events, power failures, strikes, civil disorder, war, military action, national or local emergency or other causes." During an abnormal disruption of the market like Hurricane Sandy, all parties within the chain of distribution for any essential consumer goods or services are prohibited from charging unconscionably excessive prices. "Consumer goods" are defined by the statute as "those used, bought or rendered primarily for personal, family or household purposes."

Gasoline, which is vital to the health, safety and welfare of consumers, is a "consumer good" under the terms of the statute; therefore, retailers may not charge unconscionably excessive prices for gasoline during an abnormal disruption of the market.

The law does not specifically define what constitutes an "unconscionably excessive price"; however, it provides that a price may be "unconscionably excessive" if the amount charged represents a gross disparity between the price of the goods or services which were the subject of the transaction and their value measured by the price at which such consumer goods or services were sold or offered for sale by the defendant in the usual course of business immediately prior to the onset of the abnormal disruption of the market.

A "before-and-after" price analysis can be used as evidence of price gouging. Evidence that a price is unconscionably excessive may also include proof that "the amount charged grossly exceeded the price at which the same or similar goods or services were readily obtainable by other consumers in the trade area"; however, a merchant may counter with evidence that additional costs not within its control were imposed for the goods or services. Notably, the price law does not prohibit any disparity between the price charged before and after there is an abnormal disruption of the market. Rather, the statute prohibits a "gross disparity," when it is clear that a business is taking unfair advantage of consumers by charging unconscionably excessive prices, and increasing its profits, under severe circumstances that call for shared sacrifices.

Keywords: 
fuels data, petroleum